Growth delivered and momentum continuing with sustainability-related work now at 41% of aggregated revenue
Worley today announced an increase in aggregated revenue to US$10,928 million, compared to US$9,065 million and an increase in underlying NPATA to US$348 million, for the 12 months ended 30 June 2023 compared to $329 million for the prior corresponding period.
Statutory NPATA is $104 million, compared to $243 million in the prior corresponding period, with the result impacted by the loss on sale of the North American turnaround and maintenance business, including the impairment of purchased goodwill associated with it. This transaction, which is part of an active portfolio management process, supports Worley’s strategy of delivering high-value solutions in growth markets across the energy, chemicals, and resources sectors, and our ambition to grow revenue from sustainability-related business across the portfolio.
Underlying EBITA of $635 million increased 16% compared to the prior corresponding period, predominantly driven by volume increase. The underlying EBITA margin however decreased slightly to 5.8% from 6.0% due to an increase in overall procurement revenue which has more than doubled from the prior corresponding period. Margin on revenue excluding procurement is 6.5%, up from 6.4%, delivering in line with the outlook provided in February 2023.
Chief Executive Officer, Chris Ashton commented “Our FY2023 result reflects the strong growth we’ve delivered and the momentum building around sustainability-related work as our customers invest in their transition to a lower carbon economy. This momentum is expected to continue as customers look to us to apply innovative solutions to help them tackle some of their most complex challenges in both traditional and sustainability-related work. Disciplined execution of our strategy means we continue to deliver in line with our expectations and has driven positive shifts in revenue, earnings and margins.
“Our capital management position supports our growth plans and we have extended our debt maturity profile. We completed the refinancing of our syndicated bank facilities securing improved terms and pricing. We also successfully issued our second sustainability-linked bond for $350 million. Leverage is 2.2x, down from 2.5x at the prior corresponding period, and is at levels supportive of future growth. Operating cash flow is $260 million, compared with $316 million at FY2022. Our cash conversion is 86.6% after adjustment to include working capital recovery for the 1-month post-completion of the North American turnaround and maintenance business divestment ($43m) and prepayment of software costs ($25m). Our target range for cash conversion is 85 - 95%, reflecting our growing business.
“We’re continuing to benefit from increasing customer investment in sustainability. As a global leader and trusted provider of sustainability solutions, we’re leveraging our differentiated position to deliver long-term value. We continue to execute our strategy and see a future of sustained growth. We’re taking deliberate actions as we continue to focus on improving quality of earnings.” Ashton said.
We expect FY2024 aggregated revenue excluding procurement to grow (on FY2023 proforma) as new and emerging customers and major projects generate further upside. We also expect procurement volumes to grow further on FY2023. We expect the underlying EBITA margin (excluding the impact of procurement) to be within a range of 7.5-8% in FY2024.
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