Worley Limited (WOR) Earnings Call Transcript & Summary

Good day, and thank you for standing by. Welcome to the Worley Half year '24 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Chief Executive Officer, Chris Ashton.

Thanks, everyone, for joining the call today. Apologies for a slight delay to the start. Clearly, a busy day at the ASX, but welcome to the half year results for Worley. I'm pleased to be presenting them to you with Tiernan O’Rourke. Many of you know Tiernan, and those who don't, Tiernan is our CFO. Just moving to Slide 2 and our disclaimer. Just remind everyone to review what is said here. Moving on to Slide 3. I want to begin by acknowledging the Cammeraygal people of the Eora Nation as the traditional custodians of the land on which we meet today. Recognize their strength, resilience and capacity, and we pay our respect to the elders past and present and to all First Nations people here today. On our call today, I'll provide an overview of our business performance and strategic progress over the period as we continue to deliver growth. Tiernan will add further detail on our half year results, and I'll share some key market trends before providing our outlook. We'll then open for any questions. Turning to Slide 4. We Today, I want to leave you with 3 key messages. First, we delivered consistently with a strong growth in revenue, earnings and margins. Second, our disciplined strategy execution resulted in a strong cash result and sustained growth in backlog and pipeline. And third, as a leading global provider of sustainability solutions, we expect long-term growth from structural changes in our end markets. Turning to Slide 5. I'd like to take you through our business performance. And so moving on to Slide 6. It's important that we keep our people safe and well, and this remains our highest priority and lies at the heart of our culture. We create a secure and supportive environment which enables our people to be their best, leading to better mental health, greater engagement, innovation and productivity. This half, we launched our well-being hub, providing resources and mental health support for all of our people around the world. In addition, we published our global Respectful Workplace Behavior Policy, which underpins our respected work program. Our Code of Conduct is core to our values and underpins who we are and everything we do. We invest in training annually, and we don't tolerate any action, which undermines the trust we've all worked hard to build. Moving on to Slide 7. I I'm pleased with the progress we've made across our ESG business commitments. This half, we've reduced our Scope 1 and Scope 2 emissions by 7% and remain ahead of our planned reduction targets. We've improved the gender balance of our graduates and our intake in half 1 FY '24 is 58%, up 48% from last year. Our ESG ratings we've achieved a AA rating by MSCI in our new industrial peer group, maintaining a leading position among our new peers. For the second consecutive year, our leadership has been recognized by our inclusion in the Dow Jones Sustainability Index for Australia, and we recently received an A rating from Monash University for our FY '22 Modern Slavery statement. Modern Slavery remains a focus for our business. We undertake a high level of diligence checks on suppliers and customers, and we're committed to increasing our level of transparency through our recently issued third Modern Slavery Statement supported by an active program of work. Moving on to Slide 8. We continue to deliver consistently with strong growth in revenue, earnings and margins. Our aggregated revenue was up 14% on the half 1 FY '23 with increases across the regions and all 3 segments of energy, chemicals and resources. Our underlying EBITA of $340 million is up 28% compared to the prior corresponding period. And this was achieved despite a more limited contribution from Venture Global and Northvolt contracts that was expected. In line with our expectations, margins, excluding procurement have grown to 7.5%, which is up from 6.6% at the prior corresponding period and is in line with our forecast range for FY '24. Our ongoing project awards signify our customers' long-term trust in our relationship and their expertise for their asset build. Sustainability revenue has reached a milestone, now accounting for over half of our total aggregated revenue. And as you look to our leading indicators, sustainability in our sales pipeline is now 83% and is 51% in our backlog. This indicates we're on track to deliver our ambition to drive 75% of our aggregated revenue from sustainability-related work by the end of FY '26. And I'm pleased to say the Worley Board has determined to pay an interim dividend of $0.25 per share unfranked. And I want to recognize these results have been achieved because of our highly capable people led by a dedicated and experienced group executive team. Moving to Slide 9. I want to say a few words about how I've dealt with the Ecuador issue. In January, together with Tiernan, we lead into the issue to address those concerns raised by many of you. We did an extensive roadshow. We made additional releases and importantly, we've spoken to how Worley has matured as an organization in relation to monitoring and compliance. It's a regret, and we apologize to the way this issue was raised. But we're confident in our legal position from the inception, we were confident in our legal position from the inception of the arbitration process. And we worked hard across January to clarify the matter as well as in February to rebuild the trust you have in our excellent business. We finished an extensive stakeholder management plan in the middle of February and today and focus on what is I consider to be a great set of results. The lessons of Ecuador, however, will not be lost. Let me remind you of a critical fact. Worley has not breached any corruption or bribery laws. Our business has robust business practices. And as the CEO, I ensure we uphold the highest standards of ethical behavior. We have a 0 tolerance for deviation from this. Our business has made significant progress on governance and compliance matters, and I'm confident we have the necessary controls in place. But always have an eye for improvement as opportunity presents itself. On this slide, we show a range of the measures we've put in place in the last few years to continue to improve our governance processes, controls and monitoring. Turning to Slide 10. We've evolved our sustainability definition to align more closely with international taxonomies allocating our sustainability-related revenue across the 2 categories of transitional and sustainable. Our ambition to drive 75% of our aggregated revenue from sustainability related work by FY '26 remains in place with sustainability-related revenue, the sum of transitional and sustainable revenue. Moving on to Page 11. Our factored sales pipeline and backlog are signed post of the strength of our business and continue to show growth in the near to medium term. Our pipeline is up 35% on the prior corresponding period, including Venture Global and about 12% without it. The project remains in our pipeline until after FID in line with our usual booking practices. Our backlog continues to grow and is up 11% on the prior corresponding period. We've also included this time gross margin trends that indicate new work is routinely being won at higher-than-average margins. Moving to Slide 12. We continue to win a mix of traditional and sustainability-related work and have been awarded a number of significant wins across strategic growth areas, both in the half and since January. For example, we support the acceleration of battery materials, delivering EPCM services for Umicore's large-scale battery materials facility. And our work in hydrogen is growing with a number of wins across the front end through the fabrication and construction services. These wins signify we're building on our long-term relationships and trusted relationship with our customers as well as expanding into new markets. Moving on to Slide 13. We're working on the development of a groundbreaking carbon capture facility at Heidelberg Materials' cement works in North Wales, as a first of its kind in the UK. This is a further expansion into a new adjacent market in sustainability and with this, an incremental growth opportunity for us. We're pleased to worked with BP as a trusted partner on this new global -- on the new global framework providing EPCM services covering BP's global refinery assets as well as their new energy portfolio including strategic projects in green and blue hydrogen, low-carbon fuels and sustainable aviation fuels. We have a strong presence in the Middle East, and we've worked alongside Qatar Energy, LNG for over a decade and this project award further supports Qatar on its sustainability journey and presents an opportunity to use our in-depth knowledge of the region and global expertise across the carbon capture, utilization, sequestration sector. Moving on to Slide 14. In line with our last ASX announcement, we've signed the reimbursable EPC agreement for Venture Global CP2 LNG export facility in Louisiana, the U.S.A. And we continue to provide engineering, procurement and construction support services required to prepare for the project -- prepare the project for construction commencement under the limited notice to proceed. And as shared before, we'll notify the market when Venture Global receives its FERC approval. Moving on to Slide 15. Our strategic investment has provided Worley with first mover advantage in many emerging sustainability markets. It has also delivered accretive returns. Since the beginning of the program, we won $6.1 billion of new work associated with 7 of our featured growth areas. This program is set to conclude at the end of this financial year and we'll advise that the full year results on a continuation of the program. However, for clarity, our margin ambitions beyond FY '24 include the continuation of a similar level of investment going forward given the accretive nature of the returns that, that investment is generated. I'm now going to hand over to Tiernan, who will provide further detail on our half year results. Tiernan?

Thanks, Chris, and good morning, everyone. Our half year financial results today demonstrate momentum in delivering our strategy, as Chris has already said. Our earnings increased and margins and operating cash flow are in their target ranges. Worley's capital management position is even stronger this half with leverage and liquidity at very supportive levels. I'll turn now to Slide 17. Our aggregated revenue of $5.6 billion is up 22% on the first half FY '23 pro forma. Remember, the pro forma reference relates to the divestment of the predominantly blue-collar North American turnaround and maintenance business last May. We continue to see strong growth in our procurement revenue at margin, in line with our expectations and reflective of our current project mix. When you exclude procurement, growth in revenue is up 14%. Turning at group profit, we delivered an underlying EBITA of $345 million, up 28% on first half FY '23 pro forma. Our professional services revenue has increased 26% over the same period, reflecting the quality of our underlying order book and the commitment of our customers to invest in the energy transition and also on their journey towards net-zero in the next few decades. This fundamental trend in our addressable market has been evident in our results for a few years now. As expected, this half year result is delivered from the phasing contribution of around 45% of full year earnings. Our underlying NPAT is $188 million, up 30% on first half FY '23 pro forma. We did not anticipate any one-off items being booked below the line in FY '24. However, we have decided to write off the net exposure of $58 million relating to historic services provided in Ecuador, and this has been treated as a one-off amount separate to our underlying EBITA. The finalization of these accounting entries for the net exposure as well as general provisioning of 31 December 2023, addresses all known financial exposures relating to these historic services. While we have taken the decision to remove the net exposure from that balance sheet, we are still considering the options for further legal proceedings. While we believe we have provided adequate disclosures in the past, we continue on the journey we started a few years ago to improve our reporting purpose. This period end, we have provided more detail in the contingent liability note in the half year report, specifically around Ecuador and other project-related risks. In regard to the [ for state-owned ] enterprise amounts owing reported some years ago, with the write-off of the Ecuador net exposure and the adequate provisioning for remaining liabilities associated with it. The only outstanding SOE is now [ Portland Gas ]. This receivable some $28 million, has a $5 million provision against it, but remains, in our view, a legitimate receivable. Worley delivered value to its customer and the legal case to recover it is well underway. Changes to control processes, including a requirement to get approval from the CFO to continue to work on a project when 2 months of WIP remains unbilled and unpaid has ensured that Worley has not accumulated amounts owed of similar magnitude to these old SOE balances. Together with project provisioning, appropriate bidding of margins, and oversight by our project assurance team, mature governance and compliance processes, some of which Chris has outlined, helped to ensure that material liabilities do not accumulate on any one project. Our outlook for FY '24 indicated margins would reach between 7.5% and 8%, while EBITA grows. This half year EBITA margin was 7.5% as we continue our journey towards generating high single-digit margins in the medium term from the mix of projects we undertake. Moving to Slide 18. The EBITA walks presented here show our progress in expanding margins, excluding procurement compared to first half '23 and second half '23. In both these walks, you can see that the margin is predominantly driven by rate improvements that continue to flow through from backlog. The other key contributor to our margin is our project mix with professional services now making up 90% of our EBITA. Jumping on to Slide 19. We've previously said that we expect to deliver double-digit EBITA CAGR over the medium term. We continue to execute our strategy to achieve this and what gives us confidence in further margin expansion from here is the following. First, the trend towards increased gross margins in our factored sales pipeline and backlog, and that's being maintained that trend. This means that we're continuing to work -- to win work at higher margins, which then flows through to revenue. Second, we're maintaining our disciplined approach to managing our cost base as we grow. In the half, this is evidenced by our increased productivity, whereby profit is growing faster than overheads. Finally, the world is allocating more investment towards achieving net-zero. USD 1.6 trillion in the last 12 months, up from $1 trillion last year, and this is supporting the growth in volume in our pipeline and backlog and reinforcing the margin growth thematic. From all of this, the key message is that we're seeing increased margins and profit in FY '24. Moving to my favorite slide, capital management. We continue to strengthen our capital management position, which is structured around funding our growth and delivering increased value to shareholders. We present our capital management plan in a consistent way, so you can see the decisions we're making regarding our free cash flow. Our reported cash conversion ratio for the half is 141%, which reflects strong underlying cash flows, but also a transition to increased advanced billings on some new contracts like CP2 and Umicore as we strive to achieve better terms and conditions in this market. The transition to better terms can be changeable and can obscure the underlying cash performance in the period in which they occur. Accordingly, we also provide today underlying cash conversion ratios normalized for the impact of the effect of advanced billings this period. This ratio is 96%, at the top of our target range and demonstrating a focus on converting profit to cash while also allowing adequate investment in working capital for growth. DSO has reduced from 63 to 55 days with a contribution from the write-off of Ecuador. We maintain an appropriate level of liquidity for our business. Our leverage has continued its trend down and is now at 1.8x, below our target range, but creating a very strong capital base for the company. Our weighted average cost of debt in the half is 4.5%, up from 3.9% last year because of rate hikes, and we expect it to be in the range of 4.4% to 4.6% at FY '24. Our underlying tax rate was 33.9% at the first half '24, consistent with our target range, and we expect this to be similar for the rest of FY '24. Turning to Slide 21. We've got a strong customer base and have worked with many of our customers for decades. In addition, we're forging new partnerships and emerging customers -- with emerging customers in high-growth markets. The majority of our top 20 customers were delivering both traditional and sustainability-related work. Our results reflect our customers' confidence in our capabilities and experience and the growing demand for our services. Recent multiyear contract wins reaffirm this. When we consider all these competitive advantages, we ask ourselves, why do customers choose Worley over our competition? And why invest in Worley? The answers to these questions are worth reflecting on and include: We have a greater diversity across end markets than our global peers, with a strong margin profile and backlog and pipeline; we have over 49,000 highly capable people, 88% of whom provide professional services. That's around 43,000 highly skilled engineers across multiple disciplines; we have a higher proportion of sustainability-related revenue, now at $2.9 billion through our early mover advantage in new high-growth markets; and Worley has a low-risk contract style with about 80% of our work reimbursable. We don't take on material lump sum turnkey work. Our balance sheet is strong with high cash generation and appropriate liquidity, which supports our strategic investments in growth. All our key information is disclosed in our broker toolkit, allowing analysts to compare the Worley position against those of others. And there are many more, but you get the point. I hope you use this list to do the comparison yourselves. In summary, as the CFO, I can say it's been a big year with some bumps along the way, but we have a strong business with results in line with outlook and the focus team to execute our strategy. I'll hand back to Chris to finish the presentation.

Thanks, Tiernan. And before I take you through the outlook, I'd like to briefly focus on the emerging thematics and our strategic response to global trends. And this will start on Slide 23. At a macro level, Worley is managing 3 risks but also opportunities. That's the attraction and retention of highly skilled resources to meet the demand that we're facing into, inflation and supply chain disruption and their impact to the economies of the business and ongoing geopolitical tensions affecting normal operations of global markets. We're actively focused on mitigating these risks every day recognize they will remain an ongoing challenge for businesses globally, not just Worley. However, the fundamental structural shifts in our market remain. Bloomberg New Energy Finance recently reported global spending on the clean energy transition has hit a record as Tiernan noted, of $1.6 trillion. But this is still not enough. To get the world on track to meet its net-zero emissions target by 2050. To date, support of government policies and incentives have been influencing sustainable spending and supporting the economics of some of these early-stage technologies. New sustainable finance taxonomies, inclusive of transition taxonomies are expected to accelerate investments. For example, releasing spend under the EU Green deal. However, there's been recent instances of governments such as the U.K. softening short-term targets while maintaining their longer-term commitments. This is influencing where customers invest, not what they invest, but where they invest, and this can have an impact on the timing of their projects. Worley's global footprint and diversified business means we can support our customers and deliver our projects across the regions, and we'll work with our customers to drive down the levelized cost of their projects. This year, they're going to be over 40 countries around the world set to hold national elections, creating, obviously, the potential for change. And while we don't anticipate these change will have an adverse impact on the business, we're closely monitoring the outcomes and are prepared for a wide range of scenarios. Moving on to Slide 24. The outlook presented at the time of our FY '23 results remains consistent with that, which we're expecting for FY '24, subject to no deterioration in the current market conditions. We expect FY '24 aggregate revenue, excluding procurement to grow on an FY '23 pro forma basis, as new and emerging customers generate further upside with additional volume from major projects. We also expect procurement volumes to grow further on FY '23. We expect the underlying EBITA margin, excluding the impact of procurement, to be within the range of 7.5% to 8% in FY '24. And that's, as we discussed previously. The impact of the delay in Venture Global CP2 project achieving final investment decision has been primarily offset by accelerating associated engineering work to prepare the project for construction commencement. In addition, new work has been won across our global business and prudent provisioning for project delays and ongoing challenge for managing a global business has also allowed us to remain in line with our original forecast. As a leading global solution provider in the markets we serve, we're encouraged by the volume of new work we continue to win in our strategic growth areas. Moving on to Slide 25. Before moving into Q&A, I'd like to just go back and remind everyone of our key messages. First, we've delivered consistently with strong growth in revenue, earnings and margins. Second, our disciplined strategy, execution has resulted in strong cash results and a sustained growth in backlog and future pipeline. And third, as a leading global provider of sustainability solutions, we expect long-term growth from structural changes in our end markets. So just moving on to the Q&A slide that concludes the presentation. I appreciate everyone for joining the webcast, and Tiernan and I will now take questions from those of you who joined the call today. Thank you.

[Operator Instructions] Our first question comes from John Purtell with Macquarie.

Just had a few quick questions, if I could. Chris, I appreciate your comments there at the start, Ecuador -- I missed those. I think just in terms of how the stakeholder management plan is proceeding. So what's the status there and general customer reaction and the impact on customer win rates?

Very, very open dialogue with our customers. Very openly, very transparently, John, no negative reaction from our customer base, continued strong support from all of the customers that we -- that we've engaged with. Very appreciative of the open approach. Obviously, in January, we went straight out with the analysts, investors, all of our key stakeholders. So very proactive on the stakeholder engagement plan, but no negative feedback from our customers. And for many of our customers who worked in some of the non-OECD countries, an understanding of the challenges associated with that. So look, we continue to win and sign long-term contracts. Over the next few weeks, I'm excited by what we'll be able to announce. But look, good support, very strong support from our existing customer base as well as the newer customers that we're working with, John.

Just a second one. Look, at a sort of sector or macro level, we have seen a sort of shift back to more traditional spend, the sustainability. So just interested in any impact you're seeing on your growth rates within sustainability?

Yes. I mean, if you look at our future factored pipeline, it's 83% of it is sustainability related, John. So Obviously, that future factor pipeline then flows into backlog that then flows into earnings delivered. But if you look, 51% of our backlog is sustainable. We crossed 50% this year, half year on the earnings and 83% is in the future. But we're flexible. And the way I look at this, the world in terms of population, absolute terms continues to grow. And so absolute energy consumption is going to continue to grow. What form that takes, whether it's traditional or sustainable may vary. But the long-term trajectory continues to show, and it's reflected in our pipeline, high levels of spend in the sustainability space. And I'm going to give you an example. Aramco made a statement a few weeks ago to reduce its maximum sustainable production capacity from 13 million to 12 million. But it's spending -- it's committing over $100 billion in gas in that Jafurah field. So it's -- we're still seeing strong commitment to the sustainability space transitional as well as pure sustainable. And Aramco is an example, it's one of our biggest businesses with -- we're doing a huge amount of work with them. Going to be doing gas as well as their existing oil work but gas, green hydrogen and blue hydrogen. So I think the important thing is that with 88% of our workforce being professional services, we can pivot from one to the other. But the indication is from the backlog, which is obviously a leading indicator, 83% remains in the sustainability space. So still seeing strong support for the strategic pivot that works and journey we're on, John.

And just the last one for Tiernan. We saw global support costs up a lot in the half. What drove that? And is that expected to continue into the second half?

John, as I mentioned in my section that our productivity metric is very positive. So you will see overheads growing, but they're growing to support the income and top line growth. So I'm really pleased where our overheads are going. All of the savings we made a number of years ago have been maintained, and the integrity of that savings plan has been maintained. And any increase you see Chris and I have oversight of that. Any increase you see is generating additional productivity through the business. So you will see increases in overhead. But as we reported today, those overheads have been absorbed in the 28% increase in EBITA.

[Operator Instructions] Our next question comes from Rohan Sundram with MST Financial.

Chris and Tiernan, question is around Ecuador largely answered, but just one follow-up on the back of John's question. Just around the amount of resourcing that you've had to apply to this, how incremental is it? And is it material? Or could it be a drag to margins or not?

You mean on to Ecuador?

Yes, yes, towards the Ecuador issue.

No. I mean, the resource applied to that is myself, Tiernan and legal support. In fact, my role as the CEO was to effectively allow the business -- all of the business to continue focus on this. So it's not a distraction at all to them. Clearly, it's absorbed the time of myself and Tiernan and our legal group, but from the part of the business that is market facing, generating new work and then delivering that new work, it is not a distraction at all. Not at all.

Our next question comes from James Byrne with Citi.

Question on CP2. Appreciate you've accelerated some of the engineering work, which is protecting your earnings at the moment for FY '24 at least. Yesterday, though, the energy adviser, the White House said that this moratorium on the export permits from the DOE, it could last for up to 14 months. So there's only so much work you can do with regards to the engineering. I'm interested to understand, at what point does this start to affect you where you're remobilizing your staff elsewhere or reducing headcount? As you've said FY '24 looks okay. I think what we are worried about in equity markets is what FY '25 is going to look like.

Well, I think it's really -- this is a great opportunity to clarify that the DOE approval is needed for export. It is not needed to build the plant. That is the Federal Energy Regulatory Commission, FERC. There are 2 separate approvals and what the Washington has announced is a review -- our moratorium on the export of the facility. So James, that is not an approval that the project needs to move to field, physically build the facility. And what our customers currently at the moment is working on the FERC approval, but they are separate approvals. They are not the same. And meetings last week, the customer said, "look, the project, full steam ahead, continue with enduring, procuring all the major equipment." So that's important. But it's also important, James, that Venture Global doesn't define us. It's a big project. It's an important project. But the fact is the business outside of VG continues to grow. And if there was a slowdown, then we reallocate the resource to the projects that we're winning and the growth that we've got elsewhere in the business. So its -- resource management is something that we have to do. So that's just part of the leading global business.

I would just also add, James, that we are, also to Chris' point, we're also reporting our growth, excluding Venture Global because I think it's important for you to see that -- our backlog and our revenue are growing excluding Venture Global. So don't -- ignore that, that we can still grow without Venture Global because there are a lot of other projects that are in the pipeline that will come to market.

And we continue...

Are you suggesting then that Venture Global would take an FID without their export permit?

Well, what I'm saying is Venture Global don't need the DOE approval to build the facility. Yes, and it would not need DOE approval till substantially after -- its after a 14-month moratorium. So obviously, that's still a decision that is going to be made by VG. But indications in sort of discussion that we had with them last week is this project continues, that commitment continues to build the facility. So that's -- I mean that is latest, last week.

Our next question comes from Gordon Ramsay with RBC Capital Markets.

Chris, I'm just interested in your comments that you brought up on Saudi Aramco. And I just want to confirm that Worley is unaffected by the deferral of the expansion projects on the oil side, you implied you have business in other areas, obviously, but does that have no effect on Worley?

It actually doesn't have an effect. The 2 projects that have been delayed, have absolutely no effect on us at all. We actually -- they were moving in the EPC phase. And if you know Aramco does hard-money contract and we're not involved in those 2. But we are involved in the gas side. So we're seeing a significant investment by Aramco on the gas side on the Jafurah field, over $100 billion, liquid chemicals with Aramco. So the 2 projects that will take the maximum sustainable production from 13 million to 12 million, we're not involved, no. So it doesn't impact us at all. And in fact, what that does, that will release capital to support Aramco's expansion in areas of gas, blue hydrogen, green hydrogen, as example. So yes. I'm only seeing growth opportunities with Aramco, significant growth opportunities. In fact, that 2 regional leads, Mark and Mark will be in Saudi Arabia next week to discuss with Aramco, their growth needs or their needs for Worley to continue growing its resource base to support their investment.

Okay. Just another quick one, if I may, just on the CP2 project. Clearly, there's an issue with CP1 with contractual customers and FERC has got involved. Is it possible that, that could delay a decision outside of what Biden is doing right now with this deferral on export licenses? I'm just worried that this project has potential to stall for a longer period than what might just because of Biden's current policy?

Well, look, as I said to answering James' question that VG, Venture Global, committed to the project. We are full steam ahead on engineering and procurement, speaking to the CEOs of the other major suppliers on the project, they're full steam ahead in the manufacturing, the production of those facilities. Look, what happens with the moratorium. It's an election year. You've got some big state politics between the Republicans and the Democrats. It came out and had said one of the first things Trump will do, delete the moratorium, so -- while let's say the moratorium could be 14 months, it could be a lot less. Yes. So -- but look, that's a challenge that really, we've got to rely on VG to manage, but their message to us is full steam ahead. The project is going to get built. We need to continue with engineering and procurement of major equipment.

Our next question comes from Cameron Taylor with Bank of America.

Chris and Tiernan, you mentioned that we're growing global spend for the energy transition of $1.6 trillion. But we are seeing a delay in number of green projects, hydrogen and carbon capture on the back of tougher IRA requirements in the U.S. We've seen BP and Shell trimming their renewable spend. And we're also seeing a sort of subdued oil and gas CapEx cycle. How do you expect Worley to grow accounting for all this? Is market share becoming more important? That's my question.

Well, we're not -- if you look at our future factored pipeline, it's bigger than -- we've shown a growth in it. 83% of it is in the sustainability space. So the data -- the universe that we're facing into, the markets that we're facing into, we're not seeing signs of the market shrinking. The market is strong in the sectors that we're facing into. We've got a differentiated strategy, and that continues to gain traction. The economics without IRA or the green deal in Europe, always going to be a challenge. I mean, the idea of the IRA and the EU Green deal is to accelerate investment in those spaces but we're not seeing the slowdown. And we're certainly not seeing a slowdown in the traditional energy space that you referenced. Again, Aramco may be shifting from oil to gas but there's -- if you look at the population growth, there's going to be a continued increase in energy, whether it's green -- traditional transitional or sustainable, and that means there's going to be continued investment. We're talking about a naturally depleting reserve here. But if you look at our future factored pipeline that we're showing, yes, it's growing.

Cameron, I would add that part of our advantage is that we are a diversified business across the energy, chemicals and resources sectors and then a whole multiple of subsectors. That gives us diversification benefit. We also account for delays in our projects. I mean at any one time, when I last checked our sales system, we have about 12,000 contracts live at the moment. So that spreads our risk. But when we do enter contracts, one of the reasons you're saying our margins grow is that we take into account and factor the likelihood of contracts going ahead. But we also factor in potential delays. It's one of the reasons why we've been able to cope with Venture Global -- slowdown of Venture Global and also Northvolt in this financial year and still maintain our original forecast. So I think we are very aware of the changes in markets. The other important point is that we've talked about this $1.6 trillion number. That's still way too low compared to what is required to get to net-zero. And whilst getting the net-zero may take longer. In 1 year, $600 billion of additional investment has occurred. And yes, we do have a good market share. We do have a good share of that market, not only a share -- maintaining our share of the existing market, but also a greater share of the new market, the new energy transition market because of our first mover advantage.

And I would also say we announced a shift from our GICS code from energy to industrials last year. I think it's worth just reinforcing that we do more than just energy. If you look at the resource side of what we do, and the chemicals side of what we do, we're more than an energy company or support the energy sector. And clearly, the investment spend in resource continues. And while Europe is quite in the chemicals, there's still continued investment in that space. So I think it's just -- it's worth reflecting on the fact that we're more than an energy company. We are heavy in the resource, we are having in the chemicals. And that was the reason for really shifting our GICS code away from energy into that of industrials. And it's that diversification, which gives us a level of confidence on the growth opportunity.

I would now like to turn the call back over to Chris Ashton for any closing remarks.

Yes. Look, I'll just close by saying, look, this is the fifth reporting period that we've delivered what we said we would deliver. The market in which we're operating in, the sectors in which we operate continue to show strength, and that's reflected in the future factored pipeline. Our strategy is differentiated and continues to gain traction, and that's reflected in the 83% sustainability in the future factored sales pipeline as well. We've got great customer support, incredible customer support. Globally with our traditional customers, the ones we've been with for a long time, but also the emerging customers who are coming to us because the $100 million we committed to investing back in 2021 has allowed us to build capability and a value proposition that differentiates us. And I think it's a combination of our market being strong, our strategy being differentiating, our great customer support that's allowed us to deliver what I consider a great set of results. And I would encourage you to go and look at the broker toolkit and look at typical ratios of first half, second half of historical first half, second half performance. And our outlook remains in line with that which we shared last year at the half year -- the full year results and the AGM. So great set of results as a result of the great work that the team have done and I think continued opportunity to deliver our strategy and the commitment for EBITA growth going forward.

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