Worley Limited (WOR) Earnings Call Transcript & Summary

Welcome, everyone, and thank you for joining us at our Investor Day for 2023. I'd like to begin by acknowledging the Gadigal people of the Eora Nation as the traditional custodians of the land on which we meet today. We acknowledge and we recognize their continuing connection to the lands and waters, and thank them for protecting this coastline and its ecosystems since time immemorial, and for their unique ability to care for country and their deep spiritual connection to it. We pay our respects to the elders, past and present, and extend that respect to all First Nations people present today whose knowledge and wisdom has ensured the continuation of culture and traditional practices. I'll remind you to review our disclaimer shown here. Today, I'm really pleased that we're all being joined by our CEO, Chris, and a number of our group executive team who are here today. The agenda really aims to address how we've set our business up for success and for the future and how we are delivering on our strategy. Let me introduce you briefly to the GE members who will either be presenting or participating in a panel-style discussion today. So Chris, our CEO, and this is in order; Sue Brown, Chief Sustainability Officer; Andy Hemingway, our Head of Growth; Adrian Smith, Head of Transformation; Tiernan O'Rourke, our CFO; Vikki Pink, our Chief People Officer; Mark Brantley, Group President, EMEA and APAC; and then Mark Trueman, who will also be joining us unfortunately from Houston, not in person today, but he will be in the room joining via Zoom. He's President of our Americas. Partway through, we'll actually have a break to give you a chance to stretch your legs, get some tea. And then at the end of the presentation, once we come back and they completed, there will be Q&A. And then after that time to mingle over a light lunch as well with our leaders. I'll now hand over to Farzana Khambatta for a short safety moment.

Good morning, everyone. My name is Farzana Khambatta. At Worley, we live our values, and I'm here to share what this means to me. This company isn't just about another workplace. It's a diverse and caring community. When I returned back into the workforce after taking 2 years off for maternity leave, I was a little nervous about how I would fit back into a corporate environment. However, I found that I was welcomed back, and my transition was seamless. My manager provided me with flexible part-time work which allowed me to balance my home and my work life in a manner where I wasn't feeling pressured, and there was continued investment in my career development. Worley is all about creating a supportive community, and this is very important to me. Whenever I've needed help or advice, my colleagues have always been there for me. They have encouraged me and motivated me to take on new challenges, such as transitioning into a consulting role after 12 years of being a process engineer. And now as I transition and work with the Investor Relations team, my new team are also supporting me and providing me with the framework for my continued success. One way that I give back to our Worley community is through the Women of Worley People's Network. As the past Chair and an active member of the Perth chapter, I am very proud of the creative and collaborative network that we have created, which has such an inclusive environment. Our chapter is just a fantastic place which has created thought-provoking and inspiring events such as sessions with our senior leaders who have honestly answered and provided their life and career journeys with us. I have also benefited from a fantastic mentoring program in our region. Our chapter is just one part of a larger women of Worley network, and it is so special to be able to connect with people all around the world through a program and a network that encourages us to advance in our careers and contribute to the company's success through harnessing the power of diversity. Worley's values are not just buzzwords. They are the foundation of our community, and we are definitely stronger together, we rise to the challenge, unlock brilliance and live life. Thank you.

Thank you, Farzana, and now I'm going to welcome Chris to the stage.

Okay. Does my mic work? Yes, good. First of all, thanks, everyone, for coming in the room today, but also those who are joining online. And this is the first face-to-face one we've done since 2019 since before COVID, and it's fantastic to see the attendance today from so many faces that we've gotten to know online over the last 3 years. So today, look, I want to tell the story of Worley and the journey we've been on, and that today, I want to leave you with 3 key messages. The first is that we're a trusted provider of high-value solutions to our customers, and we're benefiting from what is an accelerating customer investment in sustainability with a significant and growing natural share of the market. Second, with the momentum building strongly, we see a clear path to increased earnings and margins expansion in the medium term. And third, we're consistently delivering on our sustainability capability and our sustainability strategy, and doing so, building a sustainable growth business into the future. Over the past 4 years, Worley has transformed through a business that you may have known to what it is today. That is a result of the deliberate actions we've taken to shift the business to position us for the future. It began with the acquisition of Jacobs ECR in 2019, which has actually closed just over a week ago -- 2 weeks ago, in 2019, so it's almost 4 years since we had regulatory approval of that and began our transformation journey. And what that did was that gave us global scale and diversification and established us as a leader -- a global leader, in the energy, chemicals and resources sectors. I took on the role of CEO in February 2020, and we launched our new purpose, delivering a more sustainable world, and laid out our strategy for transforming the organization. And this has positioned us at the center of a significant future, sustainability-related spend as our customers transition to their lower carbon future. During COVID, I took the opportunity through the extraordinary challenges that the world faced to simplify the operation, and this has set us up for a scalable business as we grow and move forward. There's no doubt in my mind that our pivot to sustainability has given us first-mover advantage in providing sustainability-related solutions for both existing as well as emerging customers. It's allowed us to accelerate the capture of opportunities in high-growth markets, and we're committed to invest $100 million over 3 years to deliver on that transformation. And we're just a little under 2/3 of the way through that commitment and spending that. And we're already seeing that investment pay dividends in positioning us with the markets that we're in and allow us to capture work that we may not have been able to without that transformational investment. We moved early, we moved fast, and the decisions we made were bold, and that strategy has allowed us to move towards our ambition of deriving 75% of our revenue from sustainability-related markets by 2026. However, it's important that we need to embrace and recognize the fact that we live in a world of contrast, one in which we operate where the demands for today and the expectations for tomorrow are not necessarily aligned. The consumption of traditional energy and the need to decarbonize them are going to exist for a period of time. And that contrast presents us with opportunity for us to evolve our brand and even further than what it is today and make us really a core part of the transformational journey that our customers are on. Part of that journey was announced on Friday last week when we announced to the market a significant shift in our GICS classification from energy to industrials. And that was an external independent validation of the journey we're on and the progress we've made over the 4 years. Most importantly, as we've talked about earlier, we live our values. They're not part-time, applied some of the time, they exist all the time, and they shape the decisions we make. And I go back to a year ago when those values shaped the decision very quickly to withdraw from Russia. The values live in the organization every day. One of the things that can differentiate an organization and we differentiate Worley is our culture. We want our people to feel energized and empowered and included. And I believe that is the journey we're very much on today. And that culture amplifies big-picture thinking, allows people to believe in the possibility for each of them as individuals and the possibility of the journey that we're on as an organization. It's based on collaboration and embraces innovation. We have the right strategy. We've got the right structure, and I believe we've got a great team to deliver on the transformation. As a leader in the sectors we serve, with a compelling value proposition as we face in at what we believe is going to be a prolonged up cycle. As I've said before, our business is growing. The levels of activity are beyond anything I've seen in my 25 years with Worley. And we expect to continue to benefit from the volume growth as our high compound growth rate in our factored sales pipeline continues to flow through backlog and into revenue. Second, we're already seeing the benefit of that early mover advantage. The $100 million that we invested in the transformation, the fact we started our transformation journey 4 years ago, we pivoted powerfully to sustainability in 2020 is giving us that advantage. Over the past 5 reporting periods, our sustainability-related work has been accelerating with a compound growth rate of 29% in aggregated revenue, 48% in backlog and 59% in our factored sales pipeline. Our traditional revenue has remained steady while our sustainability-related work is quickly becoming our core business. And third, we're expecting earnings and margin expansion in the near to medium term. We have a significant and growing natural share of the increasing addressable market due to our increased access to growing sustainability-related investments with our customers, both the customers who worked with in the past, but also emerging customers, such as Northvolt, a battery processing materials facility that we're doing in Sweden. The demand for our services is enabling us to actively prioritize higher-margin work. And these, in aggregate, are the building blocks to delivering a sustained double-digit annualized earnings growth in the medium term. And finally, our capital management position supports our growth plans. We have a strong credit rating, access to well-priced debt capital and a strong free cash flow that will facilitate accretive reinvestment and reduction in leverage. Our quarterly business update illustrates continued strong momentum in the third quarter as our factored sales pipeline, bookings and backlog all continue to grow. Our pipeline annual growth rate has exceeded 30% for some time, and we're seeing a similar growth rate in our bookings over the last 12 months. Backlog is at $16.7 billion, up 8% year-to-date, and sustainability-related work now represents 40% of our total backlog. Our total headcount has grown 4% since the half year, and we're now at 55,100 people around the world. Our global integrated delivery business is India. It's the largest it's ever been and is growing at a faster rate than we've ever seen. Our capital management strategy, which Tiernan will talk about later, is structured around funding our growth and delivering increased value to our shareholders. And since our half year results, we've successfully issued our second sustainability-linked bond with a 5.5-year maturity at 5.95% interest rate. We're in the process of renewing our syndicated debt facility, and we expect to have that -- have with that improved terms and conditions. I want to reiterate that our expectations for FY '23 remain in line with the outlook presented at our half year results in February. On this slide, you can see the growth in our sales pipeline, rolling 12-month bookings and backlog over the last 9 months. What's interesting is the size of our factored sales pipeline continues to grow and is up 36% since the half. This is primarily driven by increasing sustainability-related opportunities, which now represent more than 70% of our total pipeline, and that's up from 66% in the half. Our rolling 12-month backlog, our bookings are increasing with around $14 billion in wins over the past 12 months. Sustainability-related work by revenue is increasing as a proportion of our wins compared with traditional work as we remain focused on higher-margin target areas. Our strategic awards since January, including the aggregation of sustainability early wins, highlight the scale and breadth of contracts we're doing. Our sustainability wins year-to-date are of 115% compared with the same time last year. And we're seeing early phase sustainability work translate into subsequent phases as evidenced by the upward trend in the average sustainability project size, which is at 1.9x on prior corresponding period. Many of the projects that we've called out and will be called out today are examples of where customers are looking to partner with us to deliver on their new and innovative technologies. And these are complex projects evidenced by some of that, which we're showing today in the booths. Requiring integrated solutions and needing to be delivered at an increasing pace to the market if the world is to hit net zero by 2050. And this is where Worley has an unrivaled track record. Our Technology Solutions team is enabling Australia to play a critical role in the rare earth space by providing our proprietary Chemetics technology to Arafura. We've been awarded the detailed design of one of the world's largest onshore carbon capture and storage facilities located in Malaysia. As I've said before, our traditional business remains to be important to us. And yesterday, we announced the Shell Sparta project, which is a Gulf of Mexico deep-water floating project. That's an example of the complex projects that we're working on in the traditional space. In summary, we're a transformed business. We acted early, and we have the right strategy and the right team that is already delivering consistent and improved results, and these have an upward trajectory. This continues to materialize in the form of our rapidly growing -- the rapidly growing number and size of our project wins. The rest of the morning, you're going to hear from some of the team. And after me, now I'm going to introduce Sue Brown, who's our Group Head of Sustainability, and she's going to give you an insight into what we're doing in that space. So Sue, over to you.

Thanks, Chris. It's great to be here. I can hear my mic is working, which is great. So today, I'm going to talk to you about our sustainability strategy and the progress that we're making. Our purpose is delivering a more sustainable world. And our strategic transformation has established us as a global leader in sustainability solutions across energy, chemicals and resources sectors. Our sustainability-related work is a really strong growth engine for our business, up 50% over the last 2 years. Sustainability-related work now represents around 40% of our aggregated revenue and more than 70% of the opportunities in our pipeline. This is a leading indicator of what our business will look like in the medium to long term. Today, I'm going to cover 3 things: first, the evolving sustainability landscape and what this means for our business; second, how we're shaping the future with bold thinking and solutions; and finally, the scale of the ambitious sustainability-related work that we're undertaking with our customers. The approach to sustainability in an industrial context continues to mature, and the expectations of what it means to be sustainable are also evolving. Globally recognized frameworks are emerging, such as the EU taxonomy for sustainable activities, and the International Sustainability Standards Board, or ISSB standards for disclosure. These provide guidance on how to identify, assess, respond to and disclose ESG-related risks, opportunities and metrics. We're taking a proactive approach to these standards and continually improving our sustainability reporting to meet best practice. We know that when it comes to achieving net zero, the investment required is significant, and I'm sure everybody in this room appreciates that. The financing, the transition paper released in March by the Energy Transitions Commission tells us that around USD 3.5 trillion per annum of capital investment will be needed out to 2050 to build a net zero global economy. Today, global spending has just ticked over $1 trillion per annum. So that's less than 1/3 of what it needs to be. When we started to accelerate our sustainability journey several years ago, it was largely industry rather than government driving investment towards achieving net zero. More recently, we've seen some significant moves by government in areas such as policy regulation, finance and tax incentives and R&D, all of which will play a key role in facilitating the energy transition. These new policies and regulatory frameworks are creating the right conditions for our customers to be more ambitious in their own sustainability goals. A prime example is the U.S. Inflation Reduction Act. It's been a real game changer, directing USD 370 billion towards energy security and boosting clean energy investments, including economic incentives for carbon capture, utilization and storage projects. In February, the European Commission announced the Green Deal Industrial Plan. This plan builds on the trillion-dollar European Green Deal of a couple of years ago to scale up the EU's technology development, manufacturing capacity and installation of net zero technologies and products. A critical part of this new part of the EU deal is making it easier for individual member states to support green industries via tax incentives and other initiatives. And close to the home for many of you in this room, the Net Zero Australia study released last month identified that AUD 7 billion to AUD 9 trillion are going to be required for domestic and export energy, industrial infrastructure by 2060. There's clearly much to be done, much work to do. And we're playing a leading role in the world's decarbonization by supporting our customers in their sustainability journeys and helping to build sustainable businesses for a lower carbon world. Sustainability and partnership are really at the core of who we are, what we do and how we do it across our project portfolio. We're upskilling our people and fostering a culture that empowers our team to challenge and innovate and to deliver sustainable solutions across our business. We're engaged in innovative partnerships, sponsoring and championing industry initiatives such as the Fast Infra Consortium, the Energy Transitions Commission, the Climate Leaders Coalition and Net Zero Australia. We're actively partnering with others, including the Blockchain for Energy Consortium and collaborating with ABB and IBM on green hydrogen. These partnerships are driving development of technology solutions across the industry and also act as a differentiator for us in the market, creates value for the industry at large, for our customers, for investors and for people and communities. With Princeton University's Andlinger Center for the Energy and the Environment, we've brought new thinking to practical climate action through our From Ambition to Reality series. We've published 2 papers already, and there's a third due for release later this year. And we've shared this thinking with customers, industry peers, academia, governments to help drive that collective action that's required. This includes a COP27, which we attended late last year as part of the Australian delegation. We're pioneering some of these ideas in project execution, providing breakthrough delivery solutions on some of our large-scale projects. So for example, recently, we delivered an LNG regasification terminal in 8.5 months. So that's from a blank sheet of paper, twinkle in someone's eye, post the invasion of Ukraine, to gas in the German grid in 8.5 months. So ordinarily, a fast-tracked project of this type would take 18 to 24 months. Our team, who worked that project, like to describe this as being a lightning speed fast track. We reduced the fast track duration by half again. And this type of pace is what the energy transition is going to demand if we're to achieve the goals of the Paris Agreement. We continue to drive progress across our material sustainability programs of work as we refine and implement our ESG governance and reporting framework. We've set ambitious net zero targets across our Scope 1, 2 and 3 emissions and are tracking well to achieve these. And we're pleased to be recognized for our progress. Last year, we were included in the Dow Jones Sustainability Index, the DJSI for Australia and Asia Pacific. We've been upgraded to the prime ESG corporate rating by ISS, which means that our tradable bonds and shares qualify for responsible investment. And we were recently recognized by the CDP as a climate change supplier engagement leader as part of its annual supplier engagement rating program. So while we're delivering on our own sustainability commitments and improving our ESG performance, our biggest contribution is supporting our customers to tackle the complex challenges of the global energy transition. And we have deep and unrivaled experience in shaping the global energy transition. As you can see from this slide, we're partnering with our customers to deliver infrastructure and integrated solutions to some of the most ambitious and large-scale projects in the world. These include delivering what will be the largest commercial scale development of direct air capture technology with 1PointFive, a subsidiary of Oxy's Low Carbon Ventures business in the Permian Basin. The facility will remove carbon dioxide from the atmosphere that is equivalent to taking 200,000 cars off the road. This negative carbon emissions technology removes carbon dioxide directly from the atmosphere, and it will be key to how we support hard-to-abate industries in achieving their net zero goals. For those of you here in person, we've got a model which showcases that direct air capture pilot or plant out in the next room, and I'd encourage you to have a look at it. We're partnering with Avantium to deliver a first-of-a-kind biopolymer manufacturing facility that will produce recyclable bioplastics from a plant-based degradable monomer. This has the potential to revolutionize the production of bottles and packaging by using a renewable bio feedstock rather than fossil fuel feedstock. As Chris has mentioned, we're working with Northvolt on their Gigafactory in Sweden to supply batteries to major car manufacturers in Europe. Northvolt produced their first battery from its European factory in late 2021. And to date, Northvolt has secured USD 55 billion worth of contracts with customers such as BMW, Volkswagen, et cetera. The factory itself is enormous and will have an area of equivalent to approximately 70 soccer fields. And Worley is delivering over a dozen sustainable aviation fuel projects at scale around the world, working with the largest global players. So fun fact, since 2011, over 450,000 commercial flights have taken to the skies using sustainable aviation fuels already. These are just some examples of the progress we're making with our customers, delivering sustainable solutions that help us all move to -- move closer to achieving net zero. Next, you'll hear more about Worley's strategy across the markets we serve and where we're accelerating our growth. So over to our resident Yorkshireman, Andy Hemingway.

What a fantastic introduction. Thank you, Sue. It's great to be here at my first Investor Day since I joined Worley 8 months ago. What drew me to Worley was its leading market position in the energy transition, its clear ambition and its values, which align very closely with my own. Today, I'd like to talk to you about 3 things: the key trends and insights in our target markets; our deliberate focus on those markets that offer the best growth; and the delivery of sustainable solutions at scale in partnership with our customers. We're grappling with 2 realities in our energy system. We're tackling the criticality of near-term affordable energy, and we're also addressing the challenge of decarbonizing energy and industry to deliver net zero by 2050 against a landscape that's ever more complex. Our customers are making substantial capital investments in both areas. Worley is right at the heart of it. We have a bold ambition that by 2026, 25% of our aggregated revenue will come from sustainability work. The traditional energy markets is still important to us and investment in these areas will increase due to energy security, affordability and depleting reserves. Worley is actively managing our portfolio of businesses. We do this by pursuing growth in a structured way with the target markets with the best opportunities and the highest margins. We're being more selective in the work that we pursue and the customers that we work with. We're helping customers in traditional hard-to-abate markets to decarbonize, while also shaping the future of sustainability in the markets where we operate. We're partnering with our customers not just delivering projects, but creating value over the life of the portfolio of their assets. We're also working with them to address the challenges of bringing new sustainable technologies to market. I'll share some examples that demonstrate how we are doing this, and more importantly, what differentiates us. In the low carbon energy sector. We are focused on power and hydrogen, and sustainability investment is driving growth in both of these markets. We know that the investment required to make -- to meet net zero by 2050 is significant, and capital deployment is accelerating. We are focused on high-value market segments, emerging technologies and large-scale integrated projects where we can drive the margins in line with the expertise that we bring. We're avoiding highly commoditized and lower-margin markets. Our pipeline in our target markets for hydrogen and power is growing and has increased by 300% in the last year alone. The work we are doing with Green Energy Oman is a great example of the role we play in the integration of multiple technologies at scale. This mega project includes optimizing 25 gigawatts of wind and solar, then transforming this renewable energy through electrolysis into green hydrogen and ammonia. We have optimized the project to achieve the lowest levelized cost of ammonia. We've integrated energy storage solutions as well as grid-forming technologies to support the power network. At completion, it will require 2,000 wind turbines and 40 million solar panels. To put that into context, 25 gigawatts equates to 3x Oman's total installed capacity. In integrator gas and conventional energy, there's momentum in capital growth, largely driven by energy security. The Ukraine conflict has shifted global gas dynamics and increased demand for U.S. LNG exports to Europe, creating demand for LNG terminals and midstream capacity expansion. We strategically invested in building our capability and capacity in these growth areas through our core delivery hubs. And we're now seeing a benefit of this investment through the work that we're winning. Sue mentioned that we're extremely proud of the work that we've done at Brunsbüttel, the import terminal in Germany. We went from contract award to first gas in 9 months, an incredible response. Our priority focus is decarbonization, and globally, we're a leader in this space. We've seen significant increase in projects, including CCUS and broader decarbonization. A great example of this is the work that we're doing on designing one of the largest offshore CCUS facilities in the world, the Kasawari CCS Project in Malaysia, which will capture over 3 million tonnes of carbon dioxide per annum. Turning to chemicals and fuels. High inflation, rising energy costs, declining GDP have slow growth in the chemicals market. However, the longer-term outlook is positive, and our key customers are making investment decisions today to secure our future positions. The low carbon fuels market continues to grow at pace. Right now, we're seeing refineries converting renewable diesel and sustainability aviation fuels from biomass feedstocks. We were an early mover in the low carbon fuel sector, particularly in the U.S., and we've grown a significant market share in this space. Our early experience has allowed us to build capabilities, which were now taken worldwide to help our global customers convert and decarbonize their assets. A great example in Western Australia, we're working with BP on the Kwinana refinery conversion to renewable fuels. However, we recognize the limited supply in biomass feedstocks. And again, we're building capabilities ahead of the next generation of emerging fuel production technologies. The significant growth in resources continues. It's driven by the need for critical minerals and EV batteries, electricity generation and networks. We have built capacity and capabilities in the right commodities, in the right markets with the right customers. And this targeted approach is paying off in the work that we're winning. With our key customers, our bookings have doubled every year for the last 2 years. And we have grown our market share as they continue to invest more in CapEx than their competitors. We continue to evolve and adapt as we focus on more attractive parts of the value chain with higher-quality earnings. One great example of this is how Worley is partnering with providers of innovative technology to reduce the carbon footprint of water usage in mine operations. We built strong positions in early project phases, and this enables us to support our customers into project delivery and then right the way through into project completion and successful operation. A really good example of this is the Woodsmith project where Anglo America awarded us the project management agreement in conjunction with completing the study phase. The Woodsmith project will deliver Polyhalite Fertilizer to farmers with a carbon footprint 85% less than traditional fertilizer products. We'd like to show you a short video of the Woodsmith project. [Presentation]

Thank you. Every time I watch that video, I just get a huge sense of pride. What a phenomenal project. So Worley is a purpose-driven organization with a bold ambition. I think the key message is we're delivering on our strategy. As Chris said today, more than 70% of our pipeline is in sustainability-related work, reflecting the shift in how far we've moved in our core business. This is where we play and where we will continue to lead. We're differentiating ourselves in the market as a premium provider of complex integrated projects that support our customers through the energy transition. Our early investment in emerging technologies has allowed us to take leading positions in high-growth markets. We continue to support our customers in traditional markets with a real focus on reducing the carbon intensity of their investments. And I think maybe I'll just share a reflection. I've been with Worley now for 9 months. And I've been in these markets, in this industry for 26 years. I've never looked into the future markets with so much excitement. The potential that we have is incredible. And what's really, really exciting is we're positioned in the right markets, and we're just in the right place. We're leading. And what's also super satisfying is we're working with customers who want to work in partnership for the long term. I think we're in an incredible position, and it's a privilege to be part of it. So I shall now hand you over to Adrian, who will give you a bit of an overview of transformation. Thank you very much.

Thanks, Andy. In recent years, we've talked about our transformation journey. And as Chris shared earlier, we have transformed as a company. So what then does future transformation look like? Today, I'll focus on 3 areas: first, our priority areas in transformation; second, an update on our $100 million investment; and finally, we'll look at specific examples of our fastest-growing markets. I'd like to discuss key elements of our ongoing transformation that span our entire organization. First, we focus on selecting, incubating and building solutions for our chosen high-growth markets, and then we integrate them into our core business. This is represented by a $100 million investment in organic growth, and I'll talk more about this shortly. Second, we're a large organization with many projects and initiatives that are running simultaneously. Transformation brings these projects together in a portfolio of investments with an overall roadmap that clearly aligns with our purpose and ambition. We're deliberate in our investment into these key areas in line with our strategic goals. Third, we understand that to maintain our leading position across our markets and deliver projects at the scale and pace required to deliver net zero, we must drive transformational project delivery. To do this, we continue to invest in efficiencies in our current end-to-end processes. By increasing automation, digitization and replication of our current work practices, we're able to generate efficiencies, delivering high volumes of work and greater value for our customers and for ourselves. You have the opportunity today to experience some of our digital solutions, which will give you a glimpse into how we're using these technologies to change the way we deliver projects for our customers, and these are only the beginning. We're also envisioning new ways of working and making targeted investments in this space. We call these our digital project delivery pathways. One area we're actively looking at is generative AI and how we can use our extensive and unique knowledge built up over many thousands of projects to deliver a step change in the way we do projects. And finally, we have a specific work area focused on scaling our consultancy solutions. We understand the important role this plays in creating value for our customers, generating initial opportunities that lead to new work and then positioning us well for the ongoing phases of work. Picking up on Andy's earlier points, our transformation strategy identifies potential growth markets, capabilities and offerings that we believe have the potential to drive value creation and build accretive businesses. From here, we use a stage-gated process to assess the opportunities and filter them in line with our strategic priorities. There's a rigorous process for evaluating market and assessing the strategic fit with our purpose, ambition and our investment criteria. For example, a good candidate for growth investment is a market that can provide incremental revenue in the hundreds of millions of dollars at a margin above 7.5% EBITA once we have it established. Transformation then takes the lead on assessing the opportunity by developing the value proposition, the business case and where we need to invest to scale this business, working hand-in-hand with our customers at every stage. Growth in operations are then responsible for embedding, integrating and scaling these businesses. At every stage, there are off ramps, where, if we question the fit or the return on investment, we can scale back or discontinue any particular investment. Not every market that we look at is going to turn into a scalable business, and some will play a support role. A good example of this is offshore wind. It's a significant OEM play, but typically a less complex engineering challenge. As a result, offshore wind remains a key part of our overall offering but we don't see it as a high-growth market. I'd like to take you through the focus of all these ongoing investment. Each of our growth areas may have a different emphasis, but business incubation and scaling require a combination of developing internal capabilities and market-facing solutions to strengthen the value proposition. Transformation is developing solutions and partnerships so we can provide appropriate focus and direction to these relationships while our operations focus on day-to-day delivery of our projects. We have a particular focus on developing consulting capabilities across the full project life cycle, and we're upskilling our workforce to meet this demand at scale. Our strategy is to scale new market propositions into accretive businesses. These businesses will define the future scope of our operations and a critical to ongoing success. As you can see on the table on the right-hand side, we continue to be encouraged by how well our chosen growth areas are performing. Each one of these have high addressable markets. And in each one of these, we have an absolute right to play. Pipeline growth remains strong, which gives us confidence that we are focused on the right areas. I'd now like to take you through 3 of them in detail. The first of these is battery materials, and we're seeing exponential growth in this market tied to the uptake of electric vehicles and increasingly energy storage systems. It's also an area where we have a high degree of confidence in our ability to scale. This subsector leverages existing skills that Worley has in the mining and the chemical sectors. What we're also seeing is that geographical factors are stimulating growth in geographies where we have strong capabilities, particularly in Europe and North America. We service the entire value chain from raw material extraction and processing through to cathode and anode materials, which are precursors to battery manufacturing. We also work with our customers in delivering complex energy storage and distribution systems. Finally, we're working on a number of projects in battery recycling to address the challenge of developing a more circular economy. Our strategic investment is focused on integrating our capabilities, building a standardized approach to design and strengthening our bench to meet the demand. To give one example, Syrah Resources is the largest integrated natural graphite operation globally and the first vertically integrated natural graphite active anode material supplier outside of China. We've worked with Syrah across the value chain, providing services for their graphite mine in Mozambique and their Vidalia facility, which produces active anode material for both battery makers and car manufacturers. The second example is carbon capture, utilization and storage, and it is growing rapidly. Our addressable market is estimated at $15 billion and increasing. In CCUS, we already have major engagements across the value chain globally with major projects in North America, Europe, the Middle East, Southeast Asia and Australia. In the U.S., the Inflation Reduction Act is a major boost to investment, and we're working with customers and partners to leverage these opportunities. Sue mentioned we're working with 1PointFive on their flagship direct air capture project in the U.S. It's set to become the world's largest direct air capture plant. To put the scale of this project into perspective, currently, globally, only 10,000 tonnes of CO2 per year are captured through direct air capture. DAC 1 alone will capture 0.5 million tonnes of CO2 every year. That's the first one. 1PointFive plans to build 100 of these across the globe by 2035. From all our active CCUS projects, we expect nearly 60 million tonnes per annum of CO2 will be captured. That's roughly equivalent to the annual emissions of over 3 million Australian households With our established leadership position in CCUS, we're working to respond to our customers' needs with a pipeline of potential solutions that are currently undergoing incubation. Our teams have established an ecosystem across the value chain, and we have a significant project portfolio already that supports both innovation and continuous learning. And finally, low carbon hydrogen is one of our most developed growth areas, and it's a fundamental part of the solution required to reach net zero goals. Hydrogen is also at the heart of low-carbon energy solutions, replacing hard-to-abate applications, and it aligns with our traditional process industry experience. As with CCUS, government support continues to accelerate the hydrogen industry. Again, the Inflation Reduction Act in the U.S. incentivizes clean hydrogen investments as one example. On this page, you can see a range of major engagements that we are leading or involved in, and we continue to see projects moving through the development phases towards execution. Our primary focus is to help customers reduce the levelized cost of hydrogen to ensure their business cases are viable. This requires an innovative approach to both the execution of the capital project and smart solutions during the asset life cycle to reduce the OpEx. We're, therefore, investing in solutions to create highly efficient, replicable assets and a digital platform to allow asset owners and the supply chain to realize value during the operational phase of these assets. We expect to continue creating additional value, strengthening our market position as a partner of choice for project delivery and providing solutions led us to access a larger share of the market over the entire life of these assets. And we've now got a short video to showcase some of our developing low-carbon hydrogen offering. [Presentation]

We're going to take a short break now. So please stretch your legs, grab a tea, coffee. Well, I'll call you back probably in about 10 minutes. Thank you. [Break]

Hello, everyone. I know they are very rich conversations happening, but we would like you all, please, to take your seats again. There will be time afterwards as well to continue those discussions and spend some time at the booths as well. Thank you. All right. Thank you. I'd like to now invite Tiernan to the stage.

Thank you, Verena, and -- sorry. [Presentation]

Boy, oh, boy. People will do anything to stop the CFO talking. Are you sure now, Chris? No more videos? Okay. Very good. Good morning, everyone. Tiernan O'Rourke, the CFO. I'd like to add my welcome to all of you, particularly to the equity analysts, the equity investors. But also, there's a lot of debt investors in the room as well. I want to acknowledge them. And I don't think we did, but I'd like to acknowledge the people on the webcast. I know there's a lot of people that couldn't be here today. I'm hoping you're having a good user experience digitally. A couple of housekeeping issues. I'm not going to stand behind the lectern. I have an aversion to lecterns. They make me look like a giraffe with a bad back. So I'm going to wander around the stage, if that's okay. Also, just in case you want to subtract it from our margin, all of this technology is included in our margin, okay? So don't subtract this. This is good investment. And just a little bit of a housekeeping. Andy did mention that our ambition was to achieve 25% sustainability-related contract. Of course, it's 75%, just to make sure you don't [ know ] that down as well. So look, I'm going to take you through a few slides on a topic that we've talked a lot about in the past, and that is improved earnings and increased value creation. And I'm going to lay down the building blocks for -- from where we are today, where we're going to go and how we're going to get there. So let me start on this slide. And one of the most important components of getting to improved earnings is that we believe that double-digit medium-term EBITA compound annual growth rate is possible. And of course, you'll ask, why is that? And we see 4 steps to getting to that rhythm. First of all, market growth. Our addressable market, and you heard from Chris earlier, our addressable market is growing very strongly mainly because of the significant investment and increasing investment by our customers in sustainability. The second area is increased market share. What we are seeing is that our natural share in the market is growing significantly. Why is that? It's not only because the market is growing. But it's also, we had first-mover advantage, pivoting to our sustainability focus, a number of years ago, growing our capability. And you've heard from my colleagues earlier, the capability that we are growing is giving us a competitive advantage. And we have global scale. And that's all positioning us really well where customers can employ Worley to do their contracts with confidence. And that is increasing our natural share. Margin expansion, of course, we are actively pricing to the current market and also the future market because we've got to think about the future. We sell for many years on some of our larger contracts. So pricing really well gives us margin expansion. And of course, ongoing discipline around cost management, incredibly important in any business. And then further upside. Further upside will come from very disciplined M&A activity. It will come from an ongoing partnership arrangements with our customers and some of which we've talked about today. And of course, active portfolio management, which you have seen, we are doing a lot more of and will most likely do more in the future. And what I wanted to do on the next few slides is just build on the detail for each of these. So moving first to market growth, and the best way to illustrate market growth is to provide you with our normal quarterly update. You know that we started this quarterly update last year. And there are really 3 key points on this slide. First of all, 43% of our quarter 3 wins are from sustainability work. Now to put that in context, a quarter ago, that was 35%. And a year ago, it was 19%. So it gives you some evidence of the significant growth in the market. The second thing is if you look at the table on the top right-hand side with all of the wins by project phase, if you compare that to one quarter ago, they have all materially grown in the period. And indeed, if you aggregate feed and feasibility, combined, they have grown 55% in the last quarter. So the market is very, very hot. The third thing, and Chris mentioned this earlier, is that the average sustainability project size has increased 1.9x. That was 1.8x a quarter ago. And that's evidence of the early works transitioning into EPC and EPCM and most importantly, Worley winning those contracts. We shouldn't go past this slide without also focusing on traditional. And traditional -- for the last 3 quarters, the wins in the traditional business have remained steady. So still a very big contributor. And I think the key message here is that the market is very strong, and we are winning a big share of it. Moving on to increased market share. And I think if you look at these charts, what you can see is that sustainability-related factored sales pipeline and the sustainability-related backlog have grown at a compound annual growth rate over the last 5 reporting periods of 59% and 48%, respectively. And you might ask why. You've heard that we have invested $100 million in nurturing some of our new growth units, and you've seen some of them: hydrogen, low-carbon fuels, battery materials, CCUS, to name a few. All of those are providing a platform for accretive returns in this business. And most importantly, and I think it will be a feature of the future, the success in converting the sales pipeline into backlog, into our order book, is a real key factor of our participation in the market. And I think the key message from this slide is that our bold moves that Chris has talked about and the existing capability and the new capability that we have developed is making us the go-to contractor in this sector. If I move on to margin expansion, and I think there's a few important components, about 4 key components that are driving margin expansion. The first is supply-demand dynamics, and supply-demand dynamics have inverted in recent years in favor of capable contractors like Worley. And what that means is that we are generating additional margin and increased margin in both traditional and sustainability-related contracts, and that's incredibly important. We've also talked to you about increasing in sole sourcing in the market, and sole sourcing is giving us significant pricing opportunities. Why? Because we have global scale. We have resources to allocate the contracts. We are investing in technology. And our partnership approach is very appealing to our customers. And that's driving margin improvement. Customers are also exhibiting a higher degree of urgency as the pressure to achieve net zero by 2050 intensifies. And whilst there will be variability quarter-on-quarter in the speed with which projects come to market, what you can see is that the backlog and this factored sales pipeline are coming to market. The trend is that they're coming to market much faster than before. And I think the key message here is that higher margins that we're seeing are coming from a range of factors, not just a single factor. And if I continue the theme on margin expansion, one of the consequences of taking $375 million of cost out of this business in the last few years is that it gives us operational leverage. And that operational leverage, we believe, will start to emerge and support margin expansion in the next few years. Project assurance, I think, in the sector, and if you follow the sector for a long time, project assurance is essential. And one of the things we're focusing on is making sure that the as-sold margin is the same as the as-delivered margin. And we will still continue with a very low risk posture around reimbursable contracts to keep the risk low. And we are also investing in technology. As I mentioned earlier, we are investing in technology to automate some of the engineering hours, the lower-level engineering hours, to release those hours to be allocated to higher-margin work. And then finally, the resource security, we -- our attraction and retention strategies are allowing us to allocate resources when and where they're required. And it goes back to giving customers the confidence. And I think the productivity in all of these areas, the key message here, the productivity is really giving us the ability to increase margin. I wanted to talk about capital management and particularly, present a structure around how we think about it. We think that there is further upside from better management of cash flows and better management of capital flows. And this is the structure that we're going to use going forward and talk to you regularly about. You know that we've reset our DSO targets, leverage, cash conversion and effective underlying tax rate. And what that does is gives us some strength in operating cash flows, particularly around the 85% to 95% cash conversion. We have a minimum liquidity target which adequately provides support for the growth in the business. And our dividend payout ratio allows us to share our earnings with our investors while retaining excess cash to reinvest accretively. Therefore, we have a strong balance sheet, and what that balance sheet will do is throw off excess cash that allows us to do 4 key things. First of all, maintain debt at reasonable levels, reasonable levels for the cash production and the sector; secondly, to organically invest and make accretive organic investments like the $100 million that we've already been doing for the last 18 months; but also, to inorganically invest in accretive niche capability; and then finally, if the need arises and we have further excess cash, to return dividends by way of increased dividends, if that's also needed. So I think the key message is this capital plan supports the growth that you've heard about today in the business and underpins a lot of the flexibility that we have going forward. And then finally, on active portfolio management, I mentioned that, that was a key component. And it is important, we believe, to be very active around it, and we demonstrated that activity with the sale of the North American turnaround business earlier this year. And what that demonstrates, again, is that we are focusing on high-margin, sustainability-related contracts as a priority. And whilst you will see us sell some smaller businesses nowhere near the scale of the North American business, we may also exit some geographies and/or some subsectors if strategically that makes sense. But importantly, we are very confident that, that cash and that capital released can be reinvested accretively elsewhere above the cost of capital. And so I think the key message here around portfolio management is that we will continue to be active in portfolio management because it's very good for business, and it will streamline our business and direct capital where it needs to be. That's all I was going to say. I'm happy to answer some questions later. But they are the building blocks for improved earnings and increased value creation. As I said, happy to answer questions later. But now I'm going to hand over to Joel because we're going to have an important panel to see some of my other colleagues. Over to you, Joel.

Thank you very much. Good morning, everybody. My name is Joel Labi. I will be the independent moderator for today's discussion, which is regions in focus. I'm a Director of Strategic and Corporate Communications at GRACosway. And in a not-too-previous life, was a journalist, both in Australia with the Nine Radio networks and more recently with CNN and Thomson Reuters in the Americas and Hong Kong, before coming back home and moving into this part of my life. So I'd love to introduce to you this morning, we've got Vikki Pink, the Chief People Officer at Worley. We've got Mark Brantley, the Group President of EMEA, APAC. And our condolences to Mark Trueman who isn't here. He's, unfortunately, joining us from Houston. So because you're lucky enough to be joining us on video screen today, I'm going to go to you first. So please, a round of applause for everybody joining us here this morning. So you would have heard from the CEO, Chris' introduction this morning that there was a rather significant bit of news that came out to the market at the end of last week. It was, of course, the global industry classification with Worley moving from energy into the industrial space. I think that is one of the clear examples of where this enormous strategic shift for the business is coming from. But I'm interested to hear from all 3 of you, both from the regional perspectives and also from a human resources capacity, how have you brought everybody along in this transformation? So Mark T, I'll start with you first.

Yes. Thanks, Joel. And most of you know, Sydney is my hometown. So I'm disappointed not to be there, but Houston is a good second. Sometimes the business -- we've just got things that we've got to get done. So look, the transformation has -- it's -- clearly, you've seen from what's happening today, we're really starting to make fantastic progress in achieving the ambition. And it's been a journey. It's not easy what we do. It's hard, but we've done it with a really clear strategy. We've done it with the bold moves of investing $100 million to create or turbocharge, to catalyze the development of the capabilities that we need. We've looked really closely at the values, and I know Vikki will talk about behaviors to bring people on the journey. The whole people side of change management has been absolutely critical to what we've been doing. So lots of levers to pull, but we're making really good progress. It's really quite exciting.

Mark Brantley, an interesting number today as well, 73% of the sales pipeline now made up from sustainability projects. Just walk me through how important that is.

Great to be here with everyone and those joining virtually. It's critical. Just 3 years ago when we launched our sustainability commitment, a lot of people were asking customers, what about us? What does that mean? Are you walking away from us? And employees, do we have a job going forward? And fast forward until now, and we talk about sustainability every day. We were ahead of some of our customers, and we're going to the pandemic. So leading through that is a journey, but it is a wise decision to do. And to see where we are today and the momentum, it's definitely exciting. And I was with a group of new graduates in Melbourne last week, and most of them joined because of our commitment to sustainability and them being able to be a part of the future and making a difference. And had someone said, "I don't know exactly what I'm going to do, but I know I'll be a part of Worley making a difference." And so it's an exciting time.

It's an interesting choice of language as well from the Chief Executive to say that this is a reflection of our transformed business. Vikki, talk me through the transformation that you're ushering in right now.

Yes. Thanks for that, Joel. So you heard from my colleagues earlier, we moved early, we moved fast and we move with boldness. And so it's such a reflection and the announcement on Friday is an absolute reflection of the transformation that we're going through and the difference that we're making. And people are really energized by what we do. They're energized by the fact that we're doing things that have never been done before. And we're really attracting amazing skill sets into our business and developing the right skill sets. And so I think it's reflective of the fact that as Mark T said, we're focused on culture. We're focused on being very deliberate in the work we do and who we work with, and then we're focusing on the right people.

Mark B, how do you execute a vision when you're building things that have never been done before? I want to, at this point, move to a bit of a discussion about kind of the opportunities that both you and Mark T are seeing on the horizon right now.

Absolutely. As we launched, we started working with our customers on their net zero commitments and what they were going to do. And that helped us with our messaging with our customers, that we're going to stay with them, help them. We felt like we have a responsibility to the world, and we're in a great position because of all our global relationships and customers that need to decarbonize. So that message was pretty easy. And then we started showing examples where our employees were -- had transferable skills because they're worried, "New energy projects. What does that mean? We can't do that." And then when we started doing projects, and they're like, "Wow! We can be part of that." And so it was pretty easy. We had to message it but then have proofs, and now we're on the journey.

Well, it's interesting that in Andy's presentation, the sales pipeline for low carbon hydrogen alone is up 300% in the last year, which is a pretty extraordinary number. Mark T, if you can talk me through, some of the sectors that you're seeing are particularly booming right now. Is it energy? Is it chemicals? Is it resources? And how does that all fit into this shift towards sustainability?

Yes, look, it's -- I don't have a quick answer to that one, unfortunately, Joel. What we're seeing is that particularly in conventional fossil fuels or conventional energy and also in mining, they haven't had a lot of investment in the last 8 to 10 years. So there's a bit of a hangover. There's a bit of a catch up to be had there. Then in conventional energy, we've got the impact of Russia and, if you like, the bifurcation of the energy system. Real strong demands in LNG, for example. And then overlay that, we have the energy transition, so our existing customers needing to decarbonize their assets and plan for the future. So it's almost the perfect storm of core markets coming back, overlaying with this wave of investment that they have committed to, to be able to achieve their net zero ambitions. And that's even before we start talking about things like the IRA, which I've heard -- I know has been brought up a couple of times already.

Yes, we'll get into that. But just quickly, Mark T, what other numbers are you seeing in terms of like backlogs, other sales pipeline, staffing numbers, anything that you can give us a bit of a preview on there?

Look, the backlog -- the numbers are there. I don't have it in front of me at the moment, but backlog is definitely up. It's up substantially. We're seeing staff numbers and professional numbers are going up. Obviously, on craft, we're coming down a bit with the divestment of the maintenance and turnaround business. But we're very confident that we'll fill that hole very quickly with the work that's coming in.

Right. Well, on that note, let's take a look at the competitive landscape at the moment. And Vikki, I'm really interested in your thoughts on the competition in resourcing. So I'll start with you because you also mentioned that Worley has shifted towards this allocation of resources towards higher-margin businesses. You're in a very enviable position where you can pick and choose who you want to work with. You're ceasing a lot of low-margin work right now. How is that converting on the resourcing side for you?

Look, firstly, people are the absolute center of what we do. And we saw that this morning, and it's always such a delight to listen to our people and their experiences and how they see Worley. But I also said earlier that we're very deliberate about the work we do, who we work with and where we work. And so that's us real stewarding on behalf of our people. We are managing to bring the skill sets into our business at a fairly good pace. We have maintained our time to fill slightly under market, and it's sitting around 32 days. And we've seen that reduce gradually, particularly over the last 6 months. And just as we're knocking on people's door to come and work with Worley, we have people knocking on our door every day. And you can see from what we've talked through this morning why. It is a tough market, and we're absolutely relentless with our focus on this, Joel. So if I think about sustainability skill sets, for obvious reasons, representation of diverse groups, they are constantly at the fore of our focus. As Tiernan mentioned before, we're really thinking in quite diverse ways about how we attract talent. We have great partnerships in place. We are thinking about how we get work done more broadly: the use of artificial intelligence, as Sue mentioned earlier; the use of technology, as Adrian and Andy both referred to. So how we do our work has to keep changing. Our team in India are a real powerhouse for us from a capacity point of view and from a research and development and innovation point of view. So with the work at hand and the opportunities on offer, we are able to deliver to both the people who join us and the people that we have enormous value from a development and career perspective. And all of that, we know, delivers higher value to our customer.

[ Moving ] away from resourcing, Mark B, what about your customers? What are they telling you? Why are they partnering with you over your competitors?

Predictability. We have long relationships with our customers. We don't behave in a transactional manner. We want to do a project and then be there for the repeat project and going forward. Also, in this rollout of sustainability projects, the low carbon fuels, the hydrogen, a lot of our customers are doing global portfolios. They're doing -- add a renewable fuels diesels, say, in Kwinana, as shown earlier. And then BP has announced they're going to do it in 5 other locations around the world. And as an example, we're able to support them in that deployment of capital in a consistent way and getting synergies and replication standardization as we go, so they get the benefit of that. And there's a lot of customers talking about global deployment. So well positioned for that. Customers also look at us for our resources. I get ask a lot of times, "Can you staff up? Are we pushing you too fast?" And we say no, and then I share numbers. I'll share, EMEA, APAC last year, we net grew 2,900 people. This year, we're on track by June to be 3,500 net growth. So that's your [ 1 year ] growth. So demonstrating that we can find resources as [ particular ] sharing and get people onboarded and up to speed and able to step up to their projects is a big benefit and an edge over some of our competition.

Mark T, are you seeing in the Americas this sort of pick and stick mentality as well?

Yes, absolutely. I'm seeing everything Mark is talking about. And the fact that we went early this strategy has helped. So our customers, they're looking for, well, who can lead the way; who's a safe pair of hands; who can we work with around the table, not on opposite sides of the table, to go forward and deliver what needs to be delivered. I think certainly in North America, so Canada and the U.S., where we have a really strong construction and fabrication capability. So we've got -- in the front end, we've got [ Advisian ]. We've got the full engineering procurement capabilities. We've got fabrication for modular solutions and then the full construction capability as well. And increasingly, that ability to go from start all the way through to finish with an integrated offering is -- our customers are asking for more and more of that. And DAC with Oxy is just a great example of a long-term program. We're starting at the beginning, and we will take that all the way through.

It would be remiss of me not to acknowledge that there are obvious broader challenges globally. You've got inflation. You've got cost of labor, cost of materials. So generally, uncertain economic environment. We've got a federal budget in Australia tonight, which is delivering a small surplus, and then slipping back into deficit again. So it really is a coin flip in terms of where some economies are going. But I'm interested for both of the Marks to go into, and Mark B, we'll start with you, the sort of challenges that you're seeing right now and how you and Worley are managing them.

So we stay close to our customers. And we talk about their portfolio, their projects they want to deploy, when that's going to happen. And we're staying in tune with what's happening with inflation, supply chain risks of being able to deploy the materials for the projects. And there's some shifts from time to time in certain countries. Right now, in Europe, some of the chemical customers are, with the high feedstock cost and high energy costs, they're tightening up, delaying some projects. But they're looking elsewhere where they can deploy the capital. So we're positioned well for that. So it's just the real time, staying close to what's happening in the world, having the discussions with the customers and as partners, coming up with solutions to keep the capital going. So we see shifts, but we're still trending up overall.

And Mark T, obviously, inflation is a huge talking point in America, in the United States, specifically. Are you seeing any direct impacts of that on your operations over there? And what sort of challenges then are you able to kind of maneuver around?

I think we're having some network problems at the moment, but if you can hear me, in inflation, it is a concern. We've -- we see it in supply chain. Now we don't do -- as you know, we don't do a lot of lump sum work. So we're -- from our own particular -- our own position, inflation, we're relatively protected. But ultimately, projects have got to add up. And if the economics don't work, then, obviously, that's a concern. So reaching deep into the supply chain. You talk about competitive advantage. Our customers, in many areas, are looking for speed to market. And if we're looking for speed to market, we need to be looking for different ways of delivering projects. And again, speed to market often can help with inflation, but that is a concern. Parts of the supply chain, it has stabilized. But there are still some areas where there'll be a rare metal or a particular type of equipment that has a part that comes from somewhere difficult. We have to be absolutely all over that. It's getting a bit better. But what we do is hard. And close to 55,000 people around the world, we've got a pretty unique position to actually see what's happening out there.

Well, Mark T, I'll stay with you on that just for a moment because with the sort of complex geopolitical and regulatory situation that we have, particularly in the United States, there's also a fair bit of opportunity. The aptly named Inflation Reduction Act, for example, has actually spurred on a h*** of a lot of investments, particularly in the sustainability and renewable space. What are you seeing there? And why do you think that there's been a surge of capital flowing in there?

Well, I mean, the IRA, it is going to change the world. And it's -- we're seeing investments being made coming to the U.S. We're seeing them being canceled in other parts of the world and being -- capital flows, it's pretty fluid. This room would know that better than any. And where the regulatory environment [ supports ] and Chris -- sorry, Sue talked about $370 billion, it's actually going to be a lot more than that in the end. It's flowing into the U.S. The other thing that's happened is because it will make the U.S. [ move and get over ] the hump in terms of moving to net zero. But because the economy is so large, what we're seeing is a race to the top. And the Europeans have responded. The Canadians have responded a couple of weeks ago with their response to the IRA. So it's actually changing everywhere around the world. Maybe even one day in Australia, we might do something bold. But look, it's -- on battery materials, carbon capture, hydrogen, it's our existing [ tool ]. Really, balance sheet-strong IOC customers, it's the second tiers, and it's the developers. There's actually money for everyone and substantial amounts of money, whether it's direct funding or tax subsidies. There's also the Infrastructure Act, which came before the IRA. So there's a number of different levers that have been pulled in the U.S. market. Never seen anything like it, frankly.

Mark B, just briefly, we've obviously -- Europe and the response to Russia's invasion of Ukraine, there's big set of circumstances there, very different to the situation in the United States, just talk about energy nationalism and so forth. I mean how is that presenting an opportunity and a challenge for you right now?

Yes. As we went through the Russian invasion of Ukraine and that shift, it was opportunity, in some cases, elsewhere in the world, in the region, to support the energy security. As the IRA took off, I started hearing customers talking about that and what are we going to do to respond to it. But most of the projects that are in planning are still moving forward. Some delayed a little bit, but I have not seen it really derail the industry and what we're focused on, on energy in Europe. But coming out of the pandemic, Europe is really on fire. It was really deploying a lot of capital. It's slowed a little, but I have high expectations it will take right back off.

Okay. I'm conscious of time, and I still do want to cover off a few more topics here. So Vikki, I'll bring you in for this discussion. Because Chris commented earlier that we're on the cusp of a prolonged up-cycle in the market. If you look at Worley's business approach, its shift towards sustainability, 29% annualized increase in sustainability projects over the past 2 years. But obviously, you've still got the traditional oil and gas part of the business as well that needs to be acknowledged. This is an enormous change of ethos for the company. How are your staff responding? And what are you doing to ensure that they are, not only brought along for the journey, but are on board with this as well?

Yes. Great question, Joel. We've talked this morning about a number of things that differentiate Worley and why we're seeing the success and the momentum that we're experiencing. And people are one of our differentiators. They're our absolute core to our success. And we focused on 2 things. I talked about one before, which is the right people. So that's the attraction, retention, the development, how we mobilize and use the talent we have. And we saw some great examples this morning about how we do that globally. But what goes hand-in-hand with that, and is absolutely the core and the critical piece, is the right experience. What does it feel like to work for Worley is a question on our minds all the time. We heard Farzana talk this morning. And Farzana, thank you so much sharing your story, really powerful and such a reflection of the focus that we're bringing on a handful of things. Firstly, what is our culture? So we are investing in a strongly values-based behavioral culture. And behaviors, I cannot emphasize more how critical that is to our success. If you think about the comments made by our people and some of our customers this morning on the videos, it all comes down to behavior, how we work together, how we collaborate, the values and the ethics with which we operate. They are at the heart of who this company is. We focus on leadership, on learning and making sure learning is every day, critically on well-being and mental health for all the reasons I'm sure everybody in this room understands. But core to that is the values and the culture. And the last piece there is, as we think about how we digitalize what we take to customers, we digitalize and use technology for the work we do, we also look at the experience for our people and how do we digitalize that because as people -- with people as a core differentiator, that's a really key part of retention.

Mark B, how do you merge the old with the new, bringing in sustainability into the traditional oil and gas space?

Yes. I think as like I commented earlier, doing the messaging that these projects, they might be considered new energy and they are, but it's right in the skill set of what our employees do to design and to build to deliver the assets. So as we've gone through this journey and we demonstrated that, that's a new energy project or a sustainable project and you're on it, doing it, so that proofs and examples as we go and working with our customers, it's the same customers.

And look, we've heard throughout the day as well, these enormous projects that Worley is currently involved in. Just off the top of my head, Green Energy Oman, the Kasawari CCS in Malaysia. If you picked up a copy of The Australian the other day, you would have seen this huge project in Texas with Occidental Petroleum. It's literally going to be sucking carbon dioxide out of the air with enormous high-powered fans. So Mark T, that takes me to the value proposition of Worley. And quite bluntly, why buy?

I think Tiernan and Chris and everyone said it. And the world is changing. We're off, and the world is going to decarbonize. It needs lots of conventional energy whilst we transition, and then it needs to build a whole new infrastructure and it's the whole supply chain. It's...

I think we may have lost Mark T there.

Not just the fuel moving from molecules to electrons. Do we have a network problem? Or can you hear me or...