Bob Keiller - CEO Alan Semple - CFO Robin Watson - CEO of Wood Group PSN

Dave Thomas - Credit Suisse Phil Lindsay - HSBC Ian Mitchell - JPMorgan Asad Farid - Berenberg Bank Rob Pulleyn - Morgan Stanley Andrew Whittock - Liberum Alex Brooks - Canaccord David Farrell - Macquarie James Evans - Exane BNP Paribas Sanjeev Bahl - Numis Neill Morton - Investec Fiona Maclean - Bank of America Merrill Lynch

Are we ready to go? We're just passed one minute passed the hour, so good morning, everyone. Today Alan and I would like to update you on the performance for Wood Group for the first half of 2014. Robin Watson, the CEO of Wood Group PSN, is also with us today. And he, Alan and myself will answer any questions that you have after we've given you a brief update. And, as usual, I'll handle the easier questions and I'll slope -- shoulder the difficult ones to both Alan and Robin this morning, as well. Now, as I've done with previous presentations, I would like today to start by highlighting one of our seven core values. And today I'd like to talk about the financial responsibility core value, which is -- it actually comprises three sentences. But it covers five different, discreet topics. Firstly, it's about receiving fair reward for what we do. Secondly, it's about managing financial risk. Thirdly, it's about communicating our financial performance. The fourth element of it is about looking after our own costs. But the fifth element is how we look after customers' costs. And it's that point I'd like to talk about, briefly. By helping our customers to reduce costs of designing, building, operating, maintaining or upgrading their assets, it clearly helps them to get more out of their assets. And I'll give you a few examples to illustrate that. For a client on the east coast of America we helped them to take $60 million out of their capital-investment program, simply by employing better planning, better management of subcontractors and using our engineering expertise. A client came to us with a front-end engineering design for a large, onshore plant. We submitted 182 cost-reduction proposals, of which they accepted 114. This reduced the plant cost by 37% and made the project economically viable. On the Shell Starmount pipeline project we helped them to reduce the overall-project costs from $40 million to $25 million. Prior to this, the project had been stalled as sub-economic. However, it's now entered the defined stage and we're helping them on that. And as a final example, in the UK we could see a potential weakening of the activity. So we reduced the rates to our day-rate contractors by 10%. This reduces our revenue. And because most of our contracts are reimbursable it clearly -- it reduces our income, as well. So you might say -- well, why would you logically do that until you were demanded to do so by your customers? Well, the bottom line is that it makes good sense for us. It strengthens our relationships with our customers. And it's why it's part of our core value. The move was welcomed by all of our clients. And it was quickly copied by our main competitors in the region, too. So let me move you on to the financial headlines in the first half. And most of you will have already read these in the release that came out this morning, anyway. But a quick reminder that total revenue was up 10%. EBITA was flat at $244 million. And adjusted earnings per share also flat at 44.4c. The first-half results reflect varied performance across the Group. We've seen strong growth in our PSN production services, led by our US shale activities, offset by anticipated, lower contribution from upstream engineering and a somewhat-disappointing performance in our turbine activities. Now, Alan will discuss the financials in further detail. And I'll pick up some operational commentary at the end of this presentation. Now, overall the outlook for the Group for the year remains unchanged. That's from the position that we outlined at our December 2013 trading update and that we reconfirmed in February. And then again in May and then again in June. We continue to expect full-year EBITA in line with expectations and up on 2013. We continue to deliver our strategy as a predominantly reimbursable business, principally focused on upstream oil and gas. Performance-wise we are delivering significant growth in our activities in US shale, which are represented by our production services and onshore-pipelines businesses. And I'll say more about the US shale later, as we do see this as a key, long-term growth opportunity and a growth market for the Group. I've already highlighted our focus on delivering cost efficiencies and adding value to customers in my example for the financial responsibility core value. In all aspects of our business early involvement in projects is where we think we can add the most value and improve efficiency. Now, I've talked previously about trying to ensure that each part of the business should be able to provide an acceptable return on capital. And that was the primary reason behind the creation of the EthosEnergy joint venture, to create a better-differentiated offering in parts of our turbine activities. Now, 2014 will be more challenging for EthosEnergy than anticipated. However, we're still confident in the longer-term outlook and the potential for synergies to come through. Now, in terms of fit, in July we acquired Agility Projects in Norway, which establishes a green-field and brownfield platform for engineering capability in the Norwegian sector of the North Sea. And positions us well for future projects in what we believe to be a good, long-term market. We also completed a number of smaller, bolt-on acquisitions, including Meesters in the Bakken shale region, Cape Software and Sunstone, a Calgary-based pipeline consultancy. In 2013 we took the decision to lower the risk profile of the group, particularly our exposure to large, fixed-price contracts. It's our intention not to undertake any further fixed-price EPC contracts of the equivalent scale and to exit our current, large EPC contracts. The Dorad EPC contract in Israel is now substantially complete, with a profitable outcome overall. And we expect to fully exit the Oman PDO contract by July 2015. The final thing I'd like to discuss is collaboration. Harnessing the collective strengths of the different parts of Wood Group so we can deliver better solutions to our customers is part of our continued growth plan. When we last spoke we were in the early stages of this effort. We'd created regional business-development forums and we'd a single, cross-Group, business-development database. Since then we have aligned long-term incentives for management. We've aligned branding across the Group. And we've improved sharing of back-office resources. I'm pleased to say that our strong focus in this area is beginning to bear fruit. Our forward-opportunity pipeline for opportunities where we need to collaborate with different parts of the Group now has over $2 billion worth of opportunities in it. And we recently secured a substantial contract with Exxon Malaysia and expect further rewards that combine the services and skills of different parts of the Group coming together. I'm now going to hand over to Alan to talk through some of the financial performance. Then, as I say, I'll come back with operational highlights in a few minutes. Alan?

Thank you, Bob, and good morning, everybody. There have been changes to statutory reporting this year. However, for the purposes of presenting the key financial information and the interim statement, the figures are prepared on a similar basis to last year, being proportional reporting of joint ventures unless noted otherwise. Reconciliations to statutory measures are provided in the notes to the accounts in the appendices to this presentation. Overall the Group performed in line with the first half of 2013, generated total EBITA of $244 million and adjusted, diluted earnings per share of $0.444. This was a somewhat-varied set of results; down in engineering, as expected. Strong growth in PSN's production services. And a disappointing performance in turbine activities. We expect to see a continuation of the engineering and PSN production services trends in the second half and a partial recovery in turbine activities. Now, as a result and as Bob mentioned, we continue to see the full year being in line with expectations and up on 2013. We're declaring an interim dividend of $0.089, an increase of 25%, in line with guidance from February. Our intent remains that we will have double-digit percentage increases from 2015 onwards, reflecting our confidence in the longer-term growth. Since the IPO in 2002 the dividend has now increased by an equivalent of 20% per annum compound. If I now look at the results by reporting segment in more detail, engineering saw revenue growth of 4%, EBITA down 9%, with a resulting reduction in margin to 10.7%. Upstream revenue increased in the period and this was almost all related to higher levels of onshore work. Upstream EBITA reduced, with the margin reduction reflecting lower margins from offshore and from Canada and the mix change, given the higher onshore contribution. Subsea and pipelines saw flatter revenue but higher EBITA. And downstream revenue and EBITA both improved. PSN production services performed very well in the period, with revenue up 22%, EBITA up 47% and margins increasing to 7%. Performance benefited from the contribution from the Elkhorn and Pyeroy acquisitions. But underlying performance was also strong, notably in the US onshore-shale market, where we continue to see higher margins than some of our more-traditional markets. For turbine joint ventures, the businesses now making up EthosEnergy with the largest variance. And although we expect a significant improvement in the second half, we do not expect to get back in line with plans for the year as a result of delays and a significantly-lower EPC backlog. Other joint ventures were behind due to deferrals. But we're confident that this will be recovered in the second half. It's typical to see turbine activity weighted to the second half. And we anticipate 2014 will be no different. Dorad handover was delayed until May, resulting in higher costs. We're in active discussions around change orders. And anticipate the year-to-date loss will be largely recovered by the year end. As usual, we've set out a pro-forma analysis to show a like-for-like comparison between the first half of 2014 and 2013, adjusting for acquisitions and for FX. The only material change is in PSN production services, where EBITA growth on a like-for-like basis was 21%. This largely reflects the US onshore strength, including strong organic growth in businesses previously acquired. And the benefit from our higher levels of CapEx over the last couple of years. The cash flow and net-debt summary has been prepared using equity accounting. We've then added the joint-venture position to come to a total net-debt figure. Cash generated from operations pre working capital increased by $62 million to $330 million. And post working capital increased by $28 million to $137 million. The working-capital position reflects the typical seasonality, as can be seen from the 2013 half- and full-year figures set out on the slide. Of the reported outflow in the first half, $20 million related to the Dorad contract. And the remainder is primarily in PSN production services, including the impact of higher activity and seasonality. Acquisitions and deferred considerations' spend of $65 million included $23 million for 2014 acquisitions and $42 million for acquisitions in prior periods. Payments for CapEx and intangible assets increased to $68 million. And include significant investment in plant and infrastructure related to our US shale expansion and ongoing ERP- and system-related expenditure. We continue to expect the full-year CapEx and intangibles to be around the $140 million, of which $15 million relates to joint ventures. Overall we expect a significant improvement in cash flow in the second half, benefiting from the working-capital seasonality and some underlying improvement. The Group's return on capital employed reduced from 18% at June 2013 to 16%, mainly due to the higher average working capital and the reduction in overall margin in the period. Net debt, including our share of joint venture net debt to total EBITDA, at June 30, 2014 was 0.8 times, comfortably in the range outlined in February of 0.5 to 1.5. In May we agreed to issue $375 million of unsecured senior notes in the US private-placement market, with drawdown this month and in November. These will be a mix of 7-, 10- and 12-year maturities at an average fixed rate of 3.74%, which we consider to be very competitive, highlighting the strong level of demand in the market generated by the placement. The issue will further diversify our source of the funding, extend the maturity profile of debt and result in a greater proportion of fixed-rate debt at favorable pricing. I'll now hand back to Bob to cover the operational review.

I'll start with our production services business' [indiscernible] strong growth. This was led by performance in US shale, including the Elkhorn business that we acquired in 2013. Now, due to the shale work, the Americas is now the largest-contributing region to production services' EBITA. I'll talk more about this on the next slide. Our North Sea business has remained robust and is benefiting from the growth in Pyeroy, which we acquired in July 2013. And in the first half of this year we have secured a five-year renewal of the Talisman Sinopec engineering and maintenance contract, an extension of our operations and maintenance contract with Chevron and also a new support contract for IONA Energy. Now, I talked about the clients' focus on efficiency on cost in the North Sea in particular. And our decision to cut contractor rates by 10% has been well received by all of our clients. Internationally we've commenced work on brownfield engineering and procurement for Exxon Mobile's operations in Papua New Guinea and expect activity in this area to increase. Also in July Wood Group PSN, in collaboration with Wood Group Mustang, secured a multi-year award for EPC and services in Malaysia, as I've already mentioned. The underlying position for Oman is broadly breakeven in the first half of 2014. And, as I've mentioned already, we expect to exit this contract fully by July 2015. Looking to the full year, growth in US shale and robust performance in the North Sea, together with cessation of losses in Oman, is expected to lead to strong growth overall in Wood Group PSN production services in 2014. Looking a little bit more at US shale, I thought it would be good to give you a bit of an insight into the market opportunity, which has increased significantly in the past few years. Through a combination of organic and acquisition-led growth we now have a business that generates around $1 billion in revenue per annum. And employs over 5,000 people engaged in site preparation, fabrication, installation, commissioning [technical difficulty] construction and O&M work. Our US shale business also delivered margins that are typically higher than in other markets, in part due to the more capital-intensive nature of our activities there. Our capabilities in US shale were further strengthened at the latter end of 2013 with the acquisition of Elkhorn, which has performed strongly in 2014. And is benefiting from infrastructure construction work in the core Permian region. In the first half of 2014 we also acquired Meesters, a specialist fabrication business in the Bakken region, and established safety and technical training facilities in the Eagle Ford region. Now, estimates of the forecast expenditure in the US shale to 2022 on activities where we have capability are very encouraging and point to long-term growth opportunities. To add some detail to that, the Permian region alone produces something like 1.6 million barrels of oil per day, which is comparable to the whole of the North Sea production in 2012. Now, we're excited about the US shale prospects. And Robin and his team will talk more about this at the PSN Capital Markets Day on October 9, which I'm sure many of you will want to come along to. Turning to our turbine activities, now, our turbine activity is comprised of three joint ventures. That's EthosEnergy, Rolls Wood Group and TransCanada Turbines and, for 2014, the Dorad EPC contract. Now, as we noted in our full-year result, our turbine activities are now reported within Wood Group PSN. Now, as Alan's already mentioned, revenue for turbine activity is down 4% and EBITA is down 52%. This was primarily due to the performance in EthosEnergy and its former constituent Wood Group Businesses during the period to completion in May. And it includes the impact of very low EPC activity. The outlook for 2014 for Ethos is more challenging than we previously anticipated. And this reflects the impact of project delays in Latin America, the Middle East and North Africa. We also saw a lower contribution from our other joint ventures, including the impact of deferrals of turbine overhauls. However, the current backlog that we have largely supports the expectation of a recovery in these businesses in the second half of the year. Now, customer handover on the Dorad contract in Israel is delayed -- was delayed to the second half of May. This contributed to the recognition of increased costs in the first part of the year, which creates a year-to-date loss, albeit the contract remains profitable overall. Now, as Alan mentioned, we're in discussion with the customer on change orders. And continue to anticipate that the financial position will be largely recovered during the remainder of 2014. Now, performance in turbine activities is typically weighted to the second half of the year. And we expect a significant improvement throughout the remainder of 2014. In EthosEnergy we're taking action to reduce costs. And expect to deliver net synergies of around $15 million by the end of the third year of that joint venture. However, overall, we anticipate that turbine activities will deliver lower EBITA in 2014 than they did in 2013. Engineering results reflect good performance in subsea, pipelines and downstream. However, this is more than offset by a lower contribution from upstream, which we saw some growth in onshore activity but was impacted by a lower contribution from offshore projects and in onshore Canada, in fact. In upstream we've been working on the detailed engineering on the Ivar Aasen in the North Sea, working alongside Agility Projects and Husky White Rose in Canada. However, we've seen a slower pace of significant awards of detailed engineering scopes on green-field engineering. That follows the completion of the large Mafumeira Sul Icthys projects last year. However, we're currently engaged in more early-stage projects than we were at this time in either 2013 or 2012. We've been working on several projects in the Gulf of Mexico, including FEED for Hess Stampede, detailed design for Anadarko Heidelberg and study work for Anadarko Shenandoah. Now, we believe our involvement in the early phases can significantly impact the overall project costs. And we think it's also an encouraging indicator of customers turning to engineering solutions to improve their overall capital efficiency. Now, good activity in Europe, the Middle East and the Caspian has contributed to profitability in our subsea business. In June we were awarded a $60 million contract for stage two of the Shah Deniz from BP in Azerbaijan, having provided engineering support throughout the earlier definition and appraisal phases. And we also booked awards from Tullow in Ghana and from South Stream in Europe. Onshore pipelines continued to perform well, benefiting from US shale work with customers including Shell and Dow. We see good prospects in Saudi Arabia and in Canada, where we added to our capability with the acquisition of Sunstone in Calgary. In downstream processing and industrial we've seen some benefit of brownfield and green-field work in refining and chemical markets, in part due to the continued benefit of lower gas prices in the US mainland. Looking to the full year, we continue to anticipate a reduction in engineering EBITA in 2014, although we remain confident that the upstream market will strengthen in the longer term with current early-stage projects providing and encouraging indicator for future activity. So, let me try and pull some of those threads together and summarize our position overall. And I'll restate what I said for each of the parts of the business. So, operationally we continue to anticipate a reduction in engineering EBITA in 2014, reflecting the lower contribution from upstream offshore, partially offset by good performance in subsea and pipelines. We remain confident that our involvement in early-stage projects will influence overall costs and provides a good indication of future upstream activity. For the production services component of the Group, PSN, strong growth in US shale and robust performance in the mature North Sea, together with the cessation of losses in Oman, should lead to good overall growth in 2014. Our turbine activity is expected to deliver significant improvement in the second half of the year, including a substantial recovery on the Dorad position that I mentioned. However, we do expect that turbine activities will deliver lower EBITA in 2014 than they did in 2013. So overall we feel we're on track to deliver the full-year EBITA in line with expectations and up on 2013, consistent with what we said last December and in subsequent updates to that. Dave Thomas - Credit Suisse: Yes. Good morning. It's Dave Thomas from Credit Suisse. I have two questions, please. And not in 10 parts, hopefully. Firstly, Bob, on the PSN business, clearly you're benefiting from the tactical acquisitions you've made in the US shale region. You're talking about strong growth, looking forward. Can we expect you to be able to deliver that organically? Or are you also looking for further acquisitions? And the second part of the question is can you expand your capabilities outside of the US to other regions, looking further out to the future? That's all.

Okay. A couple of things, Dave. I mean, we've grown the business through a combination of organic and then acquisition. But once we've acquired the business our intent is not to sit back, but to put our efforts into that including further investments so that we get subsequent organic growth. We see both channels as being a way forward. So, it's reasonable to expect that we'll come back and do further acquisitions to support our position. It's a huge geography. And we're trying to make sure we've got the right footprint across these different geographies. And if you look at the businesses that we've acquired in the last couple of years, and I talked about Elkhorn, we've talked about Meesters, but before that we've got Duval, we've got Mitchell's and we've got others that we've bought. Now, some of these are localized and some of them have got services that can be used in different basins. So we see the opportunity basically to take these businesses after we've acquired them and allow them to grow their market position by moving into the other basins. So, it will be a combination of both acquisitive and organic. As far as whether we can translate our knowledge and experience into other basins when they develop, there's no reason why not in principle. But a lot of the services we provide are quite localized. So I'm not suggesting for one minute that the companies that we've acquired would automatically be able to develop capabilities in other basins when they mature from a shale perspective. But the expertise that we've gained in how to run and how to manage the logistics of these operations, and how to keep the costs down and how to deal with the environmental issues and all the stuff that goes with it should serve us well as these other markets mature. Dave Thomas - Credit Suisse: Okay, thanks. And the second question is on Wood Group engineering. I'm not going to ask you to tell us what you think the guidance will be for full year compared with December last year, when you said it would be a 15% decline in EBITA. It looks like the first half of the year is doing better than that. Really the question is, if you look back to December last year and you compare where you are today, what has actually surprised you on the upside compared with a few months or several months ago?

Yes, that's a good question, Dave. I think at that time when we saw the Mafumeira Sul and Icthys projects coming to an end, our plan was to try and replace that volume of work with other smaller projects. Were we confident at that point we could do so and maintain the revenues? I think we had some doubts. What's been interesting for us is that our revenues overall are up and we've seen an increase in business in our pipelines business and other parts of our engineering business there as well. Subsea business has held up as well. So we've been encouraged by the fact that we've been able to replace the large projects with a number of smaller projects that are there. We think that's a good indicator for future detailed design and other project activity, but that's probably the swing factor for us in engineering. Thanks, Dave. Phil Lindsay - HSBC: It's Phil Lindsay from HSBC. Two questions, one on engineering and one on PSN. On engineering, you pointed to a recovery in the long term, Bob.

Yes. Phil Lindsay - HSBC: Does that mean that you don't expect any recovery through 2015 or do you think you might start to see it?

Now, Phil, you're asking me questions here that you know that if I try and answer that Alan's going to rugby tackle me and knock me down for that. It's early -- it's too early for us to call when that's likely to be. We've said clearly it's not 2014, as far as we can see. It could be late 2015, it could be beyond that, but I'm not going to try and nail it down to a specific point in time. Phil Lindsay - HSBC: Fair enough, but the pace at which maybe FEED studies are moving through to detailed design, is that any different from six months ago?

No. It's -- we're seeing more of them. But ultimately, there is investment decisions that need to be made by our customers, and that's largely outside of control and influence. And they've got a number of pressures on them from their own management, their shareholders and things like that, so we can't control that. Ultimately, we can just help them to try and get the best economic solution. Phil Lindsay - HSBC: Okay. All right. Second question, on Norway, so you've acquired an engineering business in Norway. Is -- can that in any way be a platform to launch a brownfield or maintenance business in Norway or do you still have -- I know for a long time you've harbored ambitions to get into that market on the maintenance side. Do you need another acquisition to get you there? And is -- given the downturn there, would now be an opportunistic time to buy?

Yes. It's a good question, but we do realize that to be successful in the Norwegian market it's better if we have a truly Norwegian business rather than trying to import our business from elsewhere. We worked alongside the Agility projects team on Ivar Aasen and other projects, so we know them well, a good fit. And we do see that ultimately, by making them part of the Group it does open up the potential to sell any of the Group's services into that Norwegian market. I think also what it does is it provides us with a potential shop window into that market that may allow us to take some services and execute them elsewhere within the Group. So I think there's a two-way effect there as well. So a primary target there is on the engineering side, but given our focus on collaboration there's no reason to think that if opportunities do come up we won't be trying to pursue them. Thanks. We need some financial questions, otherwise I'm going to be standing here. Ian Mitchell - JPMorgan: Hi. It's Ian Mitchell from JPMorgan. I've got two questions. The first is back on US shale. Clearly, there's a huge amount of opportunities in terms of projects. How should we think about what the limits are in terms of your growth ambitions? Is it purely about how much capital you want to deploy into one area and how big a part of your business you want it to be? Is it about hiring personnel in that area? What is going to give you the perimeter of the growth opportunity there? And then the second question is on -- we already know the companies have clearly been reducing CapEx spend over the last few months. Have you seen any evidence of OpEx and maintenance spend reduction at this stage?

Okay. I'll take them one at a time in terms of the growth opportunities. One thing we don't want to do is compromise the quality of what we do in terms of how we grow. So we're mindful of the fact that simply rushing out there and making uneducated purchases of companies could end up damaging the quality of the service we provide, so we're going to do things at a pace that is measured that we know we can accommodate. We're also very selective in terms of the kind of companies that we buy. We're not experts at buying companies that need to have a turnaround or are poor performing. We want to buy companies that are -- they've got -- they have the same broad values that we do and they have good quality management teams and that they've got good growth prospects and that we can acquire them for what we believe to be a reasonable price. So that limits the target set of companies for acquisition quite considerably. So we will be measured in that and yet trying to keep the pace going forward so that we can continue to exploit that. When it comes to things like the number of people, I mentioned the fact that we invested in both accommodation and training facilities in the Eagle Ford region, and that's vital in terms of how do we get more skilled people into some of these areas where they're crying out for people. We're saying -- well, we can do the training, we can provide the services. And some of that requires us to put an investment into the facilities as well. So we see that as more as an opportunity than a hindrance. On the second part of the question, are we seeing increased pressure on operations and maintenance costs? I think the pressure's always been there and I think we're seeing continued challenges in those areas. And things like our decision to take the rate cut in the UK has been well appreciated, but it's more than that. We are working with clients in terms of, well, how do we become more efficient in every aspect of reducing the lifting costs. But that's not really changed much. That's always been there. Alan, you would add anything on that at all?

No, no. I think that's fair comment. Asad Farid - Berenberg: Hi. This is Asad Farid from Berenberg. I've two questions. My first question is with regards to US shale. US PSN investors is growing very strongly. Can you please talk a bit about the risk profile of the US PSN business versus the business you have in UK North Sea. And when we look at growth, a lot of that is inorganic in nature. Can you talk a bit around the risk profile of acquisitions such as Elkhorn versus the rest of the PSN business? And the second is with regards to cost cutting on the turbine side. Can you elaborate a bit on that? And is there potential for the rest of the Group as far as cost cutting is concerned, especially on the engineering side? Because you have already taken measures on the PSN side. Thank you.

So if we talk about the risk profile, it depends how you look at it from either a commercial risk or from a security risk or for a reputational risk or all of the above. The business that we're acquiring that we execute in the US shale region for the PSN is still largely a reimbursable business. Where we do any fixed-price, lump-sum projects, they generally tend to be small in nature and very well controlled. So we're not really importing or taking on any real additional risk to the Group from that point of view. As I mentioned before, we're very careful about the type of companies we want to deal with, so we're protecting our reputational risk in that sense. And we're not basically exposing our balance sheet any more than we have elsewhere, so there's really no change to the Wood Group fairway risk profile in that sense. So it's not any different to other parts of the PSN business. The second part about the cost-reduction measures, as we pull EthosEnergy together -- and remember, it's only about two or three months since we got the eventual sign-off on that deal. And because we were awaiting competition clearance ahead of that sign off the management teams weren't allowed to work together, so they haven't been exploring the synergies in detail. Since we signed that deal, the management team are now looking at things like where have we got facilities that are overlapping, where have we got duplication of effort and where have we got, yes, a commonality of spare parts and equipment and tooling and all that kind of stuff. So these are the areas where we can see costs coming out of that. Now, given the nature of that business, that's a different type of business from other parts of the Group, so you can't necessarily see that carrying over into engineering, which is largely an office-based activity where the potential to reduce costs are possibly not the same. Alan, would you comment on anything on that?

Well, I would say -- I think, yes, I'd expand. I think on -- for Ethos, it's about leveraging technology, cross selling, supply chain and just cost reduction. And that will lead to the synergies we've indicated we think we'll get by the third year. In engineering, clearly the -- we have seen margin reduction in the period, and there has been a focus, as a result, on costs. So I think the management teams in our engineering have been looking at cost and have been taking steps to reduce the cost. And finally, across the business, it's something we're always looking to do. But I think there's been a particular focus this year on engineering.

Okay. Who's got the stick? Yes. Rob Pulleyn - Morgan Stanley: Hi. Yes. Morning. Rob Pulleyn from Morgan Stanley. A question directly to Alan so he doesn't feel too left out. I detect a definite note of caution regarding the recovery of costs on Dorad, given its late August. And you talk about costs being largely recovered by year end. Is there a significant risk in your mind that that slips into 2015? And what's the -- what are the factors that could lead to that? And the second one, I suppose a bit of a follow-on from the last topic. I see the headcount in engineering is actually broadly flat versus last year, but if -- and correct me if I'm wrong, but down a little bit from the end of the year. And it's something we talked about at full-year results. I think you've reduced it very slightly. Is there any more headcount reduction to be done in engineering given the slower pace of contract awards in the space or is this really maintaining the engineering headcount because of the recovery you talked about in the long term? Thank you.

Okay. Rob, I think the first point, we're in active discussions around change orders. We believe that we will recover the loss in the first six month, largely in the second six months. Clearly, there's always a potential that doesn't happen, but our best estimate is that we will do that in the first six-month period. I think on the engineering headcount, you're right actually. So headcount's consistent, at 10,500, with the end of the first half last year. Interestingly, in the first half last year it was rising, so the average was less than 10,500, and this year it's been falling. So the average is slightly higher than 10,500, and the average is more what drives the revenue. Within that, within our engineering being consistent, we have seen a reduction in the Houston offshore resourcing, clearly, with the two large projects ending. And we have been hiring in other areas, including London, which is working on the Ivar Aasen project. So that's really the position there. I won't call out on future headcount movements, but we're working hard to keep our people busy. But as we've shown in the past, we drive the business on utilization and so where we have to reduce headcount then unfortunately we will do that. Andrew Whittock - Liberum: It's Andrew Whittock from Liberum. Two questions, please, both to Alan I suspect. Alan, in the past you've always talked about a return-on-capital-employed target of around about 20%. It doesn't seem that we'll get back there in the second half or perhaps even 2015. Is that still a medium-, long-term acceptable level of returns? And secondly, more generally, I just wondered if you wanted to give us any guidance on 2015 at all on any other items.

Okay. Thank you, Andrew. So the first question, 20% is still the target. We use 20% for capital investments, we use 20% when we're looking at acquisitions, but typically we want to achieve that by the third year. But if you look at where we are at the moment, engineering is above 20%, Wood Group PSN is just slightly below, but strong performance there in the period. And the turbine business is well below, so we will see an improvement in the turbine business in the second half. We'll see reasonable improvement in ROCE into the second half. And very much 20% remains a key benchmark for the Group overall, and absolutely, we do believe that can be achieved. It's more of a challenge in the turbine business, but the other parts of the Group, we can get to there. On guidance, I think no might be too short an answer probably. But yes, I don't think we'll go into any specific guidance in 2015. Alex Brooks - Canaccord: Hi. It's Alex Brooks from Canaccord. A couple of questions. Firstly, what exactly is in the joint ventures now? Because that will now be an important distinction between IFRS and what you'd like to report, particularly because I noticed that the turbine activities profit of $17 million was rather more than the $7 million that was then backed out. So what's the missing $10 million, basically? And the second question is on funding. Obviously you've done this debt issue in the first half, and it would be interesting to know what the -- what direction you're planning to move the funding because having moved away from a single large revolver, that's an important change in what you're doing. Thanks.

Okay. Thank you, Alex. On the joint ventures, they are primarily related to the turbine businesses. There are other joint ventures in the Group, and you will see that when you look at the numbers closely. One of the reasons that you see some distortions in the numbers is that the PDO contract is a joint venture and so it is included there. So that does impact, clearly, last year's adjusted comparative number. So although there are some other joint -- there are some smaller joint ventures in Wood Group PSN production services and engineering, I think to simplify things, really it's easier just to think of it as largely the turbine joint ventures. Okay. Alex Brooks - Canaccord: So -- but hang on. You're backing out $7 million in the consolidated number, but the turbine joint ventures made $17 in the first half. So something lost $10 million.

Yes. Well, the PDO contract is a joint venture --

So there is still --

And if you remember, that's -- we're not giving a contract number, but that's a good number for what happened last year. Okay. That's why I note that one. Beyond that, they're really very small. And that's why I say going forward you can think of turbine joint ventures, because PDO, we made a provision last year and it will end in June next year. So I think to keep it simple, it's generally the turbine joint venture. Alex Brooks - Canaccord: Okay.

But I think on funding, we've got a $950 billion bilateral, and we've used a bilateral structure for some time. We thought it made sense, for the reasons outlined earlier, just to go into the US private placement market. We've added $375 million at what we think are very attractive rates. And I don't think in the short to medium term there's any plans to change that structure now, so we'll continue to have bilateral supported by the US PP. Alex Brooks - Canaccord: Okay. Thanks very much. Just one final question, coming back to the question on return on capital. You've given us a number of figures for shale, but you have said it's a higher-capital-intensity type business. I assume from the activity levels that it is substantially ahead of 20% return on capital, but it would be worth confirming that.

We use the 20% as the threshold for our acquisitions and we'll keep that in place, and we're confident of achieving that.

Where you've got acquisitions, you don't always get that in the early period. But we're comfortable that the shale acquisitions are all going to be strong return-on-capital-employed businesses. David Farrell - Macquarie: Hi. Good morning. David Farrell from Macquarie here. Two questions. Firstly, you talked about -- a lot about the organic growth in the US shale. I was just wondering what the acquisition opportunities were in the downstream element of the onshore US. And then the second question specifically relates to the Tawke field in Kurdistan. Could you give us an update as to the status of your operations there?

Okay. I'll take the first bit first. I wouldn't specifically talk about the downstream acquisitions and the shale aspect of it because it's mostly an upstream activity that we're involved, as well as the pipelines at the side of it. In terms of the prospect activity in that area, over the large shale -- number of shale operations, it's characterized by a supply chain that's got lots of small service providers geographically distributed. So we see opportunities for -- lots of opportunities potentially to buy good-quality, medium-sized companies with good management teams and good growth potential in virtually all of the different basins across North America, and we're pursuing a number of opportunities in that area. And specifically the question on Kurdistan, Robin, do you know anything about the detail on that?

I know from a Wood Group PSN perspective we have no-one in Kurdistan on the ground.

Okay. Was it a security-related question or was it -- yes. Okay. Sorry.

So a broad -- I'll take the mic.

Yes.

Hi. Robin Watson, Wood Group PSN. So we've got about a dozen people on rotation and about 20 to 30 people working out of Iraq in total, southern Iraq, for Shell and BP. And then Kurdistan, it's a Taqa contract that we're working out with Abu Dhabi.

Okay. Thanks, Rob. James Evans - Exane BNP Paribas: Hi. It's James Evans with Exane BNP Paribas. A couple of questions, please. Firstly, one of your competitors has talked of an early stages or early inklings of a recovery in the oil sands. Have you seen anything around that so far? And secondly and separately, I just wondered if you could talk a little bit about engineering wage inflation in the different regions. Obviously you've talked about what's happening in PSN, but are we seeing any signs of deflation or at least stabilization given what's happening to engineering activity around the world?

Yes. The first one, on the oil sands, we have not seen the recovery yet. We're hopeful, but we certainly wouldn't be signaling it at this stage because we're not seeing that yet. We've -- there's still a lot of pipeline activity associated with the Canadian market, there's still a lot of conventional gas activity associated with the Canadian market, but in terms of the in situ, oil sands activity remains suppressed there and we've not seen any uptick in that from our point of view. In terms of wage inflation, it's such a broad thing. We're operating in 60 countries. I don't know what ones you want us to talk about. James Evans - Exane BNP Paribas: The main engineering markets, so Houston, London.

Yes. The pressure's come off in a lot of the main markets because of that weakening and activity levels overall, so the upward pressure that was there in the Houston market a couple of years ago is not there to the same extent. Calgary clearly is -- the pressure's gone in there. The UK market, we're seeing some real accession in the pressure in the Aberdeen end. The London market remains very active and the upward pressure in the London market is -- remains high. Pressures in the Norwegian market remain high. The Australian market's come off. It's a number of different moving parts at any point in time. Sangeev Bahl - Numis: Thanks. Sanjeev Bahl at Numis. Just one question regarding new country entries. Clearly you've moved into Papua New Guinea and Malaysia. How do you manage the country risk of moving into a new geography, understanding the operational parameters? Clearly, Oman was a specific case, but are there any risks that we need to be aware of as you move into new geographies?

The first thing is, Malaysia's not a new country for us. We already have an established operation and an established office in KL and things like that, so we know the Malaysian market. We've got lots of Malaysian employees. And so that's not a new country entry. But it's a more general question is what I'm hearing there. We do look very carefully at a number of things. We generally use the focus of our core values, so we look at things like the safety and security, we look at things like the integrity and corruption, and then we also look at the social responsibility side in terms of how can we create local opportunities on the ground and high-quality, long-term employment opportunities. So, for instance, when we moved into Chad it was all about how do we create something here that creates long-term opportunities for the Chadian workforce as opposed to having expensive -- lots of expats flying in and out all the time, and working with the local communities and getting something there that is truly sustainable. But we do keep a close eye on security at all times and obviously we stay well clear of anything that involves anything remotely associated with any form of corruption and things like that, which sometimes inhibits our ability to move quickly into new geographies. Sangeev Bahl - Numis: And is there any specific contracting risk? Clearly that's -- CSR's an important part, but is there contracting risks that we need to be aware of?

Yes. Every opportunity that we look at, we look at the contracting risks, and sometimes we have to say no to opportunities because basically there's too much of an unlimited element and an unmitigated element in a contract. So we look at them all. We have standards. If we can't meet our standard contracting limits it then has to come up to -- for various degrees of management approval, and sometimes we say -- look, we can't do this because the contracting risk is simply unacceptable to us. We're not going to expose the whole corporation to a massive risk through a single contract. Neill Morton - Investec: Thank you. It's Neill Morton at Investec. Two questions, the first on engineering. I think a while back, Bob, you mentioned that you were now looking to do more small- to medium-sized projects to avoid the lumpiness in the profile. Was that tactical or is it strategic longer term? And then just --

Well -- Neill Morton - Investec: Sorry. Secondly, on -- back to US shale, I just wondered if you had an idea or give us a sense for how much of your activity is shale oil versus shale gas. And is there a difference, an inherent difference in margin given the relative profitability of those two activities?

Yes. I'll take the second one first. We're predominantly in the liquids side of the shale activity, so it's condensates and it's the light oils end of the shale activity in the US. From our point of view, the margins available don't vary hugely, whether it's on gas or whether it's on liquid. But our focus has predominantly been in supporting the development activity in the liquid-rich areas, particularly in areas like the Eagle Ford, the Bakken, the Niobrara, the Permian, these type of places. What was the first question again, Neill? Neill Morton - Investec: Just with regards the tactical, strategic move towards small- to medium-sized projects.

Well, I think this overall move to have greater diversity across our customer base, greater diversity across our contract base, greater geographic diversity, is something that we're looking for that it lines well with our position in terms of being largely reimbursable. It probably means that our upside margins are less than they might be overall, but we think it provides a more sustainable base on which to build from.

Neil, can I chip in here? Because I think where we said we were going to come away from larger contracts was really around the EPC work, the fixed lump-sum work in the turbine business. So I think that would be different from engineering, which is generally a reimbursable type contract.

Yes. True.

So I think that was probably the point. Neill Morton - Investec: [Question Inaudible]

Well, I think we -- I think what we indicated was that -- these were 1 million plus man-hour jobs and that we saw fewer jobs of that size on the horizon at that time, which was reflected in the capital efficiency theme. But we're very comfortable taking on jobs of that scale and of that nature, but we just highlighted there were fewer around.

Good point, Alan. Good point. We saved the best for last. Fiona Maclean - Merrill Lynch: Thank you. You're such a charmer. It's Fiona Maclean from Merrill Lynch. I have two questions. The first is on the acquisition that you did in July. Can you explain why you chose to do an engineering acquisition instead of a US shale deal in production services given there is --potential margins in production services might be higher than what that business is achieving? And then secondly, you've been in the CEO role now for a wee while and you've made a number of changes, fine tuning the business, and you're getting rid of some of the problems. What is your main plan for the next 12, 18 months in your role and what are you going to be trying to achieve from where the starting point is today?

Okay. I'll take the first point first. It's not an either or. We're looking at a number of opportunities in a number of different parts of the business at any point in time. And what we're looking at is to say -- well, actually, when we've got something that meets those criteria that I mentioned earlier on, does it support our strategic plan for that part of the business? Now, within the PSN business, we're not just looking solely at acquisitions in North America; we're looking at opportunities elsewhere. Within the engineering business, we've bought opportunities in North America, with UK and Norway recently. And we have looked elsewhere as well. So it's that looking at it as a broad opportunity set. If we ever came to the point where we were capital constrained and we had to make those choices, then clearly the return on capital and the short term growth would be factors in that. But we are looking at it with a long-term view. We do see a long-term position. And the Norwegian market is something we'd like to have from an engineering perspective. And in terms of the CEO position, it's a great question. The Group is beginning to come together. I mentioned earlier on here we're beginning to see the fruits of some of this collaboration. I think as we get bigger as a Group and we try and continue to have this growth story, then that collaboration becomes a key part of that. So for me, there's a lot more work to be done internally in how we operate as a Group, how we're joined up as a back office, how we communicate, how we relate to customers, how we hire graduates in and have them deployable to different parts of the Group rather than being brought in through single channels. So I'm afraid -- I'd like to say I could sit back with my feet on the desk and smoke cigars, but there's a lot of work still to be done I'm afraid. And obviously I've got Alan to try and keep control of as well, which is a full-time job. Yes. Any further questions, guys, at all? If not, we're coming up to just on the hour. Thank you so much indeed. Those of you that do have any want to ask in open forum, please hold back. You can contact us through Andrew and through Laura and through the guys at Brunswick as well. Thank you.