TIDMWG.
RNS Number : 5172F
Wood Group (John) PLC
10 March 2020
10 March 2020
Full year results for the year ended 31 December 2019
Earnings growth, margin improvement and strong cash
generation
Portfolio optimisation supports strategic positioning for
opportunities in energy transition and sustainable
infrastructure
Wood, the global engineering and consultancy company, today
announces its results for the year ended 31 December 2019:
2019 2018
Movement
Year ended 31 December $m $m %
------------------------------------ ----- ------ --------
Revenue (1) 9,890 10,014 (1.2)%
------------------------------------ ----- ------ --------
Adjusted EBITDA(1,2) 855 694 n/a(2)
Adjusted EBITDA Margin 8.6% 6.9% n/a(2)
------------------------------------ ----- ------ --------
Adjusted EBITDA (on a like-for-like
basis)(3) 704 668 5.4%
Adjusted EBITDA (on a like-for-like
basis) Margin(3) 7.1% 6.7% 0.4%
Operating profit before exceptional
items(1) 411 357 15.1%
------------------------------------ ----- ------ --------
Operating profit 303 165 83.6%
------------------------------------ ----- ------ --------
Profit/(loss) for the period 73 (8) n/a
------------------------------------ ----- ------ --------
Basic EPS 10.7c (1.3)c n/a
------------------------------------ ----- ------ --------
Adjusted diluted EPS(1) 46.0c 46.6c (1.3)%
------------------------------------ ----- ------ --------
Total Dividend 35.3c 35.0c 0.9%
------------------------------------ ----- ------ --------
Net debt excluding leases (4) 1,424 1,513 (5.9)%
------------------------------------ ----- ------ --------
Order book(5) 7,898 8,524 (7.3)%
------------------------------------ ----- ------ --------
"In 2019 we delivered earnings growth, margin improvement and
strong cash generation which resulted in a reduction in net debt.
Our strategy has driven decisive action to align Wood with the
significant growth opportunities in energy transition and
sustainable infrastructure and we made good progress on portfolio
optimisation and the repositioning of our consulting, project and
operations service offering in 2019. The disposal of our nuclear
and industrial services businesses generated proceeds of c$430m in
Q1 2020 and accelerated progress to target leverage. We are
confident that from this foundation we are building a
differentiated, premium, higher margin business, supported by a
continued focus on margin improvement, execution excellence and
portfolio optimisation."
- Robin Watson, Chief Executive
FY 2019 financial performance
-- Revenue of $9.9bn
reflects generally
robust activity
across energy and
built environment
markets
-- Adjusted EBITDA of
$855m and operating
profit before
exceptionals of
$411m in line with
guidance
and expectations
-- Growth in like for
like adjusted
EBITDA3 of 5%; led
by ASEAAA and E&IS
and the delivery of
cost synergies of
c$60m
-- Profit for the
period of $73m
benefitting from
significant
reduction in
exceptional items
(net of tax) from
$183m to $127m.
Exceptional costs
include a $46m
provision in
respect of
certain regulatory
investigation
settlements
-- Adjusted diluted
earnings per share
(AEPS) of 46.0c
down 1.3%
-- Strong cash
conversion of 96%
reduced net debt
excluding leases to
$1.42bn (2018:
$1.51bn).
(Net debt excluding
leases : adjusted
EBITDA pre IFRS 16
of 2.0x6)
-- Disposal of nuclear
and industrial
services businesses
completed in Q1
2020 generated
proceeds
of c$430m
delivering target
leverage of 1.5x on
a proforma basis6
-- Proposed final
dividend of 23.9c,
total dividend of
35.3c up 1% in line
with progressive
dividend
policy
Outlook for 2020
-- Order book of
$7.9bn5 reflects
our short cycle
model, the work off
of legacy fixed
price work
as the portfolio is
de-risked and
enhanced tender
governance. Current
visibility typical
for
this point in the
year with c60% of
forecast revenue
covered by order
book, of which c75%
is reimbursable
-- Existing forecasts
and order book
support modest
underlying revenue
growth and growth
in underlying
EBITDA, underpinned
by margin
improvements, as
set out in our
January trading
update
-- Existing forecast
for cash generation
in 2020 anticipates
lower provisions
movements, and
reductions in known
exceptional items
and capex. Timing
of any settlement
of regulatory items
is uncertain
although it is
possible that it
could be in 2020.
Benefit of
maintained focus
on working capital
management likely
to be more than
offset by current
expectation of an
unwind
of advances on EPC
projects received
in 2019
-- Recent impacts of
Covid-19, the
substantial
reduction in oil
price and actions
we will take
to mitigate not
reflected in
existing forecasts;
too early to
quantify. No
material impact
to date from
Covid-19. Proven
track record of
leveraging our
flexible, asset
light model in
response to
changing market
conditions and over
the last 5 years we
have diversified
end markets;
upstream/midstream
oil and gas
represents only 35%
of revenue
-- Looking further
ahead, well
positioned for
growth
opportunities
presented by trends
in energy
transition and
sustainable
infrastructure,
with a unique range
of capabilities and
breadth
of customers and
markets
Notes:
1. Wood's primary reporting metrics are revenue, aligned with
the IFRS definition, and operating profit (pre-exceptional items)
which is closely aligned with the IFRS definition but excludes the
impact of exceptional items which by their nature are non-recurring
items that might otherwise distort underlying operating profit.
Adjusted EBITDA (pre-exceptional items, including Wood's share
of joint venture EBITDA) is adopted as an additional non-statutory
/'non-GAAP' measure of profit. This is presented at the Group and
Business Unit level to report underlying financial performance and
facilitate comparison with peers. 2019 adjusted EBITDA includes
adjusted EBITDA from our nuclear business and our industrial
services business, the disposals of which completed in Q1 2020.
Adjusted EBITDA includes the impact of IFRS 16 Leases (see note
2).
Adjusted Diluted EPS is also presented, defined as "earnings
before exceptional items and amortisation relating to acquisitions,
net of tax, divided by the weighted average number of ordinary
shares in issue during the period".
2. Adjusted EBITDA includes the impact of IFRS 16 Leases, which
became effective on 1 January 2019. The most significant change for
Wood is the accounting for property leases. Rental charges that
were previously recorded in operating costs in respect of these
leases are now replaced with depreciation and an interest charge.
We have chosen to apply the modified retrospective approach on
adoption of IFRS 16 and, using this approach, there is no
restatement of 2018 comparatives in 2019. The movements between
2019 metrics and 2018 comparatives that have not been restated are
shown as not applicable (n/a).
The adoption of IFRS 16 increases 2019 adjusted EBITDA by $151m.
A lease liability of $574m is recorded on the balance sheet at 31
December 2019. All financing covenants are set on a frozen GAAP
basis and are not impacted by the adoption of the standard.
3. Adjusted EBITDA on a like for like basis is calculated as
adjusted EBITDA less the adjusted EBITDA from disposals executed in
the current year, and is presented as a measure of underlying
business performance excluding businesses disposed. In 2019
executed disposals consisted of Terra Nova Technologies, the legacy
AFW power machinery businesses, our joint venture interests in
Voreas and other infrastructure assets. These disposals accounted
for $20m of revenue in 2019 (2018: $76m) and Adjusted EBITDA of
$nil (2018: $26m). As IFRS 16 has been adopted with no restatement
of 2018 comparatives, adjusted EBITDA on a like for like basis also
excludes the impact of IFRS 16 in 2019. A reconciliation of
adjusted EBITDA and adjusted EBITDA on a like for like basis to
operating profit (pre-exceptional items) is shown in note 1 to the
financial statements.
4. Net debt excluding leases is total group borrowings, offset
by cash and cash equivalents. Borrowings comprise loans drawn on
the Group's revolving credit facility, term loans, overdrafts and
unsecured senior loan notes issued in the US private placement
market. Borrowings do not include obligations relating to leases.
Cash and cash equivalents include cash at bank and in hand and
short term bank deposits. Borrowings, cash and cash equivalents
contained within assets classified as held for sale are also
included in net debt. Net debt excluding leases is presented as it
is closely aligned to the measure used in our financing
covenants.
5. 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 at 31
December 2019 excludes the order book of the nuclear and industrial
services businesses disposed. For comparability, the order book at
31 December 2018 has been restated to exclude the order book of the
nuclear and industrial services businesses as well as the TNT and
AFW power machinery businesses disposed in 2019. Order book is
presented as an indicator of the visibility of future revenue.
6. 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. References to the ratio on a
proforma basis deduct the proceeds from the disposal of the nuclear
and industrial services of c$430m from net debt and also deducts
from adjusted EBITDA the 2019 adjusted EBITDA attributable to those
businesses of $49m. The proforma basis is considered to be a useful
additional indication of the underlying financial leverage in the
business.
7. Company compiled, publicly available consensus comprises 10
analysts who have published estimates since our January 2020
trading update and includes forecasts that reflect both changes to
our reporting metrics and the impact of IFRS 16: Credit Suisse,
Exane BNP Paribas, Canaccord Genuity, Goldman Sachs, Bank of
America Merrill Lynch, Morgan Stanley, Citigroup, Kepler Cheuvreux,
Numis and HSBC.
Consensus 2019 adjusted EBITDA is $854m (range: $847m-$860m),
consensus operating profit (pre-exceptional items) is $426m (range:
$382m-$496m) and consensus AEPS is 47.0c (range: 40.0c-51.9c).
Consensus 2020 adjusted EBITDA is $895m (range: $854m-$925m),
consensus operating profit (pre-exceptional items) is $475m (range:
$440m-$511m) and consensus AEPS is 55.1c (range: 51.8c-58.2c). It
should be noted that the impact of the disposal of the industrial
services business announced in February is not fully reflected in
2020 consensus.
Wood is a global leader in consulting, projects and operations
solutions in energy and the built environment . We operate in more
than 60 countries, employing around 55,000 people, with revenues of
around $10 billion. www.woodplc.com
Wood
Andrew Rose - Head of Investor Relations 01224 532 716
Ellie Dixon - Investor Relations
Senior Manager 01224 851 369
Citigate Dewe Rogerson
Kevin Smith 020 7638 9571
Chris Barrie
There will be an analyst and investor presentation at the London
Stock Exchange, 10 Paternoster Square, EC4M 7LS at 09.00. Early
registration is advised from 08.30. A live webcast of the
presentation will be available from
https://www.woodplc.com/investors/financial-events-calendar .
Replay facilities will be available later in the day.
Chair's statement
Wood began the new strategic cycle in 2019 with a strong
operational platform positioned with the right capabilities and end
market exposures. The Board oversaw the development of a strategy
which will run to 2023 to unlock and deliver longer term growth
from a premium, differentiated, higher margin business aligned with
the emerging trends in energy transition and sustainable
infrastructure. The strategy was rolled out in the fourth quarter
through extensive internal communication and a capital markets
event.
During the year the Board supported the executive and leadership
team as they delivered against the commitment to further deleverage
the business. Significant work was also undertaken to optimise
Wood's operating model, creating a dedicated consulting offering in
TCS and agreeing the disposal of Wood's nuclear and industrial
services activities both of which completed in the first quarter of
2020.
The full year results reflect the strong operational and
financial focus of the leadership team. Adjusted EBITDA grew 5% on
a like for like basis. Strong operational cash generation delivered
a reduction in net debt and supported a small increase in the
dividend.
Wood remains committed to its progressive dividend policy which
takes into account future cashflows and earnings. This is a key
foundation of the Wood investment case which has been sustained
through the challenging conditions in our core markets over the
last few years. The Board has recommended a final dividend of 23.9
cents per share, which makes a total distribution for the year of
35.3 cents, representing an increase of 1% on the total
distribution for 2018.
In a world where environmental concerns have moved swiftly to
the top of the global agenda, the future will be very different
from the past. Wood's sustainability strategy is fundamental to the
long-term success of the business and is aligned to the UN
Sustainable Development Goals. In addition, decisive action taken
over recent years has ensured Wood is well placed to be part of the
solution to these challenges with a business strategy focused on
helping to secure the energy transition and deliver sustainable
infrastructure solutions. This will be supported by a continued
focus on margin improvement, execution excellence and portfolio
optimisation in 2020. Looking further ahead, there is a positive
medium term outlook for Wood's end markets and the Board is
confident in the leadership teams' ability to deliver organic and
acquisition led growth.
Roy Franklin, Chair
Chief Executive Review
Overview
During 2019 we retained our strong strategic and financial
focus. This is reflected in the progress made on optimising our
operating platform while delivering earnings growth, EBITDA margin
improvement and strong cash generation. We also outlined a strategy
to create a premium, differentiated, higher margin business with an
enduring market position aligned to the opportunities presented by
energy transition and sustainable infrastructure. This strategy
will run to 2023 and builds on actions taken over the last four
years to position Wood as a flexible, asset light business with the
right mix of capability and end market exposure ahead of a
significant generational change. We have already made good progress
against our strategic objectives with the delivery of margin
improvement, progress on portfolio optimisation and a reduction in
our project risk profile whilst also taking steps to deliver
further efficiency savings. We are entering 2020 with a unique
range of capabilities and an optimal service offering in
consulting, projects and operations in energy and the built
environment.
Financial delivery: earnings growth, margin improvement and cash
generation
In the last strategic cycle we laid strong financial foundations
as we improved project risk governance, delivered synergies,
reduced the level of exceptional costs and structurally improved
working capital management.
Our 2019 full year results reflect this focus and agility,
demonstrating adjusted EBITDA growth of 5% and 40 bps adjusted
EBITDA margin improvement, both on a like for like basis, good
growth in operating profit which is up 15% and strong operational
cash generation.
We increased the dividend by 1.0% in line with our progressive
dividend policy and delivered a reduction in net debt excluding
leases of $89m, further strengthening our balance sheet.
Future Ready Now: creating a premium, differentiated, higher
margin business
We have redefined the shape of our business for the
opportunities presented by the emerging trends in energy transition
and sustainable infrastructure.
In the fourth quarter of 2019, we brought together the
capabilities of STS and E&IS into a more efficient, global,
industry leading consulting offering. Technical Consulting
Solutions ("TCS") is a premium EBITDA margin business with
significant cross selling opportunities and delivers consulting-led
solutions against a backdrop of increasing environmental focus, the
evolving energy transition, and public demand for sustainable
infrastructure. The combination will also deliver operational
efficiencies of over $30m within 2 years of the formation of
TCS.
The disposals of our nuclear and industrial services activities,
completed in early 2020, reflect our focus on differentiated,
higher margin activities with compelling structural growth
potential. Net proceeds of c$430m were received in Q1 and
accelerate our progress towards our target leverage. Net debt
excluding leases to adjusted EBITDA pre IFRS 16 is c1.5x on a
proforma basis.
Improved safety performance and focus on sustainability
Our focus on safety is paramount and we maintained our strong
performance in 2019, with Total Recordable Case Frequency (TRCF)
and Lost Work Case Frequency (LWCF) both in line with 2018.
Sustainability is at the heart of our approach to running our
business and executing our projects. We are a signatory to the
U.N's Sustainable Development Goals (SDGs), actively tracking our
performance against them and consider our strategy and service
offering as an important enabler for the energy transition and to
meet the UN's targets on climate change.
Priorities for 2020: Margin improvement, execution excellence,
portfolio optimisation & sustainability strategy
My leadership team has four principal areas of focus in 2020
aligned with our strategic priorities:
Portfolio optimisation: We will continue to refine our operating
model and dispose of activities which do not meet our benchmarks on
profitability or strategic fit. This process will support future
investment as we look to rebuild our bolt-on M&A opportunity
pipeline in 2020 with a principal focus on our consulting
activities in the built environment.
Margin improvement: To achieve our strategic goal of 100bps
margin improvement by 2023, compared to the 2019 margin of 8.6%, we
are working on a number of initiatives. These include further
efficiency and cost reduction measures including synergies relating
to the formation of TCS, continued emphasis on risk governance to
secure work at the right margin, remaining commercially versatile
whilst also better leveraging our differentiation and technological
advantage to ensure we are appropriately rewarded for the value we
create.
Execution excellence: Achieving consistent, predictable, best in
class delivery across all projects is key to maintaining long term
business and delivering lower earnings volatility. We start from a
strong position in a number of areas with an opportunity to
replicate delivery excellence across our business. Our unique
heritage gives us broad capabilities and a strong track record.
Building on this by working with our technology partners to create
the best support eco-system whilst further differentiating our
offering will also support our margin improvement strategy.
Sustainability strategy: We have identified clear areas of focus
including safety performance, environmental improvements and
maintaining appropriate governance standards. Aligned to these
areas we are working towards a number of objectives to deliver
measurable improvements in our sustainability performance including
reducing high potential safety incidents, reducing carbon
emissions, ensuring a leading position in working conditions and
delivering active diversity and inclusion programmes.
In summary, we have an enduring and differentiated investment
platform based on an asset light, cash generative model which is
supported by a commercially versatile approach and a measured risk
appetite. The flexibility in our operating model enables us to
react quickly to changing market conditions. We have experienced no
material impact to date from Covid-19 and the broader impact of
this, and the substantial reduction in oil price, on customers'
existing and new projects is as yet uncertain. As such, it is too
early to quantify the potential impacts and also actions we will
take to mitigate them. We have proven track record of leveraging
our flexible, asset light model in response to changing market
conditions. In addition, over the last 5 years the Group has
diversified its end markets such that upstream/midstream oil and
gas represents only 35% of revenue.
We are strategically positioned for a new future with the
capabilities to help secure the energy transition and deliver
sustainable infrastructure solutions. We have leading market
positions that enable us to deliver the solutions necessary to
solve some of the world's biggest challenges. With this model we
are able to attract premium work, at the right margin, allowing us
to enhance our profitability and grow; making for an even more
attractive investment proposition.
Robin Watson, Chief Executive
Business Review
2019 2018
Movement
Year ended 31 December $m $m %
------------------------------------------- ----- ------ --------
Revenue(1) 9,890 10,014 (1.2)%
------------------------------------------- ----- ------ --------
Adjusted EBITDA(1,2) 855 694 n/a(2)
Adjusted EBITDA Margin 8.6% 6.9% n/a(2)
------------------------------------------- ----- ------ --------
Adjusted EBITDA (on a like-for-like
basis)(3) 704 668 5.4%
Adjusted EBITDA Margin (on a like-for-like
basis)(3) 7.1% 6.7% 0.4%
------------------------------------------- ----- ------ --------
Operating profit before exceptional
items(1) 411 357 15.1%
------------------------------------------- ----- ------ --------
Operating profit 303 165 83.6%
------------------------------------------- ----- ------ --------
Profit/(loss) for the period 73 (8) n/a
------------------------------------------- ----- ------ --------
Basic EPS 10.7c (1.3)c n/a
------------------------------------------- ----- ------ --------
Adjusted diluted EPS(1) 46.0c 46.6c (1.3)%
------------------------------------------- ----- ------ --------
Total Dividend 35.3c 35.0c 0.9%
------------------------------------------- ----- ------ --------
Net debt excluding leases(4) 1,424 1,513 (5.9)%
------------------------------------------- ----- ------ --------
Order book(5) 7,898 8,524 (7.3)%
------------------------------------------- ----- ------ --------
Trading performance
Our 2019 full year results demonstrate earnings growth, adjusted
EBITDA margin improvement and strong operational cash generation,
resulting in a reduction in net debt.
Revenue of $9.9bn reflected generally robust activity across
energy and built environment markets with growth in ASA and solid
activity levels in built environment markets in E&IS within TCS
offset by lower revenues in ASEAAA and reduced STS activity in
TCS.
Adjusted EBITDA of $855m includes the positive impact of $151m
from the adoption of IFRS 16 in 2019. Like for like adjusted
EBITDA(3) , adjusted for disposals executed in 2019, was up 5.4%
from $668m to $704m. This included the delivery of cost synergies
of $60m and organic growth of around $55m led by ASEAAA and
E&IS. This was partly offset by cost overruns of $53m on
projects in ASA and increased costs of $26m relating to asbestos
and foreign exchange.
Operating profit before exceptional items of $411m is stated
after depreciation of $182m of which $128m relates to the adoption
of IFRS 16, and amortisation of $244m (2018: $249m).
Profit for the period of $73m includes the impact of
significantly reduced exceptional costs net of tax of $127m (2018:
$183m). These include $42m of restructuring and integration costs
and a $46m provision in respect of regulatory investigation
settlements.
Final dividend
Our progressive dividend policy takes into account future
cashflows and earnings. The Board has recommended a final dividend
of 23.9 cents per share, which makes a total distribution for the
year of 35.3 cents, representing an increase of 1% on the total
distribution for 2018. Dividend cover is 1.3 times (2018: 1.3x) and
we expect to build dividend cover over the medium term.
Net debt and cashflow
Net debt excluding leases reduced to $1.42bn at 31 December
2019. This compares to net debt excluding leases at 31 December
2018 of $1.51bn and $1.77bn at 30 June 2019. The ratio of net debt
excluding leases to adjusted EBITDA (pre IFRS 16) at 31 December
2019 was 2.0x (31 December 2018: 2.2x).
Our strong focus on operating cashflow delivered better than
anticipated cash generation in the second half of the year despite
significant expenditure on legacy projects. A working capital
inflow in 2019 of $204m (2018: $291m), together with a reduction in
exceptional costs to $74m (2018: $142m) contributed to cash
generation from operations (excluding the impact of leases) of
$591m. Cash conversion, calculated as cash generated from
operations (excluding the impact of leases) as a percentage of
adjusted EBITDA (excluding JVs), was 96%, significantly ahead of
our guidance of 80-85%. This includes the impact of improved cash
collection $156m, a $128m cash inflow from advanced payments
primarily relating to the Americas and the effect of the
receivables facility which was drawn at $198m (30 June 2019: $192m
and 31 December 2018: $154m).
We have made excellent progress with our portfolio optimisation
strategy as we focus on premium, differentiated, higher margin
activities. In Q1 2020 we completed the disposals of our industrial
services and nuclear businesses, generating c$430m in proceeds.
This follows other recent successful asset disposals including the
TNT materials handling business in May 2019 for a consideration of
$43m. We are active on other sales processes. The disposals have
accelerated our progress towards our target leverage. Adjusting for
the disposals, on a proforma, pre-IFRS 16 basis we have now
achieved our target leverage of 1.5x adjusted EBITDA.
Order book
We have made significant progress on improving the quality of
our order book and consistently applying our measured risk
appetite. Order book at 31 December 2019 was $7.9bn (December 2018:
$8.5bn), this excludes amounts related to the industrial services
and nuclear businesses disposed in Q1 2020. Order book at 31
December 2018 has been restated on the same basis and also excludes
amounts related to TNT and the AFW power machinery businesses, both
disposed in 2019. Around 75% of order book is reimbursable
(December 2018: 71%).
The reduction in order book of 7% reflects the work off of
legacy fixed price contracts as we de-risk our portfolio, our
enhanced tender governance and our short cycle model. This
reduction is most evident in Asset Solutions Americas where we are
working off larger downstream & chemicals projects.
With c$5.8bn of order book to be delivered in 2020, c60% of
forecast 2020 revenues are secured. This is typical for our short
cycle business model, is slightly ahead of prior year.
Update on regulatory investigations
Discussions concerning possible resolutions of the
investigations by the authorities in the US, Brazil and Scotland
have progressed to the point where the Group believes that it is
likely to be able to settle the relevant matters with these
authorities at an aggregate cost of approximately $46m. This amount
is reflected as a provision in the financial statements as
described in note 20. The Group could also face further potential
civil and criminal consequences in relation to the investigation by
the SFO.
Outlook for 2020
Current visibility is typical for this point in the year with
60% of 2020 forecast revenue supported by order book. Existing
forecasts and order book support modest underlying revenue growth
and growth in underlying EBITDA, underpinned by margin
improvements, as set out in our January trading update.
The recent impacts of Covid-19, the substantial reduction in oil
price and actions we will take to mitigate are not reflected in
existing forecasts as it is too early to quantify. We have
experienced no material impact to date from Covid-19. We have
proven track record of leveraging our flexible, asset light model
in response to changing market conditions. In addition, over the
last 5 years the Group has diversified its end markets such that
upstream/midstream oil and gas represents only 35% of revenue.
Our existing forecast for cash generation in 2020 anticipates
lower provisions movements, and reductions in known exceptional
items and capex. The timing of any settlement of regulatory items
is uncertain although it is possible that it could be in 2020. The
benefit of our maintained focus on working capital management is
likely to be more than offset by our current expectation of an
unwind of advances on EPC projects received in 2019. These
forecasts do not reflect the recent impacts of Covid-19, the
substantial reduction in oil price and actions we will take to
mitigate.
Looking further ahead, with a unique range of capabilities and
breadth of customers and markets, we are well positioned for growth
opportunities presented by trends in energy transition and
sustainable infrastructure.
Asset Solutions Americas ("ASA") (c40% of Revenue)
(End markets: Upstream/midstream (c55%), Downstream &
Chemicals (c30%), Other Energy (c10%) Built Environment (c5%))
2019 2018
$m $m %
------------------------------------ ------- ------- --------
Revenue(1) 3,894 3,668 6.2%
------------------------------------ ------- ------- --------
Adjusted EBITDA(1,2) 238 227 n/a
Adjusted EBITDA Margin 6.1% 6.2% n/a
------------------------------------ ------- ------- --------
Adjusted EBITDA (on a like for like
basis)(3) 199 227 (12.3)%
Adjusted EBITDA (on a like for like
basis) Margin 5.1% 6.2% (1.1%)
------------------------------------ ------- ------- --------
People 16,300 16,900 (3.6)%
------------------------------------ ------- ------- --------
Order book(5) 2,468 2,915 (15.3)%
------------------------------------ ------- ------- --------
Revenue was up on 2018, benefitting from increased capital
projects activity in midstream and downstream & chemicals,
which offset by lower activity in renewables/other energy.
Adjusted EBITDA of $238m includes a $39m impact from the
adoption of IFRS 16. Adjusted EBITDA on a like for like basis was
down 12%. Strong earnings growth in downstream & chemicals
capital projects and the benefit of final close out on a number of
projects was more than offset by cost overruns of $53m and a
slowdown in activity in US shale in H2.
Outlook
Order book is $2.5bn with c60% of 2020 revenue secured. Order
book is down 15% compared to December 2018 reflecting the work off
of larger downstream & chemicals capital projects and the
application of our more measured risk appetite on new bids.
Our existing forecasts, which do not reflect the impacts of
Covid-19, the recent fall in oil price and actions we will take to
mitigate, anticipate capital discipline remaining evident in the
Americas across onshore, midstream and offshore. Activity in
downstream & chemicals is expected to remain robust while the
outlook for solar and wind is positive. Margin improvement
initiatives including our focus on improved execution to address
cost overruns experienced in 2019, will benefit adjusted
EBITDA.
Asset Solutions Europe, Africa, Asia and Australia ("ASEAAA") (c30% of Revenue)
(End markets: Upstream/midstream (c45%), Downstream &
Chemicals (c30%), Other Energy (c20%) Built Environment (c5%))
2019 2018
$m $m %
------------------------------------ ------- ------- -------
Revenue(1) 3,148 3,283 (4.1)%
------------------------------------ ------- ------- -------
Adjusted EBITDA(1,2) 353 258 n/a
Adjusted EBITDA Margin 11.2% 7.9% n/a
------------------------------------ ------- ------- -------
Adjusted EBITDA (on a like for like
basis)(3) 294 258 14.0%
Adjusted EBITDA (on a like for like
basis) Margin 9.3% 7.9% 1.4%
------------------------------------ ------- ------- -------
People 23,900 24,400 (2.0)%
------------------------------------ ------- ------- -------
Order book(5) 3,709 3,729 (0.5)%
------------------------------------ ------- ------- -------
Revenue was down around 4%. We saw growth in operations
solutions work in Asia Pacific and the Middle East, and relatively
robust activity in Europe. This was offset by lower procurement
revenues in capital projects.
Adjusted EBITDA of $353m includes a $59m impact from the
adoption of IFRS 16. Strong growth in adjusted EBITDA on a like for
like basis of 14% reflects excellent execution across the portfolio
and growth in operations work in Asia Pacific and the Middle East.
Capital projects remained robust, with reduced levels of low margin
procurement activity contributing to higher achieved margins.
Adjusted EBITDA on a like for like basis in Turbine Joint ventures
also improved.
Outlook
Order book of $3.7bn excludes the contribution from the
industrial services business disposed in February 2020. Around 60%
of 2020 revenue is secured. Order book reflects work off in
operations solutions work in the Middle East, offset by new
downstream & chemicals project awards in Asia Pacific. The
industrial services business, disposed in Q1 2020, generated c$175m
revenue and contributed adjusted EBITDA (including IFRS 16) of
c$15m in 2019.
Our existing forecasts, which do not reflect the impacts of
Covid-19, the recent fall in oil price and actions we will take to
mitigate, anticipate increased activity in 2020 led by capital
projects; driven by early stage FEED work and increased downstream
& chemicals work in Asia Pacific. We also expect increased
operations activity in the Middle East with customers including
Exxon and BP, and also in the UK as upstream spending increases
from low levels.
Technical Consulting Solutions ("TCS") (c30% of Revenue)
(End markets: Upstream/midstream (c15%), Downstream &
Chemicals (c5%), Other Energy (c30%) Built Environment (c50%))
2019 2018
$m $m %
------------------------------------ ------- ------- -------
Revenue(1) 2,779 2,913 (4.6)%
------------------------------------ ------- ------- -------
Adjusted EBITDA(1,2) 300 248 n/a
Adjusted EBITDA Margin 10.8% 8.5% n/a
------------------------------------ ------- ------- -------
Adjusted EBITDA (on a like for like
basis)(3) 246 241 2.1%
Adjusted EBITDA (on a like for like
basis) Margin 8.9% 8.5% 0.4%
------------------------------------ ------- ------- -------
People 15,400 15,300 0.7%
------------------------------------ ------- ------- -------
Order book(5) 1,640 1,803 (9.0)%
------------------------------------ ------- ------- -------
The formation of TCS in the fourth quarter brought together the
capabilities of Specialist Technical Solutions ("STS") and
Environment and Infrastructure Solutions ("E&IS") into a more
efficient global and industry leading consulting offering.
Revenue in E&IS was in line with 2018. In STS, revenue was
down on 2018 reflecting lower volumes in the automation service
line.
Adjusted EBITDA includes a $53m impact from the adoption of IFRS
16. Adjusted EBITDA margin on a like for like basis for TCS is up
0.6% on 2018, benefitting from improved execution in E&IS,
margin improvement initiatives and changes in sales mix as the TCO
automation contract rolls off.
Outlook
Order book of $1.6bn excludes the contribution to order book
from the nuclear business disposed in March 2020 and TNT disposed
in 2019. Around 55% of 2020 revenue is secured. Order book is down
9% on prior year reflecting the work off of the TCO automation
contract and a number of larger contracts in E&IS. The nuclear
business, disposed in March 2020, generated revenue of c$300m and
contributed adjusted EBITDA (including IFRS 16) of c$30m in
2019.
Whilst our existing forecasts do not reflect the impacts of
Covid-19, the recent fall in oil price and actions we will take to
mitigate, TCS has a broad end market exposure with only c15% in
upstream/midstream oil and gas. Existing forecasts anticipate the
impact of the change in sales mix in automation towards lower
volume higher margin work as the TCO project rolls off and the
benefit of margin improvement initiatives including synergies from
the formation of TCS.
Investment Services
A number of legacy AFW activities and liabilities are managed in
Investment Services including activities of the Industrial Power
and Machinery business. Investment Services generated revenue of
$69m (2018: $150m) and adjusted EBITDA of $36m (2018: $36m). On a
like for like basis, revenue was $67m (2018: $136m). Adjusted
EBITDA on a like for like basis was $36m (2018: $17m), which
includes the close out of a number of legacy liabilities.
Financial Review
Trading performance
Trading performance is presented based 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.
Full Year Full Year
2019 2018
$m $m
--------------------------------------------------- --------- ---------
Revenue 9,890.4 10,014.4
--------------------------------------------------- --------- ---------
Adjusted EBITDA 855.4 693.8
--------------------------------------------------- --------- ---------
Adjusted EBITDA margin % 8.6% 6.9%
Depreciation (pre-IFRS 16) (53.6) (63.9)
Depreciation (IFRS 16) (128.4) -
Amortisation - software and system development (99.5) (84.3)
Amortisation - intangible assets from acquisitions (144.2) (164.5)
--------------------------------------------------- --------- ---------
Adjusted EBIT 429.7 381.1
Tax and interest charges on joint ventures
included within operating profit but not in
adjusted EBITDA (18.7) (24.5)
--------------------------------------------------- --------- ---------
Operating profit before exceptional items 411.0 356.6
Exceptional items (107.6) (191.3)
6)
Operating profit 303.4 165.3
Net finance expense (126.5) (111.8)
IFRS 16 interest charge (28.2) -
--------------------------------------------------- --------- ---------
Profit before tax 148.7 53.5
Taxation (75.9) (61.1)
--------------------------------------------------- --------- ---------
Profit/(loss) for the period 72.8 (7.6)
Basic EPS (cents) 10.7c (1.3)c
Adjusted diluted EPS (cents) 46.0c 46.6c
--------------------------------------------------- --------- ---------
In the table above depreciation, amortisation and exceptional
items include the contribution from joint ventures.
The increase in Adjusted EBITDA of $161.6m to $855.4m is largely
the result of the transition to IFRS 16 on 1 January 2019, which
has resulted in rental costs totalling $151.0m being replaced by
depreciation expense of $128.4m and interest of $28.9m (of which
$0.7m is reflected within tax and interest charges on joint
ventures) and improved trading.
The review of our trading performance is contained within the
Chief Executive Review.
Amortisation
Total amortisation for 2019 of $243.7m (2018: $248.8m) includes
$123.4m for Amec Foster Wheeler ("AFW") (2018: $126.4m) and $20.8m
(2018: $38.1m) of amortisation relating to intangible assets
arising from prior year acquisitions. Amortisation in respect of
software and development costs was $99.5m (2018: $84.3m) and this
largely relates to engineering software and ERP system development.
Included in the amortisation charge for the year above is $1.3m
(2018: $2.5m) in respect of joint ventures.
Net finance expense and debt
Net finance expense is analysed below.
Full year Full year
2019 2018
$m $m
--------------------------------------------------------- --------- ---------
Interest on bank borrowings 63.0 67.8
Interest on US Private Placement debt 28.5 14.1
Discounting relating to asbestos, deferred consideration
and other liabilities 12.3 15.3
IFRS 16 Interest 28.2 -
Other interest, fees and charges 32.3 19.9
Net finance charges in respect of joint ventures 5.9 8.1
--------------------------------------------------------- --------- ---------
Total finance expense including joint ventures 170.2 125.2
Finance income relating to defined benefit pension
schemes (5.7) (0.5)
Other finance income (3.9) (4.8)
--------------------------------------------------------- --------- ---------
Net finance expense including joint ventures 160.6 119.9
--------------------------------------------------------- --------- ---------
I nterest cover(4) was 5.6 times (2018: 6.2 times).
At 31 December 2019 total bank borrowings amounted to $997.6m,
including term loans of $397.6m and $600.0m of drawdowns under the
Group's $1.75bn Revolving Credit Facility. A further $235.8m of
funding is available under the Group's other short-term facilities.
In total the Group has undrawn facilities of $1,386.0m at 31
December. $297.6m of the term loan is repayable in October 2020 and
$100.0m in May 2022. The $297.6m term loan repayable in October
2020 was repaid in February 2020 following the proceeds raised by
the disposal of the Industrial Services business and the receipt of
the new bilateral loan facilities. These subsequent events are
disclosed in note 36 to the financial statements.
The Group also has $879.9m of unsecured loan notes issued in the
US private placement market which mature at varying dates between
2021 and 2031. Interest is payable at an average rate of 4.31% on
these loan notes.
Following transition to IFRS 16, the Group recognised interest
costs of $28.2m in 2019, which relates to the unwinding of discount
on the IFRS 16 lease liability.
Net debt excluding leases to adjusted EBITDA (excluding impact
of IFRS 16) at 31 December was 2.0 times (2018: 2.2 times) against
our covenant of 3.5 times. The Group remains committed to achieving
its targeted leverage policy of net debt to adjusted EBITDA of 1.5
times.
Exceptional items
Full Year Full year
2018 2017
$m $m
------------------------------------------------ --------- ---------
Loss on divestment of business 9.4 -
Redundancy, restructuring and integration costs 41.7 71.7
Arbitration settlement provision - 10.4
EthosEnergy impairment and other write offs - 51.0
Investigation support costs and provisions 56.5 26.3
Guaranteed Minimum Pension equalisation - 31.9
107.6 191.3
Tax on exceptional items 19.5 (8.5)
Continuing exceptional items, net of tax 127.1 182.8
------------------------------------------------ --------- ---------
In 2019, the Group disposed of Terra Nova Technologies and the
net loss on sale (after allocating goodwill) of $9.4m has been
included in exceptional items.
Redundancy, restructuring and integration costs of $41.7m (2018:
$71.7m) have been incurred during the year. The total includes
$11.8m (2018: $41.8m) of integration costs in relation to the
acquisition of Amec Foster Wheeler and are incurred in order to
generate efficiency savings with the enlarged business and are
expected to largely cease in 2020. In addition, $26.1m (2018:
$23.8m) of redundancy and restructuring costs were incurred, mainly
in relation to the formation of TCS and $5.8m (2018: $6.1m) of
costs relating to onerous property contracts, of which $2.8m has
been recognised as an impairment charge against the IFRS 16 right
of use asset. The total also includes $1.3m of charges related to
joint ventures and a $3.3m gain with respect to the assignation of
a lease contract to an external party.
Investigation support costs of $10.5m (2018: $26.3m) have been
incurred during the year in relation to ongoing investigations by
the US Securities and Exchange Commission, the US Department of
Justice and UK Serious Fraud Office. During the year discussions
concerning possible resolutions of the investigations by the
authorities in the US, Brazil and Scotland have progressed to the
point where the Group believes that it is likely to be able to
settle the relevant matters with these authorities at an aggregate
cost of $46.0m, which is reflected as a provision in the financial
statements as described in note 20. As set out in note 33, Amec
Foster Wheeler made a disclosure to the UK Serious Fraud Office
("SFO") about these matters and, since April 2017, in connection
with the SFO's investigation into Unaoil, the SFO has required Amec
Foster Wheeler to produce information relating to any relationship
of Amec Foster Wheeler with Unaoil and certain other third parties.
As it is not possible to make a reliable estimate of the liability
that may arise, no provision has been made for this element of the
investigation. See note 33 for full details.
An exceptional tax charge of $19.5m has been recorded in 2019
reflecting the write off of irrecoverable tax balances relating to
joint ventures.
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.
Full year Full year
2019 2018
$m $m
------------------------------------------------------- --------- ---------
Profit from continuing operations before tax,
exceptional items and amortisation 512.8 510.0
Effective tax rate on continuing operations (excluding
tax on exceptional items and amortisation) 23.89% 22.90%
Tax charge (excluding tax on exceptional items
and amortisation) 122.5 116.8
Tax charge in relation to joint ventures (12.8) (16.4)
Tax charge/(credit) in relation to exceptional
items 19.5 (8.5)
Tax credit in relation to amortisation (53.3) (30.8)
Tax charge per income statement 75.9 61.1
------------------------------------------------------- --------- ---------
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 2019 are restrictions on the deductibility of interest
in the UK and branch and withholding tax in excess of double tax
relief, offset by increased deferred tax asset recognition,
primarily in the US, and the release of provisions in relation to
uncertain tax positions. Despite challenges in relation to interest
deductibility and the US legislation around base erosion, we
currently anticipate a rate of 23-24% in 2020.
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. 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.
2019 2018
Earnings/(losses)
Earnings attributable
attributable to owners
to owners Number Earnings of the Number Earnings
of the parent of shares per share parent of shares per share
$m m cents $m m cents
---------------------------- -------------- ---------- ---------- ----------------- ---------- ----------
Basic 72.0 670.9 10.7 (8.9) 669.6 (1.3)
Effect of dilutive ordinary
shares 15.8 (0.2) - 13.4 -
---------------------------- -------------- ---------- ---------- ----------------- ---------- ----------
Diluted 72.0 686.7 10.5 (8.9) 683.0 (1.3)
Exceptional items, net
of tax 127.1 - 18.5 182.8 - 26.8
Amortisation related
to acquisitions, net
of tax 117.1 - 17.0 144.1 - 21.1
---------------------------- -------------- ---------- ---------- ----------------- ---------- ----------
Adjusted diluted 316.2 686.7 46.0 318.0 683.0 46.6
---------------------------- -------------- ---------- ---------- ----------------- ---------- ----------
Basic EPS for the year was 10.7 cents per share (2018: (1.3)
cents). The profit for the year attributable to owners of the
parent of $72.0m is higher than the $8.9m loss reported in 2018 due
to increased operating profit partially offset by higher interest
costs.
Dividend
The Wood progressive dividend policy is a key element of our
investment case. Progressive means that the interim and final
dividend will increase each year in absolute terms, taking into
account future cash flows and earnings. Given that the rate of
dividend increase in recent years has been higher than the growth
in profit, it is anticipated that the rate in growth of dividend in
the medium term will be modest and lower than the rate of growth of
profits.
The recommendation to pay a dividend is discussed at the main
Board twice a year and in March 2020 the Board recommended a final
dividend of 23.9 cents per share, which makes a total distribution
for the year of 35.3 cents, an increase of 1%. The final dividend
will be paid on 15 May 2020 to all shareholders on the register at
the close of business on 17 April 2020. When determining the level
of dividend the Board considers the amount of currently
distributable reserves as well as the Group's ability to generate
cash, the optimal leverage, planned disposals or acquisitions,
commitments to other stakeholders such as lenders, pension schemes
and tax authorities, and the size of non-operating outflows such as
restructuring costs or legal settlements.
At 31 December the Group's parent company John Wood Group PLC
has distributable reserves which would be sufficient to cover the
2019 full year dividend approximately 1.7 times. As previously
stated our preferred level of leverage is a net debt to EBITDA of
around 1.5 times. At 31 December 2019 our actual net debt to EBITDA
was 2.0 times.
The key risks associated with the dividend are the ability of
the group to continue to generate sufficient cash which could be
negatively impacted by the crystallisation of one or more of the
Group's principal risks. To the extent that these result in a
material unexpected cash outflow, and take the Group to an
unacceptable level of leverage, the Board may decide to reduce or
suspend the dividend.
Cash flow and net debt
The cash flow for the year is set out below:
Full year Leases Excluding Full year
leases
2019
2019 2019 $m 2018
$m $m $m
----------------------------------------- --------- ------- --------- ---------
Adjusted EBITDA 855.4 151.0 704.4 693.8
Less JV EBITDA and add back JV dividends (37.7) (6.1) (31.6) (44.8)
Decrease in provisions (216.1) - (216.1) (144.1)
Other 3.9 - 3.9 (28.8)
Cash flow generated from operations pre
working capital 605.5 144.9 460.6 476.1
----------------------------------------- --------- ------- --------- ---------
Decrease in receivables 200.2 - 200.2 88.9
(Decrease)/increase in payables (132.5) (11.5) (121.0) 248.7
.
Increase/(decrease) in advance payments 127.9 - 127.9 (46.5)
(Increase)/decrease in inventory (2.8) - (2.8) 0.1
----------------------------------------- --------- ------- --------- ---------
Working capital movements 192.8 (11.5) 204.3 291.2
----------------------------------------- --------- ------- --------- ---------
Cash exceptionals (52.1) 22.3 (74.4) (142.0)
----------------------------------------- --------- ------- --------- ---------
Cash generated from operations 746.2 155.7 590.5 625.3
Divestments/acquisitions 43.1 - 43.1 3.4
Capex and intangibles (127.2) - (127.2) (87.5)
Free cash flow 662.1 155.7 506.4 541.2
Tax, interest, dividends and other (407.2) 10.0 (417.2) (443.3)
Non-cash movement in leases (136.0) (136.0) -
----------------------------------------- --------- ------- --------- ---------
Decrease in net debt 118.9 29.7 89.2 97.9
----------------------------------------- --------- ------- --------- ---------
Opening net debt (2,117.2) (604.0) (1,513.2) (1,646.1)
Leases - - - 35.0
----------------------------------------- --------- ------- --------- ---------
Closing net debt (1,998.3) (574.3) (1,424.0) (1,513.2)
Closing net debt at 31 December 2019 including leases was
$1,998.3m (2018: $1,548.2m). The $604.0m opening lease liability
included in the table above, includes the lease liability of
$569.0m recognised on transition to IFRS 16 and existing finance
leases of $35.0m. Net debt excluding leases at 31 December 2019 was
$1,424.0m (2018: $1,513.2m) which excluded the impact of the
adoption of IFRS 16.
Cash generated from operations pre-working capital increased by
$129.4m to $605.5m primarily as a result of the transition to IFRS
16, whereby rental cash flows have now been reclassified to
financing activities and improved trading, partially offset by an
increase in provisions movements.
Working capital movements reduced by $98.4m to $192.8m and is
primarily due to the timing of payments to suppliers in 2019
compared with 2018. The cash inflow from payables in 2018 was
$248.7m and arose due to a change in the payment terms to 60 days,
which aligns with the payment terms of our customers. The cash
inflow from trade receivables was driven by improvement in DSO to
56 days compared with 64 days in 2018 and increased utilisation of
the receivables financing facility by $44m to $198m. In addition,
the Group received a significant advance from a customer in the
Americas.
Payments for capex and intangible assets were $127.2m (2018:
$87.5m) and included software licences and expenditure on ERP
systems across the Group. The increase is mainly due to additional
software licenses that were purchased by the Group and the timing
of certain capex payments.
Cash from divestments of $43.1m mainly relates to the disposal
of the Group's interests in Terra Nova Technologies.
Cash conversion, calculated as cash generated from operations as
a percentage of adjusted EBITDA (less JV EBITDA) reduced slightly
to 96% (2018: 102%).
Sources and uses of cash
The increase in cash generated from operations in 2019 to
$746.2m from $625.3m was primarily due to the transition to IFRS
16, whereby the cash outflows associated with rental costs are now
shown in financing activities, and improved trading. The Group also
had lower cash outflows associated with exceptional items as the
integration costs associated with the Amec Foster Wheeler reduced
in 2019. These favourable variances were partially offset by a
lower working capital inflow in 2019 compared with 2018.
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 and repayment of our debt facilities;
-- Maintenance of our progressive dividend policy;
-- Organic capex; and
-- Acquisitions.
Summary Balance Sheet
Dec Dec
2019 2018
$m $m
----------------------------------------- --------- ---------
Goodwill and intangible assets 6,299.0 6,656.7
Right of use assets 417.9 -
Other non-current assets 964.8 1,063.9
Trade and other receivables 2,306.0 2,555.7
Net held for sale assets and liabilities 412.9 31.6
Trade and other payables (2,619.6) (2,526.1)
Net debt excluding leases (1,424.0) (1,513.2)
Lease liabilities (574.3) (35.0)
Provisions (792.2) (991.2)
Other net liabilities (544.9) (632.6)
----------------------------------------- --------- ---------
Net assets 4,445.6 4,609.8
----------------------------------------- --------- ---------
Net current (liabilities)/assets (242.0) 162.6
----------------------------------------- --------- ---------
At 31 December 2019, the Group had net current liabilities of
$242.0m and this is largely due to term loans of $297.6m falling
due in October 2020 and which are, therefore, classed as current
liabilities. In February 2020, the Group completed the disposal of
the Industrial Services business which reduced short term debt by
$111.0m and secured additional bilateral loan facilities of $200.0m
which mature between September 2021 and May 2022. These subsequent
events are disclosed in note 36 to the financial statements and
confirmed that the net current liability position shown above was a
temporary situation.
Goodwill and intangible assets include $4,645.0m (2018:
$4,766.7m) of goodwill and intangibles relating to the acquisition
of Amec Foster Wheeler. This has decreased during the year
primarily because of the classification of the nuclear business as
held for sale during 2019 and the amortisation of intangible
assets.
Right of use assets and lease liabilities were recognised as a
result of the adoption of IFRS 16 and amount to $417.9m and $540.9m
respectively. Lease liabilities also include $33.4m of leases
previously classified as finance leases.
The reduction in trade receivables is due to improved cash
collection during the year and reduced activity in December 2019
compared with December 2018.
Net held for sale assets and liabilities includes $518.9m of
assets held for sale (including cash of $54.9m) and current
liabilities include $106.0m of liabilities held for sale in respect
of the nuclear and WGIS businesses and a non-core joint venture.
The Group completed the disposals of the nuclear business in March
2020 and the Industrial Services business in February 2020. The
disposal of the non-core joint venture is expected to happen during
the first half of 2020.
Trade and other payables has increased by $93.5m since 2018 and
this is partly due to an increase in gross amounts due to customers
of $73m which has increased due to a significant advance received
in respect of a major contract which was ongoing during the
year.
The provisions balance reduced by $199.0m to $792.2m. The
reduction in provisions was driven by utilisations and releases
totalling $282.6m and was offset by an income statement charge of
$106.6m. Provisions utilised during the year amounted to $181.5m,
which mainly related to asbestos and Aegis. Provisions released to
the income statement amounted to $101.1m and was mainly related to
a number of historic project related provisions. The income
statement charge of $106.6m mainly related to investigations by the
authorities in the US, Brazil and Scotland and have progressed to
the point where the Group believes that it is likely to be able to
settle the relevant matters with these authorities at an aggregate
cost of $46.0m and this is reflected as a provision at 31 December
2019. Achieving resolution of the relevant matters will involve
negotiations with five authorities in three separate jurisdictions,
and accordingly there is no certainty that resolution will be
reached with any or all of those authorities or that the aggregate
settlement amount will not exceed the amount of the provision. The
expected movement related to provisions in 2020 is approximately
$100m.
Contract assets and liabilities
Dec Dec
2019 2018
$m $m
--------------------------- ------- -------
Trade receivables 943.5 1,287.1
Amounts due from customers 962.8 935.1
Amounts due to customers (480.5) (407.5)
1,425.8 1,814.7
--------------------------- ------- -------
The reduction in trade receivables is due to improved cash
collection during the year and reduced activity in December 2019
compared with December 2018. The movement in gross amounts due to
customers is mainly explained by a significant advance received in
respect of a major contract which was ongoing during the year.
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 2019 was as follows:
$m Year 1 Year 2 Total
-------- ------- ------- -------
Revenue 3,791.9 2,300.0 6,091.9
-------- ------- ------- -------
The order book reported on page 1 of $7.9bn includes contracted
work under multi-year arrangements and is recognised according to
anticipated activity supported by customer activity and management
estimates. The $6.1bn reported above has been adjusted to reflect
contracted work supported by a contract and approved purchase
order.
Asbestos related obligations
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 United
States. At 31 December 2019, the Group has net asbestos related
liabilities of $379.6m (2018: $398.1m).
The Group expects to have net cash outflows of around $36m as a
result of asbestos liability indemnity and defence payments in
excess of insurance proceeds during 2020. 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.
The Group's EBITDA is stated after deducting costs relating to
asbestos including administration costs, movements in the liability
as a result of changes in assumptions and changes in the discount
rate.
Full details of asbestos liabilities are provided in note 20 to
the Group financial statements.
Pensions
The Group operates a number of defined benefit pension schemes
in the UK and US and a number of defined contribution plans. At 31
December 2019, the schemes had a net surplus of $241.0m (2018:
$242.7m). In assessing the potential liabilities, judgement is
required to determine the assumptions for inflation, discount rate
and member longevity. The assumptions at 31 December 2019 showed a
reduction in the discount rate which results in higher scheme
liabilities and lower RPI inflation rates. Full details of pension
assets and liabilities are provided in note 32 to the Group
financial statements.
At 31 December 2018, the largest schemes were the Amec Foster
Wheeler Pension Plan ('AFW Pension Plan') and the John Wood Group
PLC Retirement Benefit Scheme ('JWG PLC RBS') in the UK and the
Foster Wheeler Inc SERP and the Foster Wheeler Inc Pension Plan for
Certain Employees (FW Inc PPCE) in the US. In March 2019, the JWG
RBS merged with the AFW Pension Plan (now known as the Wood Pension
Plan ('WPP')).
Contingent liabilities
Details of the Group's contingent liabilities are set out in
note 33 to the financial statements.
Divestments
During 2019, the Group disposed of its investments Terra Nova
Technologies ('TNT'). TNT was part of the STS business unit (which
is now part of the TCS business unit) and the loss on the disposal
is disclosed in exceptional items.
At 31 December 2019, the Group has treated the assets and
liabilities of its nuclear business and Wood Group Industrial
Services Limited as held for sale as these businesses were sold in
the first quarter of 2020. In addition, the Group's investment in a
non-core joint venture is included in assets held for sale as the
Group expects to dispose of its investment in the first half of
2020.
New accounting standards
The new accounting standard on leases, IFRS 16 became effective
on 1 January 2019. Under IFRS 16, the Group is required to
recognise 'right of use' assets and lease liabilities in respect of
its operating leases for property, vehicles, plant and equipment.
The application of IFRS 16 has resulted in an increased
depreciation charge and higher financing costs in the income
statement with an overall increase in operating profit.
A summary of the impact of IFRS 16 on the financial statements
is set out below:
On transition $m
------------------------------------------------- -------
Right of use asset recognised 450.6
Deferred tax asset recognised 5.2
Lease liabilities recognised (569.0)
Onerous lease provisions adjustment 17.7
Onerous lease liabilities (included within other
non-current liabilities) 61.2
Trade and other payables - accruals 8.3
Trade and other receivables - prepayments (7.9)
Opening reduction to retained earnings (33.9)
2019 income statement impact (excluding joint
ventures)
Reduction in operating lease costs 144.9
Increased depreciation (123.0)
Increased interest expense (28.2)
Reduced interest on discounting of onerous lease
provision 2.2
-------------------------------------------------- -------
Reduction in profit before tax (4.1)
-------------------------------------------------- -------
The financial information set out above does not constitute the
Company's statutory accounts for the years ended 31 December 2019
or 2018 but is derived from those accounts. Statutory accounts for
2018 have been delivered to the registrar of companies, and those
for 2019 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.
Footnotes
1. Adjusted EBITDA represents operating profit of $303.4m (2018:
$165.3m) before the deduction of depreciation of $182.0m (2018:
$63.9m), amortisation of $243.7m (2018: $248.8m), exceptional items
of $107.6m (2018: $191.3m) and joint venture interest and tax of
$18.7m (2018: $24.5m) and is provided as it is a key unit of
measurement used by the Group in the management of its
business.
2. Adjusted diluted earnings per share ("AEPS") is calculated by
dividing earnings 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 and
adjusted to assume conversion of all potentially dilutive ordinary
shares.
3. Number of people includes both employees and contractors at 31 December 2019.
4. Interest cover is adjusted EBITDA excluding IFRS 16 of
$704.4m (2018: $693.8m) divided by the net finance expense, which
excludes net finance expense from joint ventures of $5.9m (2018:
$8.1m) and the impact of IFRS 16
of $28.2m .
JOHN WOOD GROUP PLC
GROUP FINANCIAL STATEMENTS
FOR THE YEAR TO 31st DECEMBER 2019
Company Registration Number SC 36219
Consolidated income statement
for the year to 31 December 2019
2019 2018
Pre-exceptional Exceptional Pre-exceptional Exceptional
items items Total items items Total
Note $m $m $m $m $m $m
--------------------------- ---- --------------- ----------- --------- --------------- ----------- ---------
Revenue from continuing
operations 1,2 9,890.4 - 9,890.4 10,014.4 - 10,014.4
Cost of sales (8,768.5) - (8,768.5) (8,820.6) - (8,820.6)
--------------------------- ---- --------------- ----------- --------- --------------- ----------- ---------
Gross profit 1,121.9 - 1,121.9 1,193.8 - 1,193.8
Administrative expenses 5 (760.4) (106.3) (866.7) (881.2) (140.3) (1,021.5)
Impairment of investment
in joint ventures 5,12 - - - - (41.4) (41.4)
Share of post-tax
profit/(loss) from
joint ventures 5,12 49.5 (1.3) 48.2 44.0 (9.6) 34.4
--------------------------- ---- --------------- ----------- --------- --------------- ----------- ---------
Operating profit 1 411.0 (107.6) 303.4 356.6 (191.3) 165.3
Finance income 3 9.6 - 9.6 5.3 - 5.3
Finance expense 3 (164.3) - (164.3) (117.1) - (117.1)
--------------------------- ---- --------------- ----------- --------- --------------- ----------- ---------
Profit/(loss) before
taxation from continuing
operations 4,5 256.3 (107.6) 148.7 244.8 (191.3) 53.5
Taxation 5,6 (56.4) (19.5) (75.9) (69.6) 8.5 (61.1)
--------------------------- ---- --------------- ----------- --------- --------------- ----------- ---------
Profit/(loss) for
the year from continuing
operations 199.9 (127.1) 72.8 175.2 (182.8) (7.6)
--------------------------- ---- --------------- ----------- --------- --------------- ----------- ---------
Profit/(loss) attributable
to
Owners of the parent 199.1 (127.1) 72.0 173.9 (182.8) (8.9)
Non-controlling
interests 28 0.8 - 0.8 1.3 - 1.3
--------------------------- ---- --------------- ----------- --------- --------------- ----------- ---------
199.9 (127.1) 72.8 175.2 (182.8) (7.6)
Earnings per share
(expressed in cents
per share)
Basic 8 10.7 (1.3)
Diluted 8 10.5 (1.3)
--------------------------- ---- --------------- ----------- --------- --------------- ----------- ---------
The notes on pages 32 to 114 are an integral part of these
consolidated financial statements.
Consolidated statement of comprehensive income/expense
for the year to 31 December 2019
2019 2018
Note $m $m
-------------------------------------------------- ----- ------ -------
Profit/(loss) for the year 72.8 (7.6)
Other comprehensive (expense)/income
Items that will not be reclassified to profit
or loss
Re-measurement (losses)/gains on retirement
benefit obligations 32 (56.1) 118.0
Movement in deferred tax relating to retirement
benefit obligations 6 6.8 (20.5)
-------------------------------------------------- ----- ------ -------
Total items that will not be reclassified to
profit or loss (49.3) 97.5
-------------------------------------------------- ----- ------ -------
Items that may be reclassified subsequently
to profit or loss
Cash flow hedges 27 (5.3) (4.7)
Tax on derivative financial instruments 6 1.4 0.6
Exchange movements on retranslation of foreign
operations 27,28 83.4 (237.7)
-------------------------------------------------- ----- ------ -------
Total items that may be reclassified subsequently
to profit or loss 79.5 (241.8)
-------------------------------------------------- ----- ------ -------
Other comprehensive income/(expense) for the
year, net of tax 30.2 (144.3)
-------------------------------------------------- ----- ------ -------
Total comprehensive income/(expense) for the
year 103.0 (151.9)
-------------------------------------------------- ----- ------ -------
Total comprehensive income/(expense) for the
year is attributable to:
Owners of the parent 102.2 (152.0)
Non-controlling interests 0.8 0.1
-------------------------------------------------- ----- ------ -------
103.0 (151.9)
-------------------------------------------------- ----- ------ -------
Total comprehensive income/(expense) for the year is
attributable to continuing operations.
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 notes on pages 32 to 114 are an integral part of these
consolidated financial statements.
Consolidated balance sheet
as at 31 December 2019
2019 2018
Note $m $m
--------------------------------------------- ---- -------- --------
Assets
Non-current assets
Goodwill and other intangible assets 9 6,299.0 6,656.7
Property plant and equipment 10 164.3 198.5
Right of use assets 11 417.9 -
Investment in joint ventures 12 168.3 168.2
Other investments 12 81.4 76.4
Long term receivables 14 95.7 128.1
Retirement benefit scheme surplus 32 368.0 404.9
Deferred tax assets 21 87.1 87.8
--------------------------------------------- ---- -------- --------
7,681.7 7,720.6
--------------------------------------------- ---- -------- --------
Current assets
Inventories 13 14.5 13.7
Trade and other receivables 14 2,306.0 2,555.7
Financial assets 14 10.1 14.3
Income tax receivable 39.8 37.4
Assets held for sale 30 518.9 58.9
Cash and cash equivalents 15 1,847.0 1,352.7
--------------------------------------------- ---- -------- --------
4,736.3 4,032.7
--------------------------------------------- ---- -------- --------
Total assets 12,418.0 11,753.3
--------------------------------------------- ---- -------- --------
Liabilities
Current liabilities
Borrowings 17 1,752.7 984.5
Trade and other payables 16 2,619.6 2,526.1
Income tax liabilities 199.5 197.9
Lease liabilities 11 159.9 -
Provisions 20 140.6 134.3
Liabilities held for sale 30 106.0 27.3
--------------------------------------------- ---- -------- --------
4,978.3 3,870.1
--------------------------------------------- ---- -------- --------
Net current (liabilities)/assets (242.0) 162.6
--------------------------------------------- ---- -------- --------
Non-current liabilities
Borrowings 17 1,573.2 1,917.3
Deferred tax liabilities 21 88.4 112.6
Retirement benefit scheme deficit 32 127.0 162.2
Lease liabilities 11 414.4 -
Other non-current liabilities 18 139.5 224.4
Provisions 20 651.6 856.9
--------------------------------------------- ---- -------- --------
2,994.1 3,273.4
--------------------------------------------- ---- -------- --------
Total liabilities 7,972.4 7,143.5
--------------------------------------------- ---- -------- --------
Net assets 4,445.6 4,609.8
--------------------------------------------- ---- -------- --------
Equity attributable to owners of the parent
Share capital 23 40.9 40.7
Share premium 24 63.9 63.9
Retained earnings 25 1,827.7 1,806.7
Merger reserve 26 2,540.8 2,790.8
Other reserves 27 (33.2) (111.3)
--------------------------------------------- ---- -------- --------
Total equity attributable to owners of the
parent 4,440.1 4,590.8
Non-controlling interests 28 5.5 19.0
--------------------------------------------- ---- -------- --------
Total equity 4,445.6 4,609.8
--------------------------------------------- ---- -------- --------
The financial statements on pages 27 to 114 were approved by the
board of directors on 9 March 2020 and signed on its behalf by:
Robin Watson, Director David Kemp, Director
The notes on pages 32 to 114 are an integral part of these
consolidated financial statements.
Consolidated statement of changes in equity
for the year to 31 December 2019
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 2018 40.5 63.9 1,935.2 2,790.8 129.9 4,960.3 11.7 4,972.0
(Loss)/profit for
the year - - (8.9) - - (8.9) 1.3 (7.6)
Other
comprehensive
income/(expense):
Re-measurement
gains on
retirement
benefit scheme 32 - - 118.0 - - 118.0 - 118.0
Movement in
deferred tax
relating to
retirement
benefit scheme 6 - - (20.5) - - (20.5) - (20.5)
Cash flow hedges 27 - - - - (4.7) (4.7) - (4.7)
Tax on derivative
financial
instruments 6 - - 0.6 - - 0.6 - 0.6
Net exchange
movements on
retranslation of
foreign
operations 27/28 - - - - (236.5) (236.5) (1.2) (237.7)
Total
comprehensive
income/(expense)
for the year - - 89.2 - (241.2) (152.0) 0.1 (151.9)
------------------ ------ -------- --------- --------- -------- --------- ------------ ------------ ---------
Transactions with
owners:
Dividends paid 7/28 - - (231.0) - - (231.0) (5.9) (236.9)
Credit relating to
share based
charges 22 - - 18.7 - - 18.7 - 18.7
Tax relating to
share option
schemes 6 - - (0.7) - - (0.7) - (0.7)
Deferred tax
impact of rate
change in equity 6 - - 1.8 - - 1.8 - 1.8
Shares allocated
to employee share
trusts 25 0.2 - (0.2) - - - - -
Shares issued by
employee share
trusts to satisfy
option exercises 25 - - 1.7 - - 1.7 - 1.7
Exchange movements
in respect of
shares held by
employee share
trusts 25 - - 6.5 - - 6.5 - 6.5
Transactions with
non-controlling
interests 25/28 - - (14.5) - - (14.5) 13.1 (1.4)
------------------ ------ -------- --------- --------- -------- --------- ------------ ------------ ---------
At 31 December
2018 40.7 63.9 1,806.7 2,790.8 (111.3) 4,590.8 19.0 4,609.8
Adjustment on
initial
application of
IFRS 16 (net of
tax) - - (33.9) - - (33.9) - (33.9)
------------------ ------ -------- --------- --------- -------- --------- ------------ ------------ ---------
Adjusted balance
at 1 January 2019 40.7 63.9 1,772.8 2,790.8 (111.3) 4,556.9 19.0 4,575.9
Profit for the
year - - 72.0 - - 72.0 0.8 72.8
Other
comprehensive
income/(expense):
Re-measurement
losses on
retirement
benefit scheme 32 - - (56.1) - - (56.1) - (56.1)
Movement in
deferred tax
relating to
retirement
benefit scheme 6 - - 6.8 - - 6.8 - 6.8
Cash flow hedges 27 - - - - (5.3) (5.3) - (5.3)
Tax on derivative
financial
instruments 6 - - 1.4 - - 1.4 - 1.4
Net exchange
movements on
retranslation of
foreign
operations 27/28 - - - - 83.4 83.4 - 83.4
Total
comprehensive
income/(expense)
for the year - - 24.1 - 78.1 102.2 0.8 103.0
------------------ ------ -------- --------- --------- -------- --------- ------------ ------------ ---------
Transactions with
owners:
Dividends paid 7/28 - - (235.5) - - (235.5) (1.2) (236.7)
Credit relating to
share based
charges 22 - - 23.4 - - 23.4 - 23.4
Tax relating to
share option
schemes 6 - - (4.1) - - (4.1) - (4.1)
Deferred tax
impact of rate
change in equity 6 - - 0.3 - - 0.3 - 0.3
Other tax
movements in
equity 6 - - 0.7 - - 0.7 - 0.7
Shares allocated
to employee share
trusts 25 0.2 - (0.2) - - - - -
Shares issued by
employee share
trusts to satisfy
option exercises 25 - - 0.4 - - 0.4 - 0.4
Exchange movements
in respect of
shares held by
employee share
trusts 25 - - (4.2) - - (4.2) - (4.2)
Transactions with
non-controlling
interests 25/28 - - - - - - (13.1) (13.1)
Transfer from
merger reserve to
retained earnings 26 - - 250.0 (250.0) - - - -
At 31 December
2019 40.9 63.9 1,827.7 2,540.8 (33.2) 4,440.1 5.5 4,445.6
------------------ ------ -------- --------- --------- -------- --------- ------------ ------------ ---------
The notes on pages 32 to 114 are an integral part of these
consolidated financial statements.
Consolidated cash flow statement
for the year to 31 December 2019
2019 2018
Note $m $m
Cash generated from operations 29 746.2 625.3
Tax paid (84.3) (83.5)
--------------------------------------------------- ---- ------- -------
Net cash generated from operating activities 661.9 541.8
--------------------------------------------------- ---- ------- -------
Cash flows from investing activities
Acquisition of subsidiaries (cash acquired
less consideration paid) 30 (5.6) (30.0)
Disposal of businesses (net of cash disposed) 30 43.1 33.4
Purchase of property plant and equipment 10 (52.0) (34.2)
Proceeds from sale of property plant and equipment 19.4 5.0
Purchase of intangible assets 9 (94.6) (58.3)
Interest received 3.9 4.8
Cash from short term investments and restricted
cash 29 11.7 45.4
Investment in joint ventures 12 (0.8) (3.2)
Repayment of loans from/(amounts advanced to)
joint ventures 30.0 (5.2)
--------------------------------------------------- ---- ------- -------
Net cash used in investing activities (44.9) (42.3)
--------------------------------------------------- ---- ------- -------
Cash flows from financing activities
Proceeds from short-term borrowings 29 770.9 448.9
Repayment of long-term borrowings 29 (348.2) (407.8)
Payment of lease liabilities (2018: repayment
of finance leases) 29 (165.6) (14.7)
Proceeds from disposal of shares by employee
share trusts 25 0.4 1.7
Interest paid (121.2) (101.5)
Dividends paid to shareholders 7 (235.5) (231.0)
Dividends paid to non-controlling interests 28 (1.2) (5.9)
Acquisition of non-controlling interests 28 - (0.2)
--------------------------------------------------- ---- ------- -------
Net cash used in financing activities (100.4) (310.5)
--------------------------------------------------- ---- ------- -------
Net increase in cash and cash equivalents 29 516.6 189.0
Effect of exchange rate changes on cash and
cash equivalents 29 8.4 (37.6)
--------------------------------------------------- ---- ------- -------
Opening cash and cash equivalents 1,376.9 1,225.5
Closing cash and cash equivalents 15 1,901.9 1,376.9
--------------------------------------------------- ---- ------- -------
Closing cash and cash equivalents includes $54.9m (2018: $24.2m)
presented in assets held for sale on the Group balance sheet (see
note 30).
The repayment of long-term borrowings of $348.2m includes
$953.1m of repayments offset by proceeds from unsecured loan notes
issued in the US Private Placement debt market of $504.9m and
$100.0m of new bilateral loan facilities.
The notes on pages 32 to 114 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, industrial and utility
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
IFRS and IFRIC interpretations adopted by the European Union ('EU')
and with those parts of the Companies Act 2006 applicable to
companies reporting under IFRS. The financial statements are also
in compliance with IFRS as issued by the International Accounting
Standards Board. 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. This is the first set of
the Group's financial statements in which IFRS 16 'Leases' has been
applied. The impact of the application of this standard is set out
on page 42.
Going concern
The Directors have a reasonable expectation that the Group will
be able to operate within the level of available facilities and
cash for the foreseeable future and accordingly believe that it is
appropriate to prepare the financial statements on a going concern
basis. In assessing the basis of preparation of the financial
statements for the year ended 31 December 2019, the Directors have
considered the principles of the Financial Reporting Council's 'The
UK Corporate Governance Code 2018', provision 30; namely assessing
the applicability of the going concern basis, the review period and
disclosures.
The Directors have undertaken a rigorous assessment of going
concern and liquidity including financial forecasts, for a period
of 12 months from the date of approval of these financial
statements, that reflect reasonable possible downsides. In order to
satisfy themselves that the Group has adequate resources for the
future, the Directors have reviewed the existing debt levels, the
committed funding and liquidity positions under debt covenants, and
the Group's ability to generate cash from trading activities. The
Group's principal debt facilities comprise a $297.6m term loan
repayable in October 2020, a $1,750.0m revolving credit facility
maturing in 2022, $300.0m of bilateral term loans maturing between
September 2021 and May 2022 (of which $200.0m was put in place in
February 2020) and $879.9m of US private placement debt repayable
in various tranches between 2021 and 2031.
At 31 December 2019, the Group had net current liabilities of
$242.0m and this is largely due to term loans of $297.6m falling
due in October 2020 being classed as current liabilities. The cash
flow forecasts show that the Group will have sufficient funds to
meet its liabilities as they fall due. The $297.6m term loan
repayable in October 2020 was reduced by $111.0m following the
disposal of the Industrial Services business in February 2020 and
the remaining balance was repaid following receipt of the new
$200.0m bilateral loan facilities entered into in February 2020.
The nuclear disposal will generate an additional cash inflow of
around GBP241m ($319m) and the proceeds will be used to repay the
term loan and other borrowings.
At 31 December 2019, the Group had headroom of $1,156.7m under
its main facilities and in addition had $229.3m of other undrawn
borrowing facilities. In undertaking their going concern review the
Directors have considered the business plans which provide
financial projections through to the end of March 2021.
Consequently, the directors are confident that the company will
have sufficient funds to continue to meet its 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. With
the exception of the application of IFRS 16 'Leases', which has
been applied from 1 January 2019, 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) 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. 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 11.3% and 12.1% have been used to
discount the CGU cash flows and a terminal value is applied using
long term growth rates of between 2% and 3%. A sensitivity analysis
has been performed allowing for possible changes to the discount
rate, the long-term growth rate and the short-term EBITDA growth
rate.
The headroom on Asset Solutions EAAA based on the assumptions
above was $386.0m. A sensitivity analysis has been performed
assuming the impact of reasonably possible changes to the
assumptions used in the impairment review, which did not result in
an impairment. A 1.3% reduction in the long-term growth rate would
result in a reduction of the headroom to $nil and a 1.2% increase
in the discount rate would result in headroom of $nil. A reasonably
possible change in the short-term EBITDA growth rate did not result
in an impairment.
The headroom on Asset Solutions Americas based on the
assumptions above was $353.0m. A sensitivity analysis has been
performed assuming the impact of reasonably possible changes to the
assumptions used in the impairment review, which did not result in
an impairment. A 1.5% reduction in the long-term growth rate would
result in a reduction of the headroom to $nil and a 1.3% increase
in the discount rate would result in headroom of $nil. A reasonably
possible change in the short-term EBITDA growth rate did not result
in an impairment.
See note 9 for further details.
(b) Income taxes (estimate)
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 21 for details.
(c) Retirement benefit schemes (estimate)
The Group operates a number of defined benefit pension schemes
which are largely closed to future accrual. The value of the
Group's retirement benefit schemes surplus/deficit is determined on
an actuarial basis using a number of 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 32. 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. See note 32 for further details.
(d) 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.
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%. Further details of the asbestos liabilities are
provided in note 20 including a sensitivity analysis showing the
impact of changes to the key assumptions.
Discussions concerning possible resolutions of the
investigations by the authorities in the US, Brazil and Scotland
have progressed to the point where the Group believes that it is
likely to be able to settle the relevant matters with these
authorities at an aggregate cost of $46.0m and this is reflected as
a provision at 31 December 2019. Achieving resolution of the
relevant matters will involve negotiations with five authorities in
three separate jurisdictions, and accordingly there is no certainty
that resolution will be reached with any or all of those
authorities or that the aggregate settlement amount will not exceed
the amount of the provision.
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. The project was
around 80% complete by value at 31 December 2019 and 90% complete
by physical progress and is expected to be operationally complete
during the second half of 2020. Management's latest estimate is
that the loss at completion will be $113m representing the expected
loss to complete less estimated revenue to be earned. A charge of
$10m was made to the income statement during 2019 in relation to
this project and the full amount of this loss has been recognised
to date.
During the year provisions of $41m were utilized and $25m
remains on the balance sheet at 31 December 2019. In reaching its
assessment of this loss, management have made certain estimates and
assumptions relating to the date of completion, productivity of
workers on site and the costs to complete. If the actual outcome
differs from these estimates and assumptions, the ultimate loss
will be different. In addition, the Group's assessment of the
ultimate loss includes change orders which have not been agreed
with the customer and management's assessment of liquidated damages
and the current estimate is that these will not be settled until
2021 at the earliest. If the amounts agreed are different to the
assumptions made, then the ultimate loss could be materially
different.
The balance of project related provisions relates to a number of
project provisions which are not individually material or
significant.
(e) Revenue recognition on fixed price and long-term contracts (estimate)
The Group has a 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. Contract revenues are affected by
uncertainties that depend on the outcome of future events.
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. The estimate could 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")
Management assess the value of revenue to be recognised at
contract inception 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 initial assessment is
reconsidered at each reporting date. The assessment is based on
discussions with the customer and a range of factors, including
prior experience of the customer and of similar contracts with
other customers.
Liquidated damages ("LDs")
Management make an assessment of the value of LDs to be provided
at contract inception 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
probabilistic estimate of the monetary amount of LDs payable which
involves a number of management assumptions and judgements
including discussions with the customer, prior experience of the
customer, prior experience of similar contracts with other
customers and other forms of documentary evidence. At 31 December
2019, the amount provided for Aegis LDs was $16.0m (2018: $15.0m)
and this is included within provisions on the balance sheet. See
note 20 for further details.
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.
(f) Lease liability (judgement)
The Group has applied judgement to determine the lease term for
some lease contracts in which it is a lessee that includes renewal
options. Management considers all facts and circumstances that
create an economic incentive to exercise an extension option, or
not exercise a termination option. Extension options (or periods
after termination options) are only included in the lease term if
the lease is reasonably certain to be extended (or terminated).
For leases of property, the following factors are normally the
most relevant:
-- If there are significant penalties to terminate (or not extend),
the Group is typically reasonably certain to extend (or not
terminate);
-- If any leasehold improvements are expected to have a significant
remaining value, the Group is typically reasonably certain to
extend (or not terminate);
-- Otherwise the Group considers other factors including historical
lease durations, the costs and business disruption to replace
the leased asset.
The lease term is reassessed if an option is actually exercised
(or not exercised) or the Group becomes obliged to exercise (or not
exercise) it. The assessment of reasonably certainty is only
revised if a significant event or change in circumstances occurs,
which affects this assessment and that is within the control of the
lessee.
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 incremental
borrowing rate ("IBR") is used. The IBR is obtained from various
external financing sources and makes adjustments to reflect the
terms of the lease and the type of asset leased.
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. The 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:
2019 2018
Average rate GBP1 = $ 1.2773 1.3345
Closing rate GBP1 = $ 1.3247 1.2736
---------------------- ------ ------
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.
Revenue in respect of variations is recognised when the
variation is approved by both parties to the contract. To the
extent that a change in scope has been agreed but the corresponding
change in price has not been agreed then revenue is recognised only
to the extent that that it is highly probable that a significant
reversal of revenue will not occur.
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 a source of
variable consideration 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 or
regulatory costs or provisions, litigation settlements, 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).
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
7 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 5-13 years
relationships
- Order backlog 2-5 years
- Brands 20 years
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 annual
impairment reviews in respect of goodwill. 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 9 for further details of goodwill impairment testing
and note 12 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 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 14 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 through to 2050. 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
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 assets are recognised to the extent that it is
probable that future taxable profits will be available against
which the temporary differences can be utilised.
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 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 Group has elected not to recognise right of use assets and
lease liabilities for leases of low value assets and short-term
leases, including IT equipment. The Group recognises the lease
payments associated with these leases as an expense on a
straight-line basis over the lease term.
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. The scheme trustees do not have
unilateral power to wind up the scheme, therefore it is within the
Group's control to gradually settle the scheme liabilities as per
IFRIC 14.11 (b) until there are no members left. 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 management, are
unlikely to succeed.
See note 20 for further details.
Possible but not probable liabilities are disclosed as
contingent liabilities in note 33.
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.
Options are also awarded under the Group's Long Term Plan
('LTP') which is the incentive scheme in place for executive
directors and certain senior executives. The charge for options
awarded under the LTP is based on the fair value of those options
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.
The Group has an Employee Share Plan 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.
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 26 for further information.
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. The Group's reportable
segments are Asset Solutions Europe, Africa, Asia, Australia ('AS
EAAA'), Assets Solutions Americas ('AS Americas'), Technical
Consulting Solutions ("TCS") and Investment Services ("IS").
Asset Solutions is focused on increasing production, improving
efficiency, reducing cost and extending asset life across
industrial markets and provides initial design, construction,
operations, maintenance and decommissioning services. TCS was
formed from the combination of the Group's Specialist Technical
Solutions ("STS") and Environmental and Infrastructure Solutions
("E&IS") business units on 1 October 2019. TCS is a single
global, multi-sector specialist technical consultancy 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 prior to their eventual
disposal.
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 in
the UK, US and Canada. 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.
Disclosure of impact of new and future accounting standards
(a) Amended standards and interpretations
The following standards and interpretations apply for the first
time to accounting periods commencing on or after 1 January
2019:
IFRS 16
Impact of application of IFRS 16
IFRS 16 introduces a single, on-balance sheet lease accounting
model for lessees. A lessee recognises a right of use asset
representing its right to use the underlying asset and a lease
liability representing its obligation to make lease payments. The
Group has assessed the impact that the initial application of IFRS
16 has on its consolidated financial statements, as described
below.
The Group adopted IFRS 16 on 1 January 2019, using the modified
retrospective approach. The cumulative effect of adopting IFRS 16
is recognised as an adjustment to the opening balance of retained
earnings at 1 January 2019, with no restatement of comparative
information. The Group has recognised new assets and liabilities
for its operating leases of property, vehicles and other assets.
The nature of expenses related to those leases has changed because
the Group now recognises a depreciation charge for right of use
assets and interest expense on lease liabilities. Previously, the
Group recognised operating lease expense on a straight-line basis
over the term of the lease, and recognised assets and liabilities
only to the extent that there was a timing difference between
actual lease payments and the expense recognised. In addition, the
Group will no longer recognise provisions for operating leases that
it assesses to be onerous, and instead performs an impairment test
on the right of use assets.
On transition to IFRS 16, the Group recognised additional right of use assets and additional
liabilities, recognising the difference in retained earnings. The impact is summarised below:
At 1 January 2019 $m
----------------------------------------------------------------------------------------------- -------
Right of use assets recognised 450.6
Deferred tax asset recognised 5.2
Lease liabilities recognised (569.0)
Onerous lease provisions adjustment 17.7
Onerous lease liabilities (included within other non-current liabilities) 61.2
Trade and other payables - accruals 8.3
Trade and other receivables - prepayments (7.9)
----------------------------------------------------------------------------------------------- -------
Opening reduction to retained earnings (33.9)
----------------------------------------------------------------------------------------------- -------
Onerous lease provisions and liabilities as at 31 December 2018
were eliminated against right of use assets recognised on
transition to IFRS 16 in line with the practical expedients noted
below.
Depreciation and interest in 2019 have increased by $128.4m
(including joint venture depreciation of $5.4m) and $28.9m
(including joint venture interest of $0.7m) respectively, which is
offset by a reduction in operating lease costs of $151.0m
(including joint venture operating lease costs of $6.1m) and an
unwinding of discounting charge of $2.2m. Adjusted EBITDA has
increased by $151.0m (including joint venture EBITDA benefit of
$6.1m) and there is a reduction of $4.1m in profit before tax.
When measuring liabilities for leases that were classified as
operating leases, the Group discounted payments using its
incremental borrowing rate as at 1 January 2019. The weighted
average rate applied is 5.2%. Right of use assets were measured at
their carrying amount as if IFRS 16 had been applied since
commencement date, discounted at the Group's incremental borrowing
rate at the date of initial application.
Reconciliation of lease liabilities recognised at 1 January 2019 $m
-------------------------------------------------------------------------------------------------- -------
Operating lease commitment at 31 December 2018 as disclosed in the Group's consolidated financial
statements 752.7
Impact of discounting (123.3)
-------------------------------------------------------------------------------------------------- -------
Commitment discounted using the incremental borrowing rate at 1 January 2019 629.4
Recognition exemption for leases of low value and short term assets (35.9)
Recognition exemption for leases with less than 12 months of lease term at transition (26.5)
Extension options reasonably expected to be exercised 2.0
-------------------------------------------------------------------------------------------------- -------
Lease liabilities recognised at 1 January 2019 569.0
-------------------------------------------------------------------------------------------------- -------
The Group used the following practical expedients when applying
IFRS 16 to leases previously classified as operating leases under
IAS 17:
-- The Group has applied the exemption not to recognise right
of use assets and liabilities for property leases with less
than 12 months of lease term;
-- The Group has applied the exemption not to recognise right
of use assets and liabilities for long-term operating leases
with a remaining lease term of 12 months as at 1 January
2019;
-- The Group applies a single discount rate to a portfolio of
leases with reasonably similar characteristics;
-- The Group relies on previous assessments on whether leases
are onerous;
-- The Group has applied the exemption not to recognise right
of use assets and liabilities for low value assets;
-- The Group has excluded initial direct costs in measuring
the right of use asset at the date of initial application;
and
-- The Group has used hindsight when determining the lease term
if the contract contains options to extend or terminate the
lease.
Impact of application of IFRIC 23
The Group has adopted IFRIC 23 Uncertainty over Income Tax
Treatments for the first time in 2019 which gives guidance on the
accounting for uncertain tax provisions. The adoption of IFRIC 23
has not resulted in a material change in relation to provisions for
tax uncertainties held by the Group.
All other amendments not yet effective and not included above
are not material or applicable to the Group.
1 Segmental reporting
The Group operates through four segments, Asset Solutions EAAA
('AS EAAA'), Asset Solutions Americas ('AS Americas'), Technical
Consulting Solutions ("TCS") and Investment Services ('IS'). TCS
was launched on 1 October 2019 and is a combination of Wood's
Specialist Technical Solutions ("STS") and Environmental and
Infrastructure Solutions ("E&IS") business units. The 2018
comparatives for TCS are the sum of the STS and E&IS segmental
results. 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. From January 2019, revenue is reported on an equity
accounting basis and consequently the 2018 revenue comparatives
have been restated to exclude joint venture revenue.
The segment information provided to the Group's Chief Executive
for the operating segments for the year ended 31 December 2019
includes the following:
Operating Segments Revenue Adjusted EBITDA(1) Operating profit before exceptionals
Year Year Year Year Year
Year ended ended ended ended ended
ended 31 Dec 31 Dec 31 Dec 31 Dec 31 Dec
31 Dec 2019 2018 2019 2018 2019 2018
$m $m $m $m $m $m
------------------------------- ------------- -------- ---------- -------- -------------------- ----------------
Asset Solutions EAAA 3,147.6 3,283.1 352.7 257.7 164.7 129.6
Asset Solutions Americas 3,894.5 3,668.2 238.0 226.8 107.5 108.9
Technical Consulting Solutions 2,779.1 2,913.2 299.6 248.5 183.8 179.3
Investment Services 69.2 149.9 36.3 35.8 35.5 25.2
Central costs (3) - - (71.2) (75.0) (80.5) (86.4)
------------------------------- ------------- -------- ---------- -------- -------------------- ----------------
Total 9,890.4 10,014.4 855.4 693.8 411.0 356.6
------------------------------- ------------- -------- ---------- --------
Exceptional items (107.6) (191.3)
Operating profit 303.4 165.3
Finance income 9.6 5.3
Finance expense (164.3) (117.1)
-------------------- ----------------
Profit before taxation from
continuing operations 148.7 53.5
Taxation (75.9) (61.1)
-------------------- ----------------
Profit/(loss) for the year from
continuing operations 72.8 (7.6)
-------------------- ----------------
Notes
1. A reconciliation of operating profit 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. Joint venture depreciation of $12.5m (2018: $12.3m) includes
IFRS 16 depreciation of $5.4m (2018: $nil).
3. Central includes the costs of certain management personnel in
both the UK and the US, along with an element of Group
infrastructure costs.
4. Revenue arising from sales between segments is not material.
5. Following adoption of IFRS 16, Adjusted EBITDA and Operating
profit before exceptionals have increased by $144.9m ($151.0m
including joint ventures) and $21.9m ($22.6m including joint
ventures) respectively due to a change in classification of
costs.
Reconciliation of Alternative Performance Measures
2019 2018
$m $m
--------------------------------------------------------- ------- ------
Operating profit per income statement 303.4 165.3
Exceptional items (note 5) 107.6 191.3
--------------------------------------------------------- ------- ------
Operating profit before exceptionals 411.0 356.6
Operating profit per income statement 303.4 165.3
Share of joint venture finance expense and tax (note 12) 18.7 24.5
Exceptional items (note 5) 107.6 191.3
Amortisation 243.7 248.8
Depreciation 53.6 63.9
IFRS 16 depreciation on right of use asset 128.4 -
Adjusted EBITDA 855.4 693.8
IAS 17 rental expense (151.0) -
EBITDA of disposed businesses - (26.0)
--------------------------------------------------------- ------- ------
Adjusted EBITDA (on a like for like basis) 704.4 667.8
--------------------------------------------------------- ------- ------
Analysis of joint venture profits by segment Adjusted EBITDA(1) Operating profit
Year Year Year Year
ended ended ended ended
31 Dec 31 Dec 31 Dec 31 Dec
2019 2018 2019 2018
$m $m $m $m
--------------------------------------------- ---------- -------- --------- -------
Asset Solutions EAAA 74.7 54.5 60.1 32.8
Asset Solutions Americas 9.2 13.2 8.7 13.2
Technical Consulting Solutions 0.9 1.8 0.9 1.7
Investment Services (2.8) 13.8 (2.8) 11.2
--------------------------------------------- ---------- -------- --------- -------
Total 82.0 83.3 66.9 58.9
--------------------------------------------- ---------- -------- --------- -------
Other segment items
Asset Solutions Technical Consulting Investment
Asset Solutions EAAA Americas Solutions Services Unallocated Total
At 31 December 2019 $m $m $m $m $m $m
-------------------- -------------------- -------------------- -------------------- ---------- ----------- -----
Capital expenditure
PP&E 22.0 26.8 9.9 - - 58.7
Intangible assets 52.3 32.0 11.2 - 1.7 97.2
Non-cash expense
Depreciation 14.5 20.2 9.2 0.3 2.3 46.5
IFRS 16 depreciation
on right of use
asset 44.2 30.4 47.5 0.5 0.4 123.0
Amortisation 100.0 76.9 58.9 - 6.6 242.4
Exceptional items
(non-cash element) 5.0 2.9 15.3 - 46.7 69.9
-------------------- -------------------- -------------------- -------------------- ---------- ----------- -----
At 31 December 2018
Capital expenditure
PP&E 13.6 15.6 5.8 0.5 1.5 37.0
Intangible assets 28.4 11.4 4.3 - 14.2 58.3
Non-cash expense
Depreciation 16.2 22.0 9.6 1.7 2.1 51.6
Amortisation 85.9 92.0 59.1 - 9.3 246.3
Exceptional items (non-cash element) 44.6 11.2 4.0 6.8 40.4 107.0
------------------------------------- ---- ---- ---- --- ---- -----
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 $7.1m (2018:
$12.3m), depreciation in respect of joint venture IFRS 16 right of
use assets totals $5.4m (2018: $nil) and joint venture amortisation
amounts to $1.3m (2018: $2.5m).
Non-current assets Continuing revenue
2019 2018 2019 2018
Geographical segments $m $m $m $m
------------------------- ------------ ------- --------- ---------
United Kingdom 1,136.1 1,226.7 1,156.2 1,327.2
United States of America 3,639.1 3,557.3 4,602.5 4,293.8
Canada 754.9 769.9 638.6 679.6
Australia 162.8 135.5 491.6 500.2
Kuwait 166.9 164.7 273.1 339.9
Kazakhstan 32.5 26.1 163.6 249.8
Saudi Arabia 98.8 84.7 235.7 193.2
Rest of the world 1,139.8 1,134.9 2,329.1 2,430.7
------------------------- ------------ ------- --------- ---------
7,130.9 7,099.8 9,890.4 10,014.4
------------------------- ------------ ------- --------- ---------
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 by geographical segment is based on the location of the
ultimate project. Revenue is attributable to the provision of
services.
2 Revenue
In the following table, revenue is disaggregated by primary
geographical market and major service line. The tables provided
below analyse total revenue. The 2018 comparatives have been
adjusted to exclude joint venture revenue and reflect minor changes
in the Group structure.
AS Total Total
AS EAAA AS EAAA AS Americas Americas TCS TCS IS IS 2019 2018
2019 2018 2019 2018 2019 2018 2019 2018 $m $m
Primary geographical market $m $m $m $m $m $m $m $m
---------------------------- ------- ------- ----------- ---------- ------- ------- ----- ----- ------- ---------
USA - - 3,403.6 3,079.1 1,180.9 1,150.6 18.0 64.1 4,602.5 4,293.8
Europe 1,194.4 1,385.7 - - 640.8 732.2 25.9 34.1 1,861.1 2,152.0
Rest of the world 1,953.2 1,897.4 490.9 589.1 957.4 1,030.4 25.3 51.7 3,426.8 3,568.6
---------------------------- ------- ------- ----------- ---------- ------- ------- ----- ----- ------- ---------
Revenue 3,147.6 3,283.1 3,894.5 3,668.2 2,779.1 2,913.2 69.2 149.9 9,890.4 10,014.4
---------------------------- ------- ------- ----------- ---------- ------- ------- ----- ----- ------- ---------
Major service lines
---------------------------- ------- ------- ----------- ---------- ------- ------- ----- ----- ------- ---------
Upstream/midstream 1,663.8 1,658.3 1,688.2 1,519.4 411.2 440.6 - - 3,763.2 3,618.3
Downstream 935.4 1,116.6 1,197.1 904.1 138.7 150.5 - - 2,271.2 2,171.2
Built Environment - - - - 1,394.4 1,405.8 - - 1,394.4 1,405.8
Other energy 548.4 508.2 1,009.2 1,244.7 834.8 916.3 69.2 149.9 2,461.6 2,819.1
Revenue 3,147.6 3,283.1 3,894.5 3,668.2 2,779.1 2,913.2 69.2 149.9 9,890.4 10,014.4
---------------------------- ------- ------- ----------- ---------- ------- ------- ----- ----- ------- ---------
The Group's revenue is largely derived from the provision of
services over time.
Revenue in 2019 included $6,967.5m (70%) (2018: $6,761.6m, 68%)
from reimbursable contracts and $2,922.9m (30%) (2018: $3,252.8m,
32%) from lump sum contracts. The calculation of revenue from lump
sum contracts is based on estimates and the amount recognised could
increase or decrease.
Contract assets and liabilities
The following table provides a summary of contract assets and
liabilities arising from the Group's contracts with customers.
2019 2018
$m $m
Trade receivables 943.5 1,287.1
Gross amounts due from customers 962.8 935.1
Gross amounts due to customers (480.5) (407.5)
1,425.8 1,814.7
--------------------------------- ------- -------
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.
The reduction in trade receivables is due to improved cash
collection during the year and reduced activity in December 2019
compared with December 2018. The increase in gross amounts due to
customers is due to a significant advance received in respect of a
major contract which was ongoing during 2019.
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 is included
within the 'Trade and other payables' heading in the Group balance
sheet.
Revenue recognised in 2019 which was included in gross amounts
due to customers at the beginning of the year of $401.3m represents
amounts included within contract liabilities at 1 January 2019.
Revenue recognised from performance obligations satisfied in
previous periods of $24.9m represents revenue recognised in 2019
for performance obligations which were considered operationally
complete at 31 December 2018.
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 2019 was as follows:
$m Year 1 Year 2 Total
-------- ------- ------- -------
Revenue 3,791.9 2,300.0 6,091.9
-------- ------- ------- -------
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 does not include any amounts
of variable consideration which are constrained.
3 Finance expense/(income)
2019 2018
$m $m
Interest payable on senior loan notes 28.5 14.1
Interest payable on borrowings 63.0 67.8
Amortisation of bank facility fees 3.9 3.9
Unwinding of discount on deferred and contingent consideration
liabilities (note 19) 0.4 1.0
Unwinding of discount on asbestos provision 9.7 9.7
Unwinding of discount on other liabilities 2.2 4.6
IFRS 16 interest (note 11) 28.2 -
Other interest expense 28.4 16.0
--------------------------------------------------------------- ----- -----
Finance expense - continuing operations 164.3 117.1
Interest receivable (3.9) (4.8)
Interest income - retirement benefit obligations (note
32) (5.7) (0.5)
Finance income (9.6) (5.3)
--------------------------------------------------------------- ----- -----
Finance expense - continuing operations - net 154.7 111.8
--------------------------------------------------------------- ----- -----
Net interest expense of $5.9m (2018: $8.1m) has been deducted in
arriving at the share of post-tax profit from joint ventures.
The unwinding of discount on the asbestos provision is $9.7m per
note 20 and includes the unwinding of discount on long-term
asbestos receivables.
4 Profit before taxation
2019 2018
$m $m
The following items have been charged/(credited) in
arriving at profit before taxation :
Employee benefits expense (note 31) 4,441.9 4,558.2
Amortisation of intangible assets (note 9) 242.4 246.3
Depreciation of property plant and equipment (note
10) 46.5 51.6
Depreciation of right of use assets (note 11) 123.0 -
(Gain)/loss on disposal of property plant and equipment (1.9) 1.4
Foreign exchange losses/(gains) 0.7 (11.7)
-------------------------------------------------------- ------- -------
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.
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:
2019 2018
$m $m
Fees payable to the Group's auditors and its associate
firms for
Audit of parent company and consolidated financial
statements 4.4 4.0
Audit of financial statements of subsidiaries of the
company 2.3 3.0
Audit related assurance services 0.4 0.3
Tax and other services 0.1 0.1
------------------------------------------------------- ---- -----
7.2 7.4
The ratio of audit related services to other non-audit
services is 1.00 : 0.01.
5 Exceptional items
2019 2018
$m $m
Exceptional items included in continuing operations
Loss on sale of core business (see note 30) 9.4 -
Redundancy, restructuring and integration costs 41.7 71.7
Arbitration settlement provision - 10.4
Investigation support costs and provisions 56.5 26.3
GMP equalisation - 31.9
Impairment of investment in EthosEnergy - 41.4
Impairments recorded by EthosEnergy - 9.6
107.6 191.3
Tax charge/(credit) 19.5 (8.5)
---------------------------------------------------- ----- -----
Continuing operations exceptional items, net of tax 127.1 182.8
---------------------------------------------------- ----- -----
In the first half of 2019, the Group disposed of Terra Nova
Technologies and the net loss on sale (after allocating goodwill)
of $9.4m has been included in exceptional items.
Redundancy, restructuring and integration costs of $41.7m (2018:
$71.7m) have been incurred during the year. The total includes
$11.8m (2018: $41.8m) of integration costs in relation to the
acquisition of Amec Foster Wheeler and were incurred in order to
generate efficiency savings with the enlarged business. These costs
are expected to largely cease in 2020. In addition, $26.1m (2018:
$23.8m) of additional redundancy and restructuring costs were
incurred, mainly in relation to the formation of TCS and $5.8m
(2018: $6.1m) of costs related to onerous property contracts, of
which $2.8m has been recognised as an impairment charge against the
IFRS 16 right of use asset. The total also includes $1.3m of
charges relating to joint ventures and a $3.3m gain with respect to
the assignation of a lease contract to an external party.
Investigation support costs of $10.5m (2018: $26.3m) have been
incurred during the year in relation to ongoing investigations by
the US Securities and Exchange Commission, the US Department of
Justice and UK Serious Fraud Office. During the year discussions
concerning possible resolutions of the investigations by the
authorities in the US, Brazil and Scotland have progressed to the
point where the Group believes that it is likely to be able to
settle the relevant matters with these authorities at an aggregate
cost of $46.0m, which is reflected as a provision in the financial
statements as described in note 20. As set out in note 33, Amec
Foster Wheeler made a disclosure to the UK Serious Fraud Office
("SFO") about these matters and, since April 2017, in connection
with the SFO's investigation into Unaoil, the SFO has required Amec
Foster Wheeler to produce information relating to any relationship
of Amec Foster Wheeler with Unaoil and certain other third parties.
As it is not possible to make a reliable estimate of the liability
that may arise, no provision has been made for this
element of the investigation. See note 33 for full details
In 2018, a charge of $10.4m was recorded in relation to a legacy
contract carried out by the Group's Gas Turbine Services business
prior to the formation of EthosEnergy. An arbitration hearing was
held in relation to a dispute between the Group and a former
subcontractor and this amount represents the additional provision
required to cover the settlement and related legal costs, $19.2m
having been provided in prior years.
A court ruling passed in October 2018 provided clarity in
respect of Guaranteed Minimum Pension ('GMP') equalisation in
relation to UK defined benefit pension schemes. As a result, the
Group allowed for GMP equalisation in determining its UK defined
benefit scheme liabilities with the increase in liabilities arising
of $31.9m being recorded as an exceptional charge in 2018.
In 2018, the Group carried out an impairment review of its
investment in the EthosEnergy joint venture. The recoverable amount
of the investment, based on management's estimate of fair value
less costs of disposal was lower than the book value and an
impairment charge of $41.4m was recorded in the income statement.
During 2018, there was also an impairment recorded by EthosEnergy
of $9.6m and this included restructuring and redundancy costs and
write downs in relation to one of its businesses.
An exceptional tax charge of $19.5m has been recorded in 2019
reflecting the write off of irrecoverable tax balances relating to
joint ventures.
The allocation of continuing exceptional items of $107.6m by
segment is as follows - AS EAAA $12.5m, AS Americas $7.8m, TCS
$22.6m, Central $65.5m, partially offset by a small credit in
Investment Services of $0.8m.
6 Taxation
2019 2018
$m $m
Current tax
Current year 100.4 120.4
Adjustment in respect of prior years (11.3) (11.9)
------------------------------------------------------ ------ ------
89.1 108.5
------------------------------------------------------ ------ ------
Deferred tax
Origination and reversal of temporary differences (25.6) (40.7)
Adjustment in respect of prior years 12.4 (6.7)
------ ------
(13.2) (47.4)
------------------------------------------------------ ------ ------
Total tax charge 75.9 61.1
------------------------------------------------------ ------ ------
Comprising
Tax on continuing operations before exceptional items 56.4 69.6
Tax on exceptional items in continuing operations 19.5 (8.5)
------------------------------------------------------ ------ ------
Total tax charge 75.9 61.1
------------------------------------------------------ ------ ------
2019 2018
Tax (credited)/charged/ to other comprehensive income/expense $m $m
Deferred tax movement on retirement benefit liabilities (6.8) 20.5
Tax on derivative financial instruments (1.4) (0.6)
Total (credited)/charged to other comprehensive income/expense (8.2) 19.9
--------------------------------------------------------------- ----- -----
2019 2018
Tax charged/(credited) to equity $m $m
Deferred tax relating to share option schemes 4.1 1.1
Current tax relating to share option schemes - (0.4)
Deferred tax impact of rate change (0.3) (1.8)
Other (0.7) -
Total charged/(credited) to equity 3.1 (1.1)
---------------------------------------------- ----- -----
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.
2019 2018
Reconciliation of applicable tax charge at statutory $m $m
rates to tax charge
Profit before taxation from continuing operations
(excluding profits from and impairment of joint ventures) 100.5 60.5
Applicable tax charge at statutory rates 15.1 10.5
Effects of:
Non-deductible expenses 12.7 10.3
Non-taxable income (2.1) (1.9)
Non-deductible expenses - exceptional 27.9 2.2
Non-taxable income - exceptional (1.5) (1.0)
Benefit of financing structure - (10.8)
Deferred tax recognition:
Recognition of deferred tax assets not previously
recognised (16.5) (1.4)
Utilisation of tax assets not previously recognised (29.7) -
Current year deferred tax assets not recognised 31.9 40.4
Write off of previously recognised deferred tax assets 0.8 0.1
Irrecoverable withholding tax 18.7 29.0
Additional US taxes 9.8 5.0
CFC charges 2.2 4.1
Uncertain tax provisions 5.0 (5.8)
Uncertain tax provisions - prior year adjustments (22.6) (25.5)
Uncertain tax provisions - prior year adjustments
- exceptional (1.5) (2.7)
Prior year adjustments 4.2 (4.3)
Prior year adjustments - exceptional 21.0 13.9
Impact of change in rates on deferred tax 0.5 (1.0)
----------------------------------------------------------- ------ ------
Total tax charge 75.9 61.1
----------------------------------------------------------- ------ ------
The weighted average of statutory tax rates was 15.0% in 2019
(2018: 17.4%).
The adjustments in respect of prior years' largely relates 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.
Net income tax liabilities in the Group balance sheet include
$149.7m (2018: $176.9m) 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 ($51.9m, 2018:
$54.7m), group financing ($33.0m, of which $11.6m relates to
deferred tax, 2018: $38.3m) and transfer pricing and tax residence
($22.2m, 2018: $26.5m). 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, $71.2m are currently under audit
by tax authorities and the provision reflects the maximum potential
liability. The outcome of the audits will determine if there is a
credit to taxation in 2020. Of the balance, $12.4m will become
statute barred for tax authority audit during 2020 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 outline key factors that may impact on future tax
charges:
From 1 January 2018 the US has introduced a charge in relation
to transactions with group companies (Base Erosion Anti-abuse Tax
"BEAT"). The rate of BEAT is currently 10%, from 1 January 2026 it
will increase to 12.5%. In December 2019 the IRS issued proposed
regulations which included the option of disclaiming for Federal
tax purposes the expenses which give rise to the BEAT charge. We
are assessing whether this would be a beneficial election factoring
in the impact on Federal and state taxes.
As part of the US tax reform, a new charge on the profits of
overseas subsidiaries of US entities was created called Global
Intangible Low-Taxed Income tax (GILTI). This resulted in a tax
charge in the current year. The Group is currently utilising
brought forward tax losses against taxable income, as these losses
are required to be used in advance of foreign tax credits. Once
these losses are extinguished, the GILTI charge will no longer
apply as there will be a Federal income tax charge on the profits
of overseas subsidiaries which will be offset by foreign tax
credits.
The UK Government included in their election manifesto the
reversal of the enacted change in the UK corporation tax rate from
19% to 17% from 1 April 2020. UK deferred tax is currently
calculated using the 17% rate. If the 2020 Finance Act changes the
rate back to 19% from 1 April, the change in rate will be reflected
in the 2020 financial statements.
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 Dividends
2019 2018
$m $m
------------------------------------------------------ ----- -----
Dividends on ordinary shares
Final 2018 dividend paid: 23.7 cents per share (Final
2017: 23.2 cents) 159.0 155.3
Interim 2019 dividend paid: 11.4 cents per share
(Interim 2018: 11.3 cents) 76.5 75.7
------------------------------------------------------ ----- -----
235.5 231.0
------------------------------------------------------ ----- -----
The directors are proposing a final dividend in respect of the
financial year ended 31 December 2019 of 23.9 cents per share. The
final dividend will be paid on 15 May 2020 to shareholders who are
on the register of members on 17 April 2020. The financial
statements do not reflect the final dividend until approved by the
shareholders, the payment of which will result in an estimated
$160.4m reduction in equity attributable to owners of the
parent.
8 Earnings per share
2019 2018
Earnings/(losses)
Earnings/(losses) attributable
attributable to owners
to owners Number Earnings of the Number Earnings
of the parent of shares per share parent of shares per share
$m m cents $m m cents
---------------------------- ----------------- ---------- ---------- ----------------- ---------- ----------
Basic pre-exceptional 199.1 670.9 29.7 173.9 669.6 26.0
Exceptional items, net
of tax (127.1) - (19.0) (182.8) - (27.3)
---------------------------- ----------------- ---------- ---------- ----------------- ---------- ----------
Basic 72.0 670.9 10.7 (8.9) 669.6 (1.3)
Effect of dilutive ordinary
shares - 15.8 (0.2) - - -
---------------------------- ----------------- ---------- ---------- ----------------- ---------- ----------
Diluted 72.0 686.7 10.5 (8.9) 669.6 (1.3)
---------------------------- ----------------- ---------- ---------- ----------------- ---------- ----------
Adjusted diluted earnings
per share calculation
---------------------------- ----------------- ---------- ---------- ----------------- ---------- ----------
Basic 72.0 670.9 10.7 (8.9) 669.6 (1.3)
Effect of dilutive ordinary
shares - 15.8 (0.2) - 13.4 -
---------------------------- ----------------- ---------- ---------- ----------------- ---------- ----------
72.0 686.7 10.5 (8.9) 683.0 (1.3)
Exceptional items, net
of tax 127.1 - 18.5 182.8 - 26.8
Amortisation related
to acquisitions, net
of tax 117.1 - 17.0 144.1 - 21.1
---------------------------- ----------------- ---------- ---------- ----------------- ---------- ----------
Adjusted diluted 316.2 686.7 46.0 318.0 683.0 46.6
---------------------------- ----------------- ---------- ---------- ----------------- ---------- ----------
Adjusted basic 316.2 670.9 47.1 318.0 669.6 47.5
---------------------------- ----------------- ---------- ---------- ----------------- ---------- ----------
As the Group has reported a basic earnings (2018: loss) per
ordinary share, any potential ordinary shares that are
anti-dilutive are included (2018: excluded) in the calculation of
diluted earnings per share. These options could potentially dilute
earnings per share in future periods. As adjusted diluted earnings
per share is a non-GAAP measure, the potential ordinary shares have
not been excluded from this calculation.
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. 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. 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. The 2018 comparatives were amended as
previously the add back in relation to amortisation included all
intangibles, whereas now only includes amortisation related to
acquisitions.
9 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 5,399.3 303.7 867.8 182.2 674.2 7,427.2
Exchange movements 54.4 14.2 9.7 0.9 6.4 85.6
Additions - 97.2 - - - 97.2
Disposals - (115.8) (23.2) - - (139.0)
Businesses divested
(note 30) (33.1) (0.6) - - (7.0) (40.7)
Reclassed as held
for sale (note 30) (210.9) (3.0) (39.8) - (15.2) (268.9)
Reclassification - 7.8 - - - 7.8
---------------------------- --------- ---------------- ------------------ -------- ------ -------
At 31 December 2019 5,209.7 303.5 814.5 183.1 658.4 7,169.2
---------------------------- --------- ---------------- ------------------ -------- ------ -------
Amortisation and impairment
At 1 January 2019 0.8 212.8 452.2 62.5 42.2 770.5
Exchange movements - 10.6 7.2 (0.1) 0.5 18.2
Amortisation charge - 98.2 62.9 47.4 33.9 242.4
Disposals - (115.8) (23.2) - - (139.0)
Businesses divested
(note 30) - (0.5) - - (0.5) (1.0)
Reclassed as held
for sale (note 30) - (2.1) (17.5) - (1.3) (20.9)
At 31 December 2019 0.8 203.2 481.6 109.8 74.8 870.2
---------------------------- --------- ---------------- ------------------ -------- ------ -------
Net book value at
31 December 2019 5,208.9 100.3 332.9 73.3 583.6 6,299.0
---------------------------- --------- ---------------- ------------------ -------- ------ -------
Cost
At 1 January 2018 5,535.3 358.2 894.6 184.7 687.4 7,660.2
Exchange movements (139.8) (20.2) (26.8) (2.5) (13.2) (202.5)
Additions - 58.3 - - - 58.3
Acquisitions 3.8 - - - - 3.8
Disposals - (97.9) - - - (97.9)
Reclassification - 5.3 - - - 5.3
---------------------------- --------- ---------------- ------------------ -------- ------ -------
At 31 December 2018 5,399.3 303.7 867.8 182.2 674.2 7,427.2
---------------------------- --------- ---------------- ------------------ -------- ------ -------
Amortisation and impairment
At 1 January 2018 0.8 245.6 389.1 12.7 9.1 657.3
Exchange movements - (16.7) (17.3) (0.7) (0.5) (35.2)
Amortisation charge - 81.8 80.4 50.5 33.6 246.3
Disposals - (97.9) - - - (97.9)
---------------------------- --------- ---------------- ------------------ -------- ------ -------
At 31 December 2018 0.8 212.8 452.2 62.5 42.2 770.5
---------------------------- --------- ---------------- ------------------ -------- ------ -------
Net book value at
31 December 2018 5,398.5 90.9 415.6 119.7 632.0 6,656.7
---------------------------- --------- ---------------- ------------------ -------- ------ -------
The carrying value of software held under deferred payment
arrangements at 31 December 2019 was $3.8m (2018: $7.3m). There
were no additions to software held under deferred payment
arrangements during the year (2018: $nil).
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 1 October 2019
(the "test date"). The Group has four CGUs and Goodwill is
monitored by management at CGU level (there is no goodwill
attributable to the Investment Services business). The allocation
of Goodwill by CGU as at the test date is shown in the table below.
Goodwill and other intangible assets in respect of the nuclear and
industrial services businesses have been classified as held for
sale and so have been tested for impairment separately.
Value-in-use calculations have been prepared for each CGU using
the cash flow projections included in the financial budgets
prepared by management and approved by the Board for 2020. The
budget is based on various assumptions including market outlook,
resource utilisation, contract backlog, contract margins and
assumed contract awards. The short-term EBITDA growth rate
assumptions used in the 2019 impairment test were in the range of
7% to 15% in (2018: 2% to 19%).
The growth rates assumed from 2022 have also been used in the
calculation of the terminal value. The growth rates used do not
exceed the long-term average growth rates for the regions in which
the CGUs operate and are 3% for EAAA (2018: 3%); 2% for ASA (2018:
2%); and 2.4% (2018: 2% - 3%) for TCS.
The cash flows have been discounted using discount rates
appropriate for each CGU, and these rates are reviewed annually.
The pre-tax rates used for the 2019 review are as follows : 11.3%
for Asset Solutions EAAA (2018: 11.4%), 11.5% for Asset Solutions
Americas (2018: 11.6%) and 12.1% (2018: 11.4% - 11.8%) for
Technical Consulting Solutions (the equivalent post-tax rates are
9.4%, 9.4%, 10.0% respectively) (2018: 9.5%, 9.5% and 9.25% -10%
respectively) and were derived from the Group WACC calculation with
specific adjustments for CGU specific risks including country risk
premiums.
The carrying value of the goodwill for each CGU as at the test
date is shown in the table below. No goodwill has been written off
during the current or prior year.
Cash Generating Unit Goodwill carrying
value ($m)
Asset Solutions EAAA 2,005.3
-----------------
Asset Solutions Americas 1,800.6
-----------------
Technical Consulting Solutions 1,308.9
-----------------
The headroom on Asset Solutions EAAA based on the assumptions
above was $386m. A sensitivity analysis has been performed assuming
the impact of reasonably possible changes to the assumptions used
in the impairment review, which did not result in an impairment. A
1.3% reduction in the long-term growth rate would result in a
reduction of the headroom to $nil and a 1.2% increase in the
discount rate would result in headroom of $nil. A reasonably
possible change in the short-term EBITDA growth rate did not result
in an impairment.
The headroom on Asset Solutions Americas based on the
assumptions above was $353m. A sensitivity analysis has been
performed assuming the impact of reasonably possible changes to the
assumptions used in the impairment review, which did not result in
an impairment. A 1.5% reduction in the long-term growth rate would
result in a reduction of the headroom to $nil and a 1.3% increase
in the discount rate would result in headroom of $nil. A reasonably
possible change in the short-term EBITDA growth rate did not result
in an impairment.
Reasonably possible changes in the critical assumptions did not
identify any potential impairments.
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 and none were identified.
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 is being amortised over periods of 2 to 5 years. Brands
recognised relate entirely to the acquisition of AFW and are being
amortised over a 20 year period.
Software and development costs includes internally generated
assets with a net book value of $18.2m at 31 December 2019 (2018:
$18.0m). $10.4m (2018: $6.5m) 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.
Goodwill of $244.0m was allocated to businesses disposed of
during the year ($33.1m) and businesses classified as held for sale
at the year end ($210.9m). Other intangibles with a total book
value of $43.7m were allocated to the businesses disposed of during
the year ($6.6m) and businesses classified as held for sale
($37.1m).
10 Property plant and equipment
Land and Buildings Plant and equipment Total
$m $m $m
---------------------------------------- ------------------ ------------------- ------
Cost
At 1 January 2019 104.4 241.1 345.5
Exchange movements 1.9 4.6 6.5
Additions 7.9 50.8 58.7
Disposals (15.7) (48.5) (64.2)
Transferred to held for sale (note 30) (0.9) (66.9) (67.8)
Reclassifications (6.4) 6.4 -
At 31 December 2019 91.2 187.5 278.7
---------------------------------------- ------------------ ------------------- ------
Accumulated depreciation and impairment
At 1 January 2019 37.5 109.5 147.0
Exchange movements 2.0 4.0 6.0
Charge for the year 10.5 36.0 46.5
Disposals (13.3) (33.4) (46.7)
Transferred to held for sale (note 30) (0.9) (37.5) (38.4)
Reclassifications 0.9 (0.9) -
At 31 December 2019 36.7 77.7 114.4
---------------------------------------- ------------------ ------------------- ------
Net book value at 31 December 2019 54.5 109.8 164.3
---------------------------------------- ------------------ ------------------- ------
Cost
At 1 January 2018 123.6 266.4 390.0
Exchange movements (4.6) (15.4) (20.0)
Additions 6.9 30.1 37.0
Acquisitions - 0.6 0.6
Disposals (8.9) (36.9) (45.8)
Reclassifications (4.5) 4.5 -
Transferred to held for sale (8.1) (8.2) (16.3)
---------------------------------------- ------------------ ------------------- ------
At 31 December 2018 104.4 241.1 345.5
---------------------------------------- ------------------ ------------------- ------
Accumulated depreciation and impairment
At 1 January 2018 37.1 119.4 156.5
Exchange movements (2.9) (12.0) (14.9)
Charge for the year 13.6 38.0 51.6
Disposals (7.0) (32.4) (39.4)
Impairment 0.7 - 0.7
Transferred to held for sale (4.0) (3.5) (7.5)
---------------------------------------- ------------------ ------------------- ------
At 31 December 2018 37.5 109.5 147.0
---------------------------------------- ------------------ ------------------- ------
Net book value at 31 December 2018 66.9 131.6 198.5
---------------------------------------- ------------------ ------------------- ------
The net book value of Land and Buildings includes $30.6m (2018:
$41.3m) of Long Leasehold and Freehold property and $23.9m (2018:
$25.6m) of Short Leasehold property. There were no material amounts
in assets under construction at 31 December 2019.
11 Leases
Land and Buildings Plant and equipment Total
Right of use assets $m $m $m
---------------------------------------------- ------------------ ------------------- -------
Net book value
At 1 January 2019 427.5 23.1 450.6
Exchange movements 1.4 0.1 1.5
Additions 103.2 17.4 120.6
Incentives received (9.0) - (9.0)
Disposals (12.3) - (12.3)
Classification as held for sale (note 30) (7.7) - (7.7)
Impairment (2.8) - (2.8)
Depreciation of right of use assets (101.1) (21.9) (123.0)
At 31 December 2019 399.2 18.7 417.9
---------------------------------------------- ------------------ ------------------- -------
Lease liabilities
At 1 January 2019 545.9 23.1 569.0
Exchange movements 1.4 0.1 1.5
Additions 103.2 17.4 120.6
Disposals (15.6) - (15.6)
Classification as held for sale (note 30) (7.2) - (7.2)
Interest expense related to lease liabilities 26.6 1.6 28.2
Repayment of lease liabilities (134.4) (21.2) (155.6)
At 31 December 2019 519.9 21.0 540.9
---------------------------------------------- ------------------ ------------------- -------
The Group has finance leases liabilities totalling $33.4m 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:
$m
---------------------------------------------------------------- --------------- ---------------- --------
Current lease liability 159.9
Non-current lease liability 414.4
--------------------------------------------------------------------------------------------------- --------
At 31 December 2019 574.3
--------------------------------------------------------------------------------------------------- --------
The following table shows the breakdown of lease expense between amounts charged to operating $m
profit and amounts charged to finance costs.
---------------------------------------------------------------------------------------------------- -------
Depreciation charge for right of use assets
Property 101.1
Plant and equipment 21.9
Short term and low value lease expense 10.7
Charged to operating profit 133.7
---------------------------------------------------------------------------------------------------- -------
Interest expense related to lease liabilities 28.2
---------------------------------------------------------------------------------------------------- -------
Charge to profit/(loss) before taxation for leases 161.9
---------------------------------------------------------------------------------------------------- -------
The short term and low value lease expense of $10.7m has been
included in cash flow from operating activities. The Group leases
various properties, plant and equipment throughout the world. The
majority of the lease liability relates to properties with leases
generally entered into for fixed periods of up to three 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. Previously, leases of property, plant and equipment were
classified as either finance or operating leases. From 1 January
2019, leases are recognised as a right of use asset and
corresponding liability, once the asset is available for use by the
Group.
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.
12 Investment in joint ventures
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 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 based 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%)
2019 2018 2019 2018
$m $m $m $m
---------------------------------- --------- --------- --------- ---------
Non-current assets 138.7 180.2 53.4 42.8
Current assets 548.9 631.2 123.4 137.5
Current liabilities (334.3) (355.7) (61.1) (63.6)
Non-current liabilities (93.0) (29.4) (3.3) (3.1)
---------------------------------- --------- --------- --------- ---------
Net assets 260.3 426.3 112.4 113.6
---------------------------------- --------- --------- --------- ---------
Wood Group share 132.8 217.4 56.2 56.8
Impairments and other adjustments (94.4) (188.4) - -
---------------------------------- --------- --------- --------- ---------
Wood Group investment 38.4 29.0 56.2 56.8
Revenue 946.3 904.5 215.1 222.8
Cost of sales (810.1) (794.6) (153.7) (158.7)
Administrative expenses (102.2) (95.6) (31.0) (33.0)
Exceptional items (2.6) (19.0) - -
---------------------------------- --------- --------- --------- ---------
Operating profit/(loss) 31.4 (4.7) 30.4 31.1
Finance (expense)/income (10.8) (5.7) (0.4) 0.2
---------------------------------- --------- --------- --------- ---------
Profit/(loss) before tax 20.6 (10.4) 30.0 31.3
Tax (2.2) (2.3) (6.0) (6.4)
---------------------------------- --------- --------- --------- ---------
Post-tax profit/(loss) from joint
ventures 18.4 (12.7) 24.0 24.9
---------------------------------- --------- --------- --------- ---------
Wood Group share 9.4 (6.5) 12.0 12.5
---------------------------------- --------- --------- --------- ---------
Cash and cash equivalents amounted to $63.0m (2018: $50.2m) and
$1.7m (2018: $2.2m) for EthosEnergy and RWG respectively.
Depreciation amounted to $4.6m (2018: $11.4m) and $2.0m (2018:
$1.3m) for EthosEnergy and RWG respectively.
Amortisation amounted to $nil (2018: $1.5m) and $2.6m (2018:
$2.6m) for EthosEnergy and RWG respectively.
EthosEnergy's net borrowings, at 31 December 2019 amounted to
$92.7m (2018: $110.6m)
RWG had net borrowings at 31 December 2019 of $4.3m (2017:
$2.4m)
The aggregate carrying amount of the Group's other equity
accounted joint ventures, which individually are not material,
amounted to $73.7m at 31 December 2019 (2018: $82.4m).
The Group's share of its joint venture income and expenses is
shown below.
2019 2018
$m $m
Revenue 1,106.8 1,021.6
Cost of sales (947.4) (873.3)
Administrative expenses (91.2) (79.8)
Exceptional items (1.3) (9.6)
--------------------------------------------- ------- -------
Operating profit 66.9 58.9
Net finance expense (5.9) (8.1)
--------------------------------------------- ------- -------
Profit before tax 61.0 50.8
Tax (12.8) (16.4)
--------------------------------------------- ------- -------
Share of post-tax profit from joint ventures 48.2 34.4
--------------------------------------------- ------- -------
The movement in investment in joint ventures is shown below.
$m
------------------------------------------- ------
At 1 January 2019 168.2
Exchange movements on retranslation of
net assets 2.7
Additional investment in joint ventures 0.8
Share of profit after tax 48.2
Impairment of investments (1.3)
Dividends received (43.0)
Reclassification of amounts due from joint
ventures 54.5
Transferred to assets held for sale (note
30) (61.8)
At 31 December 2019 168.3
-------------------------------------------- ------
The Group is in the process of disposing of an investment in a
non-core joint venture and as a result the investment balance at 31
December 2019 of $61.8m has been transferred to assets held for
sale as the Group expects to dispose of its investment in the first
half of 2020.
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 $54.5m reclassified in the table above relates to the offset
of a credit balance in investment in joint ventures against amounts
that had previously been recognised as receivable from joint
ventures. The reclassification has no impact on the income
statement or the cash flow statement and no effect on net
assets.
A full list of subsidiary and joint venture entities is included
in note 37.
Other investments
Other investments include $81.4m (2018: $76.4m) relating to the
US SERP referred to in note 32. 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 18).
13 Inventories
2019 2018
$m $m
Materials 3.5 4.3
Work in progress 1.4 3.7
Finished goods and goods for resale 9.6 5.7
------------------------------------ ---- ----
14.5 13.7
------------------------------------ ---- ----
14 Trade and other receivables
2019 2018
$m $m
Trade receivables 1,034.6 1,391.9
Less: provision for impairment of trade receivables (91.1) (104.8)
---------------------------------------------------- ------- -------
Trade receivables - net 943.5 1,287.1
Gross amounts due from customers 962.8 935.1
Prepayments 161.1 157.2
Amounts due from joint ventures 26.9 97.2
Asbestos related insurance recoveries 16.2 16.3
Research and development credits 94.1 -
Other receivables 101.4 62.8
---------------------------------------------------- ------- -------
Trade and other receivables - current 2,306.0 2,555.7
Long term receivables - asbestos related insurance
recoveries 75.1 90.2
Long term receivables - other 20.6 37.9
---------------------------------------------------- ------- -------
Total receivables 2,401.7 2,683.8
---------------------------------------------------- ------- -------
As at 31 December 2019 the Group had received $198.4m (2018:
$153.5m) 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.
Research and development credits are presented separately at 31
December 2019. In previous periods, R&D credits were presented
in a combination of tax receivable, prepayments and other
receivable accounts.
Financial assets
2019 2018
$m $m
Restricted cash - 11.7
Derivative financial instruments (note 19) 10.1 2.6
------------------------------------------- ---- ----
10.1 14.3
------------------------------------------- ---- ----
The restricted cash held at 31 December 2018 was cash that was
subject to an attachment order. The restricted cash balance was
included in the Group's net debt figure (see note 29).
The Group's trade receivables balance is shown in the table
below.
Trade Trade
receivables receivables
- Provision -
Gross for impairment Net Receivable
31 December 2019 $m $m $m days
Asset Solutions EAAA 349.9 (41.6) 308.3 70
Asset Solutions Americas 282.6 (14.8) 267.8 22
Technical Consulting Solutions 361.8 (15.9) 345.9 82
Investment Services 40.3 (18.8) 21.5 87
Total Group 1,034.6 (91.1) 943.5 56
------------------------------- ------------ --------------- ------------ ----------
Trade Trade
receivables receivables
- Provision -
Gross for impairment Net Receivable
31 December 2018 $m $m $m days
------------------------------- ------------ --------------- ------------ ----------
Asset Solutions EAAA 470.4 (50.3) 420.1 67
Asset Solutions Americas 396.1 (21.9) 374.2 45
Technical Consulting Solutions 461.5 (15.3) 446.2 78
Investment Services 63.9 (17.3) 46.6 177
------------------------------- ------------ --------------- ------------ ----------
Total Group 1,391.9 (104.8) 1,287.1 64
------------------------------- ------------ --------------- ------------ ----------
Receivable days are calculated by allocating the closing trade
receivables balance to current and prior period revenue. A
receivable days calculation of 56 indicates that closing trade
receivables represent the most recent 56 days of revenue.
A provision for the impairment of trade receivables is
established when there is objective evidence that the Group will
not be able to collect all amounts due according to the terms of
the original receivables.
The ageing of the provision for impairment of trade receivables
is as follows:
2019 2018
$m $m
--------------- ---- -----
Up to 3 months 1.4 2.1
Over 3 months 89.7 102.7
--------------- ---- -----
91.1 104.8
--------------- ---- -----
The movement on the provision for impairment of trade
receivables is as follows:
Asset
Solutions Asset Technical Consulting
EAAA Solutions Americas Solutions Investment Services Total
2019 $m $m $m $m $m
------------------------------ ---------- ------------------- -------------------- ------------------- ------
At 1 January 50.3 21.9 15.4 17.2 104.8
Exchange movements (0.3) 0.2 0.2 - 0.1
Provided during year 3.4 10.3 5.9 10.8 30.4
Utilised during year (5.7) (9.6) (4.2) - (19.5)
Released during year (5.1) (8.0) (1.3) (9.2) (23.6)
Reclassified to held for sale (1.0) - (0.1) - (1.1)
------------------------------ ---------- ------------------- -------------------- ------------------- ------
At 31 December 41.6 14.8 15.9 18.8 91.1
------------------------------ ---------- ------------------- -------------------- ------------------- ------
2018
At 1 January 48.7 24.7 17.0 2.6 93.0
Exchange movements (2.5) - - - (2.5)
Provided during year 4.9 6.3 4.4 17.7 33.3
Released during year (0.8) (9.1) (6.0) (3.1) (19.0)
--------------------- ----- ----- ----- ----- ------
At 31 December 50.3 21.9 15.4 17.2 104.8
--------------------- ----- ----- ----- ----- ------
The other classes within trade and other receivables do not
contain impaired assets.
Included within gross trade receivables of $1,034.6m above
(2018: $1,391.9m) and gross amounts due from customers of $962.8m
(2018: $935.1m) are contract assets of $300.8m (2018: $449.6m)
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:
2019 2018
$m $m
Up to 3 months overdue 153.3 197.9
Over 3 months overdue 147.5 251.7
----------------------- ----- -----
300.8 449.6
----------------------- ----- -----
The above analysis excludes retentions relating to contracts in
progress of $121.8m (2018: $104.5m).
15 Cash and cash equivalents
2019 2018
$m $m
Cash at bank and in hand 1,836.9 1,335.2
Short-term bank deposits 10.1 17.5
------------------------- ------- -------
1,847.0 1,352.7
------------------------- ------- -------
Cash at bank and in hand at 31 December 2019 includes $1,448.6m
(2018: $942.0m) 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.
Cash of $54.9m is included in assets held for sale (see note
30).
The effective interest rate on short-term deposits at 31
December 2019 was 1.5% and these deposits have an average maturity
of 6 days.
16 Trade and other payables
2019 2018
$m $m
Trade payables 1,016.5 1,050.3
Gross amounts due to customers 480.5 407.5
Other tax and social security payable 53.6 71.8
Accruals 642.9 567.4
Deferred and contingent consideration (note 19) 20.0 21.8
Finance leases - 9.8
Derivative financial instruments 3.9 7.2
Amounts due to joint ventures 4.4 3.1
Asbestos related payables 52.0 51.2
Other payables 345.8 336.0
---------- -------
2,619.6 2,526.1
------------------------------------------------ ---------- -------
Gross amounts due to customers included above represent payments
on account received in excess of amounts due from customers on
fixed price contracts. The increase in gross amounts due to
customers is mainly explained by a significant advance received in
respect of a major contract which was ongoing during 2019.
Accruals includes amounts due to suppliers and sub-contractors
that have not yet been invoiced, unpaid wages, salaries and
bonuses.
Deferred and contingent consideration represents amounts payable
on acquisitions made by the Group. The amount included in the table
above is expected to be paid within one year from the balance sheet
date.
Finance leases are now included in the leases liability (note
11).
Other payables includes project related and other
liabilities.
17 Borrowings
2019 2018
$m $m
----------------------------------------------------------- ------- -------
Bank loans and overdrafts due within one year or on demand
Unsecured 1,752.7 984.5
----------------------------------------------------------- ------- -------
Non-current bank loans
Unsecured 693.3 1,542.3
Senior loan notes
Unsecured 879.9 375.0
----------------------------------------------------------- ------- -------
Total non-current borrowings 1,573.2 1,917.3
----------------------------------------------------------- ------- -------
Borrowings of $1,448.6m (2018: $942.0m) 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. The increase in these borrowings and the
$297.6m term loan now falling due in October 2020 are the principal
causes of the increase in current borrowings.
Bank overdrafts are denominated in a number of currencies and
bear interest based on LIBOR or the relevant foreign currency
equivalent.
The Group had total facilities of $3,263.3m as at 31 December
2019, which comprised a 5 year $1,750.0m revolving credit facility
maturing in May 2022, $879.9m of senior loan notes in the US
private placement market with varying maturities, a $297.6m 3 year
term loan maturing in October 2020, $235.8m of other banking
facilities and a new $100.0m bilateral term loan maturing in May
2022.
In February 2020, the Group negotiated a further $200.0m of
bilateral term loans, which will be used to partially settle the 3
year term loan maturing in October 2020.
Of the non-current borrowings of $1,573.2m, $19.9m is
denominated in sterling with the balance in US dollars.
The Group's principal borrowing facilities at 31 December 2019
are set out in the table below.
Facility Total available Drawn at 31 December 2019 Undrawn at 31 December 2019
$m $m $m Repayable
------------------- ---------------- ------------------------- --------------------------- -------------
Term loan 297.6 297.6 - October 2020
Term loan 100.0 100.0 - May 2022
Bilateral facility 1,750.0 600.0 1,150.0 May 2022
Senior loan notes 879.9 879.9 - Various dates
Other facilities 235.8 6.5 229.3 Various dates
Unamortised fees - (6.7) 6.7 N/A
3,263.3 1,877.3 1,386.0
------------------- ---------------- ------------------------- --------------------------- -------------
The above table excludes b orrowings of $1,448.6m that are part
of the Group's cash pooling arrangements.
The Group has $879.9m (2018: $375.0m) of unsecured senior loan
notes issued in the US private placement market. The notes mature
at varying dates between 2021 and 2031 as shown in the table below.
Interest is payable at an average rate of 4.31% (2018: $3.74%).
Repayable 2019 2018
$m $m
-------------- ----------- -----
August 2021 30.0 30.0
November 2021 47.0 47.0
July 2022 35.0 -
July 2024 25.0 -
August 2024 120.0 120.0
November 2024 50.0 50.0
July 2026 126.9 -
August 2026 128.0 128.0
February 2027 40.0 -
February 2029 100.0 -
July 2029 129.5 -
July 2031 48.5 -
879.9 375.0
-------------- ----------- -----
The effective interest rates on the Group's bank loans and
overdrafts at the balance sheet date were as follows:
2019 2018
% %
------------------ ----------- ----
US dollar 2.60 3.57
Sterling 2.24 2.09
Euro 1.15 1.15
Australian dollar 1.70 2.36
------------------ ----------- ----
The carrying amounts of the Group's borrowings are denominated
in the following currencies:
2019 2018
$m $m
------------------ ----------- -------
US Dollar 2,655.9 2,177.2
Sterling 505.7 625.9
Euro 20.4 51.0
Australian dollar 127.0 35.8
Other 16.9 11.9
------------------ ----------- -------
3,325.9 2,901.8
------------------ ----------- -------
The Group is required to issue tender bonds, performance bonds,
retention bonds, advance payment bonds and standby letters of
credit to certain customers. At 31 December 2019, the Group's bank
facilities relating to the issue of bonds, guarantees and letters
of credit amounted to $1,921.4m (2018: $1,901.4m). At 31 December
2019, these facilities were 55% utilised (2018: 46%).
Borrowing facilities
The Group has the following undrawn borrowing facilities
available at 31 December:
2019 2018
$m $m
Expiring within one year 229.3 162.2
Expiring between two and five years 1,156.7 1,091.4
1,386.0 1,253.6
------------------------------------ ------- -------
All undrawn borrowing facilities are floating rate facilities.
The facilities expiring within one year are annual facilities
subject to review at various dates during 2020. The Group was in
compliance with its bank covenants throughout the year.
18 Other non-current liabilities
2019 2018
$m $m
------------------------------------------------ ----- -----
Deferred and contingent consideration (note 19) - 4.8
Finance leases - 25.2
Derivative financial instruments 10.5 -
Other payables 129.0 194.4
------------------------------------------------ ----- -----
139.5 224.4
------------------------------------------------ ----- -----
Deferred and contingent consideration represents amounts payable
on acquisitions made by the Group.
Other payables include $81.4m (2018: $76.4m) relating to the US
SERP pension arrangement referred to in note 32 and unfavourable
leases of $9.8m (2018: $70.7m). Prior to 2019, unfavourable leases
were initially measured at fair value and were amortised over the
life of the lease and presented as other payables. At 1 January
2019 unfavourable lease liabilities were offset against the right
of use asset recognised on transition to IFRS 16. Unfavourable
lease liabilities at 31 December 2019 represent non-lease
components, such as facilities costs which are not included within
the IFRS 16 lease liability.
19 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.
2019 2018
2019 2018 Carrying Carrying
Notional Notional amount amount
contract contract and and
amount amount fair value fair value
$m $m $m $m
-------------------- --------- --------- ----------- -----------
Current assets 117.5 37.7 3.6 0.5
Current liabilities (47.0) (50.3) (0.8) (2.0)
-------------------- --------- --------- ----------- -----------
A net foreign exchange gain of $1.9m (2018: loss $1.4m) 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.
2019 2018
2019 2018 Carrying Carrying
Notional Notional amount amount
contract contract and and
amount amount fair value fair value
$m $m $m $m
-------------------- --------- --------- ----------- -----------
Current assets 654.2 236.4 6.5 2.1
Current liabilities (196.1) (160.4) (3.1) (1.9)
-------------------- --------- --------- ----------- -----------
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 5%. 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 and then uses
interest rate swaps to generate the desired interest profile and to
manage the Group's exposure to interest rate fluctuations. At 31
December 2019, 34% (2018: 21%) of the Group's borrowings were at
fixed rates after taking account of interest rate swaps. 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, deposit cash with a financial institution with a credit
rating of 'A' 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.
2019 2018
Carrying Carrying
2019 2018 amount amount
Hedged Hedged and and
amount amount fair value fair value
$m $m $m $m
-------------------- ------- ------- ----------- -----------
Interest rate swaps 250.0 250.0 (10.5) (3.3)
-------------------- ------- ------- ----------- -----------
A net foreign exchange loss of $7.2m (2018: $3.3m) was
recognised in the hedging reserve as a result of fair value
movements on interest rate swaps designated as cash flow
hedges.
If average interest rates had been 1% higher or lower during
2019 (2018: 1%), post-tax profit for the year would have been
$10.6m lower or higher respectively (2018: $13.9m). 1% 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. 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 has a broad customer base and management believe that
no further credit risk provision is required in excess of the
provision for impairment of trade receivables.
Management review trade receivables based on receivable days
calculations to assess performance. A table showing trade
receivables and receivable days is provided in note 14. 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 2019 was
$1,901.9m (2018: $1,388.6m). 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 'A' or better where possible. 100% of cash held on
deposit at 31 December 2019 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 $1,386.0m undrawn portion of
the Group's committed banking facilities. The 2019 average net debt
(excluding leases) was $1,932.3m.
The cash balance and undrawn portion of the Group's committed
banking facilities can fluctuate throughout the year. The final
2018 dividend of $159.0m was paid to shareholders in May 2019 and
the 2019 interim dividend of $76.5m was paid in September 2019 and
these typically represent the Group's peak drawdown months. At both
these points the Group was within its committed facility levels.
Around the covenant remeasurement dates of 30 June and 31 December
the Group's net debt is typically lower than these peaks due to a
combination of factors including a strong focus on collection of
receipts from customers and the timing of payments to suppliers.
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 2019, 90% (2018: 100%) 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 a 5 year $1,750.0m
revolving credit facility maturing in May 2022, a $297.6m 3 year
term loan maturing in October 2020 and a new $100.0m bilateral term
loan maturing in May 2022. The $297.6m term loan repayable in
October 2020 was reduced by $111.0m following the disposal of the
Industrial Services business in February 2020 and the remaining
balance was repaid following receipt of the new $200.0m bilateral
loan facilities entered into in February 2020. The nuclear
disposal, which completed in March 2020 generated an additional
cash inflow of around $319.0m .
The Group has $879.9m of unsecured senior loan notes issued in
the US private placement market. The notes mature in various
tranches between August 2021 and 2031.
(d) Capital risk
The Group seeks to maintain an optimal capital structure by
monitoring its ratio of net debt to EBITDA, its interest cover and
its gearing ratio.
The ratio of net debt to Adjusted EBITDA at 31 December 2019 was
2.0 times (2018: 2.2 times). This ratio is calculated by dividing
net debt before leases by Adjusted EBITDA, excluding the impact of
IFRS 16.
Interest cover is calculated by dividing adjusted EBITDA,
excluding the impact of IFRS 16, by net finance expense and was 5.6
times for the year ended 31 December 2019 (2018: 6.2 times).
Gearing is calculated by dividing net debt, before leases, by
equity attributable to owners of the parent. Gearing at 31 December
2019 was 32.1% (2018: 33.0%).
Deferred and contingent consideration
Deferred and contingent consideration is payable on the
acquisition of businesses based on earn out arrangements and is
initially recognised at fair value. The amount payable is dependent
on the post-acquisition profits of the acquired entities and the
provision made is based on the Group's estimate of the likely
profits of those entities based on the relevant Acquisition
Approval Paper submitted to the Group Board. Where actual profits
are higher or lower than the Group's estimate and the amount of
contingent consideration payable is consequently different to the
amount estimated then the variance is charged or credited to the
income statement. Where deferred and contingent consideration is
payable after more than one year the estimated liability is
discounted using an appropriate rate of interest. The fair value of
contingent consideration is not based on observable market data and
as such the valuation method is classified as level 3 in the fair
value hierarchy. The process for valuation is consistently applied
to all acquisitions.
The table below presents the changes in level 3 financial
instruments during the year:
2019 2018
Contingent consideration arising from business combinations $m $m
------------------------------------------------------------- ----- ------
At 1 January 26.6 61.2
Exchange movements 0.5 (1.0)
Interest relating to discounting of contingent consideration 0.4 1.0
Payments during the year (5.6) (36.8)
Amounts (released)/charged to the income statement (1.9) 2.2
------------------------------------------------------------- ----- ------
At 31 December 20.0 26.6
------------------------------------------------------------- ----- ------
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.
Between Between
Less than 1 and 2 2 and 5 Over 5
1 year years years years
At 31 December 2019 $m $m $m $m
------------------------------ --------- -------- -------- ------
Borrowings 1,821.3 137.9 1,039.9 659.4
Trade and other payables 2,566.0 - - -
Lease liabilities 161.0 131.2 204.3 122.4
Other non-current liabilities - 47.6 91.9 -
------------------------------ --------- -------- -------- ------
At 31 December 2018
------------------------------ --------- -------- -------- ------
Borrowings 1,053.7 958.2 805.6 316.2
Trade and other payables 2,454.3 - - -
Other non-current liabilities - 150.9 76.4 -
------------------------------ --------- -------- -------- ------
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
2019 was $689.4m (book value $693.3m) (2018: $1,560.7m, book value
$1,542.3m). The fair value of the US Private Placement debt at 31
December 2019 was $883.7m (book value $879.9m) (2018: $366.9m, book
value $375.0m).
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 2019 and 31 December 2018, there were no
transfers into or out of level 2 fair value measurements.
20 Provisions
Asbestos Litigation Project
related Insurance related related
litigation and property provisions provisions Total
$m $m $m $m $m
At 1 January 2019 453.4 71.2 91.1 375.5 991.2
Adjustment on initial
application of IFRS
16 - (17.7) - - (17.7)
--------------------------- ------------ -------------- ----------- ------------ -------
Adjusted opening balance 453.4 53.5 91.1 375.5 973.5
Reclassifications - 65.8 (4.0) (69.1) (7.3)
Utilised (49.9) (10.9) (11.2) (109.5) (181.5)
Charge to income statement 18.3 14.7 46.0 27.6 106.6
Released to income
statement (4.9) (14.4) (10.1) (71.7) (101.1)
Reclassed to held for
sale - - - (3.0) (3.0)
Exchange movements 2.0 1.5 - 1.5 5.0
At 31 December 2019 418.9 110.2 111.8 151.3 792.2
--------------------------- ------------ -------------- ----------- ------------ -------
Presented as
Current - 11.3 57.0 72.3 140.6
Non-current 418.9 98.9 54.8 79.0 651.6
--------------------------- ------------ -------------- ----------- ------------ -------
The opening insurance and property provision balance has been
restated to reflect onerous lease provisions of $17.7m which were
set against the opening right of use asset recognised on transition
to IFRS 16.
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.
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.
Some of Amec Foster Wheeler US subsidiaries are named as
defendants in numerous lawsuits and out-of-court administrative
claims pending in the US in which the plaintiffs claim damages for
alleged bodily injury or death arising from exposure to asbestos in
connection with work performed, or heat exchange devices assembled,
installed and/or sold, by these entities. 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
the Group 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, as appropriate.
The total liability recorded in the Group's balance sheet at 31
December 2019 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:
2019 2018
US UK Total US UK Total
$m $m $m $m $m $m
--------------------------------- ------ ------ ------- ------- ------ -------
Asbestos related provision
Gross provision 485.8 59.2 545.0 543.3 61.7 605.0
Effect of discounting (74.1) - (74.1) (100.4) - (100.4)
Net provision 411.7 59.2 470.9 442.9 61.7 504.6
--------------------------------- ------ ------ ------- ------- ------ -------
Insurance recoveries
Gross recoveries (38.4) (54.5) (92.9) (52.2) (57.2) (109.4)
Effect of discounting 1.6 - 1.6 2.9 - 2.9
--------------------------------- ------ ------ ------- ------- ------ -------
Net recoveries (36.8) (54.5) (91.3) (49.3) (57.2) (106.5)
--------------------------------- ------ ------ ------- ------- ------ -------
Net asbestos related liabilities 374.9 4.7 379.6 393.6 4.5 398.1
--------------------------------- ------ ------ ------- ------- ------ -------
Presented in accounts as
follows
Provisions - non-current 418.9 453.4
Trade and other payables 52.0 51.2
Trade and other receivables (16.2) (16.3)
Long term receivables (75.1) (90.2)
--------------------------------- ------ ------ ------- ------- ------ -------
379.6 398.1
--------------------------------- ------ ------ ------- ------- ------ -------
In connection with updating the estimated asbestos liability and
related assets, a net interest charge of $9.7m for the time value
of money and a yield curve charge in EBITDA of $8.9m for a
reduction in the US Federal funds rate in 2019 have been
recorded.
A summary of the Group's US asbestos claim activity is shown in
the table below:
2019 2018
Number of open claims Number Number
------------------------------------------------------- -------- --------
At 1 January 64,370 70,120
New claims 2,760 2,700
Claims resolved (5,060) (8,450)
------------------------------------------------------- -------- --------
At 31 December 62,070 64,370
Claims not valued in liability (47,280) (50,160)
------------------------------------------------------- -------- --------
Open claims valued in liability at 31 December 14,790 14,210
------------------------------------------------------- -------- --------
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 its review of 2019 activity, the Group's advisors
recommended changes to the current forecast to include adjustments
for payments made in 2019 ($49.9m), adjustments to update risk
premium assumptions and adjustments to reflect the impact of
discounting. In 2019, the liability for asbestos indemnity and
defence costs to 2050 was calculated at gross nominal amount of
$545.0m (present value $470.9m), 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 period from 2009 to 2019, the average combined indemnity
and defence cost per resolved claim has been approximately $5k. The
average cost per resolved claim is increasing and management
believe it will continue to increase in the future. 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 Group's asbestos-related assets have
been discounted at an appropriate rate of interest.
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 60-70
25% change in forecasted number of new claims 55-65
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 annual
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 Annual charge to EBITDA
Duration 2019 $m
---------- ----------------------- ------------------------
10 year 1.92% 22.5
20 year 2.25% 12.9
30 year 2.39% 8.9
----------- ----------------------- ------------------------
A change of 0.1% in the 30 year US federal funds rate would give
rise to a change to the income statement charge/credit of
approximately $3m.
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 US asbestos-related net cash
impact for indemnity and defence costs and collection of insurance
proceeds:
2019 2018
$m $m
---------------------------------------------------------- ------ ------
Asbestos litigation, defence and case resolution payments 49.9 46.6
Insurance proceeds (14.3) (14.6)
Net asbestos related payments 35.6 32.0
---------------------------------------------------------- ------ ------
The Group expects to have a net cash outflow of around $36.0m as
a result of asbestos liability indemnity and defence payments in
excess of insurance proceeds during 2020. This estimate assumes no
settlements with insurance companies and no elections by the Group
to fund additional payments. As the Group continues to collect cash
from insurance settlements, the asbestos-related insurance
receivable recorded on our consolidated balance sheet will continue
to decrease.
The Group has discounted the expected future cash flows with
respect to the asbestos related liabilities and the expected
insurance recoveries using discount rates determined by reference
to appropriate risk free market interest rates.
Insurance and property provisions
The Group has liabilities in relation to its captive insurance
companies and for property dilapidations.
The Group currently has two captive insurance companies, Garlan
Insurance Limited which is active and is based in Guernsey and
Atlantic Services Limited which is dormant and is based in Bermuda.
These companies provide or provided insurance solely to other Group
companies and do not provide any insurance to third parties. The
provisions recorded by the insurance captives 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.
In prior years the provisions relating to Garlan Insurance
Limited were included in accruals and they have been moved to
provisions during 2019 to ensure consistency of treatment.
Property dilapidations relate to the cost of restoring leased
property back into its original, pre-let condition.
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
settlement 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 materially from the amounts that are
recognised in the financial statements. Litigation related
provisions include contingent liabilities acquired with Amec Foster
Wheeler, which were originally measured at fair value on
acquisition. These liabilities continue to be recognised until the
liability is settled, cancelled or expired at the higher of the
fair value initially recorded or the amount recognised in
accordance with IAS 37.
Chemical Plant Litigation in the United States
In 2013, one of Amec Foster Wheeler plc's subsidiaries
contracted to engineer, procure and construct a chemical plant for
a client in Texas. In December 2015 the client partially terminated
the contract and in September 2016, terminated the remainder of the
contract and commenced a lawsuit in Texas against the subsidiary
and also Amec Foster Wheeler plc, seeking damages for breach of
contract and warranty, gross negligence, and fraud. The claim
amount is unspecified but the client alleges that the projected
cost for the assigned scope of work is approximately $800 million
above the alleged estimate and that the subsidiary's delays have
caused it to suffer continuing monthly damages of $25 million due
to the alleged late completion of the facility and resultant delay
to the client's ability to sell the expected products from the
facility. We understand that the facility was completed
mechanically in late 2017 and began commercial operation in early
2018. The client seeks recovery of actual and punitive damages, as
well as the disgorgement of the full project fixed fee paid to the
subsidiary (approximately $66.5 million).
The Group believes that the claims lack legal and factual merit
but provided for an amount representing the fair value of the
exposure upon acquisition of Amec Foster Wheeler. The estimate that
the subsidiary provided was in connection with the client's initial
request for a lump sum bid and highly conditioned. The contract
that was ultimately signed, and which governs the dispute, is a
reimbursable cost plus fixed fee contract, with no guaranteed price
or schedule, wherein the client assumed joint responsibility for
management of the work and development of the project schedule.
Liability for consequential damages is barred, except in the case
of wilful misconduct. Except for gross negligence, wilful
misconduct, and warranty claims, overall liability is capped at 10
percent of the
contract price (or approximately $100 million). The Group has
denied the claims and intend to vigorously defend the lawsuit. It
has also interposed a counterclaim in an amount to be determined.
The lawsuit is in the early stages of proceedings and it would be
premature to predict the ultimate outcome of the matter. As at 31
December 2019 the Group has a provision of $56m (2018: $67m). This
includes $29m included as a fair value adjustment on the
acquisition of Amec Foster Wheeler.
I nvestigations
The Group has received voluntary requests for information from,
and continues to cooperate with, the US Securities and Exchange
Commission ("SEC") and the US Department of Justice ("DOJ") in
connection with their ongoing investigations into Amec Foster
Wheeler in relation to Unaoil and the historical use of agents and
certain other business counterparties by Amec Foster Wheeler and
its legacy companies in various jurisdictions.
Independently, the Group has conducted an internal investigation
into the historical engagement of Unaoil by legacy Wood Group
companies, reviewing information available to the Group in this
context. This internal investigation confirmed that a legacy Wood
Group joint venture engaged Unaoil and that the joint venture made
payments to Unaoil under agency agreements. In September 2017, the
Group informed the Crown Office and Procurator Fiscal Service
("COPFS"), the relevant authority in Scotland, of the findings of
this internal investigation. The Group has since taken steps to
conclude its investigation of these matters and has now submitted
its report on possible bribery and corruption offences to the
COPFS. These matters are now being considered by Scotland's Civil
Recovery Unit as part of the self-reporting initiative applicable
to Scotland.
Discussions concerning possible resolutions of the
investigations by the authorities in the US, Brazil and Scotland
have progressed to the point where the Group believes that it is
likely to be able to settle the relevant matters with these
authorities at an aggregate cost of $46.0m and this is reflected as
a provision at 31 December 2019. Achieving resolution of the
relevant matters will involve negotiations with five authorities in
three separate jurisdictions, and accordingly there is no certainty
that resolution will be reached with any or all of those
authorities or that the aggregate settlement amount will not exceed
the amount of the provision.
As set out in note 33, Amec Foster Wheeler made a disclosure to
the UK Serious Fraud Office ("SFO") about these matters and, since
April 2017, in connection with the SFO's investigation into Unaoil,
the SFO has required Amec Foster Wheeler to produce information
relating to any relationship of Amec Foster Wheeler with Unaoil and
certain other third parties. As it is not possible to make a
reliable estimate of the liability that may arise, no provision has
been made for this element of the investigation.
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. During the year $69.1m of project accruals
were reclassified to accruals which the Group considered to be a
more appropriate classification as the level of uncertainty over
timing and amount is less uncertain than for a provision.
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. The project was
around 80% complete by value at 31 December 2019 and 90% complete
by physical progress and is expected to be operationally complete
during the second half of 2020. Management's latest estimate is
that the loss at completion will be $113m representing the expected
loss to complete less estimated revenue to be earned. A charge of
$10m was made to the income statement during 2019 in relation to
this project and the full amount of this loss has been recognised
to date.
During the year provisions of $41m were utilised and $25m
remains on the balance sheet at 31 December 2019. In reaching its
assessment of this loss, management have made certain estimates and
assumptions relating to the date of completion, productivity of
workers on site and the costs to complete. If the actual outcome
differs from these estimates and assumptions, the ultimate loss
will be different. In addition, the Group's assessment of the
ultimate loss includes change orders which have not been agreed
with the customer and management's assessment of liquidated damages
and the current estimate is that these will not be settled until
2021 at the earliest. If the amounts agreed are different to the
assumptions made, then the ultimate loss could be materially
different.
The balance of project related provisions relates to a number of
provisions which are not individually material or significant.
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 2019, the
Group held provisions totaling $29m 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 of its
remediation obligations may continue for up to 60 years.
As described in note 33, 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.
21 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 UK rate
of corporation tax, currently 19%, will reduce to 17% in April
2020. The Group has provided deferred tax in relation to UK
companies at 17% (2018: 18%). The movement on the deferred tax
account is shown below:
(Asset)/liability
As at 1
January
As at 31
2019 Income December
As restated statement OCI Other 2019
$m $m $m $m $m
-------------------- --- --- ------------ ------------ ----- ----- ---------
Accelerated
capital allowances 14.2 (11.2) (0.8) 2.3 4.5
Intangibles 284.6 (6.7) 2.4 (6.9) 273.4
Pension 66.8 (1.1) (4.6) - 61.1
Share based
charges (13.7) 3.5 4.0 - (6.2)
Other temporary
differences 4.0 0.3 (0.4) (1.0) 2.9
Provisions (198.8) 71.0 (0.1) (4.9) (132.8)
Unremitted
earnings 42.5 (1.7) 1.0 - 41.8
Tax credits (1.5) 1.5 - 0.8 0.8
Deferred interest
deduction (17.0) (24.8) (0.9) - (42.7)
Losses (161.5) (44.0) (1.5) 5.5 (201.5)
------------------------------ ------------ ------------ ----- ----- ---------
Total 19.6 (13.2) (0.9) (4.2) 1.3
------------------------------ ------------ ------------ ----- ----- ---------
Other temporary differences include the $5.2m deferred tax asset
that was recognised on transition to IFRS 16. The $4.2m other
movement includes the $4.0m that was reclassed to held for
sale.
As at 1 January Income As at 31 December 2018
2018 statement OCI Other $m
$m $m $m $m
------------ --- --- --------------- -------------------------------------------- --------------------------------------------------------------- ------------------------------------------------ ----------------------
Accelerated capital
allowances 10.7 2.2 1.2 0.1 14.2
Intangibles 307.7 (16.5) (6.2) (0.4) 284.6
Pension 52.3 (1.1) 15.5 0.1 66.8
Share based charges (13.6) (3.3) 1.3 1.9 (13.7)
Other temporary
differences 7.8 5.0 (5.5) 1.9 9.2
Provisions (213.1) 12.0 4.1 (1.8) (198.8)
Unremitted earnings 48.1 (3.5) (2.1) - 42.5
Tax credits (27.2) 0.5 0.1 25.1 (1.5)
Deferred interest
deduction (0.3) (17.2) 0.5 - (17.0)
Losses (140.1) (25.5) 4.1 - (161.5)
---------------------- --------------- -------------------------------------------- --------------------------------------------------------------- ------------------------------------------------ ----------------------
Total 32.3 (47.4) 13.0 26.9 24.8
---------------------- --------------- -------------------------------------------- --------------------------------------------------------------- ------------------------------------------------ ----------------------
Deferred tax is presented in the financial statements as
follows:
2019 2018
$m $m
--------------------------- ------ ------
Deferred tax assets (87.1) (87.8)
Deferred tax liabilities 88.4 112.6
Net deferred tax liability 1.3 24.8
--------------------------- ------ ------
No deferred tax liability has been recognised in respect of
$20,543.5m (2018: $22,052.9m) 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 $28.3m
(2018: $22.7m).
Under current legislation, earnings remitted to the UK from
subsidiaries located in EEA countries are exempt from tax.
Uncertainty over the outcome of Brexit could result in existing tax
treaty rates being applied which would result in an estimated
increase to the unrecognised deferred tax liability of $5.0m.
The deferred tax balances are analysed below.
31 December 2019
Accelerated Share Other Deferred
capital based temporary Unremitted Tax interest
allowances Intangibles Pension charges differences Provisions earnings credits deduction Losses Netting Total
$m $m $m $m $m $m $m $m $m $m $m $m
------------ ----------- ----------- ------- ------- ----------- ---------- ---------- ------- --------- ------- ------- ------
Deferred
tax
assets (36.6) (105.8) (1.4) (6.2) (16.3) (132.8) - - (42.7) (201.5) 456.2 (87.1)
Deferred
tax
liabilities 41.1 379.2 62.5 - 19.2 - 41.8 0.8 - - (456.2) 88.4
------------ ----------- ----------- ------- ------- ----------- ---------- ---------- ------- --------- ------- ------- ------
Net 4.5 273.4 61.1 (6.2) 2.9 (132.8) 41.8 0.8 (42.7) (201.5) - 1.3
------------ ----------- ----------- ------- ------- ----------- ---------- ---------- ------- --------- ------- ------- ------
31 December 2018
Accelerated Share Other Deferred
capital based temporary Unremitted Tax interest
allowances Intangibles Pension charges differences Provisions earnings credits deduction Losses Netting Total
$m $m $m $m $m $m $m $m $m $m $m $m
------------ ----------- ----------- ------- ------- ----------- ---------- ---------- ------- --------- -------- -------- -------
Deferred
tax
assets (30.2) (129.6) (6.7) (13.7) (12.4) (198.8) - (1.5) (17.0) (161.5) 483.6 (87.8)
Deferred
tax
liabilities 44.4 414.2 73.5 - 21.6 - 42.5 - - - (483.6) 112.6
------------ ----------- ----------- ------- ------- ----------- ---------- ---------- ------- --------- -------- -------- -------
Net 14.2 284.6 66.8 (13.7) 9.2 (198.8) 42.5 (1.5) (17.0) (161.5) - 24.8
------------ ----------- ----------- ------- ------- ----------- ---------- ---------- ------- --------- -------- -------- -------
The expiry dates of unrecognised gross deferred tax assets
carried forward are as follows:
Deductible temporary
Tax losses differences Total
31 December 2019 $m $m $m
---------------------------- ---------- -------------------- -------
Expiring within 5 years 1,867.4 100.2 1,967.6
Expiring within 6-10 years 19.1 86.1 105.2
Expiring within 11-20 years 31.0 - 31.0
Unlimited 5,481.6 1,213.1 6,694.7
---------------------------- ---------- -------------------- -------
7,399.1 1,399.4 8,798.5
---------------------------- ---------- -------------------- -------
Deductible temporary
Tax losses differences Total
31 December 2018 $m $m $m
---------------------------- ---------- -------------------- -------
Expiring within 5 years 1,795.3 101.2 1,896.5
Expiring within 6-10 years 19.1 85.7 104.8
Expiring within 11-20 years 30.9 - 30.9
Unlimited 5,904.5 893.6 6,798.1
---------------------------- ---------- -------------------- -------
7,749.8 1,080.5 8,830.3
---------------------------- ---------- -------------------- -------
22 Share based charges
The Group currently has a number of share schemes that give rise
to equity settled share based charges. These are the Executive
Share Option Scheme ('ESOS'), the Long Term Plan ('LTP') and the
Employee Share Plan. The charge to operating profit for these
schemes for the year amounted to $23.4m (2018: $18.7m) 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. Awards to senior
management are made based on achievement of performance measures,
these being total shareholder return, adjusted diluted earnings per
share, synergies, gross margin and overhead improvement.
Participants may be granted conditional share awards or nil cost
options at the start of the cycle. Performance 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.
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 Fair value Awards outstanding Awards outstanding
period of award 31 December 31 December
2019 2018
6 2013-15 GBP7.53 - 3,136
7 2014-16 GBP7.26 20,028 93,275
8 2015-17 GBP5.95 43,215 79,594
9 2016-18 GBP5.82 - 2,543,147
10 2017-19 GBP8.54 1,826,743 2,004,407
11 2018-20 GBP6.67 3,914,888 4,427,002
12 2019-21 GBP5.69 6,148,563 -
------------ ----------- ------------------- -------------------
11,953,437 9,150,561
------------ ----------- ------------------- -------------------
6,368,176 awards were made during the year, 6,751 awards accrued
in respect of dividends, 114,024 awards were exercised during the
year and 3,458,027 awards lapsed or were cancelled due to
performance targets not being achieved.
In addition to the awards above, 765,227 (2018: 846,106) options
are outstanding at 31 December 2019 in respect of awards made under
the Amec Foster Wheeler Long Term Incentive Plan. These awards were
converted to Wood Group awards following the acquisition of Amec
Foster Wheeler on 6 October 2017. The fair value of these awards is
GBP7.00.
The awards outstanding under cycles 7 and 8 represent 20% of the
award at vesting which is deferred for two years.
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 options
A summary of the basis for the charge for ESOS and LTP options
is set out below together with the number of options granted,
exercised and lapsed during the year.
ESOS LTP
2019 2018 2019 2018
---------------------------- --- --------- --------- --------------- ---------------
Number of participants 400 438 374 104
--------------------------------- --------- --------- --------------- ---------------
Lapse rate 25% 25% 10-20% 10-20%
--------------------------------- --------- --------- --------------- ---------------
Risk free rate of return N/A N/A 0.32%-0.70% 0.71%-1.05%
on grants during year
---------------------------- --- --------- --------- --------------- ---------------
Share price volatility 40% 40% 40% 40%
--------------------------------- --------- --------- --------------- ---------------
Dividend yield on grants
during year N/A N/A 5.23%-7.16% 3.91%
--------------------------------- --------- --------- --------------- ---------------
Fair value of options N/A N/A GBP3.12-GBP5.05 GBP4.59-GBP6.32
granted during year
---------------------------- --- --------- --------- --------------- ---------------
Weighted average remaining 3.0 years 3.8 years 2.1 years 2.7 years
contractual life
---------------------------- --- --------- --------- --------------- ---------------
Options outstanding
1 January 2,604,860 3,026,273 1,659,534 2,036,053
--------------------------------- --------- --------- --------------- ---------------
Options granted during
the year - - 1,067,183 506,206
--------------------------------- --------- --------- --------------- ---------------
Options exercised during
the year (113,650) (263,922) (490,050) (864,278)
--------------------------------- --------- --------- --------------- ---------------
Options lapsed during
the year (174,145) (157,491) (150,028) (35,394)
--------------------------------- --------- --------- --------------- ---------------
Dividends accrued on
options - - 13,561 16,947
--------------------------------- --------- --------- --------------- ---------------
Options outstanding
31 December 2,317,065 2,604,860 2,100,200 1,659,534
--------------------------------- --------- --------- --------------- ---------------
No. of options exercisable
at 31 December 2,317,065 2,604,860 21,868 85,108
--------------------------------- --------- --------- --------------- -----------------
Weighted average share GBP5.35
price of options exercised
during year GBP6.79 GBP4.38 GBP6.44
--------------------------------- --------- --------- --------------- -----------------
Executive Share Option Schemes
The following options to subscribe for new or existing shares
were outstanding at 31 December:
Year of Grant Number of ordinary
shares under option
-------------- ---------------
2019 2018 Exercise price
(per share) Exercise period
--------------- ---------- ---------- -------------- ---------------
2009 - 137,250 222p 2013-2019
2010 178,053 179,953 377 1/2 p 2014-2020
2011 229,135 234,135 529 1/2 p 2015-2021
2012 437,377 459,803 680 1/2 p 2016-2022
2013 758,500 823,500 8451/3p 2017-2023
2014 714,000 770,219 7672/3p 2018-2024
2,317,065 2,604,860
--------------- ---------- ---------- -------------- ---------------
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 options
The following options granted under the Group's LTP were
outstanding at 31 December:
Number of ordinary
shares under option
-------------- ---------
Year of Grant 2019 2018 Exercise price Exercise
(per share) period
-------------- ---------- ---------- -------------- ---------
2014 - 74,242 0.00p 2018-2019
2015 15,000 140,000 0.00p 2019-2020
2016 - 10,866 0.00p 2018-2019
2016 170,000 225,000 0.00p 2020-2021
2017 6,868 190,303 0.00p 2019-2020
2017 434,374 512,917 0.00p 2021-2022
2018 201,742 221,236 0.00p 2020-2021
2018 254,970 284,970 0.00p 2022-2023
2019 354,161 - 0.00p 2020-2021
2019 653,085 - 0.00p 2021-2022
2019 10,000 - 0.00p 2023-2024
-------------- ---------- ---------- -------------- ---------
2,100,200 1,659,534
-------------- ---------- ---------- -------------- ---------
Options 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 an Employee Share Plan 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 2019, 182,820 shares were awarded in relation to the
second year of the plan and it is anticipated that 406,970 shares
in relation to the third year will be awarded in April 2020.
Amec Foster Wheeler also had an Employee Share Plan. Awards
under this scheme were converted to Wood Group awards following the
acquisition on 6 October 2017. At 31 December 2019, 396 (2018:
551,274) options were outstanding under this scheme.
23 Share capital
Ordinary shares of 4 (2) /(7) pence
each (2018: 4 (2) /(7) pence) 2019 2018
Issued and fully paid shares $m shares $m
------------------------------------- ------------------ ----------- ------------------ ----------------
At 1 January 681,539,369 40.7 677,692,296 40.5
Allocation of new shares to employee
share trusts 3,400,000 0.2 3,800,000 0.2
Shares issued to satisfy option - - 47,073 -
exercises
At 31 December 684,939,369 40.9 681,539,369 40.7
------------------------------------- ----------------
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.
24 Share premium
2019 2018
$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 (2018: 4(2) /(7) pence).
25 Retained earnings
2019 2018
$m $m
At 1 January 1,806.7 1,935.2
Adjustment on initial application of IFRS 16 (net
of tax) (33.9) -
------------------------------------------------------------- ------- -------
Adjusted opening balance 1,772.8 1,935.2
Profit/(loss) for the year attributable to owners
of the parent 72.0 (8.9)
Dividends paid (note 7) (235.5) (231.0)
Credit relating to share based charges (note 22) 23.4 18.7
Re-measurement (loss)/gain on retirement benefit liabilities
(note 32) (56.1) 118.0
Movement in deferred tax relating to retirement benefit
liabilities 6.8 (20.5)
Shares allocated to employee share trusts (0.2) (0.2)
Shares disposed of by employee share trusts 0.4 1.7
Tax relating to share option schemes (4.1) (0.7)
Deferred tax impact of rate change in equity 0.3 1.8
Tax on derivative financial instruments 1.4 0.6
Other tax movements in equity 0.7 -
Exchange movements in respect of shares held by employee
share trusts (4.2) 6.5
Transactions with non-controlling interests (note
28) - (14.5)
Transfer from merger reserve (note 26) 250.0 -
------------------------------------------------------------- ------- -------
At 31 December 1,827.7 1,806.7
------------------------------------------------------------- ------- -------
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 (2018:
nil).
Refer to the IFRS 16 transition note in Accounting Policies for
further detail on the $33.9m opening adjustment to the retained
earnings balance.
Shares held by employee share trusts
2019 2018
Shares $m Shares $m
Balance 1 January 11,197,394 105.1 9,107,787 113.1
New shares allocated 3,400,000 0.2 3,800,000 0.2
Shares issued to satisfy
option exercises (603,700) (0.4) (1,198,360) (1.7)
Shares issued to satisfy
awards under Long Term
Incentive Plan (114,024) - (345,067) -
Shares issued to satisfy
awards under Employee Share
Plan (182,820) - (163,961) -
Other share transactions (17,936) - (3,005) -
Exchange movement - 4.2 - (6.5)
Balance 31 December 13,678,914 109.1 11,197,394 105.1
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 2019 was $72.2m (2018: $72.2m)
based on the closing share price of GBP3.98 (2018: GBP5.06) and
closing exchange rate of 1.3247 (2018: 1.2736). The employee share
trusts have waived their rights to receipt of dividends on ordinary
shares.
26 Merger reserve
2019 2018
$m $m
At 1 January 2,790.8 2,790.8
Transfer to retained earnings (250.0) -
At 31 December 2,540.8 2,790.8
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. In December
2019, John Wood Group Holdings Limited paid $250.0m to the Company
in partial settlement of the promissory note. The repayment
represents qualifying consideration and as a result the Company
transferred an equivalent portion of the merger reserve to retained
earnings.
27 Other reserves
Capital Capital Currency
reduction redemption translation Hedging
reserve reserve reserve reserve Total
$m $m $m $m $m
At 1 January 2018 88.1 439.7 (398.2) 0.3 129.9
Cash flow hedges - - - (4.7) (4.7)
Exchange movement on
retranslation of foreign
operations - - (236.5) - (236.5)
At 31 December 2018 88.1 439.7 (634.7) (4.4) (111.3)
Cash flow hedges - - - (5.3) (5.3)
Exchange movement on
retranslation of foreign
operations - - 83.4 - 83.4
At 31 December 2019 88.1 439.7 (551.3) (9.7) (33.2)
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.
28 Non-controlling interests
2019 2018
$m $m
At 1 January 19.0 11.7
Exchange movements - (1.2)
Share of profit for the year 0.8 1.3
Dividends paid to non-controlling interests (1.2) (5.9)
Transactions with non-controlling interests (13.1) 13.1
At 31 December 5.5 19.0
Transactions with non-controlling interests largely relate to
the disposal of Amec Foster Wheeler Power Machinery Company Limited
(see note 30).
29 Cash generated from operations
2019 2018
Note $m $m
Reconciliation of operating profit to cash
generated from operations:
Operating profit from continuing operations 303.4 165.3
Less share of post-tax profit from joint ventures (48.2) (34.4)
---- -------
255.2 130.9
Adjustments for:
Depreciation 10 46.5 51.6
Depreciation on right of use assets 11 123.0 -
(Gain)/loss on disposal of property plant and
equipment 4 (1.9) 1.4
Gain on disposal of investment in joint ventures 30 (3.6) (15.3)
Impairment of property plant and equipment 10 - 0.7
Amortisation of intangible assets 9 242.4 246.3
Share based charges 22 23.4 18.7
Decrease in provisions 20 (216.1) (182.8)
Dividends from joint ventures 12 43.0 38.5
Exceptional items - non-cash impact 1 69.9 107.0
Changes in working capital (excluding effect
of acquisition and divestment of subsidiaries)
(Increase)/decrease in inventories (2.8) 0.1
Decrease in receivables 200.2 88.9
(Decrease)/increase in payables (19.1) 173.6
Exchange movements (13.9) (34.3)
Cash generated from operations 746.2 625.3
Analysis of net debt
At 1 January Cash Exchange At 31 December
2019 flow Other movements 2019
2019 $m $m $m $m $m
Short term borrowings (984.5) (770.9) - 2.7 (1,752.7)
Long term borrowings (1,917.3) 348.2 (3.9) (0.2) (1,573.2)
(2,901.8) (422.7) (3.9) 2.5 (3,325.9)
Cash and cash equivalents 1,352.7 485.9 - 8.4 1,847.0
Cash included in assets held
for sale (see note 30) 24.2 30.7 - - 54.9
Restricted cash 11.7 (11.7) - - -
Net debt excluding leases (1,513.2) 82.2 (3.9) 10.9 (1,424.0)
Leases (604.0) 165.6 (136.0) 0.1 (574.3)
Net debt including leases (2,117.2) 247.8 (139.9) 11.0 (1,998.3)
The opening lease liability of $604.0m reflects the IFRS 16
liability recognised on transition of $569.0m and leases previously
classified as finance leases of $35.0m. The cash outflow of $165.6m
in respect of leases includes lease rentals in respect of IFRS 16
leases of $155.6m (note 11) and $10.0m in respect of existing
finance leases.
The increase in amounts drawn under the cash pools and the
$297.6m term loan now falling due in October 2020 are the principal
causes of the increase in current borrowings.
Exchange Other changes At 31 December
At 1 January $m
2018 Cash flow movements 2018
2018 $m $m $m $m
--------------
Short-term
borrowings (543.2) (448.9) 7.6 - (984.5)
Long-term borrowings (2,336.1) 407.8 0.4 10.6 (1,917.3)
--------------
(2,879.3) (41.1) 8.0 10.6 (2,901.8)
Cash and cash
equivalents 1,225.5 164.8 (37.6) - 1,352.7
Cash included
in assets held
for sale (note
30) - 24.2 - - 24.2
Restricted
cash 26.5 (14.8) - - 11.7
Bank deposits
(more than
three months) 31.2 (30.6) (0.6) - -
Net debt excluding
leases (1,596.1) 102.5 (30.2) 10.6 (1,513.2)
Leases (50.0) 14.7 0.3 - (35.0)
--------------
Net debt including
leases (1,646.1) 117.2 (29.9) 10.6 (1,548.2)
--------------
30 Acquisitions and divestments
Contingent consideration payments of $5.6m were made during the
year in respect of acquisitions made in prior periods. Total
deferred and contingent consideration outstanding at 31 December
2019 amounted to $20.0m (2018: $26.6m). See note 19 for further
details.
Divestments
During 2019 the Group disposed of Terra Nova Technologies. The
assets and liabilities disposed of are set out in the table
below:
$m
Intangible assets 39.7
Investment in joint ventures 1.5
Trade and other receivables 22.1
Trade and other payables (16.1)
Net assets disposed 47.2
Cash received (44.4)
Disposal costs 6.6
Loss on disposal (see note 5) 9.4
During the first half of 2019, the Group also disposed of its
investments in the Amec Foster Wheeler Power Machinery Company
Limited, Centro Energia Teverola S.r.l and Centro Energia Ferrara
S.r.l. Disposal proceeds for these divestments, net of cash
disposed amounted to $0.4m and a gain on sale of $3.6m was recorded
in the income statement. The net profit on these disposals is
included in the Group's operating profit before exceptional items,
as the Group considers the restructuring and subsequent sale of
non-core businesses within Investment Services to be part of its
normal activities.
The cash inflow in respect of these disposals is analysed
below.
$m
------------------------ -----
Gross proceeds received 44.8
Disposal costs paid (1.7)
Cash inflow 43.1
------------------------ -----
Assets and liabilities held for sale
Amounts categorised as held for sale include the assets and
liabilities of TCS's nuclear business, the assets and liabilities
of Wood Group Industrial Services and the Group's investment in a
non-core joint venture.
In March 2020, the Group completed the sale of its nuclear
business to a subsidiary of Jacobs for a net cash consideration of
around GBP241m ($319m). The transaction was announced in August
2019 and therefore the assets and liabilities of the nuclear
business are included as held for sale as at 31 December 2019.
At 31 December 2019, the Group were in advanced discussions to
dispose of Wood Group Industrial Services Limited. In February
2020, the Group announced the disposal for an initial consideration
of GBP84m ($111m) and the assets and liabilities of that business
are also included as held for sale at 31 December 2019.
The Group is also in the process of disposing of its 50%
shareholding in non-core joint venture and its investment at 31
December 2019 has been included in assets held for sale.
The composition of assets and liabilities held for sale on the
balance sheet is set out below.
Assets held for sale $m
Intangible assets 248.0
Property, plant and equipment 29.4
Right of use assets 7.7
Investment in joint ventures 61.8
Inventories 0.6
Trade and other receivables 116.5
Cash and cash equivalents 54.9
518.9
Liabilities held for sale $m
Trade and other payables 91.7
Income tax liabilities 0.1
Deferred tax 4.0
Lease liabilities 7.2
Provisions 3.0
106.0
The 2019 results for the businesses classified as held for sale
are summarised in the table below:
$m
Revenue 475.9
Operating profit 44.3
Profit before tax 39.5
Profit after tax 37.6
31 Employees and directors
2019 2018
Employee benefits expense $m $m
Wages and salaries 3,959.2 4,032.6
Social security costs 317.1 358.5
Pension costs - defined benefit schemes (note 32) 1.0 1.5
Pension costs - defined contribution schemes (note
32) 141.2 146.9
Share based charges (note 22) 23.4 18.7
4,441.9 4,558.2
Average monthly number of employees (including 2019 2018
executive directors) No. No.
------ ------
By geographical area:
UK 10,106 10,538
US 17,586 18,682
Rest of the World 23,250 20,824
------ ------
50,942 50,044
------ ------
The average number of employees excludes contractors and
employees of joint venture companies.
2019 2018
Key management compensation $m $m
---- ----
Salaries and short-term employee benefits 9.7 8.5
Amounts receivable under long-term incentive schemes 1.1 2.1
Social security costs 1.2 1.2
Post-employment benefits 0.1 0.2
Share based charges 3.7 2.9
---- ----
15.8 14.9
---- ----
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
2019, key management held 0.1% of the voting rights of the
company.
2019 2018
Directors $m $m
Aggregate emoluments 3.8 3.5
Aggregate amounts receivable under long-term
incentive schemes 0.4 0.8
Aggregate gains made on the exercise of share
options 0.2 0.4
Share based charges 1.3 1.1
5.7 5.8
At 31 December 2019, two directors (2018: two) had retirement
benefits accruing under a defined contribution pension plan and no
directors (2018: none) had benefits accruing under a defined
benefit pension scheme. Further details of directors' emoluments
are provided in the Directors' Remuneration Report.
32 Retirement benefit schemes
The Group operates a number of defined benefit pension schemes.
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. These schemes are largely closed to future
accrual.
At 31 December 2018, the largest schemes were the Amec Foster
Wheeler Pension Plan ('AFW Pension Plan') and the John Wood Group
PLC Retirement Benefit Scheme ('JWG PLC RBS') in the UK and the
Foster Wheeler Inc SERP and the Foster Wheeler Inc Pension Plan for
Certain Employees (FW Inc PPCE) in the US. In March 2019, the JWG
PLC RBS merged with the AFW Pension Plan (now known as the Wood
Pension Plan ('WPP')).
The scheme valuations used are based on the valuation of Amec
Foster Wheeler Pension Plan as at 31 March 2017, the valuation of
the John Wood Group PLC Retirement Benefit Scheme as at 5 April
2016 and the valuation of the Foster Wheeler Inc SERP/PPCE as at 1
January 2017. 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 2019. The
assets of the schemes are stated at their aggregate market value as
at 31 December 2019.
Group 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 as 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.
Scheme membership at the date of the most recent scheme census
was as follows -
2019 2019 2019 2018 2018 2018 2018
Wood FW Inc FW JWG AFW FW FW
Pension SERP Inc PLC Pension Inc Inc
Plan PPCE RBS Plan SERP PPCE
Active members 1,741 69 59 - 1,741 90 81
Deferred members 8,787 528 718 762 8,025 549 740
Pensioner members 9,922 2,403 812 376 9,546 2,453 777
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:
2019 2019 2019 2018 2018 2018 2018
Wood FW FW JWG AFW Pension FW FW
Pension Inc Inc PLC Plan Inc Inc
Plan SERP PPCE RBS % SERP PPCE
% % % % % %
Discount rate 2.1 3.0 3.0 2.9 2.9 4.1 4.1
Rate of increase in
pensions in payment
and deferred pensions 2.6 N/A N/A 3.0 2.8 N/A N/A
Rate of retail price
index inflation 2.7 N/A N/A 3.1 3.1 N/A N/A
Rate of consumer price
index inflation 2.2 N/A N/A 2.1 N/A N/A N/A
-----
As a result of the Chancellor of the Exchequer announcing plans
to bring RPI in line with CPIH (CPI with an allowance for housing)
between 2025 and 2030, the basis for the RPI assumption has changed
at 31 December 2019. The expectation is that the gap between CPI
and RPI will close in the future and that is reflected in the 2019
assumption.
The mortality assumptions used to determine pension liabilities
in the main schemes at 31 December 2019 were as follows -
Scheme Mortality assumption
Wood Pension Plan Scheme specific table with CMI 2018 projections
and a long-term rate of improvement of 1.25%
pa
FW Inc SERP and FW Pri-2012 Employee and Annuitant tables for
Inc PPCE males and females with generational projection
using Scale MMP-2019 with no collar adjustments
The mortality tables use data appropriate to each of the Group's
schemes adjusted to allow for expected future improvements in
mortality using the latest projections.
For the schemes referred to above the assumed life expectancies
are shown in the following table:
2019 2019 2019 2018 2018 2018 2018
Wood FW FW JWG AFW FW FW
Pension Inc Inc PLC Pension Inc Inc
Plan SERP PPCE RBS Plan SERP PPCE
Life expectancy at
age 65 of male aged
45 23.7 21.6 21.6 23.6 23.9 22.2 21.8
Life expectancy at
age 65 of male aged
65 22.4 20.4 20.4 22.2 22.6 20.6 20.5
Life expectancy at
age 65 of female aged
45 25.4 23.5 23.5 25.7 25.6 24.1 23.6
Life expectancy at
age 65 of female aged
65 23.9 22.3 22.3 24.2 24.1 22.5 22.4
The amounts recognised in the income statement are as
follows:
2019 2018
$m $m
------- -------
Current service cost 1.0 1.5
Past service (credit)/cost (22.8) 25.2
------- -------
Total (income)/expense included within operating
profit (21.8) 26.7
------- -------
Interest cost 112.0 109.4
Interest income on scheme assets (117.7) (109.9)
------- -------
Total included within finance income (5.7) (0.5)
------- -------
The amounts recognised in the balance sheet are determined as
follows:
2019 2018
$m $m
Present value of funded obligations (4,233.7) (3,808.1)
Fair value of scheme assets 4,474.7 4,050.8
--------- ---------
Net surplus 241.0 242.7
--------- ---------
Changes in the present value of the defined benefit liability
are as follows:
2019 2018
$m $m
Present value of funded obligations at 1 January 3,808.1 4,354.9
Current service cost 1.0 1.5
Past service (credit)/cost (22.8) 25.2
Interest cost 112.0 109.4
Contributions - 2.1
Re-measurements:
- actuarial losses/(gains) arising from changes
in financial assumptions 415.8 (234.0)
- actuarial gains arising from changes in demographic
assumptions (35.4) (21.6)
- actuarial losses arising from changes in experience 4.0 12.6
Benefits paid (192.8) (227.5)
Exchange movements 143.8 (214.5)
------- -------
Present value of funded obligations at 31 December 4,233.7 3,808.1
------- -------
Changes in the fair value of scheme assets are as follows:
2019 2018
$m $m
Fair value of scheme assets at 1 January 4,050.8 4,522.6
Interest income on scheme assets 117.7 109.9
Contributions 16.9 14.5
Benefits paid (192.8) (226.3)
Re-measurement gain/(loss) on scheme assets 328.3 (125.0)
Expenses paid (9.3) (6.2)
Exchange movements 163.1 (238.7)
------- -------
Fair value of scheme assets at 31 December 4,474.7 4,050.8
------- -------
Analysis of the movement in the balance sheet surplus:
2019 2018
$m $m
------ ------
Surplus at 1 January 242.7 167.7
Current service cost (1.0) (1.5)
Past service credit/(cost) 22.8 (25.2)
Finance income 5.7 0.5
Contributions 16.9 12.4
Re-measurement (losses)/gains recognised in the
year (56.1) 118.0
Benefits paid - 1.2
Expenses paid (9.3) (6.2)
Exchange movements 19.3 (24.2)
------ ------
Surplus at 31 December 241.0 242.7
------ ------
The past service credit in 2019 relates to the Foster Wheeler
Inc Post Retirement Health and Life Insurance Plan, a defined
benefit scheme which the Group acquired as part of the AFW
acquisition in 2017.
The past service cost in 2018 included $31.9m relating to the
impact of GMP equalisation on the JWG PLC Retirement Benefit Scheme
and the AFW Pension Plan less a $6.7m past service credit in
respect of the Foster Wheeler Inc Pension Plan.
The net surplus/(deficit) at 31 December is presented in the
Group balance sheet as follows -
2019 2018
$m $m
JWG PLC Retirement Benefit Scheme - 35.5
Wood Pension Plan 368.0 369.4
Retirement benefit scheme surplus 368.0 404.9
Foster Wheeler Inc SERP/PPCE (86.0) (91.9)
All other schemes (41.0) (70.3)
Retirement benefit scheme deficit (127.0) (162.2)
Net surplus 241.0 242.7
For the principal schemes the defined benefit obligation can be
allocated to the plan participants as follows:
2019 2019 2019 2018 2018 2018 2018
Wood FW FW JWG AFW FW FW
Pension Inc Inc PLC Pension Inc Inc
Plan SERP PPCE RBS Plan SERP PPCE
% % % % % % %
Active members 13.3 5.2 3.4 - 12.6 5.8 4.9
Deferred members 38.6 18.1 19.4 74.0 32.5 16.2 19.5
Pensioner members 48.1 76.7 77.2 26.0 54.9 78.0 75.6
The weighted average duration of the defined benefit obligation
is as follows:
2019 2019 2019 2018 2018 2018 2018
Wood FW FW JWG AFW FW FW
Pension Inc Inc PLC Pension Inc Inc
Plan SERP PPCE RBS Plan SERP PPCE
years years years years years years years
Duration of defined
benefit obligation 16.9 9.1 9.3 19.4 17.2 8.7 9.0
The major categories of scheme assets as a percentage of total
scheme assets are as follows:
2019 2019 2019 2018 2018 2018 2018
Wood FW FW JWG AFW FW FW
Pension Inc Inc PLC Pension Inc Inc
Plan SERP PPCE RBS Plan SERP PPCE
% % % % % % %
Equities 14.3 60.0 60.0 62.9 12.7 60.0 60.0
Property 7.5 - - 8.0 8.4 - -
Bonds (including gilts) 73.0 40.0 40.0 11.3 75.4 40.0 40.0
Liability driven investments - - - 11.9 - - -
Cash 4.4 - - 3.6 3.0 - -
Other 0.8 - - 2.3 0.5 - -
-----
100.0 100.0 100.0 100.0 100.0 100.0 100.0
-----
A large proportion of equities, bonds, cash and liability driven
investments 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. The US plans are funded to ensure that statutory
obligations are met and contributions are generally payable to at
least minimum funding requirements.
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.
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 JWG AFW Pension Plan FW Inc FW Inc
Pension PLC 2018 SERP FW Inc PPCE FW Inc
Plan RBS $m 2019 SERP 2019 PPCE
2019 2018 $m 2018 $m 2018
Approximate impact on scheme liabilities $m $m $m $m
Discount rate
Plus 0.1% (63.1) (3.8) (53.7) (0.9) (0.9) (2.0) (1.8)
Minus 0.1% 64.7 4.0 55.0 0.9 0.9 2.0 1.9
Inflation
Plus 0.1% 37.9 3.0 32.2 N/A N/A N/A N/A
Minus 0.1% (37.4) (2.9) (31.9) N/A N/A N/A N/A
Life expectancy
Plus 1 year 154.4 5.4 112.1 4.1 3.7 8.7 7.5
Minus 1 year (152.0) (5.5) (111.2) (4.1) (3.7) (8.7) (7.5)
The sensitivity analysis covering the impact of increases in
pensions is included in the inflation sensitivity in the above
table.
The contributions expected to be paid during the financial year
ending 31 December 2020 amount to $34.9m (2018: $17.8m).
Defined contribution plans
Pension costs for defined contribution plans were as
follows:
2019 2018
$m $m
Defined contribution plans 141.2 146.9
There were no material contributions outstanding at 31 December
2019 in respect of defined contribution plans.
The Group operates a SERP pension arrangement in the US for
certain employees. During the year, the Group made contributions of
$0.4m (2018: $0.4m) 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 $81.4m (2018: $76.4m) and will be used to pay benefits when
employees retire. The corresponding liability is recorded in other
non-current liabilities.
33 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
work carried out. 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. 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.
Employment claims
The Group is aware of challenges to historic employment
practices which may have an impact on the Group. This includes a
challenge by HMRC into the historic application of employer's
National Insurance Contributions to workers on the UK Continental
Shelf. We believe that we are in a strong position to defend this
challenge and that our technical position is robust, therefore as a
result we do not expect that it is probable that a liability will
arise and no provision has been made. The maximum potential
exposure to the Group in relation to tax and interest should we be
unsuccessful in our position, is around $27.0m.
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. We do
not expect indemnities or retained obligations for which a
provision has not been established to have a material impact on the
Group's financial position, results of operations or cash
flows.
Investigations
The Group has received voluntary requests for information from,
and continues to cooperate with, the US Securities and Exchange
Commission ("SEC") and the US Department of Justice ("DOJ") in
connection with their ongoing investigations into Amec Foster
Wheeler in relation to Unaoil and the historical use of agents and
certain other business counterparties by Amec Foster Wheeler and
its legacy companies in various jurisdictions.
Amec Foster Wheeler made a disclosure to the UK Serious Fraud
Office ("SFO") about these matters and, since April 2017, in
connection with the SFO's investigation into Unaoil, the SFO has
required Amec Foster Wheeler to produce information relating to any
relationship of Amec Foster Wheeler with Unaoil and certain other
third parties.
In July 2017, the SFO opened an investigation into Amec Foster
Wheeler predecessor companies and associated persons. The
investigation focuses on the historical use of agents and certain
other business counterparties and possible bribery and corruption
and related offences in various jurisdictions. The Group is
co-operating with and assisting the SFO in relation to this
investigation. Notifications of certain matters within the above
investigations have also been made to the relevant authorities in
Brazil (namely, the Federal Prosecution Service and the Office of
the Comptroller General).
Independently, the Group has conducted an internal investigation
into the historical engagement of Unaoil by legacy Wood Group
companies, reviewing information available to the Group in this
context. This internal investigation confirmed that a legacy Wood
Group joint venture engaged Unaoil and that the joint venture made
payments to Unaoil under agency agreements. In September 2017, the
Group informed the Crown Office and Procurator Fiscal Service
("COPFS"), the relevant authority in Scotland, of the findings of
this internal investigation. The Group has since taken steps to
conclude its investigation of these matters and has submitted its
report on possible bribery and corruption offences to COPFS. These
matters are now being considered by Scotland's Civil Recovery Unit
as part of the self-reporting initiative applicable to
Scotland.
Discussions concerning possible resolutions of the
investigations by the authorities in the US, Brazil and Scotland
have progressed to the point where the Group believes that it is
likely to be able to settle the relevant matters with these
authorities at an aggregate cost of approximately $46.0m, which is
reflected as a provision in the financial statements as described
in note 20. Achieving resolution of the relevant investigations
will involve negotiations with five authorities in three separate
jurisdictions, and accordingly there is no certainty that
resolution will be reached with any or all of those authorities or
that the aggregate settlement amount will not exceed the amount of
the provision.
The Group could also face further potential civil and criminal
consequences in relation to the investigation by the SFO described
above. At this time, it is not possible to make a reliable estimate
of the expected financial effect that may arise in relation to the
SFO's investigation, and therefore no provision has been made for
it in the financial statements.
In addition, depending on the outcome of the various
investigations described above, it is possible that there may be
other adverse consequences for the Group's business (including
financial penalties and restrictions from participating in public
contracts). At this time, these cannot be reliably estimated, and
therefore no provision has made in respect of them in the financial
statements.
Tax planning
Recent changes to the tax environment, including the OECD's
project around Base Erosion and Profit Shifting have brought into
question tax planning previously undertaken by multinational
entities. There have been several recent high profile tax cases
against tax authorities and large groups. The European Commission
continues formal investigations to examine whether decisions by the
tax authorities in certain European countries comply with European
Union rules and has issued judgements in some cases which are being
contested by the groups and the countries affected. The Group is
monitoring the outcome of these cases in order to understand
whether there is any risk to the Group.
Specifically, the EC issued its decision regarding the UK
Controlled Foreign Companies (CFC) rules and whether a financing
exemption constituted state aid in April. The decision found that
in certain circumstances the financing exemption constituted state
aid. This is being contested by the UK Government and a number of
groups as to whether the technical basis for the decision is
correct. The application of the decision is also judgemental and
there is no consensus regarding how it should be applied. Based on
the Group's current assessment of such issues and the Group's
specific circumstances, it is not currently considered probable
that there will be an outflow in respect of these issues and no
provision has been made in the financial statements. The maximum
potential exposure to the Group of the EC CFC challenge, including
interest, is around $66.0m.
34 Capital and other financial commitments
2019 2018
$m $m
Contracts placed for future capital expenditure
not provided in the financial statements 1.7 8.3
----
The capital expenditure above relates to property plant and
equipment.
35 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.
2019 2018
$m $m
Sale of goods and services to joint ventures 43.1 60.5
Purchase of goods and services from joint ventures 8.8 13.5
Receivables from joint ventures 26.9 97.2
Payables to joint ventures 4.4 3.1
---- ----
In addition, the Group made $17.1m (2018: $15.2m) of sales to a
joint venture which acts only as a transactional entity between the
Group and the Group's end customer (at nil gain or loss) and does
not trade independently.
Key management compensation is disclosed in note 31.
The Group paid a fee of GBP15,000 per annum to Dunelm Energy, a
company in which Ian Marchant, the former Group Chairman, had an
interest, during the period in which he was in office.
36 Post balance sheet events
In February 2020, the Group secured an additional $200.0m of
bilateral term loans, $100.0m of which matures in September 2021
(the bank has the option to extend until May 2022) and $100.0m of
which matures in May 2022.
In February 2020, the Group disposed of Wood Group Industrial
Services for an initial consideration of GBP84.0m ($111.0m). The
accounting for the disposal will be presented in the 2020 interim
financial statements. The proceeds received were used to part repay
the term loan that matures in October 2020.
In March 2020, the Group disposed of the nuclear business for
net proceeds of around GBP241m ($319.0m) which will be used to
repay the term loan and other borrowings.
37 Subsidiaries and joint ventures
The Group's subsidiary and joint venture undertakings at 31
December 2019 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
Cite Zone Industrielle BP 504, Hassi
SARL Wood Group Algeria Messaoud, Algeria 100
---------
PO Box 67, Elmalaha Road (Route
Wood Group Somias SPA des Salines), Elbouni, Annaba, Algeria 55
---------
Angola
RuaKima Kienda, Edificio SGEP, 2nd
Production Services Network Floor, Apartment 16, Boavista District,
Angola Limited Ingombota, Luanda, Angola 49*
---------
No 201, Rua Engenheiro Armindo de
Andrade,Bairro Miramar, Simbizanga,
Wood Group Kianda Limitada Luanda, Angola 41*
---------
Argentina
25 de Mayo 596, piso 8 , C1002ABL,
AGRA Argentina S.A. Buenos Aires, Argentina 100
---------
Foster Wheeler E&C Argentina
S.A. Paraguay 1866, Buenos Aires, Argentina 100
---------
Pedro Molina 714, Provincia de Mendoza,
ISI Mustang (Argentina) S.A. Ciudad de Mendoza, Argentina 100
---------
Tucuman 1 Floor 4, Buenos Aires,
Wood Solar Argentina S.A.U. Argentina 100
---------
Tucuman 1 Floor 4, Buenos Aires,
Wood Wind Argentina S.A.U. Argentina 100
---------
Australia
AMEC Australia Finance Company Level 7, 197 St Georges Terrace,
Pty Ltd Perth, WA, 6000, Australia 100
---------
Amec Foster Wheeler Australia Level 7, 197 St Georges Terrace,
Holding Company Pty Ltd Perth, WA, 6000, Australia 100
---------
Amec Foster Wheeler Australia Level 7, 197 St Georges Terrace,
Pty Ltd Perth, WA, 6000, Australia 100
---------
Amec Foster Wheeler Engineering Level 7, 197 St Georges Terrace,
Holdings Pty Ltd Perth, WA, 6000, Australia 100
---------
Amec Foster Wheeler Engineering Level 7, 197 St Georges Terrace,
Pty Ltd Perth, WA, 6000, Australia 100
---------
Amec Foster Wheeler Zektin Architecture Level 7, 197 St Georges Terrace,
Pty Ltd Perth, WA, 6000, Australia 100
---------
Wood Group House, Level 1, 432 Murray
Aus-Ops Pty Ltd Street, Perth, WA 6000, Australia 100
---------
Level 7, 197 St Georges Terrace,
GRD Investments Pty Ltd Perth, WA, 6000, Australia 100
---------
Level 7, 197 St Georges Terrace,
GRD Pty Limited Perth, WA, 6000, Australia 100
---------
Wood Group House, 432 Murray Street,
Innofield Services Pty Ltd Perth, WA 6000, Australia 100
---------
Wood Group House, Level 6, 432 Murray
Mustang Engineering Pty. Ltd. Street, Perth, WA 6000, Australia 100
---------
Rider Hunt International (Australia) Wood Group House, Level 1, 432 Murray
pty Ltd Street, Perth, WA 6000, Australia 100
---------
Level 7, 197 St Georges Terrace,
S2V Consulting Pty Ltd Perth, WA, 6000, Australia 100
---------
Wood Group House, Level 6, 432 Murray
SVT Holdings Pty Ltd Street, Perth, WA 6000, Australia 100
---------
Level 20, 127 Creek Street, Brisbane,
WGPSN Queensland Pty Ltd Queensland, 4000, Australia 100
---------
Wood Group House, Level 6, 432 Murray
Wood Group Australia PTY Ltd Street, Perth, WA 6000, Australia 100
---------
Wood Group Kenny Australia Pty Wood Group House, Level 6, 432 Murray
Ltd Street, Perth, WA 6000, Australia 100
---------
Level 3 , 171 Collins Street ,Melbourne,
Wood Australia Pty Ltd VIC, 3000, Australia 100
---------
Level 7, 197 St Georges Terrace,
Wood Mineral Conveyors Pty Ltd Perth, WA, 6000, Australia 100
---------
Azerbaijan
37 Khojali Street, Baku, AZ1025,
AMEC Limited Liability Company Azerbaijan 100
---------
Khojali Avenue,Building 37, Khatal
Wood Group PSN Azerbaijan LLC District, Baku, AZ1025, Azerbaijan 100
---------
Bahamas
Montreal Engineering (Overseas) c/o 2020 Winston Park Drive, Suite
Limited 7000, Oakville, Ontario, Canada 100
---------
Bermuda
Canon's Court, 22 Victoria Street,
(PO Box HM 1179), Hamilton, HM EX,
AMEC (Bermuda) Limited Bermuda 100
---------
Canon's Court, 22 Victoria Street,
(PO Box HM 1179), Hamilton, HM EX,
Atlantic Services Limited Bermuda 100
---------
Clarendon House, 2 Church Street,
Foster Wheeler Ltd. Hamilton, HM-11, Bermuda 100
---------
Clarendon House, 2 Church Street,
P.O. Box HM 1022, Hamilton HM CX,
FW Management Operations, Ltd. Bermuda 100
---------
Brazil
AMEC do Brasil Participações Rua Quitanda 50, 15th floor, Centro,
Ltda. Rio de Janeiro, CEP 20011-030, Brazil 100
---------
Centro Empresarial Ribeirao Office
Tower, Av. Braz Olaia Acosta, 727
- 18 andar - Sl. 1810, Cep. 14026-404
Amec Foster Wheeler America - Jd. California, Ribeirao Preto,
Latina, Ltda. Sao Paulo, Brazil 100
---------
R. Nilo Peçanha, n. 50, Sala
2912, Centro, Rio de Janeiro, 20020-100,
Amec Foster Wheeler Brasil S.A. Brazil 100
---------
Rua Quitanda 50, 15th floor, Centro,
AMEC Petroleo e Gas Ltda. Rio de Janeiro, CEP 20011-030, Brazil 100
---------
Rua Professor Moraes No. 476, Loja
5, Sobreloja, Bairro Funcionarios,
AMEC Projetos e Consultoria Belo Horizonte, Minas Gerais, 30150-370,
Ltda Brazil 100
---------
Alameda Santos, 1293, Room 63, Cerqueira
César, Sao Paulo, 01419-002,
FW Industrial Power Brazil Ltda Brazil 100
---------
Estrada Sao Jose do Mutum, 301 -
Santos Barbosa Tecnica Comercio Imboassica, Cidade de Macae, Rio
e Servicos Ltda. de Janeiro, CEP 27973-030, Brazil 100
---------
Rua Ministro Salgado Filho,119,
Wood Group Engineering and Production Cavaleiros, Cidade de Macae,CEP
Facilities Brasil Ltda. 27920-210, Estado do Rio de Janeiro 100
---------
Rua Sete de Setembro, 54 - 4 andares,
Wood Group Kenny do Brasil Servicos Centro, Rio de Janeiro - RJ, CEP
de Engenharia Ltda. 20050-009, Brazil 100
---------
British Virgin Islands
Commerce House, Wickhams Cay 1,
P.O. Box 3140, Road Town, Tortola,
MDM Engineering Group Limited British Virgin Islands 100
---------
Geneva Place, 2nd Floor, 333 Waterfront
Drive, PO Box 3339, Road Town, Tortola,
Wood Group PDE Limited British Virgin Islands 100
---------
Brunei Darussalam
Unit No.s 406A-410A, Wisma Jaya,
Amec Foster Wheeler (B) SDN Jalan Pemancha, Bandar Seri Begawan
BHD BS8811, Brunei Darussalam 99
---------
Bulgaria
7th Floor, 9-11 Maria Louisa Blvd,
Vazrazhdane District, Sofia 1301,
AMEC Minproc Bulgaria EOOD Bulgaria 100
---------
Cameroon
Amec Foster Wheeler Cameroon
SARL Cap Limboh, Limbe, BP1280, Cameroon 100
---------
Canada
900 AMEC Place, 801-6th Avenue S.W.,
Amec Foster Wheeler Canada Ltd. Calgary, AB, T2P 3W3, Canada 100
---------
2020 Winston Park Drive, Suite 700,
AMEC South America Limited Oakville, ON, L6H 6X7, Canada 100
---------
900 AMEC Place, 801-6th Avenue S.W.,
MASA Ventures Limited Calgary, AB, T2P 3W3, Canada 100
---------
Rider Hunt International (Alberta) 900 AMEC Place, 801-6th Avenue S.W.,
Inc. Calgary, AB, T2P 3W3, Canada 100
---------
Wood Architectural Services 133 Crosbie Road, St. John's, NL,
Ltd. A1B 1H3, Canada 0*
---------
2020 Winston Park Drive, Suite 700,
Wood Canada Limited Oakville, ON, L6H 6X7, Canada 100
---------
900 AMEC Place, 801-6th Avenue S.W.,
Wood Geomatics Limited Calgary, AB, T2P 3W3, Canada 100
---------
Borden Ladner Gervais LLP, Centennial
Place, East Tower, 1900, 520 - 3rd
Wood Group Asset Integrity Solutions, Ave. S.W., Calgary, AB, T2P 0R3,
Inc. Canada 100
---------
Borden Ladner Gervais LLP, Centennial
Place, East Tower, 1900, 520 - 3rd
Ave. S.W., Calgary, AB, T2P 0R3,
Wood Group Canada, Inc Canada 100
---------
Borden Ladner Gervais LLP, Centennial
Place, East Tower, 1900, 520 - 3rd
Ave. S.W., Calgary, AB, T2P 0R3,
Wood Group Kenny Canada Ltd. Canada 100
---------
Cayman Islands
Codan Trust Company (Cayman) Limited,
Cricket Square, Hutchins Drive,
FW Chile Holdings Ltd. PO Box 2681, George Town, KY1-1111 100
---------
Sterling Trust (Cayman) Limited,
Whitehall House, 238 North Church
Wood Group O&M International, Street, George Town, KY1-1102, Cayman
Ltd. Islands 100
---------
Chile
AMEC CADE Ingeniería y Av. Jose Domingo, Canas No 2640,
Desarrollo De Proyectos Limitada Nunoa, Santiago, 7750164, Chile 100
---------
Amec Foster Wheeler International
Ingenieria y Construcción Av. Apoquindo 3846, piso 15, Las
Limitada Condes, Santiago, 7550123, Chile 100
---------
Amec Foster Wheeler Talcahuano, Camino A Ramuntcho 3230, Sector
Operaciones y Mantenciones Limitada 4 Esquinas, Talcahuano, Chile 100
---------
Calle Providencia 337, off. 7, Comuna
ISI Mustang Chile SpA de Providencia, Santiago, Chile 100
---------
China
Amec Foster Wheeler Engineering Room 401, Floor 4, No, 120 Qixia
& Construction Design (Shanghai) Road, Pudong New Area, Shanghai,
Co., Ltd. China 100
---------
Amec Foster Wheeler Engineering Room 204, Building 1, No. 1287,
& Consulting (Shanghai) Co., Shangcheng Road, Pudong New District,
Ltd Shanghai 100
---------
Feng Neng Sgurr (Beijing) Renewable 1217, No 5 Dongzhimen South Avenue,
Energy Technology Co. Ltd Dongcheng, China 100
---------
Room D2, 6th Floor,No 2446, Jin
Grenland Group (China) Limited Qiao Road, Shanghai, Pudong, China 100
---------
Colombia
Procesos y Disenos Energeticos Carrera 11 A No. 96-51 5th floor,
S.A.S. Bogota D.C., Colombia 100
---------
Curaçao
Harwat International Finance Curado Trust, Penstraat 35, P.O.
Corporation N.V. Box 4888, Curacao 100
---------
Cyprus
1, Lampousas Street, 1095 Nicosia,
AMEC Overseas (Cyprus) Limited Cyprus 100
---------
Themistokli Dervi, 5, Elenion Building,
J P Kenny Overseas Limited 2nd Floor, P.C. 1005, Nicosia, Cyprus 100
---------
Elenion Building, 2nd Floor, 5 Themistocles
Street, CY-1066 Nicosia,CY-1310
WGPS International Limited Nicosia, PO Box 25549, Cyprus 100
---------
Elenion Building, 2nd Floor, 5 Themistocles
Street, CY-1066 Nicosia,CY-1310
Wood Group Angola Limited Nicosia, PO Box 25549, Cyprus 100
---------
Elenion Building, 2nd Floor, 5 Themistocles
Wood Group Equatorial Guinea Street, CY-1066 Nicosia,CY-1310
Limited Nicosia, PO Box 25549, Cyprus 100
---------
Czech Republic
Amec Foster Wheeler s.r.o. Krenova 58, Brno, 60200, Czech Republic 100
---------
Democratic Republic of Congo
32 Avenue 3Z, Commune de Kasuku,
Ville de Kindu, Democratic Republic
MDM Engineering SPRL of Congo 100
---------
Egypt
Foster Wheeler Petroleum Services Al-Amerya General Free Zone, Alexandria,
S.A.E. Egypt 100
---------
Equatorial Guinea
Baker Energy International Equatorial
Guinea S.A. Bioko, Island Region, Malabo 65
---------
Hexagon Sociedad Anonima con c/o Solege, Calle Kenia S/N, Malabo,
Consejo de Administracion Equatorial Guinea 65
---------
France
14, Place de la Coupole, Charenton-le-Pont,
Amec Foster Wheeler France S.A. France, 94220 100
---------
Wood Group Engineering Services 6Pl de la Madeleine, 75008, Paris,
(France) SAS France 100
---------
60 rue de La Chaussee d'Antin, 75009,
Wood Group France SAS Paris, France 100
---------
Immeuble Horizon Sainte Victoire,
Bâtiment A, 970 rue René
Descartes, 13857 Aix-en-Provence
Wood Nuclear France SAS cedex 3, France 100
---------
Gabon
Production Services Network Place of Independence, En face de
Gabon SARL la BVMAC, Libreville, BP 922, Gabon 100
---------
Germany
Bauunternehmung Kittelberger Liebigstr. 1-3, Kaiserslautern,
GmbH i.L. 67661, Germany 100
---------
KIG Immobilien Beteiligungsgesellschaft
mbH Hammstrasse 6, 04129 Leipzig, Germany 100
---------
KIG Immobiliengesellschaft mbH
& Co. KG Hammstrasse 6, 04129 Leipzig, Germany 100
---------
Weserstrasse 4, Frankfurt am Main,
Wood E&IS GmbH 60329, Germany 100
---------
Ghana
3rd Floor Teachers Hall Complex,
Amec Foster Wheeler Operations Education Loop, Off Barnes Road,
Ghana Limited PO Box 1632, Accra, Ghana 100
---------
2nd Floor Cedar House, 13 Samora
Machel Road, Asylum Down, Accram,
MDM Projects - Ghana Limited Ghana 100
---------
No 4 Momotsa Avenue, Behind All
Saints Anglican Church, Adabraka,
Wood & BBS Ghana Limited Accra, Ghana 80
---------
20 Jones Nelson Road, Adabraka,
Wood Group Ghana Limited Accra, Ghana 49*
---------
Gibraltar
Foster Wheeler (Gibraltar) Holdings Suite 1, Burns House, 19 Town Range,
Limited Gibraltar 100
---------
Greece
Amec Foster Wheeler Hellas Engineering 21 Elvetias Street, (First Floor),
and Construction Societe Anonyme Agia Paraskevi, 153 42, Greece 100
---------
Guatemala
AMEC Guatemala Engineering and
Consulting, Sociedad Anonima Ciudad Guatemala, Guatemala 100
---------
Guernsey
22 Havilland Street, St Peter Port,
AMEC Operations Limited GY1 2QB, Guernsey 100
---------
PO Box 33, Maison Trinity, Trinity
Square, St Peter Port, GY1 4AT,
Garlan Insurance Limited Guernsey 100
---------
PO Box 119 Martello Court, Admiral
Wood Group Offshore Services Park, St Peter Port, Guernsey, GY1
Limited 3HB, Guernsey 100
---------
22 Havilland Street, St Peter Port,
Wood USA Holdings Limited GY1 2QB, Guernsey 100
---------
Hong Kong
5008, 50th Floor, Central Plaza,
AMEC Asia Pacific Limited 18 Harbour Road, Wanchai, Hong Kong 100
---------
5008, 50th Floor, Central Plaza,
AMEC Engineering Limited 18 Harbour Road, Wanchai, Hong Kong 100
---------
26/F Beautiful Group Tower, 77 Connaught
SgurrEnergy Hong Kong Limited Road Central, Hong Kong 100
---------
Hungary
FW Hungary Licensing Limited Krisztina korut 2-4. I. em. 17,
Liability Company Budapest, Hungary, 1122 100
---------
India
6th Floor, Zenith Building, Ascendas
Amec Foster Wheeler India Private IT Park, CSIR Road, Taramani, Chennai
Limited 600 113, India 100
---------
307, Atlanta Estate, 3rd Floor,
Hanuman Tekdil Road Vitbhatti, Off.
Ingenious Process Solutions W.E. Highway, Goregaon (East) Mumbai
Private Limited MH 400063 100
---------
R9, F -3 RD W: B, P-214, B- Wing,
Mustang Engineering India Private Laxmikant Apartment,Sitaram Keer
Limited Marg, Mahim, Mumbai, 400016, India 100
---------
15th Floor Tower-B, Building No.
Wood Group Kenny India Private 5, DLF Cyber City, ,HR, Phase III
Limited Gurgaon Gurgaon, 122002, India 100
---------
Floor 15, Building No 5, Tower B,
Cyber Terraces, DLF Cyber City,
Wood Group PSN India Private Phase III,Haryana, Gurgaon - 122002,
Limited India 100
---------
Indonesia
c/o 2020 Winston Park Drive, Suite
PT AGRA Monenco 700, Oakville, ON, L6H 6X7, Canada 100
---------
Perkantoran Pulo mas Blok VII No.
2, Jl Perintis Kemerdekaan, Pulo
PT Amec Foster Wheeler Indonesia Gadung, Jakarta, Timur, Indonesia 85
---------
Green Town Warehouse No. 2, Bengkong-Batam-Indonesia,
PT Australian Skills Training Indonesia 95
---------
Perkantoran Pulo mas Blok VII No.2,
Jl. Perintis Kemerdekaan, Pulo Gadung,
PT Foster Wheeler O&G Indonesia Jakarta Timur 13260, Indonesia 90
---------
c/o 2020 Winston Park Drive, Suite
PT Harding Lawson Indonesia 700, Oakville, ON, L6H 6X7, Canada 100
---------
c/o 2020 Winston Park Drive, Suite
PT Simons International Indonesia 7000, Oakville, Ontario, Canada 100
---------
Office 88 Tower, 20th - H Floor,
Jl. Casablanca Kav 88, South Jakarta,
PT Wood Group Indonesia Jakarta, 12870, Indonesia 90
---------
Iran
9th Floor Aluminumm Building, Avenue
Foster Wheeler Adibi Engineering Shah, Tehran 45
---------
Wood Group Iran - Qeshm Company No 2564, Hafez Street, Toola Industrial
(pjs) Park,Qeshm Island, Annaba, Iran 97
---------
Iraq
Ghabet El Iraq for General Contracting Suite 24, Building 106,St 19, Sec
and Engineering Services, Engineering 213, Al-Kindi St, Al-Haritheeya
Consultancy (LLC) Qts, Baghdad, Iraq 100
---------
Flat no. 23A, 3rd Floor, near Kahramana
Touchstone General Contracting, Square Anbar Building, District
Engineering Consultancy and no. 903, Hay Al Karada, Baghdad,
Project Management LLC Iraq 100
---------
Shoresh, Hadid and Khashab St.,
Wood Group, LLC Kurdistan, Erbil, Iraq 100
---------
Ireland
Second Floor, Blocks 4 and 5, Galway
Technology Park, Parkmore, Galway,
JWG Ireland CAD Unlimited Company Ireland 100
---------
Second Floor, Blocks 4 and 5,Galway
Technology Park, Parkmore, Galway,
JWG Ireland NOK Unlimited Company Ireland 100
---------
Second Floor, Blocks 4 and 5, Galway
JWG Ireland USD 2 Unlimited Technology Park, Parkmore, Galway,
Company Ireland 100
---------
Second Floor, Blocks 4 and 5, Galway
JWG Ireland USD 3 Unlimited Technology Park, Parkmore, Galway,
Company Ireland 100
---------
Second Floor, Blocks 4 and 5, Galway
Technology Park, Parkmore, Galway,
JWG Ireland USD Unlimited Company Ireland 100
---------
c/o Matheson Ormsby Prentice, 70
Sir John Rogerson's Quay, Dublin
Wood Group Kenny Ireland Limited 2, Ireland 100
---------
Italy
Amec Foster Wheeler Italiana Via S. Caboto 15, Corsico, 20094,
S.r.l. Italy 100
---------
Via S. Caboto 15, Corsico (Milano),
FW TURNA S.r.l. 20094, Italy 100
---------
Via S. Caboto 15, Corsico, Milan,
Metora S.r.l. 20094, Italy 100
---------
Via S. Caboto 15, Corsico, Milan,
Wood Eolico Italia S.r.l. 20094, Italy 100
---------
Via S. Caboto 15, Corsico, Milan,
Wood Solare Italia S.r.l. 20094, Italy 100
---------
Jamaica
c/o 2020 Winston Park Drive, Suite
Monenco Jamaica Limited 700, Oakville, ON, L6H 6X7, Canada 100
---------
Japan
Shiba International Law Offices,
1-3-4-5F Atago, Minatoku, Tokyo,
Amec Foster Wheeler Asia K.K. 105-0002, Japan 100
---------
Jersey
AMEC Nuclear Consultants International 95/97 Halkett Place, St Helier,
Limited JE1 1BX, Jersey 100
---------
28 Esplanade, St Helier, JE2 3QA,
GTS Power Solutions Limited Jersey 100
---------
28 Esplanade, St Helier, JE2 3QA,
RHI Talent UK Limited Jersey 100
---------
Wood Group Engineering Services 28 Esplanade, St Helier, JE2 3QA,
(Middle East) Limited Jersey 100
---------
Wood Group Production Facilities 28 Esplanade, St Helier, JE2 3QA,
Limited Jersey 100
---------
Kazakhstan
46 Satpayev St., Atyrau City, Atyrau
AMEC Limited Liability Partnership Oblast, 060011, Kazakhstan 100
---------
app. 27, h. 64, Bostandykskiy district,
Foster Wheeler Kazakhstan LLP Abaya Ave., Almaty City, Kazakhstan 100
---------
QED International (Kazakhstan) 46 Satpayev St., Atyrau City, Atyrau
Limited Liability Partnership Oblast, 060011, Kazakhstan 100
---------
55 Ablai Khan Ave., Room #112/114,
Wood Group Kazakhstan LLP Almaty, 050004, Kazakhstan 100
---------
Yeskertkish Kyzmet Kazakhstan Building 70A, Street No12, microdistrict
LLP Samal, Atyrau city, 060011, Kazakhstan 100
---------
Kuwait
AMEC Kuwait Project Management 2nd Floor, Al Mutawa Building, Ahmed
and Contracting Company W.L.L. Al Jaber Street, Sharq, Kuwait City 49*
---------
Liberia
Amec Foster Wheeler Liberia King Plaza, 2nd-4th Floors, Broad
Inc Street, Monrovia 10, Liberia 100
---------
Luxembourg
5, rue Guillaume Kroll, Luxembourg,
AFW Luxembourg 1 S.a.r.l. L-1882 100
---------
5, rue Guillaume Kroll, Luxembourg,
AFW Luxembourg 2 S.a.r.l. L-1882 100
---------
Financial Services S.à 15, Boulevard Friedrich Wilhelm
r.l. Raiffeisen, L-2411, Luxembourg 100
---------
FW Investment Holdings S.à 5, rue Guillaume Kroll, Luxembourg,
r.l. L-1882 100
---------
Malaysia
Suite 1005, 10th Floor, Wisma Hamzah-Kwong
Hing, No. 1, Leboh Ampang, Kuala
AMEC (Malaysia) Sdn Bhd Lumpur, 50100, Malaysia 100
---------
12th Floor, West Block, Wisma Selangor
Amec Foster Wheeler OPE Sdn Dredging, 142-C Jalan Ampang, Kuala
Bhd Lumpur, 50450, Malaysia 100
---------
Suite 1005, 10th Floor, Wisma Hamzah-Kwong
AMEC Holdings (Malaysia) Sdn Hing, No. 1, Leboh Ampang, Kuala
Bhd Lumpur, 50100, Malaysia 100
---------
Suite 1005, 10th Floor, Wisma Hamzah-Kwong
AMEC Oil Gas and Process Sdn Hing, No. 1, Leboh Ampang, Kuala
Bhd Lumpur, 50100, Malaysia 100
---------
Suite 1005, 10th Floor, Wisma Hamzah-Kwong
Hing, No. 1, Leboh Ampang, Kuala
AMEC Process & Energy Sdn Bhd Lumpur, 50100, Malaysia 100
---------
Unit C-12-4, Level 12, Block C,
Megan Avenue II, Wilayah Persekutuan,Wilayah
Persekutuan, Kuala Lumpur, 50450,
BMA Engineering SDN. BHD. Malaysia 100
---------
Suite 1005, 10th Floor, Wisma Hamzah-Kwong
Foster Wheeler (Malaysia) Sdn. Hing, No. 1, Leboh Ampang, Kuala
Bhd. Lumpur, 50100, Malaysia 100
---------
Suite 1005, 10th Floor, Wisma Hamzah-Kwong
Foster Wheeler E&C (Malaysia) Hing, No. 1, Leboh Ampang, Kuala
Sdn. Bhd. Lumpur, 50100, Malaysia 70
---------
Level 7, Menara Milenium,Jalan Damanlela,
Pusat Bandar Damansara, Damansara
Heights,Wilayah Persekutuan,Wilayah
Persekutuan, Kuala Lumpur, 50490,
Mustang Malaysia Sdn. Bhd. Malaysia 100
---------
Level 7, Menara Milenium, Jalan
Damanlela, Pusat Bandar Damansara,
Rider Hunt International (Malaysia) Damansara Heights, Kuala Lumpur,
Sdn Bhd 50490, Malaysia 100
---------
Level 7, Menara Milenium,Jalan Damanlela,
Pusat Bandar Damansara, Damansara
Heights,Wilayah Persekutuan,Wilayah
Wood Group Engineering Sdn. Persekutuan, Kuala Lumpur, 50490,
Bhd Malaysia 0*
---------
c/o Securities Services (Holdings)
Sdn Bhd, level 7, Menara Milenium,
Jalan Damanlela, Pusat Bandar Damansara,
Damansara Heights, ,Kuala Lumpur,
Damansara Town Centre, Damansa,
Wood Group Kenny Sdn Bhd 50490, Malaysia 0*
---------
Level 7, Menara Milenium,Jalan Damanlela,
Pusat Bandar Damansara, Damansara
Heights,Wilayah Persekutuan,Wilayah
Wood Group Mustang (M) Sdn. Persekutuan, Kuala Lumpur, 50490,
Bhd. Malaysia 100
---------
Lot 1-3, Level 5, Block G (South),
Wood Group Production Facilities Pusat Bandar Damansara, 50490 Kuala
(Malaysia) Sdn. Bhd. Lumpur, Kuala Lumpur, Malaysia 48*
---------
Mauritius
MDM Engineering Investments 1st Floor, Felix House, 24 Dr Joseph
Ltd Street, Port Louis, Mauritius 100
---------
1st Floor, Felix House, 24 Dr Joseph
MDM Engineering Projects Ltd Street, Port Louis, Mauritius 100
---------
St James Court-Suite 308, St Denis
P.E. Consultants, Inc. Street, Port Louis, Mauritius 100
---------
c/o Estera Management (Mauritius)
Ltd, 11th Floor, Medine Mews, La
Chaussée Street, Port Louis,
QED International Ltd Mauritius 100
---------
Mexico
c/o 2020 Winston Park Drive, Suite
AGRA Ambiental S.A. de C.V. 700, Oakville, ON, L6H 6X7, Canada 100
---------
Av. Vasconcelos 453, Colonia del
Valle 66220 Nuevo Leon, Monterrey
Amec Foster Wheeler Energia (Estados Unidos de México),
Mexico S. de R.L. de C.V. Mexico 100
---------
c/o Carlos Salazar, 2333 Oriente,
Amec Foster Wheeler Mexico, Col. Obrera, Monterrrey, Nuevo Leon,
S.A. de C.V. 64010, Mexico 100
---------
453 Planta Alta Del Valle, San Pedro
Garza Garcia, Nuevo Leon 66220,
AYMEC de Mexico S.A. de C.V. Mexico 100
---------
Libramiento Carr. Silao-León
#201, Esq. Prolongación Bailleres,
CEC Controls Automatizacion Col. Progreso Silao, Guanajuato,
S. de R.L. de C.V. CP. 36135, Mexico 100
---------
David Alfaro Siqueiros 104 piso
2, Col. Valle Oriente, San Pedro
Exergy Engineering Services, Garza Garcia, Nuevo Leon, CP. 66269,
S.A. de C.V. Mexico 100
---------
David Alfaro Siqueiros 104 piso
2, Col. Valle Oriente, San Pedro
Exergy Engineering, S.A. de Garza Garcia, Nuevo Leon, CP. 66269,
C.V. Mexico 100
---------
Foster Wheeler Constructors 699 15th Street, 6th Avenue, Agua
de Mexico, S de R.L. de C.V. Prieta, Sonora, Mexico 100
---------
Global Mining Projects and Engineering, Calle Coronado 124, Zona Centro,
S.A. de C.V. Chihuahau, Chihuahau, 31000, Mexico 100
---------
Edificio Omega, Campos Eliseos 345,
Harding Lawson de Mexico S.A. floors 2, 3 & 11, Chapultepec Polanco
de C.V. 11560 Mexico, D.F. 100
---------
HOMERO 1804 PISO 11,COL. LOS MORALES
- DELEGACION MIGUEL HIDALGO, Distrito
ISI Mustang Servicios de Ingenieria Federal, Mexico City, C.P. 11540,
de Mexico, S de R.L. De C.V. Mexico 100
---------
Blvd. Manuel Avila Camacho 40 -
Wood Group de Mexico S.A. de 1801, Lomas de Cahpultepec, Delgacion
C.V. Miguel Hidalgo, Mexico, D.F. 11000 100
---------
Blvd. Manuel Avila Camacho 40 -
Wood Group Management Services 1801, Lomas de Cahpultepec, Delgacion
de Mexico, S.A. de C.V. Miguel Hidalgo, Mexico, D.F. 11000 100
---------
Mongolia
Suite 403, 4th Floor New Century
Plaza, Chinggis Avenue, Sukhbaatar
AMEC LLC District, Ulaanbaatar, Mongolia 100
---------
Mozambique
Mocambique, Maputo Cidade, Distrito
Urbano 1, Bairro Sommerschield II,
Amec Foster Wheeler Mozambique Av. Julius Nyerere, n 3412, Maputo,
Limitada Mozambique 100
---------
73 Rua Jose Sidumo, Bairro da Polana,
Wood Group Mozambique, Limitada Maputo, Mozambique 100
---------
Netherlands
AMEC GRD SA B.V. Meander 251, Arnhem, 6825 MC, Netherlands 100
---------
Prins Bernhardplein 200, 1097 JB,
AMEC Holland B.V. Amsterdam, Netherlands 100
---------
Prins Bernhardplein 200, 1097 JB,
AMEC Investments B.V. Amsterdam, Netherlands 100
---------
Naritaweg 165, 1043 BW Amsterdam,
Foster Wheeler Continental B.V. Netherlands 100
---------
Naritaweg 165, 1043 BW Amsterdam,
Foster Wheeler Europe B.V. Netherlands 100
---------
C/O Centralis Netherlands BV, Zuidplein
126, WTC, Toren H 15e, Amsterdam,
John Wood Group B.V. 1077XV, Netherlands 100
---------
C/O Centralis Netherlands BV, Zuidplein
126, WTC, Toren H 15e, Amsterdam,
John Wood Group Holdings B.V. 1077XV, Netherlands 100
---------
New Zealand
28 Manadon Street, New Plymouth,
M&O Pacific Limited New Zealand 100
---------
Nigeria
13A AJ Marinho Drive, Victoria Island,
AMEC Contractors (W/A) Limited Lagos, Nigeria 100
---------
AMEC King Wilkinson (Nigeria) No 3, Hospital Road, PO Box 9289,
Limited Lagos, Nigeria 100
---------
18th Floor, Western House, 8/10
AMEC Offshore (Nigeria) Limited Broad street, Lagos, Nigeria 75
---------
1 Murtala Muhammed Drive, (Formerly
Foster Wheeler (Nigeria) Limited Bank Road), Ikoyi, Lagos, Nigeria 100
---------
Foster Wheeler Environmental c/o Nwokedi & Co., 21 Ajasa Street,
Company Nigeria Limited Onikan, Nigeria 87
---------
13 Sumbo Jibowu Street, Ikoyi, Lagos,
JWG Nigeria Limited Nigeria 49*
---------
Ebani House (Marina side), 62 Marina,
Monenco Nigeria Limited Lagos, Nigeria 60
---------
Overseas Technical Services No 13 Sumbo Jibowu Street, Ikoyi,
Nigeria Limited Lagos, Nigeria 93
---------
Norway
Fokserodveien 12, Sandefjord, 3241,
Erbus AS Norway 100
---------
Wood Group Kenny Norge AS Lkkeveien 99, Stavanger, 4008, Norway 100
---------
Fokserodveien 12, Sandefjord, 3241,
Wood Group Norway AS Norway 100
---------
Fokserodveien 12, Sandefjord, 3241,
Wood Group Norway Holdings AS Norway 100
---------
Wood Group Norway Operations
AS Kanalsletta 2, 4033 Stavanger, Norway 100
---------
Oman
Amec Foster Wheeler Engineering PO Box 1469, Postal Code 133, Al-Khuwair,
Consultancy LLC Sultanate of Oman 60
---------
Bldg No. 89, Way No. 6605, Al Oman
Street, Ghala Industrial Area, P.O.
Wood LLC Box 293, Al Khuwair, PC 133, Oman 70*
---------
Panama
MACTEC Engineering and Consulting, Brisas del Golf, Street 17, House
Corp. 4-E Panama City, Panama 0*
---------
Papua New Guinea
Deloitte Touche Tohmatsu, Level
9, Deloitte Haus, Macgregor Street,
Section 8, Allotment 19, Port Moresby,
National Capital District, Papua
Wood Engineering PNG Ltd New Guinea 100
---------
Dentons PNG, Level 5, Bsp Haus,
Harbour City, Port Moreseby,Papau
New Guinea, National Capital District,
Wood Group PNG Limited Papua New Guinea 100
---------
Peru
Amec Foster Wheeler Perú Calle Las Begonias 441, Piso 8,
S.A. San Isidro, Lima, 27, Peru 100
---------
Calle Martir Olaya 201, off. 801
ISI Mustang Peru S.A.C. Miraflores, Lima, Peru 100
---------
Av. de la Floresta 407, 5th Floor,
Wood Group Peru S.A.C. San Borja, Lima, Peru 100
---------
Philippines
U-7A, 7/F PDCP Bank Centre,V.A.
Rufino St. Corner L.P. Leviste St.,
Foster Wheeler (Philippines) Salcedo Village, Makati City, PH,
Corporation 1227 100
---------
585 ME National Road HW, Barangay
Production Services Network Alangilan, Batangas City, Batangas,
Holdings Corp. Philippines 100
---------
12th Floor, Net One Center,26th
Street Corner, 3rd Avenue, Crescent
PSN Production Services Network Park West,Taguig, Metro Manilla,
Philippines Corp Bonifacio Global City, 1634, Philippines 40*
---------
Poland
Amec Foster Wheeler Consulting ul. Chmielna 132/134, Warsaw, 00-805,
Poland Sp. z o.o. Poland 100
---------
Portugal
Amec Foster Wheeler (Portugal) Avenida Barbosa du Bocage 113-4,
Lda Lisboa, 1050-031, Portugal 100
---------
Puerto Rico
MACTEC Engineering and Consulting BBVA Tower Suite P1, 254 Munoz Rivera
- Caribe, P.S.C. Ave., San Juan, 00918, Puerto Rico 0*
---------
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
AMEC Operations S.R.L 1, Bucharest 010623, Romania 100
---------
Bulevardul Tudor Vladimirescu No.
22, Bldg. Greengate Office, 5th
Floor, Room 516, Campus 02, District
CEC Controls Company S.R.L. 5, Bucharest, Romania 100
---------
Russia
Office E-100, Park Place, 113/1,
Leninsky Prospekt, 117198, Moscow,
OOO Amec Foster Wheeler Russian Federation 100
---------
Production Services Network Tverskaya St. 16/3, Moscow, Moscow,
Eurasia LLC 125009, Russian Federation 50*
---------
Production Services Network 2-6 Floors,88 Amurskaya, Yuzhno-Sakhalinsk,
Sakhalin LLC 693020, Russian Federation 50*
---------
Suite 417, Kommunistichesy Prospekt
Sakhalin Technical Services 32, Yuzhno-Sakhalinsk, Sakhalin,
Network LLC Russian Federation 40*
---------
Saudi Arabia
Amec Foster Wheeler Energy and Karawan Towers, South Block, King
Partners Engineering Company Faisal Road, Al-Khobar, Saudi Arabia 75
---------
Mustang and Faisal Jamil Al-Hejailan PO Box 9175, Riyadh, 11413, Saudi
Consulting Engineering Company Arabia 70
---------
P.O. Box 17411, Riyadh, 11484, Saudi
Mustang Saudi Arabia Co. Ltd. Arabia 100
---------
Wood Group ESP Saudi Arabia
Limited PO Box 1280, Al-Khobar 51
---------
Singapore
Amec Foster Wheeler Asia Pacific One Marina Boulevard #28-00, Singapore,
Pte. Ltd. 018989, Singapore 100
---------
991E Alexandra Road, #01 - 25, 119973,
AMEC Global Resources Pte Limited Singapore 100
---------
991E Alexandra Road, #01 - 25, 119973,
AMEC Global Services Pte Ltd Singapore 100
---------
Australian Skills Training Pte. 991E, Alexandra Road, #01-25, Singapore,
Ltd. 119973, Singapore 100
---------
Foster Wheeler Eastern Private 1 Marina Boulevard, #28-00, Singapore
Limited 018989 100
---------
1 Marina Boulevard, #28-00, One
OPE O&G Asia Pacific Pte. Ltd. Marina Boulevard, 018989, Singapore 100
---------
Rider Hunt International (Singapore) 24 Raffles Place, #24-03 Clifford
Pte Limited Centre, Singapore, 048621 100
---------
Simons Pacific Services Pte #27-01 Millenia Tower, 1 Temasek
Ltd. Ave, Singapore, 039192 100
---------
Wood Group International Services Shaw Tower #28-09, 100 Beach Road,
Pte. Ltd. Singapore, 189702 100
---------
Slovakia
Hviezdoslavovo namestie 13, Mestska
The Automated Technology Group cast Stare Mesto, Bratislava, 811
(Slovakia) s.r.o. 02, Slovakia 100
---------
Wood Nuclear Slovakia s.r.o. Piestanska 3, Trnava, 917 01, Slovakia 100
---------
South Africa
Amec Foster Wheeler Properties Second Road, Halfway House, P. O.
(Pty) Limited Box 76, Midrand 1685, South Africa 100
---------
2 Eglin Road, Sunninghill, 2157,
AMEC Minproc (Proprietary) Limited South Africa 100
---------
Mossel Bay Energy IPP (proprietary) 2nd Road Halfway House, Midrand,
Limited (RF) South Africa 90
---------
Nuclear Consultants International Nr 5, 5th Ave, Melkbos Strand, Cape
(Proprietary) Limited Town, 7441, South Africa 100
---------
25 Frederick Street, Observatory
Rider Hunt International South Ext, Gauteng, Johannesburg, 2198,
Africa (Pty) Ltd South Africa 48*
---------
Wood BEE Holdings (Proprietary) 88, 2nd Street, Halfway House, Midrand,
Ltd Gauteng, 1685, South Africa 58
---------
Zeelie Office Park, 381 Ontdekkers
Wood Mining South Africa (Pty) Road, Floida Park Ext 3, Roodepoort,
Ltd 1709, South Africa 100
---------
88, 2nd Street, Halfway House, Midrand,
Wood South Africa (PTY) Ltd Gauteng, 1685, South Africa 70
---------
South Korea
KT Building 11F, 14 Yeouidaero,
AMEC Korea Limited Youngdeungpo-gu, Seoul 07320 100
---------
Spain
Calle Gabriel Garcia Marquez, no
2, Parque Empresarial Madrid, Las
Amec Foster Wheeler Energia, Rozas, 28232 Las Rozas, Madrid,
S.L.U. Spain 100
---------
Calle Gabriel Garcia Marquez, no
2, Parque Empresarial Madrid - Las
Rozas, 28230 Las Rozas, Madrid,
Amec Foster Wheeler Iberia S.L.U. Spain 100
---------
Switzerland
c/o Intertrust Services (Schweiz)
A-FW International Investments AG, Alpenstrasse 15, 6300, Zug,
GmbH Zug, Switzerland 100
---------
Amec Foster Wheeler Engineering
AG Lohweg 6, 4054 Basel, Switzerland 100
---------
Tanzania
Plot No. 18, Rukwa Street, Masaki
Kinondoni Municipality, PO Box 38192,
MDM Projects-Tanzania Limited Dar es Salaam, Tanzania 100
---------
Thailand
1st Floor Talaythong Tower, 53 Moo
Amec Foster Wheeler Holding 9, Sukhumvit Road, Thungsukla, Sriracha,
(Thailand) Limited Chonburi, 20230, Thailand 100
---------
53 Talaythong Tower, 1st Floor,
Moo 9, Sukhumvit Road, Tambol Tungsukhla,
Amphur Sriracha, Chonburi, 20230,
Foster Wheeler (Thailand) Limited 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 Engineering Road, Khwaeng Samsennok, Khet Huaykwang,
Ltd. Bangkok Metropolis, Thailand 100
---------
Trinidad and Tobago
Wood Group Trinidad & Tobago 18 Scott Bushe Street, Port of Spain,
Limited Trinidad and Tobago 100
---------
Turkey
Kucukbakkalkoy Mah, Çardak
Amec Foster Wheeler Bimas Birlesik Sok, No.1A Plaza, 34750 Atasehir,
Insaat ve Muhendislik A.S. Istanbul, Turkey 100
---------
Uganda
KAA House, Plot 41,Nakasero Road,
Wood Group PSN Uganda Limited PO Box 9566, Kampala, Uganda 100
---------
Ukraine
Room 398, Building 26, Obolonskyi
Wood Ukraine LLC Avenue, Kyiv City, 04205, Ukraine 100
---------
United Arab Emirates
Floor 5, International Tower,Capital
Centre, 24th (Karama) Street, P.O.
Production Services Network Box 105828, Abu Dhabi, United Arab
Emirates LLC Emirates 49*
---------
The MAZE Tower, 15th Floor, Sheikh
PSN Overseas Holding Company Zayed Road, PO Box 9275, Dubai,
Limited United Arab Emirates 100
---------
United Kingdom
Booths Park, Chelford Road, Knutsford,
AFW E&C Holdings Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AFW Finance 2 Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AFW Hungary Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AFW Investments Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC (AGL) Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC (BCS) 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
---------
Booths Park, Chelford Road, Knutsford,
AMEC Capital Projects Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Civil Engineering Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Construction Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Engineering Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Facilities Limited Cheshire, WA16 8QZ, England 100
---------
Amec Foster Wheeler (Holdings) Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
---------
Amec Foster Wheeler Earth and Booths Park, Chelford Road, Knutsford,
Environmental (UK) Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Amec Foster Wheeler Energy Limited Cheshire, WA16 8QZ, England 100
---------
Amec Foster Wheeler Finance Booths Park, Chelford Road, Knutsford,
Asia Limited Cheshire, WA16 8QZ, England 100
---------
Amec Foster Wheeler Finance Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Amec Foster Wheeler Group Limited Cheshire, WA16 8QZ, England 100
---------
Amec Foster Wheeler International Booths Park, Chelford Road, Knutsford,
Holdings Limited Cheshire, WA16 8QZ, England 100
---------
Amec Foster Wheeler International Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Amec Foster Wheeler Limited Cheshire, WA16 8QZ, England 100
---------
Amec Foster Wheeler Nuclear Booths Park, Chelford Road, Knutsford,
International Limited Cheshire, WA16 8QZ, England 100
---------
Amec Foster Wheeler Property Booths Park, Chelford Road, Knutsford,
and Overseas Investments Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Investments Europe Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Kazakhstan Holdings Limited Cheshire, WA16 8QZ, England 100
---------
AMEC Manufacturing and Services Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
---------
AMEC Mechanical and Electrical Booths Park, Chelford Road, Knutsford,
Services Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Mining Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Nominees Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Nuclear Overseas Limited Cheshire, WA16 8QZ, England 100
---------
Ground Floor, 15 Justice Mill Lane,
AMEC Offshore Developments Limited Aberdeen, AB11 6EQ, Scotland 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Offshore Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Process and Energy Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Project Investments 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
---------
Booths Park, Chelford Road, Knutsford,
AMEC USA Finance Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC USA Holdings Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC USA Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Utilities Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
AMEC Wind Developments Limited Cheshire, WA16 8QZ, England 100
---------
Applied Environmental Research Booths Park, Chelford Road, Knutsford,
Centre Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Attric Ltd Cheshire, WA16 8QZ, England 100
---------
Compass Point,79-87 Kingston Road,
Automated Technology Group Holdings Staines, TW18 1DT, England, United
Limited Kingdom 100
---------
c/o Ledingham Chalmers LLP, 3rd
East Mediterranean Energy Services Floor, 68-70 George Street, Edinburgh,
Limited EH2 2LR, United Kingdom 100
---------
Energy, Safety and Risk Consultants Booths Park, Chelford Road, Knutsford,
(UK) Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Entec Holdings Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Foster Wheeler (G.B.) Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Foster Wheeler (London) Limited Cheshire, WA16 8QZ, England 100
---------
Foster Wheeler (Process Plants) Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Foster Wheeler E&C 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 Investments 15 Justice Mill Lane, Aberdeen,
Limited AB11 6EQ, Scotland 100
---------
Foster Wheeler World Services Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
FW Chile Holdings 2 Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
FW Investments Limited Cheshire, WA16 8QZ, England 100
---------
15 Justice Mill Lane, Aberdeen,
HFA Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Compass Point,79-87 Kingston Road,
Integrated Maintenance Services Staines, TW18 1DT, England, United
Limited Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
JWG Trustees Limited AB11 6EQ, Scotland, United Kingdom 100
---------
James Scott Engineering Group Ground Floor, 15 Justice Mill Lane,
Limited Aberdeen, AB11 6EQ, Scotland 100
---------
Ground Floor, 15 Justice Mill Lane,
James Scott Limited Aberdeen, AB11 6EQ, Scotland 100
---------
15 Justice Mill Lane, Aberdeen,
John Wood Group Holdings Limited AB11 6EQ, Scotland 100
---------
15 Justice Mill Lane, Aberdeen,
JWG Investments Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
JWGUSA Holdings Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
Kelwat Investments Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Booths Park, Chelford Road, Knutsford,
MDM UK Finance Limited Cheshire, WA16 8QZ, England 100
---------
Metal and Pipeline Endurance Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
---------
15 Justice Mill Lane, Aberdeen,
Mustang Engineering Limited AB11 6EQ, Scotland, United Kingdom 100
---------
National Nuclear Corporation Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 100
---------
15 Justice Mill Lane, Aberdeen,
Offshore Design Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Booths Park, Chelford Road, Knutsford,
Press Construction Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Process Plants Suppliers Limited Cheshire, WA16 8QZ, England 100
---------
Production Services Network 15 Justice Mill Lane, Aberdeen,
(UK) Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Compass Point,79-87 Kingston Road,
Production Services Network Staines, TW18 1DT, England, United
Bangladesh Limited Kingdom 100
---------
Compass Point,79-87 Kingston Road,
Staines, TW18 1DT, England, United
PSJ Fabrications Ltd Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
PSN (Angola) Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
PSN (Philippines) Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
PSN Asia Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
PSN Overseas Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Compass Point,79-87 Kingston Road,
Staines, TW18 1DT, England, United
Pyeroy Limited Kingdom 100
---------
Ground Floor, 15 Justice Mill Lane,
QED International (UK) Limited Aberdeen, AB11 6EQ, Scotland 100
---------
Booths Park, Chelford Road, Knutsford,
Rider Hunt International Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Sandiway Solutions (No 3) Limited Cheshire, WA16 8QZ, England 100
---------
Compass Point,79-87 Kingston Road,
Staines, TW18 1DT, England, United
SD FortyFive Limited Kingdom 100
---------
St Vincent Plaza, 319 St Vincent
Street, Glasgow, G2 5LP, Scotland,
SgurrEnergy Limited United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
SgurrControl Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Booths Park, Chelford Road, Knutsford,
Sigma Financial Facilities Limited Cheshire, WA16 8QZ, England 100
---------
Compass Point,79-87 Kingston Road,
The Automated Technology Group Staines, TW18 1DT, England, United
Limited Kingdom 100
---------
Ground Floor, 15 Justice Mill Lane,
WGD028 Limited Aberdeen, AB11 6EQ, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
WGPSN (Holdings) Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
WGPSN Eurasia Limited AB11 6EQ, Scotland, United Kingdom 50
---------
Wood Environment & Infrastructure Booths Park, Chelford Road, Knutsford,
Solutions UK Limited Cheshire, WA16 8QZ, England 100
---------
15 Justice Mill Lane, Aberdeen,
Wood Group Algeria Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
Wood Group Algiers Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
Wood Group Annaba Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
Wood Group Arzew Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Wood Group Engineering & Operations 15 Justice Mill Lane, Aberdeen,
Support Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Wood Group Engineering (North 15 Justice Mill Lane, Aberdeen,
Sea) Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Wood Group Engineering Contractors 15 Justice Mill Lane, Aberdeen,
Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Wood Group Gas Turbine Services 15 Justice Mill Lane, Aberdeen,
Holdings Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
Wood Group Hassi Messaoud Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Wood Group Holdings (International) 15 Justice Mill Lane, Aberdeen,
Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Compass Point,79-87 Kingston Road,
Wood Group Industrial Services Staines, TW18 1DT, England, United
Limited Kingdom 100
---------
Compass Point,79-87 Kingston Road,
Staines, TW18 1DT, England, United
Wood Group Intetech Limited Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
Wood Group Investments Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
Wood Group Kenny Corporate Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Compass Point,79-87 Kingston Road,
Staines, TW18 1DT, England, United
Wood Group Kenny Limited Kingdom 100
---------
Compass Point,79-87 Kingston Road,
Staines, TW18 1DT, England, United
Wood Group Kenny UK Limited Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
Wood Group Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Wood Group Management Services 15 Justice Mill Lane, Aberdeen,
Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Wood Group Power Investments 15 Justice Mill Lane, Aberdeen,
Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Wood Group Production Services 15 Justice Mill Lane, Aberdeen,
UK Limited AB11 6EQ, Scotland, United Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
Wood Group UK Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Compass Point,79-87 Kingston Road,
Staines, TW18 1DT, England, United
Wood Group/OTS Limited Kingdom 100
---------
15 Justice Mill Lane, Aberdeen,
Wood International Limited AB11 6EQ, Scotland, United Kingdom 100
---------
Booths Park, Chelford Road, Knutsford,
Wood Nuclear Holdings Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Wood Nuclear Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Wood Pensions Trustee Limited Cheshire, WA16 8QZ, England 100
---------
Booths Park, Chelford Road, Knutsford,
Wood Transmission and Distribution Cheshire, WA16 8QZ, England, United
Limited Kingdom 100
---------
United States
400 North St. Paul, Dallas, TX,
4900 Singleton, L.P. 75201 100
---------
511 Congress Street, Ste. 200, Portland,
AMEC Architectural, Inc. ME, 04101, United States 100
---------
United Agent Group Inc., 3411 Silverside
Road Tatnall Building #104, Wilmington,
AMEC Construction Management, New Castle County, DE, 19810, United
Inc. States 100
---------
1209, Orange Street, Wilmington,
AMEC Developments, Inc. DE, 19801, United States 100
---------
600 N 2nd Street, Suite 401, Harrisburg,
AMEC E&E, P.C. PA, 17101-1071, United States 0*
---------
AMEC Engineering and Consulting 46850 Magellan, Suite 190, Novi,
of Michigan, Inc. MI, 48377, United States 100
---------
c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange
Amec Foster Wheeler Arabia Ltd. Street, Wilmington, DE, 19801 100
---------
Amec Foster Wheeler Design, 1075 Big Shanty Rd NW, Ste. 100,
LLC Kennesaw, GA, 30144, United States 0*
---------
Corporation Trust Company, Corporation
Amec Foster Wheeler Environmental Trust Center, 1209 Orange Street,
Equipment Company, Inc. Wilmington, New Castle, DE, 19801 100
---------
Corporation Trust Company, Corporation
Amec Foster Wheeler Industrial Trust Center, 1209 Orange Street,
Power Company, Inc. Wilmington, New Castle, DE, 19801 100
---------
Amec Foster Wheeler Kamtech, 1979 Lakeside Parkway, Suite 400,
Inc. Tucker, GA, 30084, United States 100
---------
c/o The Corporation Trust Company,
Amec Foster Wheeler Martinez, Corporation Trust Center, 1209 Orange
Inc. Street, Wilmington, DE, 19801 100
---------
United Agent Group Inc., 3411 Silverside
Amec Foster Wheeler North America Road, Tatnall Bldg. #104, Wilmington,
Corp. DE, 19810, United States 100
---------
c/o The Corporation Trust Company,
Amec Foster Wheeler Power Systems, Corporation Trust Center, 1209 Orange
Inc. Street, Wilmington, DE, 19801 100
---------
United Agent Group Inc., 3411 Silverside
Road, Tatnall Bldg. #104, Wilmington,
Amec Foster Wheeler USA Corporation DE, 19810, United States 100
---------
Amec Foster Wheeler Ventures, 1979 Lakeside Parkway, Suite 400,
Inc. Tucker, GA, 30084, United States 100
---------
United Agent Group Inc., 3411 Silverside
Road Tatnall Building #104, Wilmington,
New Castle County, DE, 19810, United
AMEC Holdings, Inc. States 100
---------
1105 Lakewood Parkway, Suite 300,
AMEC Industrial Programs, LLC Alpharetta, GA, 30009, United States 100
---------
40600 Ann Arbor Road E, Suite 201,
Plymouth, MI, 48170-4675, United
AMEC Michigan, Inc. States 100
---------
1209, Orange Street, Wilmington,
AMEC Newco LLC DE, 19801, United States 100
---------
225, Hillsborough Street, Raleigh,
AMEC North Carolina, Inc. NC, 27603, United States 100
---------
AMEC Oil & Gas World Services, 1209, Orange Street, Wilmington,
Inc. DE, 19801, United States 100
---------
Perryville Corporate Park, 53 Frontage
Road, PO Box 9000, Hampton, NJ,
Barsotti's Inc. 08827-90000 100
---------
United Agent Group Inc., 3411 Silverside
Road, Tatnall Bldg. #104, Wilmington,
BMA Solutions Inc. DE, 19810, United States 100
---------
United Agent Group Inc., 28175 Haggerty
C E C Controls Company, Inc. RoadD, Novi, MI, 48377, United States 100
---------
c/o The Corporation Trust Company,
Camden County Energy Recovery Corporation Trust Center, 1209 Orange
Corp. Street, Wilmington, DE, 19801 100
---------
25211 Grogans Mill Road, Suite 313,
The Woodlands, TX, 77380, United
Cape Software, Inc. States 100
---------
The Corporation Trust Company, Corporation
Trust Center, 1209 Orange Street,
Energia Holdings, LLC Wilmington, DE, 19801 100
---------
Corporation Trust Company, 1209
Equipment Consultants, Inc. Orange Street, Wilmington, DE, 19801 100
---------
c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange
Foster Wheeler Asia Limited Street, Wilmington, DE, 19801 100
---------
c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange
Foster Wheeler Energy Corporation Street, Wilmington, DE, 19801 100
---------
Foster Wheeler Environmental 1999 Bryan Street, Ste. 900, Dallas,
Corporation TX, 75201-3136, United States 100
---------
c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange
Foster Wheeler Hydrox, Inc. Street, Wilmington, DE, 19801 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,
Foster Wheeler Intercontinental Corporation Trust Center, 1209 Orange
Corporation Street, Wilmington, DE, 19801 100
---------
c/o The Corporation Trust Company,
Foster Wheeler International Corporation Trust Center, 1209 Orange
LLC Street, Wilmington, DE, 19801 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,
Foster Wheeler Realty Services, Corporation Trust Center, 1209 Orange
Inc. Street, Wilmington, DE, 19801 100
---------
United Agent Group, 2425 W Loop
South #200, Houston, TX, 77027,
Ingenious Inc. United States 100
---------
United Agent Group, 2425 W Loop
South #200, Houston, TX, 77027,
ISI Group, L.L.C. United States 100
---------
17325 Park Row, Suite 500, Houston,
JWGUSA Holdings, Inc. TX, 77084, United States 100
---------
United Agent Group Inc., 119 E.
Court Street, Cincinnati, OH, 45202,
Kelchner, Inc. United States 100
---------
1105 Lakewood Parkway, Suite 300,
MACTEC E&C International, Inc. Alpharetta, GA, 30009, United States 100
---------
MACTEC Engineering and Geology, 7 Southside Drive, Suite 201, Clifton
P.C. Park, NY, 12065, United States 0*
---------
MACTEC Environmental Consultants, 1105 Lakewood Parkway, Suite 300,
Inc. Alpharetta, GA, 30009, United States 100
---------
Perryville Corporate Park, 53 Frontage
Road, PO Box 9000, Hampton, NJ,
Martinez Cogen Limited Partnership 08827-9000 99
---------
1675, 1200, Broadway, Denver, CO,
MASA Ventures, Inc. 80202, United States 100
---------
2730, Suite 100, Gateway Oaks Drive,
Sacramento, Sacramento, CA, 95833,
MDIC Inc. United States 100
---------
United Agent Group, 2425 W Loop
South #200, Houston, TX, 77027,
Mustang International, Inc. United States 100
---------
United Agent Group, 2425 W Loop
South #200, Houston, TX, 77027,
NDT Systems, Inc. United States 100
---------
Sarah B. Biser, Esq., McCarter &
Onshore Pipeline Engineering English, LLP, 245 Park Avenue, New
D.P.C. York, NY, 10167, United States 0*
---------
Corporation Service Company, 830
Perryville Corporate Park Condominium Bear Tavern Road, West Trenton,
Association, Inc. Mercer, NJ, 08628 67
---------
c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange
Process Consultants, Inc. Street, Wilmington, DE, 19801 100
---------
1999 Bryan Street, Ste. 900, Dallas,
QED International LLC TX, 75201-3136, United States 100
---------
United Agent Group Inc., 8275 South
Eastern Av., #200, Las Vegas, NV,
RHI Talent, Inc. 89123, United States 100
---------
Rider Hunt International (USA) 1999 Bryan Street, Ste. 900, Dallas,
Inc. TX, 75201-3136, United States 100
---------
United Agent Group Inc., 5708 S.E.
136th Avenue, #2, Portland, OR,
Swaggart Brothers, Inc. 97236, United States 100
---------
United Agent Group Inc., 5708 S.E.
Swaggart Logging & Excavation 136th Avenue, #2, Portland, OR,
LLC 97236, United States 100
---------
c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange
Thelco Co. Street, Wilmington, DE, 19801 100
---------
c/o The Corporation Trust Company,
Corporation Trust Center, 1209 Orange
Tray, Inc. Street, Wilmington, DE, 19801 100
---------
Wood Environment & Infrastructure 1105 Lakewood Parkway, Suite 300,
Solutions, Inc. Alpharetta, GA, 30009, United States 100
---------
Corporation Service Company, 251
Little Falls Drive, Wilmington,
Wood Group Alaska, LLC DE, 19808, United States 100
---------
United Agent Group Inc., 3411 Silverside
Wood Group E & PF Holdings, Road, Tatnall Bldg. #104, Wilmington,
Inc. DE, 19810, United States 100
---------
United Agent Group Inc., 8275 South
Eastern Av., #200, Las Vegas, NV,
Wood Group PSN, Inc. 89123, United States 100
---------
United Agent Group Inc., 8275 South
Wood Group Support Services, Eastern Av., #200, Las Vegas, NV,
Inc. 89123, United States 100
---------
United Agent Group Inc., 8275 South
Eastern Av., #200, Las Vegas, NV,
Wood Group US Holdings, Inc. 89123, United States 100
---------
United Agent Group Inc., 8275 South
Wood Group US International, Eastern Av., #200, Las Vegas, NV,
Inc. 89123, United States 100
---------
United Agent Group, 2425 W Loop
South #200, Houston, Harris County,
Wood Group USA, Inc. TX, 77027, United States 100
---------
Suite 700, 155 Federal Street, Boston,
Wood Massachusetts, Inc. MA, 02110, United States 100
---------
818 West Seventh Street, Ste. 930,
Wood Minerals Conveyors, Inc. Los Angeles, CA, 90017, United States 100
---------
2475 Northwinds Parkway, #200-260,
Wood Programs, Inc. Alpharetta, GA, 30009, United States 100
---------
Vanuatu
O.T.S. Finance and Management Law Partners House, Rue Pasteur,
Limited Port Vila, Vanuatu 100
---------
Overseas Technical Service International Law Partners House, Rue Pasteur,
Limited Port Vila, Vanuatu 100
---------
Venezuela7
Avenida Francisco de Miranda, Torre
Amec Foster Wheeler Venezuela, Cavendes, Piso 9, Ofic 903, Caracas,
C.A. 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.
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.
Joint Ventures
Company Name Registered Address Ownership
Interest
%
Australia
Level 2, 18-32 Parliament Place,
Clough AMEC Pty Ltd(1) West Perth, WA, WA 6005, Australia 50
---------
Azerbaijan
Socar-Foster Wheeler Engineering
LLC 88A Zardaby Avenue,Baku, Azerbaijan 35
---------
Brazil
Rua Carneiro Lobo, No. 468, conjuntos
1301 a 1303, Centro Empresarial
Champs Elysees, Curitiba, State
COPEL-AMEC S/C Ltda(1) of Parana, Brazil 48
---------
Canada
Suite 2300, Bentall 5, 550 Burrard
Street, Vancouver, BC, V6C 2B5,
ABV Consultants Ltd(1) Canada 50
---------
11 Frazee Avenue, Dartmouth, NS,
AMEC Black & McDonald Limited(1) B3B 1Z4, Canada 50
---------
689 Water Street, Newfoundland,
ODL Canada Limited St. John's, NL, A1E 1B5, Canada 50
---------
1200 Waterfront Centre, 200 Burrard
Street, Vancouver, BC, V6C 3L6,
SSBV Consultants Inc. Canada 33
---------
1190 Waverley Street, Winnipeg,
Teshmont Consultants Inc. MB, R3T 0P4, Canada 50
---------
TransCanada PipeLines Tower, 111
Fifth Avenue S.W., P.O. Box 1000,
Station M, Calgary, AB, T2P 4KE,
TransCanada Turbines Limited Canada 50
---------
Suite B12, 6020 2nd Street S. E.,
Vista Mustang JV Calgary, AB, T2H 2L8, Canada 50
---------
Chile
Av. Isidora Goyenechea 2800, Floor
CEJV Ingeniería y Construcción 32, Las Condes, Santiago, 7550647,
Limitada Chile 50
---------
Consorcio AMEC CADE / PSI Consultores Av. Jose Domingo, Canas No 2640,
Limitada Nunoa, Santiago, 7750164, Chile 50
---------
Consorcio Consultor Cade Zañartu Seminario 714, Ñuñoa,
Limitada Santiago Chile 50
---------
Consorcio Consultor Systra / Av. Jose Domingo, Canas No 2640,
Cade Idepe / Geoconsult Limitada Nunoa, Santiago, 7750164, Chile 40
---------
Consorcio de Ingenieria Geoconsult Av. Jose Domingo, Canas No 2640,
Cade Idepe Limitada Nunoa, Santiago, 7750164, Chile 50
---------
Consorcio de Ingeniería Av. Jose Domingo, Canas No 2640,
Systra Cade Limitada Nunoa, Santiago, 7750164, Chile 50
---------
Consorcio de Ingenieria Transporte
Systra Cade Idepe Consultores Jose Domingo Cañas 2640, Ñuñoa,
Limitada Santiago Chile 50
---------
Avenida Andrés Bello 2711,
Construcciòn e Ingenierìa Piso 22 - Comuna Las Condens, Santiago,
Chile FI Limitada Chile 50
---------
Construcciòn e Ingenieria Avenida Santa Maria 2810, Comuna
FIM Chile,Limitada de Providencia, Santiago, Chile 33
---------
China
CEFOC Information Mansion, Zhongshan
Foster Wheeler (Hebei) Engineering West Road No. 356, Shijiazhuang,
Design Co., Ltd. China 49
---------
SZPE Amec Foster Wheeler Engineering No. 143 Jinyi Road, Jinshan District,
Co., Ltd Shanghai, 200540, China 50
---------
Cyprus
Elenion Building, 2nd Floor, 5 Themistocles
Street, CY-1066 Nicosia,CY-1310
Wood Group - CCC Limited Nicosia, PO Box 25549, Cyprus 50
---------
France
70 Boulevard de Courcelles, 75017
Momentum SNC Paris, France 33
---------
India
2 Kausar Baugh, Off NIBM Road, Kondhwa,
SgurrEnergy India Pvt. Ltd Maharashtra, Pune, 411048, India 50
---------
Kazakhstan
Satpayev str. 46, Atyrau, 060011,
PSN KazStroy JSC Kazakhstan 50
---------
Malaysia
No.8.03, 8th Floor, Plaza First
Nationwide, 161, Jalan Tun H.S.Lee,
AMEC Larastia Sdn. Bhd. 50000 Kuala Lumpur, Malaysia 49
---------
Mexico
AFWA DUBA Salina Cruz, S. de Carlos Salazar, #2333, Colonia Obrera,
R.L. de C.V. Monterrey, Nuevo Leon, Mexico 50
---------
Grupo Industrial de Ingenieria Edificio Omega, Campos Eliseos 345,
Ecologica III HLA & Iconsa S.A. floors 2, 3 & 11, Chapultepec Polanco
de C.V. 11560 Mexico, D.F. 51
---------
Av. Revolucion 468, Col. San Pedro
Mustang Diavaz, S.A.P.I. de de los Pinos Mexico, D.F., 03800,
C.V. Mexico 50
---------
David Alfaro Siqueiros 104 piso
2, Col. Valle Oriente, San Pedro
Northam Conip Consorcio, S.A. Garza Garcia, Nuevo Leon, CP. 66269,
de C.V. Mexico 50
---------
Netherlands
C/O Centralis Netherlands BV, Zuidplein
126, WTC, Toren H 15e, Amsterdam,
Wood Group Azerbaijan B.V. 1077XV, Netherlands 51
---------
New Zealand
Ground Floor, Beca House, 21 Pitt
Beca AMEC Limited Street, Auckland, 1010, New Zealand 50
---------
Oman
c/o Al Alawi, Mansoor Jamal & Co.,
Barristers & Legal Consultants,
Muscat International Centre, Mezzanine
Floor, Muttrah Business District,
AMEC Al Turki LLC 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
AMEC Black Cat LLC No. 24523 Doha, Qatar 49
---------
Saudi Arabia
Al Rushaid Petroleum Investment
Co. Building, Prince Hamoud Street,
PO Box 31685 - Al Khobar 31952,
AMEC BKW Arabia Limited(1) Saudi Arabia 50
---------
Spain
Isolux Monenco Medio Ambiente Calle Juan Bravo, 3-C, Madrid, 28006,
S.A. Spain 49
---------
Trinidad and Tobago
4th Floor, 6A Queens Park West,
Victoria Avenue, Port of Spain,
Massy Wood Group Ltd. Trinidad and Tobago 50
---------
United Arab Emirates
PO Box 26593, Unit 3601, Tiffany
Foster Wheeler Kentz Energy Tower, Cluster W, Jumeirah Lakes
Services DMCC Towers, Dubai, United Arab Emirates 50
---------
Unit No: 2H-05-230 Jewellery & Gemplex
Foster Wheeler Kentz Oil & Gas 2, Plot No: DMCC-PH2-J&GPlexS Jewellery
Services DMCC & Gemplex, Dubai, United Arab Emirates 50
---------
United Kingdom
Crown House Birch Street, Wolverhampton,
ACM Health Solutions Limited WV1 4JX, England 33
---------
15 Justice Mill Lane, Aberdeen,
EthosEnergy Group Limited AB11 6EQ, Scotland, United Kingdom 51
---------
Booths Park, Chelford Road, Knutsford,
Fast Reactor Technology Limited Cheshire, WA16 8QZ, England 51
---------
EDF Energy, GSO Business Park, East
Lewis Wind Power Holdings Limited Kilbride, G74 5PG, Scotland 50
---------
Nuclear Management Partners Booths Park, Chelford Road, Knutsford,
Limited Cheshire, WA16 8QZ, England 36
---------
Booths Park, Chelford Road, Knutsford,
PWR Power Projects Limited Cheshire, WA16 8QZ, England 50
---------
15 Justice Mill Lane, Aberdeen,
RWG (Repair & Overhauls) Limited AB11 6EQ, Scotland, United Kingdom 50
---------
Drayton Hall, Church Road, West
Drayton, UB7 7PS, England, United
Ship Support Services Limited Kingdom 50
---------
Portland House, Bickenhill Lane,
South Kensington Developments Solihull, Birmingham, B37 7BQ, England,
Limited United Kingdom 50
---------
EDF Energy, GSO Business Park, East
Stornoway Wind Farm Limited Kilbride, G74 5PG, Scotland 50
---------
15 Justice Mill Lane, Aberdeen,
Sulzer Wood Limited AB11 6EQ, Scotland, United Kingdom 49
---------
Booths Park, Chelford Road, Knutsford,
UK Nuclear Restoration Limited Cheshire, WA16 8QZ, England 50
---------
United States
701 S. Carson Street, Suite 200,
AMEC - SAI Joint Venture, LLC(1) Carson City, NV, 89701, United States 50
---------
100 Fluor Daniel Drive, Greenville,
Flour AMEC II, LLC SC, 29607-2770, United States 45
---------
(1) Entities are consolidated as joint operations on the basis
of control.
The Group will be exempting the following companies from an
audit in 2019 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)
AMEC Bravo Limited (Registered number 6206015)
Amec Foster Wheeler (Holdings) Limited (Registered number
00163609)
Amec Foster Wheeler Finance Asia Limited (Registered number
6205760)
Amec Foster Wheeler Finance Limited (Registered number
1332332)
Amec Foster Wheeler International Holdings Limited (Registered
number 10517856)
Amec Foster Wheeler International Limited (Registered number
3203966)
Amec Foster Wheeler Property and Overseas Investments Limited
(Registered number 01580678)
AMEC Investments Europe Limited (Registered number 3704533)
Amec Kazakhstan Holdings Limited (Registered number 4530056)
AMEC Nominees Limited (Registered number 374498)
AMEC Nuclear Overseas Limited (Registered number 04037762)
AMEC Project Investments Limited (Registered number 2619408)
Amec Services Limited (Registered number 2804093)
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)
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Shareholder information
Payment of dividends
The Company declares its dividends in US dollars. As a result of
the shareholders being mainly UK based, dividends will be paid in
sterling, but if you would like to receive your dividend in US
dollars please contact the Registrars at the address below. All
shareholders will receive dividends in sterling unless requested.
If you are a UK based shareholder, the Company encourages you to
have your dividends paid through the BACS (Banker's Automated
Clearing Services) system. The benefit of the BACS payment method
is that the Registrars post the tax vouchers directly to the
shareholders, whilst the dividend is credited on the payment date
to the shareholder's Bank or Building Society account. UK
shareholders who have not yet arranged for their dividends to be
paid direct to their Bank or Building Society account and wish to
benefit from this service should contact the Registrars at the
address below. Sterling dividends will be translated at the closing
mid-point spot rate on 17 April 2020 as published in the Financial
Times on 18 April 2020.
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 Auditors
JPMorgan Cazenove Limited KPMG LLP
Morgan Stanley Chartered Accountants and Statutory
Auditors
37 Albyn Place
Aberdeen
Company Solicitors
Slaughter and May
Financial calendar
Results announced 10 March 2020
Ex-dividend date 16 April 2020
Dividend record date 17 April 2020
Annual General Meeting 7 May 2020
Dividend payment date 15 May 2020
The Group's Investor Relations website can be accessed at
www.woodplc.com
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
FR UPUBUWUPUPUB
(END) Dow Jones Newswires
March 10, 2020 03:00 ET (07:00 GMT)
Grafico Azioni Wood Group (john) (LSE:WG.)
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