Chairman's Report 2017
Welcome to the WorleyParsons Annual Report for financial year 2017.
Your business has improved in many ways over the last 12 months. Gross margin and EBIT Margins have increased, chargeability is on target, cash collection is improving and importantly, backlog for new work has increased. This improvement has been driven by the Realize our Future initiatives that have reshaped and resized the business to meet the changing market dynamics.
Reshaping the business
Over the last three years the business has been reshaped and resized. We have reorganized into four business lines: Advisian, Major Projects, Integrated Solutions and Services. We are now more closely aligned with our customers with an ability to offer full range and value of services from advisory to implementation to asset optimization. Key business development activities have been contained in a new Global Sales and Marketing function to ensure global responses to global opportunities, and all our capabilities are brought to all our customers.
As the resource and energy markets have worked through structural changes in commodity pricing, fuel choice and other fundamentals, your company has developed a new strategic architecture to respond more dynamically to a changing world. This will provide a greater ability to capture revenue growth opportunities, systematically improve business performance and address the dramatic changes in the industry.
The three pillars of the new architecture focus on operational excellence, offering all of our value to all of our customers and positioning the business as a key player in the new resource and energy world. Andrew Wood discusses progress against these pillars on page 12.
Resizing the business
Significant effort has been placed on resizing the business over the last 18 months. Overheads have significantly reduced with some $500 million being removed from the business over the last 18 months. We have closed or divested a further 14 offices around the world and we are now active in 42 countries with 106 offices. I am pleased to say that we have also added two offices, one in Germany and the other in Azerbaijan – both at the specific request of two of our key global customers.
Our staff numbers have stabilized, with our workforce now at 22,800. We are meeting our targeted staff utilization rates. We have embedded processes into the Company to drive ongoing operational improvement and share best practices. We have changed the Company’s cultural mindset to where change is now a constant with a continuous improvement expectation.
(The Chairman's Report continues on page 3 of the Annual Report.)