Wood upgrades outlook as order book hits $6.3bn

Wood CEO Ken Gilmartin

John Wood Group, the Aberdeen-based global engineering and consulting giant, said its order book was up 4% to $6.3 billion as the firm reported 2023 results and upgraded its outlook.

The Aberdeen firm said its 2023 loss of $105 million “reflects operating profit more than offset by finance costs and tax.” 

The company’s share price fell about 7%. The stock is down more than 30% for the past year.

Wood announced a “simplification programme to drive efficiency” with targeted annualised savings “of around $60 million from 2025.”

Group revenue of $5.9 billion was broadly in line with the firm’s guidance, up 8% on last year, with growth across all business units, led by Consulting.

“This growth shows the demand that is in our markets for the consulting and engineering services we provide,” said Wood.

Operating profit was $38 million compared to an operating loss of $565 million in 2022, which was impacted by goodwill and intangible impairments of $542 million.

Adjusted EBITDA of $423 million was up 9% on 2022.

The group’s headcount fell to 35,335 from 35,573. Wood operates in about 60 countries.

Wood CEO Ken Gilmartin said: “We made significant progress in this first year of our three-year growth strategy. We delivered strong revenue and adjusted EBITDA growth, and we significantly improved operating cash flow.

“We continue to see clear business momentum, with a higher order book, double-digit growth in our pipeline and positive pricing trends in both pipeline and order book.

“It is encouraging that the fastest growing parts of Wood are the higher-margin Consulting business, and our sustainable solutions across all areas.

“To build on this early success and further enhance our strategic delivery, we have launched a simplification programme to drive efficiency and support further margin expansion.

“We are therefore upgrading our outlook, with 2024 guidance now towards the top end of our medium-term targets and 2025 expected to exceed those targets.

“Ultimately, our priority remains sustainable cash generation and we expect to deliver significant free cash flow from 2025.”