Chairman's Review

Despite adverse global macroeconomic factors continuing to drive uncertainty across key markets, WorleyParsons has delivered another pleasing performance. The company’s global expansion continues apace; we now have more than 40,800 employees across the group, an increase of more than 5,700 people over the past year.

Worley Parsons Chairmen

Our growth during the year was underpinned by strong capital spending by major global customers and strengthening of our global relationships with these customers. The ever growing demand for energy is driving the unconventional oil and gas sector, where we have seen strong growth in oil sands, shale gas and coal seam methane, in Canada, the USA and Australia.

Developing markets were also a significant driver of growth as large global clients continue to invest in projects in countries where the bulk of the world’s undeveloped resources lie. We have established a strong foothold in the markets we already service and have entered a number of new markets through the transfer of our proven capabilities and practices.

Activity in the chemicals sector has increased. Lower gas prices have sparked resurgence in gas monetization and petrochemical projects in the USA, while our involvement in specialty chemical projects in China and Asia continues to increase. Across many of our developed markets, we have seen an increase in asset restoration and enhancement projects driven in part by tighter regulatory regimes.


The Group reported underlying net profit after tax of $346 million, up 16% on our FY2011 result. In the current market environment, this is a strong validation of the Group’s strategy. It is also pleasing to note that the Group’s cash flow position improved significantly in the second half of the year. Margin performance was however disappointing.

The Board has resolved to pay a final dividend of 51 cents per share, up from 50 cents per share last year, taking the total dividend for the year to 91 cents per share, up from 86 cents last year.

One of the key highlights during the year was the very strong performance of the Minerals, Metals & Chemicals customer sector, which experienced growth in both project and Improve activity particularly in Australia and Canada.


The safety of our people and of those who work on projects we are involved in continues to be a major focus of the Board and Management. Notwithstanding this, we are disappointed and saddened to report that we had three work related employee fatalities this year. These fatalities and the growing complexity of our business confirm that there is more we need to do in this area, despite the fact that our record is amongst the best in our industry. The Board and Management are committed to continue to seek ways to improve our safety performance and drive towards our goal of zero harm. The Board has formed a Health, Safety and Environment committee to further support the achievement of this goal.


The business would not be in the strong position it is today were it not for our people. One of the major strengths of our business is the technical capability and experience of our global team and their ability to provide optimal, value enhancing solutions for our customers at every stage of the project cycle anywhere in the world.

This is borne from a culture of empowering and developing our people to succeed at every level, encouraging a culture of accountability, innovation and excellence and a desire to be the partner of choice for the leaders in our sectors. The move to the new Local/Global organizational model has further embedded our culture and people capability and we have seen significant efforts this year to ensure that our people remain our key competitive advantage.

I would like to express the Board’s thanks and indeed admiration for the outstanding contribution of WorleyParsons' many people during the year.

Ethics and Corporate Responsibility

Our customers, suppliers, business partners and shareholders expect that our people demonstrate the highest standards of ethical conduct in all their business dealings. The Board strongly supports these expectations and, in doing so, recognizes the importance of our strong ethical culture with leadership demonstrated by directors and senior management to reinforce this culture across the organization.

The Board regularly monitors management’s response to ethical issues which arise in the business and during the year has supported and promoted management’s initiatives to improve whistle-blower procedures, prevention of bribery processes and training and code of conduct training.

The Board supports the company’s increased focus on the corporate responsibility activities of the company and its people across the many locations where the company operates. This focus will clarify our corporate priorities and efforts to assist in making our corporate responsibility programs more effective. The new Corporate Responsibility section of this Annual Report (see pages 28 to 30) provides greater detail on our priorities, performance and examples of our activities in the communities in which we work.

Corporate Governance

The Board is confident that a robust governance structure is in place and is properly administered. This governance structure has been further developed this year with the introduction of the Board HSE Committee to assist the Board to carry out its responsibilities with respect to health, safety and environment.

In addition to the regular board meetings, directors also test the governance structure through regular discussions with relevant senior management. This is achieved by visiting different operations around the world and discussing business issues with our local people, and by requesting and receiving the output of risk management reviews and internal audits.

Board and management changes

Shareholders would most likely be aware that on 6 July this year we announced significant changes to the company’s leadership, including the appointment of Andrew Wood to succeed John Grill as Chief Executive Officer.

John is justifiably regarded as one of Australia’s outstanding business leaders. He has been inextricably linked to the growth and success of WorleyParsons, having more than 40 years ago joined the Company that became today’s WorleyParsons. John led WorleyParsons growth from a small private domestic engineering firm to a publicly listed, global leader in the markets in which it operates.

I am personally delighted that John has accepted the unanimous invitation of the Board’s non-executive directors to re-join the Board in February 2013 and at that time to become non-executive Chairman of the Board. I will become Deputy Chairman and Lead Independent Director.

It has been a great privilege to lead the Board over the past few years, and I am pleased that WorleyParsons will continue to benefit from John’s exceptional industry knowledge and strong client relationships.

Andrew Wood’s appointment to succeed John as Chief Executive Officer is another major milestone for WorleyParsons. Andrew, currently Group Managing Director – Finance is a member of the company’s Executive Committee and has been intimately involved in the development of the company’s strategy in this role. During 18 years’ service with WorleyParsons Andrew has gained extensive experience throughout the organization: this includes senior leadership roles as Managing Director of International Operations and subsequently Regional Managing Director for Australia and New Zealand. He also managed the transformational acquisitions of Parsons E&C Corporation and the Colt Group of Companies.

Andrew is the right leader for WorleyParsons at this stage of its evolution. He is supported by a very capable senior leadership team, and the Board has every faith that the Company will continue to prosper under the leadership of Andrew and his team.

Andrew’s appointment will take effect at the conclusion of the Company’s 2012 Annual General Meeting on 23 October 2012 and at that time he will also join the WorleyParsons Board.


While this is a time of major transition for the Group’s top leadership it remains business as usual for WorleyParsons. We have a sound strategy in place and a committed and highly experienced senior leadership team which has been the key architect of this strategy. I would like to thank the senior management team, led superbly by John Grill, for their outstanding contribution once again to the growth of the Group.

WorleyParsons is in excellent shape and I have complete confidence in the long term future of the Group.

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