Robin Watson - Chief Executive David Kemp - Group CFO

Michael Alsford - Citigroup Amy Wong - UBS Michael Rae - Redburn James Thompson - JP Morgan Maria-Laura Adurno - Goldman Sachs Victoria McCulloch - RBC Gregory Brown - Crédit Suisse David Farrell - Macquarie Mick Pickup - Barclays Tom Ackermans - Barclays Lillian Starke - Morgan Stanley Mark Wilson - Jefferies

Good morning everyone. Welcome to our 2017 Results Presentation. I'm joined today by David Kemp, our CFO and our Investor Relations team. 2017 was a year of transformational change, and I'm very excited about the unique platform with no accretive to acquisition of Amec Foster Wheeler in October. The transaction combines Wood Group's core strengths and design modifications in operations to facilitate with Amec Foster Wheeler's engineering procurement and construction capability. It takes Wood Group's asset lifecycle model and Amec Foster Wheeler's project management and project delivery capabilities and adds Wood's upstream oil and gas position to Amec Foster Wheeler's broader end market mix. The three brands and two companies create Woods a global leader and project engineering and technical services deliver across energy and industrial markets. The acquisition improves our project delivery offerings, enhances our capability and balance in our core oil and gas market and broadens our end market and customer exposure as well as adding intellectual property to a process and technology platform. Later in the presentation, I'll build enough steam to highlight our strategic repositioning in and parts and breadth of capability, geography and state of exposure that we have going into 2018. So what this does mean in terms of Wood's enduring investment case. Well, firstly, we continue to be commercially versatile in line with core competence and customer preference. Most of our contracts are entirely reimbursable. The others comprised a variety of structures from lump sum contracts to contractually incentivized work. The percentage of revenues in 2017 derived from large individual lump sum projects over a $100 million is 5% just to do some context into that. And that's highlights our commercial versatility and balanced risk appetite. We've seen a flexible asset like model, which has been a key to managing overhead cost and utilization through downtown in oil and gas. We've also seen a good balance across customer OpEx and CapEx expenditures. And lastly, increasing of exposure to broader industrial markets with a positive medium term outlook creates good growth opportunities and should result in lower earnings volatility overtime. I'll talk more about our operational performance and outlook later, but for now I'll hand over to David who will take you through our 2017 financial performance.

Thank you, Robin, and good morning everyone. I will start with an overview of our reported results and we'll come to the pro forma results shortly. As we outlined in November, our approach to financial reporting and metrics has not changed. We continue to report on proportionately consolidated basis with total EBITDA and adjusted diluted EPS as our principle profit measures. Reported full year results comprised a heritage Wood Group business and the contribution from AFW for the period from October. EBITDA of $372 million was ahead of the expected range set out in our December trading update of $335 million to 355 million. This is principally due to the allocation of AFW cost and contract losses pre and post completion. The legacy Wood Group business delivered relatively resilient performance in a challenging oil and gas market and a stronger second half as expected. I will go into more detail on underlying trading when looking at the pro forma results. We retained our progressive dividend policy and the board has recommended a final dividend of $23.2 per share, making a total distribution for the year of $34.3, an increase of 3%. There are some movements in a number of below the line items that are impacted by the AFW deal and that was highlighting. Amortization of a $141 million was up 35% due to the inclusion of $32 million with respect to the acquisition. For 2018, the amortization charge will include a full 12 months impact and will be around $240 million. The increase in net finance expense reflects the new syndicated debt facility totaling $2.75. The tax charge of $43 million includes a one-off non-cash credit of $8 million from the revaluation of U.S. deferred tax liabilities as a result of the tax reforms. Our effective rate 23.8%, the cash impact of the recent reduction of U.S. rate in 21% and is likely to be offset to some extent by greater restriction on the level of interest allowed and the U.S. also introduced by the reform. The go forward effective rate is likely to be in the low 20s. We recorded exceptional cost of a $165 million net of tax. This includes acquisition cost of $67 million predominantly related to advisor fees, also included a one-off cost of $51 million in relation to redundancy, restructuring and integration. Expansions also include a provision of $19 million which we recorded in the first half in relation to an ongoing arbitration. We recognized a further impairment in the carrying value of EthosEnergy of $28 million together with certain exceptional charges recorded by Ethos of $10 million largely related to impairment of receivables. We continue to progress the disposal of EthosEnergy. Pro forma EBITDA of $598 million is in line with expectations and the guidance provided in December. The pro forma basis provides better insight into the underlying continuing business and includes 12 months of AFWs results, by excludes the results of businesses disposed principally at AFW North Sea upstream business. Looking at the underlying performance of each of the reporting segments, in AS Americas, activity on offshore greenfield capital projects and onshore construction partly offset the reduction in onshore engineering works, following completion of projects in 2016 including Flint Hills and the ETC Dakota access pipeline. Activity impairment process reduced having benefited from solar project accelerations in 16 and response to the scheduled and of U.S. solar investments incentives In ASEAAA, we saw an improved performance in operations service in the Middle-East and Asia Pacific with good progress on our contracts with Exxon in Iraq in Papua New Guinea and Hess in Malaysia. The North Sea market remained challenging and we saw reduced work scopes and lower volumes of modifications work. EBITDA margin in 2017 includes the one-off benefit of amounts received by AFW related to our distribute settlement. 2016 EBITDA also included the benefit of commercial closeouts of approximately $50 million and the legacy AFW business and 15 million in legacy Wood Group. In STS, we saw a good growth in automation lead by increased activity on the Tengiz expansion project with TCO and the contribution of CEC which we acquired in May. This is obviously in part by lower activity in subsea. EBITDA margin in 2016 included a positive one-off impact of commercial close out on significant and legacy projects. The E&IS business is in line with 2016 due to growth in government activity and good execution on pharmaceutical project. In 2016 EBITDA was impacted by significant cost overruns on a fix price U.S. government capital project in the pacific. EBITDA in '17 also includes the impact of overruns on two fixed price contracts with the U.S. government. We have bridged pro forma revenues from '16 to '17. The main movement is the reduction in Asset Solutions Americas from the drop in solar activity discussed earlier and a reduction in U.S. industry in '17 particularly in Latin America. The reduction in revenue and Asset Solutions EAAA is largely due to the challenging North Sea markets and growth in STS was driven by increased activity in automation. E&IS revenues were slightly up from '16 with growth coming from activity on U.S. government work. Our full pro forma EBITDA margin is flat from '16 to '17 through a number of things worth highlighting. Commercial closeouts had a meaningful impact in both years. '17 includes the one-off benefit of amounts received by AFW related to a dispute settlement and '16 includes the benefit of commercial closeouts just to more extent. Our continued focus on overhead savings and managing utilizations in '17 helped to offset the impact of volume reduction and pricing pressure. This figure also includes early synergies delivered in '17 post-completion and the impact of AFW overhead reductions. This slide bridges net debt at December '16 to December '17. The largest contributor to the change is acquisition, which includes approximately 1.4 billion of debt assumed in relation to the acquisition of AFW, 51 million in respect to CEC and 33 million in respect of companies acquired in prior periods. Cash from divestments released in disposal of AFW's UK upstream oil and gas business and the disposal for North American nuclear and pulverized coal business. Cash conversion was 69% compared to 68% '16. Significant exceptional costs have incurred primarily acquisition and restructuring and integration related costs, excluding the impact of exceptional cash conversion was 90%. There is an opportunity to structurally improve working capital by bring the AFW's DSO in line with legacy Wood Group. Net debt to pro forma EBITDA on 31st December was 2.4 times against our covenant of 3.5 times. As you know, a key priority is to reduce the level of net debt and I'll move on to talk about deleveraging now. We have a well established approach to capital structure with a preferred longer long term ratio of net debt to EBITDA of between 0.5 times and 1.5 times. Our prospectus of commitment is unchanged. We expect to reduce net debt to EBITDA to a level within our preferred range in approximately 18 months after completion. Actual net debt at completion was in line with our expectations at $2 billion and net debt at the yearend reduced 1.65 billion 2.4 times EBITDA. Deleveraging remains a key priority and we have a robust plan in place. We are confident in the underlying cash generation and the acquired business and believe a strong balance sheet foundation benefit the Wood investment case. The first three elements of our plan cover the actions were taking on a regular cash management activity in the business. Business growth, including delivery of coal synergies better working capital management and capital discipline, the fourth element is a disposal program covering a number of assets and activities which we don't consider to be strategically important. At this stage there is a degree of commercial sensitivity around these but we will include EthosEnergy on a number of infrastructure interest. To give you more contexts, we believe the disposal program in aggregate will result in a net cash flow of over $200 million in the next 18 months. The pace of delivery of coal synergies is ahead of schedule and we're confident of delivering our target of at least $170 million in three years. The target is not impacted by the disclosing program. We expected total cost to deliver $200 million is also unaffected. To date, we have delivered annualized cost synergies of more than $40 million versus the year one exit run rate target for annualized cost synergies of approximately $50 million. Savings delivered to date our focused on rationalization of the top level for management on the initial stages of property rationalization. Key leadership was in place. On day one and this really accelerated the pace of delivery. We've subsequently announced the further two levels of organization. Cost of deliver synergies were around $30 million. Clearly, we are ahead of schedule unlikely to exceed our year one run-rate target. We have not revisited the overall target at this early stage of a three year program. In summary, we have delivered a relatively resilient performance in '17 in line with our expectations. At this early stage we anticipate modest EBITDA growth in 2018 compared to 2017 pro forma EBITDA of $598 million. 2017 pro forma EBITDA includes the one-off benefit of a dispute settlement in legacy AFW which is reported in Asset Solutions EAAA. Clearly, underlying growth is stronger reflecting synergies delivery, which is currently running ahead of schedule. Within the business units, we anticipate growth in AS America, including processing energy, Downstream and U.S. Shale, underlying growth but lower reported performance in ASEAAA including good performance in capital projects in Middle East, modest growth in SDS, led by mining activity and finally strong growth in E and IAS in the U.S. and the impact of the eliminating cost overruns. Our financial objectives and focus are clear, partially to deliver cost synergies by year three in line with our perspective's commitment. To reduce net debt to EBITDA to within our range and approximately 18 months, and finally, to retain our progressive dividend taking into account cash flows and earnings. I'll now hand back over to Robin.

Thank you, David. As you know broadening was a key element of the Wood Group's strategy and the driver for Amec Foster Wheeler transaction. It's important that the market appreciates the breadth of capability geography and secular exposure in Wood and of course we're stayed agnostic and service oriented as a business. Our Asset Solutions offering occurring for over 70% of our activity split across two business units in the Americas and the EAAA. Taking each of these business units in turn, we retained our leading capabilities in upstream engineering and operation services. And we've enhanced those with our proven process EPC offering and increased capability in downstream and chemicals in the Americas. In EAAA, we now have a better balance across upstream and downstream and well established EPC and project management capability. SCS now includes mining and minerals nuclear and process technology activities of AFW in addition to our automation and subsea businesses. And we have an environment and infrastructure as a standalone business unit as it was in Amec Foster Wheeler. The revenue by segment split provides more context, it's based in the market segmentation in the Amec Foster Wheeler model and for simplicity that's how we've displayed here just to illustrate the end market breadth we now have. I would also emphasize oil and gas remains our core market accounting for 57% of our 2017 revenue split across upstream and downstream and what was came for something like 50% to 70% of revenues going forward depending on contract phasing and the oil and gas cycle. Looking at geography of North America, Canada is by far the largest market accounting for just under half the revenues and includes a large part of the E&IS business. And finally, the top 20 customer split demonstrates our enhanced customer portfolio, reflecting the relative strengths of Wood Group with IOCs and independents and the Amec Foster Wheeler's worth NOCs and on industrial customers. In summary at Wood we're much more than an oil and gas business, we're now a broader global multi sector project engineering and technical services provider. David and I have now had initial deep dives into the Amec Foster Wheeler business units. By the large, they confirmed our understanding of the risks and opportunities identified during the acquisition process and outlining the prospectus. I'm very encouraged by the depth of capability and the unique growth prospects for the combined business. We've identified revenue synergies in a number of areas including extending our involvement in oil and gas projects across two asset lifecycle and leveraging our operations to have this experience into new industry sectors. E&I is a business I'm particularly excited about and see good growth opportunities there. As David outlined, a post-close business reviews have identified a number of non-core assets and that will help deliver the deleveraging plants. The rest inmate Foster Wheeler were well flagged, a key element of the deep dive was a focus on significant contract with profit at risk. So while the sales and what to do this, we've already enhanced government structures, ten reviews and contracting policies. Generally our stance as the Wood's service defined structure will enable project management and delivery. We've also taken a decision not to pursue some very specific fixed price contract types in one particular area, we're in the latter stages of work on a small number of projects of this nature which don't have an acceptable risk return and cash generation profile. In terms of other identified risks we continue to cooperate with the assist the relevant authorities, including the SFO in relation to investigations into this historical use of agents. So in summary whilst it's early days we remain very excited about the strategic rationale for the deal Wood impressed with a great depth of capability and opportunity and we've already taken some decisive action around the management of risk. Integration planning was a key area of focus throughout the acquisition and we've established significant early momentum and the priorities remain clear. Having the Wood operate model in place from day one provided quality for stakeholder resulted in minimum disruption and enabled our integration process to begin at pace. We benefited hugely from the reorganization of Wood Group in 2016 which gave us a simple and efficient structure which could accommodate further acquisitions. My leadership team is selected three completions and in place in day one, we've announced a follow-up to levels of organization taken our best of both approaches to make sure we retain key experience and expertise within the business. We remain very confident on delivering annualized cross synergies of over $170 million and David will take you through the progress to-date. We delivered over $240 million of overhead reductions in Wood Group during the downturn and this gives us a lot of confidence we can deliver a leaner and more efficient organization and we're well on track in achieving that. On revenue synergies we made good progress on managing bidding pipelines, aligning tender and project delivery processes and implementing our customer engagement programs. The strategy and development function is leading rest with an initial focus on educating the leaders over the broader range of Wood's capabilities and identifying opportunities and we've had some early successes already. David has gone through the deleveraging plans, but it's worth saying that this is not being pursued in isolation and as a key priority in our overall integration program. So, there's a lot still to do but I am very pleased with the momentum and the integration delivery at this early stage. To underpin the strategic rationale for the creation of Wood we're seeing some encouraging macro trends and the broader sectors we now operate in. And it's worth perhaps to elaborate a little on this middle term prognosis. Capital discipline remains a theme for upstream customers despite the recent increase in commodity price. In the Americas we expect the modest increase in shale operations to continue largely focused in the Permian. In EEE I look for Asia, the Middle East and Asia Pac is relatively robust and we're well positioned in these markets, but an early stage improvement in the UK a little less from a variable base. Pricing pressure remains in certain areas and should levels increase we expect, there will be a lot before this translates into margin improvement. In downstream, we're seeing investment increase -- to increase capacity driven by lower feedstock prices and growth and demand for chemical products particularly in the Middle East Asia and to some extent in the U.S. Customers are beginning to sanction projects that were previously considered marginal and international regulations on sulfur and emissions are also driving demand for refinery upgrades to ensure compliance. Our powder and process capability is largely state of agnostic and we are seeing good scope opportunities to replace the solar work which peaked in 2016 across a range of industrial sectors in the U.S. We expect to see growth in an environment and infrastructure activity particularly in North America and to an extent in Europe. Emission targets result in opportunities for environment or consultant services related to the construction of solar and wind farms as well as land remediation and waste disposal services on for example the decommissioning of coal fired plants. Higher commodity prices and increasing demand for minerals including iron ore and gold. We expect demand for battery minerals such as lithium, cobalt and nickel to continue to strengthen as current manufacturers look towards electric vehicles. Both of these factors are contributing to increases in mining activity and we see good opportunities and potential project sanctions for our mining business. Our activity in clean energy is relatively modest in scale, but there're positive signs in the market, of course we expect some near term contraction in the U.S. due to the scheduled end of federal incentive for solar projects and uncertainty over some imported services, globally, we expect to move towards renewable energy to have a positive impact. Demand for low carbon energy is driving growth in new built nuclear plants, especially in the Middle East, UK, Asia and parts of Europe. Other countries are changing their balance of the energy mix, which is positive for decommissioning and E&IS capabilities. Again, this slide represents a medium-term market prognosis, but I do hope it is useful in explaining the underpinning strategic rationale for the broadening strategy we are on. We now have a business of significantly increased scale to capitalize on those macro themes with the geographic spread, capability and operating model to take advantage of the significant opportunities in global energy and industrial markets with some 55,000 people across over 60 countries. Wood is better placed to serve customers than ever before with a more comprehensive range of capabilities and the potential to deliver efficient integrated solutions and fewer customer interfaces. We've an incredibly strong and broad customer base, including the world's largest IOCs and NOCs and blue-chip industrial names. I took you through the split of our top 20 customers earlier. It's worth noting that they account for only around 30% of revenues. Even our top customer accounts for only 5% of revenues, and this is comprised of a number of projects across different business units. I'll take you through some of the more strategic and material contract wins in the next slide, but a lot of our work comes from a high number of smaller scale work scopes across a very diverse range of customers. At the half year, I spoke about our dual focus on operational delivery and strategic development. Over the course of the transaction from initial announcement to completion, both businesses kept up the momentum of contract wins and delivery. So summarizing on a few of the more notable ones. In October, last year we secured our first U.K. onshore downstream O&M work scope supporting the Lindsey Oil Refinery. The five-year award leverage our extensive off-shore track record with Total. In the Americas, we increased our shale footprint to over 3,000 people with the Permian now established as our largest region. Our construction civiles, op support and pipeline services activity saw modest growth in '17, but is key to our 2018 outlook. As an indication of an enhanced breadth of capability, also in Americas, we've been awarded the $600 million EPC contract for the methanol plant being developed by YCI. This follows a successful completion of LFE's work at the plant awarded in 2015. The E&I business was awarded the EPCM scope for GlaxoSmithKline's new biotech facility in Germany. This project will be delivered from our Milan offices and is expected to run through 2019 and is a great example of geographic expansion for the E&I business unit. Our joint venture with Civmec -- through our joint venture with Civmec, Amec Foster Wheeler was awarded the $300 million EPC contract for the Gruyere Gold process plant in June. The project is one of the largest underdeveloped gold deposits in Australia, and is a great example of the encouraging portfolio of mining opportunities that we have. Finally, we were recently selected to develop the world's largest crude oil to chemical complex in Saudi Arabia on behalf of Saudi Aramco and SABIC. We'll provide front-end engineering design and project management services during the EPC phase, work will be executed from our Reading, Chennai and Al-Khobar offices and is expected to continue through the startup of operations in 2025. This is a great example of an early and significant revenue synergy, winning this work through the combination of Amec Foster Wheeler's process expertise and Wood Group's in Kingdom capability. In summary. 2017 was a year of dual focus on operational delivery and transformational strategic change. We entered the year as our business engaged in the design modifications and operation of facilities in the upstream oil and gas sector with a clear strategy to broaden into adjacent industries. We're now a global leader in project engineering and technical services delivery. We have a broader business with a multi-sector full service capability across energy and industrial markets and a more balanced offering in oil and gas. In a tough market, we delivered a relatively resilient financial performance for 2017 in line with our expectations and the guidance provided in December. We retained our operational focus and have seen good momentum in contract awards, including early revenue synergies. The Wood operating model was in place and communicated on day 1, greatly benefiting our stakeholders' understanding of the combined business and enabling our integration process to begin at pace such that cost synergies are well ahead of schedule. We also retained our commitment of progressive dividend up 3% on 2016. We see a good opportunity pipeline, and our financial objectives remain clear. At this early stage, we currently anticipate modest EBITA growth in 2018 on 2017's pro forma EBITA of $598 million, reflecting early-stage recovery in certain markets and the delivery of cost synergies. Looking further ahead, I'm really excited about the unique platform we've been able to create to unlock revenue synergies and generate good longer-term growth. I'll now take any questions. Q - Michael Alsford: It's Michael from Citi. Just a couple of questions from me. Just firstly, could help me kind of break your guidance on the EBITA growth into 2018? Should I interpret that as modest single-digit growth or should it be higher than that, I guess, because relative to consensus expectations? And then just secondly, could you help provide some color as to what is the EBITA associated with the noncore disposal plan? It would seem that it's more than investment services EBITA. So just could you maybe help us understand what that potential impact could be?

Sure. Let me pick that up. Firstly on the noncore disposals, that, obviously, does depend on what we dispose, but probably the EBITA is in the range $20 million to $30 million for those. In terms of the guidance, it's maybe helpful for me just to walk through what we are seeing. What we are seeing is modest EBITA growth for 2018 and that is on the top of the 2017 pro forma EBITA, $598 million. Obviously, as you step back from that, what does that imply? It implies good underlying growth in the business given that we've had a one-off benefit in 2017 of a dispute settlement, and that dispute settlement was in the order of $70 million. So within the business, there is good underlying growth. So in terms of what modest means, it would be a conventional definition of modest of single digits, yes.

It's Amy Wong from UBS. A strategy question for you. We've seen more contractors now either organically building up their own engineering -- independent engineering services or some contractors are actually going out and acquiring some independent engineering to get more early engagement with their clients. So how do we think about your independent engineering business and any structural pressures from that or maybe also comment if you can -- if you may on, are you seeing any attrition of your engineers into some of these more integrated contractors?

No. I mean, I think, we see ourselves as an integrated contractor, Amy. We've got a very strong legacy in both Wood Group and Amec Foster Wheeler. We're getting very engaged upfront with customers looking at smart ways to solve technical problems and solutions. So I think we've done organically, this is a transformational acquisition for us, but actually the capability that we've enhanced here and within our Specialist Technical Solutions group, we've taken our -- we've called our technical consultancy arm, which does a lot of that very clever conceptual thinking what could it -- it's kind of, some of its IP. There is intellectual property there. Some of it is just really great people that can work very innovative solutions be it at the cutting edge of Subsea technology, process technology, or some of the lightweight topsides designs we've been doing for many years. What it means contractually is that we are able to work in the chain of customer relationships. We are often a customer engineer because we provide that with the customer and then we oversee all the subcontract work right through to the primary subcontractor and we manage everyone else, PMC-type contracts are not unusual for us. And right through, Mad Dog 2 with a subcontract of SHI, albeit working very closely with BP and SHI to make sure the project is a success and you can all make a timely delivery. So no, I think, we are actually one of the engineering -- integrated engineering houses that you talk about, and we're pleased to have done it pretty much organically. And this change that we've made here with the transformational acquisition of AFW has just enhanced something that we were very accomplished in doing. I think we've also -- and probably 2 things, have we seen any attrition of engineers, we have not. If anything we are a very attractive employer to come to with the exciting range of end markets and work that we do. And I think the other thing is actually in pulling out of some of our established business, automation and control, process technologies, technical consultants, technology and orientated digital solutions. That's been a big drive for us over the last 2.5 years if you've followed us in terms of creating that Specialist Technical Solutions. We're really quite excited by who we have in there.

Tullow [ph] chemicals is a great example of our integration, we work in pre-FEED, FEED through to PMC. And if you actually think there's another, we've highlighted here is another great example the revenue synergies because neither Wood group nor AFW would have won that contract on their own. It required our substantial in-kingdom engineering capability, and AFW's downstream capability to merge together to be able to actually win that.

It's Michael Rae from Redburn. Can you just talk in a bit more detail about where we are with the integration, what are the kind of main work streams for the first half of this year, and have all the kind of big decisions now being made on the cost savings? Second question is, what are the kind of barriers to gain Amec's days sales outstanding down to Wood's levels? Is there any kind of structural reason why they would always be different? And then a final question just on the backlog. I thought you'd kind of said that you were going to continue to give backlog, but I don't see it mentioned. I don't feel strongly about it, but I just wondered has it sort of disappeared?

Want me to take these? So I'll come and do integration and where we're starting the year. So in terms of our backlog at end of the year, it's healthier than it was last year. We're going into the year with a good solid, secured work load in 2018. And end up on 2017 for both heritage businesses. In terms of integration, we've done a lot of integrations over the years. Momentum is very important. So we've got a very focused team and discrete leadership over integration efforts. We've always felt integration program is a 3-year program. Having said that, there is a lot of impact in year 1 that you need to have in your integrating businesses. So we've got a focused leadership and will run that through this calendar year and then actually over the course of the year we embed the integration responsibilities into the BUs and into the functions. In terms of the early wins, why have we been successful early? We announced the leadership team early. We removed uncertainty quickly, and we've got now the top 200 to 400 people have been fully selected, and we've got a really good blend of both organizations in that group, in fact we had a leadership conference at the end of January with the top 200 just to get very well established in terms of where we're headed with things. In terms of the delivery of the synergies, we have by and large, it's been the executive and senior management level where we have 2 for 1 in some cases, and also when we've simplified the organizational structure. Get into the transaction, we felt Amec Foster Wheeler's organization was complex and expensive and that's what we've found, so we've actually focused a lot in terms of simplifying that and obviously making it more efficient and more fleet of foot, and some of the governance challenges was around the complexity within the governance, that it didn't quite do what it needed to do from our perspective. And then there have been some obvious synergies around office consolidation. We've moved in a single compass using most of our major cities. We shut down Amec Foster Wheeler head office, for example. So there's been some low-hanging fruit in terms of organize -- office synergies and real estate synergies. So in terms of integration from my perspective, I feel really confident with what we've delivered to date, really feel good about the organizational efficiency. We've actually got really impressed with the quality of operational leaders that we now have, in the business, and the organizational structure. The simplicity of the organizational structure for BUs' core functions, it's much simpler than it has been in AFW heritage, and it really builds in the transformational change we've made in Wood Group in '16.

To pick up the other elements, what we said about backlog is, we put that in place for the 0.5 year. So we will be taking that back. We want to make sure we had a good robust and a sure process. As Robin did say, in terms of order coverage from our revenue coverage into '18, we feel we're in a significantly better place than either company was at the end of -- or the start of '17 rather. In terms of DSO and structural improvement, it's a big area of focus for us. So we talked around the deleveraging, one area as working capital management. If you look at the figures, if I looked at the legacy Wood Group business, we reduced our DSO by 1 day last year from 77 to 76 days. We felt we had to work really hard to get that -- to change that almost oil tanker in the downward direction in last 3 years, I think, it's been the upward direction. If we look at -- if you look at the combined Wood, our DSO was 86 days, and AFW was at 93 days. So we see that as a significant opportunity to generate cash through better working capital management. To put that in some context, about every day of the combined Wood is about $20 million, that sort of rough order of magnitude. When we look at it, it's a series of things that we need to do is one looking at our billing process, we've put enhanced governance in place in terms of taking up contracts, to make sure we're more focused on actually what does the cash exposure look like across a contract. Equally, we've talked about some of the problems we had in these capital projects where we've got losses. A big part of us not wanting to do that business going forward is the consequential working capital. We found out we've tied up more than $100 million in 3 contracts of working capital. Why is that the case? It's principally around management of variations and claims. So there's absolutely things we can do to get better at managing variations and claims to accelerate the process of getting them into the U.S. Government. The U.S. Government then take their time to actually deal with them. Our actual track record of getting these claims and variations once they're in is exceptionally good. So there's a number of things that we need to focus on to improve that. But it is an opportunity for us to actually improve our working capital position. There's nothing structurally we see. We are both asset-light businesses. We're dealing with the same clients in many cases. We just have a different outcome.

It's James Thompson with JP Morgan. Just briefly following on for that last point. I mean, thank you very much for providing the split between organic and inorganic in terms of your deleveraging plan. Perhaps you could maybe give us some further granularity, just in terms of the timing effect here, how you see it evolving through 2018 and into 2019.

So we hope to make progress through that 18-month period. In terms of the disposals, they will be spread out through the 18 months. The larger element is EthosEnergy. We've been working on the disposal of EthosEnergy for what feels like a very long time. It's been a fairly challenging disposal process. Why is that the case? I think largely because there are 3 elements, 3 companies involved, it's a joint venture with Siemens and we're working with a preferred bidder. So that has given it an extra complexity. So we'd -- we would see that hopefully completing in the -- sooner rather than later camp. In terms of some of the other disposals, some of them require actions before we dispose of them. Some of the infrastructure, for example, we will achieve a better outcome if we go through a permitting process and some of these. And so there's some -- there's a business where if we go through a restructuring program we will get a better outcome and that might mean they're towards the end. In terms of the working capital management that's the focus now, it's not easy activities, and so we do see hopefully a benefit through the whole 18 months, but we do need to change behaviors and governance and things, it's not an overnight process. Maria-Laura Adurno: Maria-Laura from Goldman Sachs. So the first question is around the cost synergies target. Clearly, you feel comfortable you're going ahead. Just wondering then how come you didn't maybe just upgrade the guidance that you provided? The second question, historically you've also benefited from the acquisition of bolt-ons. I was just wondering what is your thought process going forward with respect to those.

In terms of the synergy guidance, I'd probably say, we've made a really good start. So we've delivered over $40 million of run rate synergies to date. But we only completed the acquisition in October, and that's a 3-year integration program, which there's thought about early to actually change the overall target of this stage. What we have said is, we expect in year 1 to be ahead of the $50 million run rate of annual synergies. So we'll look at that target again as we progress through, but we really thought, wow, we've made an excellent start, but it is just that, it's an excellent start. What was your second question again, sorry? Maria-Laura Adurno: It's around bolt-ons.

On bolt-ons, we've set our short-term priorities. They are around the deleveraging. It is around maintaining our dividend policy. As we move out into the medium and long term, bolt-ons have been a big part of the Wood Group story in the past and we'd expect them to be a big part going forward where they add capability and they add benefit to the company. But in the short term, we don't see them as being a feature. Maria-Laura Adurno: And just one last question. With respect to the fact that -- to your comment around the fact that on some projects from the Amec Foster Wheeler part, you were not necessarily comfortable with the risk. I was just wondering which division this would be linked or which end market, maybe just some color around that.

Yes.

I'll do it. So there's -- there was a heritage capital project part of AFW, which in itself had went through a transition in the last, let's say, 18 months to 2 years. So it moved around different divisions, it was actually -- and at the time of the transaction completion it was in the E&I business, that other than common customer, to be perfectly candid, there was no logical reason that, that EPC overseas business should have been in the ENI business unit. So structurally it was -- it was something that had been an enduring stand-alone part of the AFW offering to the industry. And actually, we felt that particular projects that we're talking about were just ill conceived. David touched on it in terms of the risk-return would have probably worked out over the course, but actually the working capital tie-up and the cash element of it was one that they were just unattractive in terms of the terms. And in pertinent to the ENI business, which is the wrong place to sit it. And it surprised us, to some extent and so much that Amec Foster Wheeler have got good EPC delivery, parts of their business, that would have been a more obvious home for it in terms of execution. So it's exception rather than the rule. We took a broader look across the entire portfolio of projects. And actually, from an EPC perspective an EPC end perspective and our PMC project management perspective, we've really been very impressed with the types of contracts it has got, the relationships it has got, and actually the execution track record that they have, which many of you in the room would recognize that both the American Foster Wheeler had a good reputation particularly in oil and gas around execution of projects of that ilk.

Victoria McCulloch from RBC. Just follow-up on Maria-Laura's question. So -- and in terms of what are the costs are, so where are you on costs to-date for delevering -- delivering the synergies. And where is that compared to plan? I think, you said it was $30 million. Is that correct?

Yes. I think we are $30 million. I think its $34 million, again, with no change to the overall target. We expected the cost of synergies to run slightly ahead of actually the synergies in themselves. So the overall of this $200 million, synergies of at least $170 million we're probably getting into some of the more costly elements like the ERP programs where there has been lighter spend to-date. So there's no change to the overall guidance.

It depends on how you set them. And just in terms of the -- I guess, the underlying Wood business and how you've worked hard in the cost there. Are you still seeing benefits coming through there, that are in addition to where you've worked to get to the $240 million previously?

Yes. We did see some benefits. Overall across the business there was a $100 million of cost savings compared to '17 on a pro forma basis. And that was a mixture of AFW and Wood Group. And actually in the last quarter, some of the changes we made, as Robin said, we were very early in changing leadership, and that obviously fad into cost synergies as well. So there was still savings from the Wood Group side. I think we highlighted in the half year. We made some changes in America's. We'd seen a drop-off in activity in onshore engineering following the completion of Flint Hills and ETC Dakota access. So we've made some cost savings in there just to manage our utilization levels, as much to anything else.

A thing that I would add is there is arithmetic of saving cost, but actually really, structurally, simplified organizational design and the way that we operate the governance, the management of the business. You know that we are still reaping the dividends and doing that from a Wood Group perspective to be accounted, Victoria. The ERP capability that we've got we can enhance, in relative short order, but with confidence, the complexity that we do have in back-office systems. So I think some of enduring was just the sheer arithmetic you'd extrapolate forward and it helps your margins and everything else for very obvious reasons. Actually the -- maybe the more intangible that kind of fleet of foot, speed of decision-making, clarity in organizational purpose, a very clear focus on execution models is hugely important for us. And actually, again, people onto a common back-office platform, moving people easily, et cetera. These things are hugely important when you're dealing with a business of this scale and even complexity. So I think these intangible benefits are things that we should be thoughtful of because they take real enduring credit in terms of how we -- confidence we have in delivering the business moving forward.

It's Gregory Brown from Crédit Suisse. Thinking about the business development. It looks as though the L&G market is starting to move again. You've obviously had some success in associated markets, things like the Subsea scope, the Ichthys, things like that. But do you think there's a role for Wood to play in the larger greenfield market? And then perhaps following up from Amy's question earlier on, we've seen a number of off-shore projects go ahead based on vendor-based solutions. You appear to be pretty well-stocked with concept selection work. Now taking into account that Subsea is probably a smaller market going forward, do you see that as a future so the likes of Wood performing the pre-FEED in concept work, but FEED volumes perhaps for yourselves being slightly lighter? Or is not quite simple as that?

It's not quite as simple as that. So where do we -- where do we start? So the crude oil chemicals, actually that is greenfield, that is a new concept, advanced technology, cutting-edge process technology involved in that. And that then becomes a project to be delivered. And that's an 8-year delivery program. It's the largest in the world. So that's a great example of, I think, the whole explanation of having the full life cycle model where a customer gets confidence that not only can you do the smarts and think about the clever stuff upfront in terms of the whole process design and conceptual engineering. But you can be the last person to get it commissioned, you can even operate it thereafter. There's a real strength in having that level of capability. So will we be a player in the greenfield market? Yes, we will be a player in the greenfield market. What types of greenfield projects would we contract? Which scale would we contact at? And what level of risks and what type of financial contracting would we do, that's something that's a secondary question in terms of what you do in the greenfield space. But we will be very prominent in the greenfield marketplace. You talk about LNG, I mean, I think, and we've certainly been clear on our view of customers and ourselves. We need to have a portfolio. Our customers have a portfolio and have got a much broader portfolio than they ever had in the last decade. Most of the IOCs and actually many of the NOCs, that have got upstream, downstream, onshore, off-shore, conventional, unconventional, deep water, shallow water, a gas position, and actually increasingly a broader energy position. That will continue in our view, particularly the major blue chip IOCs and NOCs. So we need to have a portfolio that replicates that as well if we want to do as much business as possible with these customers. That's why we feel this transaction is enhancing that downstream footprint as well as some of the IP and technology plays are hugely significant. And if you look at the disruptors, decarbonization over the next 2 generations, we will see a shift. And we will have to find different uses for oil or no uses for oil. You know the different uses for oil as using it more in petrochemical, using it to create products, and that's why Saudi Aramco and SABIC CS are so keen to do what they're doing, but like many companies they're trying to get different outputs from refineries and the like, that's quite an exciting space to be in. And we've got a capability to add real value in being able to do that. You talk about LNG, of course, having a good gas footprint is clearly important. And from day 1, and for as long as you've been following us, Gregory, amongst others in the room, we've been talking about the shale basins. It's having a good broad portfolio across the shale basins, oil and gas and working across the whole spread of shale, for example. So I do feel that, that positions us very well from a Subsea perspective, will it just be feeds from now on in and PDIFF work? I don't think it will be. For a start, our Subsea business has got an OpEx and CapEx part to it so there's point of IRM work and associated work. In terms of the CapEx space, there will be a variety of different contracting options that the IOCs will use. There is a lot of talk, but the integrated model in terms of Subsea. You would probably struggle to give me a list of 5 projects that have went that way because there are not 5 significant Subsea projects that have been commissioned in that manner. There's probably around 2 dozen live Subsea projects at different stages, just now we're involved in well over half of them in one way or another. And a big part of us -- a big part of our Subsea capability as Subsea engineering in terms of pipelines control systems and infrastructure, a big part of our Subsea business is also in very much the technology and Riser Analysis and the likes. That's very specialized in its very nature. I told you it was complex.

David Farrell from Macquarie. Quick question on the balance sheet. Obviously net debt at $1.65 billion better than the $1.8 billion you highlighted in December. How much of that was a working capital inflow, which was unexpected and therefore likely to reverse out in the first half of 2017. My second question is, with regards to disposals. Where does the mining business fit in all of this? Is this now more core than it was when you announced the Amec acquisition because of the upturn in end markets?

In terms of the net debt, when we went over the trading update, I think we'd gone through 1 month-end in terms of Amec Foster Wheeler. So we didn't really have that track record of their cash performance. So I think we're naturally conservative. Just looking at the reasons it was largely our own better working capital performance in Wood and actually in AFW. In terms of how that then feeds through into '18, we typically always have a better working capital performance in the second half of the year than the first half of the year, and both Wood Group and AFW both had that outcome.

Yes. In terms of mining, when we acquired Amec Foster Wheeler, we felt the mining business was, well, firstly in mining, it's minerals processing. So actually we don’t mine as such. It's a white collar business. It's generally of the consultant and project delivery end. So it's attractive in terms of what it did. And it was attractive by the fact, it was, we felt at the bottom of the cycle and that has been proven up over the course of 2017. We do like the look of the sales pipeline from a mining perspective and we do feel it's at the kind of bottom of that cycle. So we are encouraged that, that will be part of the business it will grow in 2018. And it's never featured as part of our disposal plans from the first time we looked at the Amec Foster Wheeler.

Just as a follow-up on the balance sheet. If you look at cash conversation including exceptionals, would you expect that to go up or down into percentage terms relative to where it was in 2017.

So what was our cash conversion this year, it was 69%. If you factored in the exceptionals it was at 90%. We are going to be very focused on our working capital management. We would hope to improve that as an outcome going forward for the reasons talked about earlier around how do we improve our DSO. We think we've got some reasonable plans around that, and it will be about delivering those plans.

It's Mickey from Barclays. Firstly, thank you for the release this morning, very clean post-merger and easy to deal with. Couple of tidy-ups, I don’t know if I missed it early doors, but on the lump-sum part of your business, could you just tell me what percentage of your business in '17 was lump-sum? And how you expect that to go given that you're looking at some contracts differently these days?

Yes, I think that -- that's arithmetical, Robin touched on it in the presentation. About 5% of our contracts are effectively lump-sum over $100 million revenue. So, no significant, sort of, lump-sum contracts. So these are a handful of contracts. We highlighted one, which is the most significant one in the portfolio, which is the YCI contract. The other ones actually a couple of them are the more straightforward EPC on solar projects, for example. There's another 35% that are in the lump-sum incentivized profit space, and then 60% in the reimbursable space. I think what we've highlighted before is, I think it's too easy to say reimbursable good and actually lump-sum bad. We've always had a range of contracting within our business in U.S. shale, we've had very modest EPC with good repeatable outcomes that are essentially lump-sum. If we look across our portfolio, we've not really got that exposure to mega-projects lump-sum projects, and that's not going to be a feature of our business. But we are commercially versatile across our portfolio.

Okay. And you talk about bringing gearing down. Have you looked to the impact of IFRS 16 when it comes in start of next year?

Yes. We didn't see that it's having a major impact in the gearing. I think that in itself is going to provide quite a big challenge to banks and our sales as we, this -- for those of you who don't follow it it's the leasing standard. And in terms of working that through in terms of covenants and things like this, I think there is going to be a challenge. It's not going to be a feature of '18, but it will be a feature of '19 and onwards.

Okay. And then just tiding up. On the crude to chemicals, I thought CBI had the technology behind that, and they've signed up a joint venture. What is it you are bringing to that project?

So the process capability -- process technology team are effectively a subset of Foster Wheeler and they are actually a Reading-based team, highly specialist. So what they do is they take like all refinery and process facilities, they take black box and they make sure that they're peripherals, they make sure that if we're doing flame fire here -- in other words, they make sure that the technologies that we introduce and the equipment that we introduce provides the right outcome and terms are taking input flow streams and effectively converting it to different range of output products mix. So there's a -- like of these things and we're the only contract the working in crude oil to chemicals. We're not the only contracting, we're working on it. But in terms of the pre-FEED definition engineering, FEED engineering and project management, I think that's the fact that we are encouraged by the fact that Saudi Aramco and SABIC has taken the lead in all of that. And actually, there will be subsets of different types of patented technologies within it to be perfectly candid. You know there will be a -- you look at the whole process, full from start to finish, they'll be probably be 3 or 4 different IP technologies right through it, not to mention some of the automation and controls technologies as well. So that team has been -- is a well engrained Foster Wheeler Heritage part, and it's a real kind of crown jewels within the Foster Wheeler portfolio, the team that we have there. Funny enough, in the Saudi Aramco deputation to the U.K., just a fortnight ago, we were speaking to the Saudi Energy Minister and when we were talking about the chemicals, his response was, "Oh that will be getting done Reading." So it kind of give you a feel of how well established that capability and well respected that capability there is, but the very, very bright and capable process engineers, Ph.D. engineers that have got a huge and enduring 40-year track record of delivering that type of complex process solution.

Just one question from me Lillian Starke from Morgan Stanley. You mentioned that you haven't seen much attrition within the headcount. I was wondering if have you seen any growth or are you adding any headcounts in any of your divisions or segments?

Yes. Yes. We are. So -- yes, our headcount has increased. We are encouraged that there's a lot of organic headcount growth. So I think there's probably, it's worth just getting a bit of granularity. When we look at our cost base and our synergies from a headcount perspective, there is largely a low number of high-cost senior people that we are exiting business with over two heads of IT, for example, you bring the businesses together, you need one right through. So that is non-reimbursable overhead cost that we're removing from the business. Some of the encouraging headcount increase is obviously we've won the contracts, we've increased headcount in terms of our white-collar staff, and we've pretty much done that across the globe over 2018, and particularly in our different compasses as we're busy on the projects that we're busy on. Our onshore U.S. business that was 1 reduction in headcount, very specific to Houston, as David touched on when we runoff in terms of the North Dakota access pipeline in Flint Hills. And if I look in terms of our headcount has increased since the deal was completed, and it has increased since January. So our trajectory in terms of reimbursable headcount reflecting activity levels is growing.

Probably the area where we've seen the short term and most significant and we've added about 1,000 heads in the Permian since the turn of the year. So we had some good momentum from the end of the year to where we are now.

Mark Wilson from Jefferies. I just really want to check on that -- those legacy numbers you said in the EBITDA. Did you say $70 million for 2017?

Yes. In terms of the dispute settlement. Yes, it was about $70 million. The cash impact was much less because it was India and there was a withholding tax settlement as well.

Okay. And then can you just remind us what investment services is and how we think about that going forward?

Investment services is -- it's a mixture of things. So one, it's managing legacy liabilities. So Amec Foster Wheeler as they sold some of their construction civil businesses, retain some of the liabilities around there. So they manage these liabilities. Really good track record of achieving good outcomes relative to the provisions. There is also a couple of businesses in there that have been either the remains of the disposal. So there's an IPN business that was part of the, sort of, wider GPG that is now within investment services. And the TND businesses is in there. The history around the TND business was substantial losses over the last couple of years around some legacy contracts. So that is in a restructuring program. Hence, it's part of investment services.

So EthosEnergy as a disposable asset, that's within Asset Solutions EAAA?

Yes. It's within EEEE. Maybe there's a broader point. We've not corralled businesses that we think are going to be disposed into investment services that would be the wrong link.

Any further questions? We've never run out of questions before, so that's encouraging.

Maybe they've finish just writing some of the key points, I'm sure you've got synergies. We're very pleased we're ahead of plan and we'd focus on that. Again, given the last 3 years, it is pleasing that we're talking about our expectation of modest growth in '17 with good underlying growth in the business -- '18, sorry. Our 2017 results are ahead or in line depending on what basis you actually look at. We're not focused on the dividend, but it is up by 3% as well. And actually, we feel we've got good contract momentum as well and hopefully. Those would be your takeaways. Thank you, guys.

Thank you.