Wood Group Announces 2010 Highlights (UK)

John Wood Group PLC (“Wood Group” or the “Group”) is an international energy services company with approximately $5.1bn revenue, employing approximately 29,0001 people worldwide and operating in 50 countries. The Group has three businesses—Engineering & Production Facilities, Well Support, and Gas Turbine Services—providing a range of engineering, production facilities support, and industrial gas turbine overhaul and repair services to the oil & gas and power generation industries worldwide.

Financial Highlights

• Revenue of $5,063.1m (2009: $4,927.1m) up 3%
• EBITA2 of $344.8m (2009: $358.4m) down 4%
• Profit before tax of $254.6m (2009: $264.8m) down 4%, after an exceptional charge of $27.6m (2009: $35.8m)
• Strong cash generated from operations of $394.5m (2009: $545.5m)
• Basic earnings per ordinary share of 32.4 cents (2009: 32.1 cents) up 1%
• Adjusted diluted earnings per ordinary share3 of 39.7 cents (2009: 41.8 cents) down 5%
• Proposed final dividend of 7.6 cents, making a full year dividend of 11.0 cents (2009: 10.0 cents) up 10%

Strategic Highlights

• * Strategic decision to enhance the Group’s focus and market-leading positions in its Engineering & Production Facilities and Gas Turbine Services divisions
• * Two major steps recently announced to achieve this re-positioning

o December 2010 – acquisition of PSN for $955m. Upon completion, PSN will merge with Wood Group’s Production Facilities business to create Wood Group PSN which will have around 22,000 people in over 30 countries across the world covering all the significant oil & gas development regions

o February 2011 – divestment of the Well Support division to GE for $2.8 billion, which, Wood Group believes, fully recognises the strong performance and future prospects of the division

• * Return of cash to shareholders of not less than $1.7 billion, details of which are expected to be communicated to shareholders following completion of the disposal of the Well Support division
• * Following the expected second quarter completion of the PSN acquisition and disposal of the Well Support division, Wood Group will be set to grow its position as

o A world-leading engineering business with strong market positions in upstream, subsea and pipelines

o The world’s leading production facilities support provider

o The world’s leading independent industrial gas turbine aftermarket provider

• * Looking ahead, Wood Group will further develop these market-leading positions by extending services and broadening its international presence

o Important new markets include Angola, Brazil, Canada, Malaysia and Saudi Arabia

o Wood Group will continue to pursue both organic and acquisition-led growth

Operating Highlights

Group

Good overall revenue growth in opex4 related activities and improving market for capex4 related businesses

Engineering & Production Facilities

Continued good revenue growth in Wood Group’s Production Facilities activities, offset by somewhat subdued activity in Wood Group’s capex related Engineering businesses

Engineering

o Results impacted by soft market in 2009 and early 2010, but recovery starting to come through in good order book growth

o Strong performance in subsea & pipelines

o Continued international expansion

Production Facilities

Steady performance from North Sea business

First significant contract win in Middle East with Wood Group CCC joint venture

Continued expansion in Africa and Asia Pacific

Well Support

Significant improvement in results, including benefit of strong US drilling rig count

Continuing focus on cost control and operating efficiency

Gas Turbine Services

Revenues impacted by deferred maintenance spending by customers and delayed contract awards for Power Solutions

Market improvement in the second half of the year, contributed to over $1 billion of contract wins for Power Solutions

Outlook

Anticipate improving market conditions in 2011

The recovery signs in the greenfield engineering market in the second half of 2010, together with the increase in global E&P expenditure predicted for 2011 should result in good growth for Wood Group’s Engineering businesses

The combination of Wood Group and PSN will create the global market leader in production facilities support. Wood Group will be well positioned to benefit from the growth in new installations each year and to help its customers meet the need for even greater focus on asset integrity, process safety and quality assurance following the Macondo incident

The significant backlog in Power Solutions and strengthening maintenance market should lead to a significantly improved EBITA performance in Gas Turbine Services

Sir Ian Wood, Chairman, and Allister Langlands, Chief Executive of Wood Group, said:

“This has been an exciting and decisive re-positioning period. Our enhanced focus on our market-leading positions in greenfield engineering, production facilities support, and the industrial gas turbine aftermarket increases our capability to add value to our clients’ activities. We are well positioned to take advantage of the improving market conditions and will continue to pursue our strategy of targeted geographic expansion and extended services through organic and acquisition-led growth. Overall, we anticipate good growth over the next few years.”

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Source:Wood Group, February  21, 2011;