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Why invest in Petrofac?

We enable our clients to meet the world's evolving energy needs. The long-term fundamentals of our business are sound, and our strategy remains valid – enabling Petrofac to build on established strengths, enhance competitiveness, maintain resilience and, through our newly-created new energies business, pursue the opportunities presented by the energy transition. 

Our investment case 

Leading international service provider to the energy industry
  • Petrofac designs, builds, manages and maintains oil, gas, refining, petrochemicals and renewable energy infrastructure
  • We are a trusted partner to a diverse portfolio of clients, providing a flexible offering of services and commercial models
  • Our purpose is to enable our clients to meet the world’s evolving energy needs
  • Our four values – driven; agile; respectful; open – are at the heart of everything we do

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Well positioned in resilient markets, with an attractive growth opportunities
  • Leading presence in our addressable MENA markets, which enjoy some of the lowest marginal costs of production in the world and resilient spending on energy infrastructure through the cycle
  • Leading presence in the UK North Sea, where essential operations and maintenance activity provides a durable baseline of revenue
  • Successfully diversifying our bidding pipeline into geographies beyond our core markets, like India, South East Asia, Africa, CIS, Europe and the US

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Differentiated client offering for the energy transition
  • Rapidly growing addressable markets where Petrofac has the necessary capabilities and track record from its oil & gas experience, including: offshore wind, hydrogen, CCUS and waste-to-value
  • Unique life-of-asset service, with the capabilities to take a project from concept through to EPC delivery and then operations, giving the customer a single technical and delivery interface
  • Targeting US$1 billion revenue in the medium term and continued strong growth thereafter
Strong competitive position underpins sector-leading margins
  • Exceptional track record of safe, reliable, and innovative execution built over several decades
  • Cost effective and local delivery model with a strong focus on incountry value
  • Best-in-class delivery being enhanced through simplifying organisation, creating an optimal structure supported by technology, efficient processes, and local, customer-focused delivery to a global standard 

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Financial position
  • Capital light business model and targeting return to a net cash position 
  • Strong liquidity
  • Clear, disciplined capital allocation framework

Our strategy

We are confident that our strategy, underpinned by an operating model that drives consistency, efficiency and stringent assurance, will position us well to capitalise on a range of diverse growth opportunities that will deliver superior returns and value to all stakeholders over the medium term.

Our strategy encompasses: best-in-class delivery, return to growth, and superior returns.   

Best-in-class delivery
  • Simplify the organisation
  • Global capability, local execution
  • Digitally enabled
  • Strategic partnerships/technology neutral
Return to growth
  • Customer centric approach
  • Rebuild backlog
  • Selective growth in new geographies
  • Leverage capabilities in new energies
Superior returns
  • Enhanced risk management framework
  • Deliver premium margins, consistently
  • Capital light business model
  • Maintain strong balance sheet

Our new operating model and structure entail a single Group-wide technical services organisation, which delivers functional excellence to all Petrofac projects and operations globally. It is supplemented by a standalone, self-governing assurance function.

Return to growth in the medium term

We believe Petrofac remains a compelling investment proposition, driven by sustained recovery in addressable core markets, geographic diversification to target new market opportunities, and accelerated growth in new energies.

MEDIUM TERM

c.US$4-5bn

Group revenue

c.US1bn

New Energy revenue

>20%

Revenue contribution from New Energy

Net cash

Strong balance sheet

Financial performance

You can find our financial performance for the last five years below.

2020

2019

2018

2017

2016

Revenue (US$ million)

4,066

5,530

5,829

6,395

7,873

Backlog (US$ billion)

5.0

7.4

9.6

10.2

11.7

EBITDA (US$ million)1

211

559

671

748

704

Diluted earnings per share (cents)2

14.2

80.4

106.2

100.9

93.3

Net profit (US$ million)1,2

48

276

353

361

320

Return on capital employed

7%

23%

26%

22%

12%

  1. Business performance before separately disclosed items 
  2. Attributable to Petrofac Limited shareholders

Cash flow and liquidity (as at 31 December 2019)

US$m

2020

2019

Opening net cash / (debt)

15

90

EBITDA1

211

559

Movement in working capital

-160

-179

Tax and net interest paid

-107

-179

Capex

-57

-92

Other cash flows (incl divestments)

40

29

Free cash flow2 

-73

138

Dividend

0

-129

Other cash flows from financing activities

-58

-84

Cash (outflow) / inflow

-131

-75

Closing net cash

116

15

References

  1. See A3 in Appendix A to the consolidated financial statements
  2. See A6 in Appendix A to the consolidated financial statements