TIDMWG.
RNS Number : 3852U
Wood Group (John) PLC
28 March 2023
Full year results for the year ended 31 December 2022
28 March 2023
Transformative year, started 2023 with good momentum
FY22 FY21 Movement
At constant
currency
$m $m % %(2)
------- ------- --------- ------------
Continuing operations(1) :
----------------------------------------- ------- ------- --------- ------------
Revenue (pre-exceptional)(3) 5,442 5,238 3.9% 8.3%
----------------------------------------- ------- ------- --------- ------------
Adjusted EBITDA(4) 385 404 (4.7)% 0.3%
Adjusted EBITDA margin(5) 7.1% 7.7% (0.6)ppts
Adjusted EBIT(6) 174 187 (7.0)%
----------------------------------------- ------- ------- --------- ------------
Operating loss (568) (62) n/a
Order book(7) 6,016 6,047 (0.5)% 4.2%
Headcount (number of employees)(8) 35,573 32,930 8.0%
Results from continuing and discontinued
operations(1) :
----------------------------------------- ------- ------- --------- ------------
Loss for the period (352) (136) n/a
----------------------------------------- ------- ------- --------- ------------
Basic EPS (c) (52.4)c (20.6)c n/a
----------------------------------------- ------- ------- --------- ------------
Adjusted diluted EPS(9) (c) 5.7c 17.5c (67)%
----------------------------------------- ------- ------- --------- ------------
Net cash used in operating activities (361) (60) n/a
----------------------------------------- ------- ------- --------- ------------
Free cash flow(10) (730) (398) (83.4)%
----------------------------------------- ------- ------- --------- ------------
Net debt including leases 736 1,843 (60.4)%
----------------------------------------- ------- ------- --------- ------------
Net debt excluding leases 393 1,393 (71.8)%
----------------------------------------- ------- ------- --------- ------------
Net debt / adjusted EBITDA (excluding
leases)(11) 1.3x 3.3x n/a
----------------------------------------- ------- ------- --------- ------------
Built Environment Consulting shown as a discontinued operation.
See notes on page 5.
Ken Gilmartin, CEO, said:
"We are pleased to have delivered results in line with
expectations for 2022, including a return to revenue growth - with
8% growth at constant currency. This was achieved in a year of
major change for the Group, under new leadership, as we addressed
legacy issues, transformed our balance sheet and launched a new
strategy.
"Our strategy is already delivering. We started 2023 with good
momentum - our order book for delivery in 2023 is up 10%, headcount
is up 8% and financial guidance for 2023 is in line with our
medium-term financial targets of adjusted EBITDA growth at mid to
high single digit CAGR, with momentum building as our strategy
delivers. We now we look to the future with confidence as a much
stronger company".
Delivered results in line with expectations
-- Results at the upper end of the ranges given in the January Trading Update
-- Revenue of $5.4 billion was up 4% with growth in Consulting
(+4%) and Operations (+15%) offset by the expected decline in
Projects (-6%). At constant currency, Group revenue was up 8%
-- Adjusted EBITDA of $385 million was flat on last year at
constant currency. Top end of guidance range given in January
Trading Update of $375 million to $385 million
-- Adjusted EBITDA margin of 7.1% includes the impact of the
previously guided lower margin in Operations, and a lower margin in
Consulting, partly reflecting the impact of our decision to exit
Russia
-- Impairment of goodwill and intangibles of $542 million, as
flagged in our January trading update
-- Operating loss of $568 million primarily reflects this impairment charge
-- Loss for the period of $352 million is after a gain on sale
of Built Environment Consulting of $515 million
-- Basic EPS was a loss of 52.4c, reflecting the loss for the period
-- Adjusted diluted EPS was down 67% to 5.7c, reflecting the
lower EBIT, higher interest costs and the disposal of Built
Environment Consulting during the year
-- Free cash flow of $(730) million reflects:
o Significant working capital outflow of $367 million, including
our decision to exit lump sum turnkey and major lump sum EPC work,
and our decision to normalise payables
o Cash exceptionals of $319 million, reflecting the impact of
addressing legacy issues, including settling the Enterprise
litigation claim
-- Net debt (excl. leases) at 31 December 2022 was $393 million
- within our previously guided range. Includes a negative currency
impact and the impairment of $6 million of cash balances in
Russia
Delivering on our profitable growth strategy
-- We transformed the Group in 2022
o New strategy launched, focusing on energy and materials
markets
o New leadership team in place, seven of nine in our ELT
recently appointed
o Built Environment Consulting sold at an attractive multiple
(c.$1.7 billion net cash proceeds) and restored our financial
strength
o Legacy issues addressed including Enterprise litigation
settled in November 2022
-- Right business model now in place
o Primarily a services-based, cost reimbursable business (c.80%
of revenue, c.85% of order book)
o Repositioned away from lump sum turnkey (now less than 4% of
Group revenue and reducing)
-- Well-positioned for growth across energy and materials
o Around 20% of Group revenue from sustainable solutions based
on our strict measure(12) . This strict measure does not include
much of the decarbonisation activity we perform today for our
clients
o Strong growth across our sustainable solutions, including work
across hydrogen and carbon capture
o Pipeline growth in our strategic markets and over 90% of our
pipeline now relates to our six focus markets (Oil & Gas,
Chemicals, Hydrogen, Carbon Capture, Minerals and Life
Sciences)
-- Optimising our portfolio
o Sale of offshore labour supply operations in Gulf of Mexico
completed in March 2023 for cash consideration of $17 million,
further aligning the Group's portfolio on our focus markets
o We are currently evaluating our portfolio and have identified
underperforming businesses that do not fit with our focused
strategy, generate negative margin and represent around 4% of
revenue. We are considering options in respect of these
businesses
Momentum across our business
-- Significant order book of $6 billion , up 4% at constant currency
-- Order book for delivery in 2023 of $3.9 billion, up 10% on last year
-- Headcount up 8% to more than 35,500 people, a key growth
driver for our services-led business model
Outlook
-- While mindful of the uncertain economic outlook, our expectations for 2023 remain unchanged
-- We expect our performance in FY23 to be line with our medium-term targets:
o Adjusted EBITDA margins to be flat in the nearer term, partly
as we reinvest in the business to secure growth. In the medium
term, we continue to see opportunity for margin improvement
o Adjusted EBITDA to grow at mid to high single digit CAGR over
the medium term, with momentum building over time as our strategy
delivers
o As is typical for our business, performance will be weighted
to the second half of the year
-- We expect a material improvement in cash flow in FY23 with a
significant improvement in operating cash flow, reflecting a
much-improved working capital performance
-- As previously guided, we expect significantly lower
exceptional cash flows in FY23 of around $135 million. This, plus
the remaining tax payable on the sale of Built Environment
Consulting of around $60 million, partially offset by disposal
proceeds of around $25 million, will lead to higher net debt in
FY23
-- The exceptional cash outflows in FY23 are weighted to the
first half of the year, and the tax payable on the sale of Built
Environment Consulting will be paid in the first half of the
year
-- The improved operating cash flow performance of the Group,
along with a continued reduction in exceptional cash outflows, will
enable a return to positive free cash flow (after exceptionals) in
FY24
Supporting our medium-term margin growth and free cash flow
targets
-- We expect to expand our margin in the medium term, supported by:
o Improved pricing expectations across our markets, reflecting
the selectivity of work undertaken and the significant demand for
our services
o The continued shift to our services-led model
o Addressing the small number of underperforming businesses in
our portfolio
-- We continue to target costs savings in two key areas to support our targets:
o As outlined at our Capital Markets Day, continued
rationalisation of our property portfolio as our leases expire and
reflecting post-Covid working patterns. We anticipate annualised
savings of $15 million to $20 million by the end of 2025, with
benefits accruing from 2024. EBIT will benefit by $10 million to
$15 million per year
o IT cost savings of $10 million to $15 million from licence
rationalisation and other efficiency measures, with material
benefit accruing from 2024 onwards
In addition, as at 31 December 2022, and as set out in note 33
of our accounts, our main UK defined benefit scheme (WPP) was 119%
funded and had a significant surplus of $432 million on an IAS 19
basis, and is currently expected to be around 105% funded with a
surplus of around GBP100 million ($130 million) on the more prudent
Technical Provisions basis at 31 March 2023, consistent with the
assumptions used at the last triennial actuarial valuation.
The Group is currently working closely with the Trustee to agree
a preferred direction regarding the future of the plan. Options
being assessed include moving to a buy-in insured basis and
eventual buy-out with a third party as soon as is reasonably
practical, or to continue to run the WPP on for a limited number of
years which could potentially generate further surplus. Any
potential further surplus that might arise from running the scheme
on could benefit both the Group and pension members, ensuring that
appropriate safeguards for both the funding position and members'
interests are taken into account at all times.
Management commitment to delivery
The Board has agreed with management LTIP targets for 2023-2025
consistent with our medium-term targets. These targets are
weighted:
-- 60% to EBITDA targets, with a threshold of $450 million and a
maximum level at $525 million in 2025
-- 30% to total shareholder return relative to our peer group
-- 10% to ESG metrics relating to carbon emission reductions and leadership gender diversity
Presentation
A meeting for investors and analysts will be held at The London
Stock Exchange (10 Paternoster Square, London, EC4M 7LS) at 9:00am.
The presentation will be webcast live at
https://edge.media-server.com/mmc/p/6mhxtay5 .
It will subsequently be made available to watch on demand at
www.woodplc.com/investors . A transcript will also be made
available on our website.
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
FTI_Wood@FTIconsulting.com
Future events
As part of our expanded investor engagement calendar, we set out
below the dates for key events this year:
-- 11 May 2023 - Q1 trading update and Annual General Meeting
-- June 2023 - Decarbonisation webinar and Milan, Italy site visit
-- 13 July 2023 - HY23 trading update
-- 22 August 2023 - HY23 results
-- 9 November 2023 - Q3 trading update
-- November 2023 - Digitalisation webinar and Houston, USA site visit
NOTES
Adjustments between statutory and underlying information
The Group uses various alternative performance measures (APMs)
to enable users to better understand the performance of the Group.
The Directors believe the APMs provide a consistent measure of
business performance year-to-year and they are used by management
to measure operating performance and for forecasting and
decision-making. The Group believes they are used by investors in
analysing business performance. These APMs are not defined by IFRS
and there is a level of judgement involved in identifying the
adjustments required to calculate them. As the APMs used are not
defined under IFRS, they may not be comparable to similar measures
used by other companies. They are not a substitute for measures
defined under IFRS.
Note 1: The Built Environment Consulting business is shown as
discontinued operations. We have adjusted our underlying results to
reflect this, including restatement of comparative information. The
result of this is there is no contribution from Built Environment
Consulting included in revenue or adjusted EBITDA in all periods.
There is no change to EPS or cash flows.
Note 2: Growth rates shown at constant currency are calculated
by comparing FY22 to FY21 restated at FY22 currency rates. This
additional disclosure is made to help users better understand the
growth of our businesses.
Note 3: Revenue includes an exceptional item in FY22 of $(8.0)
million (FY21 $(25.4) million) related to contract losses in
respect of the closure of the Power and Industrials EPC business.
In FY21 the exceptional item related to Aegis Poland. Revenue
(pre-exceptional items) is an APM that is used throughout this
Report as the Group believes it provides a more useful measure of
performance. Given the immaterial size of the exceptional item, we
refer to revenue throughout the Report as the $5,442 million
pre-exceptional figure.
Note 4: A reconciliation of adjusted EBITDA to operating loss is
shown in note1 to the financial statements. A reconciliation of
adjusted EBIT to operating loss is shown in the Financial
Review.
Note 5: Adjusted EBITDA margin is adjusted EBITDA shown as a
percentage of revenue. This measure is used by management to
measure the performance of businesses, and is one of our medium
term targets.
Note 6: Adjusted EBIT is a new measure introduced to show the
Group's adjusted EBITDA after depreciation and amortisation. This
measures excludes amortisation of acquired intangibles and is
therefore aligned with our measure of adjusted EPS.
Note 7: Order book comprises revenue that is supported by a
signed contract or written purchase order for work secured under a
single contract award or frame agreements. Work under multi-year
agreements is recognised in order book according to anticipated
activity supported by purchase orders, customer plans or management
estimates. Where contracts have optional extension periods, only
the confirmed term is included. Order book disclosure is aligned
with the IFRS definition of revenue and does not include Wood's
proportional share of joint venture order book. Order book is
presented as an indicator of the visibility of future revenue.
Note 8 : Headcount is a measure of total employees working for
Wood, including Wood employees and contractors. This measure
excludes employees in our joint ventures.
Note 9: A reconciliation of adjusted diluted EPS to basic EPS is
shown in note 9 of the financial statements.
Note 10: Free cash flow is defined as all cash flows before
acquisitions, disposals and dividends. It includes all mandatory
payments the Group makes such as interest and tax, and all
exceptional cash flows. It excludes the impacts of IFRS 16 (Leases)
accounting. A reconciliation of free cash flow to our statutory
cash flow statement is shown on page 23.
Note 11: The net debt / adjusted EBITDA ratio is calculated on
the existing basis prior to the adoption of IFRS 16 in 2019 and is
based on net debt excluding leases. These measures are presented as
they closely aligned to the measure used in our financing
covenants. See calculations on page 28.
Note 12 : Estimated share of FY22 revenue as defined by Wood.
This figure is referred to across this document. Sustainable
solutions consist of activities related to: 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, in which case
the total revenue is recorded in decarbonisation.
Note 13: Certain statements in this announcement are classed as
profit forecasts for the purposes of the City Code on Takeovers and
Mergers (as set out in the separate announcement made by Wood on 28
March 2023).
CEO STATEMENT
2022 was a year where we transformed Wood. We reset the
business, strengthened our balance sheet, addressed legacy issues
and appointed new leadership. We concluded the year by setting out
our strategy at a capital markets day, highlighting how we will
deliver value consistently through focused growth across our energy
and materials end markets, and drive a return to delivering free
cash flow.
Financial performance: delivered results in line with
expectations
Return to revenue growth
Our performance in 2022 was in line with the expectations we set
mid-way through the year. Revenue of
$5.4 billion was 8% higher at constant currency. This reflects
good growth in Consulting and Operations and an improving trend in
Projects, with a return to growth in the second half.
Profitability in line with expectations
Our adjusted EBITDA in 2022 was $385 million, flat at constant
foreign exchange rates and at the upper end of the guidance range
we gave in our January trading update. Our adjusted EBITDA margin
was 7.1%, lower than the 7.7% in 2021, partly reflecting a
normalisation of margins in Operations, which benefited from
contract close out benefits in previous years, along with a lower
margin in Consulting. The margin in our Projects business was
higher in the year as we shifted the business to a service-led
model and saw improved overall project performance.
Our adjusted EBIT was $174 million and our adjusted diluted EPS
was down 67% to 5.7c. This reflects the lower profitability, high
interest costs in the year and the disposal of Built Environment
Consulting.
Our statutory loss for the year was $352 million and includes
the impairment of goodwill and intangibles. Basic EPS was a loss of
52.4c per share, reflecting this statutory loss.
Cash performance reflects our reset
Free cash outflow for the year was $730 million and reflects a
significant working capital outflow, partly reflecting our decision
to exit lump sum turnkey ("LSTK") and larger EPC activity, as well
as our decision to normalise payables at period ends. In addition
to these working capital impacts, we also had large exceptional
cash outflows arising from legacy issues, including the settlement
of the Enterprise litigation claim for $115 million in the
year.
Balance sheet now in a strong position
Our net debt excluding leases at December 2022 was $393 million,
with a net debt / adjusted EBITDA of 1.3 times. This reflects a
significant improvement on last year (3.3 times) given the impact
of the sale of Built Environment Consulting. Through the sale, we
reset our balance sheet and this allowed us to address legacy
issues and provide a firmer footing for future growth.
Our approach to capital allocation
Our capital allocation policy starts with having a strong
balance sheet. We will look to manage our target leverage over the
medium term within a range of around 0.5 to 1.5 times net debt
(excluding leases) to adjusted EBITDA (pre-IFRS 16). This allows us
to invest in our business, people and systems and fund the rundown
of our legacy liabilities.
Beyond this, we will consider how best to create value for our
shareholders from dividends, share buybacks or attractive
acquisitions.
A new chapter for Wood: we transformed the Group in 2022
Wood is built on strong foundations, from our outstanding
technical expertise and people, to our long-term client
relationships. However, we have not delivered for our shareholders
in recent years. While part of that underperformance reflects the
challenging market backdrop of lower customer investment and the
Covid pandemic, it was also driven by company-specific issues
including insufficient discipline in project selection, high levels
of restructuring and a series of legacy issues arising from the
acquisition of Amec Foster Wheeler in 2017.
We tackled these issues head-on in 2022 and launched a new
chapter for the Group with the transformative sale of Built
Environment Consulting, reset of our balance sheet and launch of
our profitable growth strategy. As we look ahead, we have instilled
a structure and discipline into the business which will mitigate
against future issues and allow us to grow from these strong
foundations.
Sale of Built Environment Consulting transformed the Group
We completed the sale of Built Environment Consulting in
September 2022 for an enterprise value of $1.81 billion,
representing an attractive EV multiple of 16 times (including
expected standalone costs). The net proceeds of around $1.7
billion, after the remaining tax due is paid in 2023, transformed
the Group's balance sheet, funded the settlement of the Enterprise
litigation and restored our financial flexibility.
We have addressed legacy issues
-- We are no longer pursuing LSTK activity or major lump sum EPC
activity, with remaining contracts due to complete in 2023
-- Our Aegis Poland contract is physically complete with commercial settlement remaining
-- The final payment for our SFO settlement is due in early 2024
-- Our onerous leases come to an end in 2024
-- We settled the Enterprise litigation
Our strengthened balance sheet will allow us to address the
defined schedule of cash outflows relating to these legacy
liabilities, as well as our asbestos liability, and allow the Group
to return to positive free cash flow in 2024.
A new leadership team in place
We have a new leadership team, with seven of nine members of our
Executive Leadership Team appointed to their roles in 2022 and
2023. Our wider senior leadership team has also undergone change,
and we have added key hires throughout 2022 to strengthen our
commercial offering, including recruiting leading subject-matter
experts.
Our refreshed strategy: profitable growth
We launched our new strategy in November 2022 following
extensive consultation with our employees, clients and
investors.
Our strategic pillars
Our strategy is delivered across three pillars:
-- Profitable growth - we will focus on priority markets and
geographies where we can lead, with an absolute focus on driving
operating cash flow, and building a high quality, low risk pipeline
with a focus on cost reimbursable work.
-- Inspired culture - we will drive improved employee engagement
and reduced levels of voluntary turnover, while maintaining our
focus on safety, and we aim to maintain a top quartile ESG rating
amongst peers. We commit to driving greater diversity in our
business, including a target of women comprising 40% of leadership
roles before 2030.
-- Performance excellence - with a focus on strong leadership,
commercial governance and efficient ways of working. We will
increase the use of our Global Excellence Centres to differentiate
our offer to clients and drive improved margin. We will ensure our
core digital solutions become embedded in client delivery, and we
expect the proportion of revenue coming from sustainable solutions
to grow each year.
Our attractive markets
The energy and materials markets offer significant growth
opportunities for Wood. We are now taking a more focused approach
to growth, targeting specific priority markets within energy and
materials that best match our competitive strengths. This narrower
focus will help ensure we can grow both profitably and
sustainably.
We are focused on:
-- Large markets with solid growth - Oil & Gas and Chemicals
-- Small markets today with substantial growth potential - Hydrogen and Carbon Capture
-- Large markets where we can significantly grow our share - Minerals and Life Sciences
Our medium-term financial targets
Our strategy will deliver returns for our shareholders and at
our Capital Markets Day we set out new financial targets:
-- Adjusted EBITDA margins to be flat in the nearer term, partly
as we reinvest in the business to secure growth. In the medium
term, we see opportunity for margin improvement
-- Adjusted EBITDA to grow at mid to high single digit CAGR over
the medium term, with momentum building over time as our strategy
delivers
-- The strong underlying cash flows of our business combined
with the reducing legacy liabilities, will result in a return to
positive free cash flow (after exceptionals) from FY24 onwards
We expect to expand our margin in the medium term, supported
by:
-- Improved pricing expectations across our markets, reflecting
the selectivity of work undertaken and the significant demand for
our services
-- The continued shift to our services-led model
-- Addressing the small number of underperforming businesses in our portfolio
We continue to target costs savings in two key areas to support
our targets:
-- As outlined at our Capital Markets Day, continued
rationalisation of our property portfolio as our leases expire and
reflecting post-Covid working patterns. We anticipate annualised
savings of $15 million to $20 million by the end of 2025, with
benefits accruing from 2024. EBIT will benefit by $10 million to
$15 million per year
-- IT cost savings of $10 million to $15 million from licence
rationalisation and other efficiency measures, with material
benefit accruing from 2024 onwards
Our management team are committed to delivery of these targets.
The Board has agreed LTIP targets for 2023-2025 consistent with our
medium-term targets. These targets are weighted:
-- 60% to EBITDA targets, with a threshold of $450 million and a
maximum level at $525 million in 2025
-- 30% to total shareholder return relative to our peer group
-- 10% to ESG metrics relating to carbon emission reductions and leadership gender diversity
In addition, as at 31 December 2022, and as set out in note 33
of our accounts, our main UK defined benefit scheme (WPP) was 119%
funded and had a significant surplus of $432 million on an IAS 19
basis, and is currently expected to be around 105% funded with a
surplus of around GBP100 million ($130 million) on the more prudent
Technical Provisions basis at 31 March 2023, consistent with the
assumptions used at the last triennial actuarial valuation.
The Group is currently working closely with the Trustee to agree
a preferred direction regarding the future of the plan. Options
being assessed include moving to a buy-in insured basis and
eventual buy-out with a third party as soon as is reasonably
practical, or to continue to run the WPP on for a limited number of
years which could potentially generate further surplus. Any
potential further surplus that might arise from running the scheme
on could benefit both the Group and pension members, ensuring that
appropriate safeguards for both the funding position and members'
interests are taken into account at all times.
Delivering on our profitable growth strategy
Right business model now in place with focus on cost
reimbursable work
We have de-risked our contract pipeline by minimising the LSTK
activity and major lump sum EPC activity, and today we are
predominately a cost reimbursable services business. Across the
Group, the proportion of our revenue that came from cost
reimbursable work is around 80% (and around 85% of our order book).
Only around 4% of revenue in FY22 came from LSTK contracts, with
the remainder being fixed price services work.
Well-positioned for growth
In addition to our order book of around $6 billion, we have a
pipeline of opportunities many times larger in magnitude. In line
with our focused and selective strategy, this pipeline is now
aligned with our focus markets.
At December 2022, over 90% of our pipeline related to our six
focus markets (Oil & Gas, Chemicals, Hydrogen, Carbon Capture,
Minerals and Life Sciences), compared to 73% a year ago. The
difference mainly relates to the removal of EPC opportunities
across renewables, in line with our new risk appetite and strategy
to focus on the complex work where we add the most value for our
clients.
Encouragingly, we have a higher pipeline in nearly all our
markets compared to a year ago, including a more than doubling of
opportunities across hydrogen and carbon capture.
Progress on our people strategy
Our headcount at December 2022 was 35,573 people, up 8% on last
year with significant increases in Consulting and Projects. This is
an increasingly important metric with our shift to a services-led
business model.
We are pleased that in the latter parts of 2022 we saw
significant improvements in both employee engagement and employee
net promoter score. We have also grown our Global Execution Centres
significantly, with more than 3,000 skilled employees now in India
and Colombia.
Progress on sustainability
Wood is an enabler of net zero, providing solutions across
decarbonisation, energy transition, and materials for a net zero
world. In addition, our life sciences solutions are aligned to the
UN Sustainable Development goal of ensuring good health and
well-being.
Around 20% of our revenue today is from sustainable solutions,
with around 30% of revenue in Projects, around 25% of revenue in
Consulting, and around 10% in Operations from such solutions. This
strict measure does not include much of the decarbonisation
activity we perform today for our clients, particularly in our
Operations business with work such as reducing methane emissions
and flaring.
We have seen strong growth in our pipeline for sustainable
solutions in the year, including across hydrogen and carbon capture
work.
Our progress on ESG matters is reflected in our MSCI AA rating,
awarded for the 8(th) consecutive year, and the maintenance of our
top quartile ranking against peers.
In 2022, we made further progress on many of our other key ESG
goals including:
-- Reducing scope 1 & 2 carbon emissions by 65% compared to
our target of a 40% reduction from our 2019 baseline
-- Embedding fair working practices through incorporating
'Building Responsibly' principles into our supply chain
pre-qualification stages and supplier code of conduct
Optimising our portfolio
We are currently evaluating our portfolio and have identified
underperforming businesses that do not fit with our focused
strategy, generate negative margin and represent around 4% of
revenue. We are considering options in respect of these
businesses.
In addition to this, the sale of our offshore labour supply
operations in Gulf of Mexico completed in March 2023 for cash
consideration of $17 million. This reflects a proactive step in
focusing the Group's portfolio on our focus markets and
solutions.
Winning work across markets
Our order book at 31 December 2022 was $6 billion, broadly flat
on the position a year ago but up by 4% at constant currency rates.
The order book for delivery in the year ahead was up 10% on a year
ago and positions us well for 2023, albeit with a more volatile
macroeconomic backdrop to win the remaining work for 2023.
Significant contract wins across Energy in the year
included:
-- 10-year engineering & project support agreement with
Chevron that forms a global strategic partnership across offshore
and onshore assets
-- Major contract extension with Equinor for operation on the
Norwegian Continental Shelf to 2026
-- 5-year multi-region engineering services contract renewal with bp
-- 3-year operations and maintenance contract renewal with Shell in the UK North Sea
-- Appointed delivery partner for Centrica Storage in the UK for key gas storage assets
-- Contract for the FEED design to deliver a large-scale green
hydrogen production facility in Norway
Significant contract wins in the year in Materials included:
-- 2-year EPCm contract with Solvay to deliver a new
polyvinylidene fluoride (PVDF) site in France
-- 4-year EPCm contract with INEOS worth over $100 million for an ethane cracker
-- Contracts with Enter Engineering in Uzbekistan worth over
$200 million - engineering and procurement services for a gas to
chemical complex, and FEED and detailed design for a mineral
processing plant
Outlook
While mindful of the uncertain economic outlook, our
expectations for 2023 remain unchanged.
We expect our performance in FY23 to be line with our
medium-term targets:
-- Adjusted EBITDA margins to be flat in the nearer term, partly
as we reinvest in the business to secure growth. In the medium
term, we continue to see opportunity for margin improvement
-- Adjusted EBITDA to grow at mid to high single digit CAGR over
the medium term, with momentum building over time as our strategy
delivers
-- As is typical for our business, performance will be weighted to the second half of the year
We expect a material improvement in cash flow in FY23 with a
significant improvement in operating cash flow, reflecting a
much-improved working capital performance. As previously guided, we
expect significantly lower exceptional cash flows in FY23 of around
$135 million. This, plus the remaining tax payable on the sale of
Built Environment Consulting of around $60 million, partially
offset by disposal proceeds of around $25 million, will lead to
higher net debt in FY23.
The exceptional cash outflows in FY23 are weighted to the first
half of the year, and the tax payable on the sale of Built
Environment will be paid in the first half of the year.
The improved operating cash flow performance of the Group, along
with a continued reduction in exceptional cash outflows, will
enable a return to positive free cash flow (after exceptionals) in
FY24.
BUSINESS REVIEWS
CONSULTING (continuing operations)(1)
Our Consulting business provides technical consulting, digital
consulting, and energy asset and technology solutions. It also
provides a range of decarbonisation solutions that sit across
Consulting and opens opportunities across Wood's other business
units.
Financial review
FY22 FY21 Movement
At constant
currency
$m $m % %
----------------------- ------ ----- --------- -------------
Revenue 625 599 4.4% 13.0%
Adjusted EBITDA(2) 73 77 (5.2)% 4.7%
Adjusted EBITDA margin 11.7% 12.9% (1.2)ppts
----------------------- ------ ----- --------- -------------
Order book(3) 476 491 (3.1)% 3.3%
----------------------- ------ ----- --------- -------------
Headcount(4) 3,941 3,467 13.7%
----------------------- ------ ----- --------- -------------
1. Built Environment Consulting shown as a discontinued
operation and comparatives has been restated. See note 1 on page
5
2. Adjusted EBITDA includes $nil from JVs (FY21: $0.1 million).
Revenue does not include any contribution from JVs.
3. FY21 order book restated. Previously disclosed figure of $535
million incorrectly included a portion related to Built Environment
Consulting
4. FY21 headcount restated.
Revenue of $625 million was 4% higher than last year, and 13%
higher on a constant currency basis, with strong growth in our
solutions across both energy security and energy transition.
Adjusted EBITDA of $73 million was 5% lower than last year but
5% higher on a constant currency basis. The adjusted EBITDA margin
declined from 12.9% to 11.7% due to a weaker performance in Applied
Intelligence, the impact of exiting high-margin work in Russia and
some employee cost pressures across our business.
The order book at 31 December 2022 was $476 million, down 3% on
last year but up 3% at constant currency. This reflects good growth
across oil and gas and energy transition solutions. At 31 December
2022, revenue in our order book for delivery in 2023 was $361
million, down 9% on last year, reflecting a change in mix in energy
consulting compared to a year ago.
Operational review
Growth in the year was led by our solutions across energy
security and transition. Encouragingly, we continue to see
significant increases in demand for our consulting offering across
hydrogen, carbon capture and other decarbonisation activities. Key
contract wins in the year across Consulting included:
-- Technology upgrade of a hydrogen steam methane reformer in Equatorial Guinea
-- FEED award to modernise controls systems for two key gas plants in the UK
-- Feasibility study for chemicals derivative facility in Abu Dhabi
We saw an increase in work across hydrogen and carbon capture in
the year. Looking ahead, we expect demand for our work across these
areas to grow significantly, helped in part by the Inflation
Reduction Act in the USA.
Revenue from sustainable solutions for Consulting was around
$160 million in the year, representing around 25% of revenue.
Outlook for 2023
Following the sale of Built Environment Consulting, our
Consulting business has refocused. We expect revenue growth for the
year given the underlying demand for our services and the growth in
headcount. Performance is expected to be weighted to the second
half of the year
PROJECTS
Our Projects business mainly provides complex engineering design
and project management across energy and materials markets
including oil and gas, chemicals, mining and minerals and life
sciences.
Financial review
FY22 FY21 Movement
At constant
currency
$m $m % %
----------------------- ------- ------ --------- -------------
Revenue(1) 2,211 2 ,340 (5.5)% (1.5)%
Adjusted EBITDA(2) 169 1 68 0.6% 9.2%
Adjusted EBITDA margin 7.6% 7.2% 0.4ppts
----------------------- ------- ------ --------- -------------
Order book 2,081 1,807 15.2% 21.4%
----------------------- ------- ------ --------- -------------
Headcount 13,918 12,311 13.1%
----------------------- ------- ------ --------- -------------
1. Pass-through revenue, for which we earn only a small or nil
margin, declined from around $390 million in FY21 to around $290
million in FY22. Revenue shown here is revenue (pre-exceptional),
see page 5 for details.
2. Adjusted EBITDA includes $3.9 million from JVs (FY21: $3.5
million). Revenue does not include any contribution from JVs.
Revenue of $2,211 million was 6% lower than last year, and down
2% on a constant currency basis. This included a decline in the
first half of the year and a return to growth in the second half of
4%, or 8% at constant currency. The return to growth came from our
services-led approach following our strategic decision to move away
from riskier LSTK work.
Adjusted EBITDA of $169 million was slightly higher than last
year and up 9% on a constant currency basis. The adjusted EBITDA
margin increased by 0.4 percentage points to 7.6%, driven by
improved project performance and the continued shift to a
services-led business model. In addition to these adjusted results,
around $25 million of contract losses were recognised as
exceptional items, see details in the Financial Review.
The order book at 31 December 2022 was $2,081 million, up 15% on
last year driven by growth across the majority of our end markets,
particularly oil & gas and chemicals. At 31 December 2022,
revenue in our order book for delivery in 2023 was $1,606 million,
up 22% on the position a year ago.
Operational review
Business growth in the year was balanced across energy and
materials markets, with a significant uptick in work in the Middle
East as customer investment increased in the region. Key contracts
wins in the year included:
-- EPCm contract worth more than $100 million to deliver
Europe's lowest carbon ethane cracker for INEOS
-- FEED and detailed design contract from Enter Engineering to
deliver world's largest copper concentrator
-- EPCm contract with Evonik in Alabama to support the production of sustainable animal feed
-- Over $300 million of contract wins in the Middle East in the second half of the year
In addition to returning to growth, we made good progress in
closing our challenging contracts in 2022 as we finalise our move
away from LSTK contracts, including moving to completion on our
renewables EPC contracts.
Revenue from sustainable solutions for Projects was around $650
million in the year, representing around 30% of revenue.
Outlook for 2023
We expect strong revenue growth for the year given the
underlying demand for our services, the significant growth in order
book and the growth in headcount.
OPERATIONS
Our Operations business manages and optimises our customers'
assets including decarbonisation, maintenance, modifications,
brownfield engineering, asset management through to
decommissioning.
Financial review
FY22 FY21 Movement
At constant
currency
$m $m % %
----------------------- ------- ------ --------- -------------
Revenue(1) 2,407 2 ,098 14.7% 16.6%
Adjusted EBITDA(2,3) 148 172 (13.9)% (11.3)%
Adjusted EBITDA margin 6.1% 8.2% (2.1)ppts
----------------------- ------- ------ --------- -------------
Order book 3,295 3,630 (9.2)% (5.3)%
----------------------- ------- ------ --------- -------------
Headcount 15,787 15,187 4.0%
----------------------- ------- ------ --------- -------------
1. Pass-through revenue, for which we earn only a small margin,
increased from around $320 million in FY21 to around $500 million
in FY22
2. Excludes results from our two Turbines joint ventures, now
included within Investment Services. Adjusted EBITDA from these JVs
was $48 million in FY22 and $54 million in FY21.
3. Adjusted EBITDA includes $15.2 million from JVs (FY21: $13.2
million). Revenue does not include any contribution from JVs.
Revenue of $2,407 million was 15% higher than last year, and 17%
higher at constant currency, reflecting higher activity levels
across our business given the stronger market conditions in
conventional energy, especially in Europe and the Middle East.
Revenue growth was also helped by an increased level of passthrough
revenue.
Adjusted EBITDA of $148 million was 14% lower than last year,
and 11% lower at constant currency, and reflects the reduction in
margin from 8.2% to 6.1%. This lower margin was expected given
increased passthrough revenue and a lower level of contract
close-out benefits in the year compared to previous years.
The order book at 31 December 2022 was $3,295 million, 9% lower
than last year. This reflects the phasing of large multi-year
awards. At 31 December 2022, revenue in our order book for delivery
in 2023 was $1,836 million, up 4% on the position a year ago.
Operational review
Business growth in the year reflects higher activity levels
across our markets, most notably in Europe and the Middle East. Key
contracts wins in the year included:
-- 3-year extension to our maintenance, modifications and
operations framework agreement with Equinor
-- Contract extension with Basra Gas Company in Iraq, including
repurposing flare gas to reduce emissions
-- Contract renewal for maintenance and operations solutions to Florida Power & Light
Revenue from sustainable solutions for Operations was around
$230 million in the year, representing around 10% of revenue.
Outlook for 2023
We expect increased activity for the year given the underlying
demand for our services
INVESTMENT SERVICES
Our Investment Services business unit manages a number of legacy
activities and liabilities, and includes our Turbines joint
ventures. The most notable areas are activities in industrial power
and heavy civil engineering. In addition to this, the results of
our Aegis Poland contract are reported within Investment
Services.
Financial review
FY22 FY21 Movement
At constant
currency
$m $m % %
----------------------- ------ ----- --------- -------------
Revenue 199 201 (0.9)% 2.8%
Adjusted EBITDA(1) 69 64 7.6% 6.8%
Adjusted EBITDA margin 34.7% 31.8% 2.9ppts
----------------------- ------ ----- --------- -------------
Order book 164 120 36.8% 38.8%
----------------------- ------ ----- --------- -------------
Headcount 426 439 (3.0)%
----------------------- ------ ----- --------- -------------
1. Now includes results from our two Turbines joint ventures,
which were previously included within Operations. Adjusted EBITDA
from these JVs was $48 million in FY22 and $54 million in FY21.
Revenue does not include any contribution from JVs.
Revenue of $199 million was broadly flat on last year and up 3%
at constant currency. Adjusted EBITDA of $69 million was 8% higher
than last year. This includes an improved performance across our
businesses .
The order book at 31 December 2022 was $164 million, up
significantly on last year. At 31 December 2022, revenue in our
order book for delivery in 2023 was $126 million, up 27% on the
position a year ago.
As is typical, performance in our Turbines joint ventures was
weighted to the second half of the year. We expect this weighting
to continue in FY23.
CENTRAL COSTS
FY22 FY21 Movement
At constant
currency
$m $m % %
---------------- ----- ---- --------- -------------
Adjusted EBITDA (74) (77) (3.8)% 7.7%
---------------- ----- ---- --------- -------------
Central costs, not allocated to business units, decreased to $74
million. The reduction partly reflects our cost reduction
programme. FY21 included a $11 million gain on sale of
property.
Outlook for 2023
We expect central costs for FY23 to be higher than FY22 due to
inflationary pressure on salaries and costs.
Financial Review
Trading performance
Trading performance is presented on the basis used by management
to run the business with adjusted EBITDA including the contribution
from joint ventures. A reconciliation of operating profit to
adjusted EBITDA is included in note 1 to the financial statements.
A calculation of adjusted diluted EPS is shown on page 22.
2022 2021
(*restated)
$m $m
--------------------------------------------------- ------- ------------
Continuing operations
Revenue (pre exceptionals) 5,442.2 5,237.7
--------------------------------------------------- ------- ------------
Adjusted EBITDA(1) 385.1 404.3
--------------------------------------------------- ------- ------------
Adjusted EBITDA margin % 7.1% 7.7%
Depreciation (PPE) (29.3) (35.1)
Depreciation on right of use asset (IFRS 16) (90.5) (85.9)
Impairment of joint venture investments and
property, plant and equipment (2.4) (5.3)
Amortisation - software and system development (89.0) (90.8)
Adjusted EBIT 173.9 187.2
Amortisation - intangible assets from acquisitions (64.4) (78.3)
Tax and interest charges on joint ventures (14.3) (15.3)
Exceptional items (121.2) (155.7)
Impairment of goodwill and intangible assets (542.3) -
Operating loss (568.3) (62.1)
Net finance expense (109.8) (92.2)
Interest charge on lease liability (16.4) (17.7)
Loss before taxation from continuing operations (694.5) (172.0)
Tax charge (10.9) (41.5)
Loss for the year from continuing operations (705.4) (213.5)
Profit from discontinued operations, net of
tax 353.7 78.0
Loss for the period (351.7) (135.5)
Non-controlling interest (4.6) (4.0)
Loss attributable to owners of parent (356.3) (139.5)
Number of shares (basic) 680.4 675.6
--------------------------------------------------- ------- ------------
Basic earnings per share (cents) (52.4) (20.6)
--------------------------------------------------- ------- ------------
* The comparative information has been restated due to a
discontinued operation outlined in note 7 of the financial
statements.
In the table above depreciation and amortisation include the
contribution from joint ventures.
Revenue for 2022 includes an exceptional item of $(8.0) million
(2021: $(25.4) million) related to contract losses in respect of
the closure of the Power and Industrials EPC business. In 2021, the
exceptional item related to Aegis Poland. Revenue (pre-exceptional
items) is an APM that is used throughout this Report as the Group
believes it provides a more useful measure of performance.
During the year, Adjusted EBITDA reduced by $19.2 million to
$385.1 million primarily due to adverse movements in FX rates.
Operating loss of $568.3 million (2021: $62.1 million) has
increased due to the large impairment charge recorded against
goodwill and intangible assets. The $353.7 million profit from
discontinued operations, net of tax includes the gain of disposal
of $514.5 million. The final proceeds from the Built Environment
Consulting business will be finalised during the first half of 2023
upon agreement of the completion balance sheet between the Group
and WSP.
The review of our trading performance is contained within the
Chief Executive Review on pages 6 to 10.
Reconciliation of Adjusted EBIT to Adjusted diluted EPS
2022 2021
(*restated)
$m $m
---------------------------------------------- ------- ------------
Adjusted EBIT 173.9 187.2
Tax and interest charges on joint ventures (14.3) (15.3)
Adjusted net finance expense (103.9) (85.9)
Interest charge on lease liability (16.4) (17.7)
---------------------------------------------- ------- ------------
Adjusted profit before tax 39.3 68.3
Adjusted tax charge (59.2) (49.9)
Adjusted profit from discontinued operations,
net of tax 63.3 103.9
Adjusted profit for the period 43.4 122.3
Non-controlling interest (4.6) (4.0)
---------------------------------------------- ------- ------------
Adjusted earnings 38.8 118.3
---------------------------------------------- ------- ------------
Number of shares (m) - diluted 680.4 675.6
Adjusted diluted EPS (cents)(2) 5.7 17.5
---------------------------------------------- ------- ------------
See notes on pages 27-29
Reconciliation to GAAP measures
2022 2021
$m $m
-------------------------------------------------- ------- -------
( 694.5
Loss before tax from continuing operations ) (172.0)
Impairment of goodwill and intangible assets 542.3 -
Exceptional items 121 .2 155.7
Exceptional items - net finance expense 5.9 6.3
Amortisation -intangible assets from acquisitions 64.4 78.3
-------------------------------------------------- ------- -------
Adjusted profit before tax 39.3 68.3
-------------------------------------------------- ------- -------
Taxation 10.9 41.5
Tax in relation to acquisition amortisation 11.9 17.5
Tax on exceptional items 36.4 (9.1)
-------------------------------------------------- ------- -------
Adjusted tax charge 59.2 49.9
-------------------------------------------------- ------- -------
Profit from discontinued operations, net of tax 353.7 78.0
Discontinued operations, gain on disposal (297.1) -
Discontinued items, exceptional items 6.7 4.0
Amortisation on acquired intangibles, net of tax - 21.9
-------------------------------------------------- ------- -------
Adjusted profit from discontinued operations,
net of tax 63.3 103.9
-------------------------------------------------- ------- -------
The reconciliation from Adjusted EBIT of $173.9 million (2021:
$187.2 million) to Adjusted earnings of $38.8 million (2021: $118.3
million) has been provided to show a clear reconciliation to
Adjusted diluted EPS, which is a key performance measure of the
Group. The reconciliation to GAAP measures highlights that the
adjusted measures remove exceptional items, including impairment
charges against goodwill and intangible assets, the exceptional
items on discontinued operations and the associated tax charges on
the basis that these are disclosed separately due to their size and
nature to enable a full understanding of the Group's performance.
Please refer to commentary on exceptional items and associated tax
charges on pages 18-20. In addition, amortisation on intangible
assets from acquisitions and the associated tax credit has been
excluded in order to provide a comparison to other groups.
Amortisation, depreciation and other impairments for continuing
operations
Total amortisation for 2022 was $153.4 million (2021: $191.7
million), of which $153.4 million (2021: $169.1 million) relates to
the continuing Group. The total amortisation charge includes $63.5
million for Amec Foster Wheeler ("AFW") (2021: $75.3 million) and
$0.9 million (2021: $3.0 million) of amortisation relating to
intangible assets arising from prior year acquisitions.
Amortisation in respect of software and development costs was $89.0
million (2021: $90.8 million) and this largely relates to
engineering software and ERP system development. Included in the
amortisation charge for the year is $1.5 million (2021: $1.8
million) in respect of joint ventures.
The total depreciation charge in 2022 for the continuing group
amounted to $119.8 million (2021: $121.0 million) and includes
depreciation on right of use assets of $90.5 million (2021: $85.9
million). Included in the depreciation charge for the year is $12.3
million (2021: $12.1 million) in respect of joint ventures.
Other impairments for 2022 were $2.4 million (2021: $5.3
million) mainly related to impairments recorded against joint
venture investments.
Net finance expense and debt
2022 2021
$m $m
--------------------------------------------------------- ----- ------
Interest on bank borrowings 47.2 32.8
Interest on US Private Placement debt 40.3 35.9
Discounting relating to asbestos, deferred consideration
and other liabilities 6.8 6.4
Other interest, fees and charges 22.4 20.4
Total finance expense excluding joint ventures
and interest charge on lease liability 116.7 95.5
Finance income relating to defined benefit pension
schemes (2.4) (0.2)
Other finance income (4.5) (3.1)
Net finance expense 109.8 92.2
--------------------------------------------------------- ----- ------
Interest charge on lease liability 16.4 17.7
Net finance charges in respect of joint ventures 4.4 3.6
--------------------------------------------------------- ----- ------
Net finance expense including joint ventures, continuing
Group 130.6 113.5
--------------------------------------------------------- ----- ------
Interest on bank borrowings of $47.2 million (2021: $32.8
million) primarily relates to interest charged on borrowings under
the $1.2 billion Revolving Credit Facility ('RCF') which matures in
October 2026 and the United Kingdom Export Facility ('UKEF') term
loan which matures in July 2026. The original $600 million term
loan was partially repaid following the disposal of the Built
Environment Consulting business, with two separate repayments of
$200 million in September and December 2022. The increase in the
interest expense is driven by higher levels of debt in the first
half of 2022 compared with 2021 and higher interest rates. The
interest rate increase is due to a combination of higher margin
because net debt to adjusted EBITDA exceeded 3.5 times and higher
floating interest rates.
The interest charge on US Private Placement debt increased by
$4.4 million to $40.3 million primarily due to the covenant waiver
which led to an additional charge of $7.7 million. As part of the
Built Environment Consulting business sales process, the Group
agreed lender consent for the sale and a temporary amendment of the
net debt to Adjusted EBITDA covenant to 4.5 times in June and
December 2022 measurement dates. The increased interest caused by
higher margin was offset due to the total repayment of around $450
million to the USPP noteholders, which was comprised of the early
settlement of notes following the disposal of the Built Environment
Consulting business in 2022 and the $35 million tranche which fell
due in July 2022. The Group had $352.0 million (2021: $803.3
million) of unsecured loan notes outstanding at 31 December 2022,
maturing between 2024 and 2031.
Other interest, fees and charges amount to $22.4 million (2021:
$20.4 million) and principally relates to the amortisation of bank
facility costs of $10.5 million (2021: $7.4 million) and interest
on bank overdrafts.
In total, the Group had undrawn facilities of $1,265.4 million
as at 31 December 2022, of which $1,157.9 million related to the
revolving credit facility.
The Group recognised interest costs in relation to lease
liabilities of $16.4 million (2021: $17.7 million) which relates to
the unwinding of discount on the lease liability.
The unwinding of discount on the asbestos provision is $5.9
million (2021: $6.3 million) and includes the unwinding of discount
on long-term asbestos receivables.
Net debt excluding leases to adjusted EBITDA (excluding the
impact of IFRS 16) at 31 December was 1.3 times (2021: 3.3 times)
against our covenants of 3.5 times. This is calculated pre-IFRS 16
as our covenants are calculated on a frozen GAAP basis, see note 4
on page 28.
I nterest cover (see note 5 on page 28) was 4.1 times (2021: 4.5
times) against our covenant of 3.5 times.
Exceptional items
2022 2021
$m $m
------------------------------------------------------ ------ ------
Aegis contract loss (revenue) - 25.4
Aegis contract loss (cost of sales) - 73.9
Power and Industrial EPC losses (revenue) 8.0 -
Power and Industrial EPC losses (cost of sales) 17.0 -
Impairment charge 542.3 -
Gain on divestment of business - (14.4)
Redundancy, restructuring and integration costs 30.1 73.9
Enterprise settlement 35.6 -
Investigation support costs and provisions (4.2) -
Asbestos yield curve, costs and charges 21.5 (3.1)
Russia exit costs and charges 13.2 -
Exceptional items included in continuing operations,
before interest and tax 663.5 155.7
Unwinding of discount on asbestos provision 5.9 6.3
Tax charge/(credit) in relation to exceptional
items 5.2 (1.2)
Impact of change in UK rate on prior year exceptional
deferred tax - 10.3
Recognition of deferred tax assets due to UK
pension actuarial movements (41.6) -
Continuing exceptional items, net of interest
and tax 633.0 171.1
------------------------------------------------------ ------ ------
Exceptional items are those significant items which are
separately disclosed by virtue of their size or incidence to enable
a full understanding of the Group's financial performance.
Power and Industrial EPC losses
The Power and Industrial EPC losses relates to events in 2022
which resulted in a further write down of fixed price contracts in
the Power and Industrial EPC business, following the strategic
decision to exit this market during 2021. By virtue of its size and
nature of these projects being within a sector that the Group no
longer operates, this was recorded as an exceptional charge through
revenue and cost of sales. The negative revenue of $8.0 million
represents the impact of a reduction in total value of the
contract, is in relation to revenue recognised in prior years and
is unchanged from the half year.
Aegis contract losses
The Aegis contract loss in 2021 of $99.3 million reflected an
estimate of the full contract loss at that time.
Impairment charge of goodwill and intangible assets
The impairment charge recognised against goodwill and intangible
assets amounts to $542.3 million and is recorded within exceptional
items by virtue of its size. The impairment charge was triggered by
the disposal of the Built Environment Consulting business,
increases in discount rates and lower expectations of profitability
during the forecast period.
The disposal of the Built Environment Consulting business and
increasing discount rates increased the risk of an impairment
charge being recognised at the year end, as outlined in the Group's
interim condensed financial statements. The discount rate increased
by 1.35% since the half year which was largely driven by increases
to risk free rates and higher market volatility.
Included within the impairment charge of $542.3 million were
impairments of $44.9 million and $4.2 million taken against the
brand and customer relationships which were recognised on the
acquisition of AFW. The Group performed an assessment over the
brand asset recognised on acquisition of AFW. The carrying value of
the brand was tested by considering its value in use, as it was
determined that there is no readily available market to sell the
brand as a standalone asset.
Redundancy, restructuring and integration costs
During the year to 31 December 2022, $30.1 million was incurred
in relation to redundancy and restructuring activities. During 2022
the Group has continued to progress various initiatives which
support the improved efficiency and enhancement of underlying group
profitability in the medium to longer term. Included within the
$30.1 million were costs of around $11.0 million in developing the
new strategy which is expected to further enhance profitability and
cash generation in the medium to long term.
Gain on sale of divestment of business
The gain in 2021 of $14.4 million relates to the disposal of the
Group's interest in Sulzer Wood Limited.
Enterprise settlement
The Enterprise claim was concluded in November 2022, with the
amount settled being in excess of the amount provided for. Overall,
the amount paid to Enterprise was higher than our underlying legal
assessment of the merits of the case, but further drawn-out
litigation was likely to be costly and carried a risk that a court
awarded a figure higher than the amount paid. The charge in the
year was classed as an exceptional item both by its nature, a
historic litigation settlement and by size.
Investigation support costs and provisions
The regulatory investigations were all closed out during the
first half of 2021 and the agreed settlements were materially in
line with the provision made at 31 December 2020. The $4.2 million
credit relates to the release of some provisions made for
additional legal and other costs which were ultimately not needed.
Certain amounts due to the SFO and COFPS have been deferred in line
with agreed payment schedules and the disclosures in the financial
statements reflect this.
Asbestos
All asbestos costs have been treated as exceptional on the basis
that movements in the provision are non-trading and can be large
and driven by market conditions which are out with the Group's
control. Excluding these amounts from the trading results improves
the understandability of the underlying trading performance of the
Group.
The $21.5 million charge (2021: credit $3.1 million) principally
comprises a $52.8 million charge in the period and was a result of
an updated actuarial review which updated the best estimate for
recent claims experience and latest projections. This is offset by
a credit of $31.3 million in 2022, which comprises of a $35.6
million yield curve credit as a result of higher discount rates
(2021: $5.6 million) and $4.3 million (2021: $2.5 million) of costs
in relation to managing the claims. The 30-year US Treasury rate
has increased to 3.97%, from 1.90% at the end of December 2021, and
led to the income statement credit.
$5.9 million of interest costs which relate to the unwinding of
discount on the asbestos provision are also shown as exceptional
(2021: $6.3 million).
Russia exit costs and charges
The Group has incurred costs of $7.0 million in relation to the
exit of its business in Russia as a result of Government sanctions.
The exceptional cost recognised during 2022 relates to early
contract exits and associated losses, the closure of an office and
other legal costs. In addition, the Group has impaired cash
balances held within Russia by $6.2 million. The Group has
confidence in being able to utilise the remaining balance of $5
million, disclosed as restricted cash in note 16 to the financial
statements, to meet these exit costs.
Tax
An exceptional tax credit of $36.4 million (2021: charge $9.1
million) has been recorded in continuing operations during the
period. It consists of a $5.2 million tax charge on exceptional
items (2021: $1.2 million credit) and an exceptional credit of
$41.6 million recognised due to the actuarial gain in relation to
the UK defined benefit pension scheme. As deferred tax liabilities
support the recognition of deferred tax assets, the additional
$41.6 million of deferred tax assets have been recognised through
exceptional items based on its size. In 2021, a $10.3 million tax
charge was recognised relating to the change of the UK tax rate
impacting on deferred tax balances created in prior years through
exceptional items.
Taxation
The effective tax rate on profit before tax, exceptional items
and amortisation and including Wood's share of joint venture profit
on a proportionally consolidated basis is set out below, together
with a reconciliation to the tax charge in the income
statement.
2022 2021
$m $m
-------------------------------------------------------- ------- -------
Loss from continuing operations before tax (694.5) (172.0)
Profit from discontinued operations, net of tax
and before exceptional items 63.3 82.0
Tax charge in relation to joint ventures (note
13) 9.9 11.7
Amortisation (note 10) 151.9 189.9
Exceptional items (continuing operations) 669.4 162.0
Tax charge in relation to discontinued operations 7.9 13.4
Profit before tax, exceptional items and amortisation 207.9 287.0
Effective tax rate on total operations (excluding
tax on exceptional items and amortisation) 36.84% 26.38%
Tax charge (excluding tax on exceptional items
and amortisation) 76.6 75.7
Tax charge in relation to joint ventures (9.9) (11.7)
Tax charge in relation to exceptional items (continuing
operations) 5.2 9.1
Recognition of deferred tax assets due to UK
pension actuarial movements (41.6) -
Tax credit in relation to amortisation (11.5) (18.2)
Tax charge on discontinued operations (7.9) (13.4)
Tax charge from continuing operations per the
income statement 10.9 41.5
-------------------------------------------------------- ------- -------
The effective tax rate reflects the rate of tax applicable in
the jurisdictions in which the Group operates and is adjusted for
permanent differences between accounting and taxable profit and the
recognition of deferred tax assets. Key adjustments impacting on
the rate in 2022 are withholding taxes suffered on which full
double tax relief is not available, the impact of the US Base
Erosion and Anti Abuse Tax less the release of uncertain tax
provisions reflecting the positive outcomes in relation to specific
risks.
We anticipate that the tax rate will be 34% to 36% going forward
reflecting the tax rates of the countries the Group operates in
along with the withholding taxes in excess of double tax relief.
There are factors that would impact on this on an annual basis such
as actuarial movements on the UK pension scheme impacting on
deferred tax asset recognition and changes in uncertain tax
provisions.
In addition to the effective tax rate, the total tax charge in
the income statement reflects the impact of exceptional items and
amortisation which by their nature tend to be expenses that are
more likely to be not deductible than those incurred in ongoing
trading profits. The income statement tax charge excludes tax in
relation to joint ventures.
Earnings per share
The calculation of basic earnings per share is based on the
earnings attributable to owners of the parent divided by the
weighted average number of ordinary shares in issue during the year
excluding shares held by the Group's employee share trusts. For the
calculation of adjusted diluted earnings per share, the weighted
average number of ordinary shares in issue is adjusted to assume
conversion of dilutive potential ordinary shares, only when there
is a profit per share. Adjusted diluted earnings per share is
disclosed to show the results excluding the impact of exceptional
items and amortisation related to acquisitions, net of tax.
2022 2021
Continuing operations Discontinued operations
Continuing Discontinued operations (restated) (restated) Total
operations $m Total $m $m (restated)
$m $m $m
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
(Losses)/earnings
attributable to equity
shareholders (basic
pre-exceptional) (77.0) 63.3 (13.7) (46.4) 82.0 35.6
Exceptional items, net
of tax (633.0) 290.4 (342.6) (171.1) (4.0) (175.1)
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
(Losses)/earnings
attributable to equity
shareholders (basic) (710.0) 353.7 (356.3) (217.5) 78.0 (139.5)
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
Number of shares (basic) 680.4 680.4 680.4 675.6 675.6 675.6
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
Number of shares
(diluted) 680.4 680.4 680.4 675.6 675.6 675.6
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
Basic earnings per share
(cents) (104.4) 52.0 (52.4) (32.2) 11.6 (20.6)
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
Diluted earnings per
share (cents) (104.4) 52.0 (52.4) (32.2) 11.6 (20.6)
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
(Losses)/earnings
attributable to equity
shareholders (diluted) (710.0) 353.7 ( 356.3 ) (217.5) 78.0 (139.5)
Exceptional items, net
of tax 633.0 (290.4) 342.6 171.1 4.0 175.1
Amortisation of
intangibles on
acquisition, net of tax 52.5 - 52.5 60.8 21.9 82.7
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
(Losses)/earnings
attributable
to equity shareholders
(adjusted diluted) (24.5) 63.3 38.8 14.4 103.9 118.3
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
(Losses)/earnings
attributable
to equity shareholders
(adjusted basic) (24.5) 63.3 38.8 14.4 103.9 118.3
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
Number of shares
(diluted) 680.4 680.4 680.4 675.6 675.6 675.6
Number of shares (basic) 680.4 680.4 680.4 675.6 675.6 675.6
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
Adjusted diluted (cents) (3.6) 9.3 5.7 2.1 15.4 17.5
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
Adjusted basic (cents) (3.6) 9.3 5.7 2.1 15.4 17.5
------------------------- -------------- -------------------------- ---------- ---------------------- ------------------------ -------------
Basic loss per share for the year was 52.4 cents (2021: 20.6
cents). The increase in loss per share is largely driven by an
impairment charge on goodwill and intangible assets of $542.3
million partly offset by a post-tax gain on sale of discontinued
operation of $297.1 million. Further details of this impairment
charge and discontinued operation are explained within notes 10 and
7 of the financial statements.
Dividend
The Group's capital allocation policy was announced at the
Capital Markets Day. The Board is committed to maintaining a strong
balance sheet, with medium term target leverage range of around
0.5x to 1.5x, while investing in systems and software and
addressing legacy issues. Beyond this, the Board will consider how
best to create value for our shareholders from dividends, share
buybacks or attractive acquisitions.
Cash flow and net debt
The cash flow for the year is set out below and includes both
continuing and discontinued operations:
Excluding leases Impact of Leases Total Excluding leases Impact of Leases Total
2022 2022 2022 2021 2021 2021
$m $m $m $m $m $m
------------------------- ---------------- ---------------- --------- ---------------- ---------------- ---------
Adjusted EBITDA 337.0 121.0 458.0 418.5 135.4 553.9
Less JV EBITDA (50.8) (7.7) (58.5) (54.0) (6.7) (60.7)
JV Dividends 30.1 - 30.1 26.3 - 26.3
Adjusted decrease in
provisions (note 6) (43.7) - (43.7) (75.6) - (75.6)
Other 28.1 - 28.1 10.7 3.3 14.0
------------------------- ---------------- ---------------- --------- ---------------- ---------------- ---------
Adjusted cash flow
generated from
operations pre working
capital 300.7 113.3 414.0 325.9 132.0 457.9
------------------------- ---------------- ---------------- --------- ---------------- ---------------- ---------
Increase in receivables (97.5) - (97.5) (70.1) - (70.1)
Adjusted decrease in
payables (note 6) (267.6) - (267.6) (235.9) - (235.9)
(Increase)/decrease in
inventory (1.6) - (1.6) 0.1 - 0.1
------------------------- ---------------- ---------------- --------- ---------------- ---------------- ---------
Adjusted working capital
movements (366.7) - (366.7) (305.9) - (305.9)
------------------------- ---------------- ---------------- --------- ---------------- ---------------- ---------
Adjusted cash (outflow)/
generated from
operations (note 6) (66.0) 113.3 47.3 20.0 132.0 152.0
Purchase of property,
plant and equipment (27.6) - (27.6) (22.4) - (22.4)
Proceeds from sale of
property, plant and
equipment 7.1 - 7.1 22.1 - 22.1
Purchase of intangible
assets (109.2) - (109.2) (92.5) - (92.5)
Interest received 4.5 - 4.5 3.1 - 3.1
Interest paid (98.1) - (98.1) (87.5) - (87.5)
Adjusted tax paid (81.9) - (81.9) (73.5) - (73.5)
Other (39.6) (6.3) (45.9) (8.2) 14.6 6.4
Non-cash movement in
leases - (14.7) (14.7) - (76.0) (76.0)
Free cash flow (excluding
exceptionals) (410.8) 92.3 (318.5) (238.9) 70.6 (168.3)
Cash exceptionals (318.8) 14.6 (304.2) (159.1) 21.0 (138.1)
Free cash flow (729.6) 106.9 (622.7) (398.0) 91.6 (306.4)
Divestments 1,729.4 - 1,729.4 19.3 - 19.3
Decrease/(increase) in
net debt 999.8 106.9 1,106.7 (378.7) 91.6 (287.1)
------------------------- ---------------- ---------------- --------- ---------------- ---------------- ---------
Opening net debt (1,393.0) (449.8) (1,842.8) (1,014.3) (541.4) (1,555.7)
Closing net debt (393.2) (342.9) (736.1) (1,393.0) (449.8) (1,842.8)
Closing net debt at 31 December 2022 including leases was $736.1
million (2021: $1,842.8 million). Included within closing net debt
is the IFRS 16 lease liability which is the net present value of
the lease payments that are not paid at the commencement date of
the lease and subsequently increased by the interest cost and
reduced by the lease payment made. The lease liability as at 31
December 2022 was $342.9 million (2021: $449.8 million). All
covenants on the debt facilities are measured on a frozen GAAP
basis and therefore exclude the impact of IFRS 16.
Closing net debt excluding leases as at 31 December 2022 was
$393.2 million (2021: $1,393.0 million). The reduction in net debt
excluding leases of $999.8 million is mainly due to the proceeds
from the divestment of the Built Environment Consulting business
offset by higher cash exceptionals and a higher adjusted cash
outflow from operations, due to a large working capital outflow.
The monthly average net debt excluding leases in 2022 was $1,489.1
million (2021: $1,680.0 million). The cash balance and undrawn
portion of the Group's committed banking facilities can fluctuate
throughout the year, and the net debt at December is significantly
lower than the 2022 average net debt due to the receipt of the
disposal proceeds in September 2022. Around the covenant
remeasurement dates of 30 June and 31 December the Group's net debt
excluding leases is typically lower than the monthly averages due
to a combination of factors including a strong focus on collection
of receipts from customers.
Cash generated from operations pre-working capital decreased by
$43.9 million to $414.0 million primarily as a result of the
reduction in EBITDA. The movement in provisions in 2022 includes
utilisations of the provision of around $40m and the net non-cash
credit to EBITDA and is caused by releases to EBITDA exceeding the
EBITDA charge of new provisions recognised. The release in 2022 is
driven by the Group concluding on a number of historic litigation
and insurance and property provisions which are no longer necessary
following resolution of disputes or the underlying risk.
There was a working capital outflow of $366.7 million (2021:
$305.9 million). There was an improvement in activity levels in the
final quarter of 2022 compared with 2021, and days sales
outstanding ("DSO") has remained broadly similar, leading to a
higher trade receivables and gross amounts due from customers,
resulting in an outflow during 2022.
The outflow in the year due to payables of $267.6 million is
higher than 2021. The large outflow in 2022 was due to quicker
payments to suppliers, which led to a large reduction in the year
end payables balance. The normalisation of payables was sign-posted
as a use of the Built Environment Consulting business proceeds.
The Group uses a receivables financing facility of $200.0
million. The amount utilised at 31 December 2022 was $200.0 million
(2021: $200.0 million). The facility is non-recourse to the Group
and so is not included in our net debt.
Cash exceptionals have increased by $166.1 million to $304.2
million in 2022 and mainly relates to the settlement of known legal
claims and asbestos payments, including the Enterprise settlement
of $115 million, the investigation payments of around $38 million
in respect of the investigation which was provided for in 2020 and
asbestos payments of around $40 million. The remaining cash
exceptional mainly relates to the legacy Aegis contract of $48
million and restructuring costs of around $35 million, which
include the costs of developing the new strategy.
The free cash outflow of $622.7 million (2021: $306.4 million)
has increased by $316.3 million, largely due to the $166.1 million
and $104.7 million adverse movements in cash exceptionals and cash
flow from operations respectively. The remaining adverse movement
of $45.5 million in free cash flow is due to:
-- Other outflows increased by $52.3 million to $45.9 million
and principally comprise of foreign exchange movements of $25.4
million in net debt excluding leases (2021: $5.5 million) and
movements on prepaid debt fees and accrued interest charges
totalling $21.1 million (2021: inflow of $12.1 million).
-- Proceeds from sale on property, plant and equipment decreased
by $15.0 million to $7.1 million due to the one-off sale and lease
back of a property in 2021 and an increase of $16.7 million related
to the purchase of intangible assets, including software and
investment in ERP improvements throughout the Group.
-- There was an increase in tax payments during 2022 of $8.4
million due to the settlement of uncertain tax provisions ("UTPs"),
which had been provided for in previous periods.
-- Net interest paid in the period increased to $93.6 million
(2021: $84.4 million) and is due to higher prevailing interest
rates and net debt during the period.
-- There was an offsetting reduction in lease liabilities of
$61.3 million due to disposals of the lease liability following the
sale of the Built Environment Consulting business.
Net cash from divestments of $1,729.4 million relates to the
disposal of our Built Environment Consulting business in September,
and includes taxes paid of around $22 million on the disposal.
Cash conversion, calculated as cash generated from operations as
a percentage of adjusted EBITDA (less JV EBITDA) reduced to 11.8%
(2021: 30.8%) primarily due to large working capital outflow during
2022.
Sources and uses of cash
The decrease in adjusted cash generated from operations from
$152.0 million in 2021 to $47.3 million in 2022 reflects the lower
EBITDA in the year and large working capital outflows.
There are a number of risks associated with net cash flow from
operations, including:
-- Market risks, such as variability in commodity prices which
impacts on activities by our customers;
-- Project risks, which include delays and disputes which can
influence our ability to collect cash from our customers; and
-- Other risks, including the actions of governments and other
third parties which can affect our ability to service our
increasingly global customer base.
The Group remain committed to a strong balance sheet. Our uses
of cash include:
-- Servicing of our debt facilities;
-- Capital expenditure through investments in systems and software;
-- Maintain financial strength to deal with legacy issues;
-- Potential returns to our shareholders; and
-- Potential acquisitions.
Summary balance sheet
2022 2021
-------------------------------
$m $m
------------------------------- --------- ---------
Goodwill and intangible assets 4,309.1 6,075.3
Right of use assets 276.0 356.1
Other non-current assets 918.0 790.6
Trade and other receivables 1,545.0 1,791.3
Trade and other payables (1,687.6) (1,998.6)
Net debt excluding leases (393.2) (1,393.0)
Lease liabilities (342.9) (449.8)
Provisions (459.7) (635.2)
Other net liabilities (435.2) (451.4)
------------------------------- --------- ---------
Net assets 3,729.5 4,085.3
------------------------------- --------- ---------
Net current liabilities (235.0) (367.9)
------------------------------- --------- ---------
At 31 December 2022, the Group had net current liabilities of
$235.0 million (2021: $367.9 million).
Goodwill and intangible assets include $2,523.5 million (2021:
$4,228.7 million) of goodwill and intangibles relating to the
acquisition of Amec Foster Wheeler. The balance has decreased due
to the disposal of the Built Environment Consulting business
leading to a reduction in carrying amount of $995.6 million; an
impairment charge of $542.3 million, and amortisation of $64.4
million.
Right of use assets and lease liabilities amount to $276.0
million (2021: $356.1 million) and $342.9 million (2021: $449.8
million) respectively.
The reduction in trade and other receivables is primarily due to
the disposal of the Built Environment Consulting business which was
partially offset by increased activity levels in the final quarter
of the year compared with the same period in 2021. There have been
no instances of material default by our customers as a result of
the current market conditions.
Trade and other payables have decreased by $311.0 million since
December 2021 and this is mainly due to quicker payments to
suppliers, which led to a large reduction in the year end payables
balance, and the disposal of the Built Environment Consulting
business.
Provisions
Total provisions as at 31 December 2022 were $459.7 million
(2021: $635.2 million) and comprise of asbestos liabilities of
$311.4 million (2021: $342.1 million), litigation related
provisions of $12.8 million (2021: $93.3 million), project related
provisions of $63.3 million (2021: $112.2 million), insurance
provisions of $46.2 million (2021: $55.2 million) and property
provisions of $26.0 million (2021: $32.4 million).
Largely as a result of the acquisition of AFW, the Group is
subject to claims by individuals who allege that they have suffered
personal injury from exposure to asbestos primarily in connection
with equipment allegedly manufactured by certain subsidiaries
during the 1970s or earlier. The overwhelming majority of claims
that have been made and are expected to be made are in the USA. At
31 December 2022, the Group has net asbestos related liabilities
including current liabilities and insurance recovery assets of
$335.4 million (2021: $349.1 million).
The Group expects to have net cash outflows of around $38
million as a result of asbestos liability indemnity and defence
payments in excess of insurance proceeds during 2023. The estimate
assumes no additional settlements with insurance companies and no
elections to fund additional payments. The Group has worked with
its independent asbestos valuation experts to estimate the amount
of asbestos related indemnity and defence costs at each year end
based on a forecast to 2050.
Litigation related provisions reduced from $93.3 million to
$12.8 million in 2022, largely as a result of the settlement the
Enterprise case in November 2022.
Full details of provisions are provided in note 21 to the Group
financial statements.
Pensions
The Group operates a number of defined benefit pension schemes
in the UK and US, alongside a number of defined contribution plans.
At 31 December 2022, the UK defined benefit pension plan had a
surplus of $432.4 million (2021: $259.6 million) and other schemes
had deficits totalling $73.2 million (2021: $74.7 million).
The Group has total pension scheme assets of $2,892.2 million
(2021: $4,811.5 million) and pension scheme obligations of $2,533.0
million (2021: $4,626.6 million) and is therefore 114% (2021: 104%)
funded on an IAS 19 basis. The reduction in the scheme liabilities
is driven by a higher discount rate used in the actuarial
assumptions.
In assessing the potential liabilities, judgement is required to
determine the assumptions for inflation, discount rate and member
longevity. The assumptions at 31 December 2022 showed an increase
in the discount rate which results in lower scheme liabilities and
higher RPI inflation rates, thereby increasing the surplus compared
to 2021. Full details of pension assets and liabilities are
provided in note 33 to the Group financial statements.
In addition, our main UK defined benefit scheme (WPP) was 119%
funded based on its significant surplus of $432 million on an IAS
19 basis, and is currently expected to be around 105% funded with a
surplus of around GBP100 million ($130 million) on the more prudent
Technical Provisions basis at 31 March 2023, consistent with the
assumptions used at the last triennial actuarial valuation. The
Group is currently working closely with the Trustee to agree a
preferred direction regarding the future of the plan. Options being
assessed include moving to a buy-in insured basis and eventual
buy-out with a third party as soon as is reasonably practical, or
to continue to run the WPP on for a limited number of years which
could potentially generate further surplus. Any potential further
surplus that might arise from running the scheme on could benefit
both the Group and pension members, ensuring that appropriate
safeguards for both the funding position and members' interests are
taken into account at all times.
Contingent liabilities
Details of the Group's contingent liabilities are set out in
note 34 to the financial statements.
Divestments
During 2022 the Group disposed of the Built Environment
Consulting business for $1,729.4 million, which includes the impact
of taxes paid on the disposal. The final proceeds from the Built
Environment Consulting business will be finalised during the first
half of 2023 upon agreement of the completion balance sheet between
the Group and WSP.
Note
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2022
or 2021 but is derived from those accounts. Statutory accounts for
2021 have been delivered to the registrar of companies, and those
for 2022 will be delivered in due course. The auditor has reported
on those accounts; their reports were (i) unqualified, (ii) did not
include a reference to any matters to which the auditor drew
attention by way of emphasis without qualifying their report and
(iii) did not contain a statement under section 498 (2) or (3) of
the Companies Act 2006.
There are no changes to the accounting policies since the last
published financial statements.
Notes
1. A reconciliation of operating loss to adjusted EBITDA is
presented in table below and is a key unit of measurement used by
the Group in the management of its business.
2022 2021
$m $m
--------------------------------------------------------- ------- ------
Operating loss per income statement (568.3) (62.1)
Share of joint venture finance expense and tax (note 13) 14.3 15.3
Exceptional items (note 5) 663.5 155.7
Amortisation (including joint ventures) 153.4 169.1
Depreciation (including joint ventures) 29.3 35.1
Depreciation of right of use assets 90.5 85.9
Impairment of PP&E and right of use assets 2.4 5.3
--------------------------------------------------------- ------- ------
Adjusted EBITDA (continuing operations) 385.1 404.3
--------------------------------------------------------- ------- ------
Discontinued operation
Operating profit (discontinued) 66.2 94.4
Exceptional items (note 5) 6.7 4.0
Amortisation (including joint ventures) - 22.6
Depreciation (including joint ventures) - 4.0
Depreciation of right of use assets - 23.9
Impairment of PP&E and right of use assets - 0.7
--------------------------------------------------------- ------- ------
Adjusted EBITDA (discontinued operation) 72.9 149.6
--------------------------------------------------------- ------- ------
Total Group Adjusted EBITDA 458.0 553.9
--------------------------------------------------------- ------- ------
2. Adjusted diluted earnings per share ("AEPS") is calculated by
dividing earnings attributable to owners before exceptional items
and amortisation relating to acquisitions, net of tax, by the
weighted average number of ordinary shares in issue during the
period, excluding shares held by the Group's employee share
ownership trusts. In 2022, AEPS was not adjusted to assume
conversion of all potentially dilutive ordinary shares because the
unadjusted result is a loss.
3. Number of people includes both employees and contractors at 31 December 2022.
4. Net Debt to Adjusted EBITDA cover on a covenant and reported
basis is presented in the table below:
2022 2021
$m $m
Net debt excluding lease liabilities (reported basis) (note 30) 393.2 1,393.0
Covenant adjustments 16.2 13.5
---------------------------------------------------------------- ----- -------
Net debt (covenant basis) 409.4 1,406.5
---------------------------------------------------------------- ----- -------
Adjusted EBITDA (covenant basis) 315.1 448.0
---------------------------------------------------------------- ----- -------
Net debt to Adjusted EBITDA (covenant basis) - times 1.30 3.14
---------------------------------------------------------------- ----- -------
Adjusted EBITDA (reported basis) 294.4 418.5
---------------------------------------------------------------- ----- -------
Net debt to Adjusted EBITDA (reported basis) - times 1.34 3.33
---------------------------------------------------------------- ----- -------
Adjusted EBITDA (covenant basis) excludes Adjusted EBITDA from
the discontinued operation and the impact of leases. The covenant
adjustment to net debt relates to finance leases which are adjusted
for in line with the funding agreements. Note: the covenant basis
shown above refers to the measure as calculated for our RCF. The
measure used for our USPP and UKEF is not materially different from
the reported measure shown above.
5. Interest cover on a covenant and reported basis is presented in the table below:
2022 2021
$m $m
---------------------------------------- ------ -----
Net finance expense 109.8 92.6
Covenant adjustments (4.4) (6.7)
Non-recurring net finance expense (37.5) -
Net finance expense (covenant basis) 67.9 85.9
Adjusted EBITA (covenant basis) 273.6 408.6
---------------------------------------- ------ -----
Interest cover (covenant basis) 4.0 4.8
---------------------------------------- ------ -----
Net finance expense 109.8 92.6
Non-recurring net finance expense (37.5) -
---------------------------------------- ------ -----
Recurring net finance expense 72.3 92.6
Adjusted EBITDA (reported basis) 294.4 418.5
---------------------------------------- ------ -----
Interest cover (reported basis) - times 4.1 4.5
---------------------------------------- ------ -----
6. Reconciliation to GAAP measures between consolidated cash
flow statement and cash flow and net debt reconciliation
2022 2021
$m $m
---------------------------------------------------- ------- -------
Decrease in provisions (123.1) (75.6)
Prior year cash exceptionals 79.4 -
---------------------------------------------------- ------- -------
Adjusted movement in provisions (43.7) (75.6)
---------------------------------------------------- ------- -------
Decrease in payables (398.9) (326.1)
Prior year cash exceptionals 131.3 90.2
---------------------------------------------------- ------- -------
Adjusted decrease in payables (267.6) (235.9)
---------------------------------------------------- ------- -------
Tax paid (103.9) (73.5)
Tax paid on disposal of business 22.0 -
---------------------------------------------------- ------- -------
Adjusted tax paid (81.9) (73.5)
---------------------------------------------------- ------- -------
Disposal of businesses (net of cash disposed) 1,751.4 19.3
Tax paid on disposal of business (22.0) -
---------------------------------------------------- ------- -------
Divestments 1,729.4 19.3
---------------------------------------------------- ------- -------
Adjusted cash generated from operations 47.3 152.0
Cash exceptionals (304.2) (138.1)
---------------------------------------------------- ------- -------
Cash (outflow)/generated from operations (256.9) 13.9
Purchase of property, plant and equipment (27.6) (22.4)
Proceeds from sale of property, plant and equipment 7.1 22.1
Purchase of intangible assets (109.2) (92.5)
Interest received 4.5 3.1
Interest paid (98.1) (87.5)
Adjusted tax paid (81.9) (73.5)
Other (45.9) 6.4
Non-cash movement in leases (14.7) (76.0)
Impact of leases (106.9) (91.6)
---------------------------------------------------- ------- -------
Free cash flow (729.6) (398.0)
---------------------------------------------------- ------- -------
Decreases in provisions and payables, cash generated from
operations and tax paid have been adjusted to show exceptional
items separately, in order to present significant items separately
from the rest of the cash flow either by virtue of size or nature
and reflects how the Group evaluates cash performance of the
business.
7. Constant currency references. Growth rates shown at constant
currency are calculated by comparing FY22 to FY21 restated at FY22
currency rates. This additional disclosure is made to help users
better understand the growth of our business.
8. Adjusted EBITDA Margin. Adjusted EBITDA margin is adjusted
EBITDA shown as a percentage of revenue. This measure is used by
management to measure the performance of businesses, and is one of
our medium term targets.
9. Revenue from sustainable solutions. Estimated share of FY22
revenue as defined by Wood. This figure is referred to across this
document. Sustainable solutions consist of activities related to:
renewable energy, hydrogen, carbon capture & storage,
electrification and electricity transmissions & 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. On 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, in which case the total revenue is recorded in
decarbonisation
JOHN WOOD GROUP PLC
GROUP FINANCIAL STATEMENTS
FOR THE YEAR TO 31 DECEMBER 2022
Company Registration Number SC036219
Consolidated income statement
for the year to 31 December 2022
2022 2021 (restated*)
Pre-exceptional Exceptional Pre-exceptional Exceptional
items items Total items items Total
Note $m $m $m $m $m $m
----------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
Continuing operations
Revenue 1,2,5 5,442.2 (8.0) 5,434.2 5,237.7 (25.4) 5,212.3
Cost of sales 5 (4,776.8) (17.0) (4,793.8) (4,617.8) (73.9) (4,691.7)
----------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
Gross profit 665.4 (25.0) 640.4 619.9 (99.3) 520.6
Administrative expenses 5 (600.6) (96.2) (696.8) (557.8) (56.4) (614.2)
Impairment of goodwill
and intangible assets 5 - (542.3) (542.3) - - -
Share of post-tax
profit from joint
ventures 13 30.4 - 30.4 31.5 - 31.5
----------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
Operating profit/(loss) 95.2 (663.5) (568.3) 93.6 (155.7) (62.1)
Finance income 3 6.9 - 6.9 3.3 - 3.3
Finance expense 3,5 (127.2) (5.9) (133.1) (106.9) (6.3) (113.2)
----------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
Loss before taxation
from continuing
operations 4,5 (25.1) (669.4) (694.5) (10.0) (162.0) (172.0)
Taxation 5,6 (47.3) 36.4 (10.9) (32.4) (9.1) (41.5)
----------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
Loss for the year
from continuing
operations (72.4) (633.0) (705.4) (42.4) (171.1) (213.5)
Discontinued operation
Profit/(loss) from
discontinued operations,
net of tax 7 63.3 290.4 353.7 82.0 (4.0) 78.0
----------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
(Loss)/profit for
the period (9.1) (342.6) (351.7) 39.6 (175.1) (135.5)
----------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
(Loss)/profit attributable
to:
Owners of the parent (13.7) (342.6) (356.3) 35.6 (175.1) (139.5)
Non-controlling
interests 29 4.6 - 4.6 4.0 - 4.0
----------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
(9.1) (342.6) (351.7) 39.6 (175.1) (135.5)
Earnings per share
(expressed in cents
per share)
Basic 9 (52.4) (20.6)
Diluted 9 (52.4) (20.6)
Earnings per share
- continuing operations
(expressed in cents
per share)
Basic 9 (104.4) (32.2)
Diluted 9 (104.4) (32.2)
----------------------------- ----- --------------- ----------- --------- --------------- ----------- ---------
The notes on pages 38 to 121 are an integral part of these
consolidated financial statements.
* The comparative information has been restated due to a
discontinued operation outlined in note 7.
Consolidated statement of comprehensive income/expense
for the year to 31 December 2022
2022 2021
(restated*)
Note $m $m
--------------------------------------------------------------------------------------- ---- --------- ------------
Loss for the year (351.7) (135.5)
Other comprehensive income from continuing operations
Items that will not be reclassified to profit or loss
Re-measurement gains on retirement benefit obligations 33 168.0 76.2
Movement in deferred tax relating to retirement benefit obligations 6 (41.6) (9.5)
--------------------------------------------------------------------------------------- ---- --------- ------------
Total items that will not be reclassified to profit or loss 126.4 66.7
--------------------------------------------------------------------------------------- ---- --------- ------------
Items that may be reclassified subsequently to profit or loss
Cash flow hedges 28 5.1 7.9
Tax on derivative financial instruments 6 (1.7) (3.4)
Exchange movements on retranslation of foreign operations 28 (165.1) (51.0)
--------------------------------------------------------------------------------------- ---- --------- ------------
Total items that may be reclassified subsequently to profit or loss (161.7) (46.5)
--------------------------------------------------------------------------------------- ---- --------- ------------
Other comprehensive (expense)/income from continuing operations for the year, net of
tax (35.3) 20.2
--------------------------------------------------------------------------------------- ---- --------- ------------
Other comprehensive (expense)/income from discontinued operations
Re-measurement gains on retirement benefit schemes 33 2.9 7.1
Exchange movements on retranslation of foreign operations 28 (57.9) (5.3)
--------------------------------------------------------------------------------------- ---- --------- ------------
Other comprehensive (expense)/income from discontinued operations for the year, net of
tax (55.0) 1.8
--------------------------------------------------------------------------------------- ---- --------- ------------
Total comprehensive expense for the year (442.0) (113.5)
--------------------------------------------------------------------------------------- ---- --------- ------------
Total comprehensive expense for the year is attributable to:
Owners of the parent (446.6) (117.5)
Non-controlling interests 4.6 4.0
--------------------------------------------------------------------------------------- ---- --------- ------------
(442.0) (113.5)
--------------------------------------------------------------------------------------- ---- --------- ------------
Exchange movements on the retranslation of foreign operations
could be subsequently reclassified to profit or loss in the event
of the disposal of a business.
* The comparative information has been restated due to a
discontinued operation outlined in note 7.
The notes on pages 38 to 121 are an integral part of these
consolidated financial statements.
Consolidated balance sheet
as at 31 December 2022
2022 2021
Note $m $m
---------------------------------------------- ---- ------- -------
Assets
Non-current assets
Goodwill and other intangible assets 10 4,309.1 6,075.3
Property plant and equipment 11 82.4 102.2
Right of use assets 12 276.0 356.1
Investment in joint ventures 13 156.5 169.7
Other investments 13 56.0 75.9
Long term receivables 15 129.5 107.5
Retirement benefit scheme surplus 33 432.4 259.6
Deferred tax assets 22 61.2 75.7
---------------------------------------------- ---- ------- -------
5,503.1 7,222.0
---------------------------------------------- ---- ------- -------
Current assets
Inventories 14 11.1 15.9
Trade and other receivables 15 1,545.0 1,791.3
Financial assets 15 10.8 7.7
Income tax receivable 40.7 55.2
Assets held for sale 31 21.0 -
Cash and cash equivalents 16 536.7 503.0
---------------------------------------------- ---- ------- -------
2,165.3 2,373.1
---------------------------------------------- ---- ------- -------
Total assets 7,668.4 9,595.1
---------------------------------------------- ---- ------- -------
Liabilities
Current liabilities
Borrowings 18 345.9 281.9
Trade and other payables 17 1,687.6 1,998.6
Income tax liabilities 218.1 183.2
Lease liabilities 12 83.2 118.3
Provisions 21 44.9 159.0
Liabilities held for sale 31 20.6 -
---------------------------------------------- ---- ------- -------
2,400.3 2,741.0
---------------------------------------------- ---- ------- -------
Net current liabilities (235.0) (367.9)
---------------------------------------------- ---- ------- -------
Non-current liabilities
Borrowings 18 584.0 1,614.1
Deferred tax liabilities 22 100.1 72.5
Retirement benefit scheme deficit 33 73.2 74.7
Lease liabilities 12 259.7 331.5
Other non-current liabilities 19 106.8 199.8
Asbestos related litigation 21 311.4 342.1
Provisions 21 103.4 134.1
---------------------------------------------- ---- ------- -------
1,538.6 2,768.8
---------------------------------------------- ---- ------- -------
Total liabilities 3,938.9 5,509.8
---------------------------------------------- ---- ------- -------
Net assets 3,729.5 4,085.3
---------------------------------------------- ---- ------- -------
Equity attributable to owners of the parent
Share capital 24 41.3 41.3
Share premium 25 63.9 63.9
Retained earnings 26 1,224.4 1,415.0
Merger reserve 27 2,540.8 2,540.8
Other reserves 28 (142.4) 21.0
---------------------------------------------- ---- ------- -------
Total equity attributable to owners of the
parent 3,728.0 4,082.0
Non-controlling interests 29 1.5 3.3
---------------------------------------------- ---- ------- -------
Total equity 3,729.5 4,085.3
---------------------------------------------- ---- ------- -------
The financial statements on pages 31 to 121 were approved by the
board of directors on 27 March 2023 and signed on its behalf
by:
Ken Gilmartin, Director David Kemp, Director
The notes on pages 38 to 121 are an integral part of these
consolidated financial statements.
Consolidated statement of changes in equity
for the year to 31 December 2022
Equity
attributable Non-
Share Share Retained Merger Other to owners of controlling Total
capital premium earnings reserve reserves the parent interests equity
Note $m $m $m $m $m $m $m $m
------------------ ------ --------- --------- --------- -------- --------- ------------ ------------ --------
At 1 January 2021 41.1 63.9 1,455.2 2,540.8 69.0 4,170.0 2.8 4,172.8
(Loss)/Profit for
the year - - (139.5) - - (139.5) 4.0 (135.5)
Other
comprehensive
income/(expense):
Re-measurement
gains on
retirement
benefit schemes 33 - - 76.2 - - 76.2 - 76.2
Re-measurement
gains on
retirement
benefit schemes
(discontinued) 33 - - 7.1 - - 7.1 - 7.1
Movement in
deferred tax
relating to
retirement
benefit schemes 6 - - (9.5) - - (9.5) - (9.5)
Cash flow hedges 28 - - - - 7.9 7.9 - 7.9
Tax on derivative
financial
instruments 6 - - (3.4) - - (3.4) - (3.4)
Net exchange
movements on
retranslation of
foreign
operations 28 - - - - (51.0) (51.0) - (51.0)
Net exchange
movements on
retranslation of
foreign
operations
(discontinued) 28 - - - - (5.3) (5.3) - (5.3)
Total
comprehensive
(expense)/income
for the year - - (69.1) - (48.4) (117.5) 4.0 (113.5)
------------------ ------ --------- --------- --------- -------- --------- ------------ ------------ --------
Transactions with
owners:
Dividends paid 8,29 - - - - - - (2.7) (2.7)
Credit relating to
share based
charges 23 - - 22.1 - - 22.1 - 22.1
Deferred tax
impact of rate
change in equity 6 - - 4.5 - - 4.5 - 4.5
Other tax
movements in
equity 6 - - (0.1) - - (0.1) - (0.1)
Shares allocated
to employee share
trusts 26 0.2 - (0.2) - - - - -
Exchange movements
in respect of
shares held by
employee share
trusts 26 - - 1.1 - - 1.1 - 1.1
Purchase of
company shares by
employee share
trust for the
Share Incentive
Plan (SIP) 26 - - 1.5 - - 1.5 - 1.5
Net exchange
movements on
disposal of
foreign currency
operations 28 - - - - 0.4 0.4 - 0.4
Transactions with
non-controlling
interests 29 - - - - - - (0.8) (0.8)
------------------ ------ --------- --------- --------- -------- --------- ------------ ------------ --------
At 31 December
2021 41.3 63.9 1,415.0 2,540.8 21.0 4,082.0 3.3 4,085.3
------------------ ------ --------- --------- --------- -------- --------- ------------ ------------ --------
for the year to 31 December 2022
Equity
attributable Non-
Share Share Retained Merger Other to owners of controlling Total
capital premium earnings reserve reserves the parent interests equity
Note $m $m $m $m $m $m $m $m
------------------ ------ -------- --------- --------- -------- --------- ------------ ------------ ---------
At 1 January 2022 41.3 63.9 1,415.0 2,540.8 21.0 4,082.0 3.3 4,085.3
(Loss)/Profit for
the year - - (356.3) - - (356.3) 4.6 (351.7)
Other
comprehensive
income/(expense):
Re-measurement
gains on
retirement
benefit schemes 33 - - 168.0 - - 168.0 - 168.0
Re-measurement
gains on
retirement
benefit schemes
(discontinued) 33 - - 2.9 - - 2.9 - 2.9
Movement in
deferred tax
relating to
retirement
benefit schemes 6 - - (41.6) - - (41.6) - (41.6)
Cash flow hedges 28 - - - - 5.1 5.1 - 5.1
Tax on derivative
financial
instruments 6 - - (1.7) - - (1.7) - (1.7)
Net exchange
movements on
retranslation of
foreign
operations 28 - - - - (165.1) (165.1) - (165.1)
Net exchange
movements on
retranslation of
foreign
operations
(discontinued) 28 - - - - (57.9) (57.9) - (57.9)
Total
comprehensive
(expense)/income
for the year - - (228.7) - (217.9) (446.6) 4.6 (442.0)
------------------ ------ -------- --------- --------- -------- --------- ------------ ------------ ---------
Transactions with
owners:
Dividends paid 8,29 - - - - - - (1.1) (1.1)
Credit relating to
share based
charges 23 - - 20.7 - - 20.7 - 20.7
Deferred tax
impact of rate
change in equity 6 - - (0.8) - - (0.8) - (0.8)
Other tax
movements in
equity 6 - - (1.3) - - (1.3) - (1.3)
Exchange movements
in respect of
shares held by
employee share
trusts 26 - - 12.5 - - 12.5 - 12.5
Purchase of
company shares by
employee share
trust for the
Share Incentive
Plan (SIP) 26 - - 1.7 - - 1.7 - 1.7
Net exchange
movements on
disposal of
foreign currency
operations 28 - - - - 54.5 54.5 - 54.5
Transactions with
non-controlling
interests 29 - - 5.3 - - 5.3 (5.3) -
At 31 December
2022 41.3 63.9 1,224.4 2,540.8 (142.4) 3,728.0 1.5 3,729.5
------------------ ------ -------- --------- --------- -------- --------- ------------ ------------ ---------
The notes on pages 38 to 121 are an integral part of these
consolidated financial statements.
Consolidated cash flow statement
for the year to 31 December 2022
2022 2021
Note $m $m
----------------------------------------------------- ---- --------- -------
Reconciliation of loss before tax to cash generated
from operations:
Loss for the period (351.7) (135.5)
Adjustments (excluding share of joint ventures)
Depreciation 11 25.2 34.9
Depreciation on right of use assets 12 82.3 101.9
Gain on disposal of leases - (1.0)
Gain on disposal of property plant and equipment 4 (1.6) (10.0)
Impairment of goodwill and intangible assets 10 542.3 -
Impairment of property, plant and equipment 11 0.4 4.0
Impairment of right of use assets 12 - 2.0
Impairment of joint ventures 13 2.0 -
Gain on disposal of investment in joint ventures 5 - (14.4)
Amortisation of intangible assets 10 151.9 189.9
Share of post-tax profit from joint ventures 13 (30.4) (31.5)
Gain on disposal of business 7 (514.5) -
Net finance costs 3,7 127.9 112.9
Share based charges 23 20.7 22.1
Decrease in provisions 21 (123.1) (75.6)
Dividends from joint ventures 13 30.1 26.3
Other exceptional items - non-cash impact 1 35.3 126.2
Tax charge 6 236.2 54.9
Changes in working capital (excluding effect
of acquisition and divestment of subsidiaries)
(Increase)/decrease in inventories (1.6) 0.1
Increase in receivables (97.5) (70.1)
Decrease in payables (398.9) (326.1)
Exchange movements 8.1 2.9
Cash (outflow)/generated from operations (256.9) 13.9
Tax paid (103.9) (73.5)
----------------------------------------------------- ---- --------- -------
Net cash used in operating activities (360.8) (59.6)
----------------------------------------------------- ---- --------- -------
Cash flows from investing activities
Disposal of businesses (net of cash disposed) 7 1,751.4 19.3
Purchase of property plant and equipment 11 (27.6) (22.4)
Proceeds from sale of property plant and equipment 7.1 22.1
Purchase of intangible assets 10 (109.2) (92.5)
Interest received 4.5 3.1
Cash from short term investments and restricted
cash 16 - 12.5
Repayment of loans from joint ventures - 1.0
----------------------------------------------------- ---- --------- -------
Net cash generated from/(used in) investing
activities 1,626.2 (56.9)
----------------------------------------------------- ---- --------- -------
for the year to 31 December 2022
Cash flows from financing activities
Repayment of short-term borrowings 30 (35.0) (33.5)
Proceeds from short-term borrowings 30 88.0 -
Proceeds from long term borrowings 30 - 664.9
Repayment of long-term borrowings 30 (1,039.1) (335.6)
Payment of lease liabilities 30 (121.6) (167.6)
Proceeds from SIP shares 26 1.7 1.5
Interest paid (98.1) (87.5)
Dividends paid to non-controlling interests 29 (1.1) (2.7)
Net cash (used in)/generated from financing
activities (1,205.2) 39.5
----------------------------------------------------- ---- --------- -------
Net increase/(decrease) in cash and cash equivalents 30 60.2 (77.0)
Effect of exchange rate changes on cash and
cash equivalents 30 (26.5) (5.0)
----------------------------------------------------- ---- --------- -------
Opening cash and cash equivalents 503.0 585.0
Closing cash and cash equivalents 16 536.7 503.0
----------------------------------------------------- ---- --------- -------
The repayment of long-term borrowings of $1,039.1m includes the
partial repayment of $400.0m of the United Kingdom Export Facility,
the repayment of $416.3m of the senior loan notes and the reduction
in utilisation of the long-term revolving credit facility of
$222.8m.
Payment of lease liabilities includes the cash payments for the
principal portion of lease payments of $103.7m (2021: $147.3m) and
for the interest portion of $17.9m (2021: $20.3m). The
classification of interest paid within financing activities is in
line with the Group accounting policy.
The Group has elected to present a cash flow statement that
includes an analysis of all cash flows in total, including both
continuing and discontinued operations. Amounts related to the
discontinued operation by operating, investing and financing
activities are disclosed in note 7.
The notes on pages 38 to 121 are an integral part of these
consolidated financial statements
General information
John Wood Group PLC, its subsidiaries and joint ventures, ('the
Group') delivers comprehensive services to support its customers
across the complete lifecycle of their assets, from concept to
decommissioning, across a range of energy and materials markets.
Details of the Group's activities during the year are provided in
the Strategic Report. John Wood Group PLC is a public limited
company, incorporated and domiciled in the United Kingdom and
listed on the London Stock Exchange. Copies of the Group financial
statements are available from the Company's registered office at 15
Justice Mill Lane, Aberdeen AB11 6EQ.
Accounting Policies
Basis of preparation
These financial statements have been prepared in accordance with
UK-adopted international accounting standards. The Group financial
statements have been prepared on a going concern basis under the
historical cost convention as modified by the revaluation of
financial assets and liabilities at fair value through the income
statement. The financial statements are presented in US dollars and
all values are rounded to the nearest $0.1m, unless otherwise
stated.
Going concern
The directors have undertaken a rigorous assessment of going
concern and liquidity over a period of at least 12 months from the
date of approval of these financial statements (the going concern
period), which includes financial forecasts up to the end of 2024
to reflect severe, but plausible downside scenarios. The directors
have considered as part of this assessment the impact of the events
that happened post balance sheet date and up to the date of issue
of these financial statements.
The Built Environment Consulting business disposal was completed
in September, leading to the receipt of gross proceeds of $1,805.3m
and has led to a significant reduction in net debt (excluding
leases) to $393.2m at 31 December 2022 compared with $1,393m at 31
December 2021. The proceeds have principally been used to pay down
the Group's debt facilities including a $400m repayment of the
$600m term loan and $416.3m repayment of the US private placement
loan notes.
In order to satisfy themselves that they have adequate resources
for the going concern assessment period, the directors have
reviewed the Group's existing debt levels, the forecast compliance
with debt covenants, and the Group's ability to generate cash from
trading activities. As of 31 December 2022, the Group's principal
debt facilities comprise a $1,200.0m revolving credit facility
maturing in October 2026; a $200.0m term loan maturing in July 2026
and $352.0m of US private placement debt repayable in various
tranches between July 2024 and July 2031, with around 75% due in
2025 or later. At 31 December 2022, the Group had headroom of
$1,157.9m under its principal debt facilities and a further $109.7m
of other undrawn borrowing facilities, and the Group expect to have
sufficient levels of headroom in the severe but plausible downside
scenario modelled.
At 31 December 2022, the Group had net current liabilities of
$235.0m (2021: $367.9 million).
The directors have considered a range of scenarios on the
Group's future financial performance and cash flows. These
scenarios reflect our outlook for the broad range of end markets
that the Group operates in, whilst also considering the order book
visibility and the restored financial strength of the Group's
balance sheet. The Group anticipates growth in priority markets and
geographies including conventional energy, which the directors have
increased confidence in due to the current market focus on energy
security. In addition, the process and chemicals business has
strong growth drivers including decarbonisation of facilities and
population growth, which facilitates increased demand for chemicals
products. The order book as at December 2022 includes a high level
of revenue coverage for 2023 which is also improved from prior
years and in conjunction with the strong market drivers described
above, gives the directors improved confidence in the underlying
forecasts.
The directors have also considered severe, but plausible
downside scenarios which reflect further material reductions in
revenue of between 5% and 10% and a 1% reduction in gross margin
from the base scenario, which is the Board approved forecast, the
basis of which is described above. This could result from a
worsening economic climate which could lead to deferrals or
cancellations of contracts by our clients. In each of the scenarios
modelled, the financial covenants were passed with significant
facility headroom remaining available. In the going concern
forecast period, for the June 2023 covenants, due to higher
interest rates and elevated levels of net debt, in the 12 months
prior the interest cover ratio reduced, but the covenants are
forecast to pass after adjusting for the non-recurring interest
which arose on facilities repaid and cancelled during 2022. These
repayments were made subsequent to the disposal of the Built
Environment Consulting business. In addition, the directors
considered the impact of the removal of the receivables financing
facility (which is not committed) of $200m and adverse movements in
working capital as further severe sensitivities. The Group still
had sufficient headroom to meet its liabilities as they fall due
with these additional sensitivities.
Consequently, the directors are confident that the Group and
company will have sufficient funds to continue to meet their
liabilities as they fall due for at least 12 months from the date
of approval of the financial statements and therefore have prepared
the financial statements on a going concern basis.
Significant accounting policies
The Group's significant accounting policies adopted in the
preparation of these financial statements are set out below. These
policies have been consistently applied to all the years
presented.
Critical accounting judgements and estimates
The preparation of the financial statements requires the use of
estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and
the reported amounts of revenue and expenses during the year. These
estimates and judgements are based on management's best knowledge
of the amount, event or actions and actual results ultimately may
differ from those estimates. Group management believe that the
estimates and assumptions listed below have a significant risk of
resulting in a material adjustment to the carrying amounts of
assets and liabilities.
(a) Revenue recognition on fixed price and long-term contracts (estimate)
The Group has a large number of fixed price long-term contracts
which are accounted for in accordance with IFRS 15 and require
estimates to be made for contract revenue. These contracts do not
typically generate individually material revenue however they are
material in aggregate. Contract revenues are affected by
uncertainties that depend on the outcome of future events. Lump sum
revenue from continuing operations amounted to $1,179.8m in 2022
(2021: $1,272.4m).
Uncertainties include the estimation of:
Forecast costs to complete the contract
At the end of the reporting period the Group is required to
estimate costs to complete on lump sum or fixed price contracts
based on the work to be performed after the reporting date, which
may span more than one reporting period. This involves an objective
evaluation of project progress against the delivery schedule,
evaluation of the work to be performed and the associated costs to
fully deliver the contract to the customer and contingencies. These
factors are affected by a variety of uncertainties that depend on
the outcome of future events, and so often need to be revised as
events unfold, and therefore it is not practically possible to
present these sensitivities which will be different across a large
number of individually immaterial contracts. The estimates from
these contracts, in aggregate, could nevertheless have a possible
material impact on revenue, cost of sales, gross amounts due to
customers and gross amounts due from customers.
Recognition of revenue from variation orders ("VOs")
As contracts progress management may deem that the company is
entitled to VOs increasing the contracts price under the existing
contracts (variable considerations). In some instances, changes to
the scope or requirements of a project equate to changing the
contract in a way that entitles the Company to additional
consideration (contract modifications).
Where VOs are linked to variable considerations management
estimate the value of revenue to be recognised such that it is
considered highly probable that a significant reversal in the
amount of cumulative revenue recognised to date will not occur when
the uncertainty associated with the VO is subsequently resolved.
This assessment is reconsidered at each reporting date. The
assessment is based on discussions with the customer and a range of
factors, including contractual entitlement, prior experience of the
customer and of similar contracts with other customers.
Where VOs are linked to contract modifications, management
recognise associated revenue when such modifications are approved
and when the company has an enforceable right to payment. In cases
where the price has not been agreed, management estimate the value
of revenue to be recognised such that it is considered highly
probable that a significant reversal in the amount of cumulative
revenue recognised to date will not occur when the final price for
the contract modification has been agreed.
On the Aegis contract, management deem that the Company is
entitled to variable considerations under the existing contractual
arrangements. Only the proportion of this deemed entitlement that
is assessed as highly probable is recognised as part of the revenue
calculation. The assessment of the proportion of the deemed
entitlement to VOs that is considered to be highly probable is a
judgement made by management in consultation with internal and
external experts. The amount of the accumulated recognised VOs in
relation to the Aegis contract is material. Refer to note 21 for
further details of the provisions recognised in respect of this
contract.
Liquidated damages ("LDs")
LDs are penalties (negative variable considerations) that are
determined when certain contractual requirements are not met.
Management make an assessment of the value of LDs to be provided at
the reporting date such that it is considered highly probable that
a significant reversal in the amount of cumulative revenue
recognised will not occur when the uncertainty associated with the
LD is subsequently resolved. This initial assessment is
reconsidered at each reporting date. The assessment is based on a
best estimate of the monetary amount of LDs payable which involves
a number of management assumptions and judgements including
discussions with the customer, contractual entitlement, prior
experience of the customer, prior experience of similar contracts
with other customers and other forms of documentary evidence.
Estimates are updated regularly, and significant changes are
highlighted through established internal review procedures. The
contract reviews focus on the timing and recognition of revenue
including income from incentive payments, scope variations and
claims.
See note 2 for further details.
(b) Impairment of goodwill (estimate)
The Group carries out impairment reviews whenever events or
changes in circumstance indicate that the carrying value of
goodwill may not be recoverable. In addition, the Group carries out
an annual impairment review. Management expectations are formed in
line with performance to date and experience, as well as available
external market data.
An impairment loss is recognised when the recoverable amount of
goodwill is less than the carrying amount. The impairment tests are
carried out by CGU ('Cash Generating Unit') and reflect the latest
Group budgets and forecasts as approved by the Board. The budgets
and forecasts are based on various assumptions relating to the
Group's businesses including assumptions relating to market
outlook, resource utilisation, contract awards and contract
margins. The outlook for the Group is discussed in the Chief
Executive's Review. Pre-tax discount rates of between 12.2% and
13.2% have been used to discount the CGU cash flows and a terminal
value is applied using long term growth rates of 2.4%. A
sensitivity analysis has been performed allowing for possible
changes to the key assumptions used in the impairment model.
See note 10 for further details.
(c) Provisions and contingent liabilities (judgement and estimate)
The Group records provisions where it has a present obligation
(legal or constructive) as a result of a past event, it is probable
that an outflow of resources will be required to settle the
obligation and a reliable estimate of the obligation can be made.
Where the outcome is less than probable, but more than remote, or a
reliable estimate cannot be made, no provision is recorded but a
contingent liability is disclosed in the financial statements, if
material. The recording of provisions is an area which requires the
exercise of management judgement relating to the nature, timing and
probability of the liability and typically the Group's balance
sheet includes contract provisions and provisions for pending legal
issues. The Enterprise claim was settled in 2022, with the amount
settled being in excess of the amount provided for. Overall, the
amount paid to Enterprise was higher than our underlying legal
assessment of the merits of the case, but further drawn-out
litigation was likely to be costly and carried a risk that a court
awarded a figure higher than the amount paid. The excess payment
was classed as an exceptional item both by its nature, a historic
litigation settlement and by size.
As a result of the acquisition of Amec Foster Wheeler ("AFW") in
2017, the Group has acquired a significant asbestos related
liability. Some of AFW's legacy US and UK subsidiaries are
defendants in asbestos related lawsuits and there are out of court
informal claims pending in both jurisdictions. Plaintiffs claim
damages for personal injury alleged to have arisen from exposure to
the use of asbestos in connection with work allegedly performed by
subsidiary companies in the 1970s and earlier. The provision for
asbestos liabilities is the Group's best estimate of the obligation
required to settle claims up until 2050. Group policy is to record
annual changes to the underlying gross estimates where they move by
more than 5%.
The critical assumptions applied in determining the asbestos
provision include: indemnity settlement amount, forecasted number
of new claims, estimated defence costs and the discount rate. The
Group uses a 30-year US Treasury bond rate to discount its asbestos
liabilities. The 30-year US Treasury rate, has increased to 3.97%
from 1.9% at the end of December 2021. This has resulted in a
credit of $35.6m being recognised through the income statement and
has been treated as exceptional due to being outwith the control of
the Group. The Group's subsidiaries have been effective in managing
the asbestos litigation, in part, because the Group has access to
historical project documents and other business records going back
more than 50 years, allowing it to defend itself by determining if
the claimants were present at the location of the alleged asbestos
exposure and, if so, the timing and extent of their presence.
The Group also recorded a $52.8m exceptional charge with respect
to the asbestos liability in the period and was a result of an
updated actuarial review which updated the best estimate for recent
claims experience and latest projections. Further details of the
asbestos liabilities are provided in note 21 including a
sensitivity analysis showing the impact of changes to the key
assumptions.
(d) Retirement benefit schemes (estimate)
The value of the Group's retirement benefit schemes
surplus/deficit is determined on an actuarial basis using several
assumptions. Changes in these assumptions will impact the carrying
value of the surplus/deficit. A sensitivity analysis showing the
impact of changes to these assumptions is provided in note 33. The
principal assumptions that impact the carrying value are the
discount rate, the inflation rate and life expectancy. The Group
determines the appropriate assumptions to be used in the actuarial
valuations at the end of each financial year following consultation
with the retirement benefit schemes' actuaries. In determining the
discount rate, consideration is given to the interest rates of
high-quality corporate bonds in the currency in which the benefits
will be paid and that have terms to maturity similar to those of
the related retirement benefit obligation. The inflation rate is
derived from the yield curve used in deriving the discount rate and
adjusted by an agreed risk premium. Assumptions regarding future
mortality are based on published statistics and the latest
available mortality tables. The Group, in conjunction with the
schemes' actuaries, continues to monitor the impact of the Covid-19
pandemic on mortality data. The tax rate applied to the surplus of
the UK scheme is 25%, on the basis that there is no expectation
that the manner of any future recovery would be in the form of a
refund, which would be taxed at 35%.
The majority of pension scheme assets have quoted prices in
active markets. Scheme assets are revalued at least once per annum
to reflect their fair value. Fair value is based on market price
information. If this is not available, the most recent transaction
price, revenue or earnings-based valuations using unobservable
inputs may be used for level 3 investments in the fair value
hierarchy.
Further details of the assumptions and measurements outlined can
be seen in note 33.
Basis of consolidation
The Group financial statements are the result of the
consolidation of the financial statements of the Group's subsidiary
undertakings from the date of acquisition or up until the date of
divestment as appropriate. Subsidiaries are entities controlled by
the Group. The Group 'controls' an entity when it is exposed to, or
has rights to, variable returns from its involvement with the
entity and has the ability to affect those returns through its
power over the entity. All Group companies apply the Group's
accounting policies and prepare financial statements to 31
December. Intra-group balances and transactions, and any unrealised
income and expenses arising from intra-group transactions, are
eliminated.
Joint ventures and joint operations
A joint venture is a type of joint arrangement where the parties
to the arrangement share rights to its net assets. A joint
arrangement is an arrangement of which two or more parties have
joint control. Joint control is the contractually agreed
arrangement which exists only when decisions about the relevant
activities require unanimous consent of the parties sharing
control. The considerations made in determining joint control are
similar to those necessary to determine control over
subsidiaries.
The Group's interests in joint ventures are accounted for using
equity accounting. Under the equity method, the investment in a
joint venture is initially recognised at cost. The carrying amount
of the investment is adjusted to recognise changes in the Group's
share of net assets of the joint venture from the acquisition date.
The results of the joint ventures are included in the consolidated
financial statements from the date the joint control commences
until the date that it ceases. T he Group includes its share of
joint venture profit on the line 'Share of post-tax profit from
joint ventures' in the Group income statement and its share of
joint venture net assets in the 'investment in joint ventures' line
in the Group balance sheet.
A joint operation is a joint arrangement whereby the parties
that have joint control of the arrangement have rights to the
assets and obligations for the liabilities relating to the
arrangement. The Group accounts for joint operations by recognising
the appropriate proportional share of revenue, expenses, assets and
liabilities.
Presentational currency
The Group's earnings stream is primarily US dollars and the
Group therefore uses the US dollar as its presentational
currency.
The following exchange rates have been used in the preparation
of these financial statements:
2022 2021
Average rate GBP1 = $ 1.2324 1.3757
Closing rate GBP1 = $ 1.2029 1.3545
---------------------- ------ ------
Foreign currencies
In each individual entity, transactions in foreign currencies
are translated into the relevant functional currency at the
exchange rates ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies are
retranslated at the exchange rates ruling at the balance sheet
date. Any exchange differences are taken to the income
statement.
Income statements of entities whose functional currency is not
the US dollar are translated into US dollars at average rates of
exchange for the period and assets and liabilities are translated
into US dollars at the rates of exchange ruling at the balance
sheet date. Exchange differences arising on translation of net
assets in such entities held at the beginning of the year, together
with those differences resulting from the restatement of profits
and losses from average to year end rates, are taken to the
currency translation reserve.
The assets and liabilities of foreign operations, including
goodwill and fair value adjustments arising on the acquisition of a
foreign entity are treated as assets and liabilities of the foreign
entity and translated at the exchange rate ruling at the balance
sheet date with any exchange differences taken to the currency
translation reserve.
Foreign currency differences are recognised in Other
Comprehensive Income ("OCI") and accumulated in the translation
reserve, except to the extent that the translation difference is
allocated to Non-Controlling Interests ("NCI").
When a foreign operation is disposed of in its entirety or
partially such that control, significant influence or joint control
is lost, the cumulative amount in the translation reserve related
to the foreign operation is reclassified to profit or loss as part
of the gain or loss on disposal. If the Group disposes of part of
its interest in a subsidiary but retains control, then the relevant
proportion of the cumulative amount is reattributed to NCI. When
the Group disposes of only part of an associate or joint venture
while retaining significant influence or joint control, the
relevant proportion of the cumulative amount is reclassified to
profit or loss. The directors consider it appropriate to record
sterling denominated equity share capital in the financial
statements of John Wood Group PLC at the exchange rate ruling on
the date it was raised.
Revenue recognition
Revenue comprises the fair value of the consideration specified
in a contract with a customer and is stated net of sales taxes
(such as VAT) and discounts. The Group recognises revenue when it
transfers control over a good or service to a customer.
With regard to cost reimbursable projects and lump sum projects,
further detail is provided below about the nature and timing of the
satisfaction of performance obligations in contracts with
customers, including payment terms and the related revenue
recognition policies.
Cost reimbursable projects
Revenue is recognised over time as the services are provided
based on contractual rates per man hour in respect of multi-year
service contracts. The amount of variable revenue related to the
achievement of key performance indicators (KPIs) is estimated at
the start of the contract, but any revenue recognised is
constrained to the extent that it is highly probable there will not
be a significant reversal in future periods.
Lump sum or fixed price contacts
Revenue on fixed price or lump sum contracts for services,
construction contracts and fixed price long-term service agreements
is recognised over time according to the stage of completion
reached in the contract by measuring the proportion of costs
incurred for work performed to total estimated costs. Margin is
only recognised when the outcome of the contract can be measured
reliably.
Management assess the value of revenue to be recognised in
respect of variation orders based on the considerations described
in the critical accounting judgements and estimates section above
in the paragraph regarding recognition of revenue from variation
orders ("VOs").
A claim is an amount that the contractor seeks to collect from
the customer as reimbursement for costs whose inclusion in the
contract price is disputed, and may arise from, for example, delays
caused by the customer, errors in specification or design and
disputed variations in contract work. Claims are also usually
variable considerations and are included in contract revenue only
to the extent that it is highly probable that a significant
reversal of revenue will not occur. Appropriate legal advice is
taken in advance of any material revenue being recognised in
respect of claims.
The related contract costs are recognised in the income
statement when incurred. When it is probable that total contract
costs will exceed total contract revenue, the expected loss is
recognised immediately.
The Group's payment terms state that all invoices are generally
payable within 30 days.
Details of the services provided by the Group are provided under
the 'Segmental Reporting' heading.
Exceptional items
Exceptional items are those significant items which are
separately disclosed by virtue of their size or incidence to enable
a full understanding of the Group's financial performance.
Transactions which may give rise to material exceptional items
include gains and losses on divestment of businesses; write downs
or impairments of assets including goodwill; restructuring and
redundancy costs or provisions; litigation or regulatory
settlements; asbestos related income or charges; tax provisions or
payments; provisions for onerous contracts and acquisition and
divestment costs. The tax impact on these transactions is shown
separately in the exceptional items note to the financial
statements (note 5).
Restructuring and redundancy costs or provisions will include
those costs associated with major Board approved programmes which
will deliver longer term benefits to the Group. If this involves
closure of a material office, discrete operating unit or service
line the exceptional cost will include redundancy and severance of
impacted employees, onerous contract provisions, the write off any
unrecoverable net assets and any reversals in future periods.
Finance expense/income
Interest income and expense is recorded in the income statement
in the period to which it relates. Arrangement fees and expenses in
respect of the Group's debt facilities are amortised over the
period which the Group expects the facility to be in place.
Interest relating to the unwinding of discount on deferred and
contingent consideration, IFRS 16 lease liabilities and asbestos
liabilities is included in finance expense. Interest expense and
interest income on scheme assets relating to the Group's retirement
benefit schemes are also included in finance income/expense. See
note 3 for further details.
Interest income or expense is recognised using the effective
interest method. The 'effective interest rate' is the rate that
exactly discounts estimated future cash payments or receipts
through the expected life of the financial instrument to:
- The gross carrying amount of the financial asset; or
- The amortised cost of the financial liability.
Dividends payable
Dividends to the Group's shareholders are recognised as a
liability in the period in which the dividends are approved by
shareholders. Interim dividends are recognised when paid. See note
8 for further details.
Business combinations
The Group accounts for business combinations using the
acquisition method of accounting when control is transferred to the
Group. The consideration transferred is measured at fair value, as
are the identifiable net assets acquired. Any goodwill that arises
is tested annually for impairment. Intangible assets arising on
business combinations are tested for impairment when indicators of
impairment exist. Acquisition costs are expensed and included in
administrative expenses in the income statement.
Goodwill
Goodwill represents the excess of the cost of an acquisition
over the fair value of the net assets acquired. Goodwill is carried
at cost less accumulated impairment losses. Goodwill is not
amortised.
Intangible assets
Intangible assets are carried at cost less accumulated
amortisation. Intangible assets are recognised if it is probable
that there will be future economic benefits attributable to the
asset, the cost of the asset can be measured reliably, the asset is
separately identifiable and there is control over the use of the
asset. Where the Group acquires a business, intangible assets on
acquisition are identified and evaluated to determine the carrying
value on the acquisition balance sheet. Intangible assets are
amortised over their estimated useful lives on a straight-line
basis, as follows:
Software 3-5 years
Development costs and licenses 3-5 years
Intangible assets on acquisition
- Customer contracts and relationships 5-13 years
- Order backlog 2-5 years
- Brands 16 years
As detailed in note 10, the Group has reassessed the useful life
of the brand intangible asset to 16 years following a review of the
use of the brand in each of the CGUs. Following this review, an
impairment charge of $44.9m was booked and the remaining useful
life was reduced accordingly. The anticipated amortisation charge
in 2023 to be taken against the brand is around $25m based on 2022
average exchange rates and compares with the $24.1m charge booked
in 2022.
Property plant and equipment
Property plant and equipment (PP&E) is stated at cost less
accumulated depreciation and impairment. No depreciation is charged
with respect to freehold land and assets in the course of
construction.
Depreciation is calculated using the straight-line method over
the following estimated useful lives of the assets:
Freehold buildings 25--50 years
Leasehold improvements period of lease
Plant and equipment 3--10 years
When estimating the useful life of an asset group, the principal
factors the Group takes into account are the durability of the
assets, the intensity at which the assets are expected to be used
and the expected rate of technological developments. Asset lives
and residual values are assessed at each balance sheet date.
Refer to the Leases policy for the Group's policy with respect
to the right of use assets.
Impairment
The Group performs impairment reviews in respect of PP&E,
investment in joint ventures and intangible assets whenever events
or changes in circumstance indicate that the carrying amount may
not be recoverable. In addition, the Group carries out impairment
reviews in respect of goodwill, at least annually. An impairment
loss is recognised when the recoverable amount of an asset, which
is the higher of the asset's fair value less costs to sell and its
value in use, is less than its carrying amount.
Impairment losses are recognised in profit or loss. They are
allocated to first reduce the carrying amount of any goodwill
allocated to the CGU, and then to reduce the carrying amounts of
the other assets in the CGU on a pro-rata basis.
For the purposes of impairment testing, assets are grouped
together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the
cash inflows of other assets or cash generating units ("CGUs").
Goodwill arising from a business combination is allocated to the
appropriate CGU or groups of CGUs that are expected to benefit from
the synergies of the combination. The CGUs are aligned to the
structure the Group uses to manage its business. Cash flows are
discounted in determining the value in use.
See note 10 for further details of goodwill impairment testing
and note 13 for details of impairment of investment in joint
ventures.
Cash and cash equivalents
Cash and cash equivalents include cash in hand and other
short-term bank deposits with original maturities of three months
or less. Bank overdrafts are included within borrowings in current
liabilities. The Group presents balances that are part of a pooling
arrangement with no right of offset on a gross basis in both cash
and short-term borrowings.
Trade receivables
Trade receivables are recognised initially at fair value and
subsequently measured at amortised cost using the effective
interest method, less provision for impairment. Trade receivables
are typically classified as Held to Collect.
The Group recognises loss allowances for Expected Credit Losses
('ECLs') on trade receivables and gross amounts due from customers,
measured at an amount equal to lifetime ECLs. ECLs are a
probability-weighted estimate of credit losses. Credit losses are
measured as the present value of all cash shortfalls (i.e. the
difference between the cash flows due to the entity in accordance
with the contract and the cash flows that the Group expects to
receive). ECLs are discounted at the effective interest rate of the
financial asset.
At each reporting date, the Group assesses whether financial
assets carried at amortised cost are credit-impaired. A financial
asset is 'credit-impaired' when one or more events that have a
detrimental impact on the estimated future cash flows of the
financial asset have occurred. Evidence that a financial asset is
credit-impaired includes a customer being in significant financial
difficulty or a breach of contract such as a default. The gross
carrying amount of a financial asset is written off when the Group
has no reasonable expectation of
recovering a financial asset in its entirety or a portion
thereof. For individual customers, the Group individually makes an
assessment with respect to the timing and amount of write-off based
on whether there is a reasonable expectation of recovery.
The Group has a non-recourse financing arrangement with one of
its banks in which funds are received in relation to trade
receivable balances before the due date for payment. Trade
receivables are derecognised on receipt of the payment from the
bank. See note 15 for further details.
Asbestos related receivables
Asbestos related receivables represents management's best
estimate of insurance recoveries relating to liabilities for
pending and estimated future asbestos claims. They are only
recognised when it is virtually certain that the claim will be
paid. Asbestos related assets under executed settlement agreements
with insurers due in the next 12 months are recorded within Trade
and other receivables and beyond 12 months are recorded within Long
term receivables. The Group's asbestos related assets have been
discounted using an appropriate rate of interest.
Trade payables
Trade payables are recognised initially at fair value and
subsequently measured at amortised cost.
Borrowings
Borrowings are recognised initially at fair value, net of
transaction costs incurred. Borrowings are subsequently stated at
amortised cost using the effective interest method.
Deferred and contingent consideration
Where deferred or contingent consideration is payable on the
acquisition of a business based on an earn out arrangement, an
estimate of the amount payable is made at the date of acquisition
and reviewed regularly thereafter, with any change in the estimated
liability being reflected in the income statement. Where the change
in liability is considered material, it is disclosed as an
exceptional item in the income statement. Where deferred
consideration is payable after more than one year, the estimated
liability is discounted using an appropriate rate of interest.
Deferred consideration is initially recognised at fair value and
subsequently measured at amortised cost. Contingent consideration
is recognised at fair value.
Taxation
Tax provisions are based on management's interpretation of
country specific tax law and the likelihood of settlement. This
involves a significant amount of judgement as tax legislation can
be complex and open to different interpretation. Management uses
in-house tax experts, professional firms and previous experience
when assessing tax risks. When actual liabilities differ from the
provisions, adjustments are made which can have a material impact
on the Group's tax charge for the year.
Deferred tax asset recognition is based on two factors. Firstly,
deferred tax liabilities in the same jurisdiction as assets that
are legally capable of being offset and the timing of the reversal
of the asset and liability would enable the deduction from the
asset to be utilised against the taxable income from the liability.
Secondly, forecast profits support the recognition of deferred tax
assets not otherwise supported by deferred tax liabilities.
Management uses in-house tax experts to determine the forecast
period to support recognition, this is considered by jurisdiction
or entity dependent on the tax laws of the jurisdiction. If actual
results differ from the forecasts the impact of not being able to
utilise the expected amount of deferred tax assets can have a
material impact on the Group's tax charge for the year.
See note 6 and 22 for details.
The tax charge represents the sum of tax currently payable and
deferred tax. Tax currently payable is based on the taxable profit
for the year. Taxable profit differs from the profit reported in
the income statement due to items that are not taxable or
deductible in any period
and also due to items that are taxable or deductible in a
different period. The Group's liability for current tax is
calculated using tax rates enacted or substantively enacted at the
balance sheet date.
Tax is recognised in the income statement except to the extent
that it relates to items recognised in other comprehensive income
or equity, in which case it is recognised in other comprehensive
income or equity as appropriate.
A current tax provision is recognised when the Group has a
present obligation as a result of a past event, it is probable that
the Group will be required to settle that obligation and a reliable
estimate can be made of the amount of the obligation. In line with
IFRIC 23, depending on the circumstances, the provision is either
the single most likely outcome, or a probability weighted average
of all potential outcomes. The provision incorporates tax and
penalties where appropriate. Separate provisions for interest are
also recorded. Interest in respect of the tax provisions is not
included in the tax charge, but disclosed within profit before
tax.
Deferred tax is provided, using the full liability method, on
temporary differences arising between the tax bases of assets and
liabilities and their carrying amounts in the consolidated
financial statements. The principal temporary differences arise
from depreciation on PP&E, tax
losses carried forward and, in relation to acquisitions, the
difference between the fair values of the net assets acquired and
their tax base. Tax rates enacted, or substantively enacted, at the
balance sheet date are used to determine deferred tax.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and joint
ventures, except where the Group is able to control the reversal of
the temporary difference and it is probable that the temporary
difference will not reverse in the foreseeable future.
Tax assets and liabilities are offset when they relate to income
taxes levied by the same taxation authority and it is intended that
they will be settled on a net basis.
Accounting for derivative financial instruments and hedging
activities
Derivatives are initially recognised at fair value on the date
the contract is entered into and are subsequently re-measured at
fair value. Where hedging is to be undertaken, the Group documents
the relationship between the hedging instrument and the hedged item
at the inception of the transaction, as well as the risk management
objective and strategy for undertaking the hedge transaction. The
Group also documents its assessment, both at hedge inception and on
an ongoing basis, of whether the derivatives that are used in
hedging transactions are highly effective in offsetting changes in
fair values or cash flows of the hedged items.
Fair value measurement
'Fair value' is the price that would be received to sell an
asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date in the
principal or, in its absence, the most advantageous market to which
the Group has access at that date. The fair value of a liability
reflects its non-performance risk. A number of the Group's
accounting policies and disclosures require the measurement of fair
values, for both financial and non-financial assets and
liabilities.
When one is available, the Group measures the fair value of an
instrument using the quoted price in an active market for that
instrument. If there is no quoted price in an active market, then
the Group uses valuation techniques that maximise the use of
relevant observable outputs and minimise the use of unobservable
outputs. The chosen valuation technique incorporates all of the
factors that market participants would take into account in pricing
a transaction.
The fair value of interest rate swaps is calculated as the
present value of their estimated future cash flows. The fair value
of forward foreign exchange contracts is determined using forward
foreign exchange market rates at the balance sheet date. The fair
values of all derivative financial instruments are verified by
comparison to valuations provided by financial institutions.
The carrying values of trade receivables and payables
approximate to their fair values.
The fair value of financial liabilities is estimated by
discounting the future contractual cash flows at the current market
interest rate that is available to the Group for similar financial
instruments.
Leases
At inception of a contract, the Group assesses whether a
contract is, or contains, a lease. A contract is, or contains, a
lease if the contract conveys the right to control or use an
identified asset for a period of time in exchange for
consideration. To assess whether a contract conveys the right to
control the use of an asset, the Group uses the definition of a
lease in IFRS 16.
This policy is applied to contracts entered into, on or after 1
January 2019. The Group recognises a right of use asset and a lease
liability at the lease commencement date. The right of use asset is
initially measured at cost, and subsequently at cost less any
accumulated depreciation and impairment losses and adjusted for
certain remeasurements of the lease liability.
The right of use asset is subsequently depreciated using the
straight-line method from the commencement date to the end of the
lease term. The right of use asset is periodically reduced by
impairment losses, if any, and adjusted for certain remeasurements
of the lease liability.
The lease liability is initially measured at the present value
of the lease payments that are not paid at the commencement date,
discounted using the Group's incremental borrowing rate ("IBR") and
is subsequently increased by the interest cost on the lease
liability and reduced by repayments. It is remeasured when there is
a change in future lease payments arising from a change in an index
or rate, a change in the assessment of whether an extension option
is reasonably certain to be exercised or a termination option is
reasonably certain not to be exercised.
The Group has applied judgement to determine the lease term for
some lease contracts in which it is a lessee that includes renewal
options. The assessment of whether the Group is reasonably certain
to exercise such options impacts the lease term, which may
significantly affect the amount of lease liabilities and right of
use assets recognised.
The Group applies the practical expedient for short-term leases
in which a lessee is permitted to make an accounting policy
election not to recognise lease assets and lease liabilities for
leases with a term of 12 months or less and do not include an
option to purchase the underlying asset. Lease costs of short-term
leases are recognised on a straight-line basis over the term of the
lease term and disclosed within the consolidated financial
statements. The Group believes short-term lease commitments are not
materially different than the short-term lease cost for the
period.
Retirement benefit scheme surplus/deficit
The Group operates a number of defined benefit and defined
contribution pension schemes. The surplus or deficit recognised in
respect of the defined benefit schemes represents the difference
between the present value of the defined benefit obligations and
the fair value of the scheme assets. The assets of these schemes
are held in separate trustee administered funds. The schemes are
largely closed to future accrual.
The defined benefit schemes' assets are measured using fair
values. Pension scheme liabilities are measured annually by an
independent actuary using the projected unit method and discounted
at the current rate of return on a high-quality corporate bond of
equivalent term and currency to the liability. The increase in the
present value of the liabilities of the Group's defined benefit
schemes expected to arise from employee service in the period is
charged to operating profit. The interest income on scheme assets
and the increase during the period in the present value of the
scheme's liabilities arising from the passage of time are netted
and included in finance income/expense. Re-measurement gains and
losses are recognised in the statement of comprehensive income in
full in the period in which they occur. The defined benefit schemes
surplus or deficit is recognised in full and presented on the face
of the Group balance sheet.
Group management consider it appropriate to recognise the IAS 19
surplus in the Wood Pension Plan as the rules governing the scheme
provide an unconditional right to a refund assuming the gradual
settlement of the scheme's liabilities over time until there are no
members left, as per IFRIC 14.11 (b). On a winding up scenario, any
surplus would be returned to the Group.
The Group's contributions to defined contribution schemes are
charged to the income statement in the period to which the
contributions relate.
The Group operates a SERP pension arrangement in the US for
certain employees. Contributions are paid into a separate
investment vehicle and invested in a portfolio of US funds that are
recognised by the Group in other investments with a corresponding
liability in other non-current liabilities. Investments are carried
at fair value. The fair value of listed equity investments and
mutual funds is based on quoted market prices and so the fair value
measurement can be categorised in Level 1 of the fair value
hierarchy.
Provisions
Provisions are recognised where the Group is deemed to have a
legal or constructive obligation, it is probable that a transfer of
economic benefits will be required to settle the obligation, and a
reliable estimate of the obligation can be made. Where amounts
provided are payable after more than one year the estimated
liability is discounted using an appropriate rate of interest.
The Group has taken internal and external advice in considering
known and reasonably likely legal claims made by or against the
Group. It carefully assesses the likelihood of success of a claim
or action. Appropriate provisions are made for legal claims or
actions against the Group on the basis of likely outcome, but no
provisions are made for those which, in the view of the directors,
are less than probable or for which no amount can be reliably
measured.
See note 21 for further details.
Where the outcome is less than probable, but more than remote or
a reliable estimate cannot be made, no provision is recorded but a
contingent liability is disclosed in the financial statements, if
material.
Share based charges relating to employee share schemes
The Group has recorded share based charges in relation to a
number of employee share schemes.
Charges are recorded in the income statement as an employee
benefit expense for the fair value of share options (as at the
grant date) expected to be exercised under the Executive Share
Option Schemes ('ESOS'). Amounts are accrued over the vesting
period with the corresponding credit recorded in retained
earnings.
Awards are allocated under the Group's Long Term Plan ('LTP')
which is the incentive plan in place for executive directors and
certain senior executives. The charge for awards granted under the
LTP is based on the fair value of those awards at the grant date,
spread over the vesting period. The corresponding credit is
recorded in retained earnings. For awards that have a market
related performance measure, the fair value of the market related
element is calculated using a Monte Carlo simulation model.
Employees may also be granted non-performance awards either in
the form of conditional share awards or share options. These awards
typically have a three year vesting period.
The Group has an Employee Share Plan ("ESP") under which
employees contribute regular monthly amounts which are used to
purchase shares over a one year period. At the end of the year the
participating employees are awarded one free share for every two
shares purchased providing they remain in employment for a further
year. A charge is calculated for the award of free shares and
accrued over the vesting period with the corresponding credit taken
to retained earnings. The Group introduced the Share Incentive Plan
("SIP") in 2021. Under the plan, which is recognised by HM Revenue
and Customs, employees contribute regular monthly amounts of up to
GBP150 per month to purchase shares. The participating employees
are awarded one free share for every two purchased, provided that
they hold the purchased shares for 3 years and remain in
employment.
Share capital
John Wood Group PLC has one class of ordinary shares and these
are classified as equity. Dividends on ordinary shares are not
recognised as a liability or charged to equity until they have been
approved by shareholders.
The Group is deemed to have control of the assets, liabilities,
income and costs of its employee share trusts, therefore they have
been consolidated in the financial statements of the Group. Shares
acquired by and disposed of by the employee share trusts are
recorded at cost. The cost of shares held by the employee share
trusts is deducted from equity.
Merger reserve
Where an acquisition qualifies for merger relief under Section
612 of the Companies Act 2006, the premium arising on the issue of
shares to fund the acquisition is credited to a merger reserve. See
note 27 for further information.
Discontinued operations
The Group has classified its Built Environment Consulting
business as a discontinued operation for the reporting period
ending 31 December 2022. A discontinued operation is a component of
the Group's business, the operations and cash flows of which can be
clearly distinguished from the rest of the Group and which:
- represents a separate major line of business or geographic area of operations;
- is part of a single co-ordinated plan to dispose of a separate
major line of business or geographic area of operations; or
- is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier
of disposal or when the operation meets criteria to be classified
as held for sale. When an operation is classified as a discontinued
operation, the comparative income statement and statement of
comprehensive income are presented as if the operation had been
discontinued from the start of the comparative period.
Classification as held for sale was from 1 January 2022 and in
September 2022, the sale of this business was completed. Details
are outlined in note 7.
Segmental reporting
The Group has determined that its operating segments are based
on management reports reviewed by the Chief Operating Decision
Maker ('CODM'), the Group's Chief Executive. Our financial
reporting segments reflect our current operating model which
consists of Projects, Operations, Consulting and Investment
Services ("IVS"). Projects is focused on providing front-end
engineering services, procurement and project management. Our
Operations segment focuses on improving operational efficiency by
providing maintenance, modification and operation services.
Consulting is a multi-sector specialist technical consultancy
division providing innovative thinking needed to maximise value at
every stage of the asset life cycle. Investment Services manages a
range of legacy or non-core businesses and investments with a view
to generating value via remediation and restructuring.
Due to changes made to internal management reporting from 1
January 2022, the Group is reporting a new operating segment known
as Built Environment Consulting. This operating segment reflects
the Built Environment Consulting business which has been disposed
of in 2022 and was reported within the Consulting segment in prior
periods. Comparatives have been restated to show this change, as
noted throughout the financial statements.
The Chief Executive measures the operating performance of these
segments using 'Adjusted EBITDA' (Earnings before interest, tax,
depreciation and amortisation). Operating segments are reported in
a manner consistent with the internal management reports provided
to the Chief Executive who is responsible for allocating resources
and assessing performance of the operating segments.
Assets and liabilities held for sale
Disposal groups are classified as assets and liabilities held
for sale if it is highly probable that they will be recovered
primarily through sale rather than continuing use. Disposal groups
are measured at the lower of carrying value and fair value less
costs to sell and their assets and liabilities are presented
separately from other assets and liabilities on the balance
sheet.
Research and development government credits
The Group claims research and development government credits
predominantly in the UK, US, Canada and Australia. These credits
are similar in nature to grants and are offset against the related
expenditure category in the income statement. The credits are
recognised when there is reasonable assurance that they will be
received, which in some cases can be some time after the original
expense is incurred.
Government grants
The Group recognises a government grant when it has reasonable
assurance that it will comply with the relevant conditions and that
the grant will be received. This may be a judgemental matter,
particularly when governments are introducing new programmes that
may require new legislation, or for which there is little
established practice for assessing whether the conditions to
receive a grant are met. If the conditions are met, then the Group
recognises government grants as a credit in profit or loss in line
with its recognition of the expenses that the grants are intended
to compensate.
The disclosure of impact of new and future accounting
standards
Standards issued but not yet effective
The Group is required to comply with the requirements of IFRS 17
Insurance Contracts for reporting periods beginning on or after 1
January 2023. The new accounting standard sets out the requirements
that the Group should apply in reporting information about
insurance contracts it issues and reinsurance contracts it
holds.
The Group is undertaking an assessment of its insurance
contracts held under its captive insurance company, Garlan
Insurance Limited, and will fully adopt this standard from 1
January 2023. At this stage, the impact of the accounting standard
is not expected to have a material impact on the Group financial
statements.
Amendments to IAS 37 Provisions, Contingent Liabilities and
Contingent Assets clarifies that for the purposes of assessing
whether a contract is onerous, the cost of fulfilling the contract
includes both the incremental costs of fulfilling that contract and
an allocation of other costs that relate directly to fulfilling the
contract. The Group undertook a review of its material onerous
contracts and concluded that the amendment to the accounting
standard is not expected to have a material impact on the Group
financial statements.
Amendments to other existing standards do not have a material
impact on the financial statements.
1 Segmental reporting
During the year, the Group monitored activity and performance
through five operating segments; Projects, Operations, Consulting,
Built Environment Consulting and Investment Services ('IVS'). The
Group is reporting a new Built Environment Consulting segment due
to changes made to internal management reporting in respect of the
sale of the Built Environment Consulting business. Built
Environment Consulting is a new segment in addition to the
reportable segments previously shown in the 2021 Annual Report.
Comparatives in the table below have been restated to reflect this
change.
Under IFRS 11 'Joint arrangements', the Group is required to
account for joint ventures using equity accounting. Adjusted EBITDA
as shown in the table below includes our share of joint venture
profits and excludes exceptional items, which is consistent with
the way management review the performance of the business units.
Revenue is reported on an equity accounting basis and therefore
revenue figures exclude joint venture revenue.
The segment information provided to the Group's Chief Executive
for the reportable operating segments for the year ended 31
December 2022 includes the following:
Reportable operating segments Revenue (3) Adjusted EBITDA(1) Operating profit/(loss)
2022 2021 2022 2021 2022 2021
$m $m $m $m $m $m
------------------------------------------------ ------- --------- --------- --------- ------------ -----------
Projects 2,211.2 2,339.8 168.7 167.7 (125.3) (19.6)
Operations 2,406.9 2,098.1 147.6 171.6 (344.3) 57.8
Consulting (restated) (4) 625.3 599.2 73.1 77.2 (6.2) 32 .5
Built Environment Consulting (discontinued) (4) 881.1 1,188.3 72.9 149.6 66.2 94 .4
Investment Services 198.8 200.6 69.3 64.4 46.2 (52.1)
Central costs (2) - - (73.6) (76.6) (138.7) (80.7)
------------------------------------------------ ------- --------- --------- --------- ------------ -----------
Total Group 6,323.3 6,426.0 458.0 553.9 (502.1) 32 .3
Elimination of discontinued operation (4) (881.1) (1,188.3) (72.9) (149.6) (66.2) (94.4)
------------------------------------------------ ------- --------- --------- --------- ------------ -----------
Total (continuing operations) 5,442.2 5,237.7 385.1 404.3 (568.3) (62.1)
------------------------------------------------ ------- --------- --------- --------- ------------ -----------
Finance income 6.9 3.3
Finance expense (133.1) (113.2)
------------ -----------
Loss before taxation from continuing operations (694.5) (172.0)
Taxation (10.9) (41.5)
------------ -----------
Loss for the year from continuing operations (705.4) (213.5)
------------ -----------
Profit from discontinued operation, net of tax 353.7 78.0
------------ -----------
Loss for the year (351.7) (135.5)
------------ -----------
Notes
1. A reconciliation of operating profit/(loss) to Adjusted
EBITDA is provided in the table below. Adjusted EBITDA is provided
as it is a unit of measurement used by the Group in the management
of its business. Adjusted EBITDA is stated before exceptional items
(see note 5).
2. Central includes the costs of certain Group management
personnel, along with an element of Group infrastructure costs.
3. Revenue arising from sales between segments is not material,
and does not include the impact of the exceptional item disclosed
on the face of the income statement of $8.0m (2021: $25.4m) which
is in respect of the Projects (2021: Investment Services) operating
segment.
4. The Group's Built Environment Consulting business, shown by
the operating segment named 'Built Environment Consulting', was
previously included within the Consulting segment. Built
Environment Consulting has been classified as a discontinued
operation for the year ended 31 December 2022 (see note 7) and the
comparative periods have been restated to show the results of this
discontinued operation.
Reconciliation of Alternative Performance Measures
2022 2021
$m $m
---------------------------------------------------------------------- ------- ------
Operating loss per income statement (568.3) (62.1)
Share of joint venture finance expense and tax (note 13) 14.3 15.3
Exceptional items (note 5) 663.5 155.7
Amortisation (including joint ventures) 153.4 169.1
Depreciation (including joint ventures) 29.3 35.1
Depreciation of right of use assets 90.5 85.9
Impairment of joint venture investments, PP&E and right of use assets 2.4 5.3
---------------------------------------------------------------------- ------- ------
Adjusted EBITDA (continuing operations) 385.1 404.3
---------------------------------------------------------------------- ------- ------
Discontinued operation
Operating profit (discontinued) 66.2 94.4
Exceptional items (note 5) 6.7 4.0
Amortisation (including joint ventures) - 22.6
Depreciation (including joint ventures) - 4.0
Depreciation of right of use assets - 23.9
Impairment of PP&E and right of use assets - 0.7
---------------------------------------------------------------------- ------- ------
Adjusted EBITDA (discontinued operation) 72.9 149.6
---------------------------------------------------------------------- ------- ------
Total Group Adjusted EBITDA 458.0 553.9
---------------------------------------------------------------------- ------- ------
Upon classification as a discontinued operation and held for
sale on 1 January 2022, the Built Environment Consulting disposal
group was not depreciated or amortised in line with the IFRS 5
accounting standard.
Analysis of joint venture profits by segment Adjusted EBITDA Operating profit
2022 2021 2022 2021
$m $m $m $m
--------------------------------------------- -------- ------- -------- --------
Projects 3.9 3.5 3.5 3.2
Operations 15.2 13.2 13.0 12.0
Consulting - 0.1 - 0.1
Investment Services 39.4 43.9 28.2 31.5
Total 58.5 60.7 44.7 46.8
--------------------------------------------- -------- ------- -------- --------
The main joint ventures contributing to Adjusted EBITDA and
Operating Profit within the Investment Services segment are
EthosEnergy and RWG. The results of these joint ventures are
disclosed further in note 13.
Other segment items
Built Environment Investment
Projects Operations Consulting Consulting Services Unallocated Total
At 31 December 2022 $m $m $m $m $m $m $m
----------------------- -------- ---------- ---------- ----------------------- ---------- ----------- -------
Capital expenditure
PP&E 7.3 11.6 1.3 3.1 3.2 1.1 27.6
Intangible assets 43.3 49.5 18.2 0.2 - 4.7 115.9
Non-cash expense
Depreciation 8.7 10.3 1.0 - 1.1 4.1 25.2
Depreciation of right
of use assets 34.4 17.5 8.3 - 10.6 11.5 82.3
Amortisation 77.7 36.7 27.5 - - 10.0 151.9
Impairment of
intangible assets 113.3 396.3 32.7 - - - 542.3
Exceptional items
(non-cash element) 14.3 - 1.8 - - 19.2 35.3
----------------------- -------- ---------- ---------- ----------------------- ---------- ----------- -------
Built Environment Investment
Projects Operations Consulting Consulting Services Unallocated Total
At 31 December 2021 $m $m $m $m $m $m $m
----------------------- -------- ---------- ---------- ----------------------- ---------- ----------- -------
Capital expenditure
PP&E 7.1 8.3 2.2 3.0 - 1.8 22.4
Intangible assets 28.6 33.0 30.7 0.3 - 1.6 94.2
Non-cash expense
Depreciation 9.9 12.8 1.0 4.1 1.0 6.1 34.9
Depreciation of right
of use assets 36.9 17.4 12 .0 24.0 3.3 8.3 101.9
Amortisation 93.9 27.7 23.4 22.6 - 22.3 189.9
Exceptional items
(non-cash element) 1.3 35.4 7.3 - 101.6 (19.4) 126.2
----------------------- -------- ---------- ---------- ----------------------- ---------- ----------- -------
The figures in the tables above are prepared on an equity
accounting basis and therefore exclude the share of joint
ventures.
Depreciation in respect of joint ventures totals $4.1m (2021:
$4.2m), depreciation in respect of joint venture right of use
assets totals $8.2m (2021: $7.9m) and joint venture amortisation
amounts to $1.5m (2021: $1.8m).
Revenue
Non-current assets (Continuing operations)
2022 2021 2022 2021
Geographical segments $m $m $m $m
--------------------------------- ----------- ------- ------------ ------------
United States of America 2,082.2 3,214.9 1,423.5 1,655.4
United Kingdom 803.4 960.4 731.5 702.2
Canada 436.8 728.5 383.2 339.2
Norway 103.2 112.1 342.3 193.2
Australia 150.3 196.6 331.9 344.5
Brunei 10.2 11.5 232.9 210.3
Saudi Arabia 102.6 105.2 187.5 83.4
Singapore 96.6 104.3 109.0 142.4
Germany 15.3 16.5 89.2 163.3
Kuwait 220.7 234.4 70.3 131.1
Rest of the world 858.7 1,094.8 1,540.9 1,272.7
Total 4,880.0 6,779.2 5,442.2 5,237.7
--------------------------------- ----------- ------- ------------ ------------
Non-current assets includes goodwill and other intangible
assets, property plant and equipment, right of use assets,
investment in joint ventures and other investments. Revenue in the
table above analyses total revenue and does not reflect the $8.0m
(2021: $25.4m) exceptional item as disclosed on the Income
Statement
2 Revenue
Revenue by geographical segment is based on the location of the
ultimate project. Revenue is attributable to the provision of
services.
In the following table, revenue is disaggregated by primary
geographical market and major service line. The tables provided
below analyses total revenue excluding our share of joint venture
revenue.
Built Environment Consulting Built Environment Consulting
2022 2021
Projects Projects Operations Operations Consulting Consulting (discontinued) (discontinued) IVS IVS Total Total
2022 2021 2022 2021 2022 2021 $m $m 2022 2021 2022 2021
(restated)
Primary geographical market $m $m $m $m $m $m $m $m $m $m
---------------------------- -------- -------- ---------- ---------- ---------- ----------- ----------------------------- ----------------------------- ----- ----- ------- -------
USA 593.7 856.3 457.5 459.9 233.3 194.7 544.7 767.0 139.0 144.5 1,968.2 2,422.4
Europe 379.1 374.7 820.4 723.5 188.2 174.0 62.3 110.2 27.5 23.8 1,477.5 1,406.2
Rest of the world 1,238.4 1,108.8 1,129.0 914.7 203.8 230.5 274.1 311.1 32.3 32.3 2,877.6 2,597.4
---------------------------- -------- -------- ---------- ---------- ---------- ----------- ----------------------------- ----------------------------- ----- ----- ------- -------
Revenue 2,211.2 2,339.8 2,406.9 2,098.1 625.3 599.2 881.1 1,188.3 198.8 200.6 6,323.3 6,426.0
---------------------------- -------- -------- ---------- ---------- ---------- ----------- ----------------------------- ----------------------------- ----- ----- ------- -------
Major service lines
---------------------------- -------- -------- ---------- ---------- ---------- ----------- ----------------------------- ----------------------------- ----- ----- ------- -------
Energy
Oil & Gas 704.7 578.2 1,989.7 1,647.7 316.6 350.4 - - 18.7 1.1 3,029.7 2,577.4
Power 145.0 97.2 93.5 70.4 8.8 13.0 - - 39.0 64.7 286.3 245.3
Renewables, Hydrogen and
Carbon Capture 112.5 258.2 28.6 25.1 76.7 59.0 - - 5.0 2.3 222.8 344.6
Materials
Refining & Chemicals 801.3 836.0 224.9 246.0 62.5 61.7 - - - 5.4 1,088.7 1,149.1
Minerals Processing and Life
Sciences 417.4 441.1 19.5 22.1 43.9 57.0 - - - 39.7 480.8 559.9
Other
Built Environment 5.4 5.8 44.2 68.8 10.2 5.5 881.1 1,188.3 136.1 87.4 1,077.0 1,355.8
Industrial Processes 24.9 123.1 6.5 18.0 100.8 42.9 - - - - 132.2 184.0
Other - 0.2 - - 5.8 9.7 - - - - 5.8 9.9
Revenue 2,211.2 2,339.8 2,406.9 2,098.1 625.3 599.2 881.1 1,188.3 198.8 200.6 6,323.3 6,426.0
---------------------------- -------- -------- ---------- ---------- ---------- ----------- ----------------------------- ----------------------------- ----- ----- ------- -------
The Group's revenue is largely derived from the provision of
services over time.
Revenue from continuing operations in 2022 included $4,262.4m
(78%) (2021: $3,965.3m, 74%) from reimbursable contracts and
$1,179.8m (22%) (2021: $1,272.4m, 26%) from lump sum contracts. The
calculation of revenue from lump sum contracts is based on
estimates and the amount recognised could increase or decrease.
Included within Operations is $6.2m (2021: $7.5m) of revenue
which had no associated cost.
Continuing operations Discontinued operations Total
2022 2021 2022 2021 2022 2021
$m $m $m $m $m $m
-------------- ----------- ---------- ---------- ------------- ------- -------
Total revenue 5,442.2 5,237.7 881.1 1,188.3 6,323.3 6,426.0
-------------- ----------- ---------- ---------- ------------- ------- -------
Total revenue does not reflect the $8.0m (2021: $25.4m)
exceptional item as disclosed on the Income Statement. This
exceptional item relates to the Projects (2021: Investment
Services) business unit.
Contract assets and liabilities
The following table provides a summary of contract assets and
liabilities arising from the Group's contracts with customers.
2022 2021
$m $m
Trade receivables 679.6 729.6
Non-current contract assets 97.0 66.5
Gross amounts due from customers 556.9 628.1
Gross amounts due to customers (113.0) (202.5)
1,220.5 1,221.7
--------------------------------- ------- -------
The contract asset balances include amounts the Group has
invoiced to customers (trade receivables) as well as amounts where
the Group has the right to receive consideration for work completed
which has not been billed at the reporting date (gross amounts due
from customers). Gross amounts due from customers are transferred
to trade receivables when the rights become unconditional which
usually occurs when the customer is invoiced. Gross amounts due to
customers primarily relates to advance consideration received from
customers, for which revenue is recognised over time.
Non-current contract assets of $97.0m includes $72.9m of gross
amounts due from customers and $1.4m of trade receivables in
relation to the Aegis contract as at 31 December 2022. The
corresponding balances as at 31 December 2021 amounted to $66.5m,
with $46.6m included in gross amounts due from customers and $19.9m
of trade receivables. The increase in the non-current contract
assets is mainly as a result of the Aegis contract progression
towards completion. The Group has classified the receivable
balances as non-current due to the element of uncertainty
surrounding the timing of the receipt of these balances. Refer to
note 21 for further details of the provisions recognised in respect
of this contract.
Trade receivables and gross amounts due from customers are
included within the 'Trade and other receivables' heading in the
Group balance sheet. Gross amounts due to customers and deferred
income are included within the 'Trade and other payables' heading
in the Group balance sheet. A reduction in each of the balances
outlined above is observed as a result of the disposal of the Built
Environment Consulting business.
Revenue recognised in 2022 which was included in gross amounts
due to customers and deferred income at the beginning of the year
of $194.0m represents amounts included within contract liabilities
at 1 January 2022. Revenue recognised from performance obligations
satisfied in previous periods of $14.6m represents revenue
recognised in 2022 for performance obligations which were
considered operationally complete at 31 December 2021.
Transaction price allocated to the remaining performance
obligations
The transaction price allocated to the remaining performance
obligations (unsatisfied or partially unsatisfied) as at 31
December 2022 was as follows:
$m Year 1 Year 2 Total
-------- -------- ------- -------
Revenue 3, 539.3 1,905.8 5,445.1
-------- -------- ------- -------
The Group has not adopted the practical expedients permitted by
IFRS 15, therefore all contracts which have an original expected
duration of one year or less have been included in the table above.
The estimate of the transaction price represents contractually
agreed backlog and does not include any amounts of variable
consideration which are constrained. The Group continues to move
into a reimbursable contract model, moving away from lump sum
contracts which are inherently riskier. 83% of future performance
obligations relate to reimbursable contracts and the remainder to
lump sum.
3 Finance expense/(income)
2022 2021
$m $m
(restated)
Interest payable on senior loan notes 40.3 35.9
Interest payable on borrowings 47.2 32.8
Amortisation of bank facility fees 10.5 7.4
Unwinding of discount on other liabilities 0.9 0.1
Lease interest (note 12) 16.4 17.7
Other interest expense 11.9 13.0
--------------------------------------------------------- ----- ----------
Finance expense - continuing operations (pre-exceptional
items) 127.2 106.9
Unwinding of discount on asbestos provision (note
5) 5.9 6.3
Finance expense - total 133.1 113.2
Interest receivable (4.5) (3.1)
Interest income - retirement benefit obligations (note
33) (2.4) (0.2)
Finance income (6.9) (3.3)
--------------------------------------------------------- ----- ----------
Finance expense - total - net 126.2 109.9
--------------------------------------------------------- ----- ----------
Net interest expense of $4.4m (2021: $3.6m) has been deducted in
arriving at the share of post-tax profit from joint ventures.
The unwinding of discount on the asbestos provision is $5.9m
(2021: $6.3m) and includes the unwinding of discount on long-term
asbestos receivables (note 21). This is presented within
exceptional items in line with the Group's accounting policies.
4 Profit before taxation
2022 2021
$m $m
The following items have been charged/(credited) in
arriving at profit before taxation:
Employee benefits expense (note 32) 3,130.0 3,141.8
Amortisation of intangible assets (note 10) 151.9 189.9
Depreciation of property plant and equipment (note
11) 25.2 34.9
Depreciation of right of use assets (note 12) 82.3 101.9
Gain on disposal of property plant and equipment (1.6) (10.0)
Impairment of intangible assets 542.3 -
Foreign exchange losses 4.2 2.0
---------------------------------------------------- ------- -------
Depreciation of property plant and equipment is included in cost
of sales or administrative expenses in the income statement.
Amortisation of intangible assets is included in administrative
expenses in the income statement.
An impairment charge of $542.3m was recorded against intangible
assets and related to goodwill, brands and customer
relationships.
Services provided by the Group's auditors and associate
firms
During the year the Group obtained the following services from
its auditors, KPMG and associate firms at costs as detailed
below:
2022 2021
$m $m
Fees payable to the Group's auditors and its associate
firms for
Audit of parent company and consolidated financial
statements 8.7 5.5
Audit of financial statements of subsidiaries of the
Company 2.4 2.8
------------------------------------------------------- ---- ------
Total statutory audit fees 11.1 8.3
Fees payable to the Group's auditor for the audit
of non-statutory financial statements 0.6 -
Audit related assurance services 0.5 0.4
Other assurance services 1.4 -
Tax and other services - 0.1
------------------------------------------------------- ---- ------
13.6 8.8
The ratio of audit related services to other non-audit services
is 1: 0.18.
The fees of $8.7m disclosed for 'Audit of parent company and
consolidated financial statements' disclosed in 2022 include $1.8m
fees relating to audit work performed in respect of the 2021
consolidated financial statements.
Fees payable to the Group's auditor for the audit of
non-statutory financial statements relate to the audit of carve-out
financial statements of Built Environment Consulting.
Other assurance services are Reporting Accountant services
performed by KPMG in relation to the Built Environment Consulting
business disposal.
5 Exceptional items
2022 2021
$m $m
Exceptional items included in continuing operations
Aegis contract loss (revenue) - 25.4
Aegis contract loss (cost of sales) - 73.9
Power and Industrial EPC losses (revenue) 8.0 -
Power and Industrial EPC losses (cost of sales) 17.0 -
Impairment of goodwill and intangible assets (note
10) 542.3 -
Gain on sale of business - (14.4)
Redundancy, restructuring and integration costs 30.1 73.9
Investigation support costs and provisions (4.2) -
Enterprise settlement 35.6 -
Asbestos yield curve, costs and charges 21.5 (3.1)
Russia exit costs and charges 13.2 -
Exceptional items included in continuing operations,
before interest and tax 663.5 155.7
Unwinding of discount on asbestos provision 5.9 6.3
Tax charge/(credit) in relation to exceptional items 5.2 (1.2)
Impact of change in UK rate on prior year exceptional
deferred tax - 10.3
Recognition of deferred tax assets due to UK pension
actuarial movements (41.6) -
Exceptional items included in continuing operations,
net of interest and tax 633.0 171.1
------------------------------------------------------ ------ ------
Exceptional items are those significant items which are
separately disclosed by virtue of their size or incidence to enable
a full understanding of the Group's financial performance.
Power and Industrial EPC losses
The Power and Industrial EPC losses relates to events in 2022
which resulted in a further write down of fixed price contracts in
the Power and Industrial EPC business, following the strategic
decision to exit this market during 2021. By virtue of its size and
nature of these projects being within a sector that the Group no
longer operates, this was recorded as an exceptional charge through
revenue and cost of sales. The negative revenue of $8.0m represents
the impact of a reduction in total value of the contract and is in
relation to revenue recognised in prior years.
Aegis contract loss
The Aegis contract loss in 2021 of $99.3m reflected an estimate
of the full contract loss at that time.
Impairment charge of goodwill and intangible assets
The impairment charge recognised against goodwill and intangible
assets amounts to $542.3m and is recorded within exceptional items
by virtue of its size. The impairment charge was triggered by the
disposal of the Built Environment Consulting business, increases in
discount rates and lower expectations of profitability during the
forecast period.
The disposal of the Built Environment Consulting business and
increasing discount rates increased the risk of an impairment
charge being recognised at the year end, as outlined in the Group's
interim condensed financial statements. The discount rate increased
by 1.35% since the half year which was largely driven by increases
to risk free rates and higher market volatility.
Included within the impairment charge of $542.3m were
impairments of $44.9m and $4.2m taken against the brand and
customer relationships which were recognised on the acquisition of
AFW. The Group performed an assessment over the brand asset
recognised on acquisition of AFW. The carrying value of the brand
was tested by considering its value in use, as it was determined
that there is no readily available market to sell the brand as a
standalone asset.
Redundancy, restructuring and integration costs
During the year to 31 December 2022, $30.1m was incurred in
relation to redundancy and restructuring activities.
During 2022 the Group has continued to progress various
initiatives which support the improved efficiency and enhancement
of underlying group profitability in the medium to longer term.
Included within the $30.1m were costs of around $11m in developing
the new strategy which is expected to further enhance profitability
and cash generation in the medium to long term.
Gain on sale of divestment of business
The gain in 2021 of $14.4m relates to the disposal of the
Group's interest in Sulzer Wood Limited.
Enterprise settlement
The Enterprise claim was concluded in November 2022, with the
amount settled being in excess of the amount provided for. Overall,
the amount paid to Enterprise was higher than our underlying legal
assessment of the merits of the case, but further drawn-out
litigation was likely to be costly and carried a risk that a court
awarded a figure higher than the amount paid. The charge in the
year was classed as an exceptional item both by its nature, i.e. a
historic litigation settlement, and by size.
Investigation support costs and provisions
The regulatory investigations were all closed out during the
first half of 2021 and the agreed settlements were materially in
line with the provision made at 31 December 2020. The $4.2m credit
relates to the release of some provisions made for additional legal
and other costs which were ultimately not needed. Certain amounts
due to the SFO and COFPS have been deferred in line with agreed
payment schedules and the disclosures in the financial statements
reflect this.
Asbestos
All asbestos costs have been treated as exceptional on the basis
that movements in the provision are non-trading and can be large
and driven by market conditions which are out with the Group's
control. Excluding these amounts from the trading results improves
the understandability of the underlying trading performance of the
Group.
The $21.5m charge (2021: credit $3.1m) principally comprises a
$52.8m charge in the period that was a result of an updated
actuarial review which updated the best estimate for recent claims
experience and latest projections. This is offset by a credit of
$31.3m in 2022, which comprises of a $35.6m yield curve credit as a
result of higher discount rates (2021: $5.6m) and $4.3m (2021:
$2.5m) of costs in relation to managing the claims. The 30-year US
Treasury rate has increased to 3.97%, from 1.90% at the end of
December 2021, and led to the income statement credit.
$5.9m of interest costs which relate to the unwinding of
discount on the asbestos provision are also shown as exceptional
(2021: $6.3m).
Russia exit costs and charges
The Group has incurred costs of $7.0m in relation to the exit of
its business in Russia as a result of Government sanctions. The
exceptional cost recognised during 2022 relates to early contract
exits and associated losses, the closure of an office and other
legal costs. In addition, the Group has impaired cash balances held
within Russia by $6.2m. The Group has confidence in being able to
utilise the remaining balance of $5m, disclosed as restricted cash
in note 16, to meet these exit costs.
Tax
An exceptional tax credit of $36.4m (2021: $9.1m charge) has
been recorded in continuing operations during the period. It
consists of a $5.2m tax charge on exceptional items (2021: $1.2m
credit) and an exceptional credit of $41.6m recognised due to the
actuarial gain in relation to the UK defined benefit pension
scheme. As deferred tax liabilities support the recognition of
deferred tax assets, the additional $41.6m of deferred tax assets
have been recognised through exceptional items based on its size.
In 2021, a $10.3m tax charge was recognised relating to the change
of the UK tax rate impacting on deferred tax balances created in
prior years through exceptional items.
6 Taxation
2022 2021
$m $m
Current tax
Current year 188.5 104.7
Adjustment in respect of prior years (14.8) (29.5)
------------------------------------------------------ ------ ------
173.7 75.2
------------------------------------------------------ ------ ------
Deferred tax
Origination and reversal of temporary differences 62.7 (23.7)
Adjustment in respect of prior years (0.2) 3.4
------ ------
62.5 (20.3)
------------------------------------------------------ ------ ------
Total tax charge 236.2 54.9
------------------------------------------------------ ------ ------
Comprising
Tax on continuing operations before exceptional items 47.3 32.4
Tax charge in relation to exceptional items (note 5) 5.2 9.1
Recognition of deferred tax assets due to UK pension
actuarial movements (note 5) (41.6) -
Tax on discontinued operations 225.3 13.4
------------------------------------------------------ ------ ------
Total tax charge 236.2 54.9
------------------------------------------------------ ------ ------
2022 2021
Tax credited to other comprehensive income/expense $m $m
Deferred tax movement on retirement benefit liabilities 41.6 9.5
Tax on derivative financial instruments 1.7 3.4
Total credited to other comprehensive income/expense 43.3 12.9
-------------------------------------------------------- ---- ----
2022 2021
Tax charged/(credited) to equity $m $m
Deferred tax impact of rate change 0.8 (4.5)
Other 1.3 0.1
Total charged/(credited) to equity 2.1 (4.4)
----------------------------------- ---- -----
Tax payments differ from the current tax charge primarily due to
the time lag between tax charge and payments in most jurisdictions
and movements in uncertain tax provisions differing from the timing
of any related payments.
2022 2021
Reconciliation of applicable tax charge at statutory $m $m
rates to tax charge
-------------------------------------------------------- ------- -------
Loss before taxation from continuing operations (694.5) (172.0)
Profit before taxation from discontinued operations
(note 7) 64.5 91.4
Gain on sale of discontinued operation (note 7) 514.5 -
Less: Share of post-tax profit from joint ventures
(note 13) (30.4) (31.5)
Loss before taxation from total operations (excluding
profits from joint ventures) (145.9) (112.1)
Applicable tax charge at statutory rates 36.5 (16.6)
Effects of:
Non-deductible expenses 8.2 11.4
Non-taxable income (1.0) (4.2)
Non-deductible expenses - exceptional 332.8 1.1
Non-taxable income - exceptional (0.3) (3.0)
Deferred tax recognition:
Recognition of deferred tax assets not previously
recognised (4.3) (19.4)
Utilisation of tax assets not previously recognised (12.4) (12.7)
Current year deferred tax assets not recognised 37.7 66.9
Write off of previously recognised deferred tax assets 5.2 22.4
Recognition due to UK pension actuarial loss (41.6) -
Utilisation of unrecognised deferred tax assets due
to the Built Environment Consulting disposal (145.5) -
Irrecoverable withholding tax 20.4 10.4
US Base Erosion and Anti-abuse Tax 6.7 -
CFC charges 2.3 2.0
Uncertain tax provisions 7.5 23.6
Uncertain tax provisions prior year adjustments (26.7) (24.9)
Uncertain tax provisions prior year adjustments -
Exceptional 1.5 -
Prior year adjustments 7.7 0.9
Prior year adjustments - exceptional 2.5 (2.2)
Impact of change in rates on deferred tax (1.0) (0.8)
Total tax charge 236.2 54.9
-------------------------------------------------------- ------- -------
Comprising
Tax charge on continuing operations 10.9 41.5
Tax charge on discontinued operations 225.3 13.4
-------------------------------------------------------- ------- -------
Total tax charge 236.2 54.9
-------------------------------------------------------- ------- -------
The weighted average of statutory tax rates is (25.0%) in 2022
(2021: 14.8%). The negative tax rate in 2022 reflects the overall
profit before tax being a small loss, and the geographical split
resulting in a taxable gain in relation to the disposal of the
Built Environment Consulting business in the US, with losses in
lower tax jurisdictions such as the UK.
The non-deductible expenses - exceptional relates to the
impairment of goodwill, non-deductible expenses in relation to the
Built Environment Consulting business disposal, and the impact of
permanent adjustments relating to the taxable gain on disposal of
the Built Environment Consulting business.
The adjustments in respect of prior years largely relate to the
release of uncertain tax positions as the final outcome on certain
issues was agreed with tax authorities during the year or the
statute of limitations for audit by the tax authorities expiring
without challenge. The most significant element relates to a
provision in Saudi Arabia, accrued in 2021, which has reduced as
the Group has utilised an amnesty to settle the tax liability
without penalty and without limiting the ability to appeal. The
benefit is $11.7m, no other movements are individually
significant.
The utilisation of deferred tax assets not previously recognised
primarily relates to the utilisation of losses in the US against
the gain on disposal of the Built Environment Consulting
business.
In 2021 deferred tax of $18.3m in relation to undistributed
reserves in Chile and Russia was released as it is not anticipated
distributions will be paid in the foreseeable future triggering a
tax liability. This amount was included within irrecoverable
withholding tax.
During the year, the UK defined benefit pension fund asset on
the Wood Pension Plan increased due to actuarial gains of $166.3m,
resulting in the associated deferred tax liability increasing, with
a debit shown in Other Comprehensive Income. The deferred tax
liability supports the recognition of deferred tax assets, and as a
result $41.6m (2021: $12.5m) has been recognised and a
corresponding credit recognised in the profit and loss account. Due
to the size of the credit in 2022 this has been recognized as an
exceptional item.
Net income tax liabilities in the Group balance sheet include
$108.0m (2021: $135.6m) relating to uncertain tax positions where
management has had to exercise judgement in determining the most
likely outcome in respect of the relevant issue. The larger amounts
relate to recoverability of withholding taxes ($36.4m, 2021:
$49.2m), group financing ($25.2m, 2021: $27.1m) and transfer
pricing and tax residence ($9.6m, 2021: $9.2m). Where the final
outcome on these issues differs to the amounts provided, the
Group's tax charge will be impacted.
Of the uncertain tax positions, $72.9m are currently under audit
by tax authorities and the provision reflects the maximum potential
liability reflecting the outcome of the audits being either no
liability or the full risk being challenged. The outcome of the
audits will determine if there is a credit to taxation in 2023. The
remaining $35.1m comprises uncertain tax positions not yet under
audit, none of which are individually material. Of the $35.1m,
$0.7m will become statute barred for tax authority audit during
2023 if the tax authorities do not commence an audit.
Factors affecting the tax charge in future years
There are a number of factors that may affect the Group's future
tax charge including the resolution of open issues with the tax
authorities, corporate acquisitions and disposals, the use of
brought forward losses and changes in tax legislation and rates.
The following outlines key factors that may impact on future tax
charges.
On 8 October 2021, 136 countries signed up to the OECDs
Inclusive Framework. This includes an agreement for a minimum level
of tax of 15% which it is planned will be in place for 2024. Based
on the 2022 results, this would have resulted in an increase in the
tax charge of $3.6m reflecting additional tax on profits in the UAE
and the captive insurance company in Guernsey.
During 2022, the actuarial gain in relation to the UK pension
fund has resulted in a recognition of deferred tax assets which can
now be supported by the deferred tax liability related to the
pensions asset. Whilst the movement in the deferred tax liability
is taken to Other Comprehensive Income, the additional recognition
of assets is taken to the Income Statement. The future tax charge
will therefore be impacted by movements in the pension asset
valuation with actuarial gains increasing deferred tax asset
recognition and actuarial losses decreasing recognition. The
deferred tax liability in relation to the UK pension fund at 31
December 2022 is $108.1m.
The UK Government announced in its budget on 3 March 2021, a
rise in the rate of Corporation Tax from 19% to 25% from 1 April
2023. The increase is reflected in deferred tax in the accounts,
however there is no impact as deferred tax assets are only
recognised to the extent there are deferred tax liabilities in the
UK. We anticipate the tax charge and cash tax payable is likely to
increase from the 2023 year end onwards as a result of the rate
rise.
As part the disposal of the Built Environment Consulting
business, certain intangible assets were sold including those
relating to the business on the acquisition of Amec Foster Wheeler.
These intangible assets have related deferred tax liabilities which
give rise to a tax credit as the intangible assets are amortised.
The book value of the business disposed incorporates the relevant
deferred tax liabilities and is reflected in the profit on disposal
before tax. In future years, the deferred tax credit in relation to
the amortisation of intangibles will reduce reflecting the
disposals.
Tax Policy
The Group is committed to complying with all relevant tax laws,
rules, regulations and reporting and disclosure requirements
wherever it operates. All tax planning undertaken is consistent
with the Group's overall strategy and approach to risk. The Group
aims to use incentives and reliefs to minimise the tax cost of
conducting business but will not use them for purposes which are
knowingly contradictory to the intent of the legislation. A full
copy of the Group's tax strategy can be found on the Group's
website at www.woodplc.com
7 Discontinued operation
In September 2022, the Group announced it had completed an
agreement to sell the Built Environment Consulting business, which
is included within the Built Environment Consulting operating
segment. This follows the strategic review outlined in the 2021
Annual Report and allows the Group to strengthen its balance sheet
position and deliver value to shareholders.
The Built Environment Consulting business was classified as a
discontinued operation from 1 January 2022, at which point the
conditions under IFRS 5 were met. The comparative Group income
statement and statement of comprehensive income have been restated
to show the discontinued operation separately from continuing
operations.
(i) Results of discontinued operation
2022 2021
Note $m $m
-------------------------------------------------------------------- ------ -------- ----------
External revenue 881.1 1,188.3
Cost of sales (759.6) (1,024.1)
Gross profit 121.5 164.2
Administrative expenses (48.6) (65.8)
Exceptional items - administrative expenses (6.7) (4.0)
-------------------------------------------------------------------- ------ -------- ----------
Operating profit 66.2 94.4
Finance expense (1.7) (3.0)
-------------------------------------------------------------------- ------ -------- ----------
Profit before tax 64.5 91.4
Taxation (7.9) (13.4)
Results from operating activities, net of tax 56.6 78.0
-------------------------------------------------------------------- ------ -------- ----------
Gain on sale of discontinued operation 514.5 -
Income tax on gain on sale of discontinued operation (exceptional) (217.4) -
-------------------------------------------------------------------- ------ -------- ----------
Profit from discontinued operation, net of tax 353.7 78.0
-------------------------------------------------------------------- ------ -------- ----------
Earnings per share (cents)
Basic 9 52.0 11.6
Diluted 9 52.0 11.6
-------------------------------------------------------------------- ------ -------- ----------
The profit from the discontinued operation, net of tax of
$353.7m (2021: $78.0m) is attributable entirely to the owners of
the Company.
Exceptional items within administrative expenses of $6.7m
relates to costs incurred on the Built Environment Consulting
business disposal project.
Total disposal proceeds of $1,808.9m are receivable from the
disposal of the Built Environment Consulting business during 2022.
The final proceeds from the Built Environment Consulting business
will be finalised during the first half of 2023 upon agreement of
the completion balance sheet between the Group and WSP. The net
impact of the disposal proceeds, less the net assets disposed,
disposal costs, post completion accruals, elimination of R&D
tax credits and FX recycling is a $514.5m gain on disposal. An
exceptional tax charge in relation to the sale of the Built
Environment Consulting business of $217.4m has been recognised.
The results of the discontinued operation contained in the table
above excludes the impact of intercompany transactions with the
rest of the Group. Intercompany revenue of $23.6m (2021: $37.6m)
was generated by the discontinued operation in the period.
(ii) Cash flows from / (used in) discontinued operation
2022 2021
Note $m $m
-------------------------------------------------------- ------- ---------- --------
Net cash (used in)/generated from operating activities (6.0) 106.6
Net cash generated from/(used in) investing activities 1,748.4 (6.1)
Net cash flows for the period 1,742.4 100.5
----------------------------------------------------------------- ---------- --------
(iii) Effect of disposal on financial position of the Group
The composition of assets and liabilities disposed of are set
out in the table below:
$m
--------------------------------------------- -------
Intangible assets (note 10) 996.4
Deferred tax on intangible assets (57.2)
Property, plant and equipment (note 11) 14.7
Right of use assets (note 12) 71.5
Trade and other receivables 384.6
Cash and cash equivalents 14.4
Deferred tax assets 39.0
Trade and other payables (244.5)
Lease liabilities (note 12) (62.7)
Income tax liabilities (9.4)
Deferred tax liabilities (37.0)
Retirement benefit obligations (note 33) (2.8)
Provisions (0.7)
Other non-current liabilities (0.4)
--------------------------------------------- -------
Net assets and liabilities disposed 1,105.9
Post-acquisition foreign translation reserve 54.5
Elimination of R&D tax credits 74.7
Post completion accrual 14.4
Disposal costs 44.9
--------------------------------------------- -------
Adjusted balances disposed 1,294.4
Gross proceeds receivable 1,808.9
--------------------------------------------- -------
Gain on disposal 514.5
--------------------------------------------- -------
An adjustment of $54.5m to recycle the cumulative translation
adjustment ('CTA') amounts through the profit and loss account have
been recorded as part of the disposal.
Following the disposal of the Built Environment Consulting
business the taxable US profits have significantly reduced, and
therefore there is insufficient future forecast profitability to
support the recognition of R&D tax credits of $74.7m. In
addition, the Group have provided for probable outflows in cash of
$14.4m relating to post-completion negotiations with the
buyers.
The Group incurred $44.9m of costs in relation to the disposal
of the Built Environment Consulting business, mainly consisting of
professional fees, of which $39.5m has been paid at the
year-end.
The cash inflow in respect of these disposals is analysed
below.
$m
----------------------------------- -------
Gross proceeds received 1,805.3
Cash and cash equivalents disposed (14.4)
Disposal costs paid (39.5)
Cash inflow 1,751.4
----------------------------------- -------
8 Dividends
No decision has been taken to resume the dividend and this will
be kept under review by the directors. Any decision to resume
payment of a dividend will consider the Group's future
profitability and cash requirements.
9 Earnings per share
2022 2021
(Losses)/ Earnings/(losses)
Earnings attributable
attributable to owners
to owners of Number Earnings/(losses) of the Number Earnings/(losses)
the parent of shares per share parent of shares per share
$m m cents $m m cents
-------------------- --------------- ---------- ----------------- ----------------- ---------- -----------------
Basic
pre-exceptional (13.7) 680.4 (2.0) 35.6 675.6 5.3
Exceptional items,
net of tax (342.6) - (50.4) (175.1) - (25.9)
-------------------- --------------- ---------- ----------------- ----------------- ---------- -----------------
Basic (356.3) 680.4 (52.4) (139.5) 675.6 (20.6)
Diluted (356.3) 680.4 (52.4) (139.5) 675.6 (20.6)
-------------------- --------------- ---------- ----------------- ----------------- ---------- -----------------
Adjusted diluted
earnings per share
calculation
-------------------- --------------- ---------- ----------------- ----------------- ---------- -----------------
Basic (356.3) 680.4 (52.4) (139.5) 675.6 (20.6)
(356.3) 680.4 (52.4) (139.5) 675.6 (20.6)
Exceptional items,
net of tax 342.6 - 50.4 175.1 - 25.9
Amortisation related
to acquisitions, net
of tax 52.5 - 7.7 82.7 - 12.2
------------------------ ----------- ---------- ----------------- ----------------- ---------- -----------------
Adjusted diluted 38.8 680.4 5.7 118.3 675.6 17.5
-------------------- --------------- ---------- ----------------- ----------------- ---------- -----------------
Adjusted basic 38.8 680.4 5.7 118.3 675.6 17.5
-------------------- --------------- ---------- ----------------- ----------------- ---------- -----------------
i) (Losses)/earnings attributable to equity shareholders
2022 2021
Continuing operations Discontinued operations
Continuing Discontinued operations (restated) (restated) Total
operations $m Total $m $m (restated)
$m $m $m
------------------------- -------------- -------------------------- -------- ---------------------- ------------------------ ---------------
(Losses)/earnings
attributable to equity
shareholders (basic
pre-exceptional) (77.0) 63.3 (13.7) (46.4) 82.0 35.6
Exceptional items, net
of tax (633.0) 290.4 (342.6) (171.1) (4.0) (175.1)
------------------------- -------------- -------------------------- -------- ---------------------- ------------------------ ---------------
(Losses)/earnings
attributable
to equity shareholders (710.0) 353.7 (356.3) (217.5) 78.0 (139.5)
------------------------- -------------- -------------------------- -------- ---------------------- ------------------------ ---------------
Number of shares (basic) 680.4 680.4 680.4 675.6 675.6 675.6
------------------------- -------------- -------------------------- -------- ---------------------- ------------------------ ---------------
Number of shares
(diluted) 680.4 680.4 680.4 675.6 675.6 675.6
------------------------- -------------- -------------------------- -------- ---------------------- ------------------------ ---------------
Basic earnings per share
(cents) (104.4) 52.0 (52.4) (32.2) 11.6 (20.6)
------------------------- -------------- -------------------------- -------- ---------------------- ------------------------ ---------------
Diluted earnings per
share (cents) (104.4) 52.0 (52.4) (32.2) 11.6 (20.6)
------------------------- -------------- -------------------------- -------- ---------------------- ------------------------ ---------------
2022 2021
Continuing operations Discontinued operations
Continuing Discontinued operations (restated) (restated) Total
operations $m Total $m $m (restated)
$m $m $m
(Losses)/earnings
attributable to
equity
shareholders (710.0) 353.7 (356.3) (217.5) 78.0 (139.5)
Exceptional items,
net of tax 633.0 (290.4) 342.6 171.1 4.0 175.1
Amortisation of
intangibles on
acquisition,
net of tax 52.5 - 52.5 60.8 21.9 82.7
-------------------- -------------- -------------------------- -------- ---------------------- ------------------------ -------------
(Losses)/earnings
attributable
to equity
shareholders
(adjusted diluted) (24.5) 63.3 38.8 14.4 103.9 118.3
-------------------- -------------- -------------------------- -------- ---------------------- ------------------------ -------------
(Losses)/earnings
attributable
to equity
shareholders
(adjusted basic) (24.5) 63.3 38.8 14.4 103.9 118.3
-------------------- -------------- -------------------------- -------- ---------------------- ------------------------ -------------
Number of shares
(diluted) 680.4 680.4 680.4 675.6 675.6 675.6
Number of shares
(basic) 680.4 680.4 680.4 675.6 675.6 675.6
-------------------- -------------- -------------------------- -------- ---------------------- ------------------------ -------------
Adjusted diluted
(cents) (3.6) 9.3 5.7 2.1 15.4 17.5
-------------------- -------------- -------------------------- -------- ---------------------- ------------------------ -------------
Adjusted basic
(cents) (3.6) 9.3 5.7 2.1 15.4 17.5
-------------------- -------------- -------------------------- -------- ---------------------- ------------------------ -------------
As the Group has reported a basic loss (2021: loss) per ordinary
share, any potential ordinary shares that are dilutive are excluded
in the calculation of diluted earnings per share. These options
could potentially dilute earnings per share in future periods. In
accordance with IAS 33, the same weighted average number of shares
has been used to calculate the adjusted EPS measures and as the
unadjusted result is a loss, the dilutive effects have not been
taken into account in this calculation. Had the result been a
profit, an additional 25.6m of dilutive potential shares would have
been used in the calculation of diluted EPS metrics, which would
have reduced the adjusted diluted EPS by 0.2 cents.
In the comparative period, the Group reported an overall basic
loss per ordinary share, therefore the effect of dilutive ordinary
shares was excluded in the calculation of diluted earnings per
share. Where profits have been made when disaggregating
discontinued and continuing operations, the calculation of diluted
earnings per share was performed on the same basis as the overall
Group.
The calculation of basic earnings per share is based on the
earnings attributable to owners of the parent divided by the
weighted average number of ordinary shares in issue during the year
excluding shares held by the Group's employee share trusts. For the
calculation of diluted earnings per share, the weighted average
number of ordinary shares in issue is adjusted to assume conversion
of dilutive potential ordinary shares, only when there is a profit
per share. The Group's dilutive ordinary shares comprise share
options granted to employees under Executive Share Option Schemes,
shares and share options awarded under the Group's Long-Term Plan
and shares awarded under the Group's Employee Share Plan and Share
Incentive Plan. Adjusted basic and adjusted diluted earnings per
share are disclosed to show the results excluding the impact of
exceptional items and amortisation related to acquisitions, net of
tax.
10 Goodwill and other intangible assets
Software Customer
and development contracts Order
Goodwill costs and relationships backlog Brands Total
$m $m $m $m $m $m
Cost
At 1 January 2022 5,226.2 288.8 815.7 183.9 661.0 7,175.6
Exchange movements (173.2) (40.3) (21.8) (2.8) (13.3) (251.4)
Additions - 115.9 - - - 115.9
Disposals - (3.4) - - - (3.4)
Businesses divested
(note 7) (775.6) (17.8) (137.8) (24.1) (168.3) (1,123.6)
At 31 December 2022 4,277.4 343.2 656.1 157.0 479.4 5,913.1
-------------------- ---------- ---------------- ------------------ -------- ------- ---------
Amortisation and
impairment
At 1 January 2022 0.8 205.7 581.2 171.7 140.9 1,100.3
Exchange movements (5.2) (33.4) (15.8) (2.5) (3.0) (59.9)
Amortisation charge - 87.5 28.4 11.9 24.1 151.9
Impairment 493.2 - 4.2 - 44.9 542.3
Disposals - (3.4) - - - (3.4)
Businesses divested
(note 7) - (17.0) (50.3) (24.1) (35.8) (127.2)
At 31 December 2022 488.8 239.4 547.7 157.0 171.1 1,604.0
-------------------- ---------- ---------------- ------------------ -------- ------- ---------
Net book value at
31 December 2022 3,788.6 103.8 108.4 - 308.3 4,309.1
-------------------- ---------- ---------------- ------------------ -------- ------- ---------
Cost
At 1 January 2021 5,266.4 323.6 822.2 184.9 664.4 7,261.5
Exchange movements (40.2) (3.6) (6.5) (1.0) (3.4) (54.7)
Additions - 94.2 - - - 94.2
Disposals - (125.4) - - - (125.4)
At 31 December 2021 5,226.2 288.8 815.7 183.9 661.0 7,175.6
-------------------- ---------- ---------------- ------------------ -------- ------- ---------
Amortisation and
impairment
At 1 January 2021 0.8 245.3 542.5 148.3 108.4 1,045.3
Exchange movements - (3.2) (4.8) (0.8) (0.7) (9.5)
Amortisation charge - 89.0 43.5 24.2 33.2 189.9
Disposals - (125.4) - - - (125.4)
At 31 December 2021 0.8 205.7 581.2 171.7 140.9 1,100.3
-------------------- ---------- ---------------- ------------------ -------- ------- ---------
Net book value at
31 December 2021 5,225.4 83.1 234.5 12.2 520.1 6,075.3
-------------------- ---------- ---------------- ------------------ -------- ------- ---------
In accordance with IAS 36 'Impairment of assets', goodwill was
tested for impairment during the year. The impairment tests were
carried out by Cash Generating Unit ('CGU') as at 31 December 2022
(the "test date"). The Group has five CGUs and Goodwill is
monitored by management at CGU level. The allocation of Goodwill by
CGU as at the test date is shown in the table below.
Value-in-use calculations have been prepared for each CGU using
the cash flow projections included in the financial forecasts
prepared by management and approved by the Board for the period
2023 through to 2027. In preparing the forecasts, management have
considered market outlook; growth in market share; resource
utilisation; contract backlog; contract margins; and assumed
contract awards. The key market drivers, within energy, include
energy security driven by the ongoing conflict in Ukraine and
supporting energy transition in our focus markets, such as hydrogen
and carbon capture. Our materials growth drivers are also
underpinned by transition to net zero, as well as increased
consumer demand driven by population growth and higher standards of
living. The Group's impairment model assumes combined annual growth
in market share for the majority of sectors of around 5% of its
current market share to 2025 and leads to a revenue CAGR of 14.2%
and 4.8% for Projects and Operations respectively. The Projects
CAGR includes growth from the life sciences sector where Projects
is expected to leverage from its existing engineering capabilities
and client relationships to grow its market share. If this growth
does not materialise, there is a risk of further impairment in the
Projects and Operations CGUs.
The projected growth in the CGUs is underpinned by the Group's
strategy to fully capitalise on the engineering capabilities of
each of the CGUs to help our clients move to net zero through the
energy transition and decarbonisation. In addition to applying
decarbonization capabilities within each CGU across each of the
growth markets, digitization is another key driver which is
expected to draw demand for the digital tools, products and
capabilities offered by the Consulting CGU. During 2022 each of the
CGUs have had significant contract wins in energy transition and
decarbonisation and are therefore well placed to benefit from
significant levels of investment required by our clients to achieve
net zero. The Group have also considered that there are risks
associated with energy transition, including energy transition and
industrial decarbonisation markets not generating sufficient
revenues to meet targets, which may also impact the Group's ability
to attract or retain the appropriately skilled workforce which
could prevent the Group from competing for work in this space.
However, offsetting this risk is the large near-term addressable
market focused on energy security within oil and gas along with the
desire of those clients to pursue net-zero and decarbonization
efforts. These projects are supporting the energy security agenda
as major economies aim to reduce their dependency on Russian oil
and gas, whilst also ensuring affordable energy for consumers.
The terminal growth rates assumed from 2027 do not exceed the
long-term average historical growth rates for the regions and
sectors in which the CGUs operate. The Group is well placed to
benefit from the significant long term growth opportunities from
Energy Transition, which has been considered in determining long
term growth rates. Management reviewed independent forecasts which
set out the long-term investment required in order to achieve net
zero. This long-term annual growth was then applied to each of the
CGUs based on current activity levels. Accordingly, the long-term
growth rates assumed in the model are 2.4% for Operations (2021:
2.6%); 2.4% for Projects (2021: 2.7%); and 2.4% (2021: 2.5%) for
Consulting.
The cash flows have been discounted using discount rates
appropriate for each CGU, and these rates are reviewed for each
impairment review performed. The discount rate is a critical
assumption in the impairment test and the significant volatility in
financial markets has led to an increase in the discount rate. The
Group have considered the additional specific risks related to each
business such as country risk and forecasting risk. The pre-tax
rates used for the 2022 review are tabulated as follows and were
derived from the Group WACC calculation with specific adjustments
for CGU specific risks including country risk premiums:
Cash Generating Unit Pre-tax discount rate Pre-tax discount rate Post-tax discount rate Post-tax discount rate
2022 2021 2022 2021
% % % %
--------------------- --------------------- --------------------- ---------------------- ----------------------
Projects 13.2 10.6 11.0 9.3
Operations 12.9 10.2 10.5 8.9
Consulting 12.2 10.2 9.9 8.8
Kelchner 12.4 10.4 10.4 9.6
Swaggart 12.8 10.4 10.4 9.6
In order to reduce headroom to $nil for the CGUs with headroom,
the post-tax discount rate would need to increase to:
Cash Generating Unit %
--------------------- ----
Projects 11.9
Consulting 14.9
Kelchner 28.9
Swaggart 18.0
The carrying value of the goodwill for each CGU as at the test
date is shown in the table below.
Cash Generating Unit Goodwill Goodwill
carrying carrying
value value
2022 Test 2021 Test
date date
$m $m
--------------------- ---------- ----------
Projects 2,280.8 2,353.8
Operations 1,594.8 1,645.4
Consulting 372.4 1,193.0
Kelchner 16.9 16.9
Swaggart 16.3 16.3
The headroom for Projects was $153m and the Group recognised an
impairment charge of $313m within the Operations CGU based on the
assumptions described above. The recoverable amount of the
Operations CGU at the test date was $1,408m. The key assumptions
used in the impairment model for these CGUs are discount rate, long
term growth rate and revenue growth. There are reasonable changes
in assumptions that would result in an impairment for Projects. If
the post-tax discount rate was 1.5% higher for Projects, the
impairment would be $238m. A 2.0% reduction in revenue CAGR over
the forecast period would reduce headroom to $nil and a 0.7%
reduction in the long-term growth rate would also reduce headroom
to $nil. The Operations post tax discount rate would need to be
1.5% lower to reduce the impairment charge to $nil. A 1.5% increase
in the post-tax discount rate would increase the impairment charge
to $530m and a 1% reduction in the long-term growth rate would
increase the impairment charge to $427m. A 1% reduction in the
revenue CAGR would increase the impairment charge to $370m.
The carrying values of the corporate assets that were not
allocated to the above cash generating units above were $73.2m
(2021: $91m) and were tested for impairment at the group level,
taking into account the estimates and assumptions discussed above
in respect of the Group's cash generating units. The Group post tax
discount rate was 9.7% (pre-tax 11.5%) and a terminal growth rate
of 2.4% was applied to the forecast consolidated cash flows of the
Group, including the unallocated central costs. The recoverable
amount of the Group at the test date was $4,373m and highlighted an
additional $180m of impairment to be allocated to the CGUs. The
Group post-tax discount rate would need to be 0.3% lower to reduce
the impairment charge to $nil.
Intangible assets arising on acquisition include the valuation
of customer contracts and relationships, order backlog and brands
recognised on business combinations. As part of the annual
impairment review, Group management has assessed whether there were
any impairment triggers. Following the recent material disposals,
including the built environment and nuclear businesses in 2022 and
2020 respectively, an impairment review was carried out over the
brand assets recognised on acquisition of AFW in 2017. Management
considered the sectors that the Group is targeting as part of its
refreshed strategy, and considered whether these benefit from the
brand, which reflected AFW's history and capabilities in certain
markets. This impairment review resulted in an impairment of $44.9m
being recognised and a reduction in the remaining useful life to 11
years, or a total useful life since acquisition of 16 years.
Customer relationships relate mainly to the acquisition of Amec
Foster Wheeler in 2017 and are being amortised over periods of 5 to
13 years. Order backlog relates entirely to the acquisition of AFW
and was being amortised over periods of 2 to 5 years and has fully
amortised. Brands recognised relate entirely to the acquisition of
AFW and the remaining carrying value is being amortised over a
period of 11 years.
Software and development costs includes internally generated
assets with a net book value of $36.9m at 31 December 2022 (2021:
$25.4m). $19.9m (2021: $9.4m) of internally generated intangibles
is included in additions in the year.
The software disposals relate to the write off of fully
depreciated assets that are no longer in use.
11 Property plant and equipment
Land and Buildings Plant and equipment Total
$m $m $m
---------------------------------------- ------------------ ------------------- ------
Cost
At 1 January 2022 86.7 115.7 202.4
Exchange movements (5.3) (10.9) (16.2)
Additions 1.5 26.1 27.6
Disposals (11.0) (21.7) (32.7)
Businesses divested (note 7) (22.1) (28.1) (50.2)
Reclassifications 1.8 (1.8) -
At 31 December 2022 51.6 79.3 130.9
---------------------------------------- ------------------ ------------------- ------
Accumulated depreciation and impairment
At 1 January 2022 50.5 49.7 100.2
Exchange movements (3.5) (11.4) (14.9)
Charge for the year 5.5 19.7 25.2
Disposals (7.5) (19.4) (26.9)
Businesses divested (note 7) (18.3) (17.2) (35.5)
Reclassifications 1.8 (1.8) -
Impairment - 0.4 0.4
At 31 December 2022 28.5 20.0 48.5
---------------------------------------- ------------------ ------------------- ------
Net book value at 31 December 2022 23.1 59.3 82.4
---------------------------------------- ------------------ ------------------- ------
Cost
At 1 January 2021 63.1 174.5 237.6
Exchange movements (1.2) (3.2) (4.4)
Additions 2.7 19.7 22.4
Disposals (5.4) (47.8) (53.2)
Reclassifications 27.5 (27.5) -
---------------------------------------- ------------------ ------------------- ------
At 31 December 2021 86.7 115.7 202.4
---------------------------------------- ------------------ ------------------- ------
Accumulated depreciation and impairment
At 1 January 2021 31.2 80.0 111.2
Exchange movements (0.8) (4.4) (5.2)
Charge for the year 9.0 25.9 34.9
Disposals (5.0) (39.7) (44.7)
Reclassifications 12.5 (12.5) -
Impairment 3.6 0.4 4.0
---------------------------------------- ------------------ ------------------- ------
At 31 December 2021 50.5 49.7 100.2
---------------------------------------- ------------------ ------------------- ------
Net book value at 31 December 2021 36.2 66.0 102.2
---------------------------------------- ------------------ ------------------- ------
The net book value of Land and Buildings includes $14.0m (2021:
$21.8m) of Long Leasehold and Freehold property and $9.1m (2021:
$14.4m) of Short Leasehold property. There were no material amounts
in assets under construction at 31 December 2022. During 2021, net
book value of $15.0m relating to Long Freehold property which was
previously included within 'Plant and equipment' was reclassified
to 'Land and Buildings'. This net book value comprises $27.5m of
cost offset by $12.5m of accumulated depreciation and
impairment.
12 Leases
Land and Buildings Plant and equipment Total
Right of use assets $m $m $m
---------------------------------------------- ------------------ ------------------- -------
Net book value
At 1 January 2022 316.6 39.5 356.1
Exchange movements (17.5) (2.1) (19.6)
Additions 67.8 27.0 94.8
Disposals (1.5) - (1.5)
Businesses divested (note 7) (53.7) (17.8) (71.5)
Depreciation of right of use assets (62.2) (20.1) (82.3)
At 31 December 2022 249.5 26.5 276.0
Lease liabilities
---------------------------------------------- ------------------ ------------------- -------
At 1 January 2022 449.8
Exchange movements (27.0)
Additions 91.9
Disposals (5.4)
Businesses divested (note 7) (62.7)
Interest expense related to lease liabilities 17.9
Repayment of lease liabilities (121.6)
---------------------------------------------- ------------------ ------------------- -------
At 31 December 2022 342.9
---------------------------------------------- ------------------ ------------------- -------
Right of use assets
---------------------------------------------- ------------------ ------------------- -------
Net book value
At 1 January 2021 380.5 28.4 408.9
Exchange movements (3.4) (2.6) (6.0)
Additions 35.9 30.8 66.7
Disposals (9.3) (0.3) (9.6)
Impairment (2.0) - (2.0)
Depreciation of right of use assets (85.1) (16.8) (101.9)
At 31 December 2021 316.6 39.5 356.1
---------------------------------------------- ------------------ ------------------- -------
Lease liabilities
---------------------------------------------- -------
At 1 January 2021 541.4
Exchange movements (4.2)
Additions 70.5
Disposals (10.6)
Interest expense related to lease liabilities 20.3
Repayment of lease liabilities (167.6)
------------------------------------------------ -------
At 31 December 2021 449.8
------------------------------------------------ -------
Included in the above, the Group has finance leases liabilities
totalling $16.2m (2021: $13.5m) in addition to the IFRS 16 lease
liabilities in respect of leases previously classified as operating
leases under IAS 17.
A maturity analysis of the Group's total lease liability is
shown below:
2022 2021
$m $m
---------------------------------------------------- ------------ ------------- ------------- ------------
Current lease liability 83.2 118.3
Non-current lease liability 259.7 331.5
--------------------------------------------------------------------------------- ------------- ------------
Total lease liability 342.9 449.8
--------------------------------------------------------------------------------- ------------- ------------
The following table shows the breakdown of lease expense between amounts charged to operating
profit and amounts charged to finance costs.
$m $m
Depreciation charge for right of use assets
Property 62.2 85.1
Plant and equipment 20.1 16.8
Charged to operating profit 82.3 101.9
------------------------------------------------------------------------------------- --------- ------------
Interest expense related to lease liabilities 17.9 20.3
Charge to profit/(loss) before taxation for leases 100.2 122.2
------------------------------------------------------------------------------------- --------- ------------
The Group leases real estate, including land, buildings and
warehouses, machinery/equipment, vehicles and IT equipment. The
right of use assets generate cash flows as part of the cash
generating units disclosed in note 10. The majority of the lease
liability relates to real estate with leases generally entered into
for fixed periods of up to five years, unless of strategic
importance to the Group. Some leases have extension options as
described below. Lease terms are negotiated on an individual basis
and contain a wide range of terms and conditions. The lease
agreements do not impose any covenants other than the security
interests in the leased assets that are held by the lessor. Leased
assets are not used as security for borrowing purposes.
The Group recognises a right of use asset and a lease liability
at the lease commencement date. The right of use asset is initially
measured at cost, and subsequently at cost less any accumulated
depreciation and impairment losses and adjusted for certain
remeasurements of the lease liability. The lease liability is
initially measured at the present value of the lease payments that
are not paid at the commencement date, discounted using the Group's
incremental borrowing rate ("IBR").
The lease liability is subsequently increased by the interest
cost on the lease liability and reduced by the lease payment made.
It is remeasured when there is a change in future lease payments
arising from a change in an index or rate, a change in the
assessment of whether an extension option is reasonably certain to
be exercised or a termination option is reasonably certain not to
be exercised.
The Group has applied judgement to determine the lease term for
some lease contracts in which it is a lessee that includes renewal
options. The assessment of whether the Group is reasonably certain
to exercise such options impacts the lease term, which may
significantly affect the amount of lease liabilities and right of
use assets recognised.
The lease payments are discounted using the interest rate
implicit in the lease. If that rate cannot be readily determined,
which is generally the case for leases in the Group, the Group's
IBR is used. The IBR is the rate that the individual lessee would
have to pay to borrow the funds necessary to obtain an asset of
similar value to the right of use asset in a similar economic
environment with similar terms, security and conditions.
13 Investment in joint ventures and other investments
The Group operates a number of joint ventures companies, the
most significant of which are its turbine JV's, EthosEnergy Group
Limited and RWG (Repair & Overhauls) Limited. The Group
considers these to be joint arrangements on the basis that two or
more parties have joint control, which is defined as the
contractually agreed sharing of control and exists only when
decisions about the relevant activities of the joint arrangement
require the unanimous consent of the parties sharing control. The
Group has a 51% shareholding in EthosEnergy, a provider of rotating
equipment services and solutions to the power, oil and gas and
industrial markets. EthosEnergy is domiciled and headquartered in
Aberdeen, Scotland. The Group has a 50% shareholding in RWG, a
provider of repair and overhaul services to the oil and gas, power
generation and marine propulsion industries. RWG is based in
Aberdeen, Scotland.
The assets, liabilities, income and expenses of the EthosEnergy
and RWG are shown below. The financial information below has been
extracted from the management accounts for these entities.
EthosEnergy (100%) RWG (100%)
2022 2021 2022 2021
$m $m $m $m
------------------------------------ --------- --------- ---------- --------
Non-current assets 137.9 121.7 57.9 65.7
Current assets 520.7 517.9 141.4 155.3
Current liabilities (347.7) (335.9) (74.6) (94.2)
Non-current liabilities (78.7) (66.9) (7.7) (6.8)
------------------------------------ --------- --------- ---------- --------
Net assets 232.2 236.8 117.0 120.0
------------------------------------ --------- --------- ---------- --------
Wood Group share 118.4 120.8 58.5 60.0
Accumulated impairments and other
adjustments (65.9) (70.8) - -
------------------------------------ --------- --------- ---------- --------
Wood Group investment 52.5 50.0 58.5 60.0
Revenue 824.8 832.7 234.3 237.9
Cost of sales (721.5) (701.4) (169.8) (170.9)
Administrative expenses (80.5) (103.3) (31.2) (32.7)
Exceptional items - - - -
------------------------------------ --------- --------- ---------- --------
Operating profit 22.8 28.0 33.3 34.3
Finance expense (7.5) (6.1) (0.8) (0.8)
------------------------------------ --------- --------- ---------- --------
Profit before tax 15.3 21.9 32.5 33.5
Tax (6.4) (8.5) (6.5) (7.1)
------------------------------------ --------- --------- ---------- --------
Post-tax profit from joint ventures 8.9 13.4 26.0 26.4
------------------------------------ --------- --------- ---------- --------
Wood Group share 4.5 6.8 13.0 13.2
------------------------------------ --------- --------- ---------- --------
Cash and cash equivalents amounted to $48.2m (2021: $77.5m) and
$13.9m (2021: $8.2m) for EthosEnergy and RWG respectively.
Depreciation amounted to $29.0m (2021: $16.6m) and $9.2m (2021:
$4.3m) for EthosEnergy and RWG respectively.
Amortisation amounted to $0.9m (2021: $1.0m) and $2.1m (2021:
$2.5m) for EthosEnergy and RWG respectively.
EthosEnergy's net debt at 31 December 2022 amounted to $85.7m
(2021: $37.5m).
RWG had net cash at 31 December 2022 of $5.1m (2021: $1.8m).
The aggregate carrying amount of the Group's other equity
accounted joint ventures, which individually are not material,
amounted to $45.5m at 31 December 2022 (2021: $59.7m).
The Group's share of its joint venture income and expenses is
shown below.
2022 2021
$m $m
Revenue 754.7 753.1
Cost of sales (641.8) (624.9)
Administrative expenses (68.2) (81.4)
Operating profit 44.7 46.8
Net finance expense (4.4) (3.6)
--------------------------------------------- ------- -------
Profit before tax 40.3 43.2
Tax (9.9) (11.7)
--------------------------------------------- ------- -------
Share of post-tax profit from joint ventures 30.4 31.5
--------------------------------------------- ------- -------
The movement in investment in joint ventures is shown below:
2022 2021
$m $m
-------------------------------------------------- ------ ------
At 1 January 169.7 168.7
Exchange movements on retranslation of net assets (11.9) 0.3
Share of profit after tax 30.4 31.5
Dividends received (30.1) (26.3)
Impairment of joint ventures (2.0) -
Additions 0.4 -
Disposals (note 7) - (4.5)
At 31 December 156.5 169.7
-------------------------------------------------- ------ ------
The joint ventures have no significant contingent liabilities to
which the Group is exposed, nor has the Group any significant
contingent liabilities in relation to its interest in the joint
ventures.
The $4.5m disposal relates to movements on a joint venture
investment in the year and other non-core joint venture disposals
completed during 2021.
A full list of subsidiary and joint venture entities is included
in note 38.
Other investments
Other investments of $56.0m (2021: $75.9m) includes $55.6m
(2021: $75.9m) relating to the US SERP defined contribution scheme
referred to in note 33. The SERP invests in a mixture of equities,
bonds and money market funds as part of a pension arrangement for
US based employees. The liabilities of the SERP are included in
non-current liabilities (see note 19).
14 Inventories
2022 2021
$m $m
Materials 3.1 3.7
Work in progress - 0.3
Finished goods and goods for resale 8.0 11.9
------------------------------------ ---- ----
11.1 15.9
------------------------------------ ---- ----
15 Trade and other receivables
2022 2021
$m $m
Trade receivables 744.6 805.5
Less: provision for impairment of trade receivables (65.0) (75.9)
---------------------------------------------------- ------- -------
Trade receivables - net 679.6 729.6
Gross amounts due from customers 556.9 628.1
Prepayments 84.6 105.8
Amounts due from joint ventures 8.9 13.1
Asbestos related insurance recoveries 11.1 13.5
Research and development credits 24.7 119.1
Other receivables 179.2 182.1
---------------------------------------------------- ------- -------
Trade and other receivables - current 1,545.0 1,791.3
Long term receivables - asbestos related insurance
recoveries 24.4 34.0
Long term receivables - other 105.1 73.5
---------------------------------------------------- ------- -------
Total receivables 1,674.5 1,898.8
---------------------------------------------------- ------- -------
As at 31 December 2022, the Group had received $200.0m (2021:
$200.0m) of cash relating to a non-recourse financing arrangement
with one of its banks. An equivalent amount of trade receivables
was derecognised on receipt of the cash. At 31 December 2022,
$113.6m (2021: $79.4m) had been received from customers in the
normal course of business in relation to the same amounts received
from the facility. This $113.6m (2021: $79.4m) is due to be paid
over to the bank and is included in trade payables. The impact of
both the cash received from the facility and the cash received from
customers is included within cash generated from operations.
Included within other long-term receivables of $105.1m (2021:
$73.5m) are contract assets of $74.3m (2021: $66.5m) in relation to
the Aegis contract. Refer to note 21 for further details of the
provisions recognised in respect of this contract.
Financial assets
2022 2021
$m $m
Derivative financial instruments (note 20) 10.8 7.7
------------------------------------------- ---- ----
10.8 7.7
------------------------------------------- ---- ----
The Group's trade receivables balance is shown in the table
below.
Trade Trade
receivables receivables
- Provision -
Gross for impairment Net Receivable
31 December 2022 $m $m $m days
Projects 371.1 (40.4) 330.7 76
Operations 197.4 (5.3) 192.1 42
Consulting 105.1 (3.8) 101.3 75
Investment Services 71.0 (15.5) 55.5 73
Total Group 744.6 (65.0) 679.6 67
-------------------- ------------ --------------- ------------ ----------
Trade Trade
receivables receivables
- Provision -
Gross for impairment Net Receivable
31 December 2021 $m $m $m days
----------------------------- ------------ --------------- ------------ ----------
Projects 318.1 (43.7) 274.4 73
Operations 162.2 (8.2) 154.0 47
Consulting 91.5 (3.7) 87.8 76
Built Environment Consulting 175.3 (5.1) 170.2 81
Investment Services 58.4 (15.2) 43.2 49
----------------------------- ------------ --------------- ------------ ----------
Total Group 805.5 (75.9) 729.6 69
----------------------------- ------------ --------------- ------------ ----------
Receivable days are calculated by allocating the closing trade
receivables and gross amounts due from customers balances to
current revenue. A receivable days calculation of 67 indicates that
closing trade receivables represent on average the most recent 67
days of revenue.
Receivable days for Investment Services has been adjusted to
exclude the impact of the Aegis project for both 2022 and 2021. The
Total Group Receivable days reflects all Group activity including
Aegis.
The ageing of the provision for impairment of trade receivables
is as follows:
2022 2021
$m $m
--------------- ---- ----
Up to 3 months 2.6 0.8
Over 3 months 62.4 75.1
--------------- ---- ----
65.0 75.9
--------------- ---- ----
The movement on the provision for impairment of trade
receivables is as follows:
Built Environment Consulting
Projects Operations Consulting $m Investment Services Total
2022 $m $m $m $m $m
---------------------- -------- ---------- ---------- ---------------------------- ------------------- -------
At 1 January 43.7 8.2 3.7 5.1 15.2 75.9
Exchange movements (2.7) (0.1) 0.1 - (0.6) (3.3)
Disposed during year - - - (4.1) - (4.1)
Reclassed during year - 0.1 (0.9) - - (0.8)
Transfers during year (0.1) 0.1 - - 0.1 0.1
Provided during year 4.2 0.7 1.6 (0.2) 1.5 7.8
Utilised during year (3.5) (3.3) (0.2) - - (7.0)
Released during year (1.2) (0.4) (0.5) (0.8) (0.7) (3.6)
At 31 December 40.4 5.3 3.8 - 15.5 65.0
---------------------- -------- ---------- ---------- ---------------------------- ------------------- -------
2021
----------------------
At 1 January 58.8 7.3 4.4 5.9 18.4 94.8
Exchange movements (2.8) (0.1) (-) (0.1) (0.7) (3.7)
Reclassed during year - - (0.1) - 1.0 0.9
Transfers during year (0.1) 0.1 (0.1) - - (0.1)
Provided during year 3.0 2.2 0.8 (0.7) 0.3 5.6
Utilised during year (2.4) (0.9) (1.0) - (3.6) (7.9)
Released during year (12.8) (0.4) (0.3) - (0.2) (13.7)
---------------------- -------- ---------- ---------- ---------------------------- ------------------- -------
At 31 December 43.7 8.2 3.7 5.1 15.2 75.9
---------------------- -------- ---------- ---------- ---------------------------- ------------------- -------
The other classes within trade and other receivables do not
contain impaired assets.
Included within gross trade receivables of $744.6m above (2021:
$805.5m) and gross amounts due from customers of $556.9m (2021:
$628.1m) are contract assets of $244.6m (2021: $203.4m) which were
past due. These relate to customers for whom there is no recent
history or expectation of default. The ageing analysis of these
contract assets is as follows:
2022 2021
$m $m
Up to 3 months overdue 117.9 89.6
Over 3 months overdue 126.7 113.8
----------------------- ----- -----
244.6 203.4
----------------------- ----- -----
The above analysis excludes retentions relating to contracts in
progress of $67.2m (2021: $90.5m).
16 Cash and cash equivalents
2022 2021
$m $m
Cash at bank and in hand 521.7 480.0
Short-term bank deposits - 10.5
Restricted cash 15.0 12.5
------------------------- ----- -----
536.7 503.0
------------------------- ----- -----
Cash at bank and in hand at 31 December 2022 includes $328.4m
(2021: $240.4m) that is part of the Group's cash pooling
arrangements and both cash and borrowings are grossed up by this
amount in the financial statements.
The effective interest rate on short-term deposits at 31
December 2022 was nil% (2021: 2.8%) and these deposits have an
average maturity of zero days (2021: 20 days).
The restricted cash balance comprises $10.0m (2021: $12.5m) of
cash held in jurisdictions where there is insufficient liquidity in
the local market to allow for immediate repatriation. The remaining
$5.0m (2021: $nil) relates to balances held within Russia that are
impacted by the sanctions associated with Russia's invasion of
Ukraine. Management considers it appropriate to include the
restricted cash balance in the Group's net debt figure (see note
30) on the basis that it meets the definition of cash, albeit is
not readily available to the Group.
17 Trade and other payables
2022 2021
$m $m
Trade payables 550.6 856.6
Gross amounts due to customers 15.6 87.5
Deferred income 97.4 115.0
Other tax and social security payable 58.2 58.3
Accruals 637.0 483.1
Derivative financial instruments 10.8 3.7
Amounts due to joint ventures 0.3 0.4
Asbestos related payables 59.5 54.5
Other payables 258.2 339.5
---------- -------
1,687.6 1,998.6
-------------------------------------- ---------- -------
Trade payables includes $113.6m (2021: $79.4m) relating to cash
received from customers which is due to be paid over to the
bank.
Gross amounts due to customers included above represent payments
on account received in excess of amounts due from customers on
fixed price contracts.
Accruals includes amounts due to suppliers and sub-contractors
that have not yet been invoiced, unpaid wages, salaries and
bonuses.
Other payables includes project related and other liabilities
which include the amounts due under the investigation which was
concluded in 2021 of $37.3m.
18 Borrowings
2022 2021
$m $m
----------------------------------------------------------- ----- -------
Bank loans and overdrafts due within one year or on demand
Unsecured 345.9 246.9
Senior loan notes
Unsecured - 35.0
----------------------------------------------------------- ----- -------
Total current borrowings 345.9 281.9
----------------------------------------------------------- ----- -------
Non-current bank loans
Unsecured 232.0 845.8
Senior loan notes
Unsecured 352.0 768.3
----------------------------------------------------------- ----- -------
Total non-current borrowings 584.0 1,614.1
----------------------------------------------------------- ----- -------
Borrowings of $328.4m (2021: $240.4m) that are part of the
Group's cash pooling arrangements and are netted against cash for
internal reporting purposes are grossed up in the short-term
borrowings figure above.
Bank overdrafts are denominated in a number of currencies and
bear interest based on the Bank of England base rate or the
relevant foreign currency equivalent.
Following the disposal of the Built Environment Consulting
business in September, the Group repaid $400.0m of the $600.0m term
loan and the agreed early repayment totalling $416.3m of the US
Private Placement loan notes. The Group had total facilities of
$1,866.9m as at 31 December 2022, which comprises of a $200.0m term
loan maturing in July 2026, $1,200.0m of Revolving Credit Facility
maturing in October 2026, $352.0m of senior loan notes in the US
private placement market with varying maturities and $114.9m of
other banking facilities.
Of the non-current borrowings of $584.0m, $50.4m is denominated
in sterling and the balance in US dollars.
The Group's principal borrowing facilities at 31 December 2022
are set out in the table below.
Drawn at 31 December 2022 Undrawn at 31 December 2022
Facility Total available $m $m
$m Repayable
-------------------------- ---------------- -------------------------- --------------------------- -------------
Term loan 200.0 200.0 - July 2026
Revolving credit facility 1,200.0 42.1 1,157.9 October 2026
Senior loan notes 352.0 352.0 - Various dates
Other facilities 114.9 5.2 109.7 Various dates
Accrued interest - 12.2 (12.2) N/A
Unamortised fees - (10.0) 10.0 N/A
1,866.9 601.5 1,265.4
-------------------------- ---------------- -------------------------- --------------------------- -------------
The above table excludes borrowings of $328.4m that are part of
the Group's cash pooling arrangements and are offset by equivalent
cash balances.
The Group has $352.0m (2021: $803.3m) of unsecured senior loan
notes issued in the US private placement market. The notes mature
at varying dates between 2024 and 2031 as shown in the table below.
Interest is payable at an average rate of 5.95% (2021: 4.21%).
2022 2021
Repayable $m $m
--------------
July 2022 - 35.0
July 2024 11.5 25.0
August 2024 55.1 120.0
November 2024 23.0 50.0
July 2026 57.4 127.3
August 2026 58.8 128.0
February 2027 18.4 40.0
February 2029 46.0 100.0
July 2029 59.5 129.5
July 2031 22.3 48.5
352.0 803.3
--------------
The effective interest rates on the Group's bank loans and
overdrafts at the balance sheet date were as follows:
2022 2021
% %
----------
US dollar 4.79 1.79
Sterling 5.09 1.40
Euro 3.02 1.11
----------
The carrying amounts of the Group's borrowings, including those
held within pooling arrangements, are denominated in the following
currencies:
2022 2021
$m $m
----------
US Dollar 611.6 1,537.3
Sterling 176.7 69.0
Euro 120.0 282.1
Other 21.6 7.6
----------
929.9 1,896.0
----------
The Group is required to issue tender bonds, performance bonds,
retention bonds, advance payment bonds and standby letters of
credit to certain customers. Management have assessed that the
possibility of these being triggered is remote. At 31 December
2022, the Group's bank facilities relating to the issue of bonds,
guarantees and letters of credit amounted to $1,244.2m (2021:
$1,292.9m). At 31 December 2022, these facilities were 61% utilised
(2021: 65%).
Borrowing facilities
The Group has the following undrawn borrowing facilities
available at 31 December:
2022 2021
$m $m
Expiring within one year 109.7 148.9
Expiring between one and two years - -
Expiring between two and five years 1,155.7 954.2
1,265.4 1,103.1
------------------------------------
All undrawn borrowing facilities are floating rate facilities.
The facilities expiring within one year are annual facilities
subject to review at various dates during 2023. The Group was in
compliance with its bank covenants throughout the year.
A reconciliation of movements of borrowings and lease
liabilities to cash flows arising from financing activities is
presented in the table below.
Short Long Lease
term term liabilities Total
borrowings borrowings $m $m
$m $m
Balance 1 January 2022 281.9 1,614.1 449.8 2,345.8
Changes from financing cash flows
Repayments of long-term borrowings - (1,039.1) - (1,039.1)
Repayments of short-term borrowings (35.0) - - (35.0)
(Proceeds from short-term borrowings 88.0 - - 88.0
Payment of lease liabilities (note
12) - - (121.6) (121.6)
Total changes from financing activities 53.0 (1,039.1) (121.6) (1,107.7)
Effects of changes in foreign exchange
rates (note 30) (1.2) 0.1 (27.0) (28.1)
Other changes
New leases (note 12) - - 23.8 23.8
Interest expense (note 3) - 98.1 17.9 116.0
Interest paid - (98.1) - (98.1)
Other movements 12.2 8.9 - 21.1
Total liability other changes 12.2 8.9 41.7 62.8
Balance at 31 December 2022 345.9 584.0 342.9 1,272.8
Short Long Lease
term term liabilities Total
borrowings borrowings $m $m
$m $m
Balance 1 January 2021 315.3 1,296.5 541.4 2,153.2
Changes from financing cash flows
Repayment of long-term borrowings - 329.3 - 329.3
Repayment of short-term borrowings (33.5) - - (33.5)
Payment of lease liabilities (note
12) - - (167.6) (167.6)
Total changes from financing activities (33.5) 329.3 (167.6) 128.2
Effects of changes in foreign exchange
rates (note 30) 0.1 0.4 (4.2) (3.7)
Other changes
New leases (note 12) - - 59.9 59.9
Interest expense (note 3) - 87.5 20.3 107.8
Interest paid - (87.5) - (87.5)
Other movements - (12.1) - (12.1)
Total liability other changes - (12.1) 80.2 68.1
Balance at 31 December 2021 281.9 1,614.1 449.8 2,345.8
19 Other non-current liabilities
2022 2021
$m $m
Derivative financial instruments - 8.1
Other payables 106.8 191.7
106.8 199.8
Other payables include $33.6m in respect of the regulatory
investigations, which were closed out during 2021 and represents
payments due in 2024, $55.6m (2021: $75.9m) relating to the US SERP
pension arrangement referred to in note 33 and unfavourable leases
of $3.3m (2021: $8.6m). Unfavourable lease liabilities represent
non-lease components, such as facilities costs which are not
included within the IFRS 16 lease liability.
20 Financial instruments
The Group's activities give rise to a variety of financial
risks: market risk (including foreign exchange risk and cash flow
interest rate risk), credit risk and liquidity risk. The Group's
overall risk management strategy is to hedge exposures wherever
practicable in order to minimise any potential adverse impact on
the Group's financial performance.
Risk management is carried out by the Group Treasury department
in line with the Group's Treasury policies. Group Treasury,
together with the Group's business units identify, evaluate and
where appropriate, hedge financial risks. The Group's Treasury
policies cover specific areas, such as foreign exchange risk,
interest rate risk, use of derivative financial instruments and
investment of excess cash.
Where the Board considers that a material element of the Group's
profits and net assets are exposed to a country in which there is
significant geo-political uncertainty a strategy is agreed to
ensure that the risk is minimised.
(a) Market risk
(i) Foreign exchange risk
The Group is exposed to foreign exchange risk arising from
various currencies. The Group has subsidiary companies whose
revenue and expenses are denominated in currencies other than the
US dollar. Where possible, the Group's policy is to eliminate all
significant currency exposures at the time of the transaction by
using financial instruments such as forward currency contracts.
Changes in the forward contract fair values are booked through the
income statement, except where hedge accounting is used in which
case the change in fair value is recorded in equity.
Hedging of foreign currency exchange risk - cash flow hedges
The notional contract amount, carrying amount and fair values of
forward contracts and currency swaps designated as cash flow hedges
at the balance sheet date are shown in the table below.
2022 2021
2022 2021 Carrying Carrying
Notional Notional amount amount
contract contract and and
amount amount fair value fair value
$m $m $m $m
Current assets 144.9 99.4 2.1 1.3
Current liabilities (180.7) (52.5) (4.8) (1.0)
A net foreign exchange loss of $3.0m (2021: $0.9m) was
recognised in the hedging reserve as a result of fair value
movements on forward contracts and currency swaps designated as
cash flow hedges.
Hedging of foreign currency exchange risk - fair value through
income statement
The notional contract amount, carrying amount and fair value of
all other forward contracts and currency swaps at the balance sheet
date are shown in the table below.
2022 2021
2022 2021 Carrying Carrying
Notional Notional amount amount
contract contract and and
amount amount fair value fair value
$m $m $m $m
Current assets 990.4 583.2 8.7 6.4
Current liabilities (337.8) (411.9) (6.0) (2.7)
The Group's largest foreign exchange risk relates to movements
in the sterling/US dollar exchange rate. Movements in the
sterling/US dollar rate can impact the translation of sterling
profit earned in the UK and the translation of sterling denominated
net assets. A weakening of the pound has a negative impact on
translation of UK companies' profits and net assets. Sterling
denominated trading profits in the UK are offset by the Group's
corporate overhead and a 10% change in the sterling/dollar rate
would result in a change to Adjusted EBITDA of less than 1%. A 10%
change in the sterling/dollar rate would impact net assets by less
than 1%. 10% has been used in these calculations as it represents a
reasonable possible change in the sterling/US dollar exchange rate.
The Group also has foreign exchange risk in relation a number of
other currencies, such as the Australian dollar, the Canadian
dollar and the Euro.
(ii) Interest rate risk
The Group finances its operations through a mixture of retained
profits and debt. The Group borrows in the desired currencies at a
mixture of fixed and floating rates of interest to manage the
Group's exposure to interest rate fluctuations. At 31 December
2022, 53% (2021: 52%) of the Group's borrowings were at fixed
rates. The Group is also exposed to interest rate risk on cash held
on deposit. The Group's policy is to maximise the return on cash
deposits and where possible and deposit cash with a financial
institution with a credit rating of BBB+ or better.
Hedging of interest rate risk - cash flow hedges
The notional contract amount, carrying amount and fair value of
interest rate swaps designated as cash flow hedges at the balance
sheet date are shown in the table below.
2022 2021
Carrying Carrying
2022 2021 amount amount
Hedged Hedged and and
amount amount fair value fair value
$m $m $m $m
Interest rate swaps - 250.0 - (8.1)
A net gain of $8.1m (2021: $8.8m) was recognised in the hedging
reserve as a result of fair value movements on interest rate swaps
designated as cash flow hedges.
The $250m interest rate swap was closed out in September 2022,
following the disposal of the Built Environment Consulting business
and led to a net gain of $8.1m recognised in the hedging
reserve.
If average interest rates had been 2% higher or lower during
2022 (2021: 1%), post-tax profit for the year would have been $5.8m
lower or higher respectively (2021: $6.3m). 2% has been used in
this calculation as it represents a reasonable possible change in
interest rates.
(iii) Price risk
The Group is not exposed to any significant price risk in
relation to its financial instruments.
(b) Credit risk
The Group's credit risk primarily relates to its trade
receivables. The Group assumes that the credit risk on a financial
asset has increased significantly if it is more than 6 months past
due and considers a financial asset to be in default when the
financial asset is more than 12 months past due. Responsibility for
managing credit risk lies within the businesses with support being
provided by Group and divisional management where appropriate.
The credit risk associated with customers is considered as part
of each tender review process and is addressed initially through
contract payment terms. Trade finance instruments such as letters
of credit, bonds, guarantees and credit insurance are used to
manage credit risk where appropriate. Credit control practices are
applied thereafter during the project execution phase. A right to
interest and suspension is normally sought in all contracts. There
is significant management focus on customers that are classified as
high risk in the current challenging market although the Group had
no material write offs in the year.
The Group's major customers are typically large companies which
have strong credit ratings assigned by international credit rating
agencies. Where a customer does not have sufficiently strong credit
ratings, alternative forms of security such as the trade finance
instruments referred to above may be obtained.
The Group uses the simplified provision matrix when calculating
expected credit losses on financial assets. The provision matrix is
based on historical default rates and is adjusted for forward
looking estimates. The historical default rate is determined by
comparing actual contract write offs against revenue recognised
over each of the prior five years. The average write off over the
historical period can be applied to current year revenue. The
forward-looking assessment also considers post-year end cash
collection, country risk scoring, customer disputes and specific
financial uncertainties.
Management review trade receivables based on receivable days
calculations to assess performance. A table showing trade
receivables and receivable days is provided in note 15. Receivable
days calculations are not provided on non-trade receivables as
management do not believe that this information is a relevant
metric.
The maximum credit risk exposure on cash and cash equivalents
and bank deposits (more than three months) at 31 December 2022 was
$536.7m (2021: $503.0m). The Group treasury department monitors
counterparty exposure on a global basis to avoid any over exposure
to any one counterparty.
The Group's policy is to deposit cash at institutions with a
credit rating of at least BBB+. 100% of cash held on deposit at 31
December 2022 was held with such institutions.
(c) Liquidity risk
The Group's policy is to ensure the availability of an
appropriate amount of funding to meet both current and future
forecast requirements consistent with the Group's budget and
strategic plans. The Group will finance operations and growth from
its existing cash resources and the $1,265.4m undrawn portion of
the Group's committed banking facilities. The 2022 average net debt
(excluding leases) was $1,489.1m (2021: $1,680.0m). The cash
balance and undrawn portion of the Group's committed banking
facilities can fluctuate throughout the year. Around the covenant
remeasurement dates of 30 June and 31 December the Group's net debt
is typically lower than these averages due to a combination of
factors including a strong focus on collection of receipts from
customers. Although revenue is typically weighted towards the
second half of the year it is usually higher in June than in
December, which means the level of working capital required is
typically higher at the end of June and net debt is typically lower
by the end of December.
At 31 December 2022, 100% (2021: 93%) of the Group's principal
borrowing facilities (including senior loan notes) were due to
mature in more than one year. Based on the Group's latest forecasts
the Group has sufficient funding in place to meet its future
obligations.
The Group's total bank facilities comprise of a $200.0m term
loan maturing in July 2026 and a $1,200.0m revolving credit
facility which matures in October 2026. The $200.0m term loan
includes KPIs linked to growing revenues related to energy
transition and sustainable infrastructure and reducing scope 1 and
2 carbon emissions.
The Group has $352.0m of unsecured senior loan notes issued in
the US private placement market. The notes mature in various
tranches between July 2024 and 2031.
(d) Capital risk
The Group seeks to maintain an optimal capital structure by
monitoring its ratio of net debt to adjusted EBITDA, its interest
cover and its gearing ratio.
The ratio of net debt to Adjusted EBITDA at 31 December 2022 was
1.3 times (2021: 3.3 times). This ratio is calculated by dividing
net debt before leases by Adjusted EBITDA on a frozen GAAP basis
which excludes the impact of IFRS 16.
Interest cover is calculated by dividing Adjusted EBITDA,
excluding the impact of IFRS 16, by net recurring finance expense
and was 4.1 times for the year ended 31 December 2022 (2021: 4.5
times).
Gearing is calculated by dividing net debt, before leases, by
equity attributable to owners of the parent. Gearing at 31 December
2022 was 10.5% (2021: 34.1%).
Financial liabilities
The table below analyses the Group's financial liabilities into
relevant maturity groupings based on the remaining period from the
balance sheet date to the contractual maturity date. The amounts
disclosed in the table are the contractual undiscounted cash flows
which are not usually closed out before contractual maturity.
Less than Between Between Over 5
1 year 1 and 2 years 2 and 5 years years
At 31 December 2022 $m $m $m $m
Borrowings 361.2 116.2 431.2 132.7
Trade and other payables 1,628.7 - - -
Lease liabilities 107.0 80.5 123.6 145.2
Other non-current liabilities - 51.2 55.6 -
At 31 December 2021
Borrowings 333.8 51.4 1,443.6 356.1
Trade and other payables 1,935.7 - - -
Lease liabilities 109.2 154.3 131.5 128.8
Other non-current liabilities - 26.9 172.6 -
Fair value of non-derivative financial assets and financial
liabilities
The fair value of short-term borrowings, trade and other
payables, trade and other receivables, financial assets, short-term
deposits and cash at bank and in hand approximates to the carrying
amount because of the short maturity of interest rates in respect
of these instruments.
The fair value of non-current bank borrowings as at 31 December
2022 was $231.1m (book value $244.3m) (2021: $773.4m, book value
$845.8m). The fair value of the US Private Placement debt at 31
December 2022 was $358.1m (book value $352.0m) (2021: $809.2m, book
value $803.3m).
Fair values (excluding the fair value of assets and liabilities
classified as held for sale) are determined using observable market
prices (level 2 as defined by IFRS 13 'Fair Value Measurement') as
follows:
-- The fair value of forward foreign exchange contracts is
estimated by discounting the difference between the contractual
forward price and the current forward price for the residual
maturity of the contract using a risk-free interest rate.
-- The fair value of interest rate swaps is estimated by
discounting estimated future cash flows based on the terms and
maturity of each contract and using market rates.
All derivative fair values are verified by comparison to
valuations provided by the derivative counterparty banks.
The Group determines whether transfers have occurred between
levels in the hierarchy by reassessing categorisation (based on the
lowest level input that is significant to the fair value
measurement as a whole) at the end of each reporting period. During
the year ended 31 December 2022 and 31 December 2021, there were no
transfers into or out of level 2 fair value measurements.
21 Provisions
Asbestos Litigation Project
related Property related related
2022 litigation Insurance $m provisions provisions Total
$m $m $m $m $m
At 1 January 2022 342.1 55.2 32.4 93.3 112.2 635.2
Reclassifications (5.6) 1.3 - 1.1 4.5 1.3
Utilised (44.1) - (3.2) (88.5) (45.5) (181.3)
Divestments - - - - (0.7) (0.7)
Charge to income
statement 59.6 17.4 0.4 10.0 15.3 102.7
Release of provisions (37.0) (27.7) (2.3) (2.5) (18.1) (87.6)
Exchange movements (3.6) - (1.3) (0.6) (4.4) (9.9)
At 31 December 2022 311.4 46.2 26.0 12.8 63.3 459.7
-----------
Presented as
Current - - 3.3 11.0 30.6 44.9
Non-current 311.4 46.2 22.7 1.8 32.7 414.8
-----------
2021
At 1 January 2021 403.7 71.0 34.0 333.0 100.9 942.6
Reclassifications (18.9) - (0.1) (214.6) (1.6) (235.2)
Utilised (42.5) - (0.4) (14.2) (8.1) (65.2)
Charge to income
statement 6.3 5.6 3.5 0.7 44.7 60.8
Release of provisions (6.3) (21.6) (4.1) (11.7) (22.0) (65.7)
Exchange movements (0.2) 0.2 (0.5) 0.1 (1.7) (2.1)
At 31 December 2021 342.1 55.2 32.4 93.3 112.2 635.2
------ -------
Presented as
Current - - 9.0 89.0 61.0 159.0
Non-current 342.1 55.2 23.4 4.3 51.2 476.2
------ -------
Asbestos related litigation
The Group assumed the majority of its asbestos-related
liabilities when it acquired Amec Foster Wheeler in October 2017.
Whilst some of the asbestos claims have been and are expected to be
made in the United Kingdom, the overwhelming majority have been and
are expected to be made in the United States.
Some of Amec Foster Wheeler's US subsidiaries are defendants in
numerous asbestos-related lawsuits and out-of-court informal claims
pending. Plaintiffs claim damages for personal injury alleged to
have arisen from exposure to, or use of, asbestos in connection
with work allegedly performed during the 1970s and earlier. The
estimates and averages presented have been calculated on the basis
of the historical US asbestos claims since the initiation of claims
filed against these entities.
The number and cost of current and future asbestos claims in the
US could be substantially higher than estimated and the timing of
payment of claims could be sooner than estimated, which could
adversely affect the Group's financial position, its results and
its cash flows.
The Group expects these subsidiaries to be named as defendants
in similar suits and that new claims will be filed in the future.
For purposes of these financial statements, management have
estimated the indemnity and defence costs to be incurred in
resolving pending and forecasted claims through to 2050. Although
we believe that these estimates are reasonable, the actual number
of future claims brought against these subsidiaries and the cost of
resolving these claims could be higher.
Some of the factors that may result in the costs of asbestos
claims being higher than the current estimates include:
-- an increase in the rate at which new claims are filed and an
increase in the number of new claimants
-- increases in legal fees or other defence costs associated with asbestos claims
-- increases in indemnity payments, decreases in the proportion
of claims dismissed with zero payment and payments being required
to be made sooner than expected
The Group has worked with its advisors with respect to
projecting asbestos liabilities and to estimate the amount of
asbestos-related indemnity and defence costs at each year-end
through to 2050. Each year the Group records its estimated asbestos
liability at a level consistent with the advisors' reasonable best
estimate. The Group's advisors perform a quarterly and annual
review of asbestos indemnity payments, defence costs and claims
activity and compare them to the forecast prepared at the previous
year-end. Based on its review, they may recommend that the
assumptions used to estimate future asbestos liabilities are
updated. This was the case in 2022 and is reflected by a charge to
exceptional items.
The total liability recorded in the Group's balance sheet at 31
December 2022 is based on estimated indemnity and defence costs
expected to be incurred to 2050. Management believe that any new
claims filed after 2050 will be minimal.
Asbestos related liabilities and assets recognised on the
Group's balance sheet are as follows:
2022 2021
US UK Total US UK Total
$m $m $m $m $m $m
------ ------
Asbestos related provision
Gross provision 425.4 32.5 457.9 406.0 38.2 444.2
Effect of discounting (87.0) - (87.0) (47.6) - (47.6)
Net provision 338.4 32.5 370.9 358.4 38.2 396.6
------ ------
Insurance recoveries
Gross recoveries (6.0) (29.5) (35.5) (13.1) (34.6) (47.7)
Effect of discounting - - - 0.2 - 0.2
------ ------
Net recoveries (6.0) (29.5) (35.5) (12.9) (34.6) (47.5)
------ ------
Net asbestos related liabilities 332.4 3.0 335.4 345.5 3.6 349.1
------ ------
Presented in accounts as
follows
Provisions - non-current 311.4 342.1
Trade and other payables 59.5 54.5
Trade and other receivables (11.1) (13.5)
Long term receivables (24.4) (34.0)
------ ------
335.4 349.1
------ ------
The gross US asbestos related provision of $425.4m (2021:
$406.0m) includes $35.4m (2021: $21.6m) relating to agreed
settlements which have not been paid at 31 December 2022. The
remaining $390.0m (2021: $384.4m) represents the gross US asbestos
related provision which is discounted to a net present value of
$303.0 million (2021: $336.8 million).
A net interest charge of $5.9m (2021: $6.3m) representing the
unwinding of the discount over time and a credit of $37.0m (2021:
credit $6.3m), of which $35.6m relates to the increase in the
30-year US Treasury Bond rate in 2022 are included within
exceptional items since the movements in the provision are
non-trading, can be large and are driven by market conditions which
are out with the Group's control.
An additional $52.8m has been charged to the income statement in
the year, reflecting future actuarial adjustments in the overall
plan estimates. The increase to the estimates are driven by a
higher number of filings compared to the underlying actuarial model
and an increased number of settlements at higher settlement
values.
A summary of the Group's US asbestos claim activity is shown in
the table below:
2022 2021
Number of open claims Number Number
At 1 January 57,490 60,400
New claims 2,330 2,440
Claims resolved (2,620) (5,350)
At 31 December 57,200 57,490
Claims not valued in liability (42,170) (42,570)
Open claims valued in liability at 31 December 15,030 14,920
Claims not valued in the liability include claims on certain
inactive court dockets, claims over six years old that are
considered abandoned and certain other items.
Based on 2022 activity, the Group's current forecast liabilities
have been adjusted for payments made in 2022 of $44.1m and to
reflect the impact of discounting.
In 2022, the liability for asbestos indemnity and defence costs
to 2050 was calculated at a gross nominal amount of $457.9m
(present value $370.9m), which brought the liability to a level
consistent with our advisor's reasonable best estimate. The total
asbestos-related liabilities are comprised of estimates for
liabilities relating to open (outstanding) claims being valued and
the liability for future unasserted claims to 2050.
The estimate takes account of the following information and/or
assumptions:
-- number of open claims
-- forecasted number of future claims
-- estimated average cost per claim by disease type -
mesothelioma, lung cancer and non-malignancies
The total estimated liability, which has been discounted for the
time value of money, includes both the estimate of forecasted
indemnity amounts and forecasted defence costs. Total defence costs
and indemnity liability payments are estimated to be incurred
through to 2050. The Group believes that it is likely that there
will be some claims filed after 2050, however these are projected
to be minimal.
In the last 5 years from 2018 to 2022, the US average combined
indemnity and defence cost per resolved claim has been
approximately $9k. The average cost per resolved claim is
increasing and management believe it will continue to increase in
the future as the Group continues to resolve the current and
estimated future claims inventory. A sensitivity analysis on
average indemnity settlement and defence costs is included in the
table below.
Asbestos related receivables represents management's best
estimate of insurance recoveries relating to liabilities for
pending and estimated future asbestos claims through to 2050. The
receivables are only recognised when it is virtually certain that
the claim will be paid.
The following table sets out the sensitivities associated with a
change in certain estimates used in relation to the US
asbestos-related liabilities:
Assumption Impact on
asbestos
liabilities
(range)
$m
-------------------------------------------------- ------------
25% change in average indemnity settlement amount 50-60
25% change in forecasted number of new claims 50-60
25% change in estimated defence costs 40-50
-------------------------------------------------- ------------
In addition to the above, the impact on the income statement in
the year is sensitive to changes in the discount rate used to
calculate the time value of money.
The Group has used the 30-year US Treasury Bond rate to discount
its asbestos liabilities. The table below sets out the current year
charge associated with a 30-year rate alongside the charge that
would have arisen had a 10 or a 20-year rate been used.
Rate as at 31 December Exceptional items
Duration 2022 $m
10 year 3.88% (34.0)
20 year 4.14% (38.0)
30 year (basis used) 3.97% (35.6)
A change of 0.1% in the 30-year US Treasury Bond rate would give
rise to a change to the income statement charge/credit of
approximately $1.5m.
The Group's subsidiaries have been effective in managing the
asbestos litigation, in part, because the Group has access to
historical project documents and other business records going back
more than 50 years, allowing it to defend itself by determining if
the claimants were present at the location of the alleged asbestos
exposure and, if so, the timing and extent of their presence. In
addition, the Group has identified and validated insurance policies
issued since 1952 and has consistently and vigorously defended
claims that are without merit and settled meritorious claims for
reasonable amounts.
The table below summarises the asbestos-related net cash impact
for indemnity and defence costs and collection of insurance
proceeds:
2022 2021
$m $m
Asbestos litigation, defence and case resolution payments 44.1 42.5
Insurance proceeds (7.7) (13.5)
Net asbestos related payments 36.4 29.0
The Group expects to have a net cash outflow of approximately
$38m as a result of asbestos liability indemnity and defence
payments in excess of insurance proceeds during 2023. This estimate
assumes no elections by the Group to fund additional payments. As
the Group continues to collect cash from previous insurance
settlements, the asbestos-related insurance receivable recorded on
our consolidated balance sheet is expected to be fully recovered in
2023.
The Group has discounted the expected future cash flows with
respect to the asbestos related liabilities using discount rates
determined by reference to appropriate risk free market interest
rates.
Insurance provisions
The Group has liabilities in relation to its captive insurance
companies of $46.2m (2021: $55.2m).
The Group currently has one captive insurance company, Garlan
Insurance Limited, which is active and is based in Guernsey. The
company provides insurance solely to other Group companies and does
not provide any insurance to third parties. The provisions recorded
represent amounts payable to external parties in respect of claims,
the value of which is based on actuarial reports which assess the
likelihood and value of these claims. These are reassessed
annually, with movements in claim reserves being recorded in the
income statement.
Property provisions
Property provisions total $26.0m (2021: $32.4m). Property
provisions mainly comprise of dilapidations relating to the cost of
restoring leased property back into its original, pre-let
condition. The estimate of costs is the greatest area of
uncertainty and the timing of future cash outflows is linked to the
term dates of numerous individual leases.
Litigation related provisions
The Group is party to litigation involving clients and
sub-contractors arising from its contracting activities. Management
has taken internal and external legal advice in considering known
or reasonably likely legal claims and actions by and against the
Group. Where a known or likely claim or action is identified,
management carefully assesses the likelihood of success of the
claim or action. A provision is recognised only in respect of those
claims or actions where management consider it is probable that a
cash outflow will be required.
Provision is made for management's best estimate of the likely
settlement costs and/or damages to be awarded for those claims and
actions that management considers are likely to be successful. Due
to the inherent commercial, legal and technical uncertainties in
estimating project claims, the amounts ultimately paid or realised
by the Group could differ from the amounts that are recognised in
the financial statements.
Investigations
Under the terms of the investigation agreements concluded in
2021, the Group will pay compensation, disgorgement and prejudgment
interest, fines and penalties in instalments, with the remaining
amounts due to the SFO and the Crown Office and Procurator Fiscal
Service ("COPFS") payable in 2023 and 2024, with approximately $38m
paid in 2022.
During 2021, the Group reclassed $196.7m of provisions to Trade
and other payables to reflect the greater certainty as a result of
the agreement. At 31 December 2022, the Group has recognised the
outstanding penalties comprising of a current portion of $37.3m
included within Trade and other payables and a non-current portion
of $33.6m included in other non-current liabilities (note 19).
Chemical plant litigation
In 2013, one of Amec Foster Wheeler plc's subsidiaries was
contracted to engineer, procure and construct a chemical plant for
a client in Texas. The cost of the project exceeded the client's
budget which led to the client partially terminating the contract
in December 2015, before terminating the remainder of the contract
and commencing a lawsuit in Texas against the subsidiary and also
Amec Foster Wheeler plc in September 2016. The client sought
recovery of actual damages, plus punitive damages, interest and
attorney's fees for breach of contract and warranty, gross
negligence and fraud. The alleged actual damages totalled $695m,
which included an alleged $317m in lost revenue from delayed
commercial operation.
The trial of the lawsuit commenced on 19 April 2022 and
concluded on 22 July 2022, with agreement reached between the
parties on 11 November 2022. The Group has agreed to settle the
case for an amount of $115m. Prior to settlement, after deducting
legal fees incurred in the period up to settlement, a provision of
$79m was held leading to a loss of $36m being recorded in 2022.
This loss has been classified as exceptional both by its nature and
by its size. All claims against the Group and its subsidiaries have
been released per the settlement agreement and the action has been
dismissed with prejudice on joint motion of the parties.
Overall, the amount paid to Enterprise was higher than the
Group's underlying legal assessment of the merits of the case, but
further drawn-out litigation was likely to be costly and carried a
risk that a court awarded a figure significantly more than the
amount paid. Negotiations with Enterprise brought the figure down
as far as possible and ultimately it was considered by the Board
that a premium was appropriate to bring the matter to a timely
close.
Other litigations
Other items relating to litigation are included within the
overall provision, none of which are individually material.
Project related provisions
The Group has numerous provisions relating to the projects it
undertakes for its customers. The value of these provisions relies
on specific judgements in areas such as the estimate of future
costs or the outcome of disputes and litigation. Whether or not
each of these provisions will be required, the exact amount that
will require to be paid and the timing of any payment will depend
on the actual outcomes.
Aegis Poland
This legacy AFW project involves the construction of various
buildings to house the Aegis Ashore anti-missile defence facility
for the United States Army Corps of Engineers ("USACE"). Wood's
construction scope is now substantially complete and is due to be
formally handed over to USACE at the end of March 2023. There has
been no change in management's assessment of the loss at completion
which remains at $222m. The full amount of this loss has been
recognised to date.
The Group's assessment of the ultimate loss includes change
orders which have not been approved by the customer. They are
estimated based on the amount that is deemed to be highly probable
to be recovered. That estimation is made considering the risks and
likelihood of recovery of change orders. The Group's assessment of
liquidated damages involves an expectation of relief from possible
obligations linked to delays on the contract. These liquidated
damages and relief assumptions are estimates prepared in
conjunction with the change orders estimates noted above. The range
of possible outcomes in respect to the change orders that are
highly likely to be recoverable and the liquidated damages for
which a relief will be obtained is material. The Group has
classified the receivable balances as non-current due to the
element of uncertainty surrounding the timing of the receipt of
these balances. The ultimate loss also includes the Group's
assessment of the total legal costs necessary to achieve recovery
of the amounts believed to be recoverable and defend our position
on liquidated damages. At this point in time this is an estimate
based on a weighted average of several possible outcomes and the
actual costs could be materially higher or lower depending on
actual route to settlement.
If the amounts agreed are different to the assumptions made,
then the ultimate loss could be materially different. At 31
December 2022, provisions of $15.6m are recognised which represent
the element of the full contract loss which has been recognised
through the income statement to date but for which revenue has not
yet been recognised or costs incurred. In reaching its assessment
of this loss, management have made certain estimates and
assumptions relating to the date of completion, recovery of costs
from USACE and the final costs to complete. If the actual outcome
differs from these estimates and assumptions, the ultimate loss
will be different.
Other project related provisions
Certain of the jurisdictions in which the Group operates, in
particular the US and the EU, have environmental laws under which
current and past owners or operators of property may be jointly and
severally liable for the costs of removal or remediation of toxic
or hazardous substances on or under their property, regardless of
whether such materials were released in violation of law and
whether the operator or owner knew of, or was responsible for, the
presence of such substances. Largely as a consequence of the
acquisition of Amec Foster Wheeler, the Group currently owns and
operates, or owned and operated, industrial facilities. It is
likely that, as a result of the Group's current or former
operations, hazardous substances have affected the property on
which those facilities are or were situated.
The Group has also received and may continue to receive claims
pursuant to indemnity obligations from the present owners of
facilities we have transferred, which may require us to incur costs
for investigation and/or remediation. As at 31 December 2022, the
Group held provisions totaling $8.6m (2021: $15.3m) for the
estimated future environmental clean-up costs in relation to
industrial facilities that it no longer operates. Whilst the timing
of the related cash flows is typically uncertain, the Group expects
that certain remediation obligations may continue for up to 100
years.
As described in note 34, the Group agreed to indemnify certain
third parties relating to businesses and/or assets that were
previously owned by the Group and were sold to them. These
principally relate to businesses that were sold by Amec Foster
Wheeler prior to its acquisition by the Group. The Group had
recognised legacy provisions which comprised many individually
immaterial provisions relating to a large number of contracts and
exposures. The Group manages its exposure to these liabilities
within Investment Services. During the year, legacy provisions were
utilised or released as claims were closed out or due to the expiry
of indemnity time periods where no claims had been received,
meaning that the likelihood of an outflow was no longer
probable.
The balance of project related provisions relates to a number of
provisions which are not individually material or significant.
22 Deferred tax
Deferred tax is calculated in full on temporary differences
under the liability method using the tax rate applicable to the
territory in which the asset or liability has arisen. The Group has
provided deferred tax in relation to UK companies at 25% (2021:
25%). The movement on the deferred tax account is shown below:
(Asset)/liability
Income
As Disposals
at As at 31
1 January December
2022 statement OCI Other 2022
$m $m $m $m $m $m
Accelerated capital
allowances (26.8) (5.4) 2.4 - - (29.8)
Intangibles 240.3 1.3 (4.5) - (57.2) 179.9
Pension 63.6 10.0 33.2 - - 106.8
Share based charges (2.3) 0.9 - - - (1.4)
Other temporary
differences (3.3) (38.0) 4.6 (0.4) - (37.1)
Provisions (50.7) 41.2 1.8 - 0.4 (7.3)
Unremitted earnings 21.7 3.1 (1.3) - - 23.5
Deferred interest
deduction (54.2) 54.2 - - - -
Tax credits - 1.5 - (1.5) - -
Losses (191.5) (6.3) 1.9 (0.1) 0.3 (195.7)
Total (3.2) 62.5 38.1 (2.0) (56.5) 38.9
Income As at 31 December 2021
As at 1 January 2021 statement OCI Other $m
$m $m $m $m
Accelerated capital allowances (24.5) (2.0) 0.3 (0.6) (26.8)
Intangibles 259.3 (14.6) (1.3) (3.1) 240.3
Pension 34.5 24.9 4.2 - 63.6
Share based charges (2.3) 0.1 - (0.1) (2.3)
Other temporary differences 10.7 (16.1) 2.7 (0.6) (3.3)
Provisions (96.8) 42.8 2.5 0.8 (50.7)
Unremitted earnings 40.3 (18.8) 0.2 - 21.7
Deferred interest deduction (63.3) 8.6 0.5 - (54.2)
Losses (149.3) (45.2) 1.4 1.6 (191.5)
Total 8.6 (20.3) 10.5 (2.0) (3.2)
Deferred tax is presented in the financial statements as
follows:
2022 2021
$m $m
Deferred tax assets (61.2) (75.7)
Deferred tax liabilities 100.1 72.5
Net deferred tax (asset)/liability 38.9 (3.2)
No deferred tax liability has been recognised in respect of
$21,722.0m (2021: $19,607.7m) of unremitted reserves of
subsidiaries because the Group is in a position to control the
timing of the reversal of the temporary difference and it is not
probable that such differences will reverse in the foreseeable
future. The amount of unrecognised deferred tax liabilities in
respect of these unremitted reserves is estimated to be $61.8m
(2021: $55.6m).
The deferred tax balances are analysed below.
31 December 2022
Accelerated Other Deferred
capital Share temporary Unremitted interest
allowances based differences earnings deduction
$m Intangibles $m Pension $m charges $m $m Provisions $m $m $m Losses $m Netting $m Total $m
------------ ----------- -------------- ---------- ---------- ----------- ------------- ---------- --------- --------- ---------- --------
Deferred tax
assets (61.7) (130.0) (1.3) (1.4) (125.3) (7.3) - - (195.7) 461.5 (61.2)
Deferred tax
liabilities 31.9 309.9 108.1 - 88.2 - 23.5 - - (461.5) 100.1
------------ ----------- -------------- ---------- ---------- ----------- ------------- ---------- --------- --------- ---------- --------
Net (29.8) 179.9 106.8 (1.4) (37.1) (7.3) 23.5 - (195.7) - 38.9
------------ ----------- -------------- ---------- ---------- ----------- ------------- ---------- --------- --------- ---------- --------
Included in the $195.7m (2021: $191.5m) of deferred tax assets
in respect of losses is an amount of $97.4m (2021: $42.2m) relating
to the UK tax group which has sufficient deferred tax liabilities
to offset, and $91.3m (2021: $129.4m) relating to the US tax group
of which no asset (2021: $32.7m) is recognised based on forecast
profits of the US business, the balance is supported by deferred
tax liabilities.
31 December 2021
Accelerated Other Deferred
capital Share temporary Unremitted interest
allowances based differences earnings deduction
$m Intangibles $m Pension $m charges $m $m Provisions $m $m $m Losses $m Netting $m Total $m
------------ ----------- -------------- ---------- ---------- ----------- ------------- ---------- --------- --------- ---------- --------
Deferred tax
assets (34.8) (133.2) (1.5) (2.3) (46.8) (50.7) - (54.2) (191.5) 439.3 (75.7)
Deferred tax
liabilities 8.0 373.5 65.1 - 43.5 - 21.7 - - (439.3) 72.5
------------ ----------- -------------- ---------- ---------- ----------- ------------- ---------- --------- --------- ---------- --------
Net (26.8) 240.3 63.6 (2.3) (3.3) (50.7) 21.7 (54.2) (191.5) - (3.2)
------------ ----------- -------------- ---------- ---------- ----------- ------------- ---------- --------- --------- ---------- --------
The expiry dates of unrecognised gross deferred tax assets
carried forward are as follows:
Deductible temporary
Tax losses differences Total
31 December 2022 $m $m $m
Expiring within 5 years 676.1 131.9 808.0
Expiring within 6-10 years - 7.5 7.5
Expiring within 11-20 years 137.7 - 137.7
Unlimited 5,271.2 1,179.5 6,450.7
6,085.0 1,318.9 7,403.9
Deductible temporary
Tax losses differences Total
31 December 2021 $m $m $m
Expiring within 5 years 676.0 128.1 804.1
Expiring within 6-10 years - 34.5 34.5
Expiring within 11-20 years 270.8 - 270.8
Unlimited 5,720.4 931.5 6,651.9
6,667.2 1,094.1 7,761.3
23 Share based charges
The Group currently has a number of share plans that give rise
to equity settled share based charges. These are the Executive
Share Option Scheme ('ESOS'), the Long Term Plan ('LTP'), the
Employee Share Plan ('ESP') and the Share Incentive Plan ('SIP').
The charge to operating profit for these plans for the year
amounted to $20.7m (2021: $22.1m) and is included in administrative
expenses with the corresponding credit included in retained
earnings.
Long Term Plan
The Group's Long-Term Plan ('LTP') was introduced in 2013. There
are two distinct awards made under the LTP, performance-based
awards to senior management made based on achievement of
performance measures and non-performance awards either in the form
of conditional share awards or share options.
The performance measures are total shareholder return, gross
margin, overhead improvement, EBITDA margin, revenue growth and ESG
targets including reducing carbon emissions and leadership gender
diversity. Participants may be granted conditional share awards or
nil cost options at the start of the cycle. Where performance
applies, this is measured over a three year period and up to 80% of
an award may vest based on the performance over that period. The
vesting of at least 20% of any award is normally deferred for a
further period of at least two years. Nil value share options may
also be awarded under the LTP.
Employees may also be granted non-performance awards either in
the form of conditional share awards or share options. These awards
typically have a three year vesting period. During 2022, a large
portion of senior management who were previously eligible for the
performance-based element of the LTP were instead awarded these
non-performance awards.
Performance based awards
Details of the LTP awards are set out in the table below. The
charge for market related performance targets has been calculated
using a Monte Carlo simulation model taking account of share price
volatility against peer group companies, risk free rate of return,
dividend yield and the expected lifetime of the award. Further
details of the LTP are provided in the Directors' Remuneration
Report.
Cycle Performance period Fair value of award Awards outstanding 31 December Awards outstanding 31 December
2022 2021
11 2018-20 GBP6.67 405,899 773,800
12 2019-21 GBP5.69 257,082 5,085,975
13 2020-22 GBP3.64 6,987,812 7,943,623
14 2021-23 GBP3.17 7,634,392 9,448,976
15 2022-24 GBP1.88 1,647,844 -
16,933,029 23,252,374
2,348,180 awards were made during the year, 80,330 awards
accrued in respect of dividends, 1,438,398 awards were exercised
during the year and 7,313,617 awards lapsed or were cancelled due
to performance targets not being achieved.
The awards outstanding under cycle 11 and 12 represent 100% of
the deferred award for directors and 20% of the award for all other
participants at vesting which is deferred for two years. Awards
under cycle 15 were granted to directors and the executive
leadership team only, with other senior management receiving
non-performance LTP awards.
Further details on the LTP are provided in the Directors'
Remuneration Report.
ESOS
For the purposes of calculating the fair value of the share
options, a Black-Scholes option pricing model has been used. Based
on past experience, it has been assumed that options will be
exercised, on average, six months after the earliest exercise date,
which is four years after grant date, and a lapse rate of 25% has
been assumed. The share price volatility used in the calculation of
40% is based on the actual volatility of the Group's shares as well
as that of comparable companies. The risk-free rate of return is
based on the implied yield available on zero coupon gilts with a
term remaining equal to the expected lifetime of the options at the
date of grant.
Share awards
A summary of the basis for the charge for ESOS and LTP options
is set out below together with the number of awards granted,
exercised and lapsed during the year.
ESOS LTP and deferred
bonus
2022 2021 2022 2021
Number of participants 218 400 349 85
Lapse rate 25% 25% 10% 10%
Risk free rate of return
on grants during year N/A N/A 0.43% 0.43%
Share price volatility 40% 40% 40% 40%
Dividend yield on grants
during year N/A N/A 0% 0%
Fair value of options N/A N/A GBP1.91-GBP2.39 GBP2.30-GBP2.81
granted during year
Weighted average remaining 0.7 years 1.4 years 2.2 years 2.4 years
contractual life
Options outstanding
1 January 1,540,288 1,991,512 3,284,268 2,060,519
Options granted during
the year - - 7,673,780 2,134,000
Options exercised during
the year - - (1,456,502) (891,340)
Options lapsed during
the year (545,288) (451,224) (1,247,012) (50,001)
Dividends accrued on
options - - - 31,090
Options outstanding
31 December 995,000 1,540,288 8,254,534 3,284,268
No. of options exercisable
at 31 December 995,000 1,487,538 296,531 219,300
Weighted average share GBP1.58 GBP2.45
price of options exercised N/A N/A
during year
Executive Share Option Schemes
The following options to subscribe for new or existing shares
were outstanding at 31 December:
Number of ordinary
Year of Grant shares under option
2022 2021 Exercise price
(per share) Exercise period
---------------- --------- -----------
2012 - 338,788 680 1/2 p 2016-2022
2013 518,500 622,000 8451/3p 2017-2023
2014 476,500 579,500 7672/3p 2018-2024
995,000 1,540,288
---------------- --------- ----------- -------------- ---------------
Share options are granted at an exercise price equal to the
average mid-market price of the shares on the three days prior to
the date of grant.
Nil value share awards
The following awards granted under the Group's LTP were
outstanding at 31 December:
Number of ordinary
shares under award
Year of Grant 2022 2021 Exercise price Exercise
(per share) period
2017 - 110,000 0.00p 2021-2022
2018 79,348 189,970 0.00p 2022-2023
2019 - 109,300 0.00p 2021-2022
2020 227,183 765,998 0.00p 2022-2023
2020 5,000 5,000 0.00p 2023-2024
2021 - 100,000 0.00p 2023-2024
2021 1,544,000 2,004,000 0.00p 2025-2026
2022 101,337 - 0.00p 2024-2025
2022 900,000 - 0.00p 2025-2026
2022 5,397,666 - 0.00p 2025
8,254,534 3,284,268
Awards are granted under the Group's LTP at nil value. There are
no performance criteria relating to the exercise of the options.
Further details on the LTP are provided in the Directors'
Remuneration Report.
Employee share plan
The Group introduced the ESP in 2016. Under the plan employees
contribute regular monthly amounts which are used to purchase
shares over a one-year period. At the end of the year, the
participating employees are awarded one free share for every two
shares purchased, providing they remain in employment for a further
year. During 2022, 2,007,094 shares were awarded in relation to the
ESP, of which 578,944 and 1,428,150 shares related to the 2021/22
and 2022/23 schemes respectively.
Share incentive plan
The Group introduced the SIP in 2021. Under the plan, which is
recognised by HM Revenue and Customs, employees contribute regular
monthly amounts of up to GBP150 per month to purchase shares. The
participating employees are awarded one free share for every two
purchased, provided that they hold the purchased shares for 3 years
and remain in employment. During 2022, 690,804 partnership shares
and 345,507 matching shares were awarded
24 Share capital
Ordinary shares of 4 (2) /(7) pence
each (2021: 4 (2) /(7) pence) 2022 2021
Authorised, issued and fully paid shares $m shares $m
At 1 January 691,839,369 41.3 688,339,369 41.1
Allocation of new shares to employee
share trusts - - 3,500,000 0.2
At 31 December 691,839,369 41.3 691,839,369 41.3
Holders of ordinary shares are entitled to receive any dividends
declared by the Company and are entitled to vote at general
meetings of the Company.
25 Share premium
2022 2021
$m $m
------------------------------- ------ ------
At 1 January and 31 December 63.9 63.9
------------------------------- ------ ------
The shares allocated to the trust during the year were issued at
4(2) /(7) pence (2021: 4(2) /(7) pence).
26 Retained earnings
2022 2021
$m $m
At 1 January 1,415.0 1,455.2
Loss for the year attributable to owners of the parent (356.3) (139.5)
Credit relating to share based charges (note 23) 20.7 22.1
Re-measurement gains on retirement benefit liabilities
(note 33) 170.9 83.3
Movement in deferred tax relating to retirement benefit
liabilities (41.6) (9.5)
Shares allocated to employee share trusts - (0.2)
Deferred tax impact of rate change in equity (0.8) 4.5
Tax on derivative financial instruments (1.7) (3.4)
Other tax movements in equity (1.3) (0.1)
Exchange movements in respect of shares held by employee
share trusts 12.5 1.1
Purchase of shares by employee share trusts for the
Share Incentive Plan (SIP) 1.7 1.5
Transactions with non-controlling interests 5.3 -
At 31 December 1,224.4 1,415.0
--------------------------------------------------------- ------- -------
Retained earnings are stated after deducting the investment in
own shares held by employee share trusts. No options have been
granted over shares held by the employee share trusts (2021:
nil).
26 Retained earnings (continued)
Shares held by employee share trusts
2022 2021
Shares $m Shares $m
Balance 1 January 14,358,014 111.9 15,006,961 112.8
New shares allocated - - 3,500,000 0.2
Shares issued to satisfy option exercises (1,456,502) - (870,503) -
Shares issued to satisfy awards under Long Term Incentive Plan (1,438,398) - (1,257,013) -
Shares issued to satisfy awards under Employee Share Plan (1,984,772) - (1,383,506) -
Shares issued to satisfy awards under Share Incentive Plan (1,036,311) - (637,925) -
Other share transactions - - - -
Exchange movement - (12.5) - (1.1)
Balance 31 December 8,442,031 99.4 14,358,014 111.9
Shares acquired by the employee share trusts are purchased in
the open market using funds provided by John Wood Group PLC to meet
obligations under the Employee Share Option Schemes and LTP. Shares
are allocated to the employee share trusts in order to satisfy
future option exercises at various prices.
The costs of funding and administering the trusts are charged to
the income statement in the period to which they relate. The market
value of the shares at 31 December 2022 was $13.7m (2021: $37.1m)
based on the closing share price of GBP1.35 (2021: GBP1.91) and
closing exchange rate of 1.2029 (2021: 1.3545). The employee share
trusts have waived their rights to receipt of dividends on ordinary
shares.
27 Merger reserve
2022 2021
$m $m
At 1 January and 31 December 2,540.8 2,540.8
On 6 October 2017, 294,510,217 new shares were issued in
relation to the acquisition of Amec Foster Wheeler Group. As the
acquisition resulted in the Group securing 90% of Amec Foster
Wheeler's share capital, the acquisition qualified for merger
relief under section 612 of the Companies Act 2006 and the premium
arising on the issue of the shares was credited to a merger reserve
rather than the share premium account.
In November 2019, John Wood Group PLC (the Company) sold its
investment in Amec Foster Wheeler Limited and other subsidiaries to
another subsidiary company, John Wood Group Holdings Limited for
$2,815.2m in exchange for a promissory note. To the extent that the
promissory note is settled by qualifying consideration, the related
portion of the merger reserve is considered realised and becomes
available for distribution.
28 Other reserves
Capital Capital Currency
reduction redemption translation Hedging
reserve reserve reserve reserve Total
$m $m $m $m $m
At 1 January 2021 88.1 439.7 (441.1) (17.7) 69.0
Cash flow hedges - - - 7.9 7.9
Exchange movement on
retranslation of foreign
operations - - (56.3) - (56.3)
Exchange movement on
disposal of foreign operations - - 0.4 - 0.4
At 31 December 2021 88.1 439.7 (497.0) (9.8) 21.0
Cash flow hedges - - - 5.1 5.1
Exchange movement on
retranslation of foreign
operations - - (223.0) - (223.0)
Exchange movement on
disposal of foreign operations - - 54.5 - 54.5
At 31 December 2022 88.1 439.7 (665.5) (4.7) (142.4)
The capital reduction reserve was created subsequent to the
Group's IPO in 2002 and is a distributable reserve.
The capital redemption reserve was created following a share
issue that formed part of a return of cash to shareholders in 2011.
This is not a distributable reserve.
The currency translation reserve relates to the retranslation of
foreign currency net assets on consolidation. This was reset to
zero on transition to IFRS at 1 January 2004. The movement during
the year relates to the retranslation of foreign operations,
including goodwill and intangible assets recognised on
acquisition.
The hedging reserve relates to the accounting for derivative
financial instruments under IFRS 9. Fair value gains and losses in
respect of effective cash flow hedges are recognised in the hedging
reserve.
29 Non-controlling interests
2022 2021
$m $m
At 1 January 3.3 2.8
Share of profit for the year 4.6 4.0
Dividends paid to non-controlling interests (1.1) (2.7)
Transactions with non-controlling interests (5.3) (0.8)
At 31 December 1.5 3.3
30 Analysis of net debt
At 1 January 2022 Cash Exchange movements At 31 December
flow Other 2022
2022 $m $m $m $m $m
Short term borrowings (281.9) (53.0) (12.2) 1.2 (345.9)
Long term borrowings (1,614.1) 1,039.1 (8.9) (0.1) (584.0)
(1,896.0) 986.1 (21.1) 1.1 (929.9)
Cash and cash equivalents 503.0 60.2 - (26.5) 536.7
Net debt excluding leases (1,393.0) 1,046.3 (21.1) (25.4) (393.2)
Leases (449.8) 121.6 (41.7) 27.0 (342.9)
Net debt including leases (1,842.8) 1,167.9 (62.8) 1.6 (736.1)
At 1 January 2021 Cash Exchange movements At 31 December
flow Other 2021
2021 $m $m $m $m $m
Short term borrowings (315.3) 33.5 - (0.1) (281.9)
Long term borrowings (1,296.5) (329.3) 12.1 (0.4) (1,614.1)
(1,611.8) (295.8) 12.1 (0.5) (1,896.0)
Cash and cash equivalents 585.0 (77.0) - (5.0) 503.0
Restricted cash 12.5 (12.5) - - -
Net debt excluding leases (1,014.3) (385.3) 12.1 (5.5) (1,393.0)
Leases ( 541.4 ) 167.6 (80.2) 4.2 (449.8)
Net debt including leases (1,555.7) (217.7) (68.1) (1.3) (1,842.8)
Cash at bank and in hand at 31 December 2022 includes $328.4m
(2021: $240.4m) that is part of the Group's cash pooling
arrangements. For internal reporting and the calculation of
interest, this amount is netted with short-term overdrafts and is
presented as a net figure on the Group's balance sheet. In
preparing these financial statements, the Group is required to
gross up both its cash and short-term borrowings figures by this
amount.
Cash and cash equivalents of $536.7m (2021: $503.0m) includes
restricted cash of $15.0m (2021: $12.5m). The restricted cash
balance comprises $10.0m (2021: $12.5m) of cash held in
jurisdictions where there is insufficient liquidity in the local
market to allow for immediate repatriation. The remaining $5.0m
(2021: $nil) relates to balances held within Russia that are
impacted by the sanctions associated with Russia's invasion of
Ukraine. Management considers it appropriate to include the
restricted cash balance in the Group's net debt figure on the basis
that it meets the definition of cash, albeit is not readily
available to the Group.
The lease liability at 31 December 2022 is made up of long term
leases of $259.7m (2021: $331.5m) and short term leases of $83.2m
(2021: $118.3m).
The other movements of $62.8m (2021: $68.1m) in the above table
represents new leases entered into of $23.8m (2021: $59.9m),
interest expense of $17.9m (2021: $20.3m), amortisation of bank
facility fees of $8.9m and accrued interest on loan notes of
$12.2m. As a result of new facilities entered into during 2021,
there was an offsetting movement caused by new facility fees
incurred of $12.1m.
As at 31 December 2022, the Group had received $200.0m (2021:
$200.0m) of cash relating to a non-recourse financing arrangement
with one of its banks. An equivalent amount of trade receivables
was derecognised on receipt of the cash. At 31 December 2022,
$113.6m (2021: $79.4m) had been received from customers in the
normal course of business in relation to the same amounts received
from the factor. This $113.6m (2021: $79.4m) is due to be paid over
to the factor and is included in trade payables. The benefit of
this arrangement of $200.0m is included within cash generated from
operations.
31 Disposal Group held for sale
Included within the agreement for the sale of the Built
Environment Consulting business is an arrangement to sell a
subsidiary separately to the rest of the transaction, which
completed in September 2022. The sale of this subsidiary, residing
in Saudi Arabia, is anticipated to complete during 2023 and
therefore the assets and liabilities of this disposal group are
classified as held for sale as at 31 December 2022.
The composition of assets and liabilities held for sale on the
balance sheet as at 31 December 2022 is set out below.
Assets held for sale $m
---------------------------- ----
Trade and other receivables 21.0
Total 21.0
Liabilities held for sale $m
---------------------------- ----
Trade and other payables 20.6
Total 20.6
32 Employees and directors
2022 2021
Employee benefits expense $m $m
Wages and salaries 2,808.0 2,797.8
Social security costs 196.1 213.6
Pension costs - defined benefit schemes (note 33) 1.7 3.7
Pension costs - defined contribution schemes (note
33) 103.5 104.6
Share based charges (note 23) 20.7 22.1
3,130.0 3,141.8
Average monthly number of employees (including 2022 2021
executive directors) No. No.
------ ------
By geographical area:
UK 5,601 5,491
US 9,128 10,926
Rest of the World 20,721 19,062
------ ------
35,450 35,479
------ ------
The average number of employees excludes contractors and
employees of joint venture companies.
2022 2021
Key management compensation $m $m
---- ----
Salaries and short-term employee benefits 13.9 10.3
Amounts receivable under long-term incentive schemes 0.7 0.2
Social security costs 1.0 1.1
Post-employment benefits 0.3 0.2
Share based charges 3.6 3.6
Termination benefits 0.9 -
---- ----
20.4 15.4
---- ----
Key management compensation represents the charge to the income
statement in respect of the remuneration of the Group board and
Group Executive Leadership Team ('ELT') members. At 31 December
2022, key management held 0.1% of the voting rights of the
company.
2022 2021
Directors $m $m
Aggregate emoluments 3.8 3.3
Aggregate amounts receivable under long-term incentive
schemes 0.3 0.1
Aggregate gains made on the exercise of share options 0.3 0.2
Share based charges 1.6 1.4
6.0 5.0
At 31 December 2022, one director (2021: one) had retirement
benefits accruing under a defined contribution pension plan and no
directors (2021: none) had benefits accruing under a defined
benefit pension scheme. Further details of directors' emoluments
are provided in the Directors' Remuneration Report.
33 Retirement benefit schemes
The Group operates a number of defined benefit pension schemes
which are largely closed to future accrual. The assets of the
defined benefits schemes are held separately from those of the
Group, being invested with independent investment companies in
trustee administered funds. The trustees of the pension schemes are
required by law to act in the best interests of the scheme
participants and are responsible for setting certain policies (such
as investment, contribution and indexation policies) for the
schemes.
At 31 December 2022, the largest schemes by gross obligation are
the Wood Pension Plan ('WPP') in the UK, the Foster Wheeler Inc
Salaried Employees Pension Plan ('FW Inc SEPP') in the US and the
Foster Wheeler Inc Pension Plan for Certain Employees ('FW Inc
PPCE') in the US.
The scheme valuations are based on the membership data contained
within the triennial valuation of Wood Pension Plan as at 31 March
2020, and the valuation of the Foster Wheeler Inc SEPP/PPCE as at 1
January 2020. The scheme valuations have been updated by the
schemes' actuaries for the requirement to assess the present value
of the liabilities of the schemes as at 31 December 2022. The
assets of the schemes are stated at their aggregate market value as
at 31 December 2022.
The actuarial valuation method is prescribed by the IAS 19
accounting standard and uses discount rates determined by the
yields on high quality, AA rated, bonds at the measurement date.
Conversely, each pension scheme is subject to a separate technical
provisions or funding basis valuation which is considered to be
more prudent than the IAS 19 methodology. Under IAS 19, the Wood
Pension Plan is 119% funded on 31 December 2022 compared to 104%
funded on the technical provisions basis.
Management have considered the requirements of IFRIC 14, 'The
Limit on a Defined Benefit Asset, Minimum Funding Requirements and
their Interaction' and consider it is appropriate to recognise the
IAS 19 surplus in the Wood Pension Plan. The rules governing these
schemes provide an unconditional right to a refund assuming the
gradual settlement of the scheme's liabilities over time until all
members have left the schemes. The requirements of IFRIC 14 also
mean there is no requirement to recognise any additional
liabilities in relation to deficit funding requirements.
Scheme membership at the date of the most recent scheme census
was as follows:
2022 2022 2022 2021 2021 2021
Wood FW FW Wood FW FW
Pension Inc Inc Pension Inc Inc
Plan SEPP PPCE Plan SEPP PPCE
Active members 494 44 28 494 48 38
Deferred members 8,313 622 437 8,313 453 653
Pensioner members 10,149 2,233 871 10,149 2,305 857
Active members includes deferred members still employed but not
actively contributing to the scheme.
The principal assumptions made by the actuaries at the balance
sheet date were:
2022 2022 2022 2021 2021 2021
Wood FW FW Wood FW FW
Pension Inc Inc Pension Inc Inc
Plan SEPP PPCE Plan SEPP PPCE
% % % % % %
Discount rate 5.0 5.2 5.2 1.8 2.6 2.6
Rate of increase in
pensions in payment
and deferred pensions 2.8 N/A N/A 3.1 N/A N/A
Rate of retail price
index inflation 3.1 N/A N/A 3.3 N/A N/A
Rate of consumer price
index inflation 2.6 N/A N/A 2.8 N/A N/A
The mortality assumptions used to determine pension liabilities
in the main schemes at 31 December 2022 were as follows -
Scheme Mortality assumption
Wood Pension Plan Scheme specific table with CMI 2021 (Sk =7.0)
projections and a long-term rate of improvement
of 1.25% pa, initial addition ("A" parameter)
of 0.3, no weight to 2020 and 15% for 2021
data
FW Inc SEPP and FW Pri-2012 Employee and Annuitant tables for
Inc PPCE males and females with generational projection
using Scale MP-2021 with no collar adjustments
and Pri-2012 Contingent Annuitant mortality
for spouses and beneficiaries with generational
projection using Scale MP-2021 with no collar
adjustments
The mortality assumption uses data appropriate to each of the
Group's schemes adjusted to allow for expected future improvements
in mortality using the latest projections. Assumptions regarding
future mortality are based on published statistics and the latest
available mortality tables. In relation to the Wood Pension Plan,
the CMI's latest mortality projections model, 'CMI 2021', published
in March 2022, allowed flexibility to vary the weight on mortality
data for individual years in response to the Covid-19 pandemic. As
a result, the Group is using an s-kappa of 7.0 and a 15% weighting
for 2021 mortality data in arriving at its 31 December 2022
mortality assumption. The impact of this is that there is more
weight given to recent mortality experience than in prior years,
but recognising the impact of exceptional mortality experience
across 2020 and 2021, no weight is placed on 2020 with less than
full weight placed on 2021. A small reduction of around 0.8% in the
value of defined benefit obligation is observed through these
changes.
For the schemes referred to above the assumed life expectancies
are shown in the following table:
2022 2022 2022 2021 2021 2021
Wood FW FW Wood FW FW
Pension Inc Inc Pension Inc Inc
Plan SEPP PPCE Plan SEPP PPCE
Life expectancy at
age 65 of male aged
45 23.8 22.1 22.1 24.1 22.0 22.0
Life expectancy at
age 65 of male aged
65 22.5 20.6 20.6 22.8 20.5 20.5
Life expectancy at
age 65 of female aged
45 25.5 24.0 24.0 25.5 23.9 23.9
Life expectancy at
age 65 of female aged
65 24.0 22.6 22.6 24.0 22.5 22.5
The amounts recognised in the income statement are as
follows:
2022 2021
$m $m
Current service cost 1.7 3.7
Past service credit - (4.8)
Total expense/(income) included within operating
profit 1.7 (1.1)
Interest cost 78.0 69.0
Interest income on scheme assets (80.4) (69.2)
Total included within finance income (2.4) (0.2)
The amounts recognised in the balance sheet are determined as
follows:
2022 2021
$m $m
Present value of funded obligations (2,533.0) (4,626.6)
Fair value of scheme assets 2,892.2 4,811.5
Net surplus 359.2 184.9
Changes in the present value of the defined benefit liability
are as follows:
2022 2021
$m $m
Present value of funded obligations at 1 January 4,626.6 4,779.9
Current service cost 1.7 3.7
Past service cost/(credit) - (4.8)
Interest cost 78.0 69.0
Contributions - -
Re-measurements:
- actuarial gains arising from changes in financial assumptions (1,544.5) (73.0)
- actuarial (gains)/losses arising from changes in demographic assumptions (31.4) 35.7
- actuarial losses arising from changes in experience 72.0 53.6
Benefits paid (177.3) (201.6)
Decrease due to divestments (58.7) -
Exchange movements (433.4) (35.9)
Present value of funded obligations at 31 December 2,533.0 4,626.6
Changes in the fair value of scheme assets are as follows:
2022 2021
$m $m
Fair value of scheme assets at 1 January 4,811.5 4,844.3
Interest income on scheme assets 80.4 69.2
Contributions 42.5 50.1
Benefits paid (177.3) (201.6)
Re-measurement (gains)/losses on scheme assets (1,333.0) 99.6
Expenses paid (7.4) (9.4)
Decrease due to divestments (55.9) -
Exchange movements (468.6) (40.7)
Fair value of scheme assets at 31 December 2,892.2 4,811.5
Analysis of the movement in the balance sheet surplus:
2022 2021
$m $m
Surplus at 1 January 184.9 64.4
Current service cost (1.7) (3.7)
Past service credit - 4.8
Finance income 2.4 0.2
Contributions 42.5 50.1
Re-measurement gains recognised in the year 170.9 83.3
Expenses paid (7.4) (9.4)
Increase due to divestments (note 7) 2.8 -
Exchange movements (35.2) (4.8)
Surplus at 31 December 359.2 184.9
The increased surplus due to divestments of $2.8m relates to
sale of a net pension liability on a small US scheme. This forms
part of the disposal of the Built Environment Consulting business
outlined in note 7.
The net surplus at 31 December is presented in the Group balance
sheet as follows -
2022 2021
$m $m
Wood Pension Plan 432.4 259.6
Retirement benefit scheme surplus 432.4 259.6
Foster Wheeler Inc SEPP/PPCE (49.4) (43.1)
All other schemes (23.8) (31.6)
Retirement benefit scheme deficit (73.2) (74.7)
Net surplus 359.2 184.9
For the principal schemes the defined benefit obligation can be
allocated to the plan participants as follows:
2022 2022 2022 2021 2021 2021
Wood FW FW AFW FW FW
Pension Inc Inc Pension Inc Inc
Plan SEPP PPCE Plan SEPP PPCE
% % % % % %
Active members 5.6 3.5 1.7 6.4 4.6 2.3
Deferred members 38.5 23.1 12.9 45.0 22.1 17.6
Pensioner members 55.9 73.4 85.4 48.6 73.3 80.1
The weighted average duration of the defined benefit obligation
is as follows:
2022 2022 2022 2021 2021 2021
Wood FW FW AFW FW FW
Pension Inc Inc Pension Inc Inc
Plan SEPP PPCE Plan SEPP PPCE
years years years years years years
Duration of defined
benefit obligation 13.0 8.1 7.3 17.0 9.5 9.1
The duration of the defined benefit obligation has reduced
during 2022 due to the rise in discount rates, which means that
later cash flows are more heavily discounted and so the weighted
average duration of liabilities is lower.
The major categories of scheme assets as a percentage of total
scheme assets are as follows:
2022 2022 2022 2021 2021 2021 2022 2021
Wood FW FW Wood FW FW Quoted Quoted
Pension Inc Inc Pension Inc Inc on active on active
Plan SEPP PPCE Plan SEPP PPCE market market
% % % % % % % %
Equities 0.4 42.9 54.1 10.7 54.4 59.7 89.8 97.4
Property [a] 2.8 - - 2.6 - - - -
Bonds (including gilts) 100.8 51.4 38.5 84.8 44.6 39.3 100.0 99..9
Cash 13.9 1.1 1.5 2.8 1.0 1.0 100.0 100.0
Derivatives [b] (17.9) - - (10.5) - - - -
Investment funds - 4.6 5.9 9.6 - - - -
100.0 100.0 100.0 100.0 100.0 100.0 n/a n/a
a. Property assets are valued based on an analysis of recent
market transactions supported by market knowledge derived from
third-party, independent valuation experts
b. Derivatives are mainly related to repurchase agreements used
to fund liability driven investments
As at 31 December 2022, 113.7% (2021: 98.0%) of total scheme
assets in the principal schemes have quoted prices in active
markets.
The Group seeks to fund its pension plans to ensure that all
benefits can be paid as and when they fall due. It has agreed
schedules of contributions with the UK plans' trustees and the
amounts payable are dependent on the funding level of the
respective plans. In October 2022, an updated schedule of
contributions for the Wood Pension Plan was agreed, which will
reduce contribution levels from $9.6m to $nil for the 2023
financial year. An additional $29.6m of contributions were made
towards the Wood Pension Plan during 2022, linked to the Group net
debt covenant being greater than 2.5x at the December 2021 and June
2022 reporting dates.
The US plans are funded to ensure that statutory obligations are
met and contributions are generally payable to at least minimum
funding requirements.
Total contributions expected to be paid during the financial
year ending 31 December 2023 amount to $nil (2021: $43.4m for the
financial year ending 31 December 2022).
Scheme risks
The retirement benefit schemes are exposed to a number of risks,
the most significant of which are -
Volatility
The defined benefit obligation is measured with reference to
corporate bond yields and if scheme assets underperform relative to
this yield, this will create a deficit, all other things being
equal. The scheme investments are well diversified such that the
failure of a single investment would not have a material impact on
the overall level of assets.
The schemes hold various liability driven investments comprising
physical gilts, swap and leveraged gilt exposures to provide asset
protection against interest and inflation factors inherent in their
liability valuations. Specifically in relation to the Wood Pension
Plan, the liquidity of the scheme has withstood recent market
turmoil, without the need for any additional contributions from the
Group to support liquidity. Collateral buffers have been further
strengthened by de-risking steps taken to disinvest from equities
and it is believed the WPP has sufficient collateral to withstand a
sizable level of movement in interest rates.
Changes in bond yields
A decrease in corporate bond yields will increase the defined
benefit obligation. This would however be offset to some extent by
a corresponding increase in the value of the scheme's bond asset
holdings.
Inflation risk
The majority of benefits in deferment and in payment are linked
to price inflation so higher actual inflation and higher assumed
inflation will increase the defined benefit obligation.
Life expectancy
The defined benefit obligation is generally made up of benefits
payable for life and so increases to members' life expectancies
will increase the defined benefit obligation, all other things
being equal.
Sensitivity of the retirement benefit obligation
The impact of changes to the key assumptions on the retirement
benefit obligation is shown below. The sensitivity is based on a
change in an assumption whilst holding all other assumptions
constant. In practice, this is unlikely to occur, and changes in
some of the assumptions may be correlated. When calculating the
sensitivity of the defined benefit obligation to significant
actuarial assumptions the same method has been applied as when
calculating the pension obligation recognised in the Group balance
sheet.
Wood Wood FW FW FW FW
Pension Pension Inc Inc Inc Inc
Plan Plan SEPP SEPP PPCE PPCE
2022 2021 2022 2021 2022 2021
Approximate increase/(decrease) $m $m $m $m $m $m
on scheme liabilities
Discount rate
Plus 0.5% (134.0) (332.0) (3.2) (4.6) (5.4) (8.9)
Minus 0.5% 151.5 378.0 3.5 5.0 5.7 9.7
Inflation
Plus 0.1% 13.3 38.5 N/A N/A N/A N/A
Minus 0.1% (13.2) (38.3) N/A N/A N/A N/A
Life expectancy
Plus 1 year 75.5 196.4 2.9 4.3 6.1 8.9
Minus 1 year (73.6) (192.2) (2.9) (4.2) (6.0) (8.9)
The sensitivity analysis covering the impact of increases in
pensions is included in the inflation sensitivity in the above
table. The discount rate sensitivities in the above table can be
extrapolated downwards and upwards to broadly calculate the impact
of a 0.25% and 1% discount rate movement respectively.
Defined contribution plans
Pension costs for defined contribution plans were as
follows:
2022 2021
$m $m
Defined contribution plans 103.5 104.6
There were no material contributions outstanding at 31 December
2022 in respect of defined contribution plans.
The Group operates a Supplemental Executive Retirement Plan
(SERP) pension arrangement in the US for certain employees. During
the year, the Group made contributions of $0.1m (2021: $0.1m) to
the arrangement. Contributions are invested in a portfolio of US
funds and the fair value of the funds at the balance sheet date are
recognised by the Group in other investments. Investments held by
the Group at 31 December amounted to $55.6m (2021: $75.9m) and will
be used to pay benefits when employees retire. The corresponding
liability is recorded in other non-current liabilities.
34 Contingent liabilities
Cross guarantees
At the balance sheet date, the Group had cross guarantees
without limit extended to its principal bankers in respect of sums
advanced to subsidiaries.
Legal Claims
From time to time, the Group is notified of claims in respect of
professional or other services performed by the Group for its
customers. For a number of these claims the potential exposure is
material. Where management believes we are in a strong position to
defend these claims no provision is made. This includes a civil
administrative determination, which we believe to be without legal
or factual merit, made by the ContralorÃa General de la República
de Colombia against two Amec Foster Wheeler subsidiaries, along
with 22 others, in relation to work carried out for Refineria de
Cartagena, S.A ("Reficar") between 2009 and 2016.
At any point in time there are a number of claims where it is
too early to assess the merit of the claim, and hence it is not
possible to make a reliable estimate of the potential financial
impact.
The group carries insurance coverage and in the event of future
economic outflow arising with respect to any of these
contingencies, an element of reimbursement may occur, subject to
any excess or other policy restrictions and limits.
Investigations
Following the settlement of the various regulatory
investigations in 2021, it remains possible that there may be other
adverse consequences for the Group's business including actions by
authorities in other jurisdictions. At this time, these
consequences and likelihood of potential further investigations
cannot be reliably estimated, and therefore no provision has made
in respect of them in the financial statements.
Employment claims
The Group received assessments from HMRC into the historical
application of employer's National Insurance Contributions to
workers on the UK Continental Shelf. The assessments have been
appealed and our case is stayed pending the outcome of a similar
case with another Group. We believe it is more likely than not that
we will be able to defend this challenge and therefore as a result
do not expect that it is probable a liability will arise. The
maximum potential exposure to the Group in relation to tax and
interest should we be unsuccessful in our position is approximately
$28m.
Indemnities and retained obligations
The Group has agreed to indemnify certain third parties relating
to businesses and/or assets that were previously owned by the Group
and were sold to them. Such indemnifications relate primarily to
breach of covenants, breach of representations and warranties, as
well as potential exposure for retained liabilities, environmental
matters and third party claims for activities conducted by the
Group prior to the sale of such businesses and/or assets. We have
established provisions for those indemnities in respect of which we
consider it probable that there will be a successful claim, to the
extent such claim is quantifiable. During 2022 the Group sold its
Built Environment Consulting business to WSP in late 2022 and the
share purchase agreement provided an indemnity for losses on three
specified contracts. No provisions were considered necessary for
these contracts as at 31 December 2022.
Tax planning
HMRC have challenged the deductibility of certain interest
expenses previously considered as part of the EU State Aid
investigation into the UK controlled foreign company regime. HMRC
are currently at the information gathering stage. We believe that
the interest deductions have been appropriately taken in line with
tax legislation and guidance and therefore do not expect any
outflow as a result, however we continue to monitor case law in the
area and will consider the challenges of HMRC when raised. The
maximum potential exposure to the Group including interest in
relation to the interest deductions is approximately $36m and in
the event of any amount ultimately being payable there is no
prospect of any reimbursement.
35 Capital and other financial commitments
2022 2021
$m $m
Contracts placed for future capital expenditure
not provided in the financial statements 74.8 119.9
The capital expenditure above relates to property plant and
equipment and software costs.
36 Related party transactions
The following transactions were carried out with the Group's
joint ventures. These transactions comprise sales and purchases of
goods and services and funding provided in the ordinary course of
business. The receivables include loans to joint venture
companies.
2022 2021
$m $m
Sale of goods and services to joint ventures 12.2 21.4
Purchase of goods and services from joint ventures 4.3 3.5
Receivables from joint ventures 8.9 13.1
Payables to joint ventures 0.3 0.4
---- ----
Compensation of key management personnel includes salaries,
non-cash benefits and contributions to post retirement benefits
schemes disclosed in note 32.
The Group operates a number of defined benefit pension
arrangements and seeks to fund these arrangements to ensure that
all benefits can be paid as and when they fall due. The Group has
an agreed schedule of contributions with the UK plan's trustees
where amounts payable by the Group are dependent on the funding
level of the respective scheme. The US plans are funded to ensure
that statutory obligations are met and contributions are generally
payable to at least minimum funding requirements. Note 33 sets out
details of the Group's pension obligations under these
arrangements.
37 Post balance sheet events
During February 2023, the Group entered into an asset purchase
agreement to sell the trade and assets of its Gulf of Mexico
offshore labour supply operations. The agreement was for a cash
consideration of $17m with the Group retaining net working capital.
The transaction completed on 14 March 2023.
38 Subsidiaries, joint ventures and other related
undertakings
The Group's subsidiary and joint venture undertakings at 31
December 2022 are listed below. All subsidiaries are fully
consolidated in the financial statements. Ownership interests noted
in the table reflect holdings of ordinary shares.
Subsidiaries
Company Name Registered Address Ownership Interest %
Algeria
Regus Algeria, Tour Nord,, Centre Commercial
et Administratif de Bab Ezzouar,, Quartier
SARL Wood Group Algeria d'affaires de Bab Ezzouar, Algeria Properties 100
--------------------
Wood Group Somias PO Box 67, Elmalaha Road (Route des Salines),
SPA Elbouni, Annaba, Algeria 55
--------------------
Angola
RuaKima Kienda, Edificio SGEP, 2nd Floor,
Production Services Apartment 16, Boavista District, Ingombota,
Network Angola Limitada Luanda, Angola 49*
--------------------
Wood Group Kianda No 201, Rua Engenheiro Armindo de Andrade,Bairro
Limitada Miramar, Simbizanga, Luanda, Angola 41*
--------------------
Argentina
Foster Wheeler E&C
Argentina S.A. Paraguay 1866, Buenos Aires, Argentina 100
--------------------
ISI Mustang (Argentina) Pedro Molina 714, Provincia de Mendoza,
S.A. Ciudad de Mendoza, Argentina 100
--------------------
Wood Solar Argentina
S.A.U. Tucuman 1 Floor 4, Buenos Aires, Argentina 100
--------------------
Wood Wind Argentina
S.A.U. Tucuman 1 Floor 4, Buenos Aires, Argentina 100
--------------------
Australia
Amec Foster Wheeler Level 1, 240 St Georges Terrace, Perth,
Australia Pty Ltd WA 6000, Australia 100
--------------------
Level 1, 240 St Georges Terrace, Perth,
Aus-Ops Pty Ltd WA 6000, Australia 100
--------------------
Innofield Services Level 1, 240 St Georges Terrace, Perth,
Pty Ltd WA 6000, Australia 100
--------------------
RIDER HUNT INTERNATIONAL Level 3, 171 Collins Street, Melbourne,
(AUSTRALIA) PTY LTD VIC 3000, Australia 100
--------------------
Level 1, 240 St Georges Terrace, Perth,
SVT Holdings Pty Ltd WA 6000, Australia 100
--------------------
Wood Australia Architecture Level 1, 240 St Georges Terrace, Perth,
Pty Ltd WA 6000, Australia 100
--------------------
Wood Australia Pty Level 3, 171 Collins Street ,Melbourne,
Ltd VIC, 3000, Australia 100
--------------------
Wood Field Services Level 3, 171 Collins Street ,Melbourne,
Pty Ltd VIC, 3000, Australia 100
--------------------
Wood Group Australia Level 1, 240 St Georges Terrace, Perth,
PTY Ltd WA 6000, Australia 100
--------------------
Wood Group Kenny Australia Level 1, 240 St Georges Terrace, Perth,
Pty Ltd WA 6000, Australia 100
--------------------
Azerbaijan
AMEC Limited Liability
Company 37 Khojali Street, Baku, AZ1025, Azerbaijan 100
--------------------
Wood Group PSN Azerbaijan Khojali Avenue,Building 37, Khatal District,
LLC Baku, AZ1025, Azerbaijan 100
--------------------
Bermuda
Clarendon House, 2 Church Street, Hamilton,
Foster Wheeler Ltd. HM-11, Bermuda 100
--------------------
FW Management Operations, Clarendon House, 2 Church Street, Hamilton
Ltd. HM CX, Bermuda 100
--------------------
Brazil
Rua Evaristo da Veiga No. 65, Salas 1101,
1201 e 1202 do Sector 1, Edificio Passeio
Amec Foster Wheeler Corporate, Centro, Rio de Janeiro, CEP
America Latina, Ltda. 20.031-040, Brazil 100
--------------------
Avenida das Americas, n 3.434, Bloco 2,
salas 307 e 308, Centro Empresarial Mario
Amec Foster Wheeler Henrique Simonsen, Barra da Tijuca, CEP
Brasil S.A. 22.640-102, Brazil 100
--------------------
Avenida das Americas, n 3.434, Bloco 2,
salas 307 e 308, Centro Empresarial Mario
AMEC Petroleo e Gas Henrique Simonsen, Barra da Tijuca, CEP
Ltda. 22.640-102, Brazil 100
--------------------
Rua Professor Moraes No. 476, Loja 5,
AMEC Projetos e Consultoria Sobreloja, Bairro Funcionarios, Belo Horizonte,
Ltda Minas Gerais, 30150-370, Brazil 100
--------------------
FW Industrial Power Alameda Santos, 1293, Room 63, Cerqueira
Brazil Ltda César, Sao Paulo, 01419-002, Brazil 100
--------------------
Santos Barbosa Tecnica Estrada Sao Jose do Mutum, 301 - Imboassica,
Comercio e Servicos Cidade de Macae, Rio de Janeiro, CEP 27973-030,
Ltda. Brazil 100
--------------------
Wood Group Engineering Rua Ministro Salgado Filho,119, Cavaleiros,
and Production Facilities Cidade de Macae,CEP 27920-210, Estado
Brasil Ltda. do Rio de Janeiro 100
--------------------
Wood Group Kenny do Rua Sete de Setembro, 54 - 4 andares,
Brasil Servicos de Centro, Rio de Janeiro - RJ, CEP 20050-009,
Engenharia Ltda. Brazil 100
--------------------
Brunei Darussalam
Unit No.s 406A-410A, Wisma Jaya, Jalan
Amec Foster Wheeler Pemancha, Bandar Seri Begawan BS8811,
(B) SDN BHD Brunei Darussalam 100
--------------------
Bulgaria
AMEC Minproc Bulgaria 7th Floor, 9-11 Maria Louisa Blvd, Vazrazhdane
EOOD District, Sofia 1301, Bulgaria 100
--------------------
Cameroon
Amec Foster Wheeler
Cameroun SARL Cap Limboh, Limbe, BP1280, Cameroon 100
--------------------
Canada
1900, 520 - 3rd Ave. S.W., Calgary, AB,
2292127 Alberta Ltd. T2P 0R3, Canada 100
--------------------
Borden Ladner Gervais LLP, Centennial
Amec Foster Wheeler Place, East Tower, 1900, 520 - 3rd Ave.
Canada Ltd. S.W., Calgary, AB, T2P 0R3, Canada 100
--------------------
Rider Hunt International 900 AMEC Place, 801-6th Avenue S.W., Calgary,
(Alberta) Inc. AB, T2P 3W3, Canada 100
--------------------
1900, 520 - 3rd Avenue SW, Calgary, AB,
Wood Canada Limited T2P 0R3, Canada 100
--------------------
Wood Group Asset Integrity 1900, 520 - 3rd Avenue SW, Calgary, AB,
Solutions, Inc. T2P 0R3, Canada 100
--------------------
Borden Ladner Gervais LLP, Centennial
Wood Group Canada, Place, East Tower, 1900, 520 - 3rd Ave.
Inc. S.W., Calgary, AB, T2P 0R3, Canada 100
--------------------
Wood Solar Canada 1900, 520 - 3rd Ave. S.W., Calgary, AB,
Ltd. T2P 0R3, Canada 100
--------------------
1900, 520 - 3rd Ave. S.W., Calgary, AB,
Wood Wind Canada Ltd. T2P 0R3, Canada 100
--------------------
Cayman Islands
Codan Trust Company (Cayman) Limited,
FW Chile Holdings Cricket Square, Hutchins Drive, PO Box
Ltd. 2681, George Town, KY1-1111 100
--------------------
Sterling Trust (Cayman) Limited, Whitehall
Wood Group O&M International, House, 238 North Church Street, George
Ltd. Town, KY1-1102, Cayman Islands 100
--------------------
Chile
Amec Foster Wheeler
Talcahuano, Operaciónes Camino A Ramuntcho 3230, Sector 4 Esquinas,
y Mantenciones Limitada Talcahuano, Chile 100
--------------------
ISI Mustang Chile Calle Providencia 337, off. 7, Comuna
SpA de Providencia, Santiago, Chile 100
--------------------
Avenida Presidente Riesco 5335, piso 8,
Wood Chile Limitada Las Condes, Chile 100
--------------------
Wood Ingenieria y
Consultoria Chile Avenida Larrain 5862, Piso 11, La Reina,
Limitada Santiago, 7870154, Chile 100
--------------------
China
Liaoning Province
Pharmaceutical Planning 3rd Floor, Gate 4, 153-10 Chuangxin Road,
and Designing Institution Hunnan District, Shenyang, Liaoning Province,
Co. Ltd. China 100
--------------------
Shenyang Dongyu Youan
Pharmaceutical Technology Gate 2, 8# Wulihe Street, Heping District,
Co. Ltd. Shenyang, Liaoning Province, China 76
--------------------
Colombia
Wood Engineering &
Consultancy Colombia Carrera 11 A No. 96-51 5th floor, Bogota
S.A.S. D.C., Colombia 100
--------------------
Cyprus
Elenion Building, 2nd Floor, 5 Themistocles
WGPS International Street, CY-1066 Nicosia,CY-1310 Nicosia,
Limited PO Box 25549, Cyprus 100
--------------------
Elenion Building, 2nd Floor, 5 Themistocles
Wood Group Angola Street, CY-1066 Nicosia,CY-1310 Nicosia,
Limited PO Box 25549, Cyprus 100
--------------------
Elenion Building, 2nd Floor, 5 Themistocles
Wood Group Equatorial Street, CY-1066 Nicosia,CY-1310 Nicosia,
Guinea Limited PO Box 25549, Cyprus 100
--------------------
Democratic Republic
of Congo
32 Avenue 3Z, Commune de Kasuku, Ville
MDM Engineering SPRL de Kindu, Democratic Republic of Congo 100
--------------------
Egypt
Foster Wheeler Petroleum Al-Amerya General Free Zone, Alexandria,
Services S.A.E. Egypt 100
--------------------
Equatorial Guinea
Baker Energy International
Equatorial Guinea
S.A. Bioko, Island Region, Malabo 65
--------------------
Hexagon Sociedad Anonima c/o Solege, Calle Kenia S/N, Malabo, Equatorial
con Consejo de Administracion Guinea 65
--------------------
France
Amec Foster Wheeler 14, Place de la Coupole, Charenton-le-Pont,
France S.A. France, 94220 100
--------------------
Wood Group Engineering
Services (France)
SAS 6Pl de la Madeleine, 75008, Paris, France 100
--------------------
Wood Group France
SAS 108 rue de Longchamp 75116 Paris 100
--------------------
Gabon
1.149, Republic Boulevard, CEDAM Building,
Production Services 6th Floor, Bali - Douala, Douala, PO Box
Network Gabon SARL 3586, Cameroon 100
--------------------
Germany
Bauunternehmung Kittelberger Liebigstr. 1-3, Kaiserslautern, 67661,
GmbH i.L. Germany 100
--------------------
KIG Immobilien Beteiligungsgesellschaft
mbH Hammstrasse 6, 04129 Leipzig, Germany 100
--------------------
KIG Immobiliengesellschaft
mbH & Co. KG Hammstrasse 6, 04129 Leipzig, Germany 100
--------------------
Wood E&IS (Renewables)
GmbH Zippelhaus 4, 20457 Hamburg, Germany 100
--------------------
Ghana
House Number 4, Momotse Avenue, Behind
All Saints Anglican Church, Adabraka,
Amec Foster Wheeler PO Box GP 1632, Accra, Greater Accra,
Operations Ghana Limited Ghana 100
--------------------
No 4 Momotsa Avenue, Behind All Saints
Wood & BBS Ghana Ltd Anglican Church, Adabraka, Accra, Ghana 80
--------------------
20 Jones Nelson Road, Adabraka, Accra,
Wood Group Ghana Limited Ghana 49*
--------------------
Greece
Amec Foster Wheeler
Hellas Engineering
and Construction Societe
Anonyme 15 Meandrou Street, Athens, 115 28, Greece 100
--------------------
Guatemala
AMEC Guatemala Engineering
and Consulting, Sociedad
Anonima Ciudad Guatemala, Guatemala 100
--------------------
Guernsey
22 Havilland Street, St Peter Port, GY1
AMEC Operations Limited 2QB, Guernsey 100
--------------------
PO Box 33, Maison Trinity, Trinity Square,
Garlan Insurance Limited St Peter Port, GY1 4AT, Guernsey 100
--------------------
Wood Group Offshore PO Box 119 Martello Court, Admiral Park,
Services Limited St Peter Port, Guernsey, GY1 3HB, Guernsey 100
--------------------
Wood USA Holdings 22 Havilland Street, St Peter Port, GY1
Limited 2QB, Guernsey 100
--------------------
Hong Kong
AMEC Asia Pacific 3806, Central Plaza, 18 Harbour Road,
Limited Wanchai, Hong Kong 99
--------------------
SgurrEnergy Hong Kong 26/F Beautiful Group Tower, 77 Connaught
Limited Road Central, Hong Kong 100
--------------------
India
Ingenious Process 307, Atlanta Estate, 3rd Floor, Hanuman
Solutions Private Tekdil Road Vitbhatti, Off. W.E. Highway,
Limited Goregaon (East) Mumbai MH 400063 100
--------------------
6th Floor, Zenith Building, Ascendas IT
Mustang Engineering Park, CSIR Road, Taramani, Chennai 600
India Private Limited 113, India 100
--------------------
Wood India Engineering 6th Floor, Zenith Building, Ascendas IT
& Projects Private Park, CSIR Road, Taramani, Chennai 600
Limited 113, India 100
--------------------
15th Floor Tower-B, Building No. 5, DLF
Wood Group Kenny India Cyber City, ,HR, Phase III Gurgaon Gurgaon,
Private Limited 122002, India 100
--------------------
5th Floor, Zenith Building, Ascendas IT
Wood Group PSN India Park, CSIR Road, Taramani, Chennai, 600113,
Private Limited India 100
--------------------
Indonesia
c/o 2020 Winston Park Drive, Suite 700,
PT AGRA Monenco Oakville, ON, L6H 6X7, Canada 100
--------------------
Perkantoran Pulo mas Blok VII No. 2, Jl
PT Amec Foster Wheeler Perintis Kemerdekaan, Pulo Gadung, Jakarta,
Indonesia Timur, Indonesia 55
--------------------
PT Australian Skills Green Town Warehouse No. 2, Bengkong-Batam-Indonesia,
Training Indonesia 95
--------------------
Perkantoran Pulo mas Blok VII No.2, Jl.
PT Foster Wheeler Perintis Kemerdekaan, Pulo Gadung, Jakarta
O&G Indonesia Timur 13260, Indonesia 90
--------------------
PT Harding Lawson c/o 2020 Winston Park Drive, Suite 700,
Indonesia Oakville, ON, L6H 6X7, Canada 100
--------------------
PT Simons International c/o 2020 Winston Park Drive, Suite 7000,
Indonesia Oakville, Ontario, Canada 100
--------------------
Gedung Perkantoran Prudential Centre,
Kota Kasablanka, Lantai 22, Unit A, J1,
Cassablanca Kav, 88 Kel. Menteng Dalam,
Kec.Tebet, Kota Adm, Jarkarta Selantan,
PT Wood Group Indonesia DKI Jarkarta, Malaysia 90
--------------------
Iran
Foster Wheeler Adibi 9th Floor Aluminumm Building, Avenue Shah,
Engineering Tehran 45
--------------------
Wood Group Iran - No 2564, Hafez Street, Toola Industrial
Qeshm Company (pjs) Park,Qeshm Island, Annaba, Iran 97
--------------------
Iraq
Ghabet El Iraq for
General Contracting
and Engineering Services, Suite 24, Building 106,St 19, Sec 213,
Engineering Consultancy Al-Kindi St, Al-Haritheeya Qts, Baghdad,
(LLC) Iraq 100
--------------------
Touchstone General
Contracting, Engineering Flat no. 23A, 3rd Floor, near Kahramana
Consultancy and Project Square Anbar Building, District no. 903,
Management LLC Hay Al Karada, Baghdad, Iraq 100
--------------------
Shoresh, Hadid and Khashab St., Kurdistan,
Wood Group, LLC Erbil, Iraq 100
--------------------
Ireland
Wood Group Kenny Ireland Second Floor, Blocks 4 and 5, Galway Technology
Limited Park, Parkmore, Galway, Ireland 100
--------------------
Italy
Via S. Caboto 15, Corsico, Milan, 20094,
Concetto Green S.r.l Italy 100
--------------------
Concettorinnovabile Via S. Caboto 15, Corsico, Milan, 20094,
s.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
ForEarth S.r.l Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Geo Rinnovabile S.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Green2dream s.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Green2grid S.r.l Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Greendream1 S.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Greendream2 S.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
HWF S.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Hybrid Energy S.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Newagro s.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Oro Rinnovabile s.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Orosolare s.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Res4green s.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Res4planet S.r.l Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Res4power s.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Resergy S.r.l Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Transizione s.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Transizioneverde s.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Tre Rinnovabili S.r.l. Italy 100
--------------------
Via S. Caboto 15, Corsico, Milan, 20094,
Versogreen s.r.l. Italy 100
--------------------
Wood Italiana S.r.l. Via S. Caboto 15, Corsico, 20094, Italy 100
--------------------
Wood Solare Italia Via S. Caboto 15, Corsico, Milan, 20094,
S.r.l. Italy 100
--------------------
Jamaica
c/o 2020 Winston Park Drive, Suite 700,
Monenco Jamaica Limited Oakville, ON, L6H 6X7, Canada 100
--------------------
Jersey
GTS Power Solutions
Limited 28 Esplanade, St Helier, JE2 3QA, Jersey 100
--------------------
RHI Talent UK Limited 28 Esplanade, St Helier, JE2 3QA, Jersey 100
--------------------
Wood Group Engineering
Services (Middle East)
Limited 28 Esplanade, St Helier, JE2 3QA, Jersey 100
--------------------
Wood Group Production
Facilities Limited 28 Esplanade, St Helier, JE2 3QA, Jersey 100
--------------------
Kazakhstan
AMEC Limited Liability 46 Satpayev St., Atyrau City, Atyrau Oblast,
Partnership 060011, Kazakhstan 100
--------------------
Foster Wheeler Kazakhstan app. 27, h. 64, Bostandykskiy district,
LLP Abaya Ave., Almaty City, Kazakhstan 100
--------------------
QED International
(Kazakhstan) Limited 46 Satpayev St., Atyrau City, Atyrau Oblast,
Liability Partnership 060011, Kazakhstan 100
--------------------
Wood Group Kazakhstan
LLP Satpayev str. 46, Atyrau, 060011, Kazakhstan 100
--------------------
Kuwait
AMEC Kuwait Project
Management and Contracting 2nd Floor, Al Mutawa Building, Ahmed Al
Company W.L.L. Jaber Street, Sharq, Kuwait City 49*
--------------------
Liberia
Amec Foster Wheeler King Plaza, 2nd-4th Floors, Broad Street,
Liberia Inc Monrovia 10, Liberia 100
--------------------
Luxembourg
Financial Services 15, Boulevard Friedrich Wilhelm Raiffeisen,
S.Ã r.l. L-2411, Luxembourg 100
--------------------
FW Investment Holdings 15, Boulevard Friedrich Wilhelm Raiffeisen,
S.Ã r.l. L-2411, Luxembourg 100
--------------------
Malaysia
Suite 1005, 10th Floor, Wisma Hamzah-Kwong
Amec Foster Wheeler Hing, No. 1, Leboh Ampang, Kuala Lumpur,
OPE Sdn. Bhd. 50100, Malaysia 100
--------------------
Unit C-12-4, Level 12, Block C, Megan
BMA Engineering SDN. Avenue II, Wilayah Persekutuan,Wilayah
BHD. Persekutuan, Kuala Lumpur, 50450, Malaysia 100
--------------------
Suite 1005, 10th Floor, Wisma Hamzah-Kwong
Foster Wheeler (Malaysia) Hing, No. 1, Leboh Ampang, Kuala Lumpur,
Sdn. Bhd. 50100, Malaysia 100
--------------------
Suite 1005, 10th Floor, Wisma Hamzah-Kwong
Foster Wheeler E&C Hing, No. 1, Leboh Ampang, Kuala Lumpur,
(Malaysia) Sdn. Bhd. 50100, Malaysia 70
--------------------
Level 7, Menara Milenium, Jalan Damanlela,
Rider Hunt International Pusat Bandar Damansara, Damansara Heights,
(Malaysia) Sdn Bhd Kuala Lumpur, 50490, Malaysia 100
--------------------
c/o Securities Services (Holdings) Sdn
Bhd, level 7, Menara Milenium, Jalan Damanlela,
Pusat Bandar Damansara, Damansara Heights,
Wood Group Kenny Sdn ,Kuala Lumpur, Damansara Town Centre,
Bhd Damansa, 50490, Malaysia 25*
--------------------
Level 7, Menara Milenium,Jalan Damanlela,
Pusat Bandar Damansara, Damansara Heights,Wilayah
Wood Group Mustang Persekutuan,Wilayah Persekutuan, Kuala
(M) Sdn. Bhd. Lumpur, 50490, Malaysia 100
--------------------
Mauritius
MDM Engineering Investments 1st Floor, Felix House, 24 Dr Joseph Street,
Ltd Port Louis, Mauritius 100
--------------------
MDM Engineering Projects 1st Floor, Felix House, 24 Dr Joseph Street,
Ltd Port Louis, Mauritius 100
--------------------
c/o First Island Trust Company Ltd, Suite
P.E. Consultants, 308, St. James Court, St. Denis Street,
Inc. Port Louis, Mauritius 100
--------------------
c/o Ocorian Corporate Services (Mauritius)
QED International Limited, 6th Floor, Tower A, 1 CyberCity,
Ltd Ebene, 72201, Mauritius 100
--------------------
Mexico
AGRA Ambiental S.A. c/o 2020 Winston Park Drive, Suite 700,
de C.V. Oakville, ON, L6H 6X7, Canada 100
--------------------
Amec Foster Wheeler Av. Vasconcelos 453, Colonia del Valle
Energia Mexico S. 66220 Nuevo Leon, Monterrey (Estados Unidos
de R.L. de C.V. de México), Mexico 100
--------------------
David Alfaro Siqueiros No.104, Piso 2,
Amec Foster Wheeler Colonia Valle Oriente, San Pedro Garza
Mexico, S.A. de C.V. Garcia, Nuevo Leon, C.P. 66269, Mexico 100
--------------------
Libramiento Carr. Silao-León #201,
Esq. Prolongación Bailleres, Col.
CEC Controls Automatizacion Progreso Silao, Guanajuato, CP. 36135,
S. de R.L. de C.V. Mexico 100
--------------------
Foster Wheeler Constructors
de Mexico S. de R.L. 699 15th Street, 6th Avenue, Agua Prieta,
de C.V. Sonora, Mexico 80
--------------------
Global Mining Projects
and Engineering, S.A. Calle Coronado 124, Zona Centro, Chihuahau,
de C.V. Chihuahau, 31000, Mexico 100
--------------------
Edificio Omega, Campos Eliseos 345, floors
Harding Lawson de 2, 3 & 11, Chapultepec Polanco 11560 Mexico,
Mexico S.A. de C.V. D.F. 100
--------------------
ISI Mustang Servicios HOMERO 1804 PISO 11,COL. LOS MORALES -
de Ingenieria de Mexico, DELEGACION MIGUEL HIDALGO, Distrito Federal,
S de R.L. De C.V. Mexico City, C.P. 11540, Mexico 100
--------------------
Insurgentes Sur #619 piso 10, Colonia
Napoles, Municipio Benito Juarez, between
Wood Group de Mexico Calle Vermont and Calle Yosemite, Mexico
S.A. de C.V. City, 03810, Mexico 100
--------------------
Wood Group Management Blvd. Manuel Avila Camacho 40 - 1801,
Services de Mexico, Lomas de Cahpultepec, Delgacion Miguel
S.A. de C.V. Hidalgo, Mexico, D.F. 11000 100
--------------------
Mongolia
Mongol TV Tower-1005, Chinggis Avenue,
Sukhbaatar District, 1st khoroo, Ulaanbaatar,
AMEC LLC Mongolia 100
--------------------
Mozambique
Mocambique, Maputo Cidade, Distrito Urbano
Amec Foster Wheeler 1, Bairro Sommerschield II, Av. Julius
Mozambique Limitada Nyerere, n 3412, Maputo, Mozambique 100
--------------------
Wood Group Mozambique, 73 Rua Jose Sidumo, Bairro da Polana,
Limitada Maputo, Mozambique 100
--------------------
Netherlands
AMEC GRD SA B.V. Meander 251, Arnhem, 6825 MC, Netherlands 100
--------------------
EDGE Amsterdam West, Basisweg 10, 1043
AMEC Holland B.V. AP, Amsterdam, Netherlands 100
--------------------
EDGE Amsterdam West, Basisweg 10, 1043
AMEC Investments B.V. AP, Amsterdam, Netherlands 100
--------------------
Foster Wheeler Continental
B.V. Naritaweg 165, 1043 BW Amsterdam, Netherlands 100
--------------------
Foster Wheeler Europe
B.V. Naritaweg 165, 1043 BW Amsterdam, Netherlands 100
--------------------
C/O Centralis Netherlands BV, Zuidplein
126, WTC, Toren H 15e, Amsterdam, 1077XV,
John Wood Group B.V. Netherlands 100
--------------------
C/O Centralis Netherlands BV, Zuidplein
John Wood Group Holdings 126, WTC, Toren H 15e, Amsterdam, 1077XV,
BV Netherlands 100
--------------------
New Zealand
26 Manadon Street, Spotswood, New Plymouth,
M&O Pacific Limited 4310, New Zealand 100
--------------------
Nigeria
AMEC Contractors (W/A) 13A AJ Marinho Drive, Victoria Island,
Limited Lagos, Nigeria 100
--------------------
AMEC King Wilkinson No 3, Hospital Road, PO Box 9289, Lagos,
(Nigeria) Limited Nigeria 100
--------------------
AMEC Offshore (Nigeria) 18th Floor, Western House, 8/10 Broad
Limited street, Lagos, Nigeria 75
--------------------
Foster Wheeler (Nigeria) 1 Murtala Muhammed Drive, (Formerly Bank
Limited Road), Ikoyi, Lagos, Nigeria 100
--------------------
Foster Wheeler Environmental c/o Nwokedi & Co., 21 Ajasa Street, Onikan,
Company Nigeria Limited Nigeria 87
--------------------
13 Sumbo Jibowu Street, Ikoyi, Lagos,
JWG Nigeria Limited Nigeria 100
--------------------
Overseas Technical No 13 Sumbo Jibowu Street, Ikoyi, Lagos,
Services Nigeria Limited Nigeria 93
--------------------
Norway
Wood Group Norway
AS Fokserodveien 12, Sandefjord, 3241, Norway 100
--------------------
Oman
Amec Foster Wheeler
Engineering Consultancy PO Box 1469, Postal Code 133, Al-Khuwair,
LLC Sultanate of Oman 60
--------------------
Bldg No. 89, Way No. 6605, Al Oman Street,
Ghala Industrial Area, P.O. Box 293, Al
Wood LLC Khuwair, PC 133, Oman 70
--------------------
Papua New Guinea
Deloitte Touche Tohmatsu, Level 9, Deloitte
Haus, Macgregor Street, Section 8, Allotment
Wood Engineering PNG 19, Port Moresby, National Capital District,
Ltd Papua New Guinea 100
--------------------
Dentons PNG, Level 5, Bsp Haus, Harbour
City, Port Moreseby,Papau New Guinea,
Wood Group PNG Limited National Capital District, Papua New Guinea 100
--------------------
Peru
Av. de la Floresta 407, 5th Floor, San
Wood Group Peru S.A.C. Borja, Lima, Peru 100
--------------------
Philippines
U-7A, 7/F PDCP Bank Centre,V.A. Rufino
Foster Wheeler (Philippines) St. Corner L.P. Leviste St., Salcedo Village,
Corporation Makati City, PH, 1227 100
--------------------
Production Services 585 ME National Road HW, Barangay Alangilan,
Network Holdings Corp. Batangas City, Batangas, Philippines 100
--------------------
12th Floor, Net One Center,26th Street
PSN Production Services Corner, 3rd Avenue, Crescent Park West,Taguig,
Network Philippines Metro Manilla, Bonifacio Global City,
Corp 1634, Philippines 100
--------------------
Poland
Amec Foster Wheeler
Consulting Poland ul. Chmielna 132/134, Warsaw, 00-805,
Sp. z o.o. Poland 100
--------------------
Portugal
Amec Foster Wheeler Avenida Barbosa du Bocage 113-4, Lisboa,
(Portugal) Lda 1050-031, Portugal 100
--------------------
Qatar
Production Services
Network Qatar LLC PO Box 2515, Doha, Qatar 49*
--------------------
Romania
Rooms 1 and 2, 2nd Floor, No. 59 Strada
Grigore Alexandrescu, Sector 1, Bucharest
AMEC Operations S.R.L 010623, Romania 100
--------------------
Russia
Office E-100, Park Place, 113/1, Leninsky
Prospekt, 117198, Moscow, Russian Federation
113/1, Leninsky Prospekt, 117198, Moscow,
OOO Amec Foster Wheeler Russian Federation 100
--------------------
Production Services 2-6 Floors,88 Amurskaya, Yuzhno-Sakhalinsk,
Network Eurasia LLC 693020, Russian Federation 100
--------------------
Production Services 2-6 Floors,88 Amurskaya, Yuzhno-Sakhalinsk,
Network Sakhalin LLC 693020, Russian Federation 99
--------------------
Saudi Arabia
Amec Foster Wheeler Majd Business Center, Tower B, P.O. Box
Energy and Partners 30920, King Faisal Road, Al-Khobar, 31952,
Engineering Company Saudi Arabia 75
--------------------
Mustang and Faisal
Jamil Al-Hejailan
Consulting Engineering PO Box 9175, Almalaz, Salahuddin Alayoubi
Company Street, Riyadh, 11413, Saudi Arabia 70
--------------------
Mustang Saudi Arabia King Fahad Road, Rakah, Po Box 8145, Al-Khobar,
Co. Ltd. 34225, Saudi Arabia 100
--------------------
Wood Group ESP Saudi
Arabia Limited PO Box 1280, Al-Khobar 51
--------------------
Singapore
Amec Foster Wheeler
Asia Pacific Pte. One Marina Boulevard #28-00, Singapore,
Ltd. 018989, Singapore 100
--------------------
AMEC Global Resources 991E Alexandra Road, #01 - 25, 119973,
Pte Limited Singapore 100
--------------------
Foster Wheeler Eastern 1 Marina Boulevard, #28-00, Singapore
Private Limited 018989 100
--------------------
OPE O&G Asia Pacific 1 Marina Boulevard, #28-00, One Marina
Pte. Ltd. Boulevard, 018989, Singapore 100
--------------------
Rider Hunt International 24 Raffles Place, #24-03 Clifford Centre,
(Singapore) Pte Limited Singapore, 048621 100
--------------------
Simons Pacific Services 8 Marina Boulevard #05-02, Marina Bay
Pte Ltd. Financial Centre, Singapore, 018981, Singapore 100
--------------------
Wood Group International 991E Alexandra Road, #01 - 25, 119973,
Services Pte. Ltd. Singapore 100
--------------------
Slovakia
The Automated Technology c/o, Kinstellar s.r.o., Hviezdoslavovo
Group (Slovakia) s.r.o. nám 13, Bratislava, 811 02, Slovakia 100
--------------------
South Africa
Waterfall Corporate Campus, Building 6,
Amec Foster Wheeler 74 Waterfall Drive Waterval City, Gauteng,
Properties (Pty) Limited 2090, South Africa 100
--------------------
AMEC Minproc (Proprietary) 2 Eglin Road, Sunninghill, 2157, South
Limited Africa 100
--------------------
Mossel Bay Energy
IPP (proprietary) 2nd Road Halfway House, Midrand, South
Limited (RF) Africa 90
--------------------
Rider Hunt International Building No. 2, Silver Stream Business
South Africa (Pty) Park, No. 10 Muswell Road South, Bryanston,
Ltd South Africa 83
--------------------
Waterfall Corporate Campus, Building 6,
Wood BEE Holdings 74 Waterfall Drive Waterval City, Gauteng,
(Proprietary) Ltd 2090, South Africa 58
--------------------
Building No. 2, Silver Stream Business
Wood Mining South Park, 10 Muswell Road South, Bryanston,
Africa (Pty) Ltd Gauteng, 2021, South Africa 100
--------------------
Waterfall Corporate Campus, Building 6,
Wood South Africa 74 Waterfall Drive Waterval City, Gauteng,
(PTY) Ltd 2090, South Africa 70
--------------------
South Korea
KG Tower 5F, 92 Tongil-ro, Jung-gu, Seoul
AMEC Korea Limited 04517, Korea 100
--------------------
Spain
Calle Gabriel Garcia Marquez, no 2, Parque
Amec Foster Wheeler Empresarial Madrid, Las Rozas, 28232 Las
Energia, S.L.U. Rozas, Madrid, Spain 100
--------------------
Calle Gabriel Garcia Marquez, no 2, Parque
Empresarial Madrid - Las Rozas, 28230
Wood Iberia S.L.U. Las Rozas, Madrid, Spain 100
--------------------
Switzerland
A-FW International c/o Intertrust Services (Schweiz) AG,
Investments GmbH Alpenstrasse 15, 6300, Zug, Zug, Switzerland 100
--------------------
Wood Engineering AG Lohweg 6, 4054 Basel, Switzerland 100
--------------------
Tanzania
Plot No. 483, Garden Road, Mikocheni Ward,
MDM Projects-Tanzania Kinondoni District, Dar es Salaam, 14112,
Limited Tanzania, the United Republic of 100
--------------------
Thailand
Amec Foster Wheeler 1st Floor Talaythong Tower, 53 Moo 9,
Holding (Thailand) Sukhumvit Road, Thungsukla, Sriracha,
Limited Chonburi, 20230, Thailand 100
--------------------
53 Talaythong Tower, 1st Floor, Moo 9,
Foster Wheeler (Thailand) Sukhumvit Road, Tambol Tungsukhla, Amphur
Limited Sriracha, Chonburi, 20230, Thailand 100
--------------------
91/17 Soi Wattananivet 4, Suthisarnvinijchai
Road, Khwaeng Samsennok, Khet Huaykwang,
SIE Siam Limited Bangkok Metropolis, Thailand 100
--------------------
91/17 Soi Wattananivet 4, Suthisarnvinijchai
Simons International Road, Khwaeng Samsennok, Khet Huaykwang,
Engineering Ltd. Bangkok Metropolis, Thailand 100
--------------------
Trinidad and Tobago
Wood Group Trinidad 18 Scott Bushe Street, Port of Spain,
& Tobago Limited Trinidad and Tobago 100
--------------------
Turkey
Amec Foster Wheeler
Bimas Birlesik Insaat Kucukbakkalkoy Mah, Çardak Sok, No.1A
ve Muhendislik A.S. Plaza, 34750 Atasehir, Istanbul, Turkey 100
--------------------
Uganda
Wood Group PSN Uganda KAA House, Plot 41,Nakasero Road, PO Box
Limited 9566, Kampala, Uganda 100
--------------------
Ukraine
Room 398, Building 26, Obolonskyi Avenue,
Wood Ukraine LLC Kyiv City, 04205, Ukraine 100
--------------------
United Arab Emirates
Production Services Unit 1301-CI Tower, Level 13, Al Bateen
Network Emirates LLC Street, Khalidiya, Abu Dhabi, PO Box 105828 49*
--------------------
The MAZE Tower, 15th Floor, Sheikh Zayed
PSN Overseas Holding Road, PO Box 9275, Dubai, United Arab
Company Limited Emirates 100
--------------------
United Kingdom
Booths Park, Chelford Road, Knutsford,
AFW Finance 2 Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
AMEC (F.C.G.) Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
AMEC (MH1992) Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
AMEC (MHL) Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
AMEC (WSL) Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
AMEC BKW Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
AMEC Bravo Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
AMEC Building Limited Cheshire, WA16 8QZ, England 100
--------------------
AMEC Capital Projects Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
AMEC Civil Engineering Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Amec Foster Wheeler Booths Park, Chelford Road, Knutsford,
(Holdings) Limited Cheshire, WA16 8QZ, England 100
--------------------
Amec Foster Wheeler
Earth and Environmental Booths Park, Chelford Road, Knutsford,
(UK) Limited Cheshire, WA16 8QZ, England 100
--------------------
Amec Foster Wheeler Booths Park, Chelford Road, Knutsford,
Energy Limited Cheshire, WA16 8QZ, England 100
--------------------
Amec Foster Wheeler Booths Park, Chelford Road, Knutsford,
Finance Asia Limited Cheshire, WA16 8QZ, England 100
--------------------
Amec Foster Wheeler Booths Park, Chelford Road, Knutsford,
Finance Limited Cheshire, WA16 8QZ, England 100
--------------------
Amec Foster Wheeler Booths Park, Chelford Road, Knutsford,
Group Limited Cheshire, WA16 8QZ, England 100
--------------------
Amec Foster Wheeler Booths Park, Chelford Road, Knutsford,
International Limited Cheshire, WA16 8QZ, England 100
--------------------
Amec Foster Wheeler Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
AMEC Investments Europe Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
AMEC Offshore Limited Cheshire, WA16 8QZ, England 100
--------------------
AMEC Process and Energy Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
AMEC Project Investments Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
AMEC Services Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
AMEC Trustees Limited Cheshire, WA16 8QZ, England 100
--------------------
AMEC USA Holdings Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
AMEC Wind Developments Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Automated Technology Booths Park, Chelford Road, Knutsford,
Group Holdings Limited Cheshire, WA16 8QZ, England 100
--------------------
c/o Ledingham Chalmers LLP, 3rd Floor,
East Mediterranean 68-70 George Street, Edinburgh, EH2 2LR,
Energy Services Limited United Kingdom 100
--------------------
Foster Wheeler (G.B.) Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Foster Wheeler (London) Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Foster Wheeler (Process Booths Park, Chelford Road, Knutsford,
Plants) Limited Cheshire, WA16 8QZ, England 100
--------------------
Foster Wheeler E&C Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Foster Wheeler Environmental Booths Park, Chelford Road, Knutsford,
(UK) Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
Foster Wheeler Europe Cheshire, WA16 8QZ, England 100
--------------------
Foster Wheeler UK 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Investments Limited Scotland 100
--------------------
Foster Wheeler World Booths Park, Chelford Road, Knutsford,
Services Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
FW Investments Limited Cheshire, WA16 8QZ, England 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
HFA Limited Scotland, United Kingdom 100
--------------------
Integrated Maintenance Booths Park, Chelford Road, Knutsford,
Services Limited Cheshire, WA16 8QZ, England 100
--------------------
Ground Floor, 15 Justice Mill Lane, Aberdeen,
James Scott Limited AB11 6EQ, Scotland 100
--------------------
John Wood Group Holdings 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
JWG Investments Limited Scotland, United Kingdom 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
JWGUSA Holdings Limited Scotland, United Kingdom 100
--------------------
Kelwat Investments 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
Metal and Pipeline Booths Park, Chelford Road, Knutsford,
Endurance Limited Cheshire, WA16 8QZ, England 100
--------------------
Mustang Engineering 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
Press Construction Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Process Plants Suppliers Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Production Services 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Network (UK) Limited Scotland, United Kingdom 100
--------------------
Production Services
Network Bangladesh Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
PSJ Fabrications Ltd Cheshire, WA16 8QZ, England 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
PSN (Angola) Limited Scotland, United Kingdom 100
--------------------
PSN (Philippines) 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
PSN Asia Limited Scotland, United Kingdom 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
PSN Overseas Limited Scotland, United Kingdom 100
--------------------
QED International Ground Floor, 15 Justice Mill Lane, Aberdeen,
(UK) Limited AB11 6EQ, Scotland 100
--------------------
GoTechnology Services Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Rider Hunt International Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Sandiway Solutions Booths Park, Chelford Road, Knutsford,
(No 3) Limited Cheshire, WA16 8QZ, England 100
--------------------
St Vincent Plaza, 319 St Vincent Street,
SgurrEnergy Limited Glasgow, G2 5LP, Scotland, United Kingdom 100
--------------------
The Automated Technology Booths Park, Chelford Road, Knutsford,
Group Limited Cheshire, WA16 8QZ, England 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
WGPSN (Holdings) Limited Scotland, United Kingdom 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
WGPSN Eurasia Limited Scotland, United Kingdom 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Wood (Indonesia) Limited Scotland, United Kingdom 100
--------------------
Booths Park, Chelford Road, Knutsford,
Wood and Company Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
Wood Finance UK Limited Cheshire, WA16 8QZ, England 100
--------------------
Wood Group Algeria 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
Wood Group Algiers 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
Wood Group Annaba 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Wood Group Arzew Limited Scotland, United Kingdom 100
--------------------
Wood Group Engineering
& Operations Support 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
Wood Group Engineering 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
(North Sea) Limited Scotland, United Kingdom 100
--------------------
Wood Group Hassi Messaoud 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
Wood Group Holdings 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
(International) Limited Scotland, United Kingdom 100
--------------------
Wood Group Investments 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
Wood Group Kenny Corporate 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
Booths Park, Chelford Road, Knutsford,
Wood Group Kenny Limited Cheshire, WA16 8QZ, England 100
--------------------
Wood Group Kenny UK Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Wood Group Limited Scotland, United Kingdom 100
--------------------
Wood Group Power Investments 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 100
--------------------
Wood Group Production 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Services UK Limited Scotland, United Kingdom 100
--------------------
15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Wood Group UK Limited Scotland, United Kingdom 100
--------------------
Booths Park, Chelford Road, Knutsford,
Wood Group/OTS Limited Cheshire, WA16 8QZ, England 100
--------------------
Wood International Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
Wood Limited Cheshire, WA16 8QZ, England 100
--------------------
Wood Pensions Trustee Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
--------------------
Wood Transmission Booths Park, Chelford Road, Knutsford,
and Distribution Limited Cheshire, WA16 8QZ, England 100
--------------------
Booths Park, Chelford Road, Knutsford,
Wood UK Limited Cheshire, WA16 8QZ, England 100
--------------------
United States
4900 Singleton, L.P. 400 North St. Paul, Dallas, TX, 75201 100
--------------------
United Agent Group Inc., 3411 Silverside
AMEC Construction Road Tatnall Building #104, Wilmington,
Management, Inc. New Castle County, DE, 19810, United States 100
--------------------
3411 Silverside Road Tatnall Building
Amec Foster Wheeler #104, Wilmington, New Castle County, DE,
Arabia Ltd. 19810, United States 100
--------------------
Amec Foster Wheeler 3411 Silverside Road Tatnall Building
Environmental Equipment #104, Wilmington, New Castle County, DE,
Company, Inc. 19810, United States 100
--------------------
Amec Foster Wheeler 3411 Silverside Road Tatnall Building
Industrial Power Company, #104, Wilmington, New Castle County, DE,
Inc. 19810, United States 100
--------------------
United Agent Group Inc., 3411 Silverside
Amec Foster Wheeler Road Tatnall Building #104, Wilmington,
Martinez, Inc. New Castle County, DE, 19810, United States 100
--------------------
United Agent Group Inc., 3411 Silverside
Amec Foster Wheeler Road, Tatnall Bldg. #104, Wilmington,
North America Corp. DE, 19810, United States 100
--------------------
c/o The Corporation Trust Company, Corporation
Amec Foster Wheeler Trust Center, 1209 Orange Street, Wilmington,
Power Systems, Inc. DE, 19801 100
--------------------
United Agent Group Inc., 3411 Silverside
Amec Foster Wheeler Road, Tatnall Bldg. #104, Wilmington,
USA Corporation DE, 19810, United States 100
--------------------
United Agent Group Inc., 3411 Silverside
Road Tatnall Building #104, Wilmington,
AMEC Holdings, Inc. New Castle County, DE, 19810, United States 100
--------------------
AMEC North Carolina, 225, Hillsborough Street, Raleigh, NC,
Inc. 27603, United States 100
--------------------
United Agent Group Inc., 3411 Silverside
AMEC Oil & Gas World Road Tatnall Building #104, Wilmington,
Services, Inc. New Castle County, DE, 19810, United States 100
--------------------
Perryville Corporate Park, 53 Frontage
Barsotti's Inc. Road, PO Box 9000, Hampton, NJ, 08827-90000 100
--------------------
United Agent Group Inc., 3411 Silverside
Road, Tatnall Bldg. #104, Wilmington,
BMA Solutions Inc. DE, 19810, United States 100
--------------------
C E C Controls Company, United Agent Group Inc., 28175 Haggerty
Inc. RoadD, Novi, MI, 48377, United States 100
--------------------
United Agent Group, 2425 W Loop South
Cape Software, Inc. #200, Houston, TX, 77027, United States 100
--------------------
8275 South Eastern Avenue #200, Las Vegas,
Ceres Solar 1, LLC Clark County, NV, 89123, United States 100
--------------------
Equipment Consultants, Corporation Trust Company, 1209 Orange
Inc. Street, Wilmington, DE, 19801 100
--------------------
Energy Transition 5444 Westheimer #1000, Houston, Harris
Ventures 1 LLC County, TX, 77056, United States 100
--------------------
Energy Transition 5444 Westheimer #1000, Houston, Harris
Ventures 2 LLC County, TX, 77056, United States 100
--------------------
Energy Transition 5444 Westheimer #1000, Houston, Harris
Ventures 3 LLC County, TX, 77056, United States 100
--------------------
Energy Transition 5444 Westheimer #1000, Houston, Harris
Ventures 4 LLC County, TX, 77056, United States 100
--------------------
Energy Transition 5444 Westheimer #1000, Houston, Harris
Ventures 5 LLC County, TX, 77056, United States 100
--------------------
Wood Contract Services 17325 Park Row, Suite 500, Houston, TX,
LLC 77084, United States 100
--------------------
Foster Wheeler Energy 5444 Westheimer #1000, Houston, Harris
Corporation County, TX, 77056, United States 100
--------------------
Foster Wheeler Environmental 5444 Westheimer #1000, Houston, Harris
Corporation County, TX, 77056, United States 100
--------------------
United Agent Group Inc., 3411 Silverside
Road, Tatnall Bldg. #104, Wilmington,
Foster Wheeler Inc. DE, 19810, United States 100
--------------------
c/o The Corporation Trust Company, Corporation
Foster Wheeler Intercontinental Trust Center, 1209 Orange Street, Wilmington,
Corporation DE, 19801 100
--------------------
United Agent Group Inc., 3411 Silverside
Foster Wheeler International Road Tatnall Building #104, Wilmington,
LLC New Castle County, DE, 19810, United States 100
--------------------
United Agent Group Inc., 3411 Silverside
Road, Tatnall Bldg. #104, Wilmington,
Foster Wheeler LLC DE, 19810, United States 100
--------------------
c/o The Corporation Trust Company, Corporation
Foster Wheeler Realty Trust Center, 1209 Orange Street, Wilmington,
Services, Inc. DE, 19801 100
--------------------
United Agent Group, 2425 W Loop South
Ingenious Inc. #200, Houston, TX, 77027, United States 100
--------------------
United Agent Group, 2425 W Loop South
ISI Group, L.L.C. #200, Houston, TX, 77027, United States 100
--------------------
United Agent Group Inc., 3411 Silverside
Road, Tatnall Bldg. #104, Wilmington,
JWGUSA Holdings, Inc. DE, 19810, United States 100
--------------------
United Agent Group Inc., 119 E. Court
Street, Cincinnati, OH, 45202, United
Kelchner, Inc. States 100
--------------------
United Agent Group Inc., 3411 Silverside
MACTEC E&C International, Road Tatnall Building #104, Wilmington,
Inc. New Castle County, DE, 19810, United States 100
--------------------
United Agent Group Inc., 3411 Silverside
Martinez Cogen Limited Road Tatnall Building #104, Wilmington,
Partnership New Castle County, DE, 19810, United States 99
--------------------
Mustang International, 5444 Westheimer #1000, Houston, Harris
Inc. County, TX, 77056, United States 100
--------------------
United Agent Group Inc., 3411 Silverside
Process Consultants, Road Tatnall Building #104, Wilmington,
Inc. New Castle County, DE, 19810, United States 100
--------------------
United Agent Group Inc., 8275 South Eastern
Av., #200, Las Vegas, NV, 89123, United
RHI Talent USA Inc. States 100
--------------------
Rider Hunt International United Agent Group, 2425 W Loop South
(USA) Inc. #200, Houston, TX, 77027, United States 100
--------------------
United Agent Group Inc., 5708 S.E. 136th
Swaggart Brothers, Avenue, #2, Portland, OR, 97236, United
Inc. States 100
--------------------
United Agent Group Inc., 5708 S.E. 136th
Swaggart Logging & Avenue, #2, Portland, OR, 97236, United
Excavation LLC States 100
--------------------
c/o The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street, Wilmington,
Thelco Co. DE, 19801 100
--------------------
3411 Silverside Road Tatnal Building #104,
Wood Contracting Services Wilmington, New Castle County, DE, 19810,
LLC United States 100
--------------------
United Agent Group Inc., 3411 Silverside
Wood Group Alaska, Road, Tatnall Bldg. #104, Wilmington,
LLC DE, 19810, United States 100
--------------------
United Agent Group Inc., 8275 South Eastern
Av., #200, Las Vegas, NV, 89123, United
Wood Group PSN, Inc. States 100
--------------------
United Agent Group Inc., 8275 South Eastern
Wood Group Support Av., #200, Las Vegas, NV, 89123, United
Services, Inc. States 100
--------------------
3411 Silverside Road Tatnall Building
Wood Group US Holdings, #104, Wilmington, New Castle County, DE,
Inc. 19810, United States 100
--------------------
United Agent Group Inc., 8275 South Eastern
Wood Group US International, Av., #200, Las Vegas, NV, 89123, United
Inc. States 100
--------------------
5444 Westheimer #1000, Houston, Harris
Wood Group USA, Inc. County, TX, 77056, United States 100
--------------------
2475 Northwinds Parkway, #200-260, Alpharetta,
Wood Programs, Inc. GA, 30009, United States 100
--------------------
Uzbekistan
Wood Energy Solutions Sulton Darvoza Business Center, 38/1 Shakhrisabz
LLC Street, Tashkent, 100060, Uzbekistan 100
--------------------
Vanuatu
O.T.S. Finance and Law Partners House, Rue Pasteur, Port
Management Limited Vila, Vanuatu 100
--------------------
Overseas Technical
Service International Law Partners House, Rue Pasteur, Port
Limited Vila, Vanuatu 100
--------------------
Venezuela
Amec Foster Wheeler Avenida Francisco de Miranda, Torre Cavendes,
Venezuela, C.A. Piso 9, Ofic 903, Caracas, Venezuela 100
--------------------
*Companies consolidated for accounting purposes as subsidiaries
on the basis of control. There is no material impact on the
financial statements of the judgements applied in assessing the
basis of control for these entities.
** The Group does not have a direct shareholding in these
entities but considers them to be under group control.
Joint Ventures
Company Name Registered Address Ownership
Interest
%
Australia
Level 6, QV1 Building, 250 St Georges
Clough Wood Pty Ltd(1) Terrace, Perth, WA, 6000, Australia 50
Azerbaijan
Socar-Foster Wheeler
Engineering LLC 88A Zardaby Avenue,Baku, Azerbaijan 35
Brunei Darussalam
Lot 29 & 30, Tapak Perindustrian Sungai
TendrillWood Sdn Bera, Kampong Sungai Bera, Seria, Belait,
Bhd KB1933, Brunei Darussalam 75
Canada
Suite 2300, Bentall 5, 550 Burrard Street,
ABV Consultants Ltd(1) Vancouver, BC, V6C 2B5, Canada 50
AMEC Black & McDonald 60 Cutler Avenue, Dartmouth, NS, B3B 0J6,
Limited(1) Canada 50
689 Water Street, Newfoundland, St. John's,
ODL Canada Limited NL, A1E 1B5, Canada 50
Teshmont Consultants 1190 Waverley Street, Winnipeg, MB, R3T
Inc. 0P4, Canada 50
Suite B12, 6020 2nd Street S. E., Calgary,
Vista Mustang JV AB, T2H 2L8, Canada 50
Chile
Consorcio AMEC CADE
/ PSI Consultores Av. Jose Domingo, Canas No 2640, Nunoa,
Limitada Santiago, 7750164, Chile 50
Consorcio Consultor
Cade Zañartu Seminario 714, Ñuñoa, Santiago
Limitada de Chile 50
Consorcio Consultor
Systra / Cade Idepe Av. Jose Domingo, Canas No 2640, Nunoa,
/ Geoconsult Limitada Santiago, 7750164, Chile 40
Consorcio de Ingenieria
Geoconsult Cade Idepe Av. Jose Domingo, Canas No 2640, Nunoa,
Limitada Santiago, 7750164, Chile 50
Consorcio de IngenierÃa Av. Jose Domingo, Canas No 2640, Nunoa,
Systra Cade Limitada Santiago, 7750164, Chile 50
Consorcio de Ingenieria
Transporte Systra
Cade Idepe Consultores Jose Domingo Cañas 2640, Ñuñoa,
Limitada Santiago Chile 50
Construcciòn
e Ingenierìa Avenida Andrés Bello 2711, Piso 22
Chile FI Limitada - Comuna Las Condens, Santiago, Chile 50
China
No. 143 Jinyi Road, Jinshan District,
Wood Zone Co., Ltd Shanghai, 200540, China 50
Cyprus
Elenion Building, 2nd Floor, 5 Themistocles
Wood Group - CCC Street, CY-1066 Nicosia,CY-1310 Nicosia,
Limited PO Box 25549, Cyprus 50
Kazakhstan
WOOD KSS JSC Satpayev str. 46, Atyrau, 060011, Kazakhstan 50
Mexico
AFWA DUBA Salina
Cruz, S. de R.L. Carlos Salazar, #2333, Colonia Obrera,
de C.V. Monterrey, Nuevo Leon, Mexico 50
Grupo Industrial
de Ingenieria Ecologica Edificio Omega, Campos Eliseos 345, floors
III HLA & Iconsa 2, 3 & 11, Chapultepec Polanco 11560 Mexico,
S.A. de C.V. D.F. 51
Mustang Diavaz, S.A.P.I. Av. Revolucion 468, Col. San Pedro de
de C.V. los Pinos Mexico, D.F., 03800, Mexico 50
David Alfaro Siqueiros 104 piso 2, Col.
Northam Conip Consorcio, Valle Oriente, San Pedro Garza Garcia,
S.A. de C.V. Nuevo Leon, CP. 66269, Mexico 50
Malaysia
Level 7, Menara Milenium,Jalan Damanlela,
Pusat Bandar Damansara, Damansara Heights,Wilayah
Persekutuan,Wilayah Persekutuan, Kuala
ICE Wood Sdn. Bhd. Lumpur, 50490, Malaysia 49
Netherlands
C/O Centralis Netherlands BV, Zuidplein
Wood Group Azerbaijan 126, WTC, Toren H 15e, Amsterdam, 1077XV,
B.V. Netherlands 51
New Zealand
Ground Floor, Beca House, 21 Pitt Street,
Wood Beca Limited Auckland, 1010, New Zealand 50
Oman
c/o Al Alawi, Mansoor Jamal & Co., Barristers
& Legal Consultants, Muscat International
Centre, Mezzanine Floor, Muttrah Business
AMEC Al Turki LLC District, P.O. Box 686 Ruwi, Oman 35
Qatar
5th Floor Al Aqaria Tower, Building No.
34, Museum Street, Old Salata Area, Street
970, Zone 18, P.O Box No. 24523 Doha,
Wood Black Cat LLC Qatar 49
Saudi Arabia
Al Rushaid Petroleum Investment Co. Building,
Prince Hamoud Street, PO Box 31685 - Al
AMEC BKW Arabia Limited(1) Khobar 31952, Saudi Arabia 50
Spain
Insolux Monenco Medio Calle Juan Bravo, 3-C, Madrid, 28006,
Ambiente S.A. Spain 49
Trinidad and Tobago
Massy Wood Group 4th Floor, 6A Queens Park West, Victoria
Ltd. Avenue, Port of Spain, Trinidad and Tobago 50
United Kingdom
ACM Health Solutions Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England, United Kingdom 33
Ethos Energy Group 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 51
Lewis Wind Power C/O Edf Renewables Atria One, 144 Morrison
Holdings Limited Street, Edinburgh, EH3 8EX 50
RWG (Repair & Overhauls) 15 Justice Mill Lane, Aberdeen, AB11 6EQ,
Limited Scotland, United Kingdom 50
South Kensington Ground Floor T3 Trinity Park, Bickenhill
Developments Limited Lane, Birmingham, B37 7ES, United Kingdom 50
Stornoway Wind Farm C/O Edf Renewables Atria One, 144 Morrison
Limited Street, Edinburgh, EH3 8EX 50
United States
100 Fluor Daniel Drive, Greenville, SC,
Flour AMEC II, LLC 29607-2770, United States 45
(1) Entities are consolidated as joint operations on the basis
of control.
In addition to the subsidiaries listed above, the Group has a
number of overseas branches.
Details of the direct subsidiaries of John Wood Group PLC are
provided in note 1 to the parent company financial statements.
The Group will be exempting the following companies from an
audit in 2022 under Section 479A of the Companies Act 2006. All of
these companies are fully consolidated in the Group Financial
Statements.
AFW Finance 2 Limited (Registered number 09861575)
AME Building Limited (Registered number 165287)
AMEC (F.C.G) Limited (Registered number 148585)
AMEC (MH1992) Limited (Registered number 222870)
AMEC (MHL) Limited (Registered number 713103)
AMEC (WSL) Limited Registered number 514311)
AMEC BKW Limited (Registered number 169831)
AMEC Bravo Limited (Registered number 6206015)
AMEC Capital Projects Limited (Registered number 2804109)
AMEC Civil Engineering Limited (Registered number 1265199)
Amec Foster Wheeler (Holdings) Limited (Registered number
00163609)
Amec Foster Wheeler Earth and Environmental (UK) Limited
(Registered number 4987981)
Amec Foster Wheeler Energy Limited (Registered number
1361134)
Amec Foster Wheeler Finance Asia Limited (Registered number
6205760)
Amec Foster Wheeler Finance Limited (Registered number
1332332)
Amec Foster Wheeler Group Limited (Registered number
4612748)
Amec Foster Wheeler International Limited (Registered number
3203966)
AMEC Investments Europe Limited (Registered number 3704533)
AMEC Offshore Limited (Registered number 1054207)
AMEC Process and Energy Limited Registered number 2028340)
AMEC Project Investments Limited (Registered number 2619408)
AMEC Services Limited (Registered number 2804093)
AMEC Trustees Limited (Registered number 2830098)
Amec USA Holdings Limited (Registered number 4041261)
Amec Wind Developments Limited (Registered number 8781332)
Automated Technology Group Holdings Limited (Registered number
07871655)
East Mediterranean Energy Services Limited (Registered number
SC505318)
Foster Wheeler (G.B.) Limited (Registered number 745470)
Foster Wheeler (London) Limited (Registered number 887857)
Foster Wheeler (Process Plants) Limited (Registered number
1184855)
Foster Wheeler E&C Limited (Registered number 2247293)
Foster Wheeler Environmental (UK) Limited (Registered number
1657494)
Foster Wheeler Europe (Registered number 04127813)
Foster Wheeler UK Investments Limited Registered number
SC649888)
Foster Wheeler World Services Limited (Registered number
1439353)
FW Investments Limited (Registered number 6933416)
HFA Limited (Registered number SC129298)
Integrated Maintenance Services Limited (Registered number
3665766)
James Scott Limited (Registered number SC35281)
John Wood Group Holdings Limited (Registered number
SC642609)
JWG Investments Limited (Registered number SC484872)
JWGUSA Holdings Limited (Registered number SC178512)
Kelwat Investments Limited (Registered number SC203212)
Metal and Pipeline Endurance Limited (Registered number
534109)
Mustang Engineering Limited (Registered number SC273548)
Press Construction Limited (Registered number 471400)
Process Plants Suppliers Limited (Registered number 957881)
Production Services Network (UK) Limited (Registered number
SC293004)
Production Services Network Bangladesh Limited (Registered
number 02214332)
PSJ Fabrications Ltd (Registered number 01205595)
PSN (Angola) Limited (Register number SC311500)
PSN (Philippines) Limited (Registered number SC345547)
PSN Asia Limited (Registered number SC317111)
PSN Overseas Limited (Registered number SC319469)
QED International (UK) Limited (Registered number SC106477)
GoTechnology Services Limited (Registered number 12522586)
Rider Hunt International Limited (Register number 02305615)
Sandiway Solutions (No 3) Limited (Registered number
5318249)
SgurrEnergy Limited (Registered number SC245814)
The Automated Technology Group Limited (Registered number
03109235)
WGPSN (Holdings) Limited (Registered number SC288570)
WGPSN Eurasia Limited (Registered number SC470501)
Wood (Indonesia) Limited (Registered number SC693591)
Wood and Company Limited (Registered number 01580678)
Wood Group Algeria Limited (Registered number SC299843)
Wood Group Algiers Limited (Registered number SC299845)
Wood Group Annaba Limited (Registered number SC299848)
Wood Group Arzew Limited (Registered number SC299850)
Wood Group Engineering (North Sea) Limited (Registered number
SC030715)
Wood Group Engineering and Operations Support Limited
(Registered number SC159149)
Wood Group Hassi Messaoud Limited (Registered number
SC299851)
Wood Group Holdings (International) Limited Register number
SC169712)
Wood Group Investments Limited (Registered number SC301983)
Wood Group Kenny Corporate Limited (Registered number
SC147353)
Wood Group Kenny Limited (Registered number 1398385)
Wood Group Kenny UK Limited (Registered number 2331383)
Wood Group Power Investments Limited (Registered number
SC454342)
Wood Group Production Services UK Limited (Registered number
SC278252)
Wood Group/OTS Limited (Registered number 1579234)
Wood International Limited (Registered number 10517856)
Wood Limited (Registered number 9861563)
Wood Finance UK Limited (Registered number 03725076)
Wood Pensions Trustee Limited (Registered number 1889899)
Wood Transmission and Distribution Limited (Registered number
11829648)
Wood UK Limited (Registered number 3863449)
Shareholder information
Officers and advisers
Secretary and Registered Office Registrars
M McIntyre Equiniti Limited
John Wood Group PLC Aspect House
15 Justice Mill Lane Spencer Road
Aberdeen Lancing
AB11 6EQ West Sussex
BN99 6DA
Stockbrokers Independent Auditor
JPMorgan Cazenove Limited KPMG LLP
Morgan Stanley Chartered Accountants and Statutory
Auditors
1 Marischal Square
Broad Street
Aberdeen
AB10 1DD
Company Solicitors
Slaughter and May
Financial calendar
Results announced 28 March 2023
Annual General Meeting 11 May 2023
The Group's Investor Relations website can be accessed at
www.woodplc.com
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END
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(END) Dow Jones Newswires
March 28, 2023 02:00 ET (06:00 GMT)
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