Amec Foster Wheeler introductory presentation · Amec Foster Wheeler at a glance 2 Listed on both London Stock Exchange New York Stock Exchange 40,000 ... Revenues by business unit

Amec Foster Wheeler - a Brief Introduction and Overview - an Integration Journey

ECRI Conference, Athens

Jon Nield, Group Project Delivery Director

2nd December 2015

Who we are Amec Foster Wheeler at a glance

2

Listed on both

London Stock Exchange

New York Stock Exchange

40,000 exceptionally talented people worldwide

150+ year history operating in over

55 countries

Employees by business units

41%

29%

23%

6%

AMEA & SE GPG

NE & CIS Americas

c. £5.5bn

2014 pro forma

Scope revenue

( c. $9bn)

Principal office locations

► We have a clear vision which

encompasses our ambitions

for the future

3

Who we are Our vision

Samir Brikho

Chief Executive

Who we are Our markets and services

Markets

► Oil & Gas

► Clean Energy

► Environment &

Infrastructure

► Mining

Offerings

► Consultancy

► Engineering

► Project management

► Project delivery

► Ongoing asset support

► Specialised power

equipment

4

Who we are Our business structure

5

Markets Sectors Business units S

tra

teg

y &

Bu

sin

es

s D

eve

lop

me

nt

Oil & Gas

Mining

E&I

Clean

Energy

Renewables / Bioprocess

Nuclear

Transmission & Distribution

Conventional Power

Glo

ba

l P

ow

er

Gro

up

No

rth

ern

Eu

rop

e &

CIS

Am

eri

ca

s

Asia

, M

idd

le E

ast,

Afr

ica &

So

uth

ern

Eu

rop

e

Water

Transport

Government

Industrial / Pharma

Upstream

Midstream

Downstream

Mining & Metals

6

47%

28%

17%

8%

Americas

Northern Europe & CIS

Asia, Middle East, Africa & Southern Europe

Global Power Group

Add a segment

and caption if

required.

Revenues by market

Figures based on 2014 pro forma

Revenues by business unit

54%

28%

10%

8%

Oil & Gas

Clean Energy / Power

Environment & Infrastructure

Mining

Who we are Revenues by business unit and market

7

What we do Our focus

Deliver world-

class HSSE

performance

Create capital

effectiveness

Local delivery

leveraging

global expertise

Build long-term

relationships

with our

customers

8

Full life-cycle services to offshore

and onshore oil and gas

(conventional and unconventional,

upstream, midstream and

downstream) for greenfield,

brownfield and asset

support projects, plus

leading refining

technology

What we do Oil & Gas

9

Strong position in clean energy

market, including full life-cycle offering to

nuclear, power and renewable energy

sectors. Leading provider, through

the Global Power Group, of

circulating fluid-bed steam

generators, advanced industrial

and utility steam generators,

advanced air quality

control systems

Image provided courtesy of EDF

What we do Clean Energy

10

Specialist skills in environment

and infrastructure including

pharmaceuticals,

bio-processing, industrial,

water, transportation

and government

What we do Environment & Infrastructure

11

Mining and minerals processing

expertise across a broad spectrum

of commodities. Leader in

projects with significant logistical

challenges in remote locations.

Top-tier position in consulting,

materials handling systems

and strong environmental

and growing

underground

expertise

What we do Mining

12

What we do Our global reach

NAVFAC

Moffett Hanger One

San Francisco, CA, US

Copper Mountain

Solar 3 LLC

Copper Mountain

Solar 3 Boulder City,

Nevada, USA

Janssen Chemical

Development Pilot Plant

Geel, Belgium

Sasol Fischer-Tropsch

Wax Expansion WP 01

Sasolburg, South Africa

Woodside Pluto LNG

Carnarvon Basin,

Western Australia

Syncrude Aurora Mine

Replacement

Syncrude Aurora Canada,

Wood Buffalo, AB

Leeville Mining

Corporation

Leeville Mine

Elko, NV, US

Chinalco Pachachaca

Lime Project

Pachachaca, Peru

Northumbrian Water

Morpeth Sewage

Treatment Works

Morpeth, UK

South Oil Company

Iraq Crude Oil Export

Expansion Project

Al Basrah, Iraq

Shannxi Yanchang

Petroleum (Group) Co., Ltd

Yanchang Jinbian Integrated

Energy & Chemical Project

Shannxi, China

Korean Southern Power

Company’s Green Power

Project in Samcheok,

South Korea’

13

How we do it Our values and behaviours

► Our values express who we

are and what we stand for

Delivering

on promises

Developing

full potential

Doing the

right thing

► We listen, understand and respond

► We agree on clear expectations

► We aspire to consistent excellence

► We invest in our people

► We embrace diversity and inclusion

► We connect globally as one team

► We put safety first

► We act ethically and with integrity

► We care about our communities

14

How we do it We put safety first

Our commitment

The Board is responsible for establishing the

policy and for monitoring and reviewing overall

HSSE performance and is committed to the value

of ‘Doing the right thing – putting safety first’.

We accomplish this through the protection and

support of our employees and anyone working

with us or affected by our activities, and our

commitment to continuous improvement.

World-class

HSSE performance

“ Samir Brikho, Chief Executive ”

15

Sustainability in Amec Foster Wheeler is

about all the factors core to our long term

success.

It’s about integrating social, environmental

and economic concerns into our values

and operations in a transparent and

accountable manner.

Our stated goal is to be acknowledged as

a leader in sustainable business practice,

continually validating our social license

to operate by ensuring employees’

behaviours and actions are in line with

our values.

How we do it Creating value through responsible business

Diversity Integrity

People

Community

Safety

Innovation

Environment

16

Our name draws on the proud histories and

customer connections of AMEC and Foster

Wheeler.

Our brand is about Connected Excellence -

the bringing together of skills, abilities,

knowledge and expertise from across our

network to deliver excellence in all we do.

Our brand

Amec Foster Wheeler – An Integration Journey

ECRI Conference,

Athens, 2nd Dec 2015

18

Agenda

•The integration journey

•Deal rationale

•Timeline

•How it was organised

•Learning and recommendations

19

Deal rationale…stronger together

► Diversifying our business across four key markets

► Extending our services across the whole oil and gas value chain; offshore

and onshore upstream, midstream/LNG, refining & chemicals

► Enhancing our offering in clean energy/power, mining, environment and

infrastructure

► Widening our geographic footprint with offices in more than 55 countries

► Strengthening customer relationships through consistently excellent

delivery of capital efficient solutions

► Increased scale and efficiency

20

A ‘combination’ where 2 + 2 = 5, 6, 7 or even more

“It was clear that we all see this proposed

deal as the combination of two great

businesses. As I reminded people, it’s not

us and you: it’s AMEC and Foster Wheeler

combining to create ‘us’. That’s why we are

using the word ‘combination’ to describe

what we aim to achieve. The new company

will not be AMEC, nor will it be Foster

Wheeler: both organisations will be

integrated into a new entity and so deliver

enhanced value. As I usually put it, 2+2 will

not equal 4 in this case, we want 2+2 =

5,6,7 or even more.”

Samir Brikho, AMEC CEO

“A compelling combination for shareholders, customers and employees”

Combining two highly skilled workforces with industry-

leading engineering and project management expertise, to

create one, integrated, collaborative company which:

• Is well positioned

- Across the oil & gas value chain, from upstream to

downstream

- Across the globe

- Diversified across markets, services and lifecycle of

customers’ assets

• Has strong and growing customer relationships

• Provides development opportunities for its employees

• Has a low risk, cash generative business model

• Can deliver $75 million+ p.a. in cost synergies

• Can create incremental growth opportunities

A COMBINATION OF AMEC AND FOSTER

WHEELER…

…POSITIONED TO FORM ONE

INTEGRATED COMPANY

21

Key Integration milestones and meeting rhythm

PLAN

Deal Timeline

SteerCo

Meetings

IMO

&

Workstreams

Key milestone

Operating

Model

PLAN INTEGRATE

Board

Meetings

AUGUST

‘14 SEPT. ‘14

OCTOBER

‘14

Tender Offer

Launch

Board

meeting

15

NOVEMBE

R ‘14

DECEMBER

‘14

Board

meeting

18

Integration

workshop #4

2

Master

Planning

session #2

16 17

OM workshop

#5

2

Day 1

Launch

Training

2

Board

meeting

26

OM workshop

#5

1

OM workshop

#7

6

OM workshop

#8

9

ConeX

‘14

10 11

Operating

Model

Launch

1

Roadshows

JULY

‘14

JUNE

‘14

MAY

‘14

28

IMO

Launch

Integration

workshop #2

26 27

Board

meeting

2

Master

Planning

session

OM workshop

#3

22

Integration

workshop #3

23 24

10 11

15 28 9 10 27 7 21 5 17

#14 #15 #16 #17 #18 #19 #20 #21 #22

29 12 13 3

#9 #10 #11 #12

4

#13

Day 1

(Deal close)

17

OM workshop

#4

22

22

Key Integration milestones 2015

PLAN

Deal Timeline

SteerCo

Meetings

IMO

&

Workstreams

Key milestone

INTEGRATE

Board

Meetings

SEPT ‘15 APRIL ‘15 MAY ‘15 JUNE ‘15

Board

meeting

1

JULY ‘15 AUGUST ‘15

Board

meeting

15

Shared

Services

Workshop

Board Meeting &

Strategy Meeting

7

28 29

MARCH

‘15

FEBRUARY

‘15

JANUARY

’15

HVEC

Workshop

17 18

Board

meeting

11

Master Planning

session #3

24 25

18 9 21 11 11 14

#27 #28 #29 #30 #31 #32

29 11

#24 #25

2

#26

27

#33

OCTOBER

‘15

Squeeze-out

Complete

19

16

#23

ConeX ’15

& integration close

4-7

Operating

Model

Launch

Operating

Model 1

8

Board

meeting

19

Board

meeting

15

23

Embracing Amec Foster Wheeler from Day 1

13th November 2014

24

Americas

NE&CIS

AMEASE

GPG

36 countries and >23,000 people directly touched by

Road Shows

Americas: 5 countries

>5000 people

AMEASE: 15 countries

>8000 people

NE&CIS: 9 countries

c.7500 people

GPG: 7 countries

c. 3000 people

- 17 Road Shows personally led by the CEO

25

Communication

• 20 page welcome booklet

“desk-dropped” on day 1

• Included this

“Communications timeline”

26

Integration Close-out at Conex ’15 – 28-October 2015

Presentation at Conex ’15, highlighting:

• How the IMO was structured and

operated.

• Key achievements

• How we measured integration success

• Integration progress

• Ongoing integration initiatives that are

now owned by the Functions.

Close-out report, including:

• How the IMO was structured and operated

• Integration timeline

• Progressive learnings

• Conclusions and Recommendations

27

Agenda

•The integration journey

•Deal rationale

•Timeline

•How it was organised

•Learning and recommendations

28

Deal closure

and regulatory

#1

#2

#3

#4

Geography /

Business

champions

Steering Committee

Integration Management Office (IMO)

Risk & Change

Management

Key Milestone

Readiness

Tracking &

Finance

Functional Workstreams Value Workstreams

Business

Development

Communications

Project Delivery

Finance Legal

Sarbanes-Oxley

Operating Model &

Org Design

Vision, Value

Drivers & Priorities

Revenue Synergies

Branding &

Communications

Culture &

Engagement

Cost Synergies

Commercial

Tax Structure &

Synergies

Backlog HR & Sustainability

HSSE

Insurance

Strategy

IT

HVEC’s Shared Services

Integration Structure

29

Regular IMO roles and meetings required

Facilitate decision

making

Ensure workstreams

on track

Manage workstream

interdependencies

Coordinate as a team

Key IMO roles Meetings

required Meeting Objectives

Integration

Steering

Committee

(biweekly, 2 hours)

Ad-hoc Sponsor

Meetings

(biweekly/ as

required,

30 mins - 1 hour)

Multi-Workstream

Call

(weekly, 2 hours)

Individual

Workstream

Meetings

(biweekly/ weekly,

30 mins - 1 hour)

IMO Team

Meetings

(twice weekly, 1 - 2

hours)

• Evaluate recommendations

• Make decisions

• Review progress

• General workstream status update

• Escalate concerns / workstream issues

• Agree recommendations to take to SteerCo

• Make sponsor-level decisions

• Workstream to provide update on achievements and

next steps

• Workstream to highlight issues requiring escalation

• Discuss interdependencies

• Cascade decisions made and agree impact

• Prepare meetings (workstreams, SteerCo, sponsors)

• Agree deployment of resources (e.g. ‘SWAT’ team)

• Manage overall tracking of risks

• Update on workstreams’ concerns and priorities

• Detailed workstream update

• Discuss key content topics where IMO “unlock” is

required

• Agree next steps

Attendees

• Steering Committee

• Garry Dryburgh

• Workstream

sponsor

• All workstream

leads

• Garry Dryburgh

• IMO team members

as required

• Workstream lead

• IMO team members

/ Garry Dryburgh

• Sponsor if required

• IMO team

30

IMO meeting rhythm (fortnightly)

1st week 2nd week

Monday Tuesday Weds Thurs Friday Monday Tuesday Weds Thurs Friday

Mo

rnin

g

Aft

ern

oo

n

Individual Workstream

Meetings* Multi-Workstream Call

Steering Committee

Members

Multi-

Workstream

Call

(2 hours)

Integration

Steering

Committee

Workstream

emails

materials for

weekly call to

IMO

Workstream

emails

materials for

weekly call to

IMO

IMO Team Meeting

IMO Team

Meeting

IMO Team

Meeting

IMO Team

Meeting Ad-hoc

Sponsor

Meetings

Ad-hoc

Sponsor

Meetings

Multi-

Workstream

Call

(2 hours) IMO Team

meeting

Project Delivery, 1h

Strategy, 30 mins

Culture &

Engagement, 1h

Backlog, 30 mins

Business

Development, 1h

Commercial, 30 mins

Communications, 30

mins

Engineering, 1h

Revenue Synergies,

1h

Cost Synergies, 30

mins

Tax Synergies, 30

mins HSSE, 30 mins

IT, 1h

Legal, 30 mins

Finance, 1h

HR / Sustainability,

1h

Operating Model &

Org Design, 1h

Branding &

Communications, 1h

*Individual Workstream Meetings may be held in parallel, timing tbd.

Insurance, 30 mins

Finance, 1h

HR / Sustainability,

1h

Operating Model &

Org Design, 1h

Branding &

Communications, 1h

Sarbanes-Oxley, 30

mins

31

AMEC and Foster Wheeler at Integration Workshop #3

(23rd July 2014)

32

Integration principles

Integration (e.g., for org, processes, policies etc.) should be sought if:

• It is needed to realise the targeted deal value drivers (overall and within each

workstream)

OR

• It is needed to maintain proper governance of the acquired company: Integration

should enable effective control of business on Day 1

OR

• It enables success of the Operating Model: chosen Operating Model will required

selected function / business unit integration

Focus on key value drivers, setting aside nice-to-have items; Don’t change

what doesn’t need to be changed

Don’t destroy value: minimize disruptions to the existing business, protect

what needs to be protected

33

What does integration success look like…

Day 1 By end

of 2014

During

2015

… for the

Business

• Base business protected (safety performance, bottom line, etc.) with ‘no surprises’ on Day 1

• New Operating model launched on January 1st then further developed; it lays out clear roles and

responsibilities and significantly accelerates the transformation to new ways of working in NewCo

• Group BD function established which improves our approach and success with: key prospects, global

accounts and delivery of Market strategies

• Cost and revenue synergies delivered according to plan; integration costs remain within budget

• Whole group collaborating successfully and effectively as an increasingly integrated company

• Integration learning captured improving our M&A capability

When to measure

(quarterly during 2015)

… for

People

• Key talent retained and proud to be working at NewCo

• NewCo attractive to new resources

• Integration smooth with no ‘falling over’

• One culture embedding as new vision, values and behaviours are embraced

… for

Customers

• Integration seamless with no detriment to service level

• Combined business benefits evident and becoming available (capabilities, geographies, expertise, etc.)

• Satisfaction increasing with NewCo’s level of service and delivery

• NewCo brand well received and gaining positive recognition in the market

… for the

Markets

• Deal closes effectively without any unnecessary delay

• Markets react well to the combination

• Combined company value greater than the sum of the two legacy companies

• Longer term strategy established which remains clear and compelling

34

Key risks to integration success

• Employees from the two legacy companies do not collaborate

effectively, or we fail to embed desired culture or behaviours

Key risks Actions to mitigate

• Ensure implementation of Operating Model and roll-out the new behaviours

• Continue rhythm on the necessary meetings / engagement sessions

• Raise and address any key issues openly

• We try to do too much on Integration leading to: a) distraction

from delivering on base businesses, with detriment to safety

performance, customers and bottom line; b) failing to deliver

on critical Integration priorities

• Continue to prioritise plans, ensuring critical items are delivered with pace

• Ensure clear allocations (FT & PT) to Integration, whilst focusing remaining resources and

efforts on the base businesses and conclude integration at the appropriate time

• Operating Model implementation is incomplete / unclear

jeopardising effective embedding of new organisation and

core business process

• Continue to communicate with and induct key stakeholders following Op Model launch

• Use implementation survey to develop actions to further embed Op Model through 2015

• Ensure that leaders in business ‘walk the talk’ on how new model should work

• Lack of transparency of plan / actual progress, therefore don’t

know if Integration is on track

• Agree plans and success factors and effectively report progress against them

• We fail to maintain compliance (especially SOX, Legal,

Commercial) whilst accelerating transition to Amec Foster

Wheeler operating model

• Continue to review plans and options (mainly Legal, Finance, Commercial) and implement

necessary mitigations across functions

• Ensure a transparent, well communicated plan in place to harmonise and roll out policies

and procedures

• Ensure effective interface with the functions, new Global Management System and the

HVEC’s and Shared Services Workstreams

• The integration journey stops when the formal integration

programme and IMO wraps-up at Conex ‘15

• Group leadership team agree 2016 continuous improvement initiatives by function.

Initiatives are monitored for effective implementation through 2016

• Market conditions continue to deteriorate • Ruthlessly pursue cost savings and revenue synergies

• Develop and implement game-changing response on HVEC’s and Shared Services

• Ensure appropriate strategy is in place, and is rigorously implemented

• We declare victory on Integration too early, failing to meet

success factors and deliver original deal thesis

• Continue to drive the integration priorities and co-ord the multi-stream interdependencies

• Transition out the workstreams effectively using the structured close-out process

35

Master Planning Session #2, 16th-17th September 2014

• Great interactions and challenges to each workstream

• Seeing the new brand content really brings the future to life

• Walking the wall helped visualise objectives, deliverables and their interdependencies

• The de-couple of Day 1 from Operating Model launch maximises the opportunity to build excitement and

manage anxiety whilst protecting the base businesses through year end

• The plan to end of year, beyond that already detailed to Day 1, is taking shape and can now be detailed also

• We continue to review, plan for and mitigate key risks

Key

messages

from

session

36

Integration Planning

Workstream

Charters

Input to Master

Planning

• One page charter setting out that workstream’s:

• Personnel (including Sponsor and Lead); Objectives; Guiding principles and

assumptions; Deliverables and milestones; Scope exclusions; Success criteria;

Risks; Coordination required with other workstreams

• Template providing more details on the next phase’s:

• Key Objectives; Key Deliverables; Key Milestones

• Agree with workstream sponsor

• From this create the draft “wall” and high level milestones plan

• Two day workshop with all workstream leads and IMO

• Guest speakers and workstream presentations

• Walk-the-wall

• Risk reviews and “speed-dating” sessions

• Key Objectives; Key Deliverables; Key Milestones updated based on Master Planning

• Add in detailed steps to achieve deliverables including man-hours

• Agree with workstream sponsor

• IMO integrate to create logic-linked, resource loaded plan

Master Planning

Integration Plan

valid

ate

/up

da

te

37

Tracking Progress

• Workstreams update progress weekly

using Integration Tracking Tool

• Summary progress table and

individual workstream reports

produced weekly by IMO

• Robust change management process

38

Workstream Close-Out

Ensuring:

• Objectives met

• Learning captured

• Information adequately stored

• Any remaining actions/agreed future

improvements clearly owned

• Key stakeholders aligned on

Workstream closure

Summarising in a Close-Out report to

improve our future M&A capability

39

Integration Close-Out

Key Contents:

• Executive summary

• Background, including deal rationale

• Integration structure, principles & governance

• Timeline and major events

• Operating Model, IAD Process &

Management System

• Integration success criteria

• Planning & monitoring

• Budgeting

• Internal communications

• Risk & Change management

• Future integration activities

• Progressive learnings

• Conclusions and recommendations

40

Agenda

•The integration journey

•Deal rationale

•Timeline

•How it was organised

•Learning and recommendations

41

Integration overall progress curve

42

Demonstrated

capability to handle

complex integrations

Feedback: major risks successfully navigated

Three things typically go wrong in integrations

43

Integration Director’s pause for reflection: 3 critical factors

• CEO in all SteerCos, setting context for

change, recognising heritage, using compelling

‘combination’ language, and creating ‘urgency’

• Membership of SteerCo, long before new

Leadership Team could be published, with joint

commitment on success of Integration

• Executive sponsor for each Workstream

• Careful selection of each Workstream leader

• Sufficient diversity in IMO team membership

• Right attendance in Integration Workshops,

Master Planning & OM sessions, weekly calls

• Robust selection process for specialist advisors

• All of the above organised into an effective and

interdependent governance structure / coalition

Right people Ruthless prioritisation

• Probed and listened hard on: culture, values,

capabilities, and ways of working

• Agreed clear expectations on deal rationale, to

follow the money and achieve new vision

• Developed straightforward integration

principles, to ensure focus on critical issues

• Continuously challenged Workstreams’ scope

Rhythm

• Identified simple delivery phases: mobilisation,

Day 1 preparations, first c.100 days, Year 1

• Planned for and progressed actionable steps,

creating visibility of changes and successes

• Brought right structure to life, adjusting rhythm

of meetings / communications to suit the phase

• Built an effective team with momentum in

raising and collaboratively addressing issues

• Investing to create a repeatable model

We’re not finished yet!

Transitioning to new “business-as-usual”

…it’s key to leaving a positive legacy

44

Progressing learnings and recommendations

Strong

governance

and

sponsorship

Right people

Robust

planning

Ruthless

prioritisation

Regular

rhythm

45

APM 5 key factors for project success

Project Planning &

Review

Goals & Objectives

Effective

Governance

Competent Project

Teams

Commitment to

Success

What we did Factor present?

• Charters

• Master planning sessions

• Integrated plan with multiple reviews & updates

• Charters captured milestones and objectives

• Integration success defined and measured

• Integration SteerCo

• Operating Model SteerCo

• Sponsors

• Sponsors drawn from group leadership team

• Workstream leads all senior leaders

• 3rd party management consultants

• Master planning sessions helped to build team

• Weekly calls maintained commitment

• Personnel changes made where necessary

connected excellence in all we do

Thank you!