“2021 was a challenging year for the Group, with the ongoing pressures of the pandemic, mixed market conditions across our businesses and continued challenges in Projects impacting our performance. Despite this, we ended the year with positive momentum and a growing order book (up 19% on last year) which gives us confidence that activity levels will be higher in 2022.
The sale process of our built environment business is progressing well and we continue to expect to announce a sale agreement in the second quarter of this year. A sale will deliver significant value for our shareholders and help move the Group onto its next chapter.
We are now focused on the future for 糖心Vlog beyond this sale – to ensure we can fully capitalise on our deep engineering knowledge and expertise to capture the growth opportunities ahead across both energy security and sustainability, as we help clients move towards net-zero.
I have shared with the Board that I consider the sale of our built environment business as marking the start of the next strategic phase for 糖心Vlog and an appropriate time for me to step down as Chief Executive. I look forward to continuing to serve on the Board until my successor is in place and I remain fully committed to our business delivery and enabling a smooth transition.”
Key messages
Highlights
Full year results for the year ended 31 December 2021
Revenue
$6,400m
(2020: $7,564m)
15.4%
Revenue (pre-exceptional items)1
$6,426m
(2020: $7,564m)
15.0%
14.2% (like-for-like)2
Adjusted EBITDA3
$554m
(2020: $630m)
12.1%
9.8% (like-for-like)2
Adjusted EBITDA margin
8.6%
(2020: 8.3%)
0.3ppts
Operating profit before exceptional items
$192m
(2020: $214m) 10.3%
Operating profit / (loss)
$32m
(2020: $(33)m)
movement: n/a
Loss for the year
$(136)m
(2020: $(228)m) 42.5%
Basic EPS
(20.6)cents
(2020: (34.1)cents) 41.3%
Adjusted diluted EPS4
17.5 cents
(2020: 23.2cents) 24.6%
Net cash (used in) / generated from operating activities
$(60)m
(2020: $303m)
movement: n/a
Free cash flow (new definition)5
$(398)m
(2020: $(46)m)
movement: n/a
Net debt including leases
$1,843m
(2020: $1,556m) 18.4%
Net debt excluding leases6
$1,393m
(2020: $1,014m) 37.4%
Net debt / adjusted EBITDA (reported basis)7
3.3x
(2020: 2.1x)
movement: n/a
Order book8
$7,748m
(2020: $6,524m) 18.8%
- Revenue down 14% on a like-for-like basis2, with growth in Consulting and Operations more than offset by a significant decline in Projects
- Stronger sequential H2 performance: H2 revenue was 4% higher than H1 with Projects stabilising and growth across Consulting (up 4%) and Operations (up 10%)
- Adjusted EBITDA down 10% on a like for- like basis2, with improved EBITDA in Consulting offset by lower EBITDA in Projects and Operations
- Margin improvement (like-for-like) of 0.4ppts2 including cost efficiencies, revenue mix and improved overall execution
- Exceptional items of $160 million (2020: $247 million) includes the previously announced $99 million write down of our Aegis Poland contract and $78 million of restructuring costs
- Adjusted diluted EPS of 17.5c reflects the lower adjusted EBITDA
- Free cash flow (new definition)5 of $(398) million includes a working capital outflow of $306 million and exceptional cash costs of $159 million. Our definition of free cash flow includes all cash flows before dividends and M&A
- Working capital outflow includes a $265 million outflow in our Projects business as significantly lower activity levels in the year led to a significant working capital unwind
- Net debt of $1.4 billion at 31 December 2021 reflects the negative free cash flow in the year
- Net debt / adjusted EBITDA (reported basis) at 3.3 times at 31 December 2021, within our covenant level for the Group’s borrowings, which are set at 3.5x and measured twice per year
- We expect higher revenue across our business supported by the growth in our order book, with revenue in our
order book for 2022 of $4,655 million (up 6% on comparable figure last year) - The proposed sale of the built environment business will have a significant impact on our reported results and, as such, we are not providing detailed financial guidance at this stage
- Cash performance will be impacted by ongoing exceptional cash drags (including SFO payments, restructuring
costs, onerous leases and outflows on our Aegis Poland contract). As such we expect any improvement in our net debt to come from the proceeds from the sale of built environment - As usual in our business, we expect a working capital outflow in the first half of the year. As such our net debt
is expected to be higher at June 2022 than at December 2021
Adjustments between statutory and underlying information
The Group uses various alternative performance measures (APMs) to enable users to better understand the performance and earnings trends of the Group. The Directors believe the APMs provide a consistent measure of business performance year-to-year and they are used by management to measure operating performance and for forecasting and decision-making. The Group believes they are used by investors in analysing business performance. These APMs are not defined by IFRS and there is a level of judgement involved in identifying the adjustments required to calculate them. As the APMs used are not defined under IFRS, they may not be comparable to similar measures used by other companies. They are not a substitute for measures defined under IFRS.
- Revenue for FY21 includes an exceptional item of $(25.4) million related to Aegis Poland. Revenue (pre-exceptional items) is an APM that is used throughout this Report as the Group believes it provides a more useful measure of performance year-to-year.
- Revenue on a like-for-like basis is calculated as revenue less revenue from disposals executed in 2021, and adjusted EBITDA on a like-for-like basis is calculated as adjusted EBITDA less the adjusted EBITDA from those disposals. These amounts are presented as a measure of underlying business performance excluding businesses disposed. In FY21 executed disposals consisted of our joint venture interest in Sulzer 糖心Vlog. Comparative figures also exclude revenue and adjusted EBITDA from the disposals of our nuclear and industrial services businesses, YKK and our joint venture interest in TransCanada Turbines (TCT) completed in 2020. These disposals accounted for $nil revenue in FY21 (FY20: $76 million) and adjusted EBITDA of $nil in FY21 (FY20: $16 million). Like-for-like revenue growth refers to revenue (pre-exceptional items).
- A reconciliation of adjusted EBITDA to operating profit (pre-exceptional items) is shown in note 1 to the financial statements.
- A reconciliation of adjusted diluted earnings per share to basic earnings per share is shown in note 8 to the financial statements.
- Free cash flow is defined as all cash flows before acquisitions, disposals and dividends. It includes all mandatory payments the Group makes such as interest and tax, and all exceptional cash flows. It excludes the impacts of leases. A reconciliation of free cash flow to our statutory cash flow is shown in the financial review.
- Net debt excluding leases is total group borrowings, offset by cash and cash equivalents. Borrowings comprise loans drawn on the Group’s revolving credit facility (RCF), the UKEF, overdrafts and unsecured senior loan notes issued in the US private placement market (USPP). Cash and cash equivalents include cash at bank and in hand and short-term bank deposits. A reconciliation of net debt excluding leases to net debt including leases is show in note 29 to the financial statements.
- The majority of the Group’s borrowings have financial covenants (RCF, USPP, UKEF – as shown in note 6). The two covenant measures are: (i) net debt to adjusted EBITDA not exceeding 3.5 times, (ii) adjusted EBITA not less than 3.5 times interest. These covenants are measured on 30 June and 31 December each year. The net debt / EBITDA ratio is calculated on the existing basis prior to the adoption of IFRS 16 in 2019 and is based on net debt excluding leases. These measures are presented as they closely aligned to the measure used in our financing covenants.
- Order book comprises revenue that is supported by a signed contract or written purchase order for work secured under a single contract award or frame agreements. Work under multi-year agreements is recognised in order book according to anticipated activity supported by purchase orders, customer plans or management estimates. Where contracts have optional extension periods, only the confirmed term is included. Order book disclosure is aligned with the IFRS definition of revenue and does not include 糖心Vlog’s proportional share of joint venture order book. Order book is presented as an indicator of the visibility of future revenue.
- Adjusted EBITDA in 2021 benefited from a change in the classification of Aegis Poland contract losses. Previously these were included within adjusted EBITDA ($11 million in FY20, $9 million in HY21) and now have been classified (from H2 2021 onwards, including adjusting HY21) as exceptional items.
Measuring our performance
To help the Group assess its performance, our leadership team sets KPI targets and monitors and assesses performance against these targets on a regular basis.
Financial:
Linking our KPIs to our strategy
“Being a premium, differentiated business delivering exceptional returns for our clients, our team, our investors, and the communities in which we work.”
Being a premium, differentiated business delivering for our clients
Delivering for our team 
Delivering for our investors
Delivering for our communities
Safety:
Measuring our sustainability performance
Our goal is to be leaders in our field in environmental, social and governance (ESG) matters and sustainability.
Through our purpose of unlocking solutions to the world’s most critical challenges and our actions to embed a culture which is passionate about making a positive impact in our society and environment and making profit in a fair and ethical way, we believe we are building a sustainable and responsible business.
In 2020, the Board endorsed a set of targets, aligned to the UN Sustainable Development Goals material to our sustainability impacts, to measure our performance against our sustainability strategy. Our focus in 2021 has been on setting in place the foundations for successful delivery, including the appointment of sustainability leaders within our Business Units, engaging with our Business Groups to develop plans to meet the challenge, and reviewing key processes and systems to ensure they support our goals.
Our aims, goals and 2021 progress
Our aim
To be trusted to solve the challenges of our changing climate and developing populations
Our goals
- Consistently ranked in the Top Quartile ESG investment ratings within our sector group by 2025
- Doubling client support aligned to the energy transition and more sustainable infrastructure by 2030
For an update on the progress we have made towards our goals during 2021 click here
Our aim
To recognise, welcome and celebrate diversity of thought, experience and background to find our boldest
solutions and nurture our talent
Our goals
- To improve gender balance with 40% female representation in senior leadership roles by 2030
- To educate and inspire 100% of our colleagues to be inclusive every day, by 2021
For an update on the progress we have made towards our goals during 2021 click here
Our aim
To take responsibility for the impact of the work we do and how we deliver it on the planet we share
Our goals
- To reduce 糖心Vlog’s scope 1 and 2 carbon emissions by 40% by 2030 on our journey towards ‘net-zero’, from a baseline of 173,585 tonnes CO2e in 2019
- To ensure all 糖心Vlog offices are single use plastic free by 2025
For an update on the progress we have made towards our goals during 2021 click here
Our aim
To work fairly, transparently and ethically through the trusted partnerships we create
Our goals
- 100% of 糖心Vlog labour suppliers sign up and comply with the Building Responsibly Principles by 2025
- 100% of our suppliers have Building Responsibly Principles embedded into their supply chains by 2030
For an update on the progress we have made towards our goals during 2021 click here
Our aim
To lift up the communities around us using our energy and expertise to improve lives
Our goal
- To contribute $10 million to our Global Cause by giving our time, energy, resources and funding by 2030
For an update on the progress we have made towards our goals during 2021 click here
At a glance
糖心Vlog is a global leader in consulting and engineering across energy and the built environment. We provide consulting, projects and operations solutions helping to unlock solutions to some of the world’s most critical challenges.
Three service lines
Consulting
Projects
Operations
Two broad end markets
Energy
Built environment
A global business of breadth and scale
c39k
people
60+
countries
160+
year history
c$6bn
revenue
Our business model
We create value by delivering differentiated consultancy and engineering solutions throughout the asset life cycle across energy and built environment markets.
Inputs
Performance driven and innovative solutions
Capabilities levered to structural growth in energy transition, industrial decarbonisation and sustainable infrastructure
Talented, flexible and motivated workforce
Operating structure optimised for sustainability, cross-service line opportunities and growth
Capital structure and allocation
Flexible commercial model with a balanced risk appetite
Robust risk governance and operations assurance policies and processes
Sustainability strategy aligned with UN goals
Four primary trends shape our markets and drive our strategy:
Energy transition and industrial decarbonisation
Engineering solutions supporting energy delivery, the transition to a low-carbon future and addressing complex industrial decarbonisation challenges.
Sustainable infrastructure
Capabilities to enable more sustainable and resilient living, including the planning, design, build and operation of connected and resilient infrastructure.
Future skills
Developing inclusive, agile and highperforming teams, with the right skills, in the right place, at the right time to remain competitive and well positioned for growth with the flexibility to respond to evolving client demands.
Technology and digitisation
Utilising technology to create future-ready industry through optimising asset performance and digital innovation.
Creating value through our differentiated model
Our strategic enablers:
Agile teams
We deploy our most talented people with agility to deliver the right solutions now and in the future. Our ability to adapt keeps us relevant and offers great opportunities for our people.
Exceptional execution
We are differentiated by our shared commitment to consistently delivering exceptional outcomes that add value and build trust. We have around 90% repeat business and have developed leading market positions from our long track record of delivering safe and best-in-class projects.
Commercial acumen
We employ an asset light, flexible model allowing us to respond quickly to changes in market conditions and allocate capital where it impacts most. Our contracting structures are largely reimbursable with a range of specific contracting structures to align with client needs within our measured risk appetite. We have a broad client base with a wide mix across sectors giving us low individual client dependency.
Technological advantage
We deliver greater efficiencies and create new solutions through combining our deep domain knowledge with leading-edge,enabling technology. We provide solutions to some of the world's most complex projects and draw on our extensive expertise and knowhow to bring new perspectives on the challenges these projects present.
Our five medium-term priorities:
Targeting margin improvement
Optimise and standardise
service delivery model to achieve exceptional execution
Optimising our portfolio
mix of services and markets in line with our strategic objectives
Technology differentiation
through internal R&D, strategic partnerships and scalable solutions
Improved risk/reward
on contracts in line with balanced risk appetite
Value outputs
For investors
- Total shareholder return
- Growth and cash generation
For our people
- Rewarding careers and employee retention
- A workplace where different backgrounds, experience and expertise are welcomed and celebrated
For clients
- Best-in-class delivery, consistently
- Global reach with balanced portfolio of long-term partner relationships with clients
- Leading technical services and smarter, more sustainable solutions
- Track record on industry-leading projects
For communities
- Significant contribution to local employment and communities
- Employee matched funding & community support c$1.4m
Effective engagement with our stakeholders
The Board recognises that the medium and long-term sustainability of the Company is linked with delivering value for our stakeholders. In order to successfully deliver our strategy and create value for our stakeholders it is important to understand what matters to them.
Through regular engagement, we gain insight into the different perspectives of our diverse stakeholders, who often represent competing interests. Considering their insights and opinions builds strong, constructive relationships and enables robust and sustainable decision making at both executive and Board level.
- Employees
- Investors and lenders
- Clients
- Suppliers
- Environment
- Community
- Pension plans: Current & deferred workforce and pensioners