John Wood Group PLC

John Wood Group PLC

Annual Report and

Financial Statements 2023

Design

the future.

Our performance

Revenue

Adjusted EBITDA

$423m

(2022: $388m)

$5,901m

(2022: $5,469m)

Order book

$6,269m

(2022: $6,017m)

Net debt excluding leases

$694m

(2022: $393m)

76%

Free cash flow

$(265)m

(2022: $(704)m)

N/A

Operating profit/(loss)

$38m

(2022: $(565)m)

N/A

Remarkable people,

trusted by clients

to design, build and

advance the world.

Notes to the performance highlights:

Metrics shown are for continuing operations. Percentage growth rates are calculated on rounded

figures on

this page. Growth rates shown at constant currency are calculated by comparing FY23 to FY22 re-presented

at FY23 currency rates.

Comparative information has been re-presented, due to the reclassi

fication o

f Built Environment Consulting

Saudi Arabia from discontinued into continuing operations following a decision not to dispose of that

business, see note 7 to the financial statements.

Adjusted earnings before interest, tax, depreciation and amortisation. A reconciliation of adjusted EBITDA is

shown in note 1 to the financial statements..

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 agreement. Multi-year agreements are recognised

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 o

f revenue and does not include Wood’s proportional share of joint

venture order book. Order book is presented as an indicator of the visibility of future revenue.

A reconciliation of net debt excluding leases to net debt including leases is shown in note 31 to the

financial

statements. We refer to net debt excluding leases throughout this report as net debt.

A reconciliation of free cash

flow to our statutory cash flow statement is shown on page 38 o

f the

financial

review.

Strategic report

Highlights

At a glance

Chair’s statement

Chief Executive review

Our markets

Our sustainable solutions

Our strategy

Our business model

Key performance indicators

Segmental review

Financial review

Sustainability

Principal risks and uncertainties

Governance

Governance at a glance

Letter from the Chair of the Board

Board of Directors

Executive Leadership Team

Governance Framework

100

Activities of the Board

102

Statement on 2023 Annual General Meeting

Resolution Votes Against

104

Purpose, values and culture

105

Division of responsibilities

106

Composition, succession & evaluation

107

Stakeholder engagement

110

s172 statement

117

Nomination Committee

120

Audit, Risk & Ethics Committee

124

Safety & Sustainability Committee

128

Remuneration Committee

130

Letter from the Chair of the Remuneration Committee

133

Workforce reward

136

Remuneration Policy

139

Executive directors’ remuneration

140

Chair of the Board and non-executive directors

152

Directors’ report

153

Group financial statements

Independent auditor’s report

158

Consolidated income statement

168

Consolidated statement of

comprehensive income/expense

169

Consolidated balance sheet

170

Consolidated statement of changes in equity

171

Consolidated cash flow statement

173

Notes to the financial statements

175

Company financial statements

Company balance sheet

246

Statement of changes in equity

247

Notes to the Company financial statements

248

Five year summary

255

Information for shareholders

256

Contents

Our markets

See page 12

Our culture

See page 64

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annual report and financial statements.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Highlights

Simplification to enhance

strategic delivery.

Strategic progress

and strong growth

in the first year o

our strategy.

Upgraded

our outlook.

John Wood Group PLC

Annual Report and Financial Statements 2023

Delivered results in line with

expectations

• Revenue growth across all business

units

• Strong adjusted EBITDA growth

Continued momentum

• Fastest growth in Consulting and

across sustainable solutions

• Order book up 4% to $6.3 billion, up

7% like-for-like

• Double-digit growth in our factored

sales pipeline

• Improving pricing trends across

pipeline, order book and in margin

performance in 2023

• Adjusted operating cash flow

improved to $194 million, up $260

million on last year

Growing our sustainable

solutions business to $1.3 billion

• Sustainable solutions revenue up

15% and represented 22% of Group

revenue

• 43% of factored sales pipeline now

in sustainable solutions

Focus on driving higher margins

• Through continued growth, evolving

our business mix with faster

growth in Consulting, improved

pricing and taking action on cost

Simplification programme to

drive ef

ficiency

• Targeting annualised savings of

around $60 million from 2025

• Initial focus on central costs, with

benefit within FY24 expected to be

around $10 million

• Will improve both adjusted EBITDA

and EBIT margins, and future cash

generation

• Cash costs to complete of c.$70

million over next 12 months,

exceptional P&L charge in FY24

Aligning our portfolio

with our strategy

• Sale process for EthosEnergy

progressing well, smaller disposals

expected to follow

Upgraded 2024 outlook

• Adjusted EBITDA growth towards

the top end of mid to high single

digit target (before disposals)

• Cash performance to continue to

improve

• Net debt at December 2024

expected to be lower than

December 2023 after the expected

proceeds from planned disposals

Upgraded medium-term outlook

• The simplification programme is

expected to add to our growth

potential, leading to adjusted

EBITDA growth in 2025 above our

medium-term target

• We are on-track to deliver

significant

free cash

flow in 2025,

as previously guided

Excluding the Gulf of Mexico labour operations business sold in March 2023. Order book at constant currency.

Sustainable solutions consist of activities related to: renewable energy, hydrogen, carbon capture & storage, electri

fication and electricity transmission &

distribution, LNG, waste to energy, sustainable fuels & feedstocks and recycling, processing of energy transition minerals, life sciences, and decarbonisation in

oil & gas, refining & chemicals, minerals processing and other industrial processes. In the case o

f mixed scopes that include a decarbonisation element, for our

pipeline disclosure we include the proportion of the opportunity that is related to those decarbonisation elements. For our revenue disclosure, we only include

revenue if directly within sustainable solutions, with mixed scopes only included if 75% or more of the scope relates to decarbonisation.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

At a glance

65%

Energy

Oil & Gas | Hydrogen | Carbon Capture

Energy security:

Delivering safe, reliable and

affordable energy

Energy transition:

Enabling a low carbon

energy future

35k+

People

60+

Countries

100+

Years of history

End markets:

27%

Materials

Minerals | Chemicals | Life Sciences

Raw materials demand:

Sustainably deliver

key energy transition minerals and chemicals

Life sciences growth:

Advanced, scalable

manufacturing post-pandemic

A global leader in consulting

and engineering across

energy and materials.

Our vision

Deliver solutions that

transform the world.

Our mission

Remarkable people, trusted

by clients to design, build and

advance the world.

Listen up

Lift others up

Stand up

Team up

Speak up

Don’t give up

Our behaviours

To find out more visit:

woodplc.com/company/our-business

Our values

Everything we do is with an

unwavering commitment to what

we believe in and how we behave:

Care

Commitment

Courage

See more in Our markets section on page 12

Geographic split, share of Group revenue

26%

20%

Europe 26%

Americas 35%

Middle East

& Africa 18%

Asia Pacific 20%

RoW 1%

35%

18%

Other

John Wood Group PLC

Annual Report and Financial Statements 2023

10%

89%

How we are organised

% share of Group revenue

(1)

The Group also includes

Investment Services (4%) that manages a number of legacy activities and liabilities, and includes our

Turbines joint ventures. The most notable areas are activities in industrial power and heavy civil engineering.

Consulting

A focused, premium consultancy

adding value throughout our

clients’ investment lifecycle.

• Technical consulting

• Digital consulting

• Decarbonisation solutions

Projects

Delivering solutions for complex,

high-value capital investments.

• Design: FEED, long-lead

procurement

• Deliver: PMC, EPCm,

detailed design, start-up

• Upgrades and expansions

Operations

Provide essential services that

keep the world’s most critical

industries performing.

• Modifications

• Operations

• Maintenance

• Asset management

$739

Revenue

$80

Adjusted EBITDA

End markets by revenue

Materials 17%

Other 14%

Energy 69%

$2,424

Revenue

$177

Adjusted EBITDA

Materials 51%

Other 6%

Energy 43%

$2,482

Revenue

$165

Adjusted EBITDA

End markets by revenue

Materials 10%

Other 1%

Energy 89%

End markets by revenue

4,055

People

13,549

People

15,561

People

42%

13%

41%

69%

17%

51%

43%

14%

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

A successful

first year o

f our

new strategy.

“I am pleased to say the team made significant

progress in 2023, which is evident from the numbers

we have reported.”

Chair’s statement

Back in 2022, we embarked on a journey

of transformation. The

first steps

included strengthening our balance

sheet through a significant disposal,

addressing legacy issues and appointing

Ken Gilmartin as our new Chief Executive

ficer (CEO). At our capital markets day

in November 2022, we set out our new

three-year profitable growth strategy to

achieve our vision of a new Wood.

While there were distractions, such as

Apollo Global Management’s approaches

in the first

few months of the year, I am

pleased to say the team made significant

progress in 2023, which is evident from

the numbers we have reported.

We delivered revenue and adjusted

EBITDA growth, grew our pipeline and

our order book. Highlights included

double-digit growth across Consulting

and sustainable solutions. Crucially, we

remain well-placed across our focus

markets which offer signi

ficant potential

for the future growth of Wood.

We have now entered the second year of

our strategy and Ken sets out his plans

in more detail on page 08 of this report,

including the simplification programme

we have started to implement to

streamline the business, reduce our cost

base and improve margins. Launching

this programme was a dif

ficult decision

to make, due to the impact on some of

our people, however the Board agreed

the end result of a leaner, more agile and

ficient Wood will lead to long-term

benefits

for all stakeholders.

Roy A Franklin

Chair

John Wood Group PLC

Annual Report and Financial Statements 2023

Financial performance

Our revenue in 2023 of $5.9 billion was

8% higher than last year with good

growth across all our business units. Our

adjusted EBITDA grew by 9% to $423

million, with a margin of 7.2%.

Our statutory results show a loss in

the period of $98 million. This re

flects

exceptional charges taken in the year,

mostly relating to a business area we

exited in 2022, as well as our relatively

high level of interest and tax in this stage

of our turnaround.

The outlook we have set out for 2024 and

beyond shows a continued improvement

in the financial health o

f the company,

our earnings potential, and most

importantly, our cash generation.

Changes to the Board

In August 2023, David Kemp advised the

Board of his intention to retire as Chief

Financial Of

ficer (CFO). Following an

extensive search process, Arvind Balan

was appointed CFO in November 2023

and will join the Board in April 2024.

Arvind brings deep industry experience

in energy and engineering businesses,

strong capital markets and operational

experience, and a record of strategic

financial leadership. On behal

f of the

Board and the company, I thank David

for his years of service and wish him

every success in the future.

In addition to the change in CFO, David

Lockwood OBE joined the Board as a

Non-Executive Director in March 2024.

David brings significant experience

of leading global engineering and

technology companies, has led large-

scale company transformations, and

has consistently delivered value for

shareholders in his career.

In December 2023, Jacqui Ferguson

informed the Board that she will resign

as a Non-Executive Director in May 2024

after our AGM to focus on her other

non-executive roles. We thank Jacqui for

her work over the years and wish her the

best in her future endeavours

Cash recovery and capital

allocation

Our priority remains to return to

generating sustainable free cash

flow

and, with continued growth of operating

cash and the falling away of signi

ficant

exceptional drags, we expect to generate

significant

free cash

flow

from 2025.

Furthermore, the strategic actions we

are taking in 2024 will improve the cash

generation of the Group and provide

increased flexibility in our capital

allocation policy over time

Looking ahead

Wood is well on its path to becoming a

stronger company and we are taking the

necessary steps to continue the progress

that has already been made. The work

that Wood does and the people we

employ are critical to the needs of our

clients and society. I am excited about

the role Wood has to play in designing

the future.

On behalf of the Board and the

Company, I thank you for your continued

support.

Roy A Franklin

Chair

Roy Franklin meets with Wood’s early career network in Houston, Texas.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Chief Executive review

Strong growth in the first year

of our growth strategy

Revenue growth across all

businesses

Group revenue of $5.9 billion was broadly

in line with our guidance, up 8% on last

year (up 9% at constant currency) with

growth across all of our business units,

led by Consulting. This growth shows the

demand that is in our markets for the

consulting and engineering services we

provide. Around a third of our revenue

growth reflected increased pass-through

activity, for which we earn little or no

margin.

Strong adjusted EBITDA growth

Our adjusted EBITDA of $423 million was

up 9% on last year, and up 11% at constant

currency, reflecting the strong revenue

growth combined with an improved margin

of 7.2%. This margin performance re

flects

an improved business mix, as we shift our

business model more and more towards

consulting and engineering services, and

improved pricing across our business. The

margin performance included the increased

opex investments we made to drive future

growth, and the dilutive impact of the

increased pass-through revenue.

Our adjusted EBIT was up 4% on last year

at $185 million, reflecting the growth in

adjusted EBITDA offset by higher lease

depreciation and software amortisation.

Our adjusted diluted EPS was 2.3 cents, an

improvement on (3.1)c in 2022, reflecting

the higher adjusted EBIT and lower finance

costs. Despite an improvement in the year,

our adjusted tax rate remains high and this

is covered in detail in the Financial Review

on page 36.

Statutory results

Operating profit in the year was $38

million compared to an operating loss of

$565 million in 2022, which was impacted

by goodwill and intangible impairments

of $542 million.

Operating profit included $77 million

of exceptional items. These included $5

million of costs related to the unsolicited

bids from Apollo Global Management,

which were booked in the first hal

f of the

year, and the movement in our asbestos

liability. Also included is a $45 million

charge in relation to the Power and

Industrials EPC business which we closed

in 2022. The charge includes a receivable

write down booked in the first hal

f as

well as a provision taken in the second

half of the year relating to an arbitration

claim against Wood. Further details are

included in the Financial Review on pages

34 to 35.

The loss for the period was $105

million, mainly reflecting the low level

of statutory operating pro

fit o

ffset by

finance costs and tax. Our basic earnings

per share was (16.1) cents (FY22: (52.4)

cents).

Strong growth

in first year o

new strategy,

upgrading

outlook.

John Wood Group PLC

Annual Report and Financial Statements 2023

Cash performance re

flects our

turnaround journey

As expected, we saw a significant

improvement in our adjusted operating

cash flow to $194 million. This year-

on-year improvement of $260 million

was driven by higher adjusted EBITDA

and a much-improved working capital

performance.

Our free cash out

flow o

f $265 million

includes $145 million of out

flows related

to exceptional cash items.

Looking ahead, we continue to expect

to grow operating cash at a rate above

the growth in adjusted EBITDA while also

reducing the exceptional cash outflows.

Operating cash generation will be further

strengthened by the actions we are

taking on cost and portfolio, and we

expect to generate significant

free cash

flow

from 2025.

Business momentum

We continue to see good momentum

across our business. Our order book of

$6.3 billion was up 7% on a like-for-like

basis while we saw double-digit growth

in our factored sales pipeline. Our

headcount grew by 1% excluding the Gulf

of Mexico business.

Encouragingly, we continue to see

improvements in pricing. The price of

work in both our pipeline and order

book improved throughout 2023 and

better pricing was a key driver of margin

expansion in the year.

Delivering on our profitable

growth strategy in 2023

We set out our profitable growth

strategy in November 2022 and we are

delivering on each of the three pillars:

inspired culture, performance excellence,

and profitable growth.

1) Delivering an inspired culture

An inspired culture is about creating a

great place to work. During 2023 we put

a real focus on culture and improving

employee engagement. We were pleased

to see a vastly improved employee net

promoter score in our mid-year survey

and a lower level of employee turnover

in professional roles across the Group.

Improving leadership diversity is a key

part of our inspired culture pillar, with

a target of 40% female representation

amongst our senior leaders by 2030. We

have now reached 35%, an improvement

on 32% at December 2022.

2) Delivering performance excellence

Performance excellence is about being

results-focused and delivering across all

of the business. Our order book growth

highlights the work done across all

business units to win new work while

maintaining the bidding discipline crucial

to our strategy. Encouragingly, we have

also delivered improvements in pricing

across the business. We are pleased to

have grown our sustainable solutions

business again, now to around $1.3 billion

of revenue, and representing 43% of our

pipeline. Our Global Execution Centre is

a critical part of delivering performance

excellence for our clients and we now

have over 2,000 employees working in

our centre in India.

3) Delivering profitable growth

Delivering profitable growth is about

building a higher-grade business. We

grew adjusted EBITDA by 9% in the year

despite higher pass-through activity

and the opex investments we made for

growth. This shows the pricing benefits

starting to come through along with

improved operational delivery. Delivering

profitable growth will lead to significant

cash flow generation over time. In 2023

we delivered a substantial improvement

in our operating cash flow as we

continued our cash recovery journey.

We have the right business model in

place

We are now a services-led business

with the majority of our contracts cost

reimbursable (c.80% of revenue) and

the remainder mostly fixed price services

(c.20% of revenue). This contract mix

represents our risk-appetite following our

strategic move away from LSTK activity.

Our markets are attractive

The energy and materials markets offer

significant growth opportunities

for

Wood. We are focused on:

• Large markets with solid growth – Oil

& Gas and Chemicals

• Small markets today with substantial

growth potential – Hydrogen and

Carbon Capture

• Large markets where we can

significantly grow our share – Minerals

and Life Sciences

Together, these six focus markets offer

an addressable market of c.$240 billion

in 2026. We expect to outperform

market growth through continued

market leadership, winning share and a

shift in our business mix over time.

“We made significant

progress in the first

year of our three-year

profitable growth

strategy. The focus in

year one was to return

to growth and deliver

results in line with our

guidance. We achieved

strong growth in adjusted

EBITDA and improved

our margin, both of

which exceeded our

expectations at the start

of the year.”

Ken Gilmartin

Chief Executive

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Ken Gilmartin leads an employee townhall at our Global Headquarters in Aberdeen, UK.

Chief Executive review

continued

Winning work across our markets

During 2023, we continued to win work

across all of our markets, helped by client

demands for solutions that address

energy security, energy transition and

sustainable materials.

Significant contract wins across

Energy

in the year included:

• New global framework agreement

with Shell

• Detailed engineering design for

Woodside’s Trion project in the Gulf of

Mexico

• New strategic partnership with

Harbour Energy, with contracts worth

around $330 million

• c.$250 million contract extension in

Southeast Asia for operations and

brownfield engineering services

Significant contract wins in the year in

Materials

included:

• Collaboration agreement with OMV

for the licensing of its ReOil® plastic

recycling technology

• $50 million capital project delivery

partner contract from GSK in the USA

• FEED and EPCm for Europe’s largest

high purity manganese processing

facility

Our pipeline continues to grow across

both energy and materials, and shows

the diversification o

f the future Group,

with 34% of the pipeline in materials and

64% in energy.

Growing our Consulting business

Our higher-margin Consulting business

saw the strongest growth across

the business in 2023, following a

reorganisation at the start of the year

and increased opex investments to drive

growth. Consulting operates across all

of our end markets, addressing client

challenges across energy, materials

and industrial digitalisation and

decarbonisation. In 2023, Consulting had

sustainable solutions revenue of c.$225

million, helped by our solutions across

hydrogen and carbon capture which

together saw nearly 1,000 pieces of work

awarded in 2023.

Growing our sustainable business

Wood is an enabler of net zero, providing

solutions across decarbonisation, energy

transition and materials for a net zero

world. We generated around $1.3 billion

of sustainable solutions revenue in 2023,

up 15% on last year. Sustainable solutions

now represent 22% of revenue and 43%

of our factored sales pipeline.

In addition to the excellent progress we

are making on growing our sustainable

solutions business, we continue to deliver

against our ESG strategy. We reduced

our scope 1 & 2 carbon emissions by

71%, ahead of our 2030 target of a 40%

reduction from our 2019 baseline, and

we continued to progress leadership

diversity. Our progress across ESG was

once again reflected in our MSCI AA

rating, awarded for the ninth consecutive

year, and the maintenance of our top

quartile ranking against peers.

John Wood Group PLC

Annual Report and Financial Statements 2023

Simplification to enhance our

strategic delivery

To build on the progress made in the first

year of our three-year strategy, we have

launched a simplification programme

to enhance our strategic delivery and

support margin expansion.

Driving margin expansion

We will drive higher margins, both

adjusted EBITDA and EBIT, through:

• Continued growth

– continuing to

deliver scale benefits as we grow

• Evolution of our business mix

–

continued shift to services-led model

and higher growth in Consulting

• Improved pricing

– reflecting the

selectivity of work and the signi

ficant

demand for our expertise

• Taking action on cost

– simplification

programme to create a leaner and

more ef

ficient Wood

Simplification programme

We have set out a simplification

programme to help us deliver higher

margins while remaining focused on

business growth. This programme will:

• Right-size our central functions

–

by putting greater ownership and

accountability for functional activities

into the business units, and reducing

the number of central function roles

• Simplify the way we work

– by

reducing complexity in our functional

structure, processes and procedures,

and expanding our shared services

model

• Deliver IT savings

– building on the cost

savings announced previously

• Reduce property costs

– cost savings

announced previously that will reduce

our property portfolio

This programme is expected to generate

annualised savings of around $60 million

from 2025, with a bene

fit in FY24 o

around $10 million. The costs to achieve

this programme are expected to be

around $70 million with an exceptional

item to be recognised in our first hal

results. The cash impact is expected to

be around $50 million in FY24, weighted

to the first hal

f, and around $20 million

in FY25.

Aligning our portfolio with our

strategy

We continue to evaluate our portfolio

and identified certain businesses deemed

non-core to our strategic growth

and priorities. The largest of which is

EthosEnergy, a joint venture within

Investment Services. We announced in

January 2024 that we had started the

sales process for EthosEnergy and have

made good progress to date. We are also

actively exploring options for a number of

other small businesses in our portfolio.

Upgraded 2024 outlook

Adjusted EBITDA is expected to grow

towards the top end of our mid to

high single digit medium term target,

before the impact of disposals. Our

adjusted EBITDA margin is expected

to expand in 2024, driven by topline

growth, an evolving business mix and

improved pricing, plus the c.$10 million

in-year benefits o

f our simpli

fication

programme.

Performance in 2024 will be weighted

to the second half, re

flecting the typical

seasonality of our business and the

phasing of the in-year bene

fit o

f the

simplification programme.

Our cash performance is expected to

continue to improve with operating cash

growing at a faster rate than adjusted

EBITDA. This will help deliver positive

free cash

flow be

fore exceptional cash

flows. These exceptional cash flows are

expected to be around $120 million and

will be weighted to the first hal

f. They

now include c.$50 million related to the

delivery of the simpli

fication programme.

Net debt at December 2024 is expected

to be lower than December 2023 after

the expected proceeds from planned

disposals.

Upgraded medium-term outlook

The simplification programme is

expected to add to our growth potential,

leading to adjusted EBITDA growth in

2025 above our medium-term target.

We will continue to expand our adjusted

EBITDA margin and that benefit will

translate into our EBIT margins and

support a significant increase in our

earnings per share over the medium

term.

We are on-track to deliver significant

free cash

flow in 2025, as previously

guided. Our sustainable free cash

flow

generation from 2025, combined with

proceeds from disposals, will provide

increased flexibility in our capital

allocation policy.

Executive Management Team

changes

Marla Storm joined Wood in January

2024 as Chief Human Resources Of

ficer

(CHRO), replacing Lesley Birse who

has retired. Michael Rasmuson joined

Wood in January 2024 as Group General

Counsel, replacing Martin McIntyre, who

will remain as Company Secretary until

a successor for this role is appointed.

Arvind Balan will join as CFO in April

2024, replacing David Kemp who will

retire. Marla and Michael are based in

Texas, USA, and Arvind will be based in

London, UK.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Our markets

Oil & Gas

Our focus is on onshore and offshore production, gas processing and pipelines

where our clients continue to invest in new and ageing assets, often to improve

ficiency and reduce emissions.

Minerals

Our focus is primarily on minerals for net zero and the clean energy transition

for example; copper, nickel and lithium.

Hydrogen

Our focus is on low carbon hydrogen production in the belief that it will be a key

part of the energy mix by 2050. We expect increased spend for new-build and

retrofit

facilities further incentivised by the US In

flation Reduction Act.

Chemicals

Our focus is on prioritising complex integrated petrochemicals facilities and

selected specialty chemicals. The specialty chemicals market is growing due to

the focus on eco-friendly products and advanced materials.

Carbon Capture

Our core focus in the short term is on capturing carbon from oil and gas and

petrochemical facilities as well as supporting carbon dioxide distribution and

storage. In the medium term we see opportunities to apply this expertise at scale

to iron, steel, cement and waste facilities. We also see longer-term emerging

opportunities to apply our expertise to iron, steel, cement and waste facilities.

Life Sciences

Our focus is on on-shoring trends, particularly in North America where our

strong engineering and major project delivery capability coupled with digital

solutions offers a differentiated approach.

Materials

We are leaders in materials

processing and production,

applying circular economy

practices to deliver critical

materials sustainably and

responsibly as we strive for

net zero.

Energy

We are leaders in energy –

ensuring safe, reliable and

affordable energy while

enabling a lower carbon

energy future.

Our cross cutting drivers:

Decarbonisation

Speed, scale and smart solutions are all required to deliver a net zero future.

Decarbonisation is key to addressing climate risks and building a more

sustainable world. It's also important to our clients and presents a tremendous

growth opportunity for Wood.

We operate across:

John Wood Group PLC

Annual Report and Financial Statements 2023

Market drivers

Energy transition

Supportive policy

Technology advancement

Transition to net zero

Improving economics

Supportive policy

Transition to net zero

Supportive policy

Technology advancement

Consumer demand

Circular initiatives

Transition to net zero

Consumer demand

On-shoring commitments

Ageing populations

Addressable

market (2026)

Market CAGR:

2023-2026

Energy security

Energy decarbonisation

Robust commodity prices

$129

52%

$23

$52

$27

Changes to market

outlook in 2023

• Lower growth in Oil and Gas

following a very strong 2023

• Oil and Gas push to

decarbonise existing assets

and focus on energy security

• Inflation Reduction Act (IRA)

in the US driving increased

investment in clean energy

• Strong demand for

sustainable minerals & metals

driven by net-zero targets and

materials needed for energy

transition

• Drive towards safer chemicals

for sustainability

• Increased on/near shoring of

critical life sciences facilities

Digitalisation

As consultants and engineers armed with data, technology and digital solutions,

we work independently to offer something our consulting and technology

competitors don’t: decades of experience in designing and building our clients’

assets, and decades of integrating digital solutions.

1. Oil & Gas refers to upstream

and midstream. Chemicals

excludes refining

2. Addressable market sizes

estimated using secondary

sources

3. Market CAGR assumptions

shown are nominal growth

rates based on a range of global

inflation assumptions

from 0%

to 2.5%

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

What we do

Our work with developers:

We provide hydrogen developers with

solutions that support the economic

production and transport of low-

carbon hydrogen.

Our proprietary technology:

We offer technology solutions that

enable clients to produce hydrogen

from fossil fuels in a cost-effective

manner, while minimising CO2

emissions.

Example projects

Blue hydrogen:

• Centrica, UK

Green hydrogen:

• CIP, Catalina project, Spain

• H2med pipeline, Spain & France

What we do

We bring technical and commercial

solutions that enable clients to

safely capture CO2, transport and

permanently store it, or unlock

value by re-using it for alternative

purposes.

Example projects

Capture:

• Storegga, Acorn, UK

Transport & Storage:

• Pathways Alliance, Canada

Our sustainable solutions

We offer a range of sustainable solutions across

both the

Energy and Materials

markets.

Energy

Decarbonisation across all markets

What we do

We provide advisory, project

development, and project execution

services for wind, solar, and energy

storage projects, having stopped EPC

renewables work in Projects.

Example projects

• Owner’s engineer for battery energy

storage project, CIP Coalburn

• Construction management

services for onshore wind project,

Aer Solier, Vermio

• Lender’s technical advisor for

offshore wind projects, CIP,

Vineyard Wind

Renewable energy

Carbon capture

Hydrogen

Energy transition

What we do

We have broad experience in gas

monetisation, the delivery of world-

class LNG projects, optimisation

consulting as well as ongoing asset

management, maintenance and

operations. This is a relatively small

part of our energy offering.

Example projects

• Cameron LNG, expansion project,

LNG

Power

Electrification

Battery storage

What we do

Wood has a history of study and

design work for clean power

generation and has performed

projects for various forms of energy

storage, including battery energy

storage, compressed air energy

storage, thermal energy storage, and

liquid air energy storage.

Example projects

Electrification:

• OGCI, refinery study, UK

• Petrobras offshore electri

fication

study, Brazil

Battery storage:

• CIP, Coalburn project, UK

(500MW+ BESS)

• Waste heat recovery project for

power generation

• Detailed design for biomass power

generation facility

John Wood Group PLC

Annual Report and Financial Statements 2023

What we do

Supporting mining clients, our focus

is on minerals supply for net zero

and the clean energy transition

for example: copper, nickel and

lithium. We have a passion for

driving forward minerals and metals

projects that are critical to our

future and delivering them safely,

cost-ef

ficiently and responsibly.

Example projects

• Euro Manganese, Czech Republic

• Teck Resources Carbon Capture,

Canada

• Arcadium Lithium, Argentina

What we do

Our expertise creating waste to

energy solutions ranges from small

commercial heat generation to

large industrial heat and power

plants that process a wide range of

feedstock to materials that would

traditionally have been treated as

waste.

Example projects

• Afri-Link and BERUDA, Cameroon

• Cuantec, UK

What we do

At Wood, we help our clients

accelerate the design, construction

and qualification o

f their complex

facilities. We apply expertise and

solutions to deliver high-performing

and sustainable projects.

Example projects

• GSK, US

• Pfizer, US

• Australian Institute for Infectious

Diseases, Australia

What we do

With a strong belief that an

effective circular economy can help

to further the pursuit of net zero,

Wood is working with our clients

to deliver innovative, commercially

attractive materials recycling

solutions with a focus on plastics

and waste to energy projects.

Example projects

• OMV, Plastics recycling

agreement, Austria

What we do

We deliver solutions enabling

the development of sustainable

fuels and materials through the

application of low carbon processes

and utilisation of sustainable

feedstocks.

Example projects

Sustainable fuels:

• Renewable Energy Group

biodiesel, US

• Preem, Sweden

• EPRI, SAF production cost and

performance study

Around $1.3 billion revenue

in 2023, up

15%

Revenue

share of

Group

Pipeline

share of

Group

Materials

Sustainable materials

22%

43%

Decarbonisation across all markets

Minerals processing

Energy transition materials

Waste to energy

Life sciences

Materials recycling

Sustainable

fuel/feedstocks

Life Sciences

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Our strategy

Profitable growth

A higher grade business

Growth in priority markets and geographies

focusing on low project risk, high quality

earnings and sustainable free cash

flow.

Creating a great place to work

Investing in creating a great place to work.

This means prioritising employee wellbeing,

doing the right thing, putting sustainability

at the heart of our business and empowering

each other to design the future.

Results focused and delivering for clients

Focused on delivering for our clients.

Maintaining the highest level of ethical

standards and the best quality as we deliver

innovative, sustainable and reliable solutions

to solve complex problems for our clients.

Inspired culture

Performance excellence

Delivered across three pillars:

The markets we choose to operate in give us significant

potential for growth. We anticipate our addressable

markets to be around $240 billion in 2026

Our selective and focused approach:

Market attractiveness

Where we play:

We target large markets where we can achieve

good margins and where we have strong client

relationships to accelerate growth.

Where we play:

We target markets where we hold a leading

position based on core capabilities, an ability to

scale talent and a strong geographic footprint.

Where we play:

We target projects that meet our preferred low

risk profile and pre

ferred contracting model. We

no longer pursue lump sum turnkey projects and

have exited large-scale EPC projects.

Our ability to win

Contracting dynamics

c.$240bn

2026 total addressable market in

core geographies

Our focus:

Large markets with

solid growth

Oil & Gas

Delivering energy

security

Chemicals

Rising global demand

Large markets where

we will significantly

grow our share

Minerals

Delivering energy

security

Life Sciences

Rising global demand

Small markets with

substantial growth

Hydrogen

Enabling energy

transition

Carbon Capture

Enabling energy

transition

John Wood Group PLC

Annual Report and Financial Statements 2023

Addressable market sizes estimated using

secondary sources

Net Promoter Score (NPS) is a customer

loyalty and satisfaction measurement taken

from asking customers how likely they are to

recommend your product or service to others

on a scale of 0-10. 2022 data

Based on 2022 contractor and design firm

revenue from general building as reported in

ENR’s (Engineering News-Record) surveys of

leading contractors and design firms.

www.enr.com

See more in Our markets section on page 12

Based on our strong competitive positions across our markets:

Outstanding

global expertise

Long-term client

relationships

Highly valued

by clients

Top global

engineering firm

World class subject matter experts

and engineers.

Decades long relationships with major

clients including Exxon, Chevron, Shell,

BP, Dow, GSK.

NPS 20% higher than market average

Ranked first amongst nine closest peers.

Top five ENR design rankings: North America,

Petroleum, Industrial and Manufacturing.

>35,000

people

>90% repeat

business

20%↑

NPS

ENR top 10

global

Delivering our

medium-term targets:

Adjusted EBITDA

to grow at

mid to high single digit CAGR

over the medium term, with

momentum building over time

as our strategy delivers

Generate

sustainable free

cash flow

See our progress in the CEO

review report on page 8

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Progress against our strategy

We made good progress against our strategy in 2023 across all three pillars.

See more in Our markets section on page 12

Our pillars:

Profitable

growth

Performance

excellence

Inspired

culture

Our strategy

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

Medium-term targets:

• Adjusted EBITDA mid to high

single digit CAGR

• Strong operating cash flow

• Return to positive free cash

flow

• Focus on reimbursable contracts

2023 progress:

Future focus:

• Adjusted EBITDA up 11%

• Significant improvement in

operating cash flow

• Deliver adjusted EBITDA

growth at upper end of

medium-term target

• Simplification programme to

support margin expansion

• Positive cash before

exceptionals

• Improve employee engagement

• Lower voluntary turnover

• Reduce recordable safety incidents

• 40% leadership female by 2030

• Higher employee NPS

• Lower voluntary turnover

across professional roles

• 35% leadership female (vs. 32%

at Dec 2022)

• Continual focus on safety

• Enhance employee experience

• Further increase diversity

• Continue SME recruitment

• Grow order book

• Increase use of Global Execution

Centres (GEC)

• Consistent Project outcomes

• Increase % sustainable solutions

• Order book up 7%

• GEC headcount over 2,000

• Sustainable solutions up 15%,

now 43% of pipeline

• Continued focus and discipline

in where we bid

• Further GEC growth

• Continue to grow sustainable

solutions

See more in Chief Executive review on page 08

At constant currency

At constant currency and excludes Gulf of Mexico labour operations business sold in March 2023

Medium-term targets:

2023 progress:

Medium-term targets:

2023 progress:

Future focus:

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Our relationships

and resources

Our business model

What we do

We create value by delivering differentiated

consultancy and engineering solutions across

the energy and materials markets.

We are an engineering and consultancy business providing

solutions to clients across the lifecycle of their projects.

Working together

to bring critical

solutions to clients

How we work with our clients

One of our key strengths is our ability to form long-term, strategic

partnerships with our clients, in some cases we have been working

together for multiple decades.

Our contractual engagements vary from short-term consultancy lasting

a few weeks, to long-term frame agreements lasting multiple years.

Typically our contracts are split into two broad categories:

• Cost reimbursable

• Fixed price services

Wood Core Industries Survey

(N=250) and Key Markets Survey

(N=250). Expert interviews

conducted by independent

consultant conducted in 2022

Highly valued

by clients

Rated at top of

closest peers.

Read more about strong competitive

positions across our markets on page 12

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Laying the

groundwork for

critical hydrogen

infrastructure

Wood is working with gas distribution

company, SGN, to accelerate plans for

key hydrogen transmission infrastructure

in Scotland and southern England that

supports the UK’s commitment to net

zero by 2050.

Wood is delivering three pre-FEED

studies to determine the route and

design of new dedicated hydrogen

pipelines and associated transmission

infrastructure. The proposed concept

also repurposes existing natural gas

infrastructure, which will link hydrogen

producers with energy users seeking

to use hydrogen to lower their carbon

emissions.

The H2 Caledonia project combines

two pre-FEED projects in Scotland’s

Central Belt and Fife’s East Coast. These

projects will explore the development of

low carbon hydrogen production across

Scotland, and will integrate with the

ongoing Aberdeen Vision study, where

Wood is also completing the pre-FEED.

In central southern England, the H2

Connect project will develop an optimal

design to connect a hydrogen network

in the area.

The project will focus on the

development of hydrogen

infrastructure and imports in the

Southampton/Solent region, and

future expansion plans for hydrogen

production and storage.

World’s first green

hydrogen gas grid

delivering 100%

renewably-generated

hydrogen for domestic

heating.

Find out more:

John Wood Group PLC

Annual Report and Financial Statements 2023

Wood and Harbour Energy (Harbour),

the UK’s largest oil and gas producer,

entered into a strategic partnership

for UK North Sea operations in 2023,

agreeing a new master services

agreement and associated contracts

valued at around $330 million.

Under this new agreement, Wood is

providing engineering, procurement

and construction and operations and

maintenance services, including digital

and decarbonisation solutions, for several

of Harbour’s offshore assets critical to

UK energy security.

The strategic partnership will run for

an initial term of

five years, with five

one-year extension options covering

Harbour’s operated assets, including its

J-Area, Greater Britannia Area, Solan

and AELE (Armada, Everest, Lomond

and Erskine) hubs.

year client relationship

50+

Designing and managing the complexity

of energy infrastructure while at

the same time seeking to minimise

associated emissions, Wood’s role as a

trusted technical partner to the energy

companies of the future is evident

through this agreement.

This partnership is supporting the

employment of hundreds of people from

Wood’s Operations business in Aberdeen

and offshore across the two EPC and

O&M contracts, with further recruitment

expected in 2024.

This agreement builds upon Wood’s

longstanding working relationship with

Harbour, having worked on the operator’s

North Sea assets for more than 50 years.

Trusted

technical

partner

to energy

leaders

Find out more:

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

To help the Group assess its performance, our Executive Leadership Team sets targets

and monitors and assesses performance against these targets on a regular basis.

Adjusted EBITDA

Free cash flow

Key performance indicators

Linking our KPIs to our strategy

These are the three strategic pillars of our focus to meet the needs of three

important stakeholder groups – our employees, our clients and our shareholders.

For more information on our

financial

performance see page 32

Measuring our performance

Adjusted EBITDA margin

Performance excellence

Profitable growth

Inspired culture

1. 2022/23 reflect continuing group

Financial:

Adjusted earnings before interest,

tax, depreciation and amortisation.

A reconciliation of adjusted EBITDA

is shown in note 1 to the financial

statements.

2023 performance:

Adjusted EBITDA

was 9% higher than last year, up 11%

at constant currency. We saw good

growth across Consulting, Projects,

Operations and Investment Services.

Target:

To grow at mid to high single

digit CAGR, momentum building as our

strategy delivers.

2021

554

2019

855

630

2020

2022

388

2023

423

Adjusted EBITDA as a percentage

of revenue.

2023 performance:

Adjusted EBITDA

margin of 7.2% compared to 7.1%

last year. This includes an increase in

Operations margin from 6.1% to 6.7%,

partially offset by a lower margin in

Consulting that includes the impact from

exiting work in Russia.

Target:

To expand margins in the medium

term.

2021

8.6

2019

8.3

2020

2022

7.1

2023

7.2

Free cash flow is defined as all cash

flows be

fore 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 IFRS 16 (Leases) accounting.

A reconciliation of free cash

flow to our

statutory cash flow is shown on page 38

of the

financial review.

2023 performance:

Free cash flow o

$(265) million includes a working capital

outflow o

f $54 million and exceptional

cash costs of $145 million.

Target:

To generate sustainable free cash

flow.

2020

2021

(398)

193

2019

(46)

2022

(704)

2023

(265)

John Wood Group PLC

Annual Report and Financial Statements 2023

Total recordable incident rate (TRIR)

per 200,000 work hours

For more information on our safety

performance see page 78

Lost time incident rate (LTIR)

per 200,000 work hours

Revenue from sustainable solutions

$bn

Order book

In 2023 our target was to have zero

incidents that resulted in fatality or

permanent impairment.

2023 performance:

We had one FPI in

the year. Sadly, one of our colleagues

lost their life in a work-related incident,

at a power plant in Kentucky in the

United States.

Fatality & Permanent Impairment (FPI)

Financial:

Safety:

Measure of sustainable solutions as a

proportion of total revenue. Sustainable

solutions consist of activities related

to decarbonisation activity, renewable

energy, hydrogen, carbon capture &

storage, power & electrification, battery

storage and LNG. In the case of mixed

scopes including a decarbonisation

element, these are only included in

sustainable solutions if 75% or more of

the scope relates to that element.

2023 performance:

In 2023, around

$1.3bn of Group revenue came from

sustainable solutions, representing about

22% of Group revenue. This is the second

year we have measured this metric.

Target:

To grow our revenue from

sustainable solutions, and increase as a

share of Group revenue.

2021

2019

2020

2022

1.1

2023

1.3

We continued to monitor performance

using traditional safety metrics to

compare data with previous years.

Total recordable incident rate is the

total of lost time incidents, restricted

work cases and medical treatment

cases per 200,000 exposure hours.

Performance is based on a rolling

12-month frequency rate and is inclusive

of contractors working under Wood’s

management system.

2023 performance:

TRIR performance

declined marginally in 2023 with our

TRIR increasing to 0.18 from 0.17 in

2022.

2021

0.18

2019

0.17

2020

2022

0.17

2023

0.18

LTIR measures lost time incidents per

200,000 exposure hours and is inclusive

of contractors working under Woods

management system.

2023 performance:

In 2023 we saw an

increase in the number of incidents that

required our people to have time off work

as a result of their injuries, As a result,

our LTIR marginally increased to 0.04

from 0.03.

2021

0.02

0.04

2019

0.04

2020

2022

0.03

2023

0.04

Order book is presented as an indicator

of the visibility of future revenue, showing

the orders the Group has to deliver in

future periods. 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. It does not

include Wood’s proportional share of JV

order book.

2023 performance:

Up 5% at constant

currency, with strong order book

growth in Consulting and Operations.

Lower order book in Projects reflecting

weakness in minerals and move away

from largescale EPC in renewables and

chemicals.

Target:

To grow our order book each year.

2019

2021

7,748

7,898

2020

6,524

2022

6,017

2023

6,269

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Key performance indicators

continued

Measuring our sustainability performance

Our goal is to be leaders in our field in environmental, social and governance (ESG) matters and

sustainability. To assess our performance in addressing the matters that are most important

to our business and key stakeholders, our leadership team sets targets, aligned to the UN

Sustainable Development Goals and regularly monitors progress towards these targets.

ESG ratings (MSCI)

Delivering

our purpose:

Client support aligned to energy

transition & sustainable materials

Cumulative revenue growth from

sustainable solutions in energy transition

and sustainable materials markets, from

a 2021 baseline. Sustainable solutions

are as defined in note 9 o

f the

financial

review on page 41.

2023 performance:

18% cumulative

growth in sustainable solutions revenue

compared to our 2021 baseline.

Target:

To double revenue from

sustainable solutions in energy transition

and sustainable materials markets by

2030, from a 2021 baseline.

Status:

On track

2021

baseline

2022

18%

2023

Read more on pages 44-45 and 69

2023

35%

2020

31%

33%

2021

32%

2022

This target is included within our

long-term incentive plan, read more

on pages 135 and 151

John Wood Group PLC

Annual Report and Financial Statements 2023

Global Cause contributions

$m cumulative contributions

Embedding fair

working practices:

Labour suppliers signed up to

Building Responsibly

Percentage of labour suppliers and

total suppliers signed up to the Building

Responsibly Principles. Embedding the

Building Responsibly principles in our

supply chain ensures we create ethical

partnerships that protect worker welfare

and helps to reduce our exposure to

potential human rights violations.

2023 performance:

73% of labour

suppliers are now signed up to the

Building Responsibly Principles.

Target:

100% of Wood labour suppliers

Responsibly Principles by 2025.

Status:

On track

73%

2023

Total suppliers signed up to

Building Responsibly

Managing our

environmental impact:

Scope 1&2

emissions reduction

Measure of the absolute reduction in

scope 1 and 2 Greenhouse Gas (GHG)

emissions reduction from a 2019 baseline.

2023 performance:

Following the sale

of our Built Environment Consulting

business in September 2022 we revised

our 2019 baseline figure in accordance

with the GHG Protocol. In 2023 we

achieved a 71% reduction in scope 1

and 2 GHG emissions compared to our

updated 2019 baseline, which is an 9%

reduction compared to the prior year.

Target:

40% reduction in scope 1 and 2

GHG emissions by 2030, compared to a

2019 baseline.

Status:

Ahead

2022

69%

2019

baseline

34%

2020

60%

2021

2023

71%

Number of Wood of

fices that have

eliminated single use plastics.

2023 performance:

17% of Wood of

fices

have been assessed as single use plastic-

free.

Target:

To ensure all Wood of

fices are

single use plastic-free by 2025.

Status:

Area for increased focus in 2024

2022

17%

2023

Plastics

elimination

Read more on page 59

This targets is included within our long-term

incentive plan, read more on pages 135 and 151

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Our Consulting business provides technical consulting, digital

consulting, and energy asset development. It also provides

decarbonisation and digital solutions that open opportunities

across our other business units.

Revenue of $739 million was 13% higher than last year, with

strong growth across both technical consulting and digital

consulting in both our energy and materials markets.

Adjusted EBITDA of $80 million was 4% higher than last year

and 6% higher on a constant currency basis, reflecting the

revenue growth offset by a lower margin. The lower adjusted

EBITDA margin of 10.8% partly re

flects the exit o

f high-margin

work in Russia in 2022, as well as the opex investments we

made to secure future growth.

The order book at 31 December 2023 was $529 million, up 11%

on last year.

Operational review

Consulting completed an internal restructure at the start of

2023 and made significant opex investments to better align with

the growth trends across technical consulting, digital consulting

and decarbonisation.

Across our markets, Consulting saw double-digit growth across

both energy and materials and 47% growth in sustainable

solutions, helped by demand for our renewables and

decarbonisation consulting solutions.

Key awards in the period across Consulting included:

• Feasibility study in Europe looking at converting natural gas

pipelines for hydrogen transportation

• Supporting Chevron Renewable Energy Group’s Biorefinery

• Pre-FEED work on SGN’s high pressure hydrogen pipelines

Sustainable solutions revenue was c.$225 million, up 47% and

represented around 30% of Consulting revenue.

Outlook for 2024

Following the opex investments made in 2023, we expect

Consulting to have the strongest adjusted EBITDA growth

in the Group, supported by good revenue growth and

an expansion in margin, weighted to the second half as

performance and pricing bene

fits ramp up.

Technical and digital

advisory business adding

value throughout our clients’

investment lifecycle.

Azad Hessamodini

Executive President, Consulting

Consulting

Revenue

(2022: $652m)

13.3%

Adjusted EBITDA margin

10.8%

Order book

$529m

Markets:

% of Group revenue:

69%

Adjusted EBITDA

$80m

(2022: $76m)

4.4%

(2022: 11.7%)

(0.9)ppts

(2022: $476m)

11.1%

Segmental review

Materials

Energy

Other

$739m

13%

17%

14%

John Wood Group PLC

Annual Report and Financial Statements 2023

Craig Shanaghey

Executive President, Projects

Delivering solutions for

complex, high-value capital

investments.

Revenue

$2,424m

(2022: $2,211m)

9.6%

Adjusted EBITDA margin

7.3%

Order book

$2,026m

Markets:

% of Group revenue:

41%

Adjusted EBITDA

$177m

(2022: $169m)

5.0%

(2022: 7.6%)

(0.3)ppts

(2022: $2,081m)

(2.6)%

Our Projects business mainly provides complex engineering

design and project management across energy and materials

markets including oil and gas, chemicals, metals and minerals

and life sciences.

Revenue of $2,424 million was 10% higher than last year. The

business saw strong growth across oil and gas and chemicals

offsetting the run-down of our LSTK and large-scale EPC

activities and lower revenue in minerals. Over half of the revenue

growth came from the increase in pass-through revenue.

Adjusted EBITDA of $177 million was 5% higher than last year.

This reflected the revenue increase combined with a lower

margin of 7.3%. The lower margin includes the impact of

higher pass-through revenue, for which we receive nil or a small

margin, and increased opex investments made in the year.

The order book at 31 December 2023 was $2,026 million,

down 3% on last year reflecting our shi

ft away from LSTK and

largescale EPC, and lower orders in our minerals business.

Operational review

The strategic move away from LSTK and largescale EPC is now

complete and is reflected in the lower headcount. We continue

to grow our services-led business model across energy and

materials.

Business growth was balanced across both energy and

materials market. Key awards in the period included:

• Collaboration agreement with OMV for the licensing of its

ReOil® plastic recycling technology

• FEEDs for ADNOC’s and QatarEnergy’s gas facilities in the

Middle East

• Detailed engineering design for Woodside’s Trion project in

the Gulf of Mexico

• Significant li

fe sciences engineering contract in the USA with

GSK worth c.$50 million

• Brownfield engineering contract to help produce active

pharmaceutical ingredients in Europe

• Supporting one of the world’s largest offshore clean power

projects in Germany

Sustainable solutions revenue was c.$730 million, up 10% and

represented c.30% of Projects revenue despite a reduction in

loss-making LSTK activity in renewables.

Outlook for 2024

We expect moderate revenue and adjusted EBITDA growth,

weighted to the second half given the phasing of new orders

and our continued shift away from LSTK and largescale EPC

work. Our adjusted EBITDA margin is expected to expand as the

year progresses.

Projects

Materials

Energy

Other

41%

43%

51%

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Steve Nicol

Executive President, Operations

Essential services keeping

the world’s critical industries

performing.

Revenue

$2,482m

Adjusted EBITDA margin

6.7%

Order book

$3,605m

Markets:

% of Group revenue:

42%

Materials

Energy

Adjusted EBITDA

$165m

(2022: $2,407m)

3.1%

(2022: $148m)

11.9%

(2022: 6.1%)

0.5ppts

(2022: $3,295m)

9.4%

Operations

Our Operations business manages and optimises our

customers’ assets including decarbonisation, maintenance,

modifications, brownfield engineering, and asset management

through to decommissioning.

Revenue of $2,482 million was 3% higher than last year, and 4%

higher at constant currency. This reflects continued increases in

activity levels in oil and gas across Europe, the Middle East and

Asia-Pacific. Revenue growth also includes an increased level o

pass-through revenue and the impact of the sale of the Gulf of

Mexico labour operations business in the period.

Adjusted EBITDA of $165 million was 12% higher than last year,

and 16% higher at constant currency, reflecting the revenue

growth and an increased margin of 6.7%. This margin increase,

despite higher pass-through revenue, mainly reflects improved

overall contract performance and some improved pricing.

The order book at 31 December 2023 was $3,605 million, 9%

higher than last year and reflects the expected strong final

quarter for bookings. Excluding the Gulf of Mexico offshore

labour operations business, the order book was up 15% at

constant currency.

Operational review

Operations continued to benefit

from higher activity levels

across geographies. Key awards in 2023 included:

• New strategic partnership with Harbour Energy for its UK

North Sea operations, with associated contracts for

five

years (with five one-year extensions) worth around $330

million

• c.$250 million contract extension in SE Asia for operations

and brownfield engineering services

• Brownfield modifications

for bp’s Murlach development in the

North Sea

• Brownfield EPCm contract with Woodside in Australia

• Two-year operations contract extension with Equinor in the

Mariner field in the North Sea

Sustainable solutions revenue was c.$260 million, up 15% and

representing around 11% of Operations revenue.

Outlook for 2024

We expect moderate revenue and adjusted EBITDA growth

throughout the year.

Segmental review

continued

Other

89%

10%

John Wood Group PLC

Annual Report and Financial Statements 2023

Our Investment Services business unit manages a number of legacy

activities and includes our Turbines joint ventures. The most notable

areas are activities in industrial power and heavy civil engineering.

Revenue of $255 million was 28% higher than last year. This

growth primarily reflects strong activity growth in our heavy

civils business and the transfer of a facilities business into

Investment Services in 2023 from Projects.

Adjusted EBITDA of $77 million mostly represents the share

of results from our Turbines joint ventures of $65 million, up

significantly on last year with a strong per

formance across both

EthosEnergy and RWG. Excluding these Turbine JVs, adjusted

EBITDA was down significantly.

The order book at 31 December 2023 was $109 million, down

34% on last year.

Outlook for 2024

We expect the contribution from Investment Services to be

broadly flat in 2024, with the per

formance of our Turbine JVs

weighted to the second half as is typical in these businesses.

Investment Services

Central costs, not allocated to business units, increased

slightly to $76 million, with cost reductions mostly offsetting

inflationary pressures.

Outlook for 2024

We expect to see a reduction in central costs of around $10

million from the bene

fits o

f our simpli

fication programme.

Central Costs

Revenue

$255m

(2022: $199m)

28.4%

Adjusted EBITDA margin

30.2%

Order book

$109m

Adjusted EBITDA

$77m

(2022: $69m)

11.2%

(2022: 34.9%)

(4.7)ppts

(2022: $164m)

(33.6)%

Adjusted EBITDA

$(76)m

(2022: $(74)m)

(3.7)%

Wood was awarded a multi-year enterprise framework

agreement to continue to provide services to Shell’s global

projects in 2023. Building on Wood’s 70-year relationship

with Shell, the companies have worked on numerous

major and complex projects spanning across more than 20

countries.

Bringing specialist consulting, engineering, procurement

and project management expertise to Shell’s greenfield

and brownfield projects, Wood will continue to support

projects that ensure energy security and enable energy

transition projects focused on carbon capture, low-

carbon fuels and hydrogen. Wood will deploy expertise in

decarbonisation, digitalisation and asset life extension to

enhance Shell assets worldwide.

Under this three-year framework, with options for two

one-year extensions, services will be provided by Wood’s

consulting and engineering teams in Europe, North

America, Latin America, South-East Asia, Australia and

the Middle East.

Ensuring

energy security

while enabling

the energy

transition

Find out more:

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Financial review

Delivered

strong growth.

“We delivered growth across all business units and an

improved margin performance. Looking ahead to 2024,

adjusted EBITDA is expected to grow towards the top end

of our mid to high single digit medium term target, before

the impact of disposals. Our adjusted EBITDA margin is

expected to expand in 2024, driven by topline growth, an

evolving business mix and improved pricing, plus the in-year

benefits o

f our simpli

fication programme.”

David Kemp

CFO

John Wood Group PLC

Annual Report and Financial Statements 2023

Trading performance

Trading performance is presented on the basis used by

management to run the business with adjusted EBITDA

including the contribution from joint ventures. Revenue does

not include any contribution from joint ventures. A reconciliation

of adjusted EBITDA and adjusted EBIT to operating pro

fit is

included below. A calculation of adjusted diluted EPS is shown

on page 33.

2023

2022

(re-presented)

Continuing operations

Revenue

5,900.7

5,469.3

Adjusted EBITDA

422.7

388.2

Adjusted EBITDA margin %

7.2%

7.1%

Depreciation (PPE)

(26.2)

(29.3)

Depreciation on right of use asset (IFRS 16)

(103.1)

(90.5)

Impairment of joint venture investments

and property, plant and equipment

(1.8)

(2.4)

Amortisation – software and system

development

(106.6)

(89.0)

Adjusted EBIT

185.0

177.0

Adjusted EBIT margin %

3.1%

3.2%

Amortisation – intangible assets from

acquisitions

(54.5)

(64.4)

Tax and interest charges on joint ventures

(16.3)

(14.3)

Exceptional items

(76.7)

(121.2)

Impairment of goodwill and intangible

assets

(542.3)

Operating profit/(loss)

37.5

(565.2)

Net finance expense

(81.5)

(109.8)

Interest charge on lease liability

(18.7)

(16.4)

Loss before taxation from continuing

operations

(62.7)

(691.4)

Tax charge on continuing operations

(65.0)

(10.9)

Loss for the year from continuing

operations

(127.7)

(702.3)

Profit

from discontinued operations, net of

tax

22.5

350.6

Loss for the period

(105.2)

(351.7)

Non-controlling interest

(5.5)

(4.6)

Loss attributable to owners of parent

(110.7)

(356.3)

Number of shares (basic)

685.9

680.4

Basic loss per share

(16.1)

(52.4)

In the table above depreciation and amortisation include the

contribution from joint ventures.

Built Environment Consulting (sold in September 2022) is

classified as a discontinued operation and its results are

included within “Total Group” measures. Continuing operations

excludes its results. The comparative information has been

re-presented due to the reclassification o

f Built Environment

Consulting Saudi Arabia from discontinued into continuing

operations. This relates to the sale of a subsidiary, previously

classified as held

for sale, which did not complete during 2023

and will now be retained by the Group. The revenue of this

business for the year ended 31 December 2022 was $27.1 million

and Adjusted EBITDA was $3.1 million.

Revenue was up 8% on 2022 to $5,900.7 million with good

growth across all business units. Adjusted EBITDA increased

by $34.5 million to $422.7 million primarily due to the higher

revenue and helped by a slightly higher margin of 7.2%

as operational performance and improved pricing offset

investments in operating costs.

Adjusted EBIT increased by $8.0 million with higher adjusted

EBITDA partly offset by higher depreciation of right of use

assets, and a higher software amortisation charge re

flecting

the increased software spend across the Group in recent years.

Operating profit o

f $37.5 million (2022: loss $565.2 million) has

improved mainly due to lower exceptional items of $76.7 million

(2022: $121.2 million) and no impairment charge (2022: $542.3

million) being recognised on goodwill and intangible assets.

The $22.5 million profit

from discontinued operations, net of

tax includes the final proceeds

from the Built Environment

Consulting business following agreement of the completion

balance sheet between the Group and WSP. The increase in

the tax charge to $65.0 million (2022: $10.9 million) is primarily

driven by actuarial movements in the UK pension scheme.

The review of our trading performance is contained within the

Chief Executive Review on pages 8 to 11.

Reconciliation of Adjusted EBIT to Adjusted diluted EPS

2023

2022

(*re-presented)

Adjusted EBIT

185.0

177.0

Tax and interest charges on joint ventures

(16.3)

(14.3)

Adjusted net finance expense

(70.4)

(103.9)

Interest charge on lease liability

(18.7)

(16.4)

Adjusted profit be

fore tax

79.6

42.4

Adjusted tax charge

(58.3)

(59.2)

Adjusted (loss)/profit

from discontinued

operations, net of tax

(10.2)

60.2

Adjusted profit

for the period

11.1

43.4

Non-controlling interest

(5.5)

(4.6)

Adjusted earnings

5.6

38.8

Number of shares (m) – diluted

685.9

680.4

Adjusted diluted EPS (cents)

0.8

5.7

Adjusted diluted EPS (cents) continuing

operations

2.3

(3.1)

See notes on pages 40 and 41

Reconciliation to GAAP measures

2023

2022

(*re-presented)

Loss before tax from continuing operations

(62.7)

(691.4)

Impairment of goodwill and intangible

assets

542.3

Exceptional items

76.7

121.2

Exceptional items – net finance expense

11.1

5.9

Amortisation -intangible assets from

acquisitions

54.5

64.4

Adjusted profit be

fore tax

79.6

42.4

Taxation

65.0

10.9

Tax in relation to acquisition amortisation

3.7

11.9

Tax on exceptional items

(10.4)

36.4

Adjusted tax charge

58.3

59.2

Profit

from discontinued operations, net

of tax

22.5

350.6

Discontinued operations, gain on disposal

(37.7)

(297.1)

Discontinued items, exceptional items

5.0

6.7

Adjusted (loss)/profit

from discontinued

operations, net of tax

(10.2)

60.2

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Financial review

continued

The reconciliation from adjusted EBIT of $185.0 million (2022:

$177.0 million) to adjusted earnings of $5.6 million (2022:

$38.8 million) has been provided to show a clear reconciliation

to adjusted diluted EPS, which is a key performance measure

of the Group. The reconciliation to GAAP measures highlights

that the adjusted measures remove exceptional items,

the exceptional items on discontinued operations and the

associated tax charges on the basis that these are disclosed

separately due to their size and nature to enable a full

understanding of the Group’s performance. Please refer to

commentary on exceptional items and associated tax charges

on pages 34 and 35. Amortisation on intangible assets from

acquisitions and the associated tax credit has been excluded to

allow a more useful comparison to Wood’s peer group.

Amortisation, depreciation and other impairments for

continuing operations

Total amortisation for 2023 was $161.1 million (2022: $153.4

million), all of which relates to the continuing Group. The total

amortisation charge includes $54.5 million of amortisation

of intangibles recognised on the acquisition of Amec Foster

Wheeler (“AFW”) (2022: $63.5 million). Amortisation in respect

of software and development costs was $106.6 million (2022:

$89.0 million) and this largely relates to engineering software

and ERP system development. Included in the amortisation

charge for the year is $1.4 million (2022: $1.5 million) in respect

of joint ventures.

The total depreciation charge in 2023 amounted to $129.3

million (2022: $119.8 million) and includes depreciation on right

of use assets of $103.1 million (2022: $90.5 million). Included in

the depreciation charge for the year is $13.1 million (2022: $12.3

million) in respect of joint ventures.

Net finance expense and debt

2023

2022

Interest on bank borrowings

59.4

47.2

Interest on US Private Placement debt

16.6

40.3

Discounting relating to asbestos, deferred

consideration and other liabilities

12.3

6.8

Other interest, fees and charges

12.6

22.4

Total finance expense excluding joint ventures

and interest charge on lease liability

100.9

116.7

Finance income relating to defined benefit

pension schemes

(18.3)

(2.4)

Other finance income

(1.1)

(4.5)

Net finance expense

81.5

109.8

Interest charge on lease liability

18.7

16.4

Net finance charges in respect o

f joint ventures

6.5

4.4

Net finance expense including joint ventures

and interest charge on lease liability

106.7

130.6

Interest on bank borrowings of $59.4 million (2022: $47.2

million) primarily relates to interest charged on borrowings

under the $1.2 billion Revolving Credit Facility (‘RCF’) which

matures in October 2026 and the United Kingdom Export

Facility (‘UKEF’) term loan which was repaid in December 2023

and replaced with a $200.0 million term loan facility maturing

in October 2026. Despite the reduction in average net debt

during the period, there was a $12.2 million increase in interest

on bank borrowings. The increase in the interest expense is

primarily driven by higher interest rates in 2023 compared with

2022.

The higher interest rate is primarily driven by higher base

rates throughout 2023 partially offset by the impact of a lower

margin in 2023, caused by the reduction in the net debt to

adjusted EBITDA covenant from December 2022.

The interest charge on US Private Placement debt decreased

by $23.7 million to $16.6 million primarily due to the total

repayment of around $450 million to the USPP noteholders

during the second half of 2022, being the early settlement

of notes following the disposal of the Built Environment

Consulting business. The Group had $352.5 million (2022:

$352.0 million) of unsecured loan notes outstanding at 31

December 2023, maturing between 2024 and 2031 with around

75% due in 2025 or later.

Other interest, fees and charges amount to $12.6 million (2022:

$22.4 million) and principally relates to the interest on other

facilities of $8.4 million, including the receivables factoring

facilities and amortisation of bank facility costs of $4.2 million

(2022: $10.5 million). The reduction of $9.8 million in other

interest, fees and charges is primarily due to lower bank facility

costs due to one off, non-cash charges incurred in 2022 as a

result of the partial early repayments of the UKEF and USPP

facilities.

In total, the Group had undrawn facilities of $902.1 million as

at 31 December 2023, of which $843.1 million related to the

revolving credit facility.

The Group recognised interest costs in relation to lease liabilities

of $18.7 million (2022: $16.4 million) which relates to the

unwinding of discount on the lease liability.

Included within the discounting balance of $12.3 million (2022:

$6.8 million) is the unwinding of discount on the asbestos

provision of $11.1 million (2022: $5.9 million).

Net debt excluding leases to adjusted EBITDA (excluding

the impact of IFRS 16) at 31 December was 2.08 times on

a covenant basis (2022: 1.3 times) against our covenants of

3.5 times. This is calculated pre IFRS 16 as our covenants are

calculated on a frozen GAAP basis, see note 4 on page 40.

Interest cover (see note 5 on page 41) was 4.0 times on a

covenant basis (2022: 4.2 times) against our covenant of 3.5

times.

Exceptional items

2023

2022

Power and Industrial EPC losses

45.1

25.0

Impairment of goodwill and intangible assets

542.3

Apollo related costs

4.8

Redundancy, restructuring and integration costs

30.1

Investigation support costs and provisions

(2.6)

(4.2)

Enterprise settlement

35.6

Asbestos yield curve, costs and charges

29.4

21.5

Russia exit costs and charges

13.2

Exceptional items included in continuing

operations, before interest and tax

76.7

663.5

Unwinding of discount on asbestos provision

11.1

5.9

Tax (credit)/charge in relation to exceptional

items

(0.2)

5.2

Release of uncertain tax provision

(7.4)

Derecognition/(recognition) of deferred tax

assets due to UK pension actuarial movements

18.0

(41.6)

Continuing exceptional items, net of interest and

tax

98.2

633.0

Exceptional items are those significant items which are

separately disclosed by virtue of their size or incidence to enable

a full understanding of the Group’s

financial per

formance.

John Wood Group PLC

Annual Report and Financial Statements 2023

Power and Industrial EPC losses

The Group made a strategic decision in 2021 to exit certain

business segments within the Power and Industrials sub

business group. Following that decision, we ceased to operate in

the large-scale EPC or lump sum turnkey business segment.

The costs of exiting that business and any subsequent costs

related to the wind down of contracts in that business, to

the extent they are material in size, have been treated as

exceptional on the basis that they relate to a segment in which

the Group no longer operates.

In the first hal

f of 2023 the Group recorded a non-cash

exceptional charge of $20.4 million relating to a write down

of receivable balances arising from activity in the Power and

Industrial EPC business. The Group had expected to recover

these balances, but these have since been disputed.

In the second half of 2023, a former client raised an arbitration

claim against the Group in respect of alleged damages and

costs arising from a legacy Power and Industrial contract.

Following evaluation of the claim, the Group has recognised a

provision of $23.0 million with a charge to exceptional items,

representing our assessment of probable out

flows arising

from

the matter.

During the year additional costs relating to the discontinued

business of $1.7 million were recorded as an exceptional

charge. This follows previous write downs made during 2022

of $25.0 million, including a revenue reversal of $8.0 million

which represents the impact of a reduction in total value of the

contract and is in relation to revenue recognised in prior years.

Apollo related costs

The Group incurred $4.8 million in relation to legal and advisor

costs arising from Apollo’s preliminary approach to potentially

acquire the ordinary share capital of the Group, which did not

ultimately lead to an offer.

Investigation support costs and provisions

The regulatory investigations were all closed out during 2021

and the agreed settlements were materially in line with the

provision made in 2020.

The $2.6m credit relates to the release

of provisions made for additional legal and other costs which

were ultimately not needed.

Asbestos

All asbestos costs have been treated as exceptional on the

basis that movements in the provision are non-trading and can

be large and driven by market conditions which are out with

the Group’s control. Excluding these charges from the trading

results improves the understandability of the underlying trading

performance of the Group.

The charge before interest and tax of $29.4 million (2022: $21.5

million) in 2023 comprises a $34.2 million charge (2022: $52.8

million) based on an updated actuarial review reflecting the

best estimate for recent claims experience and $5.4 million

(2022: $4.3 million) of costs in relation to managing the claims.

These are offset by a credit of $10.0m which relates to the

collection of insurance proceeds from an insolvent insurer and a

yield curve credit of $0.2 million (2022: $35.6 million).

The lower

yield curve credit recognised in 2023 is principally due to the 27

year blended curve rate of 3.64% not being materially different

to the 30 year flat rate o

f 3.97% in 2022.

Interest costs of $11.1 million which relate to the unwinding

of discount on the asbestos provision over time are shown as

exceptional (2022: $5.9 million).

Redundancy, restructuring and integration costs

No costs were incurred in 2023. In the prior year, $30.1 million

was incurred in relation to redundancy and restructuring

activities.

Enterprise settlement

In the prior year, the Enterprise claim was concluded, with the

amount settled being in excess of the amount provided for. The

charge in the prior year was classed as an exceptional both by

its nature (historic litigation settlement) and by size.

Tax

An exceptional tax charge of $10.4 million (2022: $36.4 million

credit) has been recorded during the period. It consists of a

$0.2 million tax credit on exceptional items (2022: $5.2 million

charge), a $7.4 million credit in relation to the release of an

uncertain tax provision created through exceptional items on

the disposal of the Well Support business in 2011, offset by an

exceptional charge of $18.0 million (2022: $41.6 million credit)

recognised due to the actuarial loss in relation to the UK defined

benefit pension scheme. As de

ferred tax liabilities support the

recognition of deferred tax assets, the reduction of $18.0 million

of deferred tax assets has been charged through exceptional

items based on its size.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Taxation

The effective tax rate on pro

fit be

fore tax, exceptional items and amortisation and including Wood’s share of joint venture pro

fit on

a proportionally consolidated basis is set out below, together with a reconciliation to the tax charge in the income statement.

2023

2022

(re-presented)

Loss from continuing operations before tax

(62.7)

(691.4)

(Loss)/profit

from discontinued operations, net of tax and before exceptional items

(10.2)

60.2

Tax charge in relation to joint ventures (note 13)

9.8

9.9

Amortisation (note 10)

159.7

151.9

Exceptional items (continuing operations)

87.8

669.4

Tax charge in relation to discontinued operations (note 7)

7.9

Profit be

fore tax, exceptional items and amortisation

184.4

207.9

Effective tax rate on total operations (excluding tax on exceptional items and amortisation)

35.63%

36.84%

Tax charge (excluding tax on exceptional items and amortisation)

65.7

76.6

Tax charge in relation to joint ventures

(9.8)

(9.9)

Tax (credit)/charge in relation to exceptional items (continuing operations)

(7.6)

5.2

Derecogniton/(recognition) of deferred tax assets due to UK pension actuarial movements

18.0

(41.6)

Tax credit in relation to amortisation

(1.3)

(11.5)

Tax charge on discontinued operations

(7.9)

Tax charge from continuing operations per the income statement

65.0

10.9

The effective tax rate re

flects the rate o

f tax applicable in the jurisdictions in which the Group operates and is adjusted for

permanent differences between accounting and taxable pro

fit and the recognition o

f deferred tax assets. Key adjustments

impacting on the rate in 2023 are withholding taxes suffered on which full double tax relief is not available, deferred tax not

recognised primarily in relation to interest expenses not deductible in the current year, less the release of uncertain tax provisions

reflecting the positive outcomes in relation to specific risks.

In addition to the effective tax rate, the total tax charge in the income statement re

flects the impact o

f exceptional items and

amortisation which by their nature tend to be expenses that are more likely to be not deductible than those incurred in ongoing

trading profits. The income statement tax charge excludes tax in relation to joint ventures. The increase in the tax charge in 2023

is largely a result of the exceptional tax charge of $18.0 million (2022: $41.6 million credit) on deferred tax assets as a result of

actuarial movements on the UK pension scheme.

Adjusted tax charge

As noted on page 33 our adjusted tax charge was $58.3 million (2022: $59.2 million), representing an adjusted effective tax rate

of 73%.

This was lower than the adjusted rate of 140% in 2022, principally due to the signi

ficant reduction in net finance costs in

the year.

Our adjusted tax rate remained relatively high however, representing a range of factors including the geographical mix of

profits and losses across the Group, restrictions on the deductibility o

f interest, withholding taxes on income in certain jurisdictions

and limits on the recognition of deferred tax assets in the UK and US due to losses in these countries.

Financial review

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

Earnings per share

The calculation of basic earnings per share is based on the earnings attributable to owners of the parent divided by the weighted

average number of ordinary shares in issue during the year excluding shares held by the Group’s employee share trusts. For the

calculation of adjusted diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume

conversion of dilutive potential ordinary shares, only when there is a pro

fit per share. Adjusted diluted earnings per share is disclosed

to show the results excluding the impact of exceptional items and amortisation related to acquisitions, net of tax.

For the year ended 31 December 2023, the Group reported a basic loss (2022: loss) per ordinary share, therefore the effect of

dilutive ordinary shares are excluded (2022: excluded) in the calculation of diluted earnings per share. Where pro

fits have been made

when disaggregating discontinued and continuing operations, the calculation of diluted earnings per share was performed on the

same basis as the whole Group.

2023

2022

Continuing

operations

Discontinued

operations

Total

Continuing

operations

(re-presented)

Discontinued

operations

(re-presented)

Total

(re-presented)

(Losses)/earnings attributable to equity shareholders

(basic pre-exceptional)

(35.0)

(10.2)

(45.2)

(73.9)

60.2

(13.7)

Exceptional items, net of tax

(98.2)

32.7

(65.5)

(633.0)

290.4

(342.6)

(Losses)/earnings attributable to equity shareholders

(basic)

(133.2)

22.5

(110.7)

(706.9)

350.6

(356.3)

Number of shares (basic)

685.9

680.4

Number of shares (diluted)

685.9

680.4

Basic earnings per share (cents)

(19.4)

3.3

(16.1)

(103.9)

51.5

(52.4)

Diluted earnings per share (cents)

(19.4)

3.3

(16.1)

(103.9)

51.5

(52.4)

(Losses)/earnings attributable to equity shareholders

(diluted)

(133.2)

22.5

(110.7)

(706.9)

350.6

(356.3)

Exceptional items, net of tax

98.2

(32.7)

65.5

633.0

(290.4)

342.6

Amortisation of intangibles on acquisition, net of tax

50.8

–

50.8

52.5

–

52.5

Earnings/(losses) attributable to equity shareholders

(adjusted diluted)

15.8

(10.2)

5.6

(21.4)

60.2

38.8

Earnings/(losses) attributable to equity shareholders

(adjusted basic)

15.8

(10.2)

5.6

(21.4)

60.2

38.8

Number of shares (diluted)

685.9

680.4

Number of shares (basic)

685.9

680.4

Adjusted diluted (cents)

2.3

(1.5)

0.8

(3.1)

8.8

5.7

Adjusted basic (cents)

2.3

(1.5)

0.8

(3.1)

8.8

5.7

Basic loss per share for the year was 16.1 cents (2022: 52.4 cents). The reduction in loss per share is driven by lower exceptional items,

net of tax in the continuing Group. The adjusted earnings per share was 0.8 cents (2022: 5.7 cents). The decline in the year mainly

reflects the absence o

f Built Environment Consulting. This measure excludes exceptional items, amortisation of acquired intangibles

and all related tax charges and credits. A reconciliation of adjusted EBIT to adjusted EPS is shown on page 33.

Capital allocation

We look to manage our target leverage over the medium term within a range of around 0.5 to 1.5 times net debt (excluding leases)

to adjusted EBITDA (pre-IFRS 16). Beyond this, we consider how best to create value for our shareholders from dividends, share

buybacks or attractive acquisitions.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Financial review

continued

Cash flow and net debt

The cash flow

for the year is set out below and includes both continuing and discontinued operations:

Excluding

leases

2023

Impact

of leases

2023

Total

2023

Excluding

leases

2022

Impact

of leases

2022

Total

2022

Adjusted EBITDA

301.4

111.1

412.5

337.0

121.0

458.0

Less JV EBITDA

(66.4)

(7.2)

(73.6)

(50.8)

(7.7)

(58.5)

JV Dividends

15.6

–

15.6

30.1

–

30.1

Adjusted decrease in provisions (note 6)

(22.1)

–

(22.1)

(43.7)

–

(43.7)

Other

18.7

(1.7)

17.0

28.1

–

28.1

Adjusted cash flow generated

from operations pre working capital

247.2

102.2

349.4

300.7

113.3

414.0

Adjusted increase in receivables

(67.7)

–

(67.7)

(97.5)

–

(97.5)

Adjusted increase/(decrease) in payables (note 6)

12.7

–

12.7

(267.6)

–

(267.6)

Decrease/(increase) in inventory

1.5

–

1.5

(1.6)

–

(1.6)

Adjusted working capital movements

(53.5)

–

(53.5)

(366.7)

–

(366.7)

Adjusted cash generated/(outflow)

from operations (note 6)

193.7

102.2

295.9

(66.0)

113.3

47.3

Purchase of property, plant and equipment

(18.8)

–

(18.8)

(27.6)

–

(27.6)

Proceeds from sale of property, plant and equipment

8.2

–

8.2

7.1

–

7.1

Purchase of intangible assets

(126.4)

–

(126.4)

(109.2)

–

(109.2)

Interest received

1.1

–

1.1

4.5

–

4.5

Interest paid

(81.7)

–

(81.7)

(98.1)

–

(98.1)

Tax paid

(97.7)

–

(97.7)

(81.9)

–

(81.9)

Non-cash movement in leases

–

(160.9)

–

(41.7)

Other

1.4

–

1.4

(14.2)

(6.3)

(20.5)

Free cash flow (excluding exceptionals)

(120.2)

(58.7)

(178.9)

(385.4)

65.3

(320.1)

Cash exceptionals

(145.0)

11.1

(133.9)

(318.8)

14.6

(304.2)

Free cash flow

(265.2)

(47.6)

(312.8)

(704.2)

79.9

(624.3)

FX movements on cash and debt facilities

(12.6)

(10.3)

(22.9)

(25.4)

27.0

1.6

Divestments

(22.5)

–

(22.5)

1,729.4

–

1,729.4

(Increase)/decrease in net debt

(300.3)

(57.9)

(358.2)

999.8

106.9

1,106.7

Opening net debt

(393.2)

(342.9)

(736.1)

(1,393.0)

(449.8)

(1,842.8)

Closing net debt

(693.5)

(400.8)

(1,094.3)

(393.2)

(342.9)

(736.1)

Closing net debt at 31 December 2023 including leases was $1,094.3 million (2022: $736.1 million). Included within closing net debt is

the IFRS 16 lease liability which is the net present value of the lease payments that are not paid at the commencement date of the

lease and subsequently increased by the interest cost and reduced by the lease payment made. The lease liability as at 31 December

2023 was $400.8 million (2022: $342.9 million), with the increase primarily relating to a new of

fice campus in Reading, UK that

replaced a previous location. All covenants on the debt facilities are measured on a pre-IFRS 16 basis.

Closing net debt excluding leases as at 31 December 2023 was $693.5 million (2022: $393.2 million). The monthly average net

debt excluding leases in 2023 was $846.4 million (2022: $1,489.1 million). The cash balance and undrawn portion of the Group’s

committed banking facilities can

fluctuate throughout the year. Around the covenant remeasurement dates o

f 30 June and 31

December the Group’s net debt excluding leases is typically lower than the monthly averages due mainly to a strong focus on

collection of receipts from customers.

Cash generated from operations pre-working capital reduced by $64.6 million to $349.4 million from $414.0 million in the year

to December 2023 reflecting increased EBITDA

from continuing operations more than offset by EBITDA from the business sold

in 2022. It includes a decrease in provisions of $22.1 million which is mainly explained by utilisations of the provision in the year.

New provisions created through EBITDA were largely offset by releases to EBITDA.

The releases in 2023 are driven by the Group

concluding on a number of historic project related and insurance provisions which are no longer considered necessary following

resolution of the disputes or the underlying risk.

New provisions primarily relate to insurance, various individually immaterial project

provisions and a litigation provision relating to a discontinued business. The other movement of $17.0 million (2022: $28.1 million) is

principally comprised of non-cash movements through EBITDA including share-based charges of $19.6 million (2022: $20.7 million),

FX movements of $3.1 million (2022: $8.1 million) and non-cash gains on disposal of the Gulf of Mexico assets, right of use assets

and property, plant and equipment of $2.0 million, $1.7 million and $2.6 million respectively.

There was a working capital outflow o

f $53.5 million (2022: $366.7 million). The out

flow in receivables o

f $67.7 million was driven

by an increase to revenue in 2023 and higher closing days sales outstanding (“DSO”) leading to higher trade receivables and gross

amounts due from customers. The trade and other payables balance is broadly consistent with 2022, resulting in a working capital

inflow in the year o

f $12.7 million.

The Group has receivables financing

facilities totalling $200.0 million. The amount utilised at 31 December 2023 was $198.2 million

(2022: $200.0 million). The facilities are non-recourse to the Group and are not included in our net debt.

John Wood Group PLC

Annual Report and Financial Statements 2023

Cash exceptionals including lease movements reduced by $170.3

million to $133.9 million as the Group continues to reduce its

exposure to legacy contracts. Payments made during 2023

mainly relate to the settlement of known legal claims and

asbestos payments. These include the historic SFO investigation

payments of $38 million which were provided for in 2020 and

net asbestos payments of around $40 million. The remaining

cash exceptionals mainly relates to the legacy Aegis contract of

$27 million and other legacy contracts of around $12 million.

The other reduction in net debt of $1.4 million (2022: increase

of $20.5 million) is principally comprised of the movements in

accrued bank interest and prepaid debt facility costs which are

included within net debt.

The free cash out

flow o

f $312.8 million (2022: $624.3 million)

was lower than in 2022, largely due to the $170.3 million

improvement in cash exceptionals and improved working capital

performance of $313.2 million. This was offset mainly by an

increase in the non-cash movement in leases totalling $160.9

million (2022: $41.7 million) driven by significant lease renewals

in the year, an increase of $17.2 million related to the purchase

of intangible assets, including software and investment in

ERP improvements throughout the Group and an increase in

tax paid of $15.8 million following conclusion of a number of

uncertain tax provisions.

A net cash outflow

from divestments of $22.5 million includes

final proceeds

from the disposal of the Built Environment

Consulting ($27.1 million) and proceeds from the sale of the

Gulf of Mexico business ($17.5 million). These are offset by taxes

paid on the Built Environment Consulting disposal of $65.0

million and professional costs incurred on the disposal of Built

Environment Consulting of $2.1 million.

Operating cash conversion, before capital expenditure,

calculated as cash generated from operations as a percentage

of adjusted EBITDA (less JV EBITDA) increased to 87.3% (2022:

11.8%) primarily due to improved working capital performance.

Summary balance sheet

2023

2022

Goodwill and intangible assets

4,319.0

4,309.1

Right of use assets

355.9

276.0

Other non-current assets

913.9

918.0

Trade and other receivables

1,554.4

1,545.0

Net held for sale assets and liabilities

(excluding cash)

0.4

Trade and other payables

(1,706.7)

(1,687.6)

Net debt excluding leases

(693.5)

(393.2)

Lease liabilities

(400.8)

(342.9)

Asbestos related litigation

(306.5)

(311.4)

Provisions

(135.3)

(148.3)

Other net liabilities

(258.5)

(435.6)

Net assets

3,641.9

3,729.5

Net current liabilities

(207.0)

(235.0)

At 31 December 2023, the Group had net current liabilities of

$207.0 million (2022: $235.0 million).

Goodwill and intangible assets amount to $4,319.0 million

(2022: $4,309.1 million) and principally comprises of goodwill

and intangibles relating to acquisitions. The increase of $9.9

million comprises of software additions of $131.0 million and FX

movements of $53.6 million offset by amortisation charges of

$159.7 million and $15.0 million of goodwill disposed following

sale of Gulf of Mexico assets.

Right of use assets and lease liabilities amount to $355.9

million (2022: $276.0 million) and $400.8 million (2022: $342.9

million) respectively.

The increase in both the right of use asset

and lease liability primarily relates to a new of

fice campus in

Reading, UK contributing to around $68 million and $64 million

respectively.

Trade and other receivables increased to $1,554.4 million

reflecting the increased revenues compared with 2022 and a

higher DSO. Trade and other payables increased to $1,706.7

million also reflecting the increasing activity levels and

follows

the normalisation of the balance as at December 2022.

Largely as a result of the acquisition of AFW, the Group is

subject to claims by individuals who allege that they have

suffered personal injury from exposure to asbestos primarily in

connection with equipment allegedly manufactured by certain

subsidiaries during the 1970s or earlier. The overwhelming

majority of claims that have been made and are expected to be

made are in the USA. The asbestos related litigation provision

amounts to $306.5 million (2022: $311.4 million).

The net asbestos liability at 31 December 2023 amounted to

$328.1 million (2022: $335.4 million) and comprised $306.5

million in provisions (2022: $311.4 million) and $50.4 million in

trade and other payables (2022: $59.5 million) less $23.2 million

in long term receivables (2022: $24.4 million) and $5.6 million in

trade and other receivables (2022: $11.1 million).

The Group expects to have net cash outflows o

f approximately

$35 million as a result of asbestos liability indemnity and

defence payments in excess of insurance proceeds during 2024.

The Group has worked with its independent asbestos valuation

experts to estimate the amount of asbestos related indemnity

and defence costs at each year end based on a forecast to

2050.

Other provisions as at December 2023 were $135.3 million

(2022: $148.3 million) and comprise project related provisions of

$42.2 million (2022: $63.3 million), insurance provisions of $40.7

million (2022: $46.2 million), property provisions of $27.4 million

(2022: $26.0 million) and litigation related provisions of $25.0

million (2022: $12.8 million).

Full details of provisions are provided in notes 21 and 22 to the

Group financial statements.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Financial review

continued

Pensions

The Group operates a number of de

fined benefit pension

schemes in the UK and US, alongside a number of de

fined

contribution plans. At 31 December 2023, the UK defined

benefit pension plan had a surplus o

f $391.9 million (2022:

$432.4 million) and other schemes had deficits totalling $80.1

million (2022: $73.2 million).

The Group’s largest pension scheme, the UK Pension Plan,

has total scheme assets of $2,822.5 million (2022: $2,690.1

million) and pension scheme obligations of $2,430.6 million

(2022: $2,257.7 million) and is therefore 116% (2022: 119%)

funded on an IAS 19 basis. There was an increase in scheme

liabilities arising from a lower discount rate used in the actuarial

assumptions, which is partially offset by an increase in scheme

assets.

In assessing the potential liabilities, judgement is required to

determine the assumptions for in

flation, discount rate and

member longevity. The assumptions at 31 December 2023

showed a small reduction in the discount rate which results in

higher scheme liabilities resulting in an overall decrease to the

surplus compared to December 2022. Full details of pension

assets and liabilities are provided in note 33 to the Group

financial statements.

The UK defined benefit pension plan was estimated to have

a surplus on a Technical Provisions basis at the last triennial

valuation date which was 31 March 2023 subject to finalisation

of the valuation during 2024. The Group is currently working

closely with the Trustee to agree a preferred direction regarding

the future of the plan. Options being assessed include moving

to a buy-in insured basis and eventual buy-out with a third

party as soon as is reasonably practical, or to continue to

run the WPP on for a limited number of years to potentially

generate further surplus. Any surplus could bene

fit both the

Group and pension members, ensuring that appropriate

safeguards for both the funding position and members’

interests are taken into account at all times.

Contingent liabilities

Details of the Group’s contingent liabilities are set out in note

34 to the financial statements.

Divestments

The final proceeds

from the disposal of the Built Environmental

Consulting business were agreed during 2023 upon agreement

of the completion balance sheet between the Group and

WSP. This has resulted in an additional gain of $31.0 million,

comprising largely of $27.1 million of cash proceeds and the

release of completion accruals being recognised in discontinued

operations.

Notes

A reconciliation of operating loss to adjusted EBITDA is presented in

table below and is a key unit of measurement used by the Group in the

management of its business.

2023

2022

Operating profit/(loss) per income statement

37.5

(565.2)

Share of joint venture

finance expense and tax

(note 13)

16.3

14.3

Exceptional items (note 5)

76.7

663.5

Amortisation (including joint ventures)

161.1

153.4

Depreciation (including joint ventures)

26.2

29.3

Depreciation of right of use assets

103.1

90.5

Impairment of PP&E and joint venture

investments

1.8

2.4

Adjusted EBITDA (continuing operations)

422.7

388.2

Discontinued operation

Operating (loss)/profit (discontinued)

(15.2)

63.1

Exceptional items (note 7)

5.0

6.7

Adjusted EBITDA (discontinued operation)

(10.2)

69.8

Total Group Adjusted EBITDA

412.5

458.0

Adjusted diluted earnings per share (“AEPS”) is calculated by dividing

earnings attributable to owners before exceptional items and amortisation

relating to acquisitions, net of tax, by the weighted average number of

ordinary shares in issue during the period, excluding shares held by the

Group’s employee share ownership trusts and is adjusted to assume

conversion of all potentially dilutive ordinary shares. AEPS on continuing

operations excludes the adjusted loss from discontinued operations, net of

tax of $10.2 million (2022: pro

fit o

f $60.2 million). In 2023, AEPS was not

adjusted to assume conversion of all potentially dilutive ordinary shares

because the unadjusted result is a loss.

Number of people includes both employees and contractors at 31 December

2023.

Net debt to adjusted EBITDA cover on a covenant basis is presented in the

table below:

2023

2022

Net debt excluding lease liabilities (reported

basis) (note 31)

693.5

393.2

Covenant adjustments

17.7

16.2

Net debt (covenant basis)

711.2

409.4

Adjusted EBITDA (covenant basis)

341.2

315.1

Net debt to adjusted EBITDA (covenant basis)

– times

2.08

1.30

Adjusted EBITDA (covenant basis) is on a rolling 12 month period and excludes

adjusted EBITDA from the discontinued operation and the impact of applying

IFRS 16. The funding agreements require that covenants are calculated by

applying IAS 17 rather than IFRS 16. The covenant adjustment to net debt

relates to finance leases which would be on the balance sheet i

f applying IAS

17. Note: the covenant basis shown above refers to the measure as calculated

for our RCF. The measure used for our USPP senior loan notes is not materially

different from the covenant measure shown above.

John Wood Group PLC

Annual Report and Financial Statements 2023

Interest cover on a covenant and reported basis is presented in the table

below:

2023

2022

Net finance expense

81.5

109.8

Covenant adjustments

(1.2)

(4.8)

Non-recurring net finance expense

(1.9)

(37.5)

Net finance expense (covenant basis)

78.4

67.5

Adjusted EBITA (covenant basis)

315.0

285.9

Interest cover (covenant basis) – times

4.0

4.2

The difference between adjusted EBITDA (covenant basis) and adjusted EBITA

(covenant basis) is $26.2million (2022: $29.2 million) and is mainly explained by

12-month rolling pre-IFRS 16 depreciation charges of $26.2 million (2022: $29.3

million).

Reconciliation to GAAP measures between consolidated cash flow

statement and cash flow and net debt reconciliation

2023

2022

Decrease in provisions

(91.0)

(123.1)

Prior year cash exceptionals

68.9

79.4

Adjusted movement in provisions

(22.1)

(43.7)

Increase in receivables

(77.5)

(97.5)

Carrying value of business disposed (operating

activity)

9.8

Adjusted increase in receivables

(67.7)

(97.5)

Decrease in payables

(54.4)

(398.9)

Prior year cash exceptionals

67.1

131.3

Adjusted increase/(decrease) in payables

12.7

(267.6)

Tax paid

(97.7)

(103.9)

Tax paid on disposal of business

22.0

Adjusted tax paid

(97.7)

(81.9)

Disposal of businesses (net of cash disposed and

tax paid)

(22.5)

1,751.4

Tax paid on disposal of business

(22.0)

Divestments

(22.5)

1,729.4

Proceeds from disposal of investments in joint

ventures

15.9

Proceeds on disposal of business (operating

activity)

(15.9)

Adjusted disposal of investments in joint ventures

Adjusted cash generated from operations

295.9

47.3

Cash exceptionals

(133.9)

(304.2)

Proceeds on disposal of business (operating

activity)

(15.9)

Cash generated from/(used in) operations

146.1

(256.9)

Proceeds on disposal of business (operating

activity)

15.9

Purchase of property, plant and equipment

(18.8)

(27.6)

Proceeds from sale of property, plant and

equipment

8.2

7.1

Purchase of intangible assets

(126.4)

(109.2)

Interest received

1.1

4.5

Interest paid

(81.7)

(98.1)

Tax paid

(97.7)

(81.9)

Non-cash movement in leases

(160.9)

(41.7)

Other

1.4

(20.5)

Free cash flow

(312.8)

(624.3)

Decreases in provisions, receivables and payables, cash generated from

operations and tax paid have been adjusted to show exceptional items

separately, to present significant items separately

from the rest of the cash

flow either by virtue o

f size or nature and re

flects how the Group evaluates

cash performance of the business.

Prior year cash exceptionals is defined as cash payments made in the current

period in respect of amounts provided for in prior periods.

The proceeds on disposal of business represents the sale of a joint venture

contained within Investment Services. Management consider this as part of

Investment Services trading activity and therefore is included within adjusted

cash generated from operations.

Constant currency references. Growth rates shown at constant currency

are calculated by comparing FY23 to FY22 restated at FY23 currency rates.

This additional disclosure is made to help users better understand the

growth of our businesses.

8. Adjusted EBITDA margin and adjusted EBIT margin. Adjusted EBITDA

margin is adjusted EBITDA shown as a percentage of revenue. Adjusted

EBIT margin is adjusted EBIT shown as a percentage of revenue. These

measures are used by management to measure the performance of

businesses, and are part of our medium term targets.

Revenue from sustainable solutions. Estimated share of FY23 revenue

as defined by Wood. This figure is re

ferred to across this document.

Sustainable solutions consist of activities related to: renewable energy,

hydrogen, carbon capture & storage, electrification and electricity

transmission & distribution, LNG, waste to energy, sustainable fuels &

feedstocks and recycling, processing of energy transition minerals, life

sciences, and decarbonisation in oil & gas, refining & chemicals, minerals

processing and other industrial processes. In the case of mixed scopes

including a decarbonisation element, these are only included in sustainable

solutions if 75% or more of the scope relates to that element, in which case

the total revenue is recorded in sustainable solutions.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

400km

carbon dioxide pipeline in Canada

40 million

tonnes carbon dioxide

transported annually

20+

oil sands facilities by 2050

Wood is performing engineering services

for a signi

ficant carbon capture and

storage (CCS) pipeline project involving

Canada’s six largest oil sands producers.

The contract, awarded by the Pathways

Alliance, supports the engineering

and design of an approximately

400-kilometre main transportation line

and laterals linking multiple oil sands

facilities with a subsurface carbon

sequestration hub. The distribution

system, along with the required metering

and booster stations, will gather and

transport up to 40 Mt/year of carbon

dioxide from more than 20 oil sands

facilities by 2050.

The transportation pipeline system with

varying diameters is a key component

of the Pathways Alliance foundational

project that is expected to reduce

emissions by 10 to 12 million tonnes

annually by 2030, about half of the

Alliance’s 22 million tonne goal by the

end of this decade.

Established in 2021, the Pathways

Alliance operates about 95% of Canada’s

oil sands production and is working, with

the support of the Canadian and Alberta

governments, to achieve the goal of net

zero greenhouse gas emissions from oil

sands production by 2050.

Designing

the path

to net zero

Find out more:

John Wood Group PLC

Annual Report and Financial Statements 2023

In 2023, Wood won an award

valued around $50m from GSK

for a US capital project to sustain

the global biopharma’s production

of critical specialty medicines. As

the capital project delivery partner,

Wood is providing engineering,

procurement, construction

management and validation

enhancement services for GSK’s

global production facility in

Rockville, Maryland.

Wood’s three-year contract is

supporting GSK’s production of

innovative specialty medicines

for the US and globally as part

of GSK’s plan to develop the site

with the latest state-of-the-art

scientific research technology and

equipment.

Sustaining global

biopharma’s

production of

critical specialty

medicines

“The need to develop and

manufacture specialty

medicines critical to

human health has never

been greater.”

Ken Gilmartin

, Chief Executive of Wood

Wood’s track record executing design and

capital project solutions for GSK facilities

in the UK over the last decade led to the

award. Under the partnership, Wood’s

growing Life Sciences team in the US is

leading project delivery, applying proven

global capital programme management

processes and expertise to deliver an

advanced facility of the highest quality

and safety standards.

Find out more:

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Sustainability

Creating

a better

tomorrow

Wood’s vision and strategy has sustainability at its

core, and we are committed to ensuring that it is

embedded in all key business decision making.

As a member of the United Nations Global

Compact (UNGC), our sustainability approach

is founded on the UNGC’s 10 principles. The

approach focuses on contributing to the UN

Sustainable Development Goals across three

areas, namely people, planet and profit while

also contributing towards the three pillars of our

business strategy. Within these three areas, our

sustainability approach focuses on the issues that

are most material to our business and our three

key stakeholder groups consisting of employees,

clients and investors. These are informed by our

periodic materiality assessments to ensure that our

sustainability approach continues to evolve with our

business and stakeholder expectations.

Sustainability index

Wood’s approach to

sustainability

See more on pages 44 to 45

Protecting the environment

Climate-related financial disclosures:

Pages 47 to 57

Managing our environmental impacts:

Pages 58 to 63

Contributing to society

Generating rewarding careers and

promoting workforce diversity &

inclusion:

Pages 64 to 69

Creating value for

our communities

See more on pages 70 to 73

Operating as a safe

and ethical business

Our approach to ethics & compliance:

Pages 74 to 76

Ensuring the health, safety & security

of our teams:

Pages 78 to 82

Balancing the interests

of our stakeholders:

Stakeholder engagement:

Pages 110 to 116

s172 statement:

Pages 117 to 119

Read more on our materiality assessment:

woodplc.com/sustainability/materiality

John Wood Group PLC

Annual Report and Financial Statements 2023

Planet

• 40% reduction in scope 1 and

2 GHG emissions by 2030,

compared to a 2019 baseline

• To ensure all Wood of

fices are

single use plastic-free by 2025

In 2023, John Wood Group PLC received a rating of AA (on a scale of AAA-CCC) in the MSCI ESG Ratings

assessment.

The use by John Wood Group PLC of any MSCI ESG Research LLC or its af

filiates (“MSCI”) data, and the

use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship,

endorsement, recommendation, or promotion of John Wood Group PLC by MSCI. MSCI services and data

are the property of msci or its information providers, and are provided ‘as-is’ and without warranty. MSCI

names and logos are trademarks or service marks of MSCI.

People

• To improve gender balance with

40% female representation in

senior leadership roles by 2030

• 100% of Wood labour suppliers

Building Responsibly Principles

by 2025

• 100% of our suppliers have

Building Responsibly Principles

embedded into their supply

chains by 2030

• To contribute $10 million to our

Global Cause by giving our time,

energy, resources and funding

by 2030

Profit

• To double revenue from

sustainable solutions in

energy transition and

sustainable materials

markets by 2030, from a

2021 baseline

• To be consistently ranked

in the top quartile ESG

investment ratings within

our sector group by 2025

Our vision:

Profitable growth

Inspired culture

Performance excellence

Strategic pillars:

Our sustainability goals:

Deliver solutions that transform the world

SDG alignment:

All information related to our sustainability programme is available on our

website:

woodplc.com/sustainability

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Non-financial and

sustainability matters

Policies & standards governing our approach

Detailed disclosure

Environmental

• HSSES policy

• Environmental management standards

• Supplier code of conduct

Employees

• Code of conduct

• Human rights policy

• Equal opportunities policy

• Harassment policy

• HSSES policy

• Diversity, equity & inclusion policy

Social matters

• Community investment policy

• Supplier code of conduct

• Tax strategy

Human Rights

• Human rights policy

• Supplier code of conduct

• Diversity, equity & inclusion policy

• Data protection policy

Anti-corruption &

anti-bribery

matters

• Code of conduct

• Supplier code of conduct

• Anti-bribery and anti-corruption policy

• Ethics reporting & anti-retaliation policy

• Commercial intermediary policy

• Conflicts o

f interest policy

• Competition law compliance policy

• Sanctions, export controls and anti-

boycotts policy

• Gifts & hospitality policy

Climate-

related financial

disclosures

Additional

disclosures

including:

• Business model

• Non-financial KPIs

• Principal risks and

impact on business

activity

Non-financial and sustainability in

formation statement

In accordance with sections 414CA and 414CB of the Companies Act 2006, the following constitutes Wood’s Non-

financial and

Sustainability Information statement.

The ‘Detailed disclosure’ provides references to where the information can be found that is relevant for the understanding of our

business in relation to the matters listed as well as the due diligence implemented in pursuance of our policies and the outcomes

of those policies. Certain information is incorporated by reference, as listed in the table below. All references are to locations in this

Annual Report and Accounts unless otherwise specified.

Environment, pages 58 to 63

TCFD report, pages 47 to 57

Stakeholder engagement, pages 110 to 116

People, pages 64 to 69

Health, safety & security, pages 78 to 82

Gender pay gap report on woodplc.com

Directors’ report, pages 153 to 156

Directors’ remuneration report, pages 136 to 152

Stakeholder engagement, pages 110 to 116

Community, pages 70 to 73

Stakeholder engagement, pages 110 to 116

People, pages 64 to 69

Ethics & compliance, pages 74 to 76

Modern slavery & human traf

ficking statement on woodplc.com

Human rights page on woodplc.com

Ethics & compliance, pages 74 to 76

TCFD report, pages 47 to 57

Business model, page 20

Non-financial KPIs, pages 26 to 27, 81,

61 and 69

Principal risks & management of principal

risks, pages 83 to 90

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Wood is adapting to climate change opportunities, delivering solutions for

a net-zero world, and addressing the risks and impacts in our business.

Task Force on Climate-related

Financial Disclosures (TCFD) Report 2023

Compliance

with TCFD

TCFD recommendations

Our disclosures are consistent with

the TCFD Recommendations and

Recommended Disclosures, including

section C of the 2021 TCFD Annex

entitled ‘Guidance for All Sectors’. We

are fully compliant with 10 of the 11

recommended disclosures.

Opposite is a summary of the status

of our compliance, together with

page references in this report where

the relevant disclosures can be found.

In addition, where relevant we

provide the expected time horizon

to achieve full compliance for any

disclosure that we require more time

to implement.

Companies Act 2006

Our disclosures also meet the

requirements of section 414CB of the

Companies Act 2006.

Footnotes:

Although qualitative scenario planning has previously been undertaken, to ensure full compliance

we commenced a process during 2023 to refresh our scenario planning taking into account

climate-related scenarios, specifically including a 2°C or lower scenario and setting out our key

assumptions. We expect to complete our scenario planning in 2024 and whilst our refreshed 2023-

2025 strategy will form the foundation of the analysis, the outputs will help to inform our view for

future strategic cycles.

Status

Page

Governance

Describe the board’s oversight of climate-related risks

and opportunities

Compliant

Describe management’s role in assessing and managing

climate-related risks and opportunities

Compliant

Strategy

Describe the climate-related risks and opportunities the

organisation has identified over the short, medium and

long term

Compliant

50 to 51

Describe the impact of climate-related risks and

opportunities on the organisation’s businesses, strategy

and financial planning

Compliant

52 to 53

Describe the resilience of the organisation’s strategy,

taking into consideration different climate-related

scenarios, including a 2°C or lower scenario

Partially

compliant

Risk management

Describe the organisation’s processes for identifying and

assessing climate-related risks

Compliant

54-55

Describe the organisation’s processes for managing

climate-related risks

Compliant

54-55

Describe how processes for identifying, assessing, and

managing climate-related risks are integrated into the

organisation’s overall risk management

Compliant

54-55

Metrics and targets

Disclose the metrics used by the organisation to assess

climate-related risks and opportunities in line with its

strategy and risk management process

Compliant

56 to 57

Disclose Scope 1, Scope 2, and, if appropriate, Scope 3

greenhouse gas (GHG) emissions, and the related risks

Compliant

56 to 57

Describe the targets used by the organisation to

manage climate-related risks and opportunities and

performance against targets

Compliant

56 to 57

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Board oversight of climate-

related risks and opportunities

At Wood, the Board as a whole has

accountability for sustainability matters,

including those related to climate. A

review of Wood’s sustainability strategy

and performance, including performance

against climate targets, is undertaken by

the Board annually. However, to ensure

suf

ficient and more

frequent oversight

of Wood’s sustainability strategy

and performance it has delegated

certain responsibilities to a Safety and

Sustainability Committee.

The Safety and Sustainability

Committee is chaired by a non-executive

director and meets four times per

year, reporting to the Board after each

meeting on matters discussed and

recommendations. The Committee’s

responsibilities include reviewing and

making recommendations on:

• the effectiveness of management’s

plans on environment and climate

action, including the setting, disclosing

and achievement of targets

• the progress against priorities and

objectives including compliance with

public commitments on sustainability

matters, responding to sustainability

risks

• the adequacy

and effectiveness of

the assurance programme for health,

safety, security and environment

(HSSE) and sustainability

• the expertise and appropriateness

of the structure of the HSSE and

Sustainability function throughout the

group

• the status, suitability and

effectiveness of Board and senior

management knowledge, training

and education to affect the necessary

competence to meet its HSSE

and Sustainability obligations and

oversight

Wood has unique consulting and

engineering skills that are critical

to solving the global challenges of

decarbonisation and energy transition,

as well as energy security. Through

oversight for the overarching business

strategy, the Board considers Wood’s

climate-related opportunities and

climate-related impacts on the

sustainability of the business model.

It does this by assessing the key

market drivers and uncertainties for

market development, key clients and

competitors across each of Wood’s focus

geographies, Wood’s historical track

record of performance, major risks to

delivery and how they will be mitigated.

The Board increases its understanding

of climate-related opportunities

through supporting global initiatives on

climate advocacy such the UN Global

Sustainable Development Goals (SDGs).

The Board has responsibility for

establishing procedures to manage risk,

oversee the internal control framework,

and determine the nature and extent of

the principal risks the company is willing

to take in order to achieve its long-term

strategic objectives” (its “risk appetite”);

performing a robust assessment of

the principal and emerging risks; and

monitoring and reviewing the risk

management and internal control

systems. The Board is assisted in this

assessment by the Audit, Risk and

Ethics Committee and the Safety and

Sustainability Committee, who are

delegated responsibility for various

aspects of risk, internal control and

assurance.

Climate-related risks are considered

as part of the overall process for

managing principal and emerging risks,

with principal and emerging risks being

reviewed by the Board twice per year.

This process includes a cross-check

against the principal and emerging

risks identified by Wood’s peer group

which helps to inform the Board’s mid-

year discussion on risk. In addition, at

the half-year and year-end, a series of

one-to-one interviews are carried out

by the President – Group Audit & Risk

and the Group Risk Vice President with

each of the non-executive directors to

understand their perception of emerging

risks, including those from climate-

related matters.

In addition to the responsibilities

delegated to the Safety and Safety

Committee and the assistance provided

by the Safety and Sustainability and

Audit Risk and Ethics committees to the

Board in its assessment of risks, further

Board oversight for climate-related

matters is undertaken by the following

Board committees:

Audit, Risk and Ethics Committee

• monitoring the integrity of Wood’s

financial statements and strategic

report, including climate-related

disclosures

• reviewing the internal audit

programme and ensuring the internal

audit plan is aligned to the principal

risks of the business which include

climate-related impacts (see ‘Risk

Management’ on page 54)

Remuneration Committee

Supporting delivery of the sustainability

strategy, including climate-related

objectives, through incorporation of

environment, social and governance

(ESG) targets in leadership team bonus

schemes and long-term incentive plans.

Governance

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Management’s role in assessing

and managing climate-related

risks and opportunities

During 2023, the Executive President of

Business Sustainability & Assurance, as

a member of the Executive Leadership

Team (ELT) oversaw the delivery of the

sustainability strategy and had overall

accountability for climate-related actions

and risk management1. The Safety

& Sustainability Committee forms

the main channel of communication

between management and the Board.

The Executive President of Business

Sustainability & Assurance attended

these Committee meetings to provide

regular reports on progress, including

updates on progress against our climate-

related targets.

During 2023, the President of

Sustainability reported to the Executive

President of Business Sustainability &

Assurance1 and was responsible for the

development, execution and monitoring

of the sustainability strategy, including

any climate-related actions and targets.

The President of Sustainability also

oversaw the Environment, Social and

Governance (ESG) risk management

framework which includes a climate

change risk register.

Wood’s Growth & Development (G&D)

function is responsible for business

development, including building on

growth opportunities in energy transition

and decarbonisation which have climate-

change as a key driver. The President of

Sustainability collaborates closely with

Wood’s G&D function to enhance Wood’s

ability to compete and secure work in

this space, and oversees the reporting

against our target of doubling client

support aligned to the energy transition

by 2030.

Given the diverse nature of climate-

related impacts and their potential

to generate risks and opportunities

throughout Wood’s business, the

wider ELT also has responsibility for

assessing and managing the impacts.

Consideration of climate-related matters

is given at a business unit (BU) level

through Quarterly Business Reviews

(QBRs).

The QBRs are chaired by the Chief

Executive Of

ficer (CEO) with attendance

by the Chief Financial Of

ficer (CFO),

other ELT members and Business Unit

(BU) leadership teams. During the QBRs,

BU risk registers are reviewed as well

as progress against BU execution plans

and internal metrics and targets related

to the delivery of Wood’s strategy.

See ‘Strategy’ and ‘Risk Management’

sections on pages 50-55 for further

details on how climate-related matters

impact Wood’s strategy and risks. The

meetings provide the Executive President

- Business Sustainability & Assurance

with insight into the operational and

commercial activities of the business

providing an opportunity to identify any

activities that could be inconsistent with

our climate commitments.

This structure will be reviewed following the

changes to the ELT in 2024 as set out on page 98.

Climate governance

Board:

ELT:

Audit, Risk & Ethics

Committee

Safety & Sustainability

Committee

Remuneration

Committee

Exec President Strategy

& Development

Exec President Business

Sustainability & Assurance

President Group

Audit & Risk

President

Sustainability

Senior

leadership:

Board

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Strategy

For the energy transition focal question,

our assessment explored two major

uncertainties resulting in two scenarios

to test the resilience of our strategy in

order to:

• Ensure our business is financially

resilient across a range of market

scenarios with respect to the pace,

scope and scale of energy transition

changes

• Enable our business model resources

to be optimised in response to specific

short to near-term market and

geographical opportunities

• Support our clients with differentiated

service offerings, engineering solutions

and delivery capabilities to help them

meet their individual climate-related

net-zero targets

Energy Transition focal question:

To what extent will energy

source provision, distribution and

demand change in the world over

the next 15 years?

Uncertainties:

• Degree of alignment across key

stakeholders, i.e. social, government,

investors and businesses

• Rate of innovation and the adoption of

renewable and low carbon energy

As result of these assessments, we

identified a comprehensive list o

f risks and

opportunities in our climate change risk

climate-related risks and opportunities

that are likely to have the most significant

potential effects on our business, strategy

and financial planning. Further detail

on our process to determine the impact

of climate-related considerations on

our business risks is included in ‘Risk

Management’ on page 54.

Climate-related risks and

opportunities

As an engineering and consulting

company, Wood operates across two

end markets; Energy and Materials.

Our strategic focus is aligned to the

key growth trends of energy transition,

energy security, sustainable materials,

circular economy, decarbonisation and

digitalisation. As such, climate-related

matters are a core consideration of

our strategy and we recognise the

potential for climate-related risks and

opportunities to impact on our business.

In 2019, as part of our strategic planning

process, we undertook qualitative

scenario planning which explored the

pace and depth of the low-carbon

energy transition required to meet

Paris Agreement targets. The scenario

planning assessed two focal questions

which considered the climate-related

impacts on the key drivers of our strategy

at that time. Those key drivers were

energy transition and the development of

sustainable infrastructure.

In September 2022, Wood completed the

sale of its Built Environment Consulting

business which was aligned to market

drivers related to the development of

sustainable infrastructure. Following the

sale, we updated our strategy for the

2023-2025 cycle and this was set out in

a capital markets day on 29 November

2022. As noted above, climate-related

matters including energy transition and

decarbonisation are core to our current

strategy and therefore the energy

transition focal question of our 2019

scenario planning remains relevant. In

alignment with the scenario planning

and strategy roll out, we have continued

to assess the risks and opportunities

throughout our strategic cycle to 2023.

As noted on page 53, we intend to refresh

our scenario planning analysis in 2024.

Our assessments considered climate-

related risks and opportunities over

short, medium and long-term time

horizons. We define these time horizons

as follows:

•

Short-term: Between 0 and 3 years

We review climate-related risk on an

annual basis and therefore consider

0 to 3 years to be a suitable short-

term assessment period. This aligns

with our going concern assessment

period. This covers a period of at least

12 months from the date of approval

of the

financial statements, but, in

order to sign off on the going concern

ability of the Group, the directors

consider the financial

forecasts out to

31 December 2025.

•

Medium-term: Between 3 and 5 years

In line with our overall business

strategic cycle, sales pipeline and

contracting periods, and Wood’s

sustainability materiality assessment

cycle, we define medium-term as

between 3 and 5 years. This aligns

to the assessment period utilised for

Wood’s viability statement which

assesses the Group’s viability over a

period of three years and models the

impacts of risks over a

five-year period.

•

Long-term: Between 5 and 30 years

Long-term considers periods beyond

our strategic cycle and extends up

to 30 years to account for known

historic climate events and the

likelihood of future occurrence, as

well as applying current scientific

knowledge to understand longer term

impacts of climate change. Factors

considered include, but are not limited

to, international agreements to limit

warming, longer term government

policy, advances in technology and

innovation, as well as physical climate

scenarios.

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Category

Status

Business impact

Opportunities

Increased client scope for energy

transition and decarbonisation services.

The measurement of this opportunity

is reflected in our target o

f doubling

of client support aligned to energy

transition and sustainable materials, see

‘Metrics & targets’ on page 56.

Opportunity

– Markets,

products &

services

Short,

medium &

long

The current global aim of attaining a maximum of 1.5ºC of

warming requires investment in energy transition and ef

ficiency

and decarbonisation and this provides Wood with opportunities

to deliver growth in these areas and diversify our client portfolio.

This opportunity is likely to have a group-wide impact with the

most significant impacts in our major service lines o

f Renewables,

Hydrogen & Carbon Capture; Minerals Processing & Life Sciences;

and Power, as well as in decarbonisation activity across all service

lines.

Increased access to capital and/

or improved cost of capital. The

measurement of this opportunity is

reflected in our target o

f top quartile

ESG ratings, see ‘Metrics & targets’ on

page 56.

Opportunity -

Markets

Short,

medium &

long

The increasing adoption of the Principles of Responsible

Investment and incorporation of climate change considerations

into capital allocation decisions provides an opportunity for Wood

to maintain and potentially increase its access to sources of

capital as a result of its strategy aligned to delivering solutions for

a net-zero future and appropriate management of its own ESG

risks. Further, this alignment could enable Wood to access more

competitive lending rates and insurance costs.

Risks

Undertaking high carbon projects that

are inconsistent with key elements of

Wood’s strategy focused on positioning

to support clients in their pursuit of

net-zero and decarbonisation. This is

recognised in our principal risk Strategic

Delivery, see ‘Risk management’ on page

54.

Transition risk

– Market &

reputation

Short,

medium &

long

Undertaking high carbon projects may result in a loss of investor

confidence and exposure to investor and lender exclusion policies

for high carbon activities, impacting Wood’s access to capital.

This risk is likely to have a group-wide impact

Energy transition and sustainable

materials markets do not generate

suf

ficient revenues required to meet

targets and/or Wood does not have

the ability to attract or retain the

appropriately skilled workforce. This is

recognised in our principal risk Strategic

Delivery, see ‘Risk management’ on page

54.

Transition risk

- Market

Short &

medium

Failure to keep pace with client demands and competitive forces

in energy transition, including decarbonisation, and sustainable

materials and/or inability to attract or retain the appropriately

skilled workforce may impact on Wood’s competitive position

resulting in an inability to compete for energy transition and

sustainable materials work effectively. This risk is likely to have

a group-wide impact with the most significant impact in our

major service lines of Renewables, Hydrogen & Carbon Capture;

Minerals Processing & Life Sciences; and Power, as well as in

decarbonisation activity across all service lines.

Failure to meet carbon targets through

lack of engagement, investment and/or

accountability, resulting in Wood being

unable to effect behavioural change.

This is recognised in our principal risk

ESG Strategy & Performance, see ‘Risk

management’ on page 54.

Transition

risk – Policy

& legal,

reputation

Medium &

long

Failure to effect the behavioural change required to meet our

carbon target may give rise to risks of environmental harm and

loss of stakeholder con

fidence. Our commitment to reduce scope

1 and 2 emissions by 40% by 2030 is underpinned by a strategic

delivery plan. The key elements of the plan include group wide

actions, such as transitioning to renewable/green energy tariffs

and driving carbon ef

ficiency improvements in our real estate

portfolio, as well as localised carbon reduction programmes for

each business unit.

Failure to align to the expected net-zero

pathway and lack of credible climate

transition plan. This is recognised

in our principal risk ESG Strategy &

Performance, see ‘Risk management’ on

page 54.

Transition risk

– reputation

Short,

medium &

long

A poorly constructed and/or articulated business response to

climate-related impacts and opportunities may give rise to

the risk that Wood’s contribution to the energy transition and

decarbonisation is not recognised and instead Wood is regarded

as a net contributor to climate change. This could result in

shareholder pressure, having a group-wide impact.

Investors and other financial stakeholders

developing and implementing net-

zero strategies which include reducing

exposure to certain sectors or activities.

This is recognised in our principal risk

ESG Strategy & Performance, see ‘Risk

management’ on page 54.

Transition risk

– reputation

Short,

medium &

long

Investors, lenders and insurers implementing their own net-zero

strategies may impose exclusions policies to reduce their exposure

to high carbon sectors and activities, such as those related to

fossil fuels. There is a risk that certain scopes of Wood’s current

operations fall within these exclusions reducing our access to

capital and insurance coverage, This risk is likely to have a group-

wide impact with the most significant impact on our major

service lines of Oil & Gas and Re

fining & Chemicals.

Details of adaptation and mitigation activities undertaken to address climate risk and any changes from the prior year are set out

in section 'Risk management' on page 54.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Strategy

continued

Wood has a flexible business model

and a long track record of evolving to

position our capabilities and technical

expertise to take advantage of growth

trends and changes in our markets. As

part of our strategic process we carry

out a comprehensive strategy review

every three years and establish strategic

direction at a high enough level to enable

agile leadership adjustments leveraging

our flexible model, over the strategy

horizon to account for evolution in

climate-related risks and opportunities in

our markets.

Our principal risk of Strategic Delivery

recognises the potential market and

reputational impacts of undertaking high

carbon projects that are inconsistent

with Wood’s positioning to support

clients in their pursuit of net-zero

and decarbonisation. Our strategic

actions throughout 2023 focusing on

growth opportunities from energy

transition, sustainable materials and

decarbonisation have significantly

mitigated this risk and as a result,

reducing carbon intensity is a feature of

many of the contracts we are delivering

today. Whilst Wood has declined a

small number of certain high-carbon

scopes of work, to further improve

governance in this area we recognise the

need for an enterprise-wide method to

assess projects for consistency with our

strategic approach.

As part of our corporate development

process, we continually evaluate our

business and consider the investment

opportunities to accelerate delivery

against our strategy. In considering such

investment opportunities we apply a

tailored diligence approach that takes

into consideration the totality of the

business across climate change risks.

As climate-related impacts are a key

driver of conditions in our market and of

client requirements, our processes are

agile and robust enough to determine

the materiality of climate risks in all

transactions. Following a review of our

business portfolio, we completed the sale

of our offshore labour supply operations

in the Gulf of Mexico in March 2023.

This divestment reflects Wood’s actions

to selectively high grade the Group’s

portfolio and invest in the markets and

solutions where we expect the strongest

profitable growth. The relative size o

f our

business portfolio related to fossil fuels

was, amongst others, a consideration in

selecting this business for divestment.

Impact on our own operations

In addition to our business strategy

aligned to enabling our clients to

transition to a low carbon economy, our

sustainability strategy contains the plans

required for our own transition.

The table on page 51 sets out the climate-

related risks and opportunities that are

the most significant

for our business in

terms of likelihood and potential impact.

We maintain a comprehensive climate risk

•

Policy & legal transition risks, including the

risks of increased carbon management

obligations, government policy restricting

fossil fuel- related activities and exposure

to climate litigation.

• Market-related transition risks,

including the impact of clients

divesting of fossil-fuel related assets

•

Acute and chronic physical risks, including

the impact of changing precipitation and

increasing extreme variability in weather

resulting in disruption to operations and

increased insurance costs or reduced

access to insurance

Whilst we consider that these risks

currently have a lower overall risk rating

than those in the table above, many of

them are contributing factors to other

Principal risks faced by the group. For

example, the impact of physical risks are

incorporated in our Project Execution

principal risk. Our climate risk register is

regularly reviewed to monitor changes

in the likelihood and severity of potential

impacts of climate-related risks and also

to identify new or emerging risks.

Impact on businesses, strategy

& financial planning

Impact on strategy

The analysis used to develop our strategy

for 2023-2025 incorporated consideration

of high-level climate-related risks and

opportunities. Together with our previous

scenario planning analysis this has

informed our strategic planning during

2023 and has guided:

• our focus on growth markets in

energy transition and sustainable

materials and growth drivers from

decarbonisation and digiatlisation

across all our markets

• our actions to ensure we have the

appropriate management and

teams in place and we form strategic

partnerships to develop the solutions

required to respond to climate change.

Through these strategic actions we

aim to ensure that Wood benefits

from opportunities in increased client

scope for energy transition, sustainable

materials and decarbonisation services

as well as manage the risks of not

meeting our revenue generation targets

and our ability to attract and retain the

skilled workforce to enable us to compete

effectively for energy transition and

decarbonisation work.

In March 2021 we committed to reducing

our scope 1 and 2 carbon emissions by

40% by 2030, from a 2019 baseline of

145,083 tonnes CO2e. In announcing the

target the Chief Executive also set out

Wood’s commitment to achieving net-

zero by 2050 or sooner. We consider that

our 2030 target and ongoing delivery

against it are important first steps that

will enable us to establish a net-zero

target in the longer term and define the

decarbonisation plans beyond 2030 that

will be required to meet it. Our approach

to this will also be guided by our

preparations for disclosing our climate

transition plan in accordance with the

guidance issued in late 2023 by the UK

Transition Plan Taskforce.

Our scope 1 and 2 emissions reduction

target is the driver for group-wide

strategic actions. Of the total Scope 1

and 2 baseline emissions, 36% arise from

purchased electrical energy, 52% from

fleet transport and 12%

from combustion

of fossil fuels predominantly for heating

purposes. Therefore, our plans to achieve

our carbon emissions reduction target

are focused on principle strategic levers

to address the areas where Wood has

both significant emissions signatures

and exercises operational control to

change or eliminate them. Our initial

focus to meet the

first milestone, a 40%

reduction, centres around:

•

Real Estate occupancy ef

ficiency

The procurement of new facilities and

fices is influenced by sustainability

and climate-related criteria enabling

evolutionary improvements to the real

estate portfolio. Wood continues to

implement hybrid working opportunities

for of

fice-based employees which allows

us to be more ef

ficient in the sizing o

the physical space Wood occupies.

During 2023 we undertook energy audits

across our European portfolio as part

of our compliance with Energy Savings

Opportunity Scheme (ESOS) which will

give us a good overview on where further

effort can be targeted and allow us to

develop our action plans to reduce energy

use and emissions.

•

Renewable energy procurement

We are taking action to switch our

energy procurement to certified

renewable energy sources. By the end

of 2023, 43% of our total purchased

electricity was from certi

fied renewable

sources. This is down from 2022 due to

a site moving outside of our operational

control which was a large renewable

energy user, however, we are focused on

increasing this to around 60%.

See pages 57 and 59 for details of our

progress towards our scope 1 and 2

emissions reduction target.

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Building climate resilience

into our business model &

strategy

Wood is a provider of consultancy

and engineering solutions to clients

in energy and materials markets

and across the full lifecycle of their

projects. We have a flexible business

model that leverages the expertise of

our talented and flexible work

force,

our global scale and decades-long

client relationships to respond to

market opportunities. We have a long

track-record of evolving to position

our capabilities and technical

expertise to take advantage of

emerging growth trends.

In its long history Wood has

transitioned from ship repair and

marine engineering operations,

to the North Sea and then global

oilfield services and now a global

engineering and consultancy

company. This flexibility ensures that

our business model and strategy is

resilient to climate-related impacts

in our markets, enabling Wood to

benefit

from opportunities from

growth trends in energy transition

and decarbonisation, and also

resilient to climate-related risks as

recognised in our principal risk of

Strategic Delivery.

We are committed to the ongoing

assessment of the resilience of our

strategy in different climate-related

scenarios. Following the sale of

our Built Environment Consulting

business we developed our updated

strategy for the cycle from 2023 to

2025. In developing our strategy,

high-level climate-related risks and

opportunities were considered.

Whilst the energy transition aspects

of our 2019 qualitative scenario

planning remain relevant for our

current strategy, during 2023 we

commenced a process focused on

refreshing our scenario planning

with a view to taking into account

different climate-related scenarios

including a 2°C or lower scenario. We

expect the refresh of our scenario

planning to be completed in 2024.

Impact on business &

financial planning

The material impacts of climate-related

issues on our business are set out in the

table on page 51. The following sets out

the impacts on our financial planning.

Wood participates in a number of

markets where climate considerations

may affect demand for our services,

including Hydrogen, Carbon Capture,

Oil & Gas, Chemicals, Minerals and

Power. We factor this into our revenue

forecasting by analysing addressable

markets and prospective growth rates

over time. During the process to update

our strategy for the 2023-2025 strategic

cycle, we engaged with external industry

consultants and clients to inform our

planning which considered movements of

our markets inclusive of climate-related

impacts. This data along with a sales

pipeline that tracks opportunities aligned

to our capabilities and strategy, form the

basis of our

financial modelling.

Climate-related issues also impact

our financial planning when making

decisions on our sources of borrowing.

Our strategy and capabilities aligned

to the energy transition have, to date,

provided us with the opportunity to

access wider sources of borrowing

including sustainability linked facilities.

As a result, during 2023 Wood had a

balanced portfolio of debt facilities

which included a five-year committed

sustainable revolving credit facility and

a UK government backed loan linked to

energy transition. It should be noted that

the latter was repaid in December 2023.

Climate-related issues are not currently

a significant

feature of budgeting for

operating costs. Costs of managing

carbon emissions are incorporated into

our operational and functional budgeting

process, e.g. procurement of energy

ficient real estate and maintenance

of carbon reporting software. Whilst

there is potential for elements of our

carbon reduction strategy to result in

incremental costs, such as switching

to the procurement of energy from

renewable sources, these are not

considered to be significant and the

actions to date have been relatively

low cost or cost neutral. Our insurance

costs reflect the impacts o

f physical

climate-related risks. They also reflect

transitional risks and opportunities, to

the extent that our overall insurance

risk profile is influenced by market and

reputational considerations driven by

changes in our strategy and demand

for our services due to climate-related

factors. Whilst we are seeing insurers

begin to include coverage for matters

such as regulatory investigations related

to climate-related disclosures this

has not impacted on insurance costs.

Therefore, to date, the effect of climate-

related matters on our insurance costs

have been more influenced by macro

global insurance market factors than by

Wood specific climate risk

factors.

The area where climate-related issues

could impact on the Group’s assets

and liabilities is on goodwill and other

intangible assets which are tested

for impairment on an annual basis by

comparing the carrying value of the

assets to the value in use calculations,

which are underpinned by the financial

forecasts approved by the Board. As

highlighted above, climate considerations

may impact demand for our services

and therefore either increase or reduce

future cash

flows o

f the Group, affecting

the value of goodwill. Energy transition

and decarbonisation trends represent

significant growth drivers

for the Group

which is well placed to benefit

from

significant levels o

f investment required

by our clients to achieve net-zero. Oil

& Gas markets continue to generate

significant value

for the Group in the

short-term due to the global focus on

energy security, whilst in the medium

to long-term we expect a shifting

demand in Oil & Gas markets towards

decarbonising operations. The relative

sizes of the markets and the in

fluence

of climate-related matters on the rates

of growth in both our energy transition

related and fossil fuel related activities

could influence the valuation o

f goodwill.

In 2023, energy security was a key driver

of revenue growth but we are seeing

increased focus on decarbonising oil

and gas activities and the transition

to cleaner fuels. As such climate-

related opportunities contributed to

good growth in our services related to

decarbonisation and hydrogen. Going

forward we expect the impact of

climate-related matters to drive further

growth in our energy transition and

sustainable materials markets. In 2023,

the impact of climate-related matters

on assets and liabilities were considered,

amongst many other factors, in the

overall market growth rates forecast

in the annual impairment review of

goodwill and other intangibles. Further

information on the impairment review is

contained in note 10 to the 2023 financial

statements.

Read more on our business model on

pages 20 to 21 and our strategy on

pages 16 to 19.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Risk registers are developed at an

individual contract or project level and

captured in our project risk management

system (ProRisk). These are then

escalated to the business grouping (BG)

and captured in the Corporate Risk

Management system (BRisk) and rolled

up into business unit (BU) risk registers,

which are reviewed respectively by the

BG and BU Leadership Teams every

quarter. The physical risks associated

with climate change, such as abnormal

temperatures and weather, are

considered in the contract/project risk

registers. Depending on the materiality,

these may then be reflected within the

Project Execution principal risk at a BG

and BU level.

The BU risk registers are subsequently

reviewed as part of the Quarterly

Business Reviews which are chaired by

the CEO with attendance by the CFO,

the other members of the ELT and the

respective BU Leadership Team.

Group level functional risk registers are

also maintained with the functional

leadership teams reviewing these risk

registers twice a year. Group level climate

change risks are considered through the

climate and ESG risk registers which are

overseen by the Business Sustainability &

Assurance group function.

Business unit and functional risk registers

are then aggregated into a group risk

per year by the Group Risk Committee

(GRC), which is attended by the CEO,

CFO, and all other members of the

ELT. This ensures that the principal

risks, including climate-related impacts,

are identified, agreed, appropriately

measured and effectively controlled,

while also monitoring emerging risks. The

output of the GRC reviews is a summary

of the principal risks which is formally

reviewed and challenged by the Board

twice per year.

Our overall risk management

framework integrating climate-

related risk assessment

Wood’s process for identifying, assessing

and responding to climate-related risks

and opportunities is incorporated within

our enterprise-wide risk management

process and framework. This framework

feeds into our principal risks and

uncertainties reviewed by the Board and

the ELT. The Wood Risk Management

Framework is designed to comply with

the UK Corporate Governance Code and

align with ISO 31000 principles.

Our group risk management standard is

the formal overarching risk management

process within Wood that complements

current policies and processes across the

Group. The purpose of the standard is to:

• Ensure there is a formal, structured

and consistent risk management

process across Wood

• Identify, mitigate, and manage risks

that occur

• Provide visibility and demonstrable

governance over business risks to

inform leadership

Our risk framework starts with the

analysis of our business and the external

environment within which we operate

to ensure our approach to assessing risk

is current, and that our risk culture can

evolve and adapt to the everchanging

risk landscape. A bottom-up and top-

down approach is followed to facilitate

the risk management process within the

organisation as laid out in the group risk

management framework shown below.

Our enterprise risk management system

(BRisk) enhances governance and

oversight of the control environment and

is an important tool in delivering Wood’s

risk management strategy.

Risk management

Wood’s Risk Management Framework

includes a focus on identifying and

assessing potential emerging risks,

including those related to climate

matters. Emerging risks are identified

throughout the year via the business

grouping, business unit and functional

risk processes, and escalated and

discussed during the GRC and further

escalated to the Board as required.

This process follows the Group risk

management framework, which applies

to all risks. As noted on page 48, a cross-

check is also undertaken against the

principal and emerging risks identified

by Wood’s peer group which helps to

inform the mid-year Board discussion on

risk. At the half-year and at the year-

end, a series of one-to-one interviews

are carried out by the President – Group

Audit & Risk and the Group Risk VP with

each of the non-executive directors to

understand their perception of emerging

risks. The outputs of these one-to-one

interviews are fed into the twice yearly

GRC and Board risk sessions.

Managing climate-related risks

As noted on page 48, climate-related

risks are considered as part of the

overall process for managing principal

and emerging risks which includes

consideration of both existing and

emerging regulatory requirements. From

our analysis, climate change risk is not

considered to be a standalone principal

risk given its diverse nature but regarded

as a contributing factor to other principal

risks. As such, the prioritisation and

materiality of climate-related risks

is considered as part of the overall

materiality assessment of principal risks

for the Group.

Group risk framework

Contract/project

Monthly project

governance risk

review

Business grouping

Project

governance review

Business unit

Project

governance review

Group

Project

governance review

Risk Escalation

Group Risk

Committee

Group risk &

principal risk

review

Board

Principal risk

review

Board Oversight

Governance & Control

Systems, KPI’s & Reporting

Business grouping

Risk review

Business unit

Risk review

Group

Business review

Quarterly

Biannual

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Principal risks are those considered to

be the most material from a

financial

perspective. The assessment of

materiality of principal risks is completed

by the ELT during the GRC. This is further

challenged and assessed by the Board

during the Board risk sessions.

Reflecting the importance o

f climate-

related risks, the impact of the various

aspects of climate-related risk for Wood

are reviewed as an integral part of our

risk management framework.

Wood considers the major impacts

of climate-related issues to be on the

key elements our strategy aligned to

energy transition, decarbonisation

and sustainable materials, and

therefore feeds into the Strategic

Delivery principal risk. Climate-related

matters are also reflected in our ESG

Principal risk:

Strategic Delivery

Lack of ability to deliver on the new

strategy by effectively addressing the

external and internal risks associated

with the strategic plan to 2025.

Mitigation, monitoring & assurance

• Strategic review of our portfolio

and identified priority markets with

external consultants and internal

experts to refine our

focus

• Strategic risks analysed and

appropriate mitigation actions put in

place

• Company level metrics/targets set

and cascaded into business units

with execution plans to achieve our

strategy

• Quarterly Business Review (QBR)

process implemented across the

Executive Leadership Team (ELT)

to measure progress both from a

business and functional perspective

against targets within the strategy

Changes to mitigations/adaptations

compared to prior year:

No change

Principal risk:

ESG strategy and performance

Our ESG strategy and performance does

not effectively address our environmental,

social and governance responsibilities,

including in relation to climate change

and regulatory obligations, leading to

our business becoming an unattractive

investment proposition for our employees,

investors, lenders, communities, and other

stakeholders.

Mitigation, monitoring & assurance

• Existing policies, procedures,

management structures and Board

oversight covering compliance with the

key components of ESG

• Monitoring of compliance and

reporting in line with the UK Corporate

Governance Code, covering governance

responsibilities, with oversight provided

by the Audit, Risk & Ethics Committee

and the Board

•

Integrated ESG risk management within

company risk management framework

• Safety & Sustainability Committee

includes oversight of sustainability

aspects with additional review by the full

Board on an annual basis

•

Sustainability targets agreed with the

Board and plans in place for target

achievement

• ESG metrics included within

management incentive schemes

•

External verification o

f certain key ESG

performance data (e.g. carbon emissions)

• Active monitoring and engagement of

stakeholders

Changes to mitigations/adaptations

compared to prior year:

More frequent

monitoring of stakeholder expectations/

policies on ESG matters

Principal risk:

Project Execution

Failure to successfully execute projects

safely and to expected quality, on time and

within budget.

Mitigation, monitoring & assurance

•

Start up, project management, technical

and resourcing execution plans for key

projects supported by monitoring and

reporting

•

Strategic Projects team assists in start-

up phase of key projects and embed

learnings from previous projects

• Tender governance processes including

Tender Review Committee at Group level

and BU levels in line with established

Delegation of Authority

• Financial Management Framework in

place to ensure disciplined contract

compliance, including variation orders and

contractual requirements, at all phases of

the project

•

Quarterly Business Reviews of BUs &

Top 10 Projects, chaired by the CEO and

attended by the CFO and BU Executive

Presidents

•

Operational Excellence functions in each

of the BUs supporting consistent project

delivery through focus on common

operating model, standardised delivery

applications and project management

academy

Changes to mitigations/adaptations

compared to prior year:

No change

Strategy & Performance principal risk

which considers the risks related to

the effectiveness of our ESG strategy

to address, amongst others, our

environmental responsibilities including

climate change.

Our Project Execution risk considers any

material climate-related risks that impact

on our ability to successfully execute

projects safely, to the expected quality,

on time and within budget. Localised

events arising from physical climate-

related risks such as those from abnormal

temperatures and weather are reflected

in project risk registers, which map back

to the Project Execution principal risk at

a business group and business unit level,

depending on the materiality.

The table below sets out our principal

risks that are impacted by climate-

related matters and the mitigations,

monitoring and assurance in place to

address those risks.

The table also includes any changes

to mitigations from the prior year to

show the evolution in our approach to

managing such risks.

Regular oversight of these risks at the

GRC, Safety & Sustainability Committee

and Board risk sessions ensures the

content of the related principal risks

remains focused on our perception of

climate-related risk on the business.

The Wood risk management framework

provides a process for all associated

risks to be governed by these oversight

committees where the associated

risks, plans and KPIs are reported and

reviewed. The framework and process to

identify principal risks also includes the

establishment of mitigation, monitoring

and assurance processes to ensure the

risks are appropriately managed on an

on-going basis.

Further detail on this process is set out on

page 83 of our 2023 annual report.

The above is a summary of our principal risks

and mitigations as they relate to climate-

related matters. Refer to pages 87 to 90 of

the 2023 annual report for a full discussion of

principal risks and mitigations.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Metrics & targets

Responding to the challenges of

our changing climate by delivering

engineering solutions to provide access

to energy and to transition to a low

carbon future are a core part of Wood’s

purpose and strategy. At the same time,

we recognise the need to manage our

own environmental impact.

To measure our climate-related

opportunities and ensure accountability

for our climate-related impacts, our

Board endorsed the targets set out

below. These targets form part of

our wider sustainability strategy and

are aligned to the UN Sustainable

Development Goals.

Measuring climate-related

opportunities and risks

In line with the key elements of our

strategy aligned to energy transition,

decarbonisation and sustainable

materials and the climate-related

impacts reflected in our Strategic

Delivery principal risk, our key metric

for measuring climate-related

opportunities is the revenue derived

from our sustainable solutions. These

include solutions that help to mitigate

the impacts of climate change such

as renewable energy, alternative fuels,

circular economy processes, processing

of energy transition materials and

decarbonising existing energy assets and

operations. Our target is to double client

support aligned to the energy transition

and sustainable materials by 2030.

As demonstrated by our principal risk of

ESG Strategy & Performance, we also

recognise that our approach to climate-

related matters forms a key part of our

ESG investment ratings and as such we

utilise those ratings as another metric

of our performance. Our target is to be

consistently ranked in the top quartile

within our sector by 2025.

To measure our performance in reducing

our own climate impacts we have

established two targets. Firstly, to

reduce scope 1 and 2 carbon emissions

and performance against this target is

embedded in the long-term incentive

plans of our executive directors. Our

second target is to reduce consumption

of single use plastics in our of

fices.

In respect of our scope 1 and 2 emissions

reduction target, whilst we see the

setting of internal carbon prices as

a significant aspect o

f our carbon

reduction strategy this is an area that

requires more time to implement.

In particular, following the sale of our

Built Environment Consulting business

and as required by the Greenhouse Gas

Protocol, we undertook an exercise in

2023 to re-baseline our scope 1 and 2

carbon emissions for the purposes of

our metric and target to exclude the

emissions from the disposed business.

During 2024 our focus will be on utilising

the revised emissions to establish a

baseline amount of emissions for each of

our business units to set carbon budgets.

We believe that this approach will

provide us with the appropriate platform

to establish internal carbon prices in the

longer-term.

Our Aim

Target

Metric

To be trusted by clients to design,

build and advance the world through

our vision to deliver solutions that

transform the world

Doubling client support aligned to energy

transition and sustainable materials by

2030

Revenue from sustainable solutions which

includes revenue from climate-related

opportunities

Consistently ranked in the Top Quartile

ESG investment ratings within our sector

group by 2025

MSCI rating and industry/peer group

ranking

To take responsibility for the impact of

the work we do and how we deliver it

on the planet we share

To reduce Wood’s scope 1 and 2 carbon

emissions by 40% by 2030 on our journey

towards net-zero

Absolute reduction in scope 1 and 2 carbon

emissions from a baseline of 145,083

tonnes CO2e in 2019

To ensure all Wood of

fices are single use

plastic free by 2025

Percentage of of

fices single use plastic

free

More details on specific measures and

disclosed 2023 outcomes can be found on

page 142 in our 2023 annual report.

To reflect the importance o

f our ESG

and sustainability programme, a range

of ESG targets are incorporated in

the application of our remuneration

policies for the leadership team and

wider workforce. In respect of climate-

related metrics, for the 2021, 2022 and

2023 long-term incentive awards, a

specific climate-related per

formance

measure related to achieving our target

of 40% reduction in scope 1 and 2 carbon

emissions by 2030 was introduced for

awards made to executive directors and

the Executive Leadership Team. This

performance measure is worth 5% of the

total award and performance is assessed

over a three-year period. To enhance the

rigour in which performance is reviewed,

and avoiding reward for failure, the

Remuneration Committee of the Board

utilises the discretionary matrix when

assessing bonus and long-term incentive

plan outcomes in addition to the

formulaic outcomes which considers any

year-on-year changes, market conditions

and relevant environmental, social and

governance (ESG) matters.

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Single use plastic (SUP)

consumption

In 2022, we commenced a process

to assess SUP consumption in our

fices to attribute a rating according

to plastic usage. By the end of 2023,

70% of our of

fices, had been assessed.

Currently, 17% are SUP free and 45% are

substantially SUP free. Progress is slower

than anticipated due to challenges in

eliminating certain items, however, we

are placing a greater focus on SUP in

2024 to accelerate progress and ensure

delivery of our target by the end of 2025.

Greenhouse gas (GHG)

emissions

Our methodology for calculating GHG

emissions is set out on page 59 of

the annual report. Our 2023 carbon

emissions data was externally verified by

an independent third party in line with

the requirements of ISO 14064-3. The

sale of our Built Environment Consulting

business completed in late September

2022 represented a significant change

to Wood’s carbon emissions profile and,

following guidelines set down in the GHG

Protocol we carried out an exercise to re-

baseline Wood’s carbon footprint. Prior

to the re-baseline exercise our global

scope 1 and 2 market-based emissions

were 173,585 tonnes CO2e and energy

consumption used to calculate these

emissions was 582,771 MWh. Our revised

scope 1 and 2 emissions for the baseline

year of 2019 are 145,083 tonnes CO2e

and our reductions against the baseline

are shown in the chart below.

In 2023, we achieved an 8% reduction

in absolute scope 1 and 2 emissions

(market-based) compared to the prior

year which has been achieved through:

• A continued focus on consolidating

and increasing energy ef

ficiency in our

real estate portfolio

• Lower on-site fuel usage as certain

major lump sum contracts completed

and were not replaced in line with our

preferred contracting structure.

To date we have achieved a 71%

reduction from our 2019 baseline,

compared to our goal of 40% reduction

in scope 1 and 2 emissions by 2030. This

reduction has been achieved without the

use of carbon offsets. The focus of our

carbon reduction strategy is on effecting

behavioural change to reduce our

emission, as such offsets do not currently

form part of our strategy but we may

need to consider their use in the future

for a small but hard to abate portion of

our emissions profile.

Client support aligned to

energy transition & sustainable

materials

Following the roll-out of our revised

strategy in late 2022, we undertook

an exercise to develop a taxonomy to

categorise our revenue portfolio and

identify revenues from our sustainable

solutions.

Our sustainable solutions consist of a

wide range of climate-related activities

including services related to renewable

energy, hydrogen, carbon capture &

storage, electrification and electricity

transmission & distribution, LNG, waste

to energy, sustainable fuels & feedstocks

and recycling, processing of energy

transition minerals and decarbonisation

in oil & gas, refining & chemicals and

minerals processing. We also include

revenue from our life sciences service

line to recognise its alignment to the

UN Sustainable Development goal of

ensuring good health and wellbeing.

Our target is to double revenue from

sustainable solutions in energy transition

and sustainable materials markets by

2030, from a 2021 baseline. In 2023,

our cumulative growth in sustainable

solutions revenue was 18%.

MSCI rating and

peer group ranking

Since the introduction of our target in

2020, Wood’s ESG performance has

consistently been ranked by MSCI as

in the top quartile compared to our

industry peers. Wood has maintained an

AA Leader rating from MSCI for at least

9 consecutive years.

As we move into a growth phase this

reduction in scope 1 and 2 emissions will

potentially reverse to a certain extent as

greater activity at project site level may

result in additional onsite fuel usage and

associated travel.

We recognise that scope 3 forms the

largest part of our total emissions. We

commenced reporting of scope 3 in 2021

to provide greater transparency over

the drivers of these emissions. This has

allowed us to initiate foundations that

will in the future help us to address our

scope 3 footprint.

By its nature, the calculation of scope 3

emissions relies on a significant amount

of estimated data. The rise in our scope

3 emissions in 2023 was largely driven

by an increase in purchased goods and

services related to increased activity

and increasing accuracy in our data as

our approach continues to mature.

Further information on our GHG

emissions including, methodology and

reporting boundaries and intensity

ratios is available on page 59 of our

2023 annual report.

2023

2020

2021

2022

ESG ratings

2019

2021

baseline

2022

18%

2023

Client support aligned to energy

transition & sustainable materials

Scope 3 emissions

million tonnes CO2e

2021

1.9

2022

1.3

2023

2.7

Scope 1 and 2 emissions reduction

2022

69%

2019

baseline

34%

2020

60%

2021

2023

71%

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Environmental impacts

Impacts are determined through analysis

of Wood’s material issues, the risk they

pose to our business and potential

financial implications together with

reputational impacts the issue may have

on Wood via our key stakeholders.

The following sets out the key

environmental impacts and risks that are

material at a Group level, our policies and

procedures for managing them and the

outcomes of those policies. It should be

noted that environmental impacts can

vary across our diverse range of site-

based projects and according to Wood’s

role and contractual sphere of in

fluence.

Our HSSES policy sets out our

commitment to the environment and

is supported by our global HSSE and

sustainability management system.

Effective management of Wood’s

strategic environmental impacts has the

potential to reduce risk to profitability

and increase Wood’s ability to generate

value for its stakeholders.

The nature of Wood’s activities gives rise to many

environmental impacts, the management of which is

strategically important to the success of the company.

Environment

Further detailed information about our

approach to environmental management

at an operational level can be found on

our Sustainability hub:

woodplc.com/sustainability

Climate change

Failure to implement a

comprehensive process to identify,

assess and co-ordinate risks

associated with the climate change

agenda could have a material impact

on Wood’s ability to deliver value to

its shareholders. Our TCFD report

on pages 47 to 57 provides detailed

disclosures of Wood’s risks and

opportunities from climate-related

matters and how we govern, manage

and measure those. In this section

we have focused on the climate

impacts on how we operate including

our approach to reducing our carbon

emissions, adapting our operations to

net-zero and increasing resilience to

physical climate risks.

Climate change sub-risks

Scope 1 and 2 emissions

(operational decarbonisation)

Scope 3 emissions

(indirect decarbonisation)

Business resilience (physical

implication of warming climate)

Legal compliance (TCFD

disclosures, see pages 47 to 57)

Our materiality assessment

is available on our website:

woodplc.com/sustainability/materiality

Our strategy is founded on capitalising

on opportunities from trends driven by

environmental considerations, to grow

our revenue from energy transition,

decarbonisation and sustainable

materials services. In addition, in

recognition that securing the supply of

affordable energy is a key consideration

while the world transitions to a lower

carbon energy system, our strategy also

focuses on energy security market drivers

for our oil and gas services which have

the potential to generate environmental

impacts. As such, our environmental

approach relies on our delivery of

innovative solutions to support the

net-zero agenda, combined with world-

class environmental management in our

operations as we deliver across our many

and diverse projects.

Wood is a signatory to the UN Global

Compact. Our environmental approach

is informed by our voluntary commitment

to integrate the Global Compact’s

environmental principles into the heart of

our business:

Principle 7: Businesses should

support a precautionary approach to

environmental challenges;

Principle 8: undertake initiatives

to promote greater environmental

responsibility; and

Principle 9: encourage the development

and diffusion of environmentally friendly

technologies.

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Scope 1 and 2 Emissions

We are committed to reducing

operational CO2e related emissions

across our portfolio and have adopted a

milestone target, developed in line with

the requirements detailed by the Science

Based Target initiative in place at the

time of setting our target. Our goal is

to reduce emissions by 40% from our

2019 baseline by 2030. In announcing

the target, the Chief Executive at the

time also set out Wood’s commitment

to achieving net-zero by 2050 or sooner.

We consider that our 2030 target and

ongoing delivery against it are important

first steps on our journey to net-zero

Carbon performance

Total global greenhouse gas (GHG) emissions and energy use for Wood for the period 01 October 2022 to 30 September 2023:

41,821

tonnes of CO2e

A total split of emissions is shown in the table below.

Global GHG emissions and energy use data for period 1 October 2022 to 30 September 2023

2022-23

2021-22

2020-21

2018-19 (Baseline year)

Emissions from:

Wood UK

Emissions

Wood

Global

Emissions

Wood UK

Emissions

Wood

Global

Emissions

Wood UK

Emissions

Wood

Global

Emissions

Wood UK

Emissions

Wood

Global

Emissions

Activities for which the Company own or control

including combustion of fuel & operation of facilities

(Scope 1)/tCO2e

2,291

26,612

2,977

28,268

3,745

35,845

10,182

70,775

Purchase of electricity, heat, steam and cooling

purchased for own use (Scope 2, location-based)/tCO2e

3,437

21,061

12,467

33,349

16,904

39,004

28,109

80,287

Purchase of electricity, heat, steam and cooling

purchased for own use (Scope 2, market-based)/tCO2e

206

15,209

387

17,420

3,926

22,710

22,107

74,308

Total gross Scope 1 and 2 emissions (location-based)/

tCO2e

5,728

47,673

15,444

61,617

20,649

74,849

38,291

151,062

Total gross Scope 1 and 2 emissions (market-based)/tCO2e

2,497

41,821

3,364

45,6882

7,671

58,5551

32,289

145,083

Energy consumption used to calculate above emissions

(MWh)

28,210

172,078

73,237

231,130

91,315

281,387

149,619

493,319

Company’s chosen intensity ratio: tCO2e (gross Scope 1

+ 2) (location-based) / $100,000 revenue

0.72

0.81

2.11

1.13

2.94

1.44

3.58

1.75

Company’s chosen intensity ratio: tCO2e (gross Scope 1

+ 2) (market-based) / $100,000 revenue

0.31

0.71

0.46

0.84

1.09

1.12

3.02

1.68

Total Scope 3 emissions/tCO2e

n/a

2,725,184

n/a

1,942,128

n/a

1,289,485

–

GHG Emissions Methodology

Wood has adopted an operational control approach to boundary setting as described in the GHG Protocol and all data relating to our target is given using the

market-based methodology of calculation. We have used accepted methods of calculation based on the WRI Greenhouse Gas Protocol: A Corporate Accounting

and Reporting Standard (revised edition). National conversion factor guidelines (e.g. Environmental Protection Agency, Environment Canada, DEFRA) have been

utilised where appropriate. 2023 conversion factors have been utilised throughout the 2023 reporting period.

Wood has elected to report emissions data for the period 1 October to 30 September rather than align to our

financial year and has done so consistently since

2017. In order to report on a financial year basis would necessitate the reliance on a significant amount o

f estimated data, particularly to calculate Q4 emissions,

which would impact on the quality of the data that is used to inform our actions to drive down emissions. As such, we consider that utilising a reporting period of

12 months to 30 September significantly enhances the accuracy o

f our emissions reporting which in turn increases the quality of the information used in decision-

making on actions to reduce our emissions.

Wood’s chosen intensity ratio is calculated based on revenue as revenue represents a key measure of our economic output and business success and is a metric

that has a high degree of accuracy. The alternative measure would be headcount; however, this was not selected due to the potential for issues in boundary

setting and variability, particulary around the impact of contractors and sub-contractors.

Scope 3 categories material to Wood – Purchased Goods and Services; Capital Goods; Fuel and Energy Related Activities; Upstream Transportation and

Distribution; Waste Generated in Operations; Business Travel; Employee Commuting (including emissions relating to our employees working from home); and until

2022, Downstream Leased Assets.

Notes:

Prior to the re-baseline exercise our 2020-2021 global scope 1 and 2 market-based emissions were 75,629 tonnes CO2e and energy consumption used to

calculate these emissions was 345,537 MWh.

Prior to the re-baseline exercise our 2021-2022 global scope 1 and 2 market-based emissions were 60,611 tonnes CO2e and energy consumption used to

calculate these emissions was 289,639 MWh.

that will enable us to establish a net-zero

target in the longer term.

Operational emission sources have

been consistently identified, quantified

and collated in the company emissions

inventory and a target delivery plan

for emissions reduction developed and

integrated into our overall business

approach. As noted on page 57, our

2019 baseline figure was restated to

reflect the sale o

f our Built Environment

Consulting business in September 2022,

which accounted for 28,502 tonnes of

scope 1 and 2 emissions (market-based)

in the baseline year.

During 2023 we continued to reduce

emissions beyond the 2030 target and

Wood’s footprint for the 12 months to 30

September 2023 of 41,821 tonnes of CO2e

is now 71% below the rebaselined 2019

benchmark. There has been an 8% reduction

in scope 1 and 2 emissions (market based) in

the period, achieved through:

• A continued focus on consolidating and

increasing energy ef

ficiency in our real

estate portfolio

• Lower on-site fuel usage as certain

major lump sum contracts completed

and were not replaced in line with our

preferred contracting structure.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

In the year, Wood strengthened its

crisis management through refreshed

leadership training, including all

three business unit leadership teams

receiving incident management

training. Having an effective and

co-ordinated response to climate-

related incident events reduces risk

to Wood employees and assets, and

ensures timely steps are taken to

assure business continuity.

Scope 3 emissions

Indirect emissions represent 98% of

the total company footprint. These

sources of emissions are more complex

to characterise, are based on GHG

Protocol estimation methods and are not

within Wood’s direct sphere of in

fluence;

therefore, they are more dif

ficult to

control. However, we are taking some

high-level actions to address our scope 3

emissions:

• We provide our people with a number

of resources to help them make more

sustainable choices. For example,

our 'Guide to taking climate action

and reducing your impact' provides

employees with advice on how to

reduce their carbon footprint, both at

work and home, and our global travel

standard requires consideration to be

given to environmental factors when

making business travel decisions

• We provide carbon training to our

suppliers and the supplier support

hub on our website contains resources

to educate our suppliers on our

expectations on key matters such

as carbon, as well as key policies,

documents and targeted training

Resilience

Oscillations in global weather patterns

have led to a more volatile climate with

increasing flood, drought and storm

conditions; storms are frequently more

violent than in the previous decade.

Weather patterns are less predictable.

Ensuring that Wood has effective Crisis

Management and Business Continuity

planning in place in critical locations is

essential.

Wood has a comprehensive Crisis &

Emergency Management (C&EM)

structure in place and through this

continually improves its resilience to

such events. This structure involves

policy, guidance and training in the

management of such events at all levels,

from the tactical to strategic, as well as

more focused efforts in particular areas

of identi

fied risk. Wood established,

for

example, a North American Hurricane

Preparedness Team to ensure the

business is effectively prepared to

manage the impact of hurricanes

heading for North American coastlines

where Wood operates.

Leadership (A/A-): Implementing current best practices

Management (B/B-): Taking coordinated action on climate issues

Awareness (C/C-): Knowledge of impacts on, and of, climate issues

Disclosure (D/D-): Transparent about climate issues

A-

B-

C-

D-

Further information on CDP and access to our annual

response is available at:

www.cdp.net/en/scores

Adaptation towards net-zero

Wood continues to drive accountability for carbon through its business processes and management system

targeting the greatest emission sources. We engage with internal and external stakeholders to discuss their role in

reduction, improve awareness and work towards the integration of carbon related priorities into their activities and

operations. Integration of climate as an essential part of our business management processes is a central tenet in

evolving towards a net-zero business in-line with the commitment made to achieve net-zero by 2050 or sooner.

During 2023 and working in conjunction with third party suppliers, Wood’s Real Estate Management team has

sourced locations and facilities to include ef

ficiency, transportation links and building management systems which

support Wood's commitment.

To show our ongoing support for the global efforts to achieve net-zero, we participate in the annual voluntary

Carbon Disclosure Project (CDP) questionnaire. Following our submission in 2023 we were awarded a disclosure

score of ‘B’ for the fourth consecutive year.

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Environmental compliance

Wood is committed to act in an

environmentally responsible manner

through identifying environmental risks,

preventing pollution, taking responsible

steps to mitigate and minimise impacts

and continually improve environmental

management. The business works in

multiple jurisdictions and on varied

scopes of work meaning there are

multiple impacts to manage as well as

regulatory regimes to comply with. We

are often obliged to work within the

client’s environmental management

system (EMS) and/or permits and

licences.

Pollution prevention

To meet our commitments in such a

diverse environmental impact landscape,

the business operates an environmental

management system (EMS) based on a

framework approach. The EMS is aligned

to ISO 14001 and forms an integral

part of Wood's integrated HSSE and

sustainability management system,

supported by the HSSES Policy and Code

of Conduct. Wood’s policy commitments

are enacted through the Environmental

Standards, a consistent framework

covering environmental preparedness,

prevention and management.

Wood’s environmental standards set

out minimum requirements to ensure

environmental risks are identified

and managed appropriately, whilst

proactively reducing impacts on the

environment from our operations.

Wood’s minimum requirements include,

but are not limited to

• Understanding and complying with

all legal, environmental regulatory

requirements and ensuring the

appropriate permissions/licences are in

place before operations commence.

• Establishing a formal process

for assessing the signi

ficance o

environmental aspects identified.

• Implementing control measures to

eliminate or reduce environmental risks

and impacts to an acceptable level and

mitigate or prevent the disturbance

flora,

fauna, and community, or

damage of cultural heritage.

• Assessing environmental conditions

associated with a site before receiving

any land or signing facility leases.

• Setting environmental objectives,

targets and indicators to facilitate

continual improvement in

environmental performance.

• Providing our workforce and relevant

third parties with appropriate

awareness training to enable

the effective management of

environmental impacts.

• Ensuring that environmental

good practice and learnings from

environmental incidents and non-

conformances are shared across the

business.

• Evaluating performance and progress

against objectives on a regular basis.

• Ensuring third parties work in line with

our environmental standards and take

all measures to protect our reputation

and performance.

Environmental training is an

essential tool for Wood to mitigate

its environmental impacts. We are

developing an environmental training

programme, to be rolled out in 2024, that

will equip employees with the knowledge

and skills necessary to understand and

address environmental issues. This will

contribute to fostering a culture of risk

awareness and preparedness, and will

help minimise our exposure to potential

liabilities.

ISO 14001:2015

Certification to ISO14001:2015 is a

business decision based on a cost/

benefit analysis. For example, clients may

require a certification in order to quali

for tendering. Wood has a consolidated

certification through Lloyds Register

which covers approximately 38% of our

business by headcount. Those areas not

covered by our certification must comply

with Wood’s minimum environmental

standards which, although not certified,

have been developed to meet the

requirements of the ISO 14001:2015

standard.

During the year, Wood’s certification

auditors recorded 6 minor non-

conformances. These were related to

environmental aspects and impact

identification and the implementation

of elements of the environmental

management system. Wood has put in

place a suite of corrective actions which

will be actioned and embedded over the

course of 2024.

Environmental incidents

During the year, Wood recorded 75

environmental incidents; these were all

low actual impact and low potential

impact. Incidents are investigated to

ascertain root cause enabling mitigation

steps to be taken. Consistent with

2022, the most common cause of

environmental incidents reported was

due to failure of operating equipment

or machinery (49%) with hydraulic

oil being the most common cause

of contamination. In total, 223 litres

of hydrocarbon were released as a

result of these incidents with minimal

environmental impact. We have seen

a decrease in hose failures in 2023 in

some parts of the business driven by a

reduction in onsite working hours.

Number of environmental incidents

2018

171

123

2019

2020

2021

2018

0.20

0.14

2019

0.10

2020

0.14

2021

2022

0.14

2022

2023

0.11

2023

Environmental incident frequency rate

per 200,000 work hours

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Regulatory compliance

There have been zero environmental

regulatory prosecutions against the

Company in 2023, however, there

has been one regulatory action. On

26 October 2023, at a UK Overhead

Lines Project, there was unauthorised

ground disturbance outside a Scheduled

Monument Consent to work. Wood

advised the regulator and a Notice to

Halt was issued by Historic Environment

Scotland.

2023

Incident

number

Prosecution

Citation / Notice

Permit / Licence contravention

(self-reported)

Overall, the number and frequency of

environmental incidents has decreased

compared to the prior year as a result

of a number of factors, including the

operation of our environmental policies.

Resource Management

Procurement of both goods and services

are governed by Wood’s supply chain

approach inclusive of the Supplier

Code of Conduct. The Supplier Code

of Conduct sets out Wood’s supplier

pre-qualification assessment which

includes environmental impact screening

and standard supplier obligations

inclusive of environmental management

requirements. This helps us to reduce our

exposure to environmental risks within

our supply chain.

Sustainable procurement

As part of our focus on continuous

improvement in supply chain, a gap

analysis has been undertaken against the

international standard for sustainable

procurement ISO20400:2017. The

assessment will support the ongoing

improvement and evolution of Wood’s

supply chain processes inclusive of

addressing environmental impacts.

Wood recognises that, like many

organisations, we will need to evolve

our processes to respond to the

recommendations of the Taskforce on

Nature Related Financial Disclosures

since there is potential for signi

ficant

impacts within our supply base. For

example, these impacts could be related

to raw materials supply, timber products

and land utilisation.

Circular economy

During 2023, Wood published to the

business a Sustainability Code of

Practice, designed to support global

Sustainable Development Goals (SDGs)

and our own sustainability targets,

including our target to eliminate single-

use plastics (SUP). The document

translates concepts of sustainability

and the circular economy into practical

project-based steps, including how to

address waste streams and, in particular,

the elimination of SUP.

Wood has targeted the elimination of

SUP at our Wood-managed locations

by 2025, and as at 31 December 2023,

17% of our locations have been declared

SUP-free. This is slower progress than

expected as we had hoped to have more

than 50% of locations SUP-free. Many

locations have significantly reduced

SUP, but a number have encountered

challenges in eliminating one or two key

products, such as plastic milk bottles and

personal water bottles. However, with

the support of Wood’s leadership we are

placing a greater focus on SUP in 2024 to

accelerate progress and assure delivery

of our target by the end of 2025.

Contaminated land

As detailed in note 22 (Provisions) to the

financial statements, Wood currently

owns or operates or has in the past

owned or operated industrial facilities

the property on which those facilities are

or were situated, as a result of current or

former operations, is likely to be affected

by hazardous substances. Wood has a

small number of legacy contaminated

land sites of which active management

is ongoing, including a former Foster

Wheeler manufacturing site which closed

in 1981 located in Pennsylvania, US. Wood

has been managing a Trichloroethylene

(TCE) plume associated with the

manufacturing process at this site.

Monitoring during the year continues

to show the plume concentrations

continuing to reduce, and the site clean-

up is now complete. The remaining pump

and treat of groundwater will remain in

place and Wood will continue to work

with the Environmental Protection

Agency until TCE levels fall within

acceptable levels.

Our environmental specialists work

closely with Real Estate and within

the business units to ensure effective

due diligence is undertaken on

location acquisition and disposals and

to ensure potential contamination

issues are identified and remediated

appropriately to prevent legacy

liabilities associated with Wood’s

operations. Wood’s Environmental

Standards set out minimum standards

for the management of polluting

materials, waste, discharges and spill

response to prevent future operational

contamination incidents.

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Governance & risk management

To ensure effective governance and oversight of environmental matters Wood has established the following:

Role in environmental impact management

Safety and Sustainability Committee of the Board

Ensures that Wood has implemented processes with appropriate resource to

effectively identify, manage and control material environmental issues.

Refer to the Safety and Sustainability Committee report on pages 128 to 129.

Business Sustainability & Assurance Executive President

Sets and develops environmental policy and advises the Executive Leadership

Team on strategic environmental related matters.

Business Unit Health, Safety, Security, Environmental and

Sustainability Presidents

Ensure the effective implementation of the company environmental

standards and EMS compliance.

The Business Sustainability & Assurance Executive President has established a HSSE and Sustainability Leadership Team

comprising of the Business Sustainability & Assurance Executive President, President of HSSE Services, President of Quality,

President of Supply Chain and President of Sustainability. The President of HSSE Services, in collaboration with members of the

team, sets out our environmental policy and standards and performance metrics. Performance is reviewed at the leadership forums

not less than monthly and a quarterly report, inclusive of environmental performance data, is submitted to the Board. The Safety

and Sustainability Committee review performance data and is responsible for interrogating environmental performance and

considering the effectiveness of corrective actions at quarterly Board meetings.

Risk management

Wood’s process for identifying, assessing and responding to environmental risks and is incorporated within our enterprise-wide

risk management process and framework as detailed on pages 83. This framework feeds into our principal risks and uncertainties

reviewed by the Board and the GRC. Environmental and climate-related impacts are reflected in several o

f our principal risks, in

particular, Major Incident (HSSE), Strategic Delivery and ESG Strategy & Performance. More details on the mitigation, monitoring

and assurance of principal risks are set out on pages 83 to 90.

Read our HSSES Policy Statement:

woodplc.com/hssepolicy

Read our Supply Chain Code of Conduct:

woodplc.com/scm

Reducing

international

carbon

emissions

In the US, the Inflation Reduction Act (IRA) means US

producers can receive $85 per ton of CO2 captured which

exceeds the cost of CO2 capture. Regulation coming

into play like the IRA is one of the reasons there is an

increasing demand to design carbon capture and storage

hubs.

From the US Gulf Coast of Louisiana and the oil sands

of Canada, to the Persian Gulf coast of Saudi Arabia,

Wood’s experts are advising and engineering the design

and digitalisation of hundreds of carbon capture projects.

Wood has completed more than 200 carbon capture and

storage (CCS) studies, which accounts for around one-

third of the total carbon-capture projects taking place

around the world.

Wood’s top five clients have

committed to invest over

$100 billion in decarbonising

their assets.

200+

CCS studies completed

Find out more:

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

People

Our success is determined by Wood’s remarkable people

delivering on our strategy as we design the future.

Our growth this year is a sign of positive momentum, thanks to the

commitment, care, strength, passion, and skillset of our teams. We

want to ensure all our people go home safely every day and remain

focused on building an inspired culture, delivering performance

excellence for our clients, and ensuring pro

fitable, sustainable growth.

Our people strategy is simple: we will attract, develop, engage, retain,

and sustain our global talent to ensure Wood is a great place to work.

The 2023 highlights of people activities are summarised opposite, and

we are immensely proud of the progress made.

2023 highlights

Attract

• Over 1 million followers on LinkedIn

• Employee benefits enhanced in

Australia & Canada; India & UAE

pending

• Increased gender diversity in

leadership to 35%

• New global recruitment system

implemented

Develop

• Re-energised employee performance

and development processes

• Launch of My Path – accessible and

relevant online learning

• Wood leadership programmes

delivered to over 600 leaders

• 780 global graduates enrolled on

business skils programmes

• Focused development of high

potentials, identified successors & early

careers

Engage, retain & sustain

• Employee engagement increased with

eNPS up to +28 from +15

• Board and ELT employee engagement

via Leadership Listening Sessions,

reward focus groups and town halls

• Global leadership conference and

Inspire Awards ceremony

• Internal marketplace – Raise Your

Hand campaigns

• Global reward engagement driving pay

equity

• Reduced professional voluntary

turnover to 13.7%

Diversity & Inclusion

• Diversity & Inclusion focus including

Best Energy Workplace at ALLY Energy

GRIT Awards

• Increased participation in seven

employee-led networks, and launch of

Women at Wood movement

• Voluntary ethnicity self-disclosure in

Australia, UK and US

Profitable

growth

Inspired

culture

Performance

excellence

Decarbonisation

Digitalisation

Attract

Develop

Engage, retain

& sustain

Diversity &

Inclusion

Strategic pillars:

Cross cutting drivers:

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

1 million

followers on LinkedIn

35%

Leadership gender diversity

Attract

Wood is a people business with a

strong global brand, attracting the best

talent. Our employee value proposition

supports the incredible efforts of our

global resourcing team with an average

time of 33 days to offer, down from

35 in 2022. We continue to focus on

internally redeploying our talent, ensuring

transfer of critical skills, and enabling

development. In support of this we

implemented an “internal marketplace”

approach increasing visibility of career

opportunities for our people and offering

them the opportunity to ‘raise their

hand’ to ensure we have the right skills

at the right time, ready to deliver to our

clients. We have also implemented a new

global recruitment system for 97% of our

population, which provides a seamless

interface with our HRIS (Human

Resources Information System) and

will enhance our ability to engage with

internal and external candidates.

Our focus on investing for the future

through graduate recruitment remains

paramount. During the year, we recruited

over 900 graduates and enrolled 780

on our global graduate business skills

programmes, which ran in March and

October. The aim of the programme is

to support graduates with the transition

from campus to corporate, creating the

opportunity for them to learn, connect

and grow by building the key capabilities

required to drive their careers and the

business forward. Feedback from the

graduate population has been positive,

with 87% satisfied or very satisfied with

the programme. Our ambitions in 2024

and beyond are to continue to increase

our graduate intake.

Our hiring practices ensure we follow

through on our diversity, inclusion and

equal opportunities commitments

and employ local nationals wherever

possible in the communities we serve to

enhance our culture. We seek to treat

all people fairly, with dignity and respect

and consider applications from all levels

of ability and areas of society, being

mindful of reasonable adjustments

which may need to be considered.

Our

culture of care and employee wellbeing

are at the heart of all we do, and we

continue to partner with The Living

Wage Foundation as a Real Living Wage

employer in the UK.

We provide competitive, fair, and

transparent reward, which is free from

bias, globally. Our leaders ensure our

equitable practices are applied and we

provide them with toolkits and training to

enable them to communicate openly with

their people. Numerous engagements on

pay, benefits, retirement, and incentives

took place during the year, with feedback

acted on, including:

• Changes to our annual bonus plan

structure for c. 1,200 participants,

aligning it to delivery of the strategy,

with regular updates on performance

ensuring motivation and engagement

are maintained with a focus on

rewarding our employees for delivering

our financial and ESG targets

• For those senior leaders participating

in long term incentive plans, we

carried out detailed engagement to

enable them to understand their role

in delivering long term sustainable

outcomes for the business, our

investors, our people, and those

communities we support

• Engagement with employees in

the US on the attractiveness of the

Employee Share Plan (ESP) and

whether to consider implementing a

new plan format, following approval

by shareholders at the AGM. These

engagements will lead to us enhancing

awareness and understanding of the

current plan and providing additional

support around the enrolment window

• Enhancing insured benefits, paid

time off and retirement provisions in

Canada

• Enhancing retirement arrangements

and reducing associated costs for

employees; enhancing carer and

indigenous cultural periods of leave in

Australia

• Review of bene

fits, terms and

conditions in India and the UAE which

will lead to improvements being

implemented in 2024

• Age-specific awareness training

for

UK retirement plans, to ensure our

people focus on their future

financial

wellbeing.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

• Our mentoring app continues to gain

followers, with 476 mentors and 906

mentees now registered, resulting in

over 319 matches. The app enables

widespread access to mentoring for

our employees and works by providing

mentees with a list of suggested

mentors based on their profiles.

Mentees review the profiles o

f the

suggested mentors and send a request

for mentoring directly through the app

• We re-energised our approach

to performance development by

introducing more frequent and

valuable check-in conversations

between managers and their

employees, and greater functionality

in our HRIS to record discussions and

actions. Employees and managers

are encouraged to have regular

conversations on performance against

objectives, and career development

to support greater engagement,

organisational performance, and

understanding from employees how

their role contributes to the overall

strategy

• We utilised our HRIS to support talent

and succession planning, and enable

data driven people decisions, with an

increased understanding of the talent

within the organisation, and over

10,000 talent profiles uploaded

• ‘My Path’, our new global careers and

development hub launched, supporting

employees and managers in learning

and career management needs.

The

hub hosts technical, business skills,

and leadership development tools and

resources, and links to our internal

career site to support individuals

looking for their next opportunity

• To enable high potential employees to

gain a better understanding of their

strengths and development priorities

we held an ‘Accelerated Development’

programme which helps build a sense

of belonging and connectiveness to

support them to reach their potential

• Strengthened succession pipeline for

leadership roles with a targeted focus

on developing key successors through

regular career conversations, targeted

development planning, internal moves

and promotions, and mentoring

support

• Team effectiveness workshops to

strengthen collaborative relationships

and drive sustainable improvements

and results

• The Project Management Academy

(PMA) reached an audience of over

8,000 attendees in 2023, delivering

courses on topics such as Scope

and Change Management, Budget

and Cost Management, Schedule

Management, and Project Risk and

Contingency Management. The PMA

supports our performance excellence

strategic pillar by providing tools that

identify competence assessment

gaps that allow leadership to focus

on the individual needs of their team

members and enhance their career

development

Develop

In Wood, we thrive on developing our

internal talent – our learning and

development focus develops capability

and performance in roles and identi

fies

requirements to support and deliver our

future success. Key highlights from 2023

include:

• 130 business and interpersonal skills

training sessions delivered to almost

8,000 learners across the globe, with

the most popular sessions focusing

on building resilience, effective

presentations, leading through change,

and networking skills

• Our flagship ‘Stepping into Leadership’

programme develops key leadership

skills for those employees who have

recently moved, or are about to move,

into their first leadership role, with 352

participants during the year

• The ‘Leading Beyond’ programme

targeted at senior leaders to enhance

the leadership capabilities required to

deliver on our strategy through being

inclusive, engaging our people, and

strengthening the inspired culture at

Wood. It supports our leaders to drive

performance excellence and unlock

growth enablers to transform the

culture and drive profitable growth

8,000

attendees in Project Management Academy

10,000

talent profiles uploaded to HRIS

900

graduates recruited globally

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

115%

Increase in employee engagement

(eNPS up to +28 from +15)

Engage, retain,

and sustain

We continue to build on our

engagement framework to ensure we

are continuously connecting with our

people, listening to their feedback, and

taking actions to deliver our inspired

culture. In June we carried out an

employee engagement “pulse plus”

survey, asking ten questions to measure

engagement, development, alignment

to and understanding of strategy,

wellbeing, and line management care.

Over 58% of our global population

responded to the survey, an increase

of 25% on the previous survey; and our

employee net promotor score (eNPS), a

key indicator of employee engagement,

increased from +15 to +28. As always,

the Board seeks regular information on

employee engagement, and results are

shared with them to enable them to

continue to measure and monitor the

effectiveness of our culture; challenge

management on where improvements

need to be made; and formulate topics

for discussion and deeper feedback with

the wider workforce via our Leadership

Listening Sessions (previously called

Listening Group Networks).

The Leadership Listening Sessions are

hosted by Board members and the

ELT and are open to all employees; an

overview of the eight sessions conducted

during the year can be found below.

In addition to these, members of the

remuneration committee engaged with

employees on pay equity; Canadian

insured benefits, retirement, and paid

time off; and variable reward plans.

More details are on page 136 of the

remuneration report.

Topic

Themes from discussions in

leadership listening sessions

Outcomes

Performance

Excellence

• Strategy: help employees understand more

how their role supports delivery of the strategy

• Systems & Processes: simplified, consistent

systems and processes will drive value.

• Wellbeing: new Wellbeing Network is an

opportunity to improve ways of working at

Wood.

• Celebrating and Rewarding Success: continue

to encourage celebrating success across

teams.

• Line managers to use results from employee engagement

survey to implement actions on areas to maintain, improve,

stop and establish.

• Wellbeing Network established to collaborate with our six

other D&I employee networks. Network will highlight local

wellbeing champions, promote Living Well at Wood, employee

assistance programme and accompanying training webinars

along with HHSES.

• Expansion of Inspire Awards to include eight awards. More

than 700 employees received spot recognition bonuses.

• Race and Ethnicity Network highlighted local cultural

celebrations.

Inspired

Culture

• Culture and Leadership: leadership visits to

fices and sites are valued by employees

and provide opportunity for further 2-way

engagement.

• Trust: trust in our strategy and leadership is

critical to have a truly inspired culture.

• Transformation: we are on a journey and

should celebrate progress to date.

• Increased number of leadership visits to of

fices and sites,

including townhalls and “meet the ELT” sessions.

• Weekly wins celebrated and employees regularly updated on

strategic progress.

• Increased eNPS (employee net promoter score) and

participation in global employee survey shows that trust is

growing in Wood, the strategy and leadership.

Profitable

Growth

• Collaboration & Networking: continue to

enhance networking across all employees at

Wood.

• One Wood. One Strategy: leaders to

emphasize ‘One Wood’ and enable more

collaboration across BUs and functional areas.

• Time: enhanced systems, processes and

admin solutions will enable an inspired culture

with reduced silos, increased performance

excellence and profitable growth.

• Employee networks continue to strengthen and sponsored by

senior leaders.

• First Diversity & Inclusion Week sponsored by Executive

Leadership Team to share key messaging and encourage

involvement in networks.

• Review of IT systems to identify improvements and

collaborative ways of working.

A year

in review

• Diversity & Inclusion: continued focus on action

plans with metrics, data, and accountability,

supported by network activity.

• Engagement: transparent communications

and in-person engagement continues to build

trust and should remain a focus.

• Strategy: employees feel more connected

with the Strategy, with further simpli

fication

required in 2024.

• Leadership: continue to develop leaders to be

accountable and flexible.

• Significant progress in

female leadership gender diversity from

32% at end 2022 to 35% at end 2023.

• Women of Wood movement launched with three initial

regional chapters (England, Middle East, and Australia)

to provide platform to amplify and understand barriers,

opportunities and solutions for women working at Wood.

Sponsored by senior leaders.

• Enhanced Indigenous Cultural leave for employees in Australia.

• Engagement enhanced with senior leaders to share 2023 D&I

achievements and collaborate on plans for 2024.

• Introduction of aggregated ethnicity pay reporting for eligible

countries in global HRIS.

• Regular strategic updates.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Key network activities in 2023 included:

• Wellbeing: to support our six wellbeing

pillars (physical, emotional, financial,

social, career and environmental),

the network provides a space for

employees to come together to

learn, share and collaborate on all

aspects of wellbeing including best

practice, engagement campaigns

and training events. We recruited 3

network co-chairs in Australia, UK and

EMEA with plans in place to recruit

a fourth in the Americas. Additional

support provided for employees

includes the implementation of a

menopause toolkit to support our

female employees and provide broader

education and awareness; a Wellbeing

Day for employees in Australia; and

enhanced education and engagement

on the global employee assistance

programme, resulting in increased

support and usage

• Armed Forces Network (AFN): with

more than 190 members in Australia,

Scandinavia, the UK, and US, the

network seeks to support veterans,

reservists, and family members, as

well as involving allies and supporters.

Plans for 2024 include increased

communications of the network and

collaboration with other employee

networks and skills

• Developing Professional Network

(DPN): this community, in partnership

with the early careers team, provides

a platform for employees to learn

more about Wood, their colleagues

and themselves, and promotes the

development and connectivity of

tomorrow’s leaders, while positively

contributing to community programs

and Wood’s culture

We continue to celebrate success. In

the fi

fth year of our Inspire Awards,

which recognise outstanding employee

contribution across our business, we took

the opportunity to revise the categories

to align with our strategic pillars and

included two new categories, Successful

Sustainability, and the Nina Schofield

Award, which celebrates a remarkable

employee in memory of our beloved

colleague who sadly died in 2022. Over

1,600 nominations were received from

across our global business, with a diverse

judging panel responsible for selecting

finalists. We also celebrated more than

700 employees receiving spot bonuses

in recognition of their achievements

during the year, with additional local

celebrations in place.

One year on from the launch of our

strategy, 200 of our global leaders met,

with a further 350 joining online, for the

W Conference 2023 – Wood’s annual

leadership conference, with the theme

of “Design the future: make it matter,

make it now”. Over the course of two

days, our leaders gathered insights from

keynote speakers and panel discussions,

participated in breakouts, and got to

know each other better as we discussed

and aligned on our deliverables and

growth priorities going into 2024.

We aim to create the best working

environment, with a culture where our

people are highly engaged, respected,

feel supported, and where differences

are valued. Our inclusive employee

networks support this and enable our

people to celebrate their diversity,

connect, learn, and share feedback to

enable us to continually improve.

• Equal Footing Network: brings

together women and allies from across

the company to spotlight barriers

and solutions for gender equity and

equality at Wood

• Race and Ethnicity (WREN): this fast-

growing network of more than 700

colleagues seeks to build awareness

of the lived experience of Black,

Indigenous, and people of colour

(BIPOC), encourage people to speak

up against racism and discrimination,

and create a safe space to connect,

learn, and advance ethnic diversity

and inclusion. During the year, WREN

held sessions to mark UK and US Black

History months, partnered with Black

Girls Do Engineering, shared ideas

for increasing ethnicity self-reporting

in, the UK, USA and Australia, and

encouraged local of

fice catering

facilities to celebrate religious festivals

such as Diwali

• STEAM (science, technology,

engineering, arts, and math): seeks to

inspire future generations by attending

careers fairs to promote careers in

STEAM and collaborating with the

DPN

• Pride: celebrates and supports the

voices, culture, and rights of the

LGBTQ+ community and creates an

environment where people can live

proudly as themselves by listening,

learning, and speaking out against any

inequality among us

Our continued focus on the employee

experience at Wood has led to a

reduction in our professional voluntary

turnover, now at 13.7%, down from 16%

in 2022.

13.7%

professional voluntary turnover reduced to

13.7%

1,600

nominations for Inspire Awards

700

employees recognised with spot bonuses

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Diversity & Inclusion

The markets in which Wood operates

attract a significantly higher percentage

of males due to the predominately

technical focus of the roles in of

fice, site,

and offshore locations. We support the

recommendations of the FTSE Women

Leaders Review on gender balance and the

Parker Review on ethnic diversity. Refer to

Nomination Committee on page 122.

As a global organisation we aim to

ensure we are inclusive to all nationalities

across our employee population. Whilst

we have not set a target on ethnic

diversity in senior management to date,

we are actively encouraging employees

to self-disclose ethnicity in our HR

system to help us monitor our progress in

improving diversity across Wood, and set

an appropriate target in the future.

We commit to driving greater diversity

in our business with the aim of having

at least 40% females in leadership

roles three levels below the Executive

Leadership Team (ELT) by 2030. The

Board remains committed to developing

diverse talent for succession and

leadership positions in support of creating

an inspired culture. On 31 December

2023, globally we had 35% female

leaders (an increase from 32% at the

end of 2022), with a continued focus on

developing female Pro

fit and Loss (P&L)

leaders across Wood. In the Operations

business unit, we have increased female

leadership from 25% to 31%; in Projects

from 16% to 17%; and in Consulting from

21% to 32%. Gender balance in our Early

Careers population is also increasing

with 30% of our graduate intake now

female. The FTSE Women Leaders Review

report, measuring female leadership

representation in the FTSE 350 for Board,

ELT, and direct reports, published in

February 2024, showed that Wood has

maintained its Board gender diversity

commitment, with 44.4% of our Board

and 28.1% of the ELT and their direct

reports represented by women. Refer to

FCA Diversity Disclosure Table on pg 123.

The 2023 UK gender pay gap covered

five entities and 4,864 employees, with

details provided at www.woodplc.

com and on the Government website,

categorized by the industry sector, as

determined by the Of

fice o

f National

Statistics. In summary between 2022

and 2023 the overall mean pay gap

reduced to 23.3% from 26.0%, the

median pay gap reduced to 31.1% from

32.8%; and the mean bonus gap reduced

to 13.2% from 44.2%, the median bonus

gap reduced to -0.7% from 32.5%. We

continue to focus on pay equity, with

fairness of pay for those carrying out the

same job, in the same location, with the

same skills and experience, regardless of

diversity.

We remain committed to our diversity,

equity and inclusion policy which

encourages an inclusive environment

where employees are involved, respected,

connected, encouraged, cared for and

welcomed. Differences such as life

experiences, gender, sexual orientation,

marital or civil partner status, gender

reassignment, race, religion, or belief,

colour, nationality, ethnic or national

origin, disability, age, and upbringing

underpin and amplify our diverse

workforce, creating an inclusive

organisation. We strengthened and

demonstrated our commitment in this

area by:

• Hiring indigenous DE&I coordinators in

Australia and Canada

• Partnering with third parties to share

best practice with peers in the sector

and other industries including ALLY

Energy (USA), Society of Women

Engineers (USA), RoboGirls (Australia),

Dress for Success (Australia), Powerful

Women (UK) and AFBE-UK (UK)

• Winning the Best Place to Work at the

2023 Ally Energy GRIT Awards

• Collaborating with the Association for

Black and Minority Ethnic Engineers

(UK) to support the business case for

voluntary ethnicity self-disclosure for

colleagues in Australia, the UK, and US,

with plans to expand in 2024 to align

with Parker Review requirements

• Launching the Women of Wood

movement with ELT sponsorship. This

movement brings together female

employees in-person at a local level to

discuss solutions and mitigate barriers

to amplifying our current and future

female talent at Wood. Local chapters

are now established in Australia,

the Middle East (covering Iraq, KSA,

Kuwait, Qatar, and the UAE), and

the UK, with plans to progress into

Southern Europe, India, and the

Americas in 2024. The Chapters

collaborate with our networks, and

themes shared with the ELT and Board

• Implementing a menopause toolkit to

support our female employees’ wellbeing,

and enhance education on this topic

• Ensuring all our training, promotion

and career development processes

are in place for all our employees

to access, regardless of their race,

ethnicity, nationality, religion, gender,

sexual orientation, age, or disability.

supporting applications made by

people with disabilities, and making

reasonable adjustments to their

environment where possible, to create

a workplace that suits their needs. If

any employee becomes disabled during

their time with us, we will re-train and/

or make reasonable adjustments to

the work environment where possible,

to maintain employment

• Annually reviewing our global policies

relating to human rights, equal

opportunities, harassment, diversity,

equity & Inclusion, and modern

slavery and human traf

ficking, which

can be found at www.woodplc.com

Our Sustainability Report highlights

our commitment to upholding the

Universal Declaration of Human

Rights and we know the protection

and enhancement of human rights is

fundamental to a sustainable business;

see more information at

www.woodplc.com/modernslavery

Human Rights

Respecting our people, and those we work

with, remains fundamental to building

a culture that encourages people to join

and stay with our organisation. We have

built strong people-related policies around

internationally recognised fundamental

human rights, publicly supporting

the adoption of these rights through

our Human Rights policy, available at

woodplc.com/sustainability/people/

human-rights. During 2023 we rolled out

our Sustainability Code of Practice, which

incorporates a systematic approach to

the identification, adoption and assurance

of worker welfare principles at our

project sites. Our HR leaders undertook

training in these principles, and their

role in safeguarding against modern

slavery and human traf

ficking. We also

continued our focus on embedding fair

working practices in our supply chain with

73% of our labour suppliers now signed

up to the Building Responsibly principles

which seek to promote the rights and

welfare of workers in the engineering and

construction industries.

*inclusive of the executive directors

**inclusive of three levels of leadership below ELT

Gender split at 31 December 2023.

Male

Female

Key:

65%

35%

78%

22%

56%

44%

80%

Overall

Board

ELT*

Leadership Team**

20%

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Community

As a community partner we commit to:

Understand:

• Our community impact and opportunities

• Our key stakeholders

• Local heritage and context around human rights

Engage:

• With key stakeholders and develop, where possible, local procurement plans

• With clear communication including methods of reporting

• On local development and investment plans

Review:

• The effectiveness of plans and community perception

• How we review and respond to community incidents

• How we benchmark our performance, monitor and evaluate

Read more about our community

investment programme on our webpage

at:

woodplc.com/sustainability/people/

community-investment

By thinking globally and acting locally, Wood seeks to ensure

that we leave a positive imprint on the communities we

operate in. Our approach seeks to create shared value by

aligning business goals with local stakeholder needs.

Our values, to demonstrate care, courage and commitment,

are the foundation for building trusted, long-lasting

relationships in our communities to create sustainable growth.

Positively impacting

our communities

We are committed to making a positive

impact in the locations where we

operate. Community impact assessments

form part of the social assessments

undertaken at the project planning stage

and largely sit outside Wood’s sphere of

influence. However, we recognise that

there can still be opportunities for Wood

to make a difference during the project

execution phase.

To enable this, in 2023 we rolled out our

Sustainability Code of Practice (SCoP),

which is a tool designed to facilitate

the consideration of practical steps

that should be considered on projects

across key focus areas supporting

Wood’s sustainability goals. The SCoP

is embedded as a requirement in our

project start-up standard and the

community investment element requires

projects to:

• Support and encourage a ‘good

neighbour’ policy at the site by being

respectful and mindful of how Wood

conducts business in the locality (noise,

behaviour, litter, etc.)

• Assess ways the project could

drive a positive legacy of bene

fit

through engagement with the local

community and engage the workforce

in community investment activities.

This could take the form of adopting a

local charitable cause or building local

amenities

• Encourage learning and engagement

opportunities for community members,

such as apprenticeships, school visits or

provision of learning materials

While our influence on community

matters at a site level is relatively limited

we see huge opportunities to create a

positive impact through our group-wide

Community Investment programme. The

focus of the programme is to encourage

and support our employees to engage

and be active within their communities

to drive positive change. We believe that

this also brings important benefits

for

our business. It can help our people to

feel part of a purposeful organisation,

increasing employee engagement levels,

and can help to develop our reputation

as an employer of choice as through

our work in areas of education we are

potentially interacting with employees of

the future.

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Our approach

Wood’s Community Investment programme aims to inspire and support our

employees around the world to ‘show up’ and ‘lift up’ the communities where we

work. The three strategic pillars of our Community Investment programme are:

• Employee Matched Funding - Wood matches employees fundraising efforts

for charities of the employee’s choice up to a speci

fied limit

• Volunteering – Giving our time, expertise and resources to support causes

that are important to our people and the communities they are a part of

•

Global Cause – In addition to supporting the wide variety of causes selected

by our employees, we also encourage our teams to unite to fundraise and

volunteer for initiatives that support our Global Cause. Our community

investment target focuses on the contributions made to our global cause,

demonstrating the power of our collective efforts

Our contributions to the communities we live and work in captures the time,

expertise and resources to measure our impact.

Volunteering

Volunteering our

time, knowledge

and expertise to

show up in our

communities and

demonstrate

commitment.

Employee matched

funding

Wood’s central

charitable

fund aimed at

matching employee

fundraising efforts

for personal choice

charities.

Our Global Cause

Chosen by our

employees and

aligned to UN

SDG4 and Quality

Education, our

Global Cause unites

our people around a

single cause.

Governance

Wood’s community investment

strategy is managed by our Community

Investment Committee. The

Committee oversees each element

of the programme through monthly

Committee approval sessions, chaired

by the Group Sustainability Manager

with representation from each of our

business units. In 2023, the Vice President

of Inclusion and Diversity and Vice

President of Occupational Health joined

the Committee to strengthen the links

between our community investment

programme and inclusion and diversity

and employee wellbeing.

Supporting a culture aligned with

our values, our community outreach

continues to enable our people to come

together and positively impact local

communities, on the issues material to

those communities and demonstrate the

good our programme can deliver.

To demonstrate commitment from

the top and set clear expectations

for our teams around the world, we

strengthened our existing community

investment governance with the

publication of a global community

investment policy signed by the Executive

President of Business Sustainability &

Assurance.

Global Cause donations to date*

$4.6m

*Includes direct monetary donations,

the value of resources donated and the

monetised value of volunteering time. Global

cause donations relate to purely educational

causes as Wood’s current global cause.

Progress towards our goal to

contribute

$10 million

to our

Global Cause by giving our time,

energy, resources and funding by 2030.

Total charitable donations*

2019

1.14

1.63

2020

1.38

1.78

2021

2022

5.62

2023

% of 2030 target achieved:

46%

In addition to the introduction of a new

policy, a revised overarching Community

Investment Manual was issued to

provide our teams with more detailed

guidance on our approach to community

investment in Wood.

In addition to governance updates,

some key committee highlights from

2023 include:

•

Committee

- To assist with raising

awareness of our community

investment programme and

encouraging participation throughout

our organisation, we strengthened BU

representation on the committee with

the addition of newly appointed BU

Global Sustainability Directors. This

was further supported by three new

committee members bringing fresh

ideas and leadership to our community

activities

•

Communication

- The introduction of

a new, internal quarterly Sustainability

Newsletter with a heavy focus on our

community investment activities has

allowed us to increase awareness

across the business and inspire local

action in support of our target

•

Recognition

- In addition to our

Sustainability Champion category in

our company annual Inspire awards,

we have also introduced a quarterly

sustainability action spotlight for

community activities

•

Global Cause

- Since 2019, our Global

Cause as chosen by our employees

has been in support of Education. This

year we canvassed our employees to

determine if this was still the cause

of choice, and results showed that it

was still the preferred area of focus for

2024 and beyond

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Global Cause -

Education

As part of our sustainability strategy,

Wood has committed to giving our time,

resources and funding to contribute

$10 million to our Global Cause by 2030,

from a 2020 baseline. We encourage our

employees to contribute to our Global

Cause all year round. However, once a

year we hold our annual Global Cause

Challenge to inspire our people to get

involved with causes that support our

Global Cause and to celebrate their

efforts. The challenge

allows employees

to submit applications in support of

educational initiatives around the world

and winning applications receive funding

from Wood.

Since launching in 2019, Wood’s Global

Cause, as chosen by our employees,

has been in support of UN SDG No. 4

Quality of Education and 2023 was our

most successful year yet, seeing more

than double the annual Global Cause

Challenge applications than typically

received in previous years.

Our target is to raise $10 million for our

Global Cause by 2030 and since the

inception of our Global Cause target,

Wood has supported at least 17 countries

with more than $4.6 million towards

educational initiatives around the

world, representing 46% of our target.

In 2023, we contributed approximately

$3.1 million which includes our efforts

during the year as well as the impact of

improvements in our internal reporting.

These improvements have enabled us to

identify and report certain contractual

contributions applied towards supporting

education in some of the countries we

operate in and in 2023 we have reflected

the amounts contributed towards those

initiatives in total to date.

Having canvassed our employees to

confirm ‘education’ is still their cause o

choice, we expect to see the continued

passion of our teams gain momentum.

propelling us further towards our $10

million by 2030 target in 2024.

$3.1m

in contributions during 2023

Our Colombia team is truly remarkable.

They

won a first place award

for

Volunteering and Inclusive Social

Investment in the 2023 Ecopetrol Iconic

Contractor Awards.

This award was in recognition of Wood’s

community impact through their local

community project ‘Musica para Ver &

Becas Tokando’ which was sponsored

with funding from Wood, contributing

to our Global Cause of Education.

The Musica Para Ver & Becas Tokando

project supports local children and young

people challenged with limited vision and

blindness, promoting the development

of their cognitive and motor skills, using

braille and musicography as unique

strategies for social inclusion. Nearly

500 children and young people have

benefitted

from this project in 2023.

500

children and young people have benefitted

from this project in 2023

Music to our

ears in Colombia

Aiming to help close the educational

gap between Aboriginal and non-

Aboriginal Australians, The Wuyagiba

Study Hub, remotely located 622 miles

from Darwin, Australia, serves local

students with a custom-made 10 week

programme of pre-university courses

which would otherwise be unattainable

due to factors such as living in remote

locations, tradition and strong family

ties.

School attendance in remote

Aboriginal communities is poor due

to geographical isolation, poverty,

as well as language and cultural

differences. As a result, opportunities

to access university education are

further limited. The western concept

of education is very different from an

Aboriginal standpoint, so leaving home

and community to study thousands

of miles away in an unfamiliar city

and unfamiliar university environment

can be a daunting and overwhelming

barrier for many.

The courses delivered focus on

preparing students for university and

also focus on cultural subjects. Since

2018, around 20 students a year have

embarked on university education with

the first student graduating in 2023.

The funding from Wood’s annual Global

Cause Challenge has gone towards

transport infrastructure upgrades

to improve the provision of supplies,

emergency medical care and transport

to the study hub. In addition, part of

the funds were used to support the

expansion of the study hub to other

remote Aboriginal communities nearby.

students a year have embarked on

university education with the first student

graduating in 2023

An educational lifeline

for Aboriginal people

in Australia

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Employee

matched funding

Employee Matched Funding allows Wood

to support our employee fundraising

efforts for causes close to their hearts

in their local communities by matching

their fundraising up to a speci

fied limit.

Building on the success of 2022, in 2023

we received many matched funding

applications with $391,359 raised as a

combination of employee and Wood

funding, supporting a number of

charitable organisations.

$391,359

in fundraising and matched donations

Volunteering

Wood recognises the importance of

supporting our people to connect with

their communities and each other.

We celebrate the volunteering efforts

of our teams and individuals giving

their time and expertise to their local

communities. 2023 saw a continued

push from our teams around the

world, volunteering 11,905 hours to

tackle a wide range of social and

environmental issues.

11,905

hours of volunteering from teams around

the world

In support of UN SDG 2.0 Zero

Hunger, for the second year running,

Pankaj Gandi together with 90 Wood

team members based in India, along

with support from their families

participated in a project known

as Foodie Angel 2.0 where they

volunteered 790 hours of their time

to prepare and distribute food boxes

to 2024 underprivileged families and

homeless people in slum areas of

Gurgaon and Delhi. This heartwarming

project was an inspiring example of

how Wood employees show up and lift

up some of the most disadvantaged

people in their local communities.

790

hours of their time to prepare

and distribute food boxes to 2024

underprivileged families

Mark Birmingham was one of our

first

employees to receive our quarterly

Sustainability Action Spotlight award for

his work with the Magnetic North Explorer

Scout Unit and Science, Technology,

Engineering & Mathematics (STEM)

outreach to local primary school children.

Volunteering 250 hours of his time in the

name of UN SDG 4.0 Quality Education,

Mark’s community involvement has

inspired more than 150 children through

STEM outreach activities, speaking to

primary children about his own education

and engineering career in oil and gas

and his weekly programme of activities

helping scouts aged between 14-18 years

to develop their life skills and explore new

activities in preparation for the next stage

of their life.

250

hours of volunteering

150

children reached through STEM outreach

activites

Food for the soul

in India

Scouting for the next

generation of engineers

in Aberdeenshire

In Aberdeen, UK, Wood is supporting local

charity AberNecessities and UN SDG

1.0 No Poverty. Employees submitted a

number of matched funding applications

in support of their fundraising efforts for

AberNecessities which included activities

such as participating in the London

Marathon, Mini Golf Masters Challenge,

a handbag sale and a 100-mile cycle for

Ride the North.

It is estimated that more than 21% of

children in Aberdeen are living in poverty

and AberNecessities seeks to meet the

basic needs of children to offer them the

best start in life. Their support reaches

disadvantaged families with the essential

and basic necessities that no child should

go without. Wood’s Employee Matched

Funding donation of £10,000 goes

towards support such as the provision of

maternity bundles for mother and baby, to

nappies, formula, milk, toys and equipment

for children aged 0-18 years old.

£10,000

Employee matched funding donation

Saying no to child

poverty with

AberNecessities

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Compliance with the Code and

supporting policies and procedures is

mandatory for all directors, of

ficers

and employees as well as contractors,

consultants, representatives,

intermediaries and agents retained by

Wood. Any reports of non-compliance

are investigated and appropriate action

taken, up to and including termination

of employment and/or business

relationships.

E&C sits within the Legal, Ethics and

Compliance function (LEC), and the

Chief Ethics and Compliance Of

ficer

reports to the General Counsel.

E&C

continues to take a risk-based approach

to strengthening governance and

carrying out key priorities. In 2023, we

focused on the following key areas:

1. ABAC Programme

2. Sanctions

3. Data privacy

4. Improving training and communications

The ABAC Programme

Wood continued to operate under

its three-year deferred prosecution

agreements with the Serious Fraud

fice (SFO) in the UK and the

Department of Justice (DOJ), and

submitted its second annual report

to the SFO and DOJ in June 2023 as

scheduled. The three year terms of both

deferred prosecution agreements are

scheduled to complete in H2 2024. The

Comptroller General’s Of

fice (CGU) in

Brazil also provided final confirmation

that Wood had complied with the

commitments required by the 18-month

leniency agreements with the Ministério

Público Federal (MPF), the CGU and the

Solicitor General (AGU) in Brazil (which

concluded in September 2022).

Wood’s ABAC Programme remains

the vehicle by which we meet our

commitments under the deferred

prosecution agreements. The ABAC

Programme has: (i) strategic goals;

(ii) related workstreams; and (iii)

appropriate senior-level governance.

Areas of focus in 2023 were tone from

the top, training & communications, and

management of third-party risk.

Our Code of Conduct is available at:

woodplc.com/ethics

Our commitment to

sustaining a visible,

continually improving ethical

culture continued to be strong

throughout 2023.

Leaders across the organisation play

a key role in delivering Wood’s Ethics

and Compliance (E&C) programme

by emphasising ethical behaviour to

our workforce and supporting those

Speaking Up.

Our Code of Conduct (the Code)

continues to be the foundation of the

E&C programme, promulgating the

importance of doing the right thing,

setting clear expectations for ethical

business practices and providing

guidance to employees on how to

respond if faced with ethical decisions. It

also sets out our Speak Up resources and

requires employees to report anything

they feel does not re

flect our values, our

policies or the law. We actively create an

environment where our employees feel

empowered to speak up and Wood does

not allow acts of retaliation against any

person who, acting in good faith, reports

suspected misconduct or participates in

an investigation.

The Code of Conduct is supported

by a suite of global E&C policies and

procedures, available in multiple

languages, covering the following:

• Anti-Bribery and Anti-Corruption

(ABAC)

• Commercial Intermediaries

• Competition Law

• Conflicts o

f Interest (COI)

• Data Protection, including Breach

Response

• Ethics Investigations

• Ethics Reporting and Anti-Retaliation

• Gifts and Hospitality (G&H)

• Sanctions, Export Controls and Anti-

Boycotts

Wood is committed to undertaking

an annual review of its E&C policies

and procedures to ensure they remain

effective, considering: (i) changes in

laws, regulations and guidance from

regulators; (ii) changes in Wood’s risk

exposure; and (iii) lessons learnt from

investigations or assurance activities.

At the end of 2022, Wood committed

under the Inspired Culture pillar of its

corporate strategy to increase its ABAC

maturity from a 3 (De

fined) to a 4

(Advanced) by the end of 2025, with a

first-year targeted increase in maturity

to 3.3 by the end of 2023. We further

developed our maturity methodology

and models, linking these to ABAC

Programme delivery. Our approach was

verified by an external third-party review

and we met our maturity target of 3.3 by

the end of 2023. The target increase by

the end of 2024 is 3.6.

Third parties

Consistent with efforts over the past

several years, we maintained our focus

on management of third parties. As

regards Commercial Intermediaries (CIs),

Wood continues to prohibit, as a matter

of policy, the engagement of sales agents

and we only engage national sponsors

where required by law. During 2023,

we launched our Global Commercial

Intermediary Procedure, which supports

our drive to use Global CIs wherever

possible to reduce our overall number of

CIs, delivered bespoke CI training to HR

colleagues and launched a Commercial

Intermediary dashboard. The dashboard

is accessible by all employees and

is updated in real-time. Increased

governance and assurance continued

throughout 2023 including a review of

certain short-term visa providers.

Management of other third-party risk,

and in particular joint venture risk, is

a key focus of the ABAC Programme,

and further progress has been made in

this area in 2023. In collaboration with

Legal and Commercial, we completed

our review of existing incorporated JV

partners, agreeing a pre-mitigation risk

rating for each JV partner and mandated

action as necessary to manage E&C risk.

We have made good progress on the

development of an ABAC Stage 1

Scorecard for assessing ABAC risks

associated with clients and projects

which will launch in early 2024. This will

continue to be an area of focus over the

next year.

Our Supply Chain Code of Conduct

is available at:

woodplc.com/scm

Ethics and Compliance

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Ethical culture

Leadership must be visibly committed

to the highest standards for business

conduct, demonstrating compliance

with the Code and our values through

their words and actions. The E&C team

partners with leaders to further embed

ethics throughout the organisation and

the ELT and other senior leaders are

subject to Tone from the Top KPIs.

The

Chief Ethics and Compliance Of

ficer

meets regularly with the CEO and the

Audit, Risk & Ethics Committee (AREC)

to provide updates on the status of

the programme. Throughout the year,

leadership reinforces E&C messaging

by engaging with employees on

various ethics and compliance topics

including but not limited to anti-bribery/

corruption, Speaking Up, non-retaliation,

conflicts o

f interest and commercial

intermediaries.

Wood has designated key leaders as

Ethics Responsible Of

ficers (ROs) to

promote the Code and related ethics

and compliance policies and procedures,

as well as to support E&C initiatives.

In addition to attending the Business

Ethics Forum, throughout 2023, ROs

continued to support: ABAC Programme

working groups and provided steering

committee business representation; the

Joint Venture Governance Programme;

E&C in building relationships within their

respective businesses; investigations;

and the use of Ethics Moments in team

meetings. Also, ROs provided feedback to

E&C on policy and processes, as well as

ensured completion within their teams of

mandatory E&C training.

Wood strives to gauge ethical culture

by partnering with a third-party to

conduct an annual anonymous survey

of employees in speci

fic geographic

regions to gather critical feedback on

the strength of our culture. In 2023,

the survey was distributed to over

9,200 employees in Europe, the Middle

East and Africa. E&C shares high-level

results with leadership to help improve

the culture and direct future training,

engagement and communication efforts.

Ethics and Compliance training

and communications

Training has always been a key element

in promoting Wood’s culture and

ensuring employees understand how

to Do the Right Thing. Wood drives

Company values through a multi-layered

risk-based ethics and compliance training

and communications plan that promotes

accountability, leadership, honesty

and integrity in support of creating

sustainable growth and value.

To maximise effectiveness, Wood

develops its ethics and compliance

training and communications plan on

an annual basis. The plan incorporates

a variety of approaches, including live

webinars, computer-based training

and microlearning videos, as well as

communication channels, such as email

newsletters, internal social media and

a dedicated intranet page regularly

refreshed with updated resources. The

plan is reviewed by E&C leadership

on a monthly basis for accountability

and adaptability to readjust priorities

depending on internal and external

circumstances.

In 2023, mandatory computer-based

training on G&H and COI was assigned

to more than 5,000 individuals who

are most exposed to those risks in their

work at Wood. The training module

was customised with a short video

introduction from the Chief Ethics

and Compliance Of

ficer and real-li

Wood scenarios, making the content

more relatable to Wood employees.

One hundred per cent completion was

attained.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Managing cases

Wood values a culture of openness and

accountability where employees and

third-party business partners Speak Up

to seek guidance on ethical or compliance

issues and to report any known or

suspected unethical, illegal or suspicious

activity or concerns that the Code of

Conduct is not being followed.

We encourage employees to use their line

manager as a first point o

f contact to

report ethics and compliance concerns,

with additional Speak Up resources

available, including another manager,

HR or Legal. As such, many matters are

managed without E&C intervention.

However, employees may also contact

E&C directly or use the Ethics Helpline,

which is operated by an independent

third party and allows anyone to raise a

concern or report a suspected violation

of our policies, procedures or the law.

Reporters can make reports by telephone

or online and may elect to remain

anonymous. On a quarterly basis, AREC

is provided a summary of the use of E&C

Speak Up resources, as well as an update

on initiatives to further promote the

Speak Up culture.

During 2023, E&C received a total of 141

concerns through the Ethics Helpline

and internal channels. All concerns are

reviewed and necessary disciplinary

action and/or remedial action is taken

as appropriate. Of the 26 allegations

that were substantiated after review

or investigation, five terminations o

employment for violations of Company

policy resulted.

Trade compliance

Building on the sanctions risk assessment

completed in 2022, we have developed

a risk-based sanctions due diligence

and approval process to focus attention

on prospects that pose the greatest

sanctions risk. Once approved,

clients and other related parties will

be continuously monitored using a

proprietary restricted party screening

and monitoring tool to allow timely

intervention when necessary. Integration

of the new process with existing

workflows is continuing with expected

completion in H1 2024.

We have seen a steady increase in the

volume and complexity of sanctions and

export control queries from the business

and have recruited an additional trade

compliance lawyer to meet that demand

and support our trade compliance

initiatives.

Data privacy and protection

Wood’s Privacy team underwent a

successful transition and integration of a

new team over the course of 2023.

In response to an independent audit

in 2022, Wood Privacy developed and

implemented a risk categorisation

and monitoring process for suppliers

within our privacy assessment process.

Improvements have also been made in

the risk categorisation of data privacy

incidents and the role assignation and

classification o

f data privacy training

within our people systems. Wood Privacy

will continue to drive improvements in

these areas in 2024 – 2025.

New data privacy laws are being

introduced across the globe on a regular

basis and Wood Privacy continues to

monitor these new privacy laws and

conduct gap analysis as required to

ensure Wood’s global compliance. Wood

continued to receive a limited number

of individual rights requests some of

which were now made outside of Europe,

reflecting the expansion o

f privacy laws

across the globe.

Data privacy incidents continue to have

a low-level impact, mainly occurring

within Wood and covering simple data

entry errors, including incorrect email

recipients. Incidents investigated by

Wood Privacy also included a small

number of ransomware attacks on

suppliers, reflective o

f the increase in

cyber security events witnessed across

the globe. Wood Privacy works in close

collaboration with Wood Information

Security to manage incidents with

suppliers and monitor trends both

internal and external to Wood. The

increase in supplier targeted attacks

demonstrates the importance of supplier

risk categorisation within privacy

assessments as referred to above,

in particular as privacy assessments

become a more common requirement

across the globe as global data privacy

laws mature and align with Europe.

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

Wood is in the detail design phase of

supporting Teck Resources Limited

(Teck) in piloting a new carbon

capture plant at the Teck smelter in

Trail, British Columbia. This first-o

its-kind solution for capturing carbon

from sul

fide ores in the smelting

process is paving the way for more

sustainable operations in the steel

and mining industries across the

world and supporting Teck in meeting

their net-zero commitment by 2050.

Teck’s smelter and refining complex

in Trail is one of the world’s largest

integrated zinc and lead operations,

producing a variety of specialty

metals, chemicals and fertiliser

products. The pilot will be installed

to capture carbon dioxide from one

part of the operation to assess the

technical and economic viability

of the selected technology in this

environment.

Paving the way for more

sustainable operations

With a long history of supporting Teck’s

operations in Trail and over 40 years of

expertise in carbon capture utilisation

and storage lifecycle solutions, Wood

completed carbon capture technology

assessments and pre-scoping and

feasibility studies for the installation

and integration of the pilot plant at the

Trail site, as well as supported Teck in the

procurement of the pilot plant.

In 2023, Wood worked closely with

the pilot plant vendor and Teck in

completing the engineering and detailed

design for the tie-in of the pilot plant.

Wood was awarded a two-year contract

extension by Brunei Shell Petroleum (BSP),

Brunei’s largest energy producer, to focus

on the continued rejuvenation of BSP’s

offshore energy asset portfolio to maximise

production capacity and ef

ficiency.

The scope of the contract includes

brownfield engineering, procurement,

construction and commissioning services,

as well as the management of its

offshore marine

fleet. The work Wood is

undertaking is expected to help maximise

the production capacity of the assets.

Employing around 1,500 skilled employees

under the contract, 65% of which are local

to Brunei, Wood is committed to investing

skilled employees local to Brunei

65%

"This extension shows

progress on our strategy,

which focuses on

reimbursable projects and

complex work in critical

industries. It is also testament

to our track record of

performance excellence, safe

operations and innovative

technical expertise."

Ken Gilmartin,

Chief Executive of Wood

Investing in

local people

and capabilities

around the world

in local people and capabilities through

the Wawasan Brunei 2035 programme

to advance employment and skills of the

country’s national workforce.

The extension to February 2026 means

Wood will deliver a range of services

across 20 of BSP’s offshore installations.

The contract is being delivered by Wood’s

teams in Brunei from the company’s main

location in Kuala Belait and offshore,

supported by the Manila, Philippines of

fice.

Find out more:

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Health and safety

The Shield is our overarching health

and safety programme that aligns

with our company values by asking our

employees to have the commitment

to prepare for challenges we may face

in our daily work, the care to engage

with what is required of us in our

roles, look out for one another and be

accountable, and have the courage to

intervene when appropriate to do so,

taking action to protect ourselves and

those around us.

We deeply regret that in 2023 one of

our colleagues lost their life on a power

plant in Kentucky, in the United States.

An investigation team led by a senior

leader was deployed to investigate the

incident. Wood’s leadership ensured

that the employees family and team

mates were supported immediately,

and our thoughts remain with the

family and friends of our colleague.

Health, safety & security

Wood is committed to providing a healthy and safe working environment for all our people and

our values of care, courage and commitment are embedded in the Shield. Ensuring we protect

our company, communities, colleagues and ourselves by upholding the Shield is fundamental in

all we do, through the simple and consistent application of Prepare, Engage and Intervene.

Profitable growth

Promoting growth through active loss prevention,

digitalisation and predictive intervention

Inspired culture

Where everyone aspires to excellence, is empowered

to act, armed with skills, knowledge and autonomy

to make a difference to deliver on our commitments

Performance excellence

Consistent enterprise-wide management of key risks

reinforced by curious, engaged leaders

Continuous improvement planning

Continuously improving the health and safety of our operations is one of the

fundamental objectives of our approach.

The three focus areas of our 2023 improvement plan aligned with Woods strategy:

John Wood Group PLC

Annual Report and Financial Statements 2023

Sustainability

continued

These focus areas are underpinned by a

yearly plan of actions aligned with our

global safety targets. Our improvement

plan focused on the following:

Fatality and Permanent Impairment

Development of the Fatality and

Permanent Impairment (FPI) Prevention

Programme, supporting the cultural

transformation required to make a step

change improvement in protecting our

people. The FPI working group engaged

the expertise of dss, industry specialists,

creating a robust programme that

identifies FPI risk situations and ensures

critical controls are present and verified.

Stakeholder engagement has been

undertaken with the Board, Leadership

teams and via our Global Learning Call.

Pilot projects were selected across all

business units, in all regions to receive the

initial roll out. Feedback so far has been

positive and once full feedback has been

gathered, the programme will be refined.

Focusing on our critical risks enables us

to manage our project risk profile at a

site level. These risks are included in the

Project risk registers (ProRisk). These

then link into our functional risk registers

which are housed in our Corporate Risk

Management System called BRisk in line

with our Risk Management standard.

These are linked to our principle risks and

further detail on this process is set out on

page 83 of our annual report.

Training

Wood’s Health and Safety training vision

is dedicated and committed to excellence

in the offering of training and educational

opportunities for the workforce. Health

and safety training is a vital element

to ensure our people go home safely

each and every day. We have a suite of

40+ instructor-led, virtual and online

courses that range from the Global HSSE

Induction to Health Protection webinars,

to Life Saving Rules, to the recently added

Fatality and Permanent Impairment (FPI)

prevention programme.

In 2023, almost 4,000 employees

participated in the instructor led sessions

and over 16,000 completing the online

e-learning offerings. Training is offered in

multiple languages to meet the demands

of the business.

The desired outcome of the delivery of all

training programmes is to help provide

the foundation for a safe, productive, and

attractive working environment, thereby

supporting the concept of developing,

enhancing, and advancing the skills,

knowledge, and desire of the workforce.

Leadership engagement

We are enhancing effective Leadership

Engagement by developing a new version

of the Leadership Engagement Guidance

and offering training to leaders on how

to get the most out of engaging with

teams. Improvements include the digital

capture of engagements via the ShieldEd

application.

Risk profiling

A project risk profiling tool has been

developed to support the management of

risk across our organisation. Assessments

were completed across the business

and the creation of a dashboard allows

business units to analyse their results and

inform assurance plans and initiatives

appropriately.

Digitalisation

Wood’s digitalisation journey has

continued to improve along the data

maturity curve by enhancing smart

automation and providing digitally

connected solutions. Digitalisation is a

key enabler to support Wood in reducing

incidents, bringing ,more ef

ficiency into

the organisation and driving out risks in

our business. Significant improvements

have been made including the provision

of dashboards showing real time data,

further development of the ShieldEd

application and online tools to connect

and leverage data, enabling our people to

make smart safety a reality.

Management system

Implementation of the revitalised

Management System, including the

translation of key procedures, has been

successfully integrated. Currently, 44%

of employees are covered by OHSAS

18001 or ISO 45001 certification. Wood’s

management system is structured

to encompass all aspects of these

standards, ensuring that all employees

operate within a system designed to

comply with them.

Contractor selection

An ISNetworld working group comprising

cross-functional team members came

together to develop a standardised

prequalification approach while aligning

the Contractor Scorecard with Wood’s

Enterprise-level prequalification

requirements that came into effect

in August 2023. The objective was to

standardise our contractor management

guidelines to ensure that suitable and

competent contractors are approved and

selected based on the risk and type of

activity. This was formed to streamline

Wood’s contractors ISN accounts and

sites that are aligned to our business and

jurisdictional structure.

The advantages of restructuring our

contractors’ accounts and sites include

establishing clear accountabilities,

ensuring active engagement of

contractors, and providing a consistent

risk avoidance processes and practices

to eliminate HSSE related incidents

and accidents among contractors. The

Contractor Scorecard is fully aligned with

Wood’s HSSE Working with Contractors

Procedure which details the 7-gate

process (planning, pre-qualification,

selection, pre-mobilisation, mobilisation,

performance oversight and engagement,

and demobilisation and closeout) which

is designed to improve the overall

management of contractors for the

lifetime of their contract.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Sustainability

continued

Mental health and wellbeing

Caring for our people is one of the

core values we have at Wood. It is

this commitment that drives our

ongoing focus to apply the best

available approaches to mental health

and wellbeing to benefit our whole

Wood community. Our global Mental

Wellness plan, launched last year, has

progressed throughout 2023.

Our Senior Leadership, led by

our CEO, have encouraged open

conversations about our mental

health, in addition to empowering

colleagues to prioritise their mental

health and wellbeing.

We have informed the business

of the success of our delivery of

our Mental Wellness plan through

monthly reporting to our ELT and

quarterly reporting to our Board. We

have not only reported attendance

at training and percentage trained,

but where data is available such as

in the UK, have been monitoring the

impact of our strategy on mental

health absences too.

We have delivered specifically

developed training to over 2,000 of

our line managers and supervisors

to not only enable better recognition

and allow for earlier intervention and

support, but also really look at how

we can address the factors that may

contribute to poor mental health.

2,000

line managers have taken part in

training

We have continued to deliver training to

everyone to raise awareness in support

of our inspired culture where mental

health stigma is consistently challenged

and reduced. In 2023, more than 1,700 of

our colleagues have taken part.

1,700

colleagues have taken part in training

We have expanded our network of global

mental Wellbeing Champions by 40%,

both onshore and offshore, who not

only proactively help raise awareness

about mental health and the wellbeing

pillars we have put in place at Wood

but listen to our people and direct those

seeking help to local support services as

necessary.

40%

increase to our network of global mental

Wellbeing Champions

We have provided regular training

sessions to our global mental Wellbeing

Champions with ongoing support and

communication.

Access to mental health support has also

been extended to all Wood employee

families through our global Employee

Assistance Programme.

Our HSE (Health, Safety and

Environment) management system

documents have been reviewed and

updated to reflect our priorities,

helping us to improve the quality of our

measures across all our business units

by setting a common framework. This

includes the use of adjustments during

the recruitment process, as well as the

provision of reasonable adjustments

when required to support those with

poor mental health.

Our Wellbeing platform, Living Well at

Wood, has been refreshed to clarify the

impact that financial wellbeing, as well

as career wellbeing, has on our overall

mental health, and to allow better

articulation of the various activities that

support good work when at Wood.

To emphase the importance of how

physical wellbeing enhances our mental

wellbeing, for the third consecutive year,

we have run our Around Wood in 30

Days challenge. This global challenge,

which encourages employees to team

up and exercise their way around the

virtual world, has gone from strength to

strength with more teams participating

in 2023 reflecting the appetite

for global

interaction and engagement.

Following on from our collaboration

with Jacobs in 2022 on World Mental

Health Day, Wood has continued

to demonstrate its commitment

to supporting mental health in the

workplace by contributing to the

development of the International

Association for Drilling Contractors

North Sea Chapter Mental Health and

Wellbeing Charter. This Charter is crucial

to initiating industry-wide cultural

change in the North Sea, laying out real,

tangible, and measurable steps to make

a long-term difference for our sector.

Wood has contributed to the Charter’s

‘Changing Minds; Saving Lives’ white

paper, which outlined a holistic approach

to resetting mental health in the energy

sector. This white paper signalled the

beginning of the Charter’s journey and

with buy-in and through-line support, we

will continue to maintain pace.

We continue to adapt to our new hybrid

way of working, listening to our Wellbeing

network as well as other Listening Group

Networks which has helped us challenge

and shape how we can be our best at

work by creating a working environment

that allows everyone to be at their best.

In 2023, to better represent the diversity

and needs of our colleagues, a subgroup

of the Wellbeing network was created to

support those who are peri menopausal

or menopausal.

In addition to providing a safe

environment for those experiencing

symptoms or challenges, or even just

wanting to learn more, World Menopause

Day in 2023 saw Wood formally launch

its menopause guidance to the global

business. The guidance is not just aimed

at those going through menopause, but

also with those who play a supporting

role whether in the workplace or at

home. Wood recognise that these are

just first steps and there is more to do.

As our Mental Wellness plan evolves, we

aim to continue to engage in meaningful

conversations with our employees about

all that impacts their mental health and

wellbeing and remain committed to

being an organisation that not only cares

about our employees wellbeing, but cares

that they have the support they need to

succeed.

John Wood Group PLC

Annual Report and Financial Statements 2023

Health and safety performance

We established both leading and

lagging safety targets at the

beginning of the year, aligned to our 2023

improvement plan:

• Zero Fatality and Permanent

Impairment (FPI)

Actual Injury

Incidents – incidents that result in

fatality, life threatening or life altering

injury or illness

• Leadership engagement events

– focused on safety visits and

engagements by senior managers

FPI incidents

Wood is committed to driving continuous

improvement in the relentless pursuit

to keep its people safe. Adopting an FPI

mindset underscores our responsibility to

create a safe working environment and

prevent FPI incidents.

The shift to measuring FPI actual and

potential incidents at Wood represents

the start of a cultural transformation to

strengthen our safety culture and ensure

our time and effort is spent on analysis

of the areas we know have greater

FPI potential and risk. Identifying,

investigating and analysing FPI incidents

demonstrates Wood’s commitment to its

values and reduces the direct and indirect

impact of these types of incidents. It

allows a deeper dive into the causes to

enable a better understanding of what is

required to prevent reoccurrence.

Leadership Engagements

Target No.

in 2023

Actual No.

in 2023

% vs

Target

4,867

6,857

141%

Effective management of Woods’ HSSE

performance depends signi

ficantly on

leadership and personal accountability.

When leaders are committed, engaged

and proactive in risk management, it

sets a positive example for the rest

of the organisation. We prioritise

demonstrating genuine leadership that is

visible to all and believe this is the crucial

difference between an exemplary and

great safety performance. Our actions,

not just words, show our employees that

we genuinely care about their wellbeing.

The commitment from our leaders

resulted in the number of engagements

achieved greatly exceeding those planned

for the year, with 6,857 carried out. These

engagements, whether in the of

fice, on

site or virtual, help build relationships,

establish trust, demonstrate

commitment to safe, compliant and

reliable outcomes, and provide an

opportunity to recognise a job well done.

HEART

HEART (Harm Elimination and

Recognition Tracker) continues to be

our behaviour-based safety observation

programme and is a key system in our

business enabling our teams, partners,

clients and contractors to proactively

identify hazards and effectively intervene

when they consider safety is being

compromised. The programme also

encourages the recognition of safe

behaviours in an effort to foster safe

working practices. Over 60,000 HEART

observations were made and recorded

in 2023. Many of our projects require

observations to be recorded in client

systems, so this number is far greater

in reality. We are working to enable the

incorporation of these into HEART to

enhance analysis and risk management.

Total recordable incident rate (TRIR)

We continue to monitor and report on

traditional metrics in line with industry

standards and include both employees

and contractors in our data.

TRIR performance declined marginally

in 2023 with our TRIR increasing to 0.18,

from 0.17 in 2022.

The most common cause of recordable

injury was contact with tools, equipment

or machinery, (18%) closely followed by

manual handing (13%).

Lost time incidence rate (LTIR)

In 2023, we saw an increase in the

number of incidents that required our

people to have time off work as a result

of their injuries. As a result, our LTIR

marginally increased to 0.04, from 0.03.

The most common work activities

undertaken at the time an LTI occurred

was maintenance, production operations

and operating equipment and machinery.

Similarly to the collective recordable

incidents, risk management issues were

the most common root cause, with

inadequate hazard identification and

inadequate identification o

f controls

featuring most often. All incidents

were investigated, and corrective and

preventative action plans established to

prevent reoccurrence.

As part of our annual planning process

which includes review of all our incidents,

assurance activities and analysis of our

leading indicators, we are confident in

the direction we are taking with FPI,

which in addition to giving us another

lens on our incidents also ensures that

we are honing in on our critical risk

areas and working towards ensuring

safe predictable delivery, whilst building

on and maintaining established safety

processes and management.

2019

0.04

2020

0.02

0.03

2021

2022

Lost time incident rate (LTIR)

per 200,000 exposure hours

2019

0.18

0.17

2020

0.18

0.17

2021

2022

Total recordable incident rate (TRIR)

per 200,000 exposure hours

0.18

2023

0.04

2023

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Sustainability

continued

Focus on Security

Wood has interests in various countries

with complex or challenging security

risk environments and maintains a

global footprint and supply chain. Group

Security’s overarching and unifying aim is

to enable the Company to safely win and

deliver work all over the world, driving the

Company’s resilience, and ensuring business

can continue even as security, political, or

social developments threaten disruption.

The team therefore advises on bids, project

security risk mitigation requirements,

travel considerations, and gives forward-

looking strategic risk advice to leadership

teams. This, in addition to being responsible

for the overarching governance of the

crisis, emergency and business continuity

management framework.

2023 saw the function reorient to align

with the Company’s refreshed three-pillar

strategy. The Company’s need to deploy

personnel into environments of varying

security risk requires a capacity to robustly

provide for their safety whilst at work and

swiftly return them to their home nations

as circumstances dictate.

Group Security’s work therefore directly

supports the inspired culture objective

in ensuring work locations are safe

and remain so, as well as providing

the expertise and resources to extract

personnel where security or medical needs

dictate.

The lean nature of the team’s composition

embodies the objective of performance

excellence as, despite its size, the

function’s comprehensive reach spans

from support at the strategic level of

the Executive Leadership Team, through

business unit and business grouping levels,

and into our of

fices and sites across the

planet. In its interactions at bid stage,

the function pursues the objective of

profitable growth by protecting margins

through identifying security costs at the

bid stage and ensuring they are included

in bids. It also fosters competition

amongst security services providers so as

to achieve cost reductions where possible.

This is complemented by the function’s

work on improving Wood’s resilience so

as to ensure that business can continue

as quickly as possible, and costs can

be minimised, as disruptions manifest

around our operations.

The function continues to provide a

geopolitical advisory capacity across the

business. This capacity has frequently

proven valuable at numerous levels

of the business as global geopolitical

changes instigate upheaval at regional

and country-levels; by providing forward-

looking advice on these changes and

potential scenarios at all levels, the

function has been able to promote both

agility and resilience across Wood.

Award-winning

safety performance

Wood has been working on the Chemical

& Refining Integrated Singapore Project

Existing Site (CRISP ES), one of the

major parts of ExxonMobil’s multi-billion

investment in Singapore, for more than

five years. Sa

fely delivering industry

leading projects is the foundation of

ExxonMobil’s Global Project organisation

and a core objective for Wood’s project

teams.

At the end of 2023, Wood’s CRISP ES

team was honoured with the ExxonMobil

Global Project’s President’s Safety,

Security, Health and Environment

(SSH&E) Award for the third year in a

row. This award recognises projects,

teams and individuals who have

demonstrated outstanding SSH&E

leadership, dedication and results.

The CRISP ES project team completed

many of its planned activities, including

the turnaround, ahead of schedule, but

most importantly, as of the end of 2023,

the team achieved more than 16 million

worked hours without any life altering

injuries.

worked hours without

life-altering injuries

16 million

In addition to this award, the CRISP

ES project team received the Safety &

Health Award Recognition for Projects

(SHARP) from the Singapore Workplace

Safety and Health Council & Ministry of

Manpower and were recognised within

the Company as the winner of the Wood

Inspire Award for Exceptional Team

Performance.

John Wood Group PLC

Annual Report and Financial Statements 2023

Risk management

Risk management is an integral part

of sound management practice and an

essential element of good corporate

governance. It improves decision making,

enhances strategic outcomes and

accountability whilst promoting a risk

aware culture within Wood.

The Board is responsible for:

• Establishing procedures to manage

risk, oversee the internal control

framework, and determine the nature

and extent of the principal risks the

Group is willing to take to achieve its

long-term objectives

• Carrying out a robust assessment of

the Group’s emerging and principal

risks

• Monitoring the Group’s risk

management and internal control

systems and carrying out a review of

their effectiveness

The Board is assisted in this assessment

by the Audit, Risk & Ethics (ARE)

Committee (formerly known as the

Audit Committee) and the Safety

and Sustainability (S&S) Committee

(formerly known as the Safety,

Sustainability, Assurance and Business

Ethics Committee), who are delegated

responsibility for various aspects of risk,

internal control, and assurance.

Group risk management

framework

The Wood risk management framework

is designed to comply with the 2018 UK

Corporate Governance Code and align

with ISO 31000 principles.

The Group risk management standard is

the formal overarching risk management

process within Wood that complements

current policies and processes across the

Group. The purpose of the standard is to:

• Ensure there is a formal, structured

and consistent risk management

process across Wood

• Identify, mitigate, and manage risks

that occur

• Provide visibility over business risks to

inform leadership

A bottom up and top down approach

is followed to facilitate the risk

management process within the

organisation as laid out in the Group risk

management framework. Risk registers

are developed at an individual contract or

project level and captured in our project

risk management system (ProRisk).

These risks are then escalated into the

business grouping (BG) and captured

into the corporate risk management

system (BRisk) and rolled up into

business unit (BU) risk registers, which

are reviewed respectively by the BG and

BU Leadership teams every quarter.

The BU risk registers are subsequently

reviewed as part of the BU Quarterly

Business Reviews which are chaired by

the CEO with attendance by the CFO,

the other members of the ELT and

the respective BU Leadership team

members.

Group level functional risk registers are

also maintained, with the functional

leadership teams reviewing these risk

registers twice a year, and an ELT review

at least annually as part of the Quarterly

Functional Review.

The aggregation of the individual risk

registers into a Group risk register was

reviewed three times during the year

by the Group Risk Committee (GRC),

which is attended by the CEO, CFO,

and all other members of the Executive

Leadership Team (ELT) to ensure that

the material risks for the Group are

appropriately measured and managed.

The GRC is facilitated by the President

- Group Audit & Risk and the Group

Risk VP. The overall focus of the GRC

meetings is to ensure that the principal

risks for Wood are identi

fied, agreed,

measured, and effectively controlled,

while monitoring emerging risks.

After the GRC meetings, the summary

of principal risks is formally reviewed and

challenged by the Board twice a year.

The principal risks identified that

face the Group are set out in this section. During the year,

the Board has carried out a robust assessment of these principal risks as well as emerging

risks and has monitored the Group’s risk management and internal control systems.

Principal risks and uncertainties

Managing our risks

Group risk framework

Contract/project

Monthly project

governance risk

review

Business grouping

Project

governance review

Business unit

Project

governance review

Group

Project

governance review

Risk Escalation

Group Risk

Committee

Group risk &

principal risk

review

Board

Principal risk

review

Board Oversight

Governance & Control

Systems, KPI’s & Reporting

Business grouping

Risk review

Business unit

Risk review

Group

Business review

Quarterly

Biannual

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

During 2023, a number of system related initiatives and improvements were conducted to enhance the way risk is captured,

monitored, assessed and managed. These included:

•

Continued embedding and maturement of risk management systems through training and awareness

•

Further development and refinement o

f risk management tools to assist in reporting, including automation of the risk and control

KPIs

•

Rollout of systems to audit and assurance teams to enhance proactive governance of the risk and control environment

•

Deepened integration with ESG risk management

Robust assessment of principal and emerging risks

The Board has carried out a robust assessment of the principal risks facing the business on a biannual basis. To support this, the

Board and its committees received regular reports from key functions such as safety, sustainability, legal, ethics & compliance,

commercial, finance, tax & treasury, IT, group audit & risk, and HR, along with operational reports

from the BUs, which include key

risks, information on compliance with controls and reports on assurance activities where applicable.

Changes to the principal risks in 2023

Risk Title

Trend

2019

2020

2021

2022

2023

ESG strategy & performance

Project execution

Contracting risk

Major incident

Major investigation

Cyber security

Sustainable cash generation

n/a

Major litigation

Failure to retain and attract critical staff

Strategic delivery

n/a

ESG and sustainability

ESG and sustainability are transversal risks that can be found across our business, and over the last year, Wood’s response to

climate change obligations and ESG matters has developed and matured by aligning to the Company’s revised strategy and the

management of ESG risk.

All ESG risks are maintained within our corporate risk management system and map back to our principal risk of ESG strategy and

performance to ensure adequate oversight and governance in identifying, managing, and reporting such risks, mitigations, and

control effectiveness.

Emerging risks

Wood’s risk management framework includes a focus on identifying and assessing potential emerging risks. Emerging risks are

identified throughout the year via the BG, BU and

functional risk processes, escalated and discussed during the GRC and further

escalated to the Board as required.

Changes to the principal risks:

Decrease

Increase

No change

New

Principal risks and uncertainties

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

This process follows the Group risk management framework, which applies to all risks. A cross-check is also undertaken against the

principal and emerging risks identified by Wood’s peer group which helps to in

form the mid-year Board discussion on risk. At the

half-year and at the year-end, a series of interviews were carried out by the President – Group Audit & Risk and the Group Risk VP

with each of the non-executive directors to understand their perception of the principal and emerging risks. The outputs of these

interviews were then fed into the half-year and year-end GRC and the Board risk sessions.

Emerging Risk

Description

Principal Risk Mapping

Geopolitical situation in

the Middle East

Ongoing geopolitical uncertainties in the Middle East could impact the safe,

on-time and on-budget delivery of projects in the wider Wood portfolio, due

to increased security risk in the region and potential supply chain disruption.

The business continues to monitor the geopolitical landscape in the region

and to address potential impacts on project delivery. The Middle East is also

a key growth area within the Group’s strategy.

Project execution

Contracting

Major incident

Cyber security

Sustainable cash generation

Strategic delivery

Disruption from Arti

ficial

Intelligence (AI)

The business recognises and continues to monitor the rapid advancements

in the AI field and sees these developments as a gateway to enhance and

increase current client offerings, rather than a threat to our existing business

model. Current AI offerings such as maintAI and the future applications of AI

technologies within our business, present opportunities for growth.

Project execution

Contracting

Cyber security

Strategic delivery

Climate change and

extreme weather

Climate change and extreme weather risk scenarios are an integral part

of individual project risk management. From analysis, climate change risk

was not considered to be a standalone principal risk, but to be a significant

contributing factor to other principal risks. The impact of climate change is

reflected in the strategy to address energy transition.

ESG strategy and performance

Project execution

Contracting

Major Incident

Strategic delivery

Risk appetite

The Group’s risk appetite is defined by six broad risk appetite statements to ensure the current list o

f principal risks are adequately

covered by the risk appetite statements. The Group’s risk appetite is considered when setting the nature, extent and effectiveness

of the key control mechanisms in place and the level of assurance activity required for each risk. A framework around the application

of the Group’s risk appetite to contracting models sets out the risk appetite for certain

fixed price or lump sum (and other high risk)

contracts. Clear criteria exist for approval of these types of contracts by the Tender Review Committee and the process has been

modified to reflect the Group’s step away

from lump sum turnkey and large scale EPC projects. The process for ongoing monitoring

fixed price and high-risk contracts continues to include quarterly BU project governance meetings attended by the CEO, CFO and

the BU Executive Presidents.

Monitoring the risk management and internal control systems and processes

The Board receives bi-annual updates on the key controls in place in relation to each of the principal risks, the level of independent

assurance activity carried out, and management’s assessment of the effectiveness of the controls. As part of this monitoring, the

Board ensures that corrective action is taken where necessary.

To ensure that responsibilities for risk and assurance are clear with the committee structure, each principal risk and area of risk is

assigned to either the Board or one of the Board committees.

Accountability for managing risk is embedded into our business as described under the Group risk management framework

section. Each BU, BG, and function has responsibility for undertaking regular risk assessments, monitoring risk, and requires senior

management to attest the control effectiveness of their risks as part of their ongoing accountabilities.

The Board’s assessment of the internal control environment, as informed by Group Audit & Risk, is effective, with some areas where

improvement is needed. Particular areas of focus are simpli

fication o

f the overall internal control environment across functional areas,

increased levels of risk-based BU assurance being carried out and actioned, to drive improvements in the application of key operational

controls, and more rigorous monitoring and application of project controls/project governance at the project/BG/BU level.

Going concern

The directors have undertaken a rigorous assessment of going concern and liquidity over a period of at least 12 months from the

date of approval of these

financial statements (the going concern period), which includes financial

forecasts up to the end of 2025

to reflect severe, but plausible scenarios. The directors have considered as part o

f this assessment the impact of the events that

happened post balance sheet date and up to the date of issue of these

financial statements.

To satisfy themselves that the Group have adequate resources for the going concern assessment period, the directors have

reviewed the Group’s existing debt levels, the forecast compliance with debt covenants, and the Group’s ability to generate cash

from trading activities. As of 31 December 2023, the Group’s principal debt facilities comprise a $1,200.0m revolving credit facility

maturing in October 2026; a $200.0m term loan which matures in October 2026 and $352.5m of US private placement debt

repayable in various tranches between July 2024 and July 2031, with around 75% due after the end of 2025. The weighted average

maturity of the Group’s debt pro

file has been extended as a result o

f a new term loan being put in place which replaced an existing

facility of the same value and that was due to mature in September 2024.

Details of the status of internal controls are included in the

Audit, Risk & Ethics Committee report on pages 124 to 127.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Going concern

(continued)

At 31 December 2023, the Group had

headroom of $843.1m under its principal

debt facilities and a further $59.8m of

other undrawn borrowing facilities. The

Group also expects to have suf

ficient

levels of headroom in the severe but

plausible downside scenarios modelled.

At 31 December 2023, the Group had

net current liabilities of $207.0m (2022:

$235.0m).

The directors have considered a range

of scenarios on the Group’s future

financial per

formance and cash

flows.

These scenarios reflect our outlook

for

the energy and materials end markets.

Energy includes oil and gas and the

Group forecasts growth in this area

is underpinned by increased focus on

energy security and decarbonisation of

operations. During 2023, for example, the

Group secured a new long-term strategic

partnership around the management of

UK North Sea Operations and deployed

the Group’s expertise in decarbonisation,

digitalisation and asset life extension

to enhance an international energy

company’s global portfolio of assets.

Materials includes minerals, chemicals

and life sciences which are underpinned

by growing populations and global net

zero ambitions. The order book gives

significant coverage over 2024 and 2025

revenues. Further, the order book is 86%

reimbursable which reflects the lower risk

profile o

f the Group’s forecast cash

flows

over the going concern period.

The directors have also considered

severe, but plausible, downside scenarios

which reflect material reductions in

2024 and 2025 revenue of 7% and 5%

respectively and reductions of 1% in

gross margin percentage from the base,

board approved, scenario. The directors

believe that the additional reductions

represent a severe, but plausible,

downside case. This could result from

a worsening economic climate which

could lead to unexpected deferrals or

cancellations of contracts by our clients.

In each of the scenarios modelled, the

financial covenants were passed with

significant

facility headroom remaining

available. The interest cover covenant

has increased levels of headroom after

adjusting for the non-recurring interest

related to facilities repaid and cancelled

within the 12-month period up to 31

December 2023.

The directors included the impact of

the removal of the receivables

financing

facilities (which are not committed) of

$200m in the base scenario and the

impact of additional adverse movements

in working capital as additional, more

severe, downside scenarios. The Group

still had suf

ficient headroom to meet

its liabilities as they fall due with these

additional sensitivities.

Consequently, the directors are confident

that the Group and company will have

suf

ficient

funds to continue to meet its

liabilities as they fall due for at least 12

months from the date of approval of the

financial statements and there

fore have

prepared the financial statements on a

going concern basis.

Viability statement

In accordance with provision 31 of the

Governance Code the directors have

assessed the Group’s viability over a

three-year period to 31 December 2026

and modelled the impacts of the risks

over a five-year period to 31 December

2028.

The process of establishing the period

over which the Group’s viability has been

assessed is subjective and considers

a range of factors, all of which are

indicative of slightly different time

frames.

In making their assessment the directors

have considered these factors both

individually and in aggregate and have

decided that, on balance, three years was

the most appropriate period.

As of 31 December 2023, the Group’s

principal debt facilities comprise a

$1,200.0m revolving credit facility

maturing in October 2026; a $200.0m

term loan which matures in October

2026 and $352.5m of US private

placement debt repayable in various

tranches between July 2024 and July

2031, with around 75% due after the end

of 2025. The $200m term loan maturing

in October 2026 replaced the outgoing

UKEF facility which was due to mature

in September 2024.

The committed

long-term financing together with

factors such as the Group’s asset light

and flexible business model, the Group’s

strategic and planning cycle and the

visibility of operational backlog led the

directors to select a period of three years

to assess the Group’s viability.

In order to make this assessment, the

Board considered the current trading

position and reviewed a number of future

scenarios which stress-tested the viability

of the business in severe but plausible

scenarios. These scenarios considered

the potential financial and operational

impacts of the Group’s principal risks

and uncertainties arising and the degree

of effectiveness of mitigating actions.

As indicated in the table on pages 87

to 90 these included, individually and

in combination, multi-year reductions

in demand, project execution and

contracting risk, revenue growth risk, the

impact of a catastrophic safety or cyber

security incident, the fines and damage

sustained by an ethical, regulatory or

data breach or a substantial litigation.

Based on the modelling performed,

the Board’s assessment was that the

strength of our balance sheet, the

flexibility o

f our business model and the

mitigating actions available meant that

in all plausible scenarios considered the

business would continue to be viable for

at least three years. Mitigating actions

would include reduction of discretionary

spend including bonuses, capex reduction

or further disposals.

Based on this assessment, the directors

have a reasonable expectation that

the Group will be able to continue in

operation and meet all its liabilities as

they fall due up to 31 December 2026.

Principal risks and uncertainties

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

Strategic

Strategic delivery

Risk profile

Our ESG strategy and performance does not effectively

address our environmental, social and governance

responsibilities, including in relation to climate change and

regulatory obligations, leading to our business becoming

an unattractive investment proposition for our employees,

investors, lenders, communities, and other stakeholders.

Mitigation, monitoring and assurance

• Existing policies, procedures, management structures

and Board oversight covering compliance with the key

components of ESG

• Monitoring of compliance and reporting in line with the

UK Corporate Governance Code, covering governance

responsibilities, with oversight provided by the Audit, Risk &

Ethics Committee and the Board

• Integrated ESG risk management within risk management

framework

• Safety & Sustainability Committee includes oversight of

sustainability aspects with additional review by the full Board

on an annual basis

• Sustainability targets agreed with the Board; plans in place

for target achievement

• ESG metrics included within Management incentive schemes

• External verification o

f certain key ESG performance data

(e.g. carbon emissions)

• Active monitoring and engagement of stakeholders

Risk profile

Challenges in generating sustainable free cash

flow lead to

inability to support future investment in the business and to be

an attractive proposition for shareholders and debt providers.

Mitigation, monitoring and assurance

• Simplification programme to enhance Group profitability

• Lower contract risk appetite to improve consistency of

returns

• Monthly BU and ELT reviews of debt and cash performance

and Board reviews against budget/forecast

• Short-term cash flow

forecasting tool embedded within the

business with monthly reviews

• Weekly monitoring of Group net debt

• Designated process for governance of capital expenditure

• Established processes for monitoring of working capital

including Quarterly Business Reviews where accounts

receivable and days sales outstanding are monitored

• Targeted improvement in day sales outstanding

• Credit policy in place with monthly reporting process

• Monthly monitoring and reporting of aged debt including any

unbilled amounts

• Management of cash out

flows

from non-trading

financial

liabilities

Risk profile

Lack of ability to deliver on the new strategy by effectively

addressing the external and internal risks associated with the

strategic plan to 2025.

Mitigation, monitoring and assurance

• Strategic review of our portfolio identi

fied priority markets

with external consultants and internal experts to refine our

focus

• Strategic risks associated with the strategy are analysed and

have appropriate mitigation actions in place

• Company-level metrics/targets are cascaded and embedded

into the BUs with execution plans to achieve the strategy

• Quarterly Business Review (QBR) and Quarterly Functional

Review (QFR) process in place across the ELT to measure

progress both from a business and functional perspective

against the targets within the strategy

Analysis of principal risks

ESG strategy & performance

Sustainable cash generation

Responsibility:

Safety & Sustainability

Nomination

Remuneration

Audit, Risk & Ethics

Board

Board assessment of change in risk from 2022:

No change

Decrease

Increase

New

Considered as part of viability assessment

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Risk profile

Weaknesses in the contract bidding and award process,

inappropriate pricing, query of contract terms, challenging

client behaviour, or failure to comply with contractual conditions

could lead to reputational damage, and/or poor financial

performance.

Mitigation, monitoring and assurance

• Contracting policy and associated approvals process

• Tender governance process including Tender Review

Committee

• Quarterly Business Reviews of BUs & Top 10 Projects, chaired

by the CEO and attended by the CFO and BU Executive

Presidents, including focus on lump sum contracts

• Contracts policies providing additional control over the

pursuit of lump sum contracts

• Commercial intervention team in place to strengthen in-

house claims capability and provide input on effective project

commercial set up

Risk profile

Problems in attracting and retaining critical staff could lead

to insuf

ficient capability and leadership to meet our strategic

objectives, and not being seen as an employer of choice.

Mitigation, monitoring and assurance

• End-to-end recruitment platform, across Wood to optimise

internal and external recruitment activities, and ensure the

right person, right place, right time

• Critical Position Resourcing reviews used at BU level to

highlight key vacancies and establish pipelines for future

demand

• Succession planning in place for management and leadership

positions with development plans in place for high-

performing employees

• Employee engagement survey carried out during 2023

to assess progress against the employee engagement

framework with follow-up focus groups and action plans

developed to address key themes

• Focus from ELT on addressing speci

fic retention challenges

• Focus on activities to provide greater career progression

which is the main reason cited for leaving – introduction of

My Path and Raise your Hand, re-energised Performance

Management process

Commercial and Operations

Risk profile

Failure to successfully execute projects safely and to expected

quality, on time and within budget.

Mitigation, monitoring and assurance

• Start up, project management, technical and resourcing

execution plans for key projects supported by monitoring and

reporting

• Strategic Projects team assists in start-up phase of key

projects and embed learnings from previous projects

• Tender governance processes including Tender Review

Committee at Group level and BU levels in line with

established Delegation of Authority

• Financial Management Framework in place to ensure

disciplined contract compliance, including variation orders

and contractual requirements, at all phases of the project

• Quarterly Business Reviews of BUs & Quarterly Project

Governance Review of Top 10 Projects, chaired by the CEO

and attended by the CFO and BU Executive Presidents

• Operational Excellence functions in each of the BUs

supporting consistent project delivery through focus on

common operating model, standardised delivery applications

and project management academy

Contracting

Project execution

Failure to retain and attract critical staff

Principal risks and uncertainties

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

Risk profile

Impact on the confidentiality, integrity and/or availability

of Wood or client data and/or disruption to Wood business

operations through malicious activity, unauthorised access,

cyber-attack and/or physical or environmental event.

Mitigation, monitoring and assurance

• Dedicated security, governance, risk and compliance team led

by Chief Information Security Of

ficer (CISO)

• Mature Information Security Management Framework that

combines technical and process controls with a group-wide

programme of colleague awareness

• Comprehensive IT security policy/standards and procedures

• Extensive threat hunt and intelligence gathering capability

• Utilisation of next generation perimeter security and best-in-

class end point detection and protection capability

• Mature cyber security incident and event management

• Security Operations Centre enabling 24/7 detect and respond

capability

• Mandatory cyber awareness training and Group wide

continuous cyber education programme

• Monthly reporting to the ELT; quarterly reporting to the

Audit, Risk & Ethics Committee and the Board with an annual

review by the Audit, Risk & Ethics Committee

Technology

Cyber security

Risk profile

Significant HSSE event (including a pandemic) leading to a

major incident resulting in multiple loss of life, signi

ficant harm

(including financial), damage to the environment and damage

to our reputation.

Mitigation, monitoring and assurance

• HSSES Framework setting out clear standards for HSSES

management across Wood aligned to ISO standards

• Quarterly Business Reviews chaired by the CEO and attended

by the Executive Leadership Team

• Business Continuity and Emergency Response Plans deployed

• Active reporting and investigation of incidents to track and

trend within the operating environment

• Comprehensive assurance plans deployed across the

Company

• Safety and Sustainability Committee provides Board

oversight of HSSE performance and preparedness for major

incidents

• Documented accountability at all levels in the Company

• Effective deployment of HSSE resources

Health, Safety, Security &

Environment (HSSE)

Major incident

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Risk profile

Regulatory investigation or proceedings resulting from non-

compliance with applicable legislation, which could lead to

consequences, including financial exposure, penalties and

reputational damage.

Mitigation, monitoring and assurance

• Suite of Wood policies that mandate compliance with

applicable laws and policies

• Dedicated Ethics Responsible Of

ficers across the business

with increased engagement and training provided from the

Group Legal, Ethics and Compliance team

• Anti-Bribery and Anti-Corruption (ABAC) programme with

dedicated project manager, Executive Sponsor, and regular

reporting to the Audit, Risk & Ethics Committee

• Robust compliance programme including our Code of

Conduct and specific requirements around the appointment

and management of commercial intermediaries

• Targeted programme of ethics and compliance training

• Group Legal, Ethics and Compliance team provides support

and guidance to the business

Risk profile

Legal action can result from a major incident, a major

regulatory investigation, contracting issues, project execution or

employee-related claims. Failure to manage litigation can lead

to increased claims, damages, fines and penalties.

Mitigation, monitoring and assurance

• Controls over major incident, major regulatory investigation,

contracting, and project execution risks

• Policies for management of litigation

• Group Legal, Ethics and Compliance team with experience

in litigation supported by external specialist lawyers, where

necessary

• Group Litigation report provided to the ELT on a monthly

basis and to the Board on a quarterly basis

• Enhanced governance on major cases with senior executive

and business unit leadership

• Identification o

f lessons learned arising from litigation and

training in key areas

Compliance and Litigation

Major investigations

Major litigation

Principal risks and uncertainties

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance at a glance

The UK Corporate Governance Code 2018:

How we comply

The long-term success of our Group is deeply rooted in

our commitment to exceptional corporate governance

standards. The Board continues to shape its approach

through the application of the UK Corporate Governance

Code 2018 (Governance Code).

We view corporate governance not merely as a set of

guidelines, but as a powerful tool that instils con

fidence in

our stakeholders about our performance delivery. It forms

the bedrock of our long-term sustainable success.

The Board reviews its governance procedures to maintain

proper control and accountability. Proper control,

accountability and compliance with the Governance Code

flow through the Group as a whole and the directors

consider that the Group has fully complied with the

provisions of the Governance Code throughout 2023.

Our Board is committed to maintaining transparency in its

reporting. The table to the right details where in this report

information can be found on how we have applied the

principles of the Governance Code throughout the year.

The complete text of the Governance Code can be found on

the Financial Reporting Council’s website (www.frc.org.uk).

The Board has applied the Governance Code Principles (A

to R) as follows:

Member

Attendance

Roy Franklin

10/10

Ken Gilmartin

10/10

David Kemp

10/10

Nigel Mills

10/10

Jacqui Ferguson

10/10

Birgitte Brinch Madsen

10/10

Susan Steele

10/10

Adrian Marsh

10/10

Brenda Reichelderfer

10/10

Board meetings held in 2023

Overall attendance

100%

Board composition as at 26 March 2024*

Gender diversity+

Length of tenure

Independent

Non-Executive Directors

Executive Directors

Chair

Board balance

60%

40%

Male

Female

Ethnic diversity+

White 100%

Ethnically diverse

0-3 years

3-6 years

6+ years

+ Further information on Diversity & Inclusion can be found on page 122.

* These figures will change

following the upcoming retirement of David Kemp and Jacqui Ferguson,

and the appointment of Arvind Balan.

100%

Board Leadership and Company Purpose

An effective Board

106

Purpose, values and culture

105

Governance framework and Board resources

100 to 102

Stakeholder engagement

110

Workforce policies and practices

106

Division of Responsibilities

Board roles

106

Independence

106

External commitments and conflicts o

f interest

106

Key activities of the Board

103

Composition, Succession and Evaluation

Appointments to the Board

107

Board skills, experience and knowledge

Annual Board evaluation

108

Audit, Risk and Internal Control

Financial reporting and External auditors and

internal audit

124

Fair, balanced and understandable

126

Risk management and internal control

Remuneration

Linking remuneration with purpose and strategy

130

Changes to policy and summary of process

139

Strategic targets and performance outcomes

130

Other

Nationality

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Dear Shareholder

Welcome to the Governance section of

our 2023 Annual report and financial

statements. This year has been

transformative for the Company,

marked by the implementation of our

new growth strategy. As we navigated

this pivotal period, the Board has

provided strategic oversight, ensuring

that key decisions align with our long-

term objectives and the interests of our

shareholders and wider stakeholders.

Our commitment to robust corporate

governance has underpinned our

actions, reinforcing our dedication

to transparency, accountability, and

integrity.

Safety

The safety and wellbeing of our people is

Wood’s priority and a primary measure

of successful delivery. It is therefore, with

great sadness, that we must report a

fatality during 2023 which took place

in one of our US-based businesses.

We extend our sincere condolences

to our employee’s family, friends, and

colleagues. An extensive investigation

has been carried out to establish root

causes and organisational learnings

from this tragic event. The Board, the

Safety & Sustainability Committee

and the Executive Leadership Team

are committed to driving a world-class

safety culture and demonstrate this

by continuously considering industry

best practice and introducing measures

such as Wood’s Fatality and Permanent

Impairment (FPI) programme to support

our pursuit of safety in performance

excellence. The Board was consulted on

the development of the FPI programme

which is central to Wood’s serious

incident improvement plan for delivering

a safer business. The Board will continue

to monitor, challenge, and analyse

Wood’s safety performance.

Driving growth with

a strong culture

Our continued success relies on

governance standards that support

all our operations. A healthy corporate

culture is the cornerstone of effective

governance. Our values of care,

commitment, and courage foster a

strong culture of integrity within the

Company. The Board builds upon this

foundation, ensuring we have ef

ficient

systems and processes to manage

risks from our operations and the

broader economic landscape, while

continually striving to enhance our

business practices. Our governance

framework empowers the Board to

make decisions in a responsible manner.

More information on our governance

framework can be found on pages 100

and 101 and on how the Board assesses

and monitors culture on page 105.

Roy A Franklin

Chair

Letter from the Chair of the Board

Delivering

on our

strategic

objectives

John Wood Group PLC

Annual Report and Financial Statements 2023

Board oversight of the new strategy

In late 2022, we embarked on a new

strategic journey, focusing on targeted

growth in specific priority markets across

energy and materials. The Board has

been instrumental in overseeing the

successful implementation and delivery

of this strategy, receiving regular updates

on progress at every Board meeting

with performance reporting aligned to

the three strategic pillars. Our full-year

results have demonstrated a strong

start to strategic delivery, with strong

growth in revenue and adjusted EBITDA.

We have made significant strides in our

key growth markets, with sustainable

solutions revenue growing by 15% to $1.3

billion.

The definition o

f sustainable solutions

can be found on page 14.

Board Changes

We announced in August 2023 that our

Chief Financial Of

ficer (CFO), David

Kemp, intended to retire in 2024. David

has provided over ten years of dedicated

service to Wood, including eight years

as CFO. His tenure was marked by

remarkable contributions and challenges,

including his pivotal role in transforming

our business from a predominantly

oil and gas services company to the

diversified entity we are today.

A rigorous process was initiated promptly

to appoint his successor, ensuring a

smooth transition and continuity in our

financial leadership. We were pleased

to announce the appointment of Arvind

Balan as the new CFO, effective from

15 April 2024. Arvind brings with him a

wealth of experience from his previous

roles, including his tenure as the CFO of

the Civil Aerospace business of Rolls-

Royce. More details on the appointment

process can be found at the Nomination

Committee Report on page 120.

The Board is confident that Arvind’s

appointment will further strengthen our

financial leadership and contribute to

our ongoing growth and transformation.

We extend our deepest gratitude to

David for his invaluable contributions

and wish him all the best for his future.

At the same time, we look forward to

welcoming Arvind and are excited about

the fresh perspectives he will bring to our

leadership team.

In March 2024, David Lockwood was

appointed to the Board as a Non-

Executive Director.

David brings over 35 years of experience

from across global engineering and

technology companies. He is currently

Chief Executive Of

ficer (CEO) o

Babcock International Group PLC,

a FTSE 250 aerospace and defence

company, a position he has held since

September 2020.

I am delighted to welcome David to the

Board. He is an innovative leader who has

led large-scale company transformations

and consistently delivered value for

shareholders, making him a strong

addition to the Board.

Further details on David’s appointment

can be found on page 121.

Sustainability

The Board has accountability for

sustainability matters. Although certain

responsibilities are delegated to the

Safety & Sustainability Committee,

I along with the CEO and all Non-

Executive Directors, attended all the

Safety & Sustainability Committee

meetings during 2023. This approach

reflects the importance o

f sustainability

matters and the Board’s commitment

to overseeing them. Through attendance

at the Committee meetings, the Board

oversaw key developments related to

Wood’s sustainability approaches. To

ensure Wood’s approach is evolving and

maturing in line with the developing legal

landscape of climate change demands,

the Board was consulted on how Wood

is preparing for matters such as UK’s

Transition Plan Taskforce framework and

the European Corporate Sustainability

Reporting Directive.

Throughout the year, the Board reviewed

performance trends of the Health,

Safety and Environment programme.

The Board also continued its ongoing

monitoring and reviewing of progress

towards Wood’s sustainability targets,

ensuring appropriate action is being

taken on the sustainability matters

that are significant to Wood’s success,

material to its key stakeholders and

contribute to the objectives of the UN

Sustainable Development goals.

Stakeholder Engagement

We continued to prioritise our

engagement with stakeholders,

recognising the unique relationship each

group has with the Company. The Board

played a crucial role in ensuring effective

communication and engagement

with these groups. We believe that

understanding and addressing the needs

and areas of focus of our stakeholders

is fundamental to our success. Further

information on how we, as a Board, have

ful

filled our duties to our stakeholders

under s172 of the Companies Act 2006

can be found on page 117. Details of how

we engaged with our different groups of

stakeholders during 2023 can be found

on pages 110 to 116.

Key areas of stakeholder engagement

outside our regular engagement plans

included significant engagement

with shareholders, employees and

clients in relation to the approach

from Apollo Global Management, Inc.

and engagement, led by the Chair of

the Remuneration Committee, with

shareholders following the vote of 77%

in favour of the Remuneration Report at

the Company’s 2023 AGM, more details

of this engagement and how it helped

to shape subsequent action by the

Board can be found on pages 118 and 119

respectively.

We remain committed to maintaining

strong relationships with all our

stakeholders, and the Board will continue

to play an active role in facilitating this

engagement.

Looking forward to 2024

As we look forward to continued growth

in 2024, I want to thank all our colleagues

at Wood for living our values and their

commitment to delivering the new

strategy. I look forward to the year ahead

with confidence.

Roy A Franklin

Chair

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

David Kemp

Chief Financial Of

ficer (CFO)

Appointed:

2015

Retiring:

2024

Contribution to the Company

David is an experienced CFO with a

significant track record o

f building

financial discipline, driving growth and

margin improvement and delivering

excellence. His extensive knowledge of

the debt and equity markets and the

wider financial and service sectors is vital

to the Company’s objectives of resilience

and a strong balance sheet.

Experience

David was appointed as CFO in 2015

and in August 2023 he announced his

intention to retire as CFO in 2024. David

was previously CFO of Wood Group’s

PSN division and a director and governor

of Albyn School Limited.

Prior to joining Wood, he served in

executive roles at Trap Oil Group, Technip,

Simmons & Company International

and Hess Corporation, working across

Finance, M&A and Operations.

David is a member of the Institute of

Chartered Accountants of Scotland and

has an honours degree in accountancy.

External appointments

Non-Executive Director and Audit

Committee Chair of Craneware plc.

Roy A Franklin

OBE

Chair and Non-Executive Director

Appointed:

2017

Chair since September 2019

Contribution to the Company

Roy brings to the Board more than

50 years’ experience in the oil and gas

industry including strong strategic and

operational expertise and extensive

experience in chairing boards of listed

companies. Such combined knowledge

enables him to steer the Board’s focus,

promoting open and productive debate

and contributes to the Board’s practical

understanding of good governance. He

has an outstanding track record and has

demonstrated consistent and valuable

leadership.

Experience

Roy initially spent 18 years at BP, latterly

as head of M&A, BP Exploration, after

which he was group MD of Clyde

Petroleum and then CEO of Paladin

Resources until its acquisition by

Talisman Energy. Roy has served on a

number of international energy boards

including Equinor ASA (as Deputy

Chair), Santos Ltd, OMV, Energean

plc and Premier Oil (as Chair) as well

as Amec Foster Wheeler until its

acquisition by the Company in October

2017.

External appointments

Director of Kosmos Energy Ltd.

Committee membership

Chair of the Nomination Committee.

Safety & Sustainability

Nomination

Remuneration

Audit, Risk & Ethics

Chair

Ken Gilmartin

Chief Executive Of

ficer (CEO)

Appointed:

2022

Contribution to the Company

Ken was appointed as CEO in July 2022,

having joined the Company in September

2021 to take on the role of Chief

Operating Of

ficer.

Ken brings a wealth of industry

experience and excellent strategic

and leadership skills to Wood and is

focused on building on the Company’s

strong foundations to capture growth

opportunities across energy security,

energy transition and sustainable

materials, and deliver value for

shareholders over the medium term.

Experience

Ken began his professional career over

25 years ago in civil engineering with

Deutsche Bahn and prior to joining

Wood, spent 15 years at Jacobs where

he held a variety of operational and

project leadership roles including

Executive Vice President of the People &

Places solutions business where he held

operational responsibility for more than

half of Jacobs’ overall business portfolio.

Throughout his career Ken has worked

internationally including leading the

delivery of major programmes across

multiple sectors in Europe, Asia, North

America, and the Middle East region.

Chair

Executive Directors

Key to Committee membership

John Wood Group PLC

Annual Report and Financial Statements 2023

Board of Directors

Nigel Mills

Non-Executive and

Senior Independent Director

Appointed:

2020

Contribution to the Company

Nigel has extensive financial, commercial

and investor relations skills, having

advised some of the UK’s largest

companies across a broad range of end

markets. His strong strategic financial

experience ensures he is well-equipped

to provide sound advice together with

independent challenge to the Board. His

contribution strengthens the Board’s

discussions and is invaluable as Wood

strives for long-term growth.

Experience

Nigel’s executive career was in

investment banking, as Chair of

Corporate Broking at Citi and CEO at

Hoare Govett.

External appointments

Senior Independent Director of Greggs

plc and Persimmon Plc and a board

member of QC Holdings Limited, The

Queen’s Club Limited, and QC Ground

Limited.

Committee membership

A member of the Nomination, Audit, Risk

& Ethics, and Remuneration Committees.

Jacqui Ferguson

Non-Executive Director

Appointed:

2016

Stepping down:

May 2024

Contribution to the Company

Jacqui contributes to both strategic

and operational matters with wide-

ranging general management and non-

executive experience. Her diverse industry

experience and related technology

expertise from multiple sectors including

telecommunications, financial services,

manufacturing, travel & transportation,

energy and government are important

elements enabling the Board to deliver its

strategy and long-term growth.

Experience

Jacqui was previously a divisional CEO

for a large global technology services

business.

In December 2023, Jacqui announced

her intention to step down as a Non-

Executive director upon the conclusion of

the Company’s Annual General Meeting

to be held in May 2024.

External appointments

Chair of Tesco Bank; Senior Independent

Director of Croda International Plc and

Deputy Chair of Engineering UK.

With effect from 1 January 2024, Jacqui

was appointed as a Non-Executive

Director of Softcat plc and National Grid

plc. Jacqui is also appointed as Senior

Independent Director of Softcat plc with

effect from May 2024.

Committee membership

On 1 January 2024, Jacqui stepped

down from her position as Chair but

remains a member of the Remuneration

Committee. Jacqui is also a member of

the Nomination and Audit, Risk & Ethics

Committees.

Birgitte Brinch Madsen

Non-Executive Director

Appointed:

2020

Contribution to the Company

Birgitte has extensive, global experience

of engineering and consulting projects in

the energy and built environment sector.

Her knowledge and understanding of

green energy technologies add value

as Wood continues to strengthen its

expertise within renewable energy.

Birgitte adds to the balance of skills and

diversity of views on the Board.

Experience

Birgitte was previously Chair of

Oreco and was a board member of

Nordsøfonden and Nordsøenheden.

Birgitte has a Master of Economics

and Finance from the University of

Copenhagen.

External appointments

Chair of Milton Huse A/S, RUM A/S

and DELPRO A/S & DELPRO WIND

A/S; Deputy Chair of DEIF A/S and

Danske Invest Funds (a single board

appointment with oversight of

five

funds,

two of which are publicly listed). Birgitte

is a board member of Arkil Holding A/S

and Hovedstadens Letbane I/S. Head of

Audit of Metroselskabet I/S.

Committee membership

A member of the Nomination and Safety

& Sustainability Committees.

Non-Executive Directors

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Non-Executive Directors

Safety & Sustainability

Nomination

Remuneration

Audit, Risk & Ethics

Chair

Key to Committee membership

John Wood Group PLC

Annual Report and Financial Statements 2023

Brenda Reichelderfer

Non-Executive Director

Appointed:

2021

Contribution to the Company

Brenda is an engineer with broad

business leadership experience. She

brings considerable global engineering

and operational capability from multiple

industries to the Board, together with

valuable independent advice.

Experience

Brenda was previously a Non-Executive

Director of Meggitt Aerospace plc and

a member of the Board of Hermetic

Solutions Group.

Brenda has a Bachelor of Science

in electrical engineering from Ohio

Northern University.

External appointments

Director of Moog, Inc. and Tribus

Aerospace, Senior Independent Director

& Compensation Chair of Federal Signal

Corporation.

Committee membership

On 1 January 2024, Brenda was

appointed Chair of the Remuneration

Committee and she is a member of the

Nomination Committee.

Susan Steele

Non-Executive Director

Appointed:

2021

Contribution to the Company

Susan has wide-ranging engineering

and construction industry, programme

management and supply chain

performance experience. Her global

expertise across a range of end markets

significantly strengthens the Board.

Experience

Susan was a director of Harvard

Bioscience, Inc. and Hill International, Inc.

In October 2021, Susan was inducted into

the National Academy of Construction,

which recognises and honours individuals

for their distinguished contribution to the

industry and to share their expertise.

Susan has a Master of Business

Administration from the University of

Miami, FL, and a Bachelor of Science

from Auburn University, AL and holds

a Certified Director credential

from

the National Association of Corporate

Directors.

External appointments

CEO of Steele & Partners.

Committee membership

Chair of the Safety & Sustainability

Committee and a member of the

Nomination and Audit, Risk & Ethics

Committees.

Adrian Marsh

Non-Executive Director

Appointed:

2019

Contribution to the Company

Adrian has a wealth of

financial expertise

in large multinational companies. He

has a proven track record in financial,

strategic and commercial roles and

brings substantial audit, risk and audit

committee expertise to the Board.

Experience

Adrian resigned as Group Finance

Director of DS Smith plc in June 2023. He

was previously Head of Tax, Treasury and

Corporate Finance at Tesco plc and has

also held divisional CFO positions at both

AstraZeneca PLC and Pilkington plc.

External appointments

Independent Non-Executive Director

and Chair of Risk and Audit Committee

of Co-operative Group Ltd and Grand

Secretary of United Grand Lodge of

England.

Committee membership

Chair of the Audit, Risk & Ethics

Committee and a member of the

Nomination and Safety & Sustainability

Committees.

Board of Directors

continued

Welcome to our new

Chief Financial Of

ficer

who joins the Company

on 15 April 2024

Non-Executive Directors

Company Secretary

Board changes

In August 2023, David Kemp announced his intention to retire as CFO and a member of the Board of Directors. David will

resign as a director with effect from 14 April 2024 and will remain an employee of Wood for a period of time to facilitate an

orderly transition.

In November 2023, it was announced that Arvind Balan is to be appointed as CFO and a member of the Board of Directors

with effect from 15 April 2024.

In December 2023, Jacqui Ferguson announced her intention to resign as a Non-Executive Director upon conclusion of the

Annual General Meeting to be held in May 2024 and on 1 January 2024, Jacqui stepped down as Chair of the Remuneration

Committee.

In February 2024, it was announced that David Lockwood was to be appointed as a Non-Executive Director of the Board of

Directors with effect from 12 March 2024.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Arvind Balan

Chief Financial Of

ficer

Appointed:

2024

Contribution to the Company

As announced by the Company

Arvind has been appointed as CFO

with effect from 15 April 2024.

Experience

Arvind has 23 years’ experience across

corporate strategy, M&A, managing

investors, raising capital and in

operational transformations. Arvind

previously worked with industrial

companies, such as ArcelorMittal,

Shell, and most recently Rolls-Royce

in a variety of CFO and functional

finance roles. Arvind is a chartered

accountant and has an MBA from the

Indian Institute of Management.

David Lockwood

OBE

Non-Executive Director

Appointed:

2024

Contribution to the Company

David brings over 35 years of experience

from across global engineering and

technology companies. He is currently

CEO of Babcock International Group

PLC, a FTSE 250 aerospace and defence

company, a position he has held since

September 2020.

Experience

David was previously CEO of Cobham

plc, a British aerospace and defence

company. Prior to that, he was CEO of

Laird plc, a British technology company,

from 2012 to 2016. David’s career also

includes senior management roles at BT

Global Services, BAE Systems and Thales

Corporation.

External appointments

CEO of Babcock International Group

PLC.

Martin J McIntyre

Company Secretary

Appointed:

2017

Martin worked in private practice with

a Scottish law firm be

fore joining Wood

in 2000. He is licensed to practice law in

both Scotland and Texas, and has held

various roles in our legal team, including

Group General Counsel from 2016 to

2023. He was appointed Company

Secretary in 2017. In December 2023, it

was announced that Martin was retiring

from his position as Group General

Counsel with effect from 2 January

2024, but would remain as Company

Secretary pending the appointment of

his successor.

Jennifer Richmond

Chief Strategy Of

ficer

Steve Nicol

Executive President, Operations

Marla Storm

Chief Human Resources Of

ficer

Craig Shanaghey

Executive President, Projects

Michael Rasmuson

General Counsel

Ken Gilmartin

Chief Executive Of

ficer

David Kemp

Chief Financial Of

ficer

Azad Hessamodini

Executive President, Consulting

Executive Leadership Team (ELT)

Executive Leadership Team

Find out more about the ELT at:

woodplc.com/leaders

Executive Leadership Team (ELT)

The ELT operates under the authority of, and reports

directly to, the Chief Executive Of

ficer (CEO) and

comprises the CEO, Chief Financial Of

ficer (CFO),

the Executive Presidents of our three business units

(Consulting, Projects and Operations), and the executive

leaders of our four Group functions, namely Business

Sustainability & Assurance (formerly known as Health,

Safety, Security, Environment & Sustainability), Human

Resources, Strategy & Development, and Legal, Ethics

and Compliance.

The ELT supports the CEO with the development

and implementation of Group strategy and with the

management of the business operations of the Group.

ELT changes

In August 2023, David Kemp announced his intention to retire

as CFO and a member of the Board of Directors. David will

resign as a director with effect from 14 April 2024 and will

remain an employee of Wood for a period of time to facilitate

an orderly transition.

In November 2023, it was announced that Arvind Balan is to

be appointed as CFO and a member of the Board of Directors

with effect from 15 April 2024.

The Company announced, in December 2023, the retirement of

Lesley Birse as Executive President, Human Resources, and Martin

McIntyre as General Counsel, together with the appointments

of Marla Storm as Chief Human Resources Of

ficer and Michael

Rasmuson as General Counsel, all effective from 2 January 2024.

Mike Collins, Executive President of Business Sustainability &

Assurance has stepped down with effect from 31 March 2024.

Jennifer Richmond assumes responsibility for the function in

addition to her existing responsibilities and was appointed Chief

Strategy Of

ficer with e

ffect from the same date.

John Wood Group PLC

Annual Report and Financial Statements 2023

Building a circular

economy solution

OMV, the integrated energy, fuels &

feedstock and chemicals & materials

company, developed the proprietary

ReOil® technology to convert plastic

waste into pyrolysis oil, a valuable

resource primarily used to produce

high-performing and sustainable

plastics. ReOil offers an innovative

solution to support the growth of

plastic recycling – it is estimated that

around 60% of plastics production

will come from recycled feedstock by

2050.

In 2023, Wood and OMV agreed to

bring ReOil jointly to the market,

combining Wood’s proprietary heater

technology with OMV’s chemical

recycling process. This agreement will

support significant advancements

in chemical-based plastic recycling,

helping to build a circular economy

solution for end-of-life plastics that

would otherwise be sent to landfill or

waste incineration.

The companies have established a

combined technology and engineering

delivery team to support clients with

the implementation of ReOil at their

sites. In addition, Wood is working

with ReOil licensees to provide full

asset lifecycle support globally.

A ReOil pilot plant has been operating

in the OMV refinery in Schwechat,

Austria since 2018 and has processed

end-of-life plastics for more than

22,000 hours to date. A 16,000 tons

per year ReOil plant is currently in

construction at the same site and

Wood is working with OMV on the

development of an industrial-scale

plant with a capacity of 200,000

tons per year.

of plastics production will come from

recycled feedstock by 2050

60%

tons of plastics to be

processed per year

200k

Find out more:

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

Governance

Financial statements

Safety &

Sustainability

Committee

Is appointed by the

Board to oversee the

Group’s management

of Health, Safety,

Security, Environment &

Sustainability (HSSES),

consistent with the

Group’s values, purpose

and strategy.

Read more on pages

128 and 129

Nomination

Committee

Leads the process for

Board appointments,

ensuring formal, rigorous

and transparent

procedures and making

recommendations to the

Board to ensure plans

are in place for an orderly

succession to both

the Board and senior

management positions

and oversees the

development of a diverse

pipeline for succession.

Audit, Risk

& Ethics

Committee

Responsible for

various aspects of

the Group’s financial

controls, financial

reporting and external

audit; the Group’s

Audit & Risk function

including operational

audit;

the Group’s risk

management controls

and processes; and the

Group’s management

of its Ethics and

Compliance programme.

Remuneration

Committee

Oversees and is

responsible for various

aspects of remuneration

and benefits o

f the

Chair, executive directors,

members of the ELT and

the Company Secretary.

Read more on pages

120 to 123

Read more on pages

124 to 127

Read more on pages

130 to 132

Governance Framework

Our governance framework includes the Company’s articles of association, delegated authorities, committee charters and matters

reserved to the Board which, taken together, provide robust controls that promote the success of the Company for the bene

fit o

its stakeholders as a whole. More information on the division of responsibilities is set out on page 106.

Board Committees

The Board is collectively responsible for the governance

of the Company on behalf of shareholders and is

accountable to them for the long-term success of

the Group. The Board focuses its time and energy on

strategy, succession planning, significant acquisitions and

divestments, the annual budget and performance against

it, monitoring and assessment of culture, monitoring

the performance of the Management team, and risk

management, specifically

focusing on principal risks and

the overall system of internal control.

Board of Directors

The Board has delegated some of its responsibilities to its

four main Board Committees – the Safety & Sustainability,

Committee, the Nomination Committee, the Audit, Risk &

Ethics Committee and the Remuneration Committee.

The structure of the Board Committees is subject to ongoing

review to ensure the highest standards of governance.

The work of these Committees is supported by members of

the ELT and other senior management.

John Wood Group PLC

Annual Report and Financial Statements 2023

100

Additional Committees established by the Board

The Board believes good corporate governance is essential to

ensuring our business is run in the right way, creating value

for all our stakeholders. It is key to overall performance and

integrity and is consistent with our shared values. Corporate

governance extends beyond regulatory compliance and the

directors consistently monitor developments in best practice,

including guidance published by investor groups.

The directors use an electronic Board paper system which

provides secure access to papers. The information provided

to Board members is of suf

ficient depth to

facilitate debate

and to fully understand the content whilst remaining clear and

concise.

If any director has concerns about the running of the Group

or any proposed course of action, they are encouraged to

express those concerns which will then be minuted. No such

concerns were raised during 2023. All directors are entitled to

take independent professional advice at the Group’s expense

and have access to the advice and services of the Company

Secretary, who is responsible for ensuring that Board

procedures are complied with. The Company Secretary

provides advice and support to the Board.

Disclosure Committee

The Disclosure Committee ensures

timely and accurate disclosure of

all information required to meet

the legal and regulatory obligations

and requirements arising from the

Company’s listing on the London

Stock Exchange.

In 2023, the Disclosure Committee

met to consider the response to

the unsolicited and conditional

proposals received from Apollo

Global Management, Inc., to acquire

the entire issued and to be issued

ordinary share capital of Wood.

The Committee comprises the Chief

Executive Of

ficer (CEO), Chie

Financial Of

ficer (CFO) and the

Company Secretary.

Standing Business

Committee

The Standing Business Committee

approves new or ongoing

transactions that the Company

requires to enter into on a day to day

basis. The Committee has and may

exercise all the powers of the Board,

except as may be prohibited by law,

with respect to all matters referred

to in the Committee’s Charter.

The Committee comprises the

Chair, CEO and CFO plus such

other persons as the Committee

may co-opt from time to time for

the purpose of assisting with all or

part only of any business within the

Committee’s remit.

Defence Committee

The Defence Committee was

constituted in January 2023 to

assist the Board in its responsibilities

by reviewing, monitoring and

supporting the Company’s response

to an approach in respect of the

possible acquisition of the entire

issued share capital of the Company

by Apollo Global Management, Inc.

The Committee comprises a

minimum of

five directors, consisting

of the Chair of the Board, the CEO,

the CFO, Adrian Marsh and Nigel

Mills.

The Committee stood down in 2023.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

101

Governance

Financial statements

The Board typically schedules four

in-person meetings and three calls

throughout the year.

During 2023, a total of ten Board

meetings took place: four ‘in-person’

Board meetings (three held in the UK and

one held in the US (Houston)) and six

Board calls (all held via video conference).

The additional meetings held in 2023

were dedicated to matters arising

from the approach from Apollo Global

Management, Inc.

The Chair, Chief Executive Of

ficer

(CEO) and Company Secretary meet

in advance of each Board meeting to

discuss and agree on the agenda for

the next meeting, as well as discuss

progress made on actions arising from

the previous meeting. Board meeting

agendas are aligned with the Board’s

annual programme. Following the

Chair, CEO and Company Secretary’s

discussion, any additional topics are

added to the relevant Board meeting

agendas.

The following are covered as standing

agenda items:

• Review of Governance and reports

from the Safety & Sustainability,

the Audit, Risk & Ethics, and the

Remuneration Committees, and the

CEO report

• Operations updates and functional

updates from HSSES, HR, Strategy

& Development, Legal, Ethics

and Compliance, and Finance &

Administration (including Investor

Relations, IT, Tax & Treasury and

Commercial)

The Board also receives presentations

from management and discusses other

matters.

Our Board is composed of highly

skilled individuals who bring a

range of skills and corporate

experience to the boardroom

(see pages 94 to 97).

The role of the Board is to lead and direct

the Group, to promote its long-term

sustainable success, generate value for

shareholders and contribute to wider

society.

The Board has a structured calendar for

the year ensuring all relevant matters are

considered and utilises its four principal

committees to ensure suf

ficient time is

allowed for discussion. At each Board

meeting, suf

ficient time is set aside

for

the Committee Chairs to report on the

contents of their discussions, put forward

any recommendations to the Board

which require approval and the actions

taken. Board members are encouraged

to attend all committee meetings.

Board

Safety &

Sustainability

Committee

Nomination

Committee

Audit, Risk

& Ethics

Committee

Remuneration

Committee

Roy Franklin

10/10

–

5/5

–

Ken Gilmartin

10/10

–

David Kemp

10/10

–

Nigel Mills

10/10

–

5/5

6/6

5/5

Jacqui Ferguson

10/10

–

5/5

6/6

5/5

Birgitte Brinch

Madsen

10/10

4/4

5/5

–

Susan Steele

10/10

4/4

5/5

6/6

–

Adrian Marsh

10/10

4/4

5/5

6/6

–

Brenda

Reichelderfer

10/10

–

5/5

–

5/5

Attendance at Board and Committee meetings is noted as the number of meetings attended

out of the maximum number of meetings possible for that director to attend, so accounting for

appointments and resignations part way through the year.

Read the Charters of the Board’s Committees at:

woodplc.com/charters

Board and Committee attendance 2023

Attendance by directors at the meetings of the Board and its Committees is

summarised in the table below. The dates of future Board meetings have been

agreed until the end of 2025.

Data is based on scheduled and additional meetings from 1 January –

31 December 2023 and shows 100% attendance by all members.

How Governance

Supports Strategy

The Board continually assesses the

flexibility and sustainability o

f our

business model, monitoring and

reviewing our strategy (including our

purpose and strategic objectives),

assessing and identifying changing or

emerging risks that could impact on

the Group in the short, medium and

long-term.

Further information on the activities of

the principal committees can be found

on page 100).

Further information on the business

model can be found on page 20.

John Wood Group PLC

Annual Report and Financial Statements 2023

102

Activities of the Board

Safety &

Sustainability

• The investigation and organisational learnings from a

fatality which took place in one of our US-based businesses,

including initiatives to improve safety culture

• Wood’s Fatality and Permanent Impairment (FPI)

programme to support our pursuit of safety in performance

excellence

• Rationalisation of the Company’s supply chain and related

processes

• Approval of the Modern Slavery and Human Traf

ficking

2023 Statement

• Updates were received at each meeting on the activities of

the Safety & Sustainability Committee

• Update on the Group’s sustainability programme

• Director independence - each Non-Executive Director is

considered independent

• Defence Planning Update with the Company’s advisers

• Briefing on Board’s duties and responsibilities in the context

of a takeover

• Reviewed the Matters Reserved to the Board policy,

Committee charters, and roles and responsibilities of the

directors

• Reviewed and updated the directors’ external appointments

and conflicts o

f interest register

• Board evaluation and focus areas for 2024

• Regular review of the Company’s principal and emerging risks

• Progress with implementation of the refreshed

strategy throughout the year

• Regular review of the Company’s strategic KPIs

• Review of business portfolio optimisation and

divestment activity

• The impact of arti

ficial intelligence on the business

• Regular updates with advisers on the proposals from

Apollo Global Management, Inc.

• IT infrastructure review and optimisation

• Real estate portfolio review and consolidation

Governance

Strategy

Key Board Activities

• Retirement planning of David Kemp. Search process

(internal and external) for new CFO, concluding in the

appointment of Arvind Balan

• Reviewed succession plans in place for the Board, ELT and

other senior management positions in the Group taking into

account the future strategy of the Company and the need

for a focus on diversity

• Updates were received at each meeting from the CFO,

including reports of progress against forecast

• Review of preliminary results statement, Annual report and

financial statements and hal

f-year results

• Review of debt and cash performance, including progress

against target leverage policy

• Updates were received at each meeting on the activities of

the Audit, Risk & Ethics Committee

• Results announcements and trading updates

• Current and future dividend policy

• Review and approval of

five year financial plan

• Extensive engagement with shareholders in respect of the

proposals from Apollo Management, Inc.

• Bi-annual presentation to Lenders by the CEO and the CFO

• Additional engagement with shareholders, following the

AGM, regarding the Remuneration Report

• Regular reports received from the CFO on investor relations

(IR) activities, including investor feedback and analysis

provided by our brokers

• The Chair, Senior Independent Director and the Chair of the

Remuneration Committee make themselves available to

meet with key shareholders

• The Board received regular updates from the Executive

President - HR on employee engagement

Board engagement

with shareholders and

other stakeholders

People & Succession

Planning

Finance

The principal areas of Board focus during 2023 and stakeholder groups considered, are outlined below:

Key to Stakeholder groups

Employees

Investors & Lenders

Community

Clients

Environmental stakeholders

Suppliers

Retirement plans: current and deferred workforce and pensioners

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

103

Governance

Financial statements

Statement on 2023 Annual General Meeting

Resolution Votes Against

In accordance with the UK Corporate

Governance Code 2018, the Company

provided an update to its shareholders

as follows:

• Whilst the Board was pleased that all

resolutions were carried, Resolution 2

regarding the Remuneration Report

gained support of 76.98% in favour

• The Board is committed to open

and transparent dialogue with

shareholders

• The Company consulted with our top

30 investors prior to the AGM, and

wrote to them on 11 May and again

on 16 June immediately following the

AGM with the offer of a meeting to

understand their views regarding the

Resolution

• Based on discussions with

shareholders, and the

recommendations from proxy advisors

such as ISS, we understand that the

primary reason some shareholders

voted against the resolution was the

level of achievement of personal and

team objectives under the Annual

Bonus Plan (ABP) for 2022 compared

to financial results, which resulted

in an overall outcome of 36% of

maximum bonus

• As set out in correspondence

with shareholders, the Board

continues to believe that this

outcome, based on contributions

from performance against

profit targets, health and sa

fety

targets and corporate/individual

objectives, was a fair and

appropriate outcome given the

progress made in 2022 to reset the

business and position Wood for

growth

• Looking forward, as noted in the

2022 Annual report and financial

statements, at the start of the

year the Company made changes

to the bonus structure for 2023

to increase the emphasis on

financial per

formance from 60%

to 90% weighting. This approach

is aligned with the strategic focus

for 2023

• The Board is grateful for the

feedback from shareholders

throughout this process and will

continue an ongoing dialogue with

shareholders to help inform future

decisions on remuneration and

other matters

John Wood Group PLC

Annual Report and Financial Statements 2023

104

The Board oversees the

development of the Group’s

purpose, defining our values

and strategy and monitoring

and assessing culture, for the

benefit o

f all stakeholders.

Our purpose informs the Group’s

strategic direction and how we deliver

value for our stakeholders. Due to its

importance, the Board periodically

reassesses our purpose to ensure

it continues to reflect the Board’s

strategy, values, and desired culture.

Our values reflect the qualities we

embody and our underlying approach

to doing business. Our values

are embedded in our operational

practices and the direct oversight and

involvement of the executive directors.

Our culture has developed from our

values and is considered a key strength

of our business. The Board reinforces

our culture and values through its

decisions, strategy and conduct. The

Board is satisfied that the culture is

operating effectively.

Our values

Everything we do is with an unwavering commitment

to what we believe in and how we behave:

Care

Working safely, with integrity, respecting and valuing each other

and our communities

Commitment

Consistently delivering to all our stakeholders

Courage

Pushing the boundaries to create smarter, more sustainable solutions

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

105

Governance

Financial statements

Purpose, values and culture

Board independence

The Board considers that all of its non-

executive directors were independent in

character and judgement, and that there

were no relationships or circumstances

which are likely to affect, or could appear

to affect, their judgement.

External commitments and

conflicts o

f interest

The Board takes into account other

commitments when considering anyone

for appointment to the Board to satisfy

itself that the individual can devote

suf

ficient time to the Company and

also to assess any potential conflicts o

interest.

For brief biographies of the directors

see pages 94 to 97.

An effective Board requires the right mix of skills and

experience. Our Board is a diverse and effective team

focused on promoting the long-term success of the Group.

An overview of the skills and experience of each of the

directors is set out on pages 94 to 97.

More information on the roles and responsibilities of the Chair, CEO and

Senior Independent Director is available at:

woodplc.com/investors/roles-and-responsibilities

Board roles

As agreed by the Board and in compliance with the UK Corporate Governance

Code 2018 there is a clear separation of the roles of the Chair and the Chief

Executive Of

ficer (CEO).

The Chair is a non-executive director and is responsible for:

•

The leadership of the Board, creating the conditions for overall Board and

individual director effectiveness

• Providing coherent leadership consistent with the Group’s vision and values,

running the Board and setting its agenda, taking full account of all concerns

of Board members, and ensuring there is a clear structure for, and the

effective running of, Board Committees with appropriate terms of reference

• Ensuring effective communication with shareholders and other stakeholders

and that the members of the Board are made aware of the views of major

investors

The CEO is an executive director and is responsible for:

•

Running the business of the Group in close collaboration with the Executive

Leadership Team (ELT)

• Providing coherent leadership of the Group with the Chair consistent with

the Group’s vision and values, developing Group objectives and strategy for

approval by the Board, effectively leading the executive directors in the day-

to-day running of the Group’s business and setting out the Group’s culture,

values and behaviours

The Senior Independent Director is responsible for:

•

Acting as a sounding board for the Chair and providing support in the

delivery of the Chair’s objectives

• Assisting shareholders who have concerns that have not been resolved

through discussion with the Chair or CEO

•

Leading the evaluation of the Chair on behalf of the other directors

Non-executive directors have responsibility for:

• Bringing constructive, independent challenge and judgement to Board

discussion. The Chair and the non-executive directors meet periodically

without the executive directors present

• Ensuring they are free from any relationships or circumstances which are

likely to affect the independence of their judgement. The Board regularly

reviews the independence of non-executive directors

The Company Secretary is responsible for:

• Advising the Board on all governance matters

• Ensuring information

flows within the Board and its Committees and

between senior management and the non-executive directors

• Facilitating the induction of new directors and assisting with the ongoing

training and development needs of Board members as required

• Facilitating an annual review of the effectiveness of the Board, Committees

and individual directors

Workforce policies and practices

The Board and/or ELT review and

approve all key policies and practices

which could impact on our workforce

and drive their behaviours. All policies

support the Group’s purpose and

reflect our values and are published

on the Group intranet.

As a business, we seek to conduct

ourselves with honesty and integrity

and believe that it is our duty to

take appropriate measures to

identify and remedy any malpractice

within or affecting the Company.

Our employees embrace our high

standards of conduct and are

encouraged to speak up if they

witness any behaviour which falls

short of those standards.

Mandatory training programmes

are used to reinforce key ethics

and compliance messages in areas

such as anti-bribery and corruption,

and conflicts o

f interest. All Board

members and employees are required

to notify the Company as soon as

they become aware of a situation

that could give rise to a conflict or

potential conflict o

f interest.

Further details are

provided on page 74.

John Wood Group PLC

Annual Report and Financial Statements 2023

106

Division of responsibilities

Appointments to the Board

We ensure that appointments to our

Board are made solely on merit with

the overriding objective of ensuring the

Board maintains the correct balance of

skills, length of service and knowledge

to successfully determine the Group’s

strategy.

Appointments are made based on the

recommendation of the Nomination

Committee with due consideration given

to the benefits o

f diversity, including

gender and ethnic diversity.

The Nomination Committee report

on pages 120 to 123 provides further

information on Board appointments,

succession planning and diversity.

Board composition

The Board comprised nine directors

during 2023, and in February 2024, the

Company announced the appointment

of David Lockwood as an additional Non-

Executive Director.

The Board considers any

recommendations made by the

Nomination Committee with regard

to Board composition and proposed

appointments.

Non-executive directors comprised a

majority of the Board (excluding the

Chair) as recommended by the UK

Corporate Governance Code 2018

(Governance Code).

Conflicts o

f interest

The Board requires directors to declare

any appointments or other situations

which would amount to a possible

conflict o

f interest, including those

resulting from signi

ficant shareholdings,

and to ensure that the influence o

f third

parties does not compromise or override

independent judgement. The Board has

procedures in place to deal with and, if

necessary, approve any such conflicts.

At the start of any Board or Committee

meeting, directors are required to declare

any conflicts arising

from agenda items

scheduled for that particular meeting

and not to take part in any discussion of

that particular item.

Board re-election

All Board directors are required to offer

themselves for re-election at the annual

general meeting (AGM) of the Company.

Any director appointed after the AGM

must stand for election by shareholders

at the next AGM. As required by

the Governance Code the papers

accompanying the resolutions proposing

their election or re-election set out

specific reasons why their contribution

is, and continues to be, important to

the Company’s long-term sustainable

success.

Chair’s performance

The Chair’s performance has been

formally evaluated by the Non-Executive

Directors, led by Nigel Mills, the

Company’s Senior Independent Director.

Private discussions were held between

the Senior Independent Director and

each of the Non-Executive directors.

The Non-Executive directors then

met without the Chair to discuss his

performance. The evaluation concluded

that the Chair is well-qualified to lead

the Board.

More information on Board Evaluation

can be found on pages 108 to 109.

Committee evaluation

The reports on each of the Board

Committees prepared as part of the

externally-facilitated Board effectiveness

review were circulated to the members

of each of the respective Committees

and subsequently discussed by those

committees.

Further details of each of the Committee

evaluations are set out on pages 121, 127,

129 and 132.

Board development

The training and continuing professional

development needs of directors are

periodically discussed at Board meetings

and during the year briefings and/or

training were provided on issues relating

to:

• Market backdrop and share price

performance, valuation analysis on

consensus and management forecasts,

and potential third-party approaches

and shareholder activism

• Board responsibilities under the

Modern Slavery Act

• UK regulatory considerations; key

features of the UK Takeover Code and

the Board’s responsibilities, including

their fiduciary duties

Arrangements are in place for newly

appointed directors to undertake an

induction process designed to develop

their knowledge and understanding

of the Group’s business. This includes

meetings with senior management,

visits to operating sites and discussion of

relevant business issues.

Following their appointment, directors

are advised of their legal and other

duties and their obligations as

directors of a listed company under the

Companies Act 2006.

Further details on director appointments and

the role of the Nomination Committee are

set out on page 120.

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John Wood Group PLC

Annual Report and Financial Statements 2023

107

Governance

Financial statements

Composition, succession & evaluation

Sustainability of the Group’s

business model

The Board believes that Wood plays a

vital role in addressing climate change

through:

• Its strategy aligned to key growth

trends in its energy and materials

markets including energy transition,

sustainable materials, circular economy

and decarbonisation

• Its unique consulting and engineering

skills that are critical to solving the

global challenges of decarbonisation

and energy transition

• The actions it is taking to minimise its

own environmental footprint

Through oversight for the overarching

business strategy, the Board considers

Wood’s climate-related opportunities

and climate-related impacts on the

sustainability of the business model.

It does this by assessing the key

market drivers and uncertainties for

market development, key clients and

competitors across each of Wood’s focus

geographies, Wood’s historical track

record of performance, major risks to

delivery and how they will be mitigated.

The Board increases its understanding

of climate-related opportunities

through supporting global initiatives on

climate advocacy such as the UN Global

Sustainable Development Goals (SDGs).

The Board considers that climate

change is appropriately addressed as

a contributing factor to other principal

risks and that it is not necessary to

identify it as a separate risk. The impacts

of climate change on the resilience of

our business model are reflected in two

of our principal risks: ESG strategy and

performance and Strategic Delivery.

In addition, our Project Execution risk

considers any material climate-related

physical risks that impact on our ability

to successfully execute projects. The

Group Risk Committee and the Board

have continued to monitor climate

change impacts through their oversight

of the principal risks.

More information on the impact of

climate-related matters, including the

impacts on the resilience of Wood’s

business model and strategy, can be

found in our climate-related

financial

disclosures on pages 47-57.

Engagement with shareholders

Our Investor Relations (IR) activities

are led by the Chief Executive Of

ficer

(CEO) and Chief Financial Of

ficer (CFO),

supported by the IR team and other

members of senior management as

appropriate. We provide the opportunity

for signi

ficant shareholders to meet with

the CEO and CFO at least twice a year

around the interim and full-year results

announcements, and with the Chair

around the Annual General Meeting.

The Chair also has regular calls with the

Company’s brokers to understand the

views of shareholders and equity markets

more broadly.

During 2023, engagement between

significant shareholders and the

Chair proceeded as normal, as well as

increased engagement throughout the

first

few months of the year in relation

to the Apollo proposal (see page 118)

and the votes against the resolution

regarding the Remuneration Report (see

page 119). The engagement throughout

the year focused on Wood’s medium-

term strategic objectives, operational

and financial per

formance, balance

sheet, and capital allocation.

Board Evaluation

The UK Corporate Governance

Code 2018 requires regular board

performance reviews to ensure

effective leadership, direction,

and control of the Company.

These evaluations form the basis

for continuous improvement and

increased effectiveness of the Board.

The Company had utilised the

services of the same external

evaluation provider for the previous

6 years and in 2023, we embarked on

a process to select a new external

facilitator.

The selection process was rigorous

and involved a detailed review of

several providers. The Company

Secretary received comprehensive

proposals from each provider which

were followed up with meetings

with each of the providers, and the

Chair then met with a shortlist of

three external facilitators. Following

an extensive review and interview

process, a recommendation was

made to the Board to appoint Clare

Chalmers Limited.

Clare Chalmers Limited was chosen

for their extensive experience, proven

track record in board evaluations, and

their alignment with our Company’s

values and objectives. We are

confident that their appointment will

bring valuable insights and contribute

to the ongoing effectiveness of our

Board.

John Wood Group PLC

Annual Report and Financial Statements 2023

108

Composition, succession & evaluation

continued

Board Evaluation key actions

in 2023 and recommendations

for 2024

A thorough review and refresh of

Board reporting and agendas, leading

to more focused and concise Board

papers. This also allowed more time

for engagement with management

and for the Board to provide support

and challenge on key decisions.

The Board received regular reports

throughout the year on progress with

the implementation of the refreshed

strategy from management,

including progress against internal

KPIs. This provided the Board with

several opportunities to engage with

management on the successes and

challenges, and to provide support

and constructive insight.

Extensive engagement with investors

throughout the year as part of our

annual programme, supplemented

by increased focus on investor

roadshows and attendance at

investor conferences.

Decision Making -

greater clarity

on why matters are coming to

the Board, whether that be for

information, discussion and/or

decisions, to ensure the Board’s time

and input is focused appropriately.

Strategy -

focusing on checking in

on progress against the strategy

and considering recalibration of the

strategy in response to market or

other changes.

Performance -

considering the impact

of broader issues such as culture and

future direction on performance.

Progress against these

recommendations will be disclosed in

the 2024 Annual report and financial

statements.

2023 Board Evaluation Process

Step 1 –

Scoping:

Step 2 –

Document

review:

Step 3 –

Board

observation:

Step 4 –

Interviews:

Step 5 –

Report:

Interviews were held with Board members and others who

interact regularly with the Board and Committees.

A report was prepared, based on analysis of the views

expressed by participants and findings

from the document

review and meeting observations. The report included

suggestions and commentary based on this analysis,

suggestions from participants, and Clare Chalmers Limited’s

ideas of pragmatic solutions or applicable good practice.

A scoping meeting between the Chair and Clare Chalmers

Limited which included a briefing

from and about the Company

and what the Board is hoping to achieve from the Board

Evaluation. Following this meeting, a framework interview

agenda was created, tailored as agreed with the Chair, which

was sent to all participants ahead of their meeting to allow

them to prepare and to ensure a consistent approach.

A selection of documents were reviewed, including Board and

Committee papers, Matters Reserved for the Board, Committee

Charters, the Annual report and financial statements, Board

biographies, the Board Meeting Schedule, Skills Matrix, the

outputs from the last Board evaluation, as well as notes from

briefing calls with the Chair and Company Secretary.

Clare Chalmers Limited observed meetings of the Board and

Nomination Committee on 20 September 2023.

Step 6 –

Report

presented to

the Board:

Clare Chalmers Limited presented the report to the Board at the

November Board meeting, at which the Board had opportunity to

discuss and reflect on the findings and recommendations, whilst

providing constructive feedback on the process and outcomes.

The Board agreed to focus on the recommendations for 2024.

Actions taken in 2023

Recommendations

for 2024

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

109

Governance

Financial statements

Stakeholder engagement

The Board recognises that the medium - and long-term sustainability of the Company is

linked to delivering value for our stakeholders. To successfully deliver our strategy and

create value for our stakeholders, it is important to understand what matters to them.

How we engage

The Board recognises the importance

of strong employee engagement and

considers that meaningful, regular dialogue

with employees provides it with greater

insights into the culture, activities, and

experiences of the people in our business.

Rather than adopting one of the three

methods of employee engagement set out

in the Governance Code, the Board uses a

combination of methods, including global

employee surveys and the Leadership

Listening Sessions, which involve employees

from around the world enabling the

employee voice to be heard by the Board

and Executive Leadership Team (ELT).

The Board believes this is a more effective

method of employee engagement and

representative of Wood’s global, diverse

workforce. Refer to page 67 for the themes

and outcomes of the 2023 Leadership

Listening Sessions.

Areas of engagement and outcomes

The Board and ELT hosted eight Leadership

Listening Sessions during the year. Open

to all employees, the sessions provide the

opportunity for the Board to understand

and listen to feedback on strategy

implementation, including inspired culture,

delivery excellence and profitable growth,

hear what is going well, and identify what

improvements can be made. In addition,

members of the remuneration committee

hosted three reward engagement sessions

focused on pay equity and Canadian

health and welfare bene

fits, and the

improvements that had been made as a

result of employee feedback, such as equity

reporting, employee training, reduced

benefits costs and enhanced paid time

off. More details, including key themes and

outcomes, can be found on page 136.

Ken Gilmartin, Chief Executive Of

ficer

(CEO), and the ELT hosted numerous

town halls across our global locations, as

well as regular virtual events. These are

always well attended and a fantastic

opportunity for employees to meet with

senior leadership, learn how the strategy

is progressing, understand key work

activities in the business units, and provide

feedback. In addition, Ken regularly hosts

Leaders Connect engagements, in person,

Employees

Our success is determined by Wood’s remarkable

people delivering on our strategy as we design the

future. Our growth this year is a sign of positive

momentum and that is thanks to the commitment,

care, strength, passion, and skillset of our teams.

We want to ensure all our people go home safely

every day and remain focused on building an inspired

culture, delivering performance excellence for our

clients, and ensuring profitable, sustainable growth.

Our people strategy is simple: we will attract,

develop, engage, retain, and sustain our global talent

to ensure Wood is a great place to work.

The 2023 highlights of people activities are

summarised from page 64, and we are immensely

proud of the progress made.

Stakeholder:

and virtually, with around 900 of the top

leaders in Wood; the Chief Financial Of

ficer

(CFO), provides bi-annual financial updates;

the Executive President of Strategy and

Development and the Executive President

of Business Sustainability & Assurance,

ensures an ongoing health and safety focus.

During the year, the Executive President

of Strategy and Development

implemented a weekly win update to

all employees, as a result of feedback

received; the business unit executive

presidents and group functions held

quarterly, focused meetings for their

areas. The leadership conference in

November also provided the opportunity

to gather insights from keynote speakers

and panel discussions, participate in

breakouts and enable leaders to get to

know each other better, discuss and align

on deliverables and growth priorities

going into 2024. The conference also

included a dinner for our annual Inspire

Awards, where we celebrated the

fantastic achievements of our global

workforce – see page 68 for more details.

Employee engagement surveys

Following the engagement survey at

the end of 2022, focus groups were held

across business units to provide leaders

and the Board with detail of emerging

themes and subsequent improvements

being implemented. In June 2023 we

held a global Pulse Plus engagement

survey with 59% of our global workforce

participating, increasing from 47% in

the prior survey. We saw a significant

increase in the employee net promoter

score (eNPS), resulting in an increase

from +15 to +28, and is a key indication

of company culture. More details can be

found on page 67.

Board engagement with leaders and high

potential employees

The Board hosts informal lunches and

dinners in different global locations with

leaders and high potential employees.

These provide the opportunity for the

Board to understand the views of

broader, and future, leadership and

consider this feedback in Board decision

making. Meeting with high-performing

talent and future leaders provides the

opportunity to engage on issues that

matter to them and gives a detailed

insight into the talent pipeline for

leadership succession planning. Board

members also continue to provide

mentorship to selected leaders to

support further progression.

John Wood Group PLC

Annual Report and Financial Statements 2023

110

How we engage with our stakeholders

and the outcomes can be found below

and the Board’s key decisions can be

found on page 118.

How we engage

We have an active investor relations (IR)

programme led by the CEO, CFO and the

IR team. Our main engagement activities

include:

• Publication and presentation of

financial results and trading updates

• Capital Markets Days

• Investor briefings and presentations

• Investor roadshows around financial

results

• Investor meetings and roadshows

throughout the year

• Attendance at investor conferences

• Obtaining feedback from investors

regularly, both directly and through

brokers

• Meetings with the Chair of the Board

• Meetings with Chairs of the

Committees of the Board

A mixture of formal and informal

meetings and presentations are held

with our lenders. Key topics include

financial per

formance, strategy and risk

management. Presentations are given

to our banks and US Private Placement

Investors after the half-year and full-year

results are announced to update them on

financial per

formance and give them the

opportunity to ask further questions.

Areas of engagement and outcomes

In addition to routine engagement

on financial per

formance, strategy

delivery and governance, we undertook

engagement on certain specific matters

in 2023 as outlined below.

Apollo Global Management approach

In the first hal

f of 2023, the Board

considered several proposals from

Apollo Global Management, Inc. (Apollo)

regarding a possible cash offer for the

entire issued and to be issued share

capital of the Company. The board,

having weighed all relevant factors,

particularly feedback received from

shareholders, decided to engage with

Apollo to see if a

firm o

ffer could be

made on the same financial terms as the

final proposal. Accordingly, and

following

discussions with our shareholders and

lenders, the Board granted Apollo access

to due diligence materials.

In taking this decision, the Board focused

on delivering value for stakeholders and

considered:

• Investors: regular engagement with

investors, including discussions with

the Chairman, CEO, CFO and IR team

through virtual and physical meetings,

letters and emails to ensure their

feedback was considered throughout

the decision-making process

• Lenders: keeping them informed

throughout the process

Following the period of detailed

engagement, Apollo announced that

it did not intend to make an offer for

Wood.

Investors & Lenders

It is important that our investors have confidence in

the Company, how it is managed and in its strategic

objectives, and how we will deliver value. Our investors

are most interested in our markets, strategy, competitive

advantages, operational and financial per

formance,

balance sheet, capital allocation, sustainability solutions,

and compliance with laws and regulations.

By providing updates on our strategy and performance

we can aid investor understanding, and through regular

interaction we gain an insight into their priorities. The

Company’s long-term success is also dependent on its

good relationship with its lenders and their continued

willingness to lend.

Stakeholder:

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

111

Governance

Financial statements

Clients

Continued growth in Wood’s business is about

capturing a larger share of our existing clients’ spend

by leveraging our relationships and expertise but also

complementing that with the push to expand our

client base and establish new relationships within our

strategic markets.

To design the future, Wood continues to

find solutions

to the world’s most critical challenges, we listen to our

clients to make sure we are leveraging our capability,

scale, global reach and leading solutions. Wood’s

clients expect a partner who not only takes on the

complex projects but also innovates with digital and

decarbonisation solutions, ultimately helping our clients

achieve a more sustainable future.

How we engage

One of the keys to our success is building

strong, successful client relationships to help

us partner with our clients and collaborate

to differentiate ourselves to win more work,

at higher margins. Client engagements are

managed through our structured Client

Management Framework by dedicated

account managers who are trusted advisers

focused on growing our relationships with

our clients with specific account planning

and objectives as well as established

growth targets. Consistent with our overall

Client Management Framework, this is a

collaborative process across Wood so that we

bring all the capabilities of the Company to

our clients.

Senior leadership meetings, annual

sponsor meetings and other key

connections with clients were conducted

in 2023 both virtually and in person.

Our primary focus remains:

• Safe and best-in-class outcomes

• Enduring relationships underpinned

by deep understanding of our clients’

challenges, trust and performance

• Delivering sustainable and digitally-

enabled solutions

• Utilising client feedback to support

business growth and drive continuous

improvement in our delivery

Stakeholder engagement

continued

Areas of engagement and outcomes

Client engagement sessions via our

CoLab facilities cover a broad range

of topics such as: safety, delivery

performance, sustainability topics, update

on strategic themes, future client activity,

exploring opportunities to jointly raise

delivery outcomes and co-create value-

added solutions. These engagements

are an opportunity for Wood to listen

to clients and vice versa. The resulting

feedback helps us to continuously improve

our performance. The insight from client

engagement helps to inform company

operational, business development and

long-term strategic direction.

Wood engages with clients as a digital

partner to deliver a unique value

proposition that allows us to create

unique solutions across all projects.

We leverage our strong partnership

networks, working independently with

technology firms such as Honeywell,

Microsoft, AVEVA, Aspentec and

Cognite to provide and integrate a

wide range of digital solutions spanning

the full asset lifecycle, maximising

performance and optimisation and

enabling decarbonisatiom. Wood is using

a combination of operational domain

knowledge with artificial intelligence to

optimise O&M spend, increase uptime

and reduce maintenance backlog.

maintAI is enabling Wood to do this

Stakeholder:

faster and cheaper than using traditional

maintenance optimisation techniques.

(maintAI is a data-driven, outcome-based

maintenance optimisation solution that

combines artificial intelligence, expert

technical skills and decades of asset

knowledge to significantly optimise the

maintenance activities, reduce asset

operating costs, and improve reliability and

production uptime at pace).

Wood is co-developing our digital twin

offering with some of our key clients

across the world and as a strategic

partner, we utilise our domain expertise

to build a true digital asset designed and

developed with the end-user in mind. We

are working with partners on solutions to

create first-o

f-its-kind end market tools

for emissions monitoring, carbon intensity

and reduction, and developing a digital twin

solution for renewable energy to enhance

asset ef

ficiency and maximise yields while

minimising total expenditure. Wood also

works with process technology partners to

develop and commercialise game-changing

technologies that address current market

challenges:

Saudi Aramco

Wood used its Digital

Twin & Transformation frameworks to

identify and rank 100+ opportunities

during the pre-feed and feed phases

of the Safaniyah and Manifa Project,

enabling significant e

ficiencies and cost

avoidances during the EPC phase.

Greenfield Project – Digital PMC - TPAO

(Turkish Petroleum)

Wood was the Digital

PMC for the entire digital lifecycle. Optimising

our approach in Pre-FEED and FEED in

preparation for EPC, Wood successfully

managed all the data and systems across

four joint venture partnerships.

Greenfield Project – Digital Strategy

& Roadmap

Wood developed a digital

strategy and roadmap for a chemicals

producer, empowering them to become a

global leader in applying digital solutions

in the chemical industry.

Wood’s digital twin solutions (ENVision)

include providing governance and insight

around GHG emissions by streamlining

and automating diverse data sets to

provide a clear, auditable and accurate

view of emissions from any asset,

organisation or city. These solutions

help Wood’s clients manage carbon

and emissions data, perform regulatory

calculations and reporting and allow KPI

management providing an auditable

record of data and optimisation. Wood

has been deploying these solutions

globally for mid- and large-scale chemical

processing companies.

John Wood Group PLC

Annual Report and Financial Statements 2023

112

How we engage

Our community investment programme

provides the framework for community

engagement consisting of:

• Matching our employees’ fundraising

efforts

• Strategically uniting our people around

a single Global Cause

• Placing a focus on the actions we take

through volunteering time, skills and

expertise

In 2023, we rolled out our Sustainability

Code of Practice which is a tool

designed to facilitate the consideration

of sustainability matters, including

community aspects, at a project site

level. The community aspects of the tool

guide our teams to engage with the

local community to ensure they operate

as a good neighbour, assess ways the

project could drive a positive legacy and

encourage learning and engagement

opportunities for the community.

Areas of engagement and outcomes

Our employees remain at the centre

of our decision making on community

investment. They are best placed to

understand the needs of our communities.

Further details on the outcome of community

activities are on pages 70 to 73.

Community

At Wood, we seek to build trusted and long-lasting

relationships with the communities that we live and

work in to create a sustainable future for all.

Our community engagement actions are guided by

our values of care, courage and commitment, and

are focused on ensuring that we operate responsibly

within those communities as well as leave a lasting

legacy of making a positive impact. Through our

engagement, we aim to address the issues that

matter most to people, deliver value and improve lives.

Stakeholder:

By consulting with our employees we seek

to embed accountability for the actions

we take, ensuring an inclusive approach to

all that we do.

In 2023, as Team Wood, we contributed

$5.6 million to good causes in our

communities, through collective

donations of time, money and resource.

We continued to celebrate employee

fundraising through our employee

matched funding scheme, supporting

many charitable or non-profit

organisations closest to the hearts of our

employees.

Our employees continued to demonstrate

their support for our Global Cause of

education and we have achieved just over

46% of our goal to raise $10 million by

2030. This includes the outcome of our

annual Global Cause Challenge which

takes place each year and enables our

employees to submit applications to

receive funding for education initiatives

nominated by them. Through the 2023

annual Global Cause Challenge, Wood

donated over $188k towards a further 23

employee-driven initiatives. The annual

challenge has supported employee-

chosen organisations in 17 countries to

date, seeking to break down the barriers

to education and deliver quality education

for all.

Winning applications from our 2023

annual Global Cause Challenge were

spread widely around the world and just

a few of these are highlighted below:

• Robogals across Australia

– Robogals

seeks to drive gender equity in

engineering and technology. Volunteers

from the organisation run engineering

and technology workshops free of

charge that are aimed at helping

young girls of primary to secondary

age to explore interests in these areas

and encourage self-con

fidence

• Basrah Empowerment Project

– The

second Iraq project of its kind, the

Basrah chapter aims to support

orphaned children in the region

with education that they would not

normally have access to

• Adopting a South Africa Pre-School

(ASAP)

– Funding from Wood

helps to support ASAP’s staf

fing

requirements. Their staff work across

six hubs preparing children for primary

school across 172 pre-schools in

underprivileged areas

• Seva Bharati in India

– Global

Challenge funding will support delivery

of computer education courses for 100

children living in slum areas of Agra

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

113

Governance

Financial statements

How we engage

To reach our many and diverse

environmental stakeholders, we have

employed multiple techniques ranging

from individual meetings, conferences

and other in-person events to the use

of social media tools to invite comment,

discussion and debate. Our strategic

engagement methods include:

• Industry environmental and

sustainability forums (e.g. Carbon

Capture and Storage Association)

• Government/public policy forums and

meetings with Government teams

• Publication of benchmarking data (e.g.

CDP, EcoVadis)

• Policy consultation (e.g. UK Hydrogen

Allocation Round)

• Conferences and industry events (e.g.

North Sea Transition Authority ESG

Taskforce, Offshore Europe, COP28)

• Roundtables (e.g. insurance events)

• Employee engagement (e.g. Early

Careers Network, Townhall events)

• Internal & External Social Media

• Meetings with Government teams

• Stakeholder meetings/briefings (e.g.

investor and lender meetings)

• Client seminars (e.g. ESF Europe, ME-

TECH

Areas of engagement and outcomes

With the IPCC and UN signalling

a climate crisis, the key areas of

engagement with environmental

stakeholders during 2023 focused on the

transition to ‘Net-zero’ and the physical

and financial mechanisms required

to effect it. The following provides

highlights of just some of the areas

covered:

Wood has responded to a range

of consultations issued by the UK

Government’s Department for Energy

Security and Net Zero (DESNZ), through

which we have:

• Offered a perspective on the

improvement of the proposed design

for the UK’s low-carbon hydrogen

certification scheme

• Given views on how the second

Hydrogen Allocation Round (HAR2)

could be optimised to deliver on the

government’s 2030 production targets

• Shared views on how to improve the

UK Industrial Energy Transformation

Fund (IETF)

Read more on our approach to environmental

management on page 58.

Read more on our sustainability targets on

pages 26 to 27.

Environmental

stakeholders

With 2023 global average daily temperatures the highest

ever recorded and beyond the expectations of many

climate scientists, the world is now close to missing the

target of limiting global warming to 1.5 degrees C.

Against this backdrop, much of our environmental

stakeholder engagement in 2023 related to climate

change. Having a clear picture of our stakeholders’

environmental concerns, priorities and opportunities is

key to growing our business sustainably, whether this is

understanding our clients’ journeys towards ‘Net-zero’, the

impact of climate transition on our investing community,

implications of new regulations, or the priorities of our

employees in talent attraction and retention.

Stakeholder:

Wood’s President of Decarbonisation

was a key member of an industry and

business forum advising UK’s Secretary

of State for Business and Trade on

opportunities and areas of focus required

to create a deliverable CCUS Supply

Chain development strategy.

Wood has responded to EU consultations

including providing our perspectives on

the important role that CCS will play in

driving industrial decarbonisation across

Europe.

In the UK, Wood is an active participant

in a number of industry forums:

• We are a member of the Carbon

Capture Storage Association (CCSA),

with a senior manager on the Board

and representation across two CCSA

steering committees. We were also a

member of the Hydrogen Council in

2023

• In January, our CEO delivered the

keynote speech for the Prosper

(formerly SCDI) annual member event

• We participated in the AWS ESG

Energy Leaders Exchange where

members explored climate change

reporting, boundaries to scope 3, as

well as trends in environmental data

disclosure

These areas of environmental

engagement are strategically important

for Wood. They help to inform our

decision-making processes, and allow

us to participate in policy development

as well as to align our service offerings

through constructive engagement.

Further information on our environmental

approach, performance and ongoing

strategy is contained in our annual

Sustainability Hub which is available at:

woodplc.com/sustainability

Stakeholder engagement

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

114

How we engage

To ensure we meet both strategic

objectives and commitments to our

clients, we engage with our suppliers

on a regular basis, and with frequency

determined by execution standards

and procedures. We employ a variety of

methods ranging from face-to-face and

online meetings, questionnaires, training,

online communication, and external

working groups. These engagements

are undertaken by the supply chain

management team and, where

appropriate, other business stakeholders.

Areas of engagement and outcomes

Supplier Relationship Management (SRM)

At the heart of our supply chain success

lies the strength of our relationships

with suppliers. We believe in fostering

long-term partnerships built on fairness,

trust, transparency, and shared values.

Our collaborative approach has not

only enhanced the ef

ficiency o

f our

supply chain but has also allowed for

agility in responding to changing market

dynamics.

Through our SRM programme, we

maintain open and transparent

communication channels with a

concentrated number of critically

strategic suppliers. Regular meetings,

feedback sessions, and joint planning

efforts allow us to address challenges

promptly and align on strategic

objectives.

Key to this is all stakeholders aligning and

recognising SRM as a strategic business

change not just a supply chain initiative.

We have worked closely with various

stakeholders to develop processes,

organisation people and systems to

deliver on our objectives.

Market intelligence

We use Market intelligence data to

provide a 360-degree view of suppliers,

markets, industries, and relevant events

that can open opportunities, provide

early warnings to threats and risks,

and highlight areas of concern. The

signposts presented as an outcome of

our intelligence, offer Wood more control

over supply chain costs and availability,

and on the reliability of delivery to our

clients.

This data has benefited Wood as a

company by enabling more informed

decisions and providing the ability to

react more quickly to client needs.

Project Delivery

As part of our project delivery

commitments, we hold a variety of

engagements with our suppliers. These

meetings involve a range of stakeholders

from within the project team and cover

key aspects of delivery such as scope

kick-off, progress meetings, inspections

and expediting visits and are all key to

ensure we are aligned to meet our client

requirements.

Due diligence activities

We conduct due diligence activities

on a selection of suppliers across a

variety of ESG areas. A suite of training

and questionnaires are issued to

these suppliers to allow us to better

understand the risk profile which they

bring to Wood. We work with suppliers

to close any gaps and implement

improvements across Anti-Bribery and

Corruption, Modern Slavery, and Building

Responsibly Principles.

Digitalisation

In some instances we have worked with

our suppliers to increase the use of

system automation by implementing

catalogues. This has helped make

the process more ef

ficient, improving

user experience and improving

communication.

It is a combination of the above and

the dedication of our supply chain

professionals, ensuring goods and

services are delivered to the right place,

at the right time and at the right cost

to meet our clients’ requirements. We

manage and reduce our risk through

market intelligence and due diligence

activities. Our SRM work also drives

maximum value from critical suppliers

through strategic relationships and

provides a basis for realising added value

and competitive advantage

Suppliers

We recognise that a robust and ef

ficient supply chain is

a fundamental contributor to our success. Throughout

2023, our commitment to excellence in supply chain

management has enabled us to navigate challenges and

identify opportunities, ensuring the seamless

flow o

goods and services to meet the needs of our clients.

It is critical that we engage with and develop suppliers

who are aligned with our values and strategic objectives,

and who can align their products or services to the

need our projects’ commitments to our clients. We have

identified and proactively engaged with a selection o

key suppliers to deliver to our clients and unlock solutions

to the world’s most critical challenges. The method of

engagements is tactical and strategic as applicable, and

it addresses a variety of areas of mutual interest.

Stakeholder:

Additional information can be found on our

Supply Hub which is a platform within our

website, for our suppliers to learn more:

woodplc.com/sustainability/profit/

supplier-support-hub

Read our Supply Chain Code of Conduct:

woodplc.com/scm

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

115

Governance

Financial statements

How we engage

In the UK, US, Canada and Australia, we

proactively engage with new employees at

the point of hire, detailing the retirement

savings options available to them.

Engagement is proactive via dedicated

portals and onboarding processes, and also

forms part of our

financial wellbeing pillar.

The Company is responsible for engaging

regularly with the 401k and superannuation

committees and UK Trustee on Company

performance and matters which may

impact the retirement plans, e.g. financial

performance, ESG reporting requirements,

and structural changes. Issues raised by

the Trustee and committees are carefully

considered by the ELT and referred to the

Board as appropriate. This ensures a better

understanding and alignment of Company

and Trustee or committee objectives.

In the UK, we have member-nominated

trustees who represent current, deferred,

and retired members; these are selected

by a Trustee selection committee. The

Company also has Company-nominated

trustees. The Trustee is responsible

for detailed communications with its

members and collaborates with the

Retirement plans:

current and

deferred workforce

and pensioners

We are committed to offering our workforce suitable

retirement plans, where appropriate. We engage with

those who are currently employed to enable them to

understand the range of offering and make the right

choices; and for pensioners, or those with deferred

pensions, we provide ongoing support and administration

either through our in-house administration team, as in

the UK, or via appointed external vendors.

In the UK, the Trustee of the pension plan is responsible

for engagement with members. In the US and Canada,

the Benefits Committee is responsible

for engagement

with members through the centralised benefits team.

In Australia, the policy committee sets the engagement

strategy with help from their advisers.

Stakeholder:

Company to ensure communications are

appropriate and relevant. The UK Trustee

board meets monthly.

Our 401k and retirement committees

meet quarterly in the US, Canada, and

annually in Australia to ful

fil all fiduciary

requirements and we proactively engage

with employees along all phases of their

retirement journey.

Areas of engagement and outcomes

• In the UK, the Pensions Administration

team undertook significant additional

engagement activities, as a result

of feedback gained from the 2022

annual survey to defined contribution

members. This included age-related

webinars, improved newsletters, and

enhancement of the online pension plan

platform which provides information

and pension fund access. The 2023

annual survey was responded to by

35% of members and the Trustee and

Administration team will use the results

to inform decision-making and consider

further improvements during 2024 such

as virtual pre-retirement seminars and

15-minute practical pension guides

• In Canada, we enhanced our

plan design competitiveness and

streamlined the structure, aligning

better to employees’ years of service;

this is part of a 3-year strategy to

support attraction and retention, and

simplify our employee value proposition

• In Australia, we changed the

superannuation provider resulting in

better service, lower cost, and improved

governance for fund members

• In the US, we improved our 401k

employee engagement campaigns,

which resulted in us being externally

recognised in receiving three awards

for excellence in marketing and

communication

During 2023, members of management

and the Chair received further

communications from UK-based

pensioners, who are former Foster

Wheeler Pension Plan members, who

have formed a group called FosPen

(these members became part of the

plan following the acquisition of Amec

Foster Wheeler in 2017). These pensioners

are from a group of approximately

2,000 pensioners who do not receive a

contractual annual pension increase on an

element of their pension, and therefore,

the impact of in

flation is eroding their

benefit more significantly. The Company

and Trustee ensure that pensioners are

treated in accordance with the Trust Deed

and Rules covering this element of the

Plan, which state that pension increases

are discretionary on pensions accrued pre-

5 April 1997.

In terms of the overall funding of the Plan,

Wood made an £8 million contribution to

the Plan in 2021 and 2022 to help achieve

the Trustee’s technical provisions funding

goal of Gilts plus 0.5%. In addition to

this, as part of the 2020 valuation, Wood

and the Trustees agreed to additional

funding triggers, designed to ensure

that existing benefits are secure. In June

and December 2021, and June 2022, one

of these triggers was activated and a

further £36 million was paid to the Plan

by Wood.

The current funding position of the Plan,

on a technical provisions basis, is 108.3%

(at 30 November 2023); on a gilts flat

basis, the funding is approximately

102%. In 2023, the Plan was subject to

the tri-annual evaluation process, with

outcomes and the long-term strategy

being discussed by the Trustees and

Company, including consideration as

to whether to apply discretion to any

pensions accrued pre-5 April 1997. Final

results are not yet available.

Stakeholder engagement

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

116

Setting

Culture,

Values, and

Strategy:

Training on

s172 Duties:

Board

Information/

Papers:

Engagement

with

Stakeholders:

Board

Discussion

and Decision:

s172 statement

This section, through to page 119, forms

part of the s172 statement which can

be found in the ‘Creating a better

tomorrow’ section on page 44.

Effective engagement with all of

our stakeholders ensures we remain

balanced in our decision-making. Our

stakeholders’ perspectives are taken

into account by the Board in its decision-

making. While we strive to generate

positive outcomes for all stakeholders,

there are instances where the Board

must balance the competing priorities of

different stakeholders.

Key Stakeholders

How the Board ful

fils its s172 duties

The Board, both as a collective

and as individuals, are

committed to acting in a manner

that they believe, in good faith,

will promote the long-term

success of the Company for the

benefit o

f its shareholders, while

also considering the interests of

all of its stakeholders.

Regular engagement with our

stakeholders not only shapes our

strategy but also informs our decisions,

enabling us to deliver results and positive

outcomes for all stakeholders.

Examples of some of the principal

decisions that the Board has taken

during the year and how s172

considerations have been factored into

the Board’s decision-making, are set out

below..

Details of our key stakeholders and

how the business and the Board have

engaged with them are set out on

pages 110 to 116.

The Board engages

with stakeholders

both directly and

indirectly via the

business and

management. The

aim is to understand

the interests,

concerns, and

expectations of the

stakeholders, which

can then inform the

Board’s decision-

making process.

After gathering

all the necessary

information, the

Board discusses the

various matters at

hand. They consider

the impact of

potential decisions

on the Company

and its stakeholders.

The Board then

makes decisions

that it believes will

promote the long-

term success of the

Company.

The Board

establishes the

Company’s culture,

values, and strategic

direction. This

involves defining the

Company’s mission,

vision, and values,

and setting strategic

objectives aligned

with these principles.

The Board members

are provided with

ongoing briefings

at Board meetings

to understand their

duties under s172 of

the Companies Act

2006. This includes

understanding

their responsibility

to act in a way

that promotes

the success of

the Company for

the benefit o

f its

members, while

also considering the

interests of other

stakeholders.

The Board reviews

comprehensive

papers and

information relevant

to their duties. This

information helps

the Board make

informed decisions.

Employees

Investors & Lenders

Community

Clients

Environmental stakeholders

Suppliers

Retirement plans: current

and deferred workforce

and pensioners

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

117

Governance

Financial statements

s172 statement

continued

Key decision 1:

Decision to engage with

Apollo Global Management, Inc.

Stakeholders considered:

s172 criteria considered:

a, b, c, e and f*

In the first hal

f of 2023, the Board considered several proposals

from Apollo Global Management, Inc. (‘Apollo’) regarding a possible

cash offer for the entire issued and to be issued share capital of the

Company. The Board rejected several initial proposals from Apollo

on the basis that they undervalued the business. However, on receipt

of a

final proposal the Board decided, having weighed all relevant

factors, particularly feedback received from shareholders, that the

Company should engage with Apollo to see if a

firm o

ffer could be

made on the same financial terms as the final proposal. Accordingly,

the Board granted Apollo access to due diligence materials.

The Board focused primarily on delivering value for our

shareholders. In addition to this, the Board considers the

potential impact on all stakeholders:

•

Engaging with the Company’s key investors to ensure their

feedback was considered in the decision-making process

• Employees, keeping them informed throughout the public

process to ensure transparency and alleviate concerns within

the workforce

• Clients and suppliers, ensuring that clients and suppliers

were confident that Wood would continue to deliver on its

commitments throughout the process

Strategic actions supported by the Board:

The strategic actions supported by the Board to generate value

for stakeholders were:

• Appointment of a committee of directors to oversee the

proposals and decision-making process

• Stakeholder impacts were considered throughout the process

• Multiple meetings with shareholders to ensure their feedback

was considered at every key stage of the process

• Ongoing engagement with the Company’s brokers, advisers

and management to ensure governance, oversight and control

• Prompt disclosure to the London Stock Exchange and

financial markets

• Regular engagement with stakeholders throughout the

process to ensure ongoing dialogue, feedback and assurance

• Throughout the process there was strong engagement and

constructive debate among directors and management

Outcomes:

By implementing these strategic actions, the Company

achieved, or aimed to achieve, the following outcomes:

•

A decision by the Board to engage with Apollo to establish if a

firm o

ffer could be made on the same terms as the proposal

•

Reassurance to investors, lenders, employees, clients and suppliers

that Wood would continue to deliver on its strategic aims during a

period of change and to minimise disruption and uncertainty

• Appropriate governance and oversight from the Board

across the proposals, decision-making and diligence process,

providing stakeholders with confidence and assurance

Following the period of detailed engagement, Apollo announced

that it did not intend to make an offer for Wood.

Key decision 2:

Capital Allocation

Policy

Stakeholders considered:

s172 criteria considered:

a, b, e and f*

The Board considered capital allocation, including a potential

share buyback, in August 2023. Whilst a buyback would lead

to a return of some value to shareholders, the Board was

cognisant that the Company’s leverage position remained

outside the target range of 0.5 to 1.5 times leverage, with

continued negative free cash

flow and net debt

forecast to

increase during 2023. The Board considered several options,

including committing to a share buyback in anticipation of

future proceeds from the disposal of certain businesses and

assets, but noted that whilst disposals would provide additional

cash, leverage would remain outside the range of 0.5 to 1.5

times leverage as at December 2023 and there was a risk that

disposals may not be executed. Taking into consideration each

of these factors, the Board critically assessed the implications

and decided not to proceed with a share buyback.

In taking this decision the Board was focused on the long-term

consequences and had regard to the interests of the Company

as a whole. The Board also had regard to the interests of:

• Investors by ensuring their views were sought and interests

considered

• Employees, clients, lenders and suppliers by providing clarity

on the Group’s capital allocation policy and maintaining

balance sheet strength

Strategic actions supported by the Board:

The strategic actions supported by the Board were:

• Engaging with the Company’s brokers to ensure the decision

was made with appropriate financial in

formation and

benchmarking data

• Ensuring investor views were sought and considered as part

of the decision-making process

Outcomes:

By implementing these strategic actions, the Company

achieved, or aims to achieve, the following outcomes:

• Maintained our primary focus on debt reduction while we are

outside our leverage range

• Kept the potential for shareholder distributions in future

years

• Maintaining investor, supplier, employee and client confidence

in the management of the Company and its

financial

structure

John Wood Group PLC

Annual Report and Financial Statements 2023

118

Key decision 3:

Approval of the

Remuneration Policy

Stakeholders considered:

s172 criteria considered:

a, b, e and f*

In 2023, the Board was required to put to shareholders a

binding vote on an updated remuneration policy to comply with

corporate governance requirements; the previous policy having

been approved by shareholders in 2020. The Remuneration

Committee initiated a review early in 2022 to enable

appropriate time to be built in for stakeholder engagement and

to consider feedback in determining proposed outcomes.

As part of the comprehensive review of the then-current policy,

the Committee considered its alignment with the new strategy,

the wider workforce, shareholders, and external best practice

guidance published by our investors and advisory bodies. Whilst

it was agreed that the majority of the existing policy remained

appropriate to support the delivery of the new strategy, the

Committee recognised the need to simplify language, align

with prevailing market norms, and reflect, where appropriate,

feedback provided by proxy voting agencies and Wood’s key

shareholders. The Board approved the new Remuneration Policy

in March 2023.

Strategic actions supported by the Board:

The strategic actions supported by the Board were:

• As the policy impacts on the remuneration of executive

directors, which flows through to that o

f the wider workforce,

the Committee was mindful to listen to feedback from

the Executive Leadership Team (ELT), global leaders and

the broader employee population to ensure fairness of

application. This was carried out via the Listening Group

Networks in 2022 open to all employees, interactive

engagement sessions with variable reward participants, and

discussions with the ELT

• The Committee also undertook to engage with the top 30

shareholders and proxy voting agencies, writing to them in

early December 2022, offering the opportunity to meet to

discuss thinking and proposals further

• Feedback from colleagues and shareholders helped shape

final proposals

Outcomes:

By implementing these strategic actions, the Company

achieved, or aims to achieve, a Remuneration Policy which

continues to support the delivery of the business strategy

and the retention and motivation of executives in a global

talent market, which is simpler and easier to understand for

all stakeholders and which appropriately reflects market and

best practice. The Company aimed to achieve this through the

following changes:

• Enhanced post-cessation shareholding requirements

from January 2023 onwards to ensure decisions taken by

executives are in the best interests of stakeholders longer

term. This decision aligns with feedback received from

shareholders and proxy voting agencies.

• Alignment with the global reward policy, which ensures the

wider workforce is provided with fair remuneration packages

that are market competitive within each employee’s country

of employment and compliant with Wood’s people policies

and local legislative requirements. This policy is reviewed

annually by leadership and provided to the Committee for

oversight and sign-off

• Provide greater flexibility in setting the per

formance

measures that be applied to the short-term incentive plan

to support business priorities over the life of the Policy. This

enabled the Board to incentivise the executive directors, ELT

and global leaders aligned to the strategy, with a focus on

financial measures in 2023 and 2024. This decision is directly

aligned to shareholder feedback received regarding the

2022 short-term incentive plan, and feedback received from

participants in the plan

• Alignment of good leaver application in long-term incentives

to market practice, with the removal of 18-month qualifying

service for good leavers. This is a fairer practice which is

more aligned with market practice. These updated terms

are reflected in The Wood Discretionary Share Plan (DSP)

which was approved by shareholders at the 2023 AGM. The

DSP replaces the Wood Long Term Plan which expired in May

2023.

s172 Criteria*

The likely consequences of any decision in the long-term

The interests of the Company’s employees

The need to foster business relationships with suppliers, clients and others

The impact of the Company’s operations on the community and the environment

The desirability of the Company maintaining a reputation for high standards of business conduct

The need to act fairly between members of the Company

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

119

Governance

Financial statements

Work of the Nomination Committee

The purpose of the Committee is to lead

the process for Board appointments,

ensuring formal, rigorous, and

transparent procedures and making

recommendations to the Board to

ensure plans are in place for an orderly

succession to both the Board and senior

management positions.

The Committee oversees the development

of a robust Executive Leadership

succession plan with a lens on creating a

diverse pipeline of leadership talent.

The Committee also regularly

reviews the composition of the Board

committees and the independence of the

non-executive directors.

The Committee held five

formal

meetings during 2023 with a focus

on succession planning for the Board

and senior management, including the

appointment of a suitable candidate

to replace the retiring Chief Financial

ficer (CFO).

Executive Leadership succession

In August 2023, it was announced

that David Kemp intended to retire

as Executive Director and CFO. The

Committee oversaw the process to

appoint his successor which included

a review of both internal and external

candidates. Odgers Berndtson supported

this process, which included a mapping

exercise to identify relevant individuals,

preparation of a shortlist, and interviews

with the Chief Executive Of

ficer (CEO)

and members of the Committee.

The process sought to identify an

experienced and strategic CFO to act

as both technical guarantor of

financial

information and a business partner and

sounding board to the CEO. Odgers

Berndtson has no other connection to

the Company or any of the members of

the Board.

Following this process, the Committee

recommended to the Board the

appointment of Arvind Balan as

Executive Director and CFO with effect

from 15 April 2024. David will resign as

a director with effect from 14 April 2024

and will remain an employee of Wood for

a period of time to facilitate an orderly

transition.

The Committee also reviewed reports

throughout 2023 on the Executive

Leadership Team (ELT) and senior

management succession planning,

including with respect to the Company’s

progress against its Diversity & Inclusion

goals and the Committee oversaw

the Company’s appointment, at the

end of 2023, of Marla Storm, as Chief

Human Resources Of

ficer, and Michael

Rasmuson, as General Counsel.

Roy A Franklin

Chair, Nomination Committee

Read the Nomination Committee Charter at:

woodplc.com/nomcommittee

“In 2023, the Committee focused on succession planning for

the Board and senior management including, in particular,

the appointment of a suitable candidate to replace the

retiring Chief Financial Of

ficer.”

Nomination Committee

Membership

The Nomination Committee comprises

the Chair and the independent

Non-Executive Directors.

Main responsibilities:

• Reviewing Board structure, size

and composition and making

recommendations to the Board with

regard to necessary adjustments

• Nominating candidates for the

approval of the Board

• Ensuring succession plans are in

place for the Board and senior

executive positions, and overseeing

the development of a diverse

pipeline for succession

• Monitoring non-executive director

independence and external

appointments

Committee meetings held

Member

Attendance

Roy Franklin

5/5

Nigel Mills

5/5

Jacqui Ferguson

5/5

Birgitte Brinch Madsen

5/5

Susan Steele

5/5

Adrian Marsh

5/5

Brenda Reichelderfer

5/5

Overall attendance

100%

John Wood Group PLC

Annual Report and Financial Statements 2023

120

Board and Committee Composition

and Succession Planning

During 2023, the Committee considered

the composition of the Board and its

Committees having regard to several

factors:

• The retirement of Thomas Botts as a

Non-Executive Director in 2022 (who

had not been replaced)

• Succession planning for the Chair

of the Remuneration Committee

(considering that Jacqui Ferguson does

not intend to stand for re-election

as a Non-Executive Director at the

Company’s Annual General Meeting

(AGM) in May 2024)

• Succession planning for my position

as Chair of the Board (considering

that my term as Chair would expire

in October 2026, nine years after

the Company’s acquisition of Amec

Foster Wheeler plc, when I was

first appointed to the Board o

f the

Company)

• The skillsets and experience of current

Board members

• Efforts to ensure a diverse Board,

including with respect to gender and

ethnicity

The Committee has engaged Spencer

Stuart to assist it with a search for two

possible candidates for non-executive

roles. They have helped the Committee

to refine its specification

for the roles

and to identify suitable candidates. This

process has resulted in the appointment

of David Lockwood with effect from 12

March 2024, and the Board hopes to

announce an additional appointment

shortly. The Committee intends to review

the composition of Board committees

following such appointment.

In December, we announced that Jacqui

Ferguson does not intend to stand for re-

election at the AGM in May 2024.

Brenda Reichelderfer has been a member

of the Remuneration Committee since

31 March 2021, and the Nomination

Committee, having considered that she

has the appropriate skills and experience,

recommended to the Board that she

be appointed to act as Chair of the

Remuneration Committee. The Board

approved that appointment.

Directors’ Induction

In February 2024, the Company

announced the appointment of David

Lockwood as a Non-Executive Director.

David received a comprehensive

induction, including information about

the Board, directors’ duties, and the

key activities of the Company and its

business units.

Independence

The Committee also regularly reviews

non-executive director independence.

After careful consideration, the

Committee confirmed that it regarded

each non-executive director as

independent for the purposes of the

Governance Code. All non-executive

directors are considered to be

independent in character and judgement;

with no relationships or circumstances

which are likely to affect, or could appear

to affect, their judgement.

External appointments

The Board requires all directors to

declare any external appointments

and has procedures in place to monitor

and approve such appointments to

ensure the director continues to devote

suf

ficient time and commitment to the

Company.

Further information on the Board’s

external appointments can be found on

pages 94 to 97.

The following changes to external

appointments occurred during 2023:

• Roy Franklin resigned as a director of

Energean plc

• Nigel Mills was appointed as Senior

Independent Director of Greggs plc,

a company of which he was already a

Non-Executive Director

• Jacqui Ferguson was appointed as

Senior Independent Director of Croda

International PLC, and chair of Tesco

Bank, both companies of which she

was already a Non-Executive Director.

She was also appointed Non-Executive

Director of Softcat plc and National

Grid plc and she resigned as a member

of the Advisory Board of Equans

• Adrian Marsh was appointed as

Senior Independent Non-Executive

Director and Chair of Risk and Audit

Committee of the Co-Operative Group

Ltd. Adrian resigned as Group Finance

director of D S Smith plc

• Birgitte Brinch Madsen was appointed

as Chair of both Milton Huse A/S and

DELPRO A/S & DELPRO WIND A/S.

Birgitte resigned as Chair of Oreco

• Susan Steele resigned as a

Non-Executive Director of Hill

International, Inc.

Effectiveness of the Committee

In the evaluation of the Committee

during 2022, the performance of the

Committee was rated positively overall

and would be improved further over the

coming year by focusing on succession

planning, which is what the Committee

has done during 2023. The Committee’s

effectiveness was reviewed again during

2023 as part of the Board’s evaluation

process which is described on pages 108

to 109.

The process included one-to-one

discussions with each member of the

Committee and with certain members

of management and attendance, as an

observer, at a meeting of the Committee.

Once the review was complete, a report

was delivered to the Committee both

in writing and by an oral presentation,

which was discussed at the Committee

meeting in November. It was felt that the

Committee was open and collaborative,

and its effectiveness could be improved

through more structure, with a clear

schedule of matters to discuss through

the year. It was also recommended to

give further consideration to succession-

planning and to develop and refine skills

matrix as a tool to aid in that process.

The Committee intends to adopt these

recommendations during 2024 and

believes that this will lead to a more

robust and effective succession planning

process.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

121

Governance

Financial statements

Diversity & Inclusion

The Committee is conscious of the

gender and ethnic diversity targets

contained in the Listing Rules applicable

to the Company for the year ended 31

December 2023 (which is our chosen

reference date for the purpose of this

report). The Committee is pleased to

report that at the end of 2023 there

were four female Board directors out

of a total of nine directors, comprising

44% of the Board. As noted earlier, we

have since appointed David Lockwood

as a Non-Executive Director, and Jacqui

Ferguson will resign as a director upon

the conclusion of the AGM.

We did not meet the target that one of

the senior Board positions (Chair, CEO,

Senior Independent Director, and CFO)

be held by a woman. Each position was

held by an individual appointed following

robust selection processes and with

the appropriate skills and experience.

The recruitment process for the CFO

position, which took place during the

year, included a consideration of gender

diversity; however, the Committee

believes that Arvind Balan is the best

candidate for the role. The Committee

remains committed to improving

Diversity & Inclusion and will continue

to take diversity into account when

considering Board succession plans and

future appointments.

The Committee also considers

Diversity & Inclusion in relation to the

composition of Board committees and

notes that two of the committees

– Remuneration and Safety &

Sustainability - are chaired by women.

We also did not meet the target, at the

end of the year, that one of our directors

is from a minority ethnic background. As

noted earlier, however, we announced

in October the appointment of Arvind

Balan with effect from 15 April 2024

and, accordingly, we expect to be in

compliance with the target from then.

The Board and the Committee has

also approved management’s goals

with respect to improvements in

gender diversity throughout the wider

leadership, received updates on progress

throughout the year, and considered

diversity in the context of ELT succession

planning. Further information concerning

the Company’s diversity initiatives, and

data on the gender diversity of the ELT

and their direct reports can be found on

page 69.

More information about our approach to

the Parker Review’s recommendations

can also be found on page 69.

Wood is committed to its

Diversity & Inclusion policy which

encourages an inclusive environment

where employees are involved, respected,

connected, encouraged, cared for and

welcomed. Differences underpin and

create our diverse workforce, creating an

inclusive organisation.

The Committee proactively seeks

regular updates on and continues to

monitor the implementation of our

Diversity & Inclusion priorities, including:

• Improved gender and diversity

representation in senior leadership

roles and across the organisation

• Development of employee initiated

and led Diversity & Inclusion networks

to provide platforms for our employees

to connect, learn, challenge and to

share views. The networks provide a

channel for employees to share and

also to provide feedback on what

Wood is doing well and to recommend

improvements. Our employee networks

are open to everyone in the Company’s

global community. Further information

can be found on page 68

Nomination Committee

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

122

Read our Diversity & Inclusion policy at:

woodplc.com/diversitypolicy

Board and ELT Diversity as at 26 March 2024 *

Each of the members of the Board and the ELT responded on a voluntary basis to

a diversity questionnaire.

Number of

Board

members

Percentage

of the

Board

Number of

senior

positions

on the

Board

Number in

executive

management

Percentage

of executive

management

Gender diversity

Men

Women

Other

categories

Not disclosed/

prefer not to

say

Ethnic diversity

White British

or other White

100

Mixed/multiple

Ethnic Groups

Asian/Asian

British

Black/African/

Caribbean/

Black British

Other

ethnic group

including Arab

Not specified/

prefer not to

say

Our people are our most valuable

resource, and creating an inclusive

working environment where they enjoy

coming to work is fundamental to

achieving our strategy.

Wood is committed to remaining an

equal opportunities employer.

As an inclusive and equal opportunities

employer, Wood gives full consideration

to applications for employment from all

levels of ability where the requirements

of the job can be adequately ful

filled by a

person with impairment. Where existing

employees become disabled, it is the

Company’s policy, wherever practicable,

to provide continuing employment under

normal terms and conditions and to

provide training, career development

and promotion to disabled employees

wherever appropriate, as we would for

any other employee.

*These figures will change in light o

f the changes to the ELT detailed on page 98.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

123

Governance

Financial statements

Membership

Adrian Marsh chaired the Audit, Risk &

Ethics (ARE) Committee throughout

2023. Adrian has recent and relevant

financial expertise having been, until 30

June 2023, the Group Finance Director

of DS Smith plc. Adrian is currently Chair

of Audit and Risk Committee of Co-

operative Group Ltd and Grand Secretary

of the United Grand Lodge of England.

Nigel Mills, Jacqui Ferguson and Susan

Steele also served on the ARE Committee

throughout the whole year. As Group

Chair, Roy Franklin is not a member

of the ARE Committee but attended

all meetings in 2023 by invitation, and

all other non-executive directors are

welcome to attend any meeting. The

Chair of the Committee reports to each

Board meeting on the activity of the

Committee. The Committee has a written

charter, which is reviewed annually,

setting out its roles and responsibilities.

Main responsibilities:

• Compliance with financial reporting

standards and relevant financial

reporting requirements

• Consideration of the

financial and IT

internal control environment

• Consideration of the Group internal

audit programme and results

• Review of the external audit

relationship and provision of non-

audit services

• Oversight of the Group’s Ethics and

Compliance programme

• Review of procedures for

whistle-blowing and ensuring

such arrangements support

proportionate and independent

investigation of such matters

• Oversight of the Group Audit & Risk

function

Read the Audit, Risk and Ethics

Committee charter at:

woodplc.com/auditcommittee

The Committee met six times in 2023,

three meetings were held in March

2023 and one each in May, August and

November 2023.

Two of the March

meetings were held by video conference

as it was considered the most ef

ficient

manner in which to carry out these

meetings, but all other meetings in 2023

were held in person.

In addition to the members of the

Committee, the CEO, CFO, Group

Financial Controller, President - Group

Audit & Risk, and the external auditors,

KPMG, attended all Committee

meetings. The Group General Counsel

and Chief Ethics and Compliance Of

ficer

attended the second March, May, August

and November meetings. During the

year, other relevant people from the

business presented to the Committee on

the topics as set out below. The Chair of

the Committee also held regular update

calls with the CFO and President - Group

Audit & Risk. The President - Group Audit

& Risk, the Chief Ethics and Compliance

ficer, and the external auditors have

the right of direct access to the Chair of

the Committee at all times, and to meet

the Committee without management

present.

KPMG continued as auditors of the

Group, having been in place since 2018,

and the Committee spent time with the

auditors during the year understanding

their audit approach, the key judgement

areas and risks they identified and the

outcomes of their work.

During the year, the following areas

were discussed at the Committee

meetings:

March (first meeting)

• Review of the material issues and

key areas of accounting and tax

judgement impacting the 2022 Group

financial statements, including the

classification o

f exceptional items,

goodwill impairment reviews, the going

concern assessment, dispensations

from Group accounting policies,

material provisions, uncertain tax

positions and the accounting for

significant contracts

• Update on KPMG’s external audit

status, independence and preliminary

conclusions

• Approval of KPMG’s non-audit fees

• Review of Group Audit & Risk reports

and status

Audit, Risk & Ethics Committee

Adrian Marsh

Chair, Audit, Risk & Ethics Committee

“The Group continues to make good progress in the

evolution of its strong

financial control environment

and risk and ethics culture, with more standardised and

consistent processes and a lower risk business model

which supports more predictable business outcomes.”

Committee meetings held

Overall attendance

100%

Member

Attendance

Adrian Marsh

6/6

Nigel Mills

6/6

Jacqui Ferguson

6/6

Susan Steele

6/6

John Wood Group PLC

Annual Report and Financial Statements 2023

124

March

(second meeting, in person)

• Close out of open matters discussed at

the first March meeting

• Review of the draft 2022

Group financial statements and

related disclosures, including assurance

around ESG disclosures

• Review and approval of the 2022

Audit Committee Corporate

Governance Report

• Status update on KPMG’s 2022

external audit work and draft audit

opinion, including discussion of their

key findings and judgmental areas

• Review of the Group Audit & Risk

annual summary for 2022 and the

overall Internal Financial Controls

assessment

• Review of the Group Ethics and

Compliance Programme

March (third meeting)

• Final review and recommendation to

the Board for approval of the 2022

Group financial statements and

related disclosures, including the going

concern and viability statements

• Final review of KPMG’s 2022 external

audit work and final audit opinion

May

• Review of signi

ficant accounting and

tax matters

• IT security update with the Group

Chief Information Of

ficer (CIO) and

Chief Information Security Of

ficer

(CISO)

• Review of Group Audit & Risk reports

issued and status against the 2023 plan

• Review of the Group Ethics and

Compliance programme

• Debrief of KPMG 2022 audit and

review of their draft plan for 2023

August

• Review and recommendation to the

Board of the 30 June 2023 Group interim

financial statements including key

accounting and tax judgements, going

concern, goodwill impairment reviews,

and classification o

f exceptional items

• Update on KPMG’s 2023 interim

financial statements external review,

their review opinion and discussion of

their key findings

• Review of Group Audit & Risk reports

and status of 2023 plan

• Review of KPMG’s draft full year 2023

audit scoping

• Review with Executive President

- People and Organisation of an

unsatisfactory Group Audit & Risk

report and the changes made to

address

• Effectiveness review of internal and

external audit

• Review of the Group Ethics and

Compliance programme

• IT security update

November

• Review of material upcoming year-

end accounting judgements and

estimates

• Review with President - Tax and

Treasury on the impact of minimum

tax rate legislation and an update on

current tax exposures

• Approval of KPMG’s 2023 external

audit plan and approval of audit fees

• Status update on KPMG’s pre year-

end audit work and pre year-end

planning

• Review of Group Audit & Risk reports

issued and status update against the

2023 plan

• Review and approval of the draft

2023 Group Audit & Risk Plan

• Audit Committee evaluation

• Update of the status of UK Corporate

Governance reforms and the

preparatory work being carried out

• IT security update from the recently

appointed new Group CIO

• Review of the Group Ethics and

Compliance programme

During the year, the Committee

focused on the following areas:

Financial reporting and

significant accounting issues

The Committee focused on the

application of our accounting policies

and on the areas of judgement and

estimation in relation to significant

accounting and tax matters. The

primary areas of judgement and

estimation considered by the

Committee in relation to the 2023

financial statements and how they were

addressed are outlined below.

Review of signi

ficant contracts

The Group executes certain contracts

on a fixed price or lump sum basis. Such

contracts inherently involve a greater

degree of estimation and judgement

than is typically the case in reimbursable

contracts. The external auditors

assessed this a key audit matter and

the Committee received updates on

related work undertaken by KPMG. The

Committee reviewed and was satisfied

with the accounting for signi

ficant lump

sum projects in progress at the year-

end and the material judgements and

estimates taken by management in

recognising profit or the quantification o

known losses where these are probable.

The Group decided to exit the market for

lump sum turnkey projects in 2022 and

that has reduced the level of risk in this

area.

Goodwill impairment reviews

At both the half-year and the year-end,

the Committee considered whether

indicators of impairment of goodwill

existed and the results of any related

impairment reviews. At 30 June 2023,

no indicators of impairment of goodwill

were identified by management,

therefore a detailed impairment review

was not performed at that time.

This

included an assessment of the impact of

the aborted takeover approach by Apollo

in the first hal

f of 2023.

At 31 December 2023, impairment

reviews were carried out as required by

Accounting Standards. The Committee’s

role is primarily to challenge the

significant assumptions and estimates

made by management to ensure that

they are reasonable and appropriate

and to consider the work done in these

areas by KPMG, who identified this as

a key audit matter. As a result of the

testing, management concluded that the

Goodwill balance was not impaired and

no write down was necessary.

The Committee challenged and was

satisfied with the assumptions and

forecasts used and the results of the

reviews, and with the sensitivities

disclosed. The significant assumptions

were around short and longer-term

growth rates, including the impact of

current markets, the impacts of energy

transition on Wood’s core markets and

discount rates. Sensitivities related to

these were performed, further details

of which can be found in note 10 of the

Group financial statements.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

125

Governance

Financial statements

Review of provisions

The Committee considered the

appropriateness, adequacy and

consistency of approach to provisioning

at the 30 June and 31 December balance

sheet dates. All material provisions,

including those made against uninsured

legal claims, asbestos litigation and

expected credit losses, are discussed

and challenged. The Committee, taking

into account the reports of the external

auditors, concluded that the positions

taken by management were appropriate.

Going concern

At both the half-year and the year-

end, the Committee considered the

appropriateness of the going concern

basis of preparation and reviewed

forecasts prepared by management

covering a period of more than 12 months

from the date of signing of the Group

financial statements. The

forecasts

used were those approved by the

Board and form part of the short- and

medium-term planning for the Group.

The Committee also reviewed the level

of committed facilities available to the

Group and compliance with the Group’s

borrowing covenants. The Committee

was comfortable that the going concern

basis remains appropriate.

Reporting measures

The Committee reviewed the interim

and year-end annual reporting, including

the use of alternative performance

measures (APMs), such as adjusted

EBITDA, on behalf of the Board. The

Committee was comfortable that APMs

add to stakeholders’ understanding

of our

financial per

formance and do

not detract from the fair, balanced

and understandable presentation of

our results. The Committee reviewed

and challenged the inclusion of items

as exceptional at both the year-end

and half -year, with reference to the

Group’s policy in this area, and taking

into account KPMG’s view of normal

custom and practice. The Committee

was satisfied that the items noted were

suf

ficiently material by nature or by

size or a combination of both to require

separate disclosure, and that all such

items had been identified.

Review of pensions

The Committee reviewed the accounting

for the Group’s de

fined benefit

obligations under IAS 19 Pensions

at the half-year and year-end. The

Committee reviewed the results of the

actuarial review performed on behalf

of management by a leading actuarial

firm, with a

focus on the key underlying

assumptions as set out in note 34 to the

financial statements. The Committee

also considered the appropriateness of

recognition of the pension asset under

IAS 19. To help with this assessment the

Committee received reports from KPMG

who use in-house actuaries to review

and challenge the assumptions made.

The Committee was satisfied with all the

assumptions, the disclosures made and

the results of the reviews.

Current and deferred tax balances

The Group operates in a number of

different tax regimes and a range of

judgements underpin the calculations for

both current and deferred tax, including

uncertain tax positions. In the Income

Statement, these can have an impact on

both the tax charge and the operating

profit. The Committee received a

detailed written report on taxation

matters at each meeting. Where

necessary, the Committee considers

advice received from professional

advisory firms and concluded that the

positions taken were appropriate. The

Committee also received updates on

work undertaken by KPMG in this area.

Internal financial control

The Board is ultimately responsible for

the Group’s system of internal control

and for reviewing its effectiveness. The

ARE Committee has been given the

responsibility to review the effectiveness

of the internal control systems

implemented by management. This

work was informed by regular updates

from the President - Group Audit &

Risk and the results of a detailed self-

assessment process on financial and

IT general controls undertaken across

the Group. The external auditors also

provide feedback on areas of

financial

and IT control which they wish to bring

to the Committee’s attention. The

Board’s assessment of the Group’s

internal control environment, as

informed by Group Audit, is effective,

with some areas where improvement

is needed. Simplification o

f the overall

internal control environment across

functional areas, particularly engineering,

project delivery and HSSES, is required

with increased levels of risk-based

BU assurance being carried out and

actioned, to drive improvements in the

application of key operational controls.

Other areas of focus are more rigorous

monitoring and application of project

controls and project governance at the

project, BG and BU level, and greater

consistency in the application of supply

chain management across the BUs.

Finally, the continued refinement and

roll-out of the

finance and HR operating

models will ensure that roles and

responsibilities are clearly understood in

the Oracle / shared service environment.

IT security review

The responsibility for reviewing IT

security is delegated to the ARE

Committee. At the May and November

Committee meetings, the Committee

received a presentation from the CIO

who provided a cyber security update

which reflected an improving and

maturing cyber readiness posture. In

November 2023 a new Group CIO was

appointed with suitable time allowed for

hand over and transition.

The presentation also included the results

of the annual cyber security assessment

audit, independently carried out by

Ernst & Young under the supervision of

Group Audit & Risk. The audit provided

the results of the assessment that was

carried out during 2023 and noted that

the maturity level had increased against

a landscape of increasing cyber risk.

Group audit

Monitoring the activity of the Group

Audit & Risk function is an agenda

item at each Committee meeting. The

President - Group Audit & Risk attended

all meetings. Each year, the Committee

agrees the plan to be carried out and

receives regular updates on progress

against this plan, including a summary

of key

findings

from each of the internal

audits, and an update on the status of

actions agreed with management. A

separate annual exercise on key themes

and insights from the internal audit work

was also considered by the Committee,

including comparing the key themes to

the prior year.

The Group Audit & Risk team continue

to be the one provider of independent

audits across all the Group’s principal

risks, and as part of the annual audit

planning process, audits are aligned

to the principal risks as set out in

the Principal risks and uncertainties

section on page 87. In 2023, the internal

audit plan continued to recognise the

importance of ESG matters with audits

focused on aspects of modern slavery,

job equity, and the annual audit of the

Group’s variable people compensation

elements.

Audit, Risk & Ethics Committee

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

126

Process audits included the HR and

payroll processes on the Oracle platform,

and the Global Execution Centre in

Chennai, which carries out workshare

engineering across the Group. The

largest two remaining projects in the

EPC Americas Engineering business,

where no further projects have been

bid since mid-2022, were also included

in the audit plan. Other audits of key

projects and locations covered multiple

scope areas including financial controls,

commercial controls, and project

execution compliance.

During 2023, EY has continued to be the

provider of strategic IT audits, under

the supervision of the President - Group

Audit & Risk. Any other internal audits

that require specialist knowledge or

language skills outside of the Group

Audit & Risk team’s abilities, are wholly

or partly outsourced as appropriate.

The Chair of the Committee and other

Committee members hold private

discussions with the President - Group

Audit & Risk as necessary during the year

outside the formal Committee process.

Ethics & Compliance

Ethics & Compliance is a standing item

across the year for the Committee, with

Ethics & Compliance discussed at one

of the March meetings and each of the

May, August and November meetings.

The Chief Ethics and Compliance Of

ficer

and General Counsel attended each of

those meetings and gave an update on

the E&C programme, an overview of

ongoing major cases and a Speak Up

report of issues raised either to Ethics

and Compliance directly or through the

whistleblowing hotline.

In addition, the

Committee also focused on the Group’s

Anti-Bribery and Corruption programme,

including Commercial Intermediaries

and joint ventures, and the output from

the 2023 ethical cultural survey.

The

Committee takes comfort from the

internal processes that allow employees

to raise concerns, as reflected in the

Speak Up reports, and can, if considered

appropriate, require further internal

investigation or an external investigation

to be conducted.

External audit

KPMG are the Group’s auditor and were

appointed in 2018 after a tender process.

During 2023 the Committee assessed

the effectiveness of audit process

through consideration of the reporting

received from KPMG at the half-year

and the year-end, the robustness of

the external auditors’ handling of key

judgmental areas and the quality of

the external auditors’ interaction with,

and reporting to, the Committee. As a

result of the assessment the Committee

concluded that the audit process was

operating effectively. The Committee

also reviewed the standing, experience

and tenure of the external audit lead

partner, the arrangements for ensuring

the independence and objectivity of the

external auditors and the nature and

level of non-audit services provided. Paul

Glendenning remained the KPMG lead

partner for 2023 which was his third year

as partner. An annual exercise to seek

feedback from around the Group on

the effectiveness of the external audit

process was performed during the year

and debrief meetings were held to ensure

opportunities to improve the process

were captured and incorporated into the

2023 external audit plan.

Appointment and independence

The Committee has overall responsibility

for ensuring that the external auditors’

independence and objectivity is not

compromised. The Committee considers

the appointment of the external

auditor each year and assesses their

independence on an ongoing basis.

During the year the Committee

received confirmation

from the external

auditors regarding their independence.

In accordance with UK regulations

and to help ensure independence, the

auditors adhere to a rotation policy

based on Auditing Practices Board

standards that require the Group audit

partner to rotate every five years.

noted, this is the current lead partner’s

third year.

The Board approved the

Committee’s recommendation that

KPMG be reappointed for the 2024

audit. Accordingly, a resolution proposing

the appointment of KPMG as the

Group’s external auditor will be put to

shareholders at the 2024 AGM. There are

no contractual obligations that restrict

the Group’s choice of external auditors.

The Company confirms that it complied

with the provisions of the Competition

and Markets Authority (CMA) Order for

the financial year under review.

Non-audit services

One of the key risks to external auditor

independence is the provision of non-

audit services by the external auditor.

The Group’s policy in this area, which is

set out in the Audit Committee’s terms

of reference, is clear. The Committee

Chair considers and approves fees in

respect of non-audit services provided by

the external auditors in accordance with

policy and the cost of non-audit services

provided in 2023 is reported in note 4 to

the financial statements. In the opinion

of the Committee, the provision of these

non-audit services did not impair KPMG’s

independence.

Committee evaluation

The Committee’s activities formed part

of the review of Board and Committee

effectiveness performed in the year.

Overall, the Committee was considered

to be operating effectively.

FRC review of Financial Statements

In November 2023, the Group’s financial

statements for the year ended 31

December 2022 were subject to a review

by the Financial Reporting Council’s

(FRC) Corporate Reporting Review team

(CRRT). The response by the Group to the

request for information was discussed

with the Chair of the Audit, Risks and

Ethics Committee, prior to responding

to the FRC enquiry. The review by the

FRC led to a prior year classification

and presentational adjustment to

total comprehensive expense, which

was deemed not to be material by the

directors on the basis it has no impact

on key performance indicators, banking

covenants, remuneration targets or any

other key ratios, and was not subject to

any further discussion elsewhere in the

Annual Report.

The FRC has confirmed that the matter

is now closed and the directors recognise

that the FRC’s review was based on

the Group’s Annual report and financial

statements for the year ended 31

December 2022 and did not benefit

from

detailed knowledge of the Company’s

business or an understanding of the

underlying transactions entered into. The

FRC’s role is not to verify information

provided but to consider compliance

with reporting requirements and based

on the scope and inherent limitations of

the review, provides no assurance that

the 2022 Annual report and financial

statements was correct in all material

respects.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

127

Governance

Financial statements

Main responsibilities:

The Committee’s main responsibilities

include reviewing and making

recommendations on:

• Health, Safety, Security & Environment

(HSSE) and sustainability strategy and

performance

• Effectiveness of the organisation’s

policies and systems and evidence

of a prevalent safety culture

and compliance with regulatory

requirements

• Effectiveness of the Group’s

sustainability management approach,

including risks and the setting and

achievement of targets

• HSSE and leadership development

throughout the Group, particularly in

frontline operations

• Quality and integrity of reporting of

HSSE and sustainability performance

• Preparedness for response to a major

HSSE incident

• Process for and outcomes of

investigations into major HSSE

and sustainability incidents and

the effectiveness with which

recommendations are assimilated

throughout the Group

• Expertise and appropriateness

of the structure of the HSSE and

sustainability function throughout

the organisation

• Adequacy and effectiveness of the

Assurance programmes for HSSE and

sustainability

• Effectiveness of Board and

senior management competency

to meet its HSSE and

sustainability obligations

In addition to meetings, in 2023 the

Committee members received quarterly

performance reports including status

against key metrics, goals and indicators

and specialist papers on focus areas

materially important to Wood’s

safety and sustainability agenda. The

Committee also engaged in discussions

with subject matter experts.

Major incident management

and learning

The Committee reviews all incidents

resulting in work-related fatalities and

permanent impairment suffered by

Wood employees, or those managed

by Wood, to ensure each incident is

managed in accordance with Wood’s

standards, values and meets post-

incident regulatory obligations. Following

the fatal incident in January 2023 as

referred to on page 78, the Committee

received in-depth briefings

from the

Operation’s business unit Executive

President.

Safety & Sustainability Committee

“The role of the Safety & Sustainability Committee remains

critical to business success by challenging and assuring progress

and improvement in all aspects of safety and sustainability.

In 2023, the Committee oversaw the expansion of the Fatality

and Permanent Impairment (FPI) prevention programme as an

agent for a step change in creating a safer business. It remains

one of the business’s key metrics and part of the annual bonus

programme for senior management. As a Committee we have also

endorsed the inclusion of sustainable revenue as part of Wood’s

key metrics, ensuring this is underpinned by a clear taxonomy. The

Committee has also ensured that Wood is prepared properly to

manage safety and sustainability risks now, and into the future.”

Read the Safety & Sustainability

Committee Charter at:

woodplc.com/sandscommittee

Susan Steele

Chair, Safety & Sustainability Committee

Membership

Susan Steele chaired the Safety &

Sustainability Committee throughout

2023. She is a non-executive member of

the Board and, having been an executive

in the industry, has relevant experience in

safety. Adrian Marsh and Birgitte Brinch

Madsen also served on the Committee

throughout the whole year. The Group

Chair, Roy Franklin, and CEO, Ken

Gilmartin, attended all meetings in 2023

by invitation.

Committee meetings held

Overall attendance

100%

Member

Attendance

Susan Steele

4/4

Adrian Marsh

4/4

Birgitte Brinch Madsen

4/4

In addition, all Wood’s directors

are invited to attend the

Committee meetings. The Chair

of the Committee reports to each

Board meeting on the activity of

the Committee. The Committee

has a written charter, which is

reviewed annually, setting out its

roles and responsibilities.

John Wood Group PLC

Annual Report and Financial Statements 2023

128

This included remediation plans

to prevent recurrence. Committee

members have monitored the progress

of this matter and remedial actions

at successive Committee meetings to

the end of the year and will continue to

monitor the effectiveness of remedial

actions throughout 2024.

The Committee was consulted on the

expansion of the FPI (formerly SIF)

programme as this is a central tenet in

Wood’s serious incident improvement

plan. Representatives from a specialist

safety consultancy supporting the

development of the programme, briefed

the Committee on its development. The

programme is based on in-depth, on-site

analysis of physical, psychological and

behavioural activity amongst project

employees across a sample of worksites

across the business. The Committee

was keen to ensure best practices were

considered and that the Company is

benchmarked against industry standards

as part of their FPI programme.

The Committee considers the FPI

programme should act as an agent for a

step change in creating a safer business.

The Committee will continue to ensure

that safety of the workforce remains a

critical priority to the business and will

closely monitor FPI trends as part of its

role in scrutinising safety performance.

FPI remains a key business metric

which is embedded in the annual bonus

programme for executive directors and

senior management and the Committee

was responsible for reviewing and

approving performance against targets.

Health, Safety and

Environmental Programme

At each Committee meeting the

members of the Board received a

comprehensive written performance

report from the Business Sustainability

& Assurance Executive President and

the Committee members scrutinised

the

performance trends. Additionally,

in the March meeting, the Business

Sustainability & Assurance Executive

President presented annual objectives

and targets for the Committee’s

endorsement. The Committee considered

and agreed that the annual objectives

were appropriate to both risk and

ambition of the business ensuring these

were linked to incentive programmes.

Executive Presidents from all three

business units were invited to brief the

Committee on progress against Wood’s

strategic safety and sustainability

objectives. Major incidents were also

covered in the sessions. The Company

has recognised the increasing risks

around mental health and the

Committee requested further details of

Wood’s response to these risks in order to

provide oversight.

Committee members were

comprehensively briefed on Wood’s Mental

Wellness programme, psychological and

mental health risks and opportunities and

the role of mental health champions by

Wood’s Occupational Health doctor.

Sustainability & ESG

The Committee received quarterly

progress reports on Wood’s sustainability

targets with analysis against target

trajectories. The Committee was briefed

on progress against Wood’s sustainability

goals and the plans in place to ensure

that Wood meets its goals and objectives

across the sustainability agenda.

The Committee was briefed on the

implementation of Wood’s new project

sustainability tool, the Sustainability

Code of Practice, which has been

designed to provide a clear line of sight

and accountability between the Group’s

targets and its activities at a project or

contract level. The Committee has also

endorsed the inclusion of a sustainable

revenue metric as part of Wood’s key

metrics ensuring this is underpinned by a

clear taxonomy.

The Committee reviewed and renewed,

with Board approval, Wood’s Modern

slavery and human traf

ficking statement

and it issued in line with the requirement

to publish a statement annually. The

Committee was also briefed on Wood’s

involvement with the Building Responsibly

organisation and implementation of the

Worker Welfare principles through the

supply chain. It was noted that progress

has been made particularly in respect of

engagement with Wood’s labour suppliers

which was seen as a key potential risk area.

The Board reviewed ratings by both MSCI

and Sustainalytics, discussing the relevant

strengths and weaknesses identified

by these rating agencies and what, if

any, further disclosures Wood should

consider making. The Board noted that

Wood’s rating was comparatively strong

against its peers in both the MSCI and

Sustainalytics, remaining top quartile.

Climate change

The Committee oversaw the efforts

Wood’s has made to decarbonise its

operations and exceed its target trajectory

for scope 1 and 2 emissions reduction.

Time in the Committee was given to the

developing legal landscape of climate

change demands and how Wood was

preparing for them, such as the work

of the UK’s Transition Plan Taskforce

framework and the European Corporate

Sustainability Reporting Directive. The

Committee received a briefing on the

timeline for implementation of upcoming

regulations and the roadmap of

measures the Company would be taking

to prepare for them.

Read our Sustainability Report:

woodplc.com/company/sustainability

Read the Modern Slavery & Human

Traf

ficking Statement:

woodplc.com/modernslavery

The Committee believes that the business

is well prepared but will continue to

assure that Wood remains ahead of this

fast-developing area.

Environmental management

The effectiveness of Wood’s

environmental management was

reviewed by the Committee during

2023. The Board received an overview of

environmental performance, pollution

sources and interventions. There had

been no significant environmental

incidents or significant regulatory action

necessitating in-depth analysis by the

Committee in 2023. The Committee

was given an overview of the updated

environmental management system and

how this is evolving to cover biodiversity

and potential capacity to evolve to cover

expected future compliance obligations

such as those expected to be driven in

the longer-term by the recommendations

of the Taskforce on Nature Related

Disclosures.

The Committee was briefed on the

management of legacy contaminated

land, progress on clean-up during

2023 and regulatory compliance. The

Committee was satisfied that legacy

sites were being managed properly and

remained in compliance with regulatory

obligations.

Committee evaluation

In October, the Committee participated

in an evaluation process as part of the

annual Board evaluation externally

facilitated by Clare Chalmers Limited.

The review focused on the effectiveness

of the Committee’s meetings and

processes and the performance of the

Committee giving narrative on areas

where improvement can be made.

It was noted that all participants

acknowledged the importance of the

Committee and the topics covered. The

Committee was charged with remaining

focused on the strategic priorities for

safety and sustainability with less

attention to operating details.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

129

Governance

Financial statements

Read the Remuneration Committee Charter at:

woodplc.com/remcommittee

Brenda Reichelderfer

Chair, Remuneration Committee

Membership

During 2023, the Remuneration

Committee membership comprised

the non-executive directors: Jacqui

Ferguson (Chair), Nigel Mills and Brenda

Reichelderfer. Brenda Reichelderfer took

over as Committee Chair from 1 January

2024. In addition, all non-executive

directors were invited to attend the

Remuneration Committee meetings

to enable awareness of Committee

activity. Members of the Committee

are considered independent, and short

biographies can be found on page 94.

Main responsibilities

The Remuneration Committee advises the

Board on executive remuneration and sets

the remuneration packages of each of the

executive directors within the approved

Directors’ Remuneration Policy (the Policy).

The Committee has a written charter,

which is reviewed annually and publicly

available on the Company website.

The Committee monitors the ongoing

appropriateness and relevance of the Policy

and its application, ensuring alignment

of incentives and rewards with the

Company strategy, wider workforce, global

remuneration trends, and culture at Wood.

The aim of the Committee is to establish

an overall remuneration structure which:

• Promotes the long-term success of the

Company and supports delivery of our

strategy

• Reflects a balance o

fixed and variable

reward, with the purpose of creating

a competitive total remuneration

package that supports the attraction

and retention of executive directors

and other senior executives

• Ensures a balance between

incentivised performance and the

interests of shareholders

In setting the Policy and its application,

the Committee considers the relevant

provisions of the UK Corporate Governance

Code, relevant regulations enacted under

the Companies Act 2006, and shareholder

views through consultation.

Our principles

Alignment with strategy, culture

and delivery of shareholder value

Ensuring the Policy and principles support

the needs of our business over the next

few years, the delivery of our strategy and

the creation of long-term value for our

shareholders. We link pay to performance

by ensuring there is a strong alignment

with the organisation’s short- and

long-term objectives, and the prevailing

company culture. Our shareholding

requirements ensure executives remain

aligned with the shareholder experience,

including post-cessation of employment.

Remuneration contents

Remuneration Committee

130

Letter from the Chair of the Remuneration Committee

133

Workforce reward

136

Executive directors’ remuneration

140

Single figure o

f remuneration*

140

CFO transition arrangements*

143

Chair of the Board and non-executive directors*

152

*Audited

Unless otherwise noted, the remaining sections of the

Annual Remuneration Report are not subject to audit.

“Our policy application in 2023 focuses on rewarding

delivery of improved

financial per

formance and delivery

of our strategy.”

Committee meetings held

Overall attendance

100%

Member

Attendance

Brenda Reichelderfer

5/5

Nigel Mills

5/5

Jacqui Ferguson

5/5

Jacqui Ferguson chaired the Commitee during 2023, with Brenda Reichelderfer

taking over as Committee Chair from 1 January 2024.

John Wood Group PLC

Annual Report and Financial Statements 2023

130

Remuneration Committee

Matters considered

Feb

Mar May

Aug Nov

Policy application for year ahead: annual salary review –

executive directors and Chair of Board, ensuring alignment with

wider workforce

Short and long-term incentives: future year arrangements,

performance measures for all plans, executive director

participation levels, risks and impact of windfall gains

Review projected outcomes for previous performance periods for

ABP and LTIP, including review of team and personal objectives

Variable reward: ongoing review of performance against targets

for executive directors and all participants

Chief Financial Of

ficer (CFO) retirement arrangements

New CFO remuneration arrangements, including post

employment shareholding

Review of shareholder feedback, post annual general meeting

as a result of less than 80% vote for the annual remuneration

report

Preparation of annual remuneration report and sign off;

determine stakeholder engagement

Annual general meeting preparation

Review ELT and Company Secretary remuneration, including new

appointments, discretionary awards, and annual review

ABP & LTIP: Deferred and/or discretionary awards review and

approval

Wider workforce focus: overview on a range of matters, including

reporting (pay equity and UK gender pay gap reporting), UK

real living wage, wellbeing, share plans, benefits, pensions, spot

bonus, annual salary review, employee engagement and reward

engagement framework

Share dilution and management: discussion and approval

External market update from advisors, including update on

investor guidelines; emerging legislation, best practices and

current thinking

Committee performance, review effectiveness, charter, and

objectives: review of current year and

determination of following

year

Stakeholder engagement

The Committee is mindful of shareholder

and other stakeholder expectations in

respect of executive pay and actively

takes this into account when developing

remuneration arrangements.

Simplicity and balance

Our remuneration effectively supports

attraction and retention and is easily

understood by all stakeholders. We

aim to provide an appropriate balance

between fixed and variable pay, with

the following main components: base

pay; benefits and pension; Annual Bonus

Plan (ABP); Long-term Incentive Plan

(LTIP); and employee share plans. Our

arrangements are clear, transparent

and aligned with those of the wider

workforce.

Internally fair, externally competitive

We ensure executive directors’

remuneration reflects wider work

force

arrangements, including base salary

increases. We use external data

to inform our thinking and ensure

remuneration decisions support

attraction, retention, incentivisation and

reward of our executive directors and

broader leadership team.

Discretion in decision making

When determining the outcomes of

short and long-term variable reward, in

addition to the formulaic outcomes, the

Committee considers any year-on-year

changes, market conditions, and relevant

environmental, social and governance

(ESG) matters. If the Committee

considers that the formulaic outcome is

not appropriate it has the flexibility to

exercise discretion to adjust outcomes

to take into account relevant factors.

exercising this judgment the factors that

the Committee may consider include, but

are not limited to; workplace fatalities

and injuries, significant environmental

incidents, large or serial fines or sanctions

from regulatory bodies and/or signi

ficant

legal judgment or settlements.

To enhance the rigour with which

performance is reviewed, the Committee

utilises a discretionary matrix when

assessing short-term (ABP) and long-

term (LTIP) incentives outcomes.

As with all Committee decisions (in line

with section 172 of the Companies Act

2006), we reflect on the experience o

all stakeholders through the course of

plan performance periods. A copy of the

framework can be found at:

woodplc.com/discretionarymatrix

Committee meetings in 2023 (detail)

During 2023, the Committee met five times to discuss remuneration issues and

the operation of the Policy. An additional meeting was held in March to determine

variable reward outcomes for 2022. Additional time during the March and May

meetings was given to discussions arising as a result of the unsolicited approach

by Apollo. There was full Committee attendance at each meeting as well as

additional Board member attendance where appropriate. The Committee has

a regular schedule of agenda items in addition to other matters. The following

matters were considered during the year:

Inform, discuss and planning

Decision made

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

131

Governance

Financial statements

Workforce engagement and remuneration

The aim of workforce engagement is to ensure that the

workforce is listened to and considered as part of the

remuneration process, ensuring that remuneration decisions are

aligned with their experience and underpinned by feedback and

data on the composition, remuneration, engagement, retention,

and diversity of the workforce.

In 2023, the Committee continued to engage with employees

globally by participating in board listening sessions with our

people to support engagement and to provide an opportunity

to our people to voice their opinions on the topics of pay equity,

variable remuneration and benefit & retirement plans.

We also discussed and reviewed updates affecting the wider

workforce at every Committee meeting, covering topics such

as pay equity, employee share plans, gender & ethnicity pay

reporting, insured benefits & retirement plans, and gender

diversity. The Committee continued to receive regular updates

from the Executive President of Human Resources (HR) and

President of Reward & Mobility throughout the year on wider

workforce remuneration matters, ensuring that broader reward

practices are understood and aligned when setting executive

remuneration. Further detail can be found on page 136.

Advice provided (including internal teams)

During the year, the Committee took advice from Deloitte LLP,

who were retained as an external advisor to the Committee.

Deloitte received £100,000 for the provision of services to the

Committee during the year. These are charged on a time and

materials basis.

The Committee considered the remuneration advice provided

by Deloitte during the year and is comfortable that it has

been objective and independent. Deloitte is a member of

the Remuneration Consultant Group and adheres to the

Group’s Code of Conduct. The Committee has reviewed the

potential for con

flicts o

f interest and judged that there were

appropriate safeguards against such con

flicts. As well as

advising the Committee, Deloitte provided other services in

2023, predominantly related to tax compliance and advisory-

Where appropriate, the Committee also receives input from

the Chair of the Board, CEO, CFO, Executive President of HR

and the President of Reward & Mobility, who also acted as

Secretary to the Committee. The Committee is comfortable

that the Deloitte engagement partner and team that

provides remuneration advice to the Committee does not

have connections with the Company or its Directors that

may impair their independence. These individuals may attend

the Committee meetings but do not take part in discussions

regarding their own compensation.

Committee evaluation

Clare Chalmers Limited undertook a review of the Committee

during the year. The performance of the Committee continues

to be positively rated overall. The Committee will focus on

continued engagement with management and the wider

workforce, to achieve the right balance between being

supportive and appropriately challenging management to

ensure accountability.

Shareholder consultation

As a minimum, the Committee engages annually with

significant shareholders and voting agencies via written

correspondence and offers the opportunity to meet with the

Chair of the Committee. The Committee views these meetings

as an opportunity to ensure the Policy, and application,

continues to be aligned with shareholder views, with feedback

used to inform the Committee’s decision-making process.

The Committee ensures that appropriate and meaningful

shareholder consultation takes place in advance of any material

change being proposed to the Policy.

A summary of any such consultation and the Committee’s

response to substantive points raised will be included in the

relevant section of the remuneration report. In addition, the

Committee receives input on broader market insights and

shareholder expectations through Committee advisors.

We have continued to proactively engage with and listen

to our shareholders during the year where appropriate.

The Committee, as always, is thankful for the time and

considerations conveyed by our stakeholders and trusts that

the proposed changes to, and application of the Policy detailed

in this report demonstrate we continue to listen and act on any

feedback.

Statement of shareholder voting

Where there are a substantial number of votes against any

resolution on directors’ remuneration, the Committee seeks

to understand the reasons for any such vote and will detail

here any actions in response to it. In line with the Corporate

Governance Code, where there are 20% or more votes against

remuneration resolutions, the Committee will support the

Board in engaging with shareholders to understand their views

regarding remuneration. The following table sets out the 2023

AGM voting in respect of our remuneration matters and voting

outcome in respect of the 2023 Policy.

Item

AGM

date

Vote For

(including

Discretionary)

Vote

Against

Votes

Withheld*

Advisory vote

on the 2022

Remuneration

Report

May

2023

355,501,006

(76.98%)

106,323,283

(23.02%)

2,988,807

Binding vote on

the 2023 Directors’

Remuneration

Policy

May

2023

443,012,707

(95.38%)

21,459,521

(4.62%)

340,868

Notes to the statement of shareholding voting

A vote withheld is not a vote in law and is not counted in the calculation of

the percentage of votes ‘For’ or ‘Against’ a resolution.

As the advisory vote on the remuneration report received less

than 80% in favour, following the AGM 2023, the Committee

engaged further with shareholders to understand their views.

Further details are provided in the letter from the Chair of the

Committee.

John Wood Group PLC

Annual Report and Financial Statements 2023

132

Remuneration Committee

continued

Letter from the Chair of the

Remuneration Committee

Dear Shareholder

I am pleased to present, as Remuneration

Committee Chair, and on behalf of the

Board, the annual report on remuneration

for the year ending 31 December 2023

which has been approved by both the

Remuneration Committee and the

Board. I was appointed to the role of

Chair from January 2024, succeeding

Jacqui Ferguson who is in her 8th year

on the Board and will not stand for re-

election at the AGM in May 2024 and

will subsequently retire from the Board.

I’d first like to thank Jacqui

for her many

years of steadfast service on behalf of

the stakeholders of Wood. Her tenure

has ushered in many improvements to

Wood’s remuneration environment. I have

been a member of the Committee since

31 March 2021. The purpose of this report

is to set out the remuneration of the

executive directors, demonstrating how

their pay aligns with the remuneration

arrangements for the wider workforce,

enables the Company culture, supports

delivery of shareholder value and

demonstrates how pay structures are

aligned with shareholder value.

As part of our normal three-year cycle,

we updated our directors’ remuneration

policy in 2023 and were grateful for your

support at the 2023 Annual General

Meeting (AGM) where it received 95.4%

in favour. Our remuneration report

received 77% in favour. In compliance

to the UK Corporate Governance Code,

we subsequently wrote to our top 30

shareholders in May and June and offered

additional meetings, with copies of

the communications published on the

Company’s website. We believe the lower-

than-normal outcome was influenced by

ISS’s recommendation to vote against

the resolution due to the level of payout

under the non-financial metrics

for the

annual bonus plan in 2022. We discussed

with shareholders our view of the need to

reward the mostly new leadership team

for their strategy development work in

2022,

which underpinned our improved

performance. In addition, we had already

put in place a bonus structure for 2023

to increase the financial per

formance

weighting from 60% to 90%. This

approach, which is aligned to our strategic

focus of delivering pro

fitable growth,

was positively acknowledged by several

shareholders.

We believe our track record shows

the Committee continues to listen to

feedback from investors and employees,

whilst considering the impact on all

stakeholders and protects the long-term

best interests of the Company.

We will

continue to engage with shareholders as

appropriate.

Workforce considerations

We continue to be mindful that reward

reflects the wider stakeholder experience

and balances the need for attraction,

motivation, and retention. We also

remain thoughtful of the particular

challenges with regards to the cost of

living for our employees, with ongoing

support provided to our global workforce,

including:

• Annual salary reviews

• Increased financial resilience resources

provided online and via interactive

engagement sessions

• Review of insured bene

fits costs

for

value enhancement opportunities

• Simplification and enhancement to

retirement plans in Australia and

Canada

• Review of employee insured bene

fits,

terms and conditions in India and the

UAE, to be implemented in 2024

• Wider engagement on our employee

assistance program and wellbeing

• Increased engagement activities such

as global town halls and leadership

visits

Further details are provided in the people

section of the annual report.

We have continued our focus on

engaging with our global employees, on

topics including:

• Reward equity, to enhance

understanding and transparency

• Feedback on our annual bonus and

long-term incentive plans

• Feedback on our Canadian insured

benefits

following changes to insured

benefits and retirement plans, and

enhancements to PTO (paid time off)

Employees were appreciative of the time

provided to listen to their feedback and

the improvements already made as a

result of previous engagements. During

the year we also discussed and reviewed

updates on the wider workforce at every

Committee meeting, covering topics

such as pay equity, employee share plans,

the cost of living response, retention,

ethnicity pay reporting, benefits and

retirement plans, parental leave, and

gender diversity.

ESG considerations

Wood continues to focus on creating

a diverse and inclusive workforce

with female representation in senior

leadership roles now at 35%, up from

32% in 2022. Management has focused

on improving through an emphasis on

P&L roles, promoting greater flexibility

at work, ensuring future talent pipeline

through early careers attraction

activities, and sponsoring our new

Women at Wood movement. We are on

target to achieve our disclosed ambition

of 40% of leadership roles being held

by females by 2030. We were delighted

to see Wood progress in the FTSE

Women Leaders review with 44.4% of

our Board and 28% of our combined

executive committee and direct reports

represented by women. Continued focus

has also been evident with our inclusive

networks, promoting diversity, with

each group sponsored by a member

of the Executive Leadership team. Of

particular note is WREN, (Wood’s Race

& Ethnicity Network) which now boasts

over 700 members and being named

as Best Energy Workplace at the Ally

Energy GRIT Awards in Houston. Further

information on our continued progress

and actions taken can be found in our

People section on page 67

We were pleased to be recognised for

our approach to governance by being

finalists in the Chartered Governance

Institute for UK and Ireland (CGIUK) in

the category of best remuneration report

for the FTSE 250. Judges recognised

the level of transparency provided in our

report, along with the alignment of the

policy to organisational culture.

Sadly, we tragically lost one of our

colleagues in January 2023, who died

while working at a site in Louisville,

Kentucky. Our commitment is for every

employee to go home safely every day,

and our local teams continue to focus on

providing a safe working environment. In

support of this focus, management led

safety engagements resulting in 1,400

leaders exceeding the annual target.

During the year, the wellbeing network

was also reinvigorated with global co-

chairs put in place.

In recognition of this

fatality from a remuneration perspective,

there will be a zero outcome for the

Fatality and Permanent Impairment

(FPI) element of the 2023 annual bonus

plan. The safety and wellbeing of our

people and their families remains

paramount.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

133

Governance

Financial statements

This results in a conditional award of

27,506 shares for David, 100% of which is

subject to a holding period until 2026. As

disclosed at the time of his appointment

as part of buy arrangements with his

previous employer, Ken was provided

with a minimum guaranteed outcome

of $900,000 gross for this plan, as such

10% of the award will vest in shares, with

80% being available in April 2024 and

remainder held until April 2026 with the

balance in value being paid in cash. These

arrangements were agreed when Ken

joined the Company in 2021 as the COO

prior to his appointment as CEO and to

the Board. Ken has determined to use

this payment to increase his shareholding

in Wood which, along with other market

purchases carried out in 2023, has

increased his share ownership to an

equivalent of 155% of his salary. This

ongoing personal investment continues

to demonstrate his commitment to the

Company and focus on delivery of the

strategic targets.

CFO transition

In August 2023, we announced David’s

intention to retire. David will remain

as CFO until 14 April 2024 when his

successor Arvind Balan joins the

Company. David’s leaving arrangements

will be disclosed in due course.

Arvind’s remuneration arrangements

have been set in accordance with the

Remuneration Policy. His salary has been

set at £550,000 and he will be eligible

for our standard bene

fits, including

employer’s pension contributions, (or

a fixed cash allowance in place o

f such

contribution) of 9% of salary, aligned

with the arrangements for the wider

workforce in the UK. He will receive

a gross allowance of up to £60,000,

against receipts, to support with

relocation within the UK. The Committee

determined that it was appropriate

to set his maximum annual bonus

opportunity at 170% of base salary

and his maximum LTIP opportunity at

185% of base salary to better re

flect

the scope and responsibility of the role.

Buyout arrangements to mirror his

previous employer’s bonus and long-term

incentive plans have been put in place

and are detailed on page 143 of the

report.

Remuneration and performance

outcomes for 2023

The application of the Remuneration

Policy in 2023 continued to focus

management on achieving long-term

value for the business with a sharpened

focus on

financial delivery. Assurance

of achievements against targets has

been carried out by internal audit,

validated independently by the Safety

& Sustainability and Audit Committees,

with a further external audit carried

out by KPMG, following the end of the

financial year.

Annual Bonus Plan Outcome

In 2023 management focused on

the delivery of the new strategy and

continuing to de-risk the business. Much

positive progress has been made, with an

emphasis on delivering stronger EBITDA

and growth. Whilst it is disappointing

that cash generation has not achieved

its target, improvement is being made to

strengthen the balance sheet.

To ensure a like-for-like comparison,

EBITDA targets were adjusted to reflect

the divestment of the Gulf of Mexico

business in March 2023 and to include

the performance of the retained Saudi

Arabian Built Environment Consulting

business that was not included as part

of the original target setting process.

The Committee is satisfied that the

adjustment to the targets is fair and

reasonable and that the revised targets

are of commensurate stretch to the

original targets. These targets are

detailed in full on page 141 in line with

our usual practice of disclosing targets

retrospectively.

In determining the bonus outcome, the

Committee considers the formulaic

outcome along with the experience of

wider stakeholders as detailed under

the discretionary matrix, which acts

as a framework for the Committee

to consider a broader set of factors

important to key stakeholders. As

detailed earlier, due to the tragic

fatality, no bonus will be paid under the

FPI performance measure, accounting

for 2.5% of the annual bonus. In total,

more than 6,500 leadership safety

engagements were carried out during

the year. The Committee considered that

it remained appropriate to reward the

achievement as efforts in this area are

critical to support keeping our people

safe and learning from incidents. This

portion of the bonus paid out at 100% of

maximum.

As a result of the Committee’s

deliberations, it has determined to award

a bonus of 41.6% of maximum for both

Ken Gilmartin, CEO and David Kemp,

CFO. We believe the bonus outcomes

reflect the per

formance of management

and the progress made in the delivery

of the strategy, leading to a healthier

financial and a more sustainable backlog

of future work.

Long Term Incentive (LTIP) Plan

Outcome

Performance measures for LTIP 2021-

2023 were relative Total Shareholder

Return (TSR), against a select group of

peer companies, at a 50% weighting;

EBITDA margin growth at 30%

weighting; revenue growth at 10%

weighting; and 10% on ESG measures,

equally split between carbon emission

reductions and improvement of women

in leadership roles, respectively. Targets

were disclosed to shareholders at the

time of grant. As disclosed last year

to ensure a like-for-like comparison

between the performance assessed

and the targets set, targets were

adjusted as a result of the sale of the

Built Environment Consulting business.

The Committee is satisfied that the

adjustment to the targets is fair and

reasonable and that the revised targets

are of commensurate stretch to the

original targets; updated targets were

also provided for LTIP 2022-2024. No

other changes have been made to

performance measures or targets.

Wood did not achieve any award under

the TSR, EBITDA or revenue measures,

but ESG measures were achieved in full

reflecting our progress in these areas,

resulting in a total award of 10% of

maximum. Carbon emissions reduction

was 71% compared to 2019 reflecting

actions we took, including; consolidating

and increasing energy ef

ficiency by

switching to renewable energy tariffs,

the sale of the Martinez power plant

in 2022, and lower on-site fuel usage

at major project sites. This resulted in

exceeding the maximum target set.

Women represented 35% of leadership

roles for 2023 exceeding the maximum

target set, reflecting our strong progress

in improving our gender diversity. We

believe this fairly re

flects the experience

of our shareholders during this time.

John Wood Group PLC

Annual Report and Financial Statements 2023

134

Letter from the Chair of the

Remuneration Committee

continued

Annual

bonus plan

Long term

incentive plan

Underpins

Other

EBITDA (40%)

Revenue

backlog (10%)

Cash

generation (40%)

Safety (5%)

Voluntary

employee

turnover (5%)

TSR

(30%)

EBITDA (60%)

Carbon

emission

reductions (5%)

Improvement

in leadership

gender

diversity (5%)

Discretionary

matrix

Holding

periods

Shareholding

Profitable Growth

A higher grade

business portfolio

●

Inspired Culture

Creating a great

place to work

●

Performance Excellence

Results focused and

delivering for clients

●

Arvind’s annual bonus for 2024 will not

be pro-rated in lieu of a buy-out of the

potential bonus that he forfeited on

leaving his current employer.

We will continue to apply broadly

the same bonus structure as in 2023,

with a 90% weighting on financial

measures to directly incentivise the

delivery of pro

fitable growth over the

year ahead, with EBITDA at 40%; cash

generation at 40%; revenue backlog at

10% and an ESG framework at 10%,

maintaining the enhanced emphasis on

financial per

formance whilst remaining

focused on safety and retention of our

people. For 2024, the cash generation

measure will be based on operating

cash flow.

The Committee considered

that it was appropriate to incentivise

management to continue to drive cash

from operations, as this is considered to

be critical to the long-term strength of

the business.

Long Term Incentive Plan

We will retain the same performance

measures and weightings for the

2024-2026 plan, focused on pro

fitable

growth and strengthening the alignment

between executives and the experience

of our shareholders: 60% EBITDA;

30% relative TSR sector peer group;

and an ESG framework weighted at

10%, capturing progress against both

carbon emission reduction targets and

leadership gender diversity targets.

Proposed policy application for 2024

Full details of our proposed

implementation of the Directors’

Remuneration Policy for 2024 can be

found on pages 150-151

Salary and benefits

In January 2024, we increased the base

salary for both executive directors by

4%, aligned with that of the wider

workforce in the UK. This increases

Ken’s base salary to £803,400, from

£772,500, and David’s to £547,409 from

£526,355.

The Committee considered

that it was appropriate to increase

David’s salary given that he will remain

with the business for most of 2024.

As noted above Arvind’s base salary

will be £550,000 from the date of his

appointment. There is no change to

benefits provided since our last report.

As disclosed in previous annual reports

and Policy, executive directors’ pension

contributions are aligned to those of the

wider workforce in the United Kingdom

at 9%.

Annual Bonus Plan

For 2024, the maximum bonus

opportunity for Ken will remain at 175%

of base salary, and 150% of base salary

for David, which remains below the Policy

maximum of 200% of base salary. David

will be eligible to participate pro rata to

his leaving date. Arvind, who joins Wood

as CFO on 15 April 2024 will participate

at a maximum of 170% of base salary.

These measures align our key strategic

priorities with value generation for our

shareholders and continue to support

our sustainability plan. Full details,

along with the threshold and maximum

targets, can be found on page 151.

We will continue to anchor participation

levels on 200% of salary for Ken; David

will not be eligible to participate in this

plan due to his planned retirement in

2024, and Arvind will participate at

185% of salary. Arvind’s LTIP for 2024

will not be pro-rated in lieu of a buy-out

of the potential bonus that he forfeited

on leaving his previous employer.

As in

previous years, and detailed in the Policy,

awards will be released no earlier than

five years

from grant, further aligning

shareholder and executive interests.

Looking ahead

I trust that in the report for 2023 we

have clearly explained our application

of the existing Directors’ Remuneration

Policy and demonstrated that

remuneration is aligned to our strategic

pillars of pro

fitable growth, per

formance

excellence and creating an inspired

culture.

I look forward to your support

on the relevant resolutions at the AGM.

Signed on behalf of the Board and as

Chair of the Remuneration Committee.

Brenda Reichelderfer

Chair, Remuneration Committee

Alignment to

strategic pillars

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

135

Governance

Financial statements

More information on the details can be found

in our People section on pages 64-69.

Transparent

engagement with

our people

As we design the future, Wood’s

remarkable people are responsible for

delivering our strategy. In support of

our people strategy, to attract, develop

engage, retain and sustain our global

talent to ensure Wood is a great place

to work, we are committed to providing

our people with transparent, internally

fair, and externally competitive reward

in return for their contribution to Wood’s

success, whilst ensuring that we are

responsible with our spend on reward.

By rewarding our employees fairly, we

will create an inspired culture that

allows our employees to thrive without

the fear of pay discrimination, allowing

them to perform to the best of their

ability. Engagement and actions taken

throughout the year include:

Focus Groups

Leadership listened to the feedback from

numerous focus groups, and considered

actions, resulting in the following

highlights:

• In Canada, we have enhanced health

and wellness benefits by reducing long-

term disability premiums, increased

coverage in our dental plan, improved

mental health support and implemented

a new musculoskeletal solution to

address physical health issues for

families. We have streamlined our

retirement savings plan contribution

structure to enhance plan design

competitiveness and improved our paid

time off policy to drive attraction and

retention, by offering additional time off.

• In Australia, we recognised our

employees were looking for greater

flexibility with leave. We have there

fore

increased provisions for Indigenous

cultural and family leave; implemented

reproductive health and wellbeing leave;

and extended leave provisions for those

experiencing domestic violence.

• In India, we conducted a

comprehensive review of how

remuneration is structured. Changes

will be implemented in 2024 resulting

in tax advantages for our people and

access to additional benefits.

• In the UAE, our extensive review will

result in greater alignment across

our business in 2024, ensuring fair

application of reward and market

competitiveness.

• We engaged with participants

in our variable reward plans to

enhance communications, increase

understanding and focus on

deliverables.

• We listened to feedback from

colleagues in the US on our employee

share plan and our proposal to

implement an alternative plan. We

heard that they wanted to retain the

current plan but receive additional

support and communications to

understand the plan more.

• Remuneration Committee members

participated in additional focus

groups on pay equity to learn more

about engagement activities and

how they can continue to improve

to aid transparency and increase

understanding. They also took the

opportunity to provide an overview of

how they make decisions on executive

pay, aligned to practices in place for

the wider workforce.

Education and engagement

More than 700 leaders participated in

reward engagement sessions covering

job grading, salary bands, pay equity,

spot bonuses and how to have impactful

conversations with their people on

reward, ensuring employees understand

their pay and benefits. To support them,

we introduced enhanced pay equity

reporting providing analysis at country,

functional, business unit and business

grouping level on the overall pay equity

landscape; providing gender breakdown

by country and length of service analysis.

This reporting enables a targeted

approach to ensure we are paying our

people fairly. We also provided reward

awareness sessions to employees,

covering a range of topics including how

pay decisions are made, an overview

of our job frameworks and associated

career paths, and what benefits, insured

and otherwise, are available to them.

Throughout 2023, we engaged with

members of our retirement plans:

• In the UK, we held dedicated sessions

for our employees aged

fty-

five

and over, targeting pre-retirement

conversations; webinars for our

younger people, focusing on the

importance of saving for the future;

a summer newsletter to over 18,000

of our plan members; and continued

enhancement of the online platform

toolkit.

• In the US and Canada, we enhanced

our communications approach to

provide personalised communications

and provide right-time messaging

based on age and retirement

readiness. Our targeted employee

engagement campaigns were

externally recognised and received

three awards for excellence in

marketing and communication.

• In Australia, we reviewed the provisions

of our superannuation plan, resulting

in a change of provider, leading to

better service, lower cost and improved

governance for fund members.

Wellbeing

We continued to promote the value

of our global Employee Assistance

Programme (EAP) which supports the

six pillars of our Living Well at Wood

strategy – see page 80. It provides

our employees, and their families, with

24/7 support, 365 days of the year, and

provides access to practical information

and counselling on a range of useful

resources including how to improve

financial resilience, reassess priorities and

build stronger foundations, budget, plan,

and where to seek additional support in

times of dif

ficulty. During the year, we

enhanced our EAP provisions in the UK

with a new health and wellbeing app.

Annual salary review

Towards the end of 2023, we completed

our annual salary review process for

eligible employees with an effective date

of 1 January 2024. Individual budgets

were applied in over 40 countries,

considering inflation projections, market

movement predictions, economic

outlook, business performance, industry

and client considerations; attraction;

retention and adjustments following pay

equity reviews. In the UK, US, Canada,

and Australia the annual salary review

budget was 4%. Line managers engaged

with their teams before the end of the

year, supporting household budgeting

and providing greater certainty for 2024.

UK pay focus

The markets in which Wood operates

attracts a significantly higher percentage

of males due to the predominantly

technical focus of the roles in of

fice,

site, and offshore locations. Our focus

on fair pay for those carrying out the

same job, in the same location, with the

same skills and experience, regardless of

diversity, will have a long-term positive

impact in addressing the gender pay

gap. Our commitment aims to increase

the number of female leaders in senior

leadership and technical positions at

Wood through continuing to work

towards a gender balance of 40% female

representation in leadership by 2030;

at the end of 2023, we had increased

to 35%, up from 32% in 2022. Details

of actions we are taking to support our

commitments can be found on page 67

and within our UK gender pay gap report,

which is published on our website.

John Wood Group PLC

Annual Report and Financial Statements 2023

136

Workforce reward

Read our full gender pay gap report at:

woodplc.com/genderpay

Employees at snapshot date

4,864

22%

female

78%

male

Gender balance

Mean gap/median gap pay

31.1%

median

23.3%

mean

Mean gap/median gap bonus

-0.7%

median

13.2%

mean

Sharing

success

We want our people to benefit

from the collective success of Wood

and be recognised for their efforts,

and commitment in delivering our

strategy.

Our employee share plans, the

Employee Share Plan (ESP) and the

Share Incentive Plan (SIP) for the

UK workforce, offer the opportunity

for employees in 18 countries to

own a stake in the future of Wood

and benefit

from matching shares

and dividends.

Our spot bonus plan provided

awards totalling circa $1.3 million

to over 730 employees during

the year, in recognition of their

outstanding contributions to Wood.

Details of how we further celebrate

achievements can be found in our

People section on pages 64-69

Summary of 2023 share plans enrolment:

24,084

eligible employees

countries

languages of inclusive communications

and materials

2,410

enrolled (10% of total eligible)

74%

re-enrolment from 2022

UK gender pay gap report

Between 2022 and 2023, our UK mean

Gender Pay Gap (GPG) for hourly rate

of pay reduced from 26.0% to 23.3%; our

mean bonus gap reduced from 44.2%

to 13.2%, and the median bonus gap

between females and males reduced to

-0.7%. Although year on year comparison

is challenging due to the operation of

salary sacrifice benefits and other pay

arrangements, we remain confident

that our pay practices are free from bias

and any gap is a result of the gender

distribution across roles and not an equal

pay issue.

Wood remains an accredited Real Living

Wage employer, and we chose to apply

the 2023 increase ahead of the deadline

to support our people over the winter

period.

Pay ratio of CEO

The base pay ratio of the CEO continues

to reflect the Company’s internally

fair

approach to pay through aligned and

consistent frameworks. Total pay across

the wider workforce is consistent with

externally competitive remuneration

required for the professional workforce,

which Wood employs, assisting with an

above average UK pay ratio with the

median salary in 2023 being £67,840.

11:1

CEO pay ratio

More information on our gender pay

gap results can be found in our People

section on pages 64-69

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

137

Governance

Financial statements

Alignment to the workforce

The objective of the Policy is to set all components of remuneration, maximum awards, and performance measurement, which

provide a compensation package promoting the long-term success of the business and delivery of the strategy.

This table provides a summary of executive directors’ remuneration outlined in our Policy and alignment to the wider workforce. The

Policy with updated scenario charts can be found at

woodplc.com/rempolicy

Element and purpose of executive director

remuneration

Alignment with workforce

Salary

To provide an appropriate level of

fixed

salary to attract and retain executives

with the qualities, skills and experience

required to deliver our strategy.

The process of setting and annually reviewing salaries against market information,

mindful of individual contribution, is the same for all employees including executive

directors. Salaries are paid either cumulatively by hours worked or on a fixed

instalment basis.

Benefits

To provide fair and market competitive

benefits which support the health and

wellbeing of our executives to perform at

their best. Employee share plans give our

people the opportunity to benefit

from

the success to which their performance

and commitment contributes.

All employees are provided with benefits which are competitive in the location they

are employed. In the UK, this includes private medical insurance, income protection

insurance (where applicable), transportation allowance (based on job level) and life

assurance. Where applicable, employees are offered the ability to choose additional

benefits to suit their li

festyle and circumstances.

Employee share plans are open to all eligible employees across the organisation.

Employees may choose to contribute up to 10% of gross salary subject to plan rules,

or such lower amount as the Committee may determine, which is deducted in regular

pay periods from an employee’s salary. Depending on country eligibility, employees

may join the Employee Share Plan (ESP) and/or Share Incentive Plan (SIP).

Retirement related benefits

To support the long-term financial

wellbeing and future stability of our

executives in return for their commitment

in delivering our strategic objectives.

Employees receive retirement plan contributions typical of the markets in which they

are employed. In the UK, executive directors are aligned to the wider workforce with a

maximum of 9% employer contribution.

Short-term incentives

To incentivise executives to deliver

strategic business priorities for the

financial year with compulsory de

ferred

payment designed to provide additional

alignment with stakeholders and reinforce

retention.

The Annual Bonus Plan (ABP) provides a reward for senior employees critical to future

success and who are in a position that can materially influence the success o

f Wood.

Participation levels are based on the job which an individual carries out linked to a

global framework. ABP is based on the same structure and performance targets

aligned to strategy throughout the organisation. Executive directors and the ELT

receive 75% of any award earned in cash, with the remainder deferred into a share-

based award for a further two years. Other participants are paid fully in cash.

ABP participation typically applies to circa 3.3% of the global employee population.

Long-term incentives

To reward and retain executives while

aligning their interests with those of

stakeholders by incentivising performance

over the longer term. Performance

measures are linked to longer-term

creation of shareholder value.

Designed to incentivise senior leaders in delivering business performance over the

longer-term. For executive directors and the ELT, the Long-Term Incentive Plan (LTIP),

a performance-based plan, provides an opportunity to earn an award, in the form of

conditional shares, subject to remaining in employment. Measures are linked to long-

term creation of shareholder value. For other senior leaders a time-vested restricted

stock model ensures alignment of variable pay in the form of shares, consistent with

global markets in which we operate. Participation levels are based on the job which an

individual carries out, linked to a global framework.

Long-term incentive participation typically applies to circa 0.7% of the global

employee population.

Shareholding requirements

To ensure that executive directors’

interests and individual wealth are aligned

with those of shareholders over a long-

term performance period.

Shareholding requirements apply to executive directors only, including the requirement

to hold shares post-employment.

John Wood Group PLC

Annual Report and Financial Statements 2023

138

Workforce reward

continued

Remuneration Policy

The Remuneration policy was reviewed and approved by shareholders at the 2023 AGM and took effect from that date. The

Committee undertook shareholder consultation to ensure views were understood and listened to. The objective of the remuneration

policy is to set the criteria for all components of executive remuneration, including award levels and performance measures. The

aim is to provide a compensation package incentivising the long-term success of Wood. We achieve this through a mix of

fixed and

variable pay, with the intent of providing a competitive total reward package that attracts and retains executives, aligned to our

strategy of incentivising executive leaders and the interests of our shareholders. A revised policy will be put to shareholders again no

later than the AGM in 2026.

The Directors’ Remuneration Policy with updated scenario charts to reflect our

proposed application of the Policy for 2024 can be found at:

woodplc.com/rempolicy

In reviewing our Policy and its application, the Committee was mindful to consider the following areas as required under the UK

Corporate Governance Code and believe that we have fully considered each as described below:

Clarity

We fully disclose our decisions regarding remuneration targets and outcomes in our annual report on

directors’ remuneration. We carry out regular stakeholder engagement throughout the year as necessary.

Our wider workforce remuneration arrangements focus on ensuring we are internally fair, whilst remaining

externally competitive. We are improving transparency of our remuneration and seek to gain feedback from

our global workforce via our employee engagement surveys and Board engagement sessions.

Simplicity

Our performance measures for short- and long-term incentives are simple and aligned to our stakeholders,

with the operation, targets and outcomes fully disclosed in the annual report each year. Where possible we

communicate future performance measures and targets, such as in our long-term incentives, but in certain

areas, such as short-term incentives, are unable to, due to commercial sensitivity. Participants are provided

with engaging supporting documentation to ensure understanding, with regular updates provided during

each performance period, to drive positive behaviours and business performance in line with our business

goals.

Proportionality

As defined in our Policy, total remuneration is more heavily weighted towards variable pay linked to Company-

wide performance and stakeholder experience. Individual performance is aligned with delivering the long-

term strategy. The Committee reserves the right to apply discretion to ensure that poor performance is not

rewarded; outcomes may be adjusted to reflect stakeholders’ experience.

Predictability

The Committee discloses and explains all relevant limits and discretions allowed under the terms of the Policy.

This is further demonstrated in our remuneration report each year.

Alignment to

culture

Incentive plans are linked to business strategy, overall performance, and growth through a mix of

financial

and non-financial targets. They reward those who exempli

fy behaviours which align to our purpose, culture

and values, aiding delivery our strategy.

Risk

Governance of our remuneration arrangements ensure, that rewards are not excessive compared to

Company results and stakeholder experience. We review our performance measures and targets of our

incentive plans to ensure they do not lead to excessive risks or poor behaviours. The Committee monitors the

overall performance of executive directors and assesses the overall outcome of performance in the relevant

financial year. Our enhanced malus and clawback provisions sa

feguard the Company against future risk in

relation to our short- and long-term incentive plans.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

139

Governance

Financial statements

42%

25% deferred

75% cash

42%

25% deferred

75% cash

Single figure o

f remuneration*

The following table sets out the single

figure o

f remuneration received or receivable (£000’s) in the year for each of the executive

directors for time in role. No remuneration for executive directors was waived during the year.

Year

Salary

(a)

Benefits

(b)

Bonus

Long–term

incentives

(c)

Other

(d)

Pension

benefits

(e)

Total

Total fixed

remuneration

Total variable

remuneration

Executive directors

Ken Gilmartin

2023

£773

£141

£562

£31

£675

£60

£2,242

£973

£1,268

Ken Gilmartin

2022

£375

£68

£238

£0

£243

£34

£958

£477

£481

David Kemp

2023

£526

£14

£328

£41

£0

£47

£956

£587

£369

David Kemp

2022

£511

£14

£276

£0

£46

£847

£571

£276

Notes to the single figure o

f remuneration

a. Salary received during the year.

b. Taxable benefits received during the year. These include transport allowance and private medical cover. For Ken this also includes a payment o

f £100,000 made

in two payments of £50,000 in January and August 2023 for relocation costs. Ken also received medical coverage for his dependants whilst they remain in the

US to facilitate his relocation; this has been included using a conversion rate of 1 GBP = 1.2749 USD.

c. The share price used to calculate the LTIP value is £1.489, the 3 month average share price to the end of the performance period. The share price at grant was

£3.17; the value shown is not as a result of share price growth. Bonus and long-term incentive outcomes are described in the following sections.

d. Long-term incentive payment to Ken Gilmartin formed part of the guaranteed buy-out arrangements when he joined Wood as Chief Operating Of

ficer (COO)

in 2021, prior to his qualifying service as an executive director. The conversion rate used was 1 GBP = 1.2749 USD

e. Pension figure reflects cash value o

f de

fined contribution pension contribution or cash alternative, as detailed in the next section. The aggregate amount o

executive directors’ remuneration (salary, benefits including cash pension allowances; and bonus and long-term incentives) is £3,197,765. The aggregate amount

of Company contributions to executive directors’ pension schemes was £107,352.

Pension benefits

In line with the Policy, executive directors can choose to participate in the relevant local defined contribution pension arrangement or

receive a cash allowance in lieu of pension, or a combination thereof. In line with our current policy and aligned with the wider workforce,

payment may be up to 9% of base salary in the UK. Since April 2023, both Ken Gilmartin and David Kemp receive a

fixed employer

contribution of £10,000 per annum and the remaining balance to the 9% is paid as a cash allowance. Prior to April 2023, Ken Gilmartin

received 9% of base salary in de

fined pension contributions; David Kemp chose to receive his

full pension entitlement as a cash allowance.

Normal retirement age specified in the pension plan rules is 65 years. There are no additional benefits that become receivable in the

event of early retirement.

Bonus

For 2023, the maximum bonus opportunity was 175% of base salary for Ken, and 150% for David. Bonus measures were split between

financial and ESG measures with a balance o

f 90% and 10% respectively. Financial measures were further split into three measures –

a 40% measure of pro

fit, a 40% measure

for cash generation and a 10% measure of revenue backlog as illustrated in the chart below.

To assure achievement outcomes against targets within variable incentives, performance is considered and approved by the Safety &

Sustainability Committee, with a further external independent audit carried out following the end of the

financial year as appropriate.

Relative weighting (% of bonus maximum opportunity)

Revenue

backlog

10%

ESG

10%

Profit

40%

Cash generation

40%

financial measures 90%

non-financial

measures 10%

David Kemp

Final bonus payment:

£328,145

Final award as % of salary:

62%

Ken Gilmartin

Final bonus payment:

£561,865

Final award as % of salary:

73%

Final award as a % of

max bonus opportunity

Final award as a % of

max bonus opportunity

75% of the award will be paid in cash, with the remaining 25% deferred into a conditional award of nil-cost shares for a further two

years with continued employment a requirement to receive the deferred award, other than for those classi

fied as good leavers as

detailed in our Policy. Our malus and clawback provisions safeguard the Company against future risk in relation to this award.

Bonus award achievement summary

The charts below provide a summary of the overall bonus achievement for each of the executive directors:

John Wood Group PLC

Annual Report and Financial Statements 2023

140

Executive directors’ remuneration

ESG measures and outcomes

ESG measures accounted for a total of 10% of the maximum

bonus opportunity and consisted of three Key Performance

Indicators (KPIs). Weighted as followed:

• 2.5% Fatality and Permanent impairment (FPI)

• 2.5% Delivery against leadership safety engagement

• 5% Improvement in voluntary professional employee turnover

To provide assurance of achievement outcomes against targets,

performance is considered and approved by the Safety &

Sustainability Committee.

For leadership safety engagement and voluntary professional

turnover, threshold performance was set at 85% of target,

with maximum bonus achieved upon when results exceed 115%

of target. Upon achieving threshold performance, 20% of the

maximum bonus is paid; if target performance is met, 50%

of the maximum bonus opportunity is paid; 100% is payable

for reaching maximum performance. Performance between

threshold and target and between target and maximum will

result in a proportionate award calculated on a straight-line

basis.

For Fatality and Permanent impairment, no bonus will be

payable for this portion if the target of zero is not met.

Measure

Target & payment

Achieved

Fatality &

Permanent

impairment (FPI)

Zero FPI

Due to a tragic

fatality in January

2023, no payment will

be made

Delivery against

leadership safety

engagement

Complete 4,915 safety

leadership safety

engagements.

100% payable

6,587 leadership

safety engagements

completed

Improvement

in voluntary

professional

employee turnover

Voluntary turnover to

be 15%.

82% payable

13.7% achieved

Use of discretion

Using the discretionary decision matrix for guidance, the

Committee consider the experience of all stakeholders during

the performance period, including customers, investors,

suppliers, and the wider workforce, supported by reports

from audit and the Safety & Sustainability Committee. The

Committee chose not to apply discretion to the outcome of the

annual bonus award for 2023.

A full copy of the discretionary decision matrix can be found at:

woodplc.com/discretionarymatrix

Financial measures and outcomes

Financial measures for the bonus year which ended 31

December 2023 consisted of:

• Profit target – we used (Earnings Be

fore Interest, Taxes,

Depreciation and Amortisation) as our measure of success.

• A cash generation target – measured on free cash

flow

• Growth - measured through revenue backlog additions

Threshold performance for 2023 was 85% of target, with

maximum bonus achieved when results exceed 115% of

target. Upon achieving threshold performance, 20% of the

maximum bonus is paid; if target performance is met, 50%

of the maximum bonus opportunity is paid; 100% is payable

for reaching maximum performance. Performance between

threshold and target and between target and maximum will

result in a proportionate award calculated on a straight-line

basis as illustrated in the following graph:

Note:

Illustrations not to scale

EBITDA

Achieved

$422m

Cash generation

% max achievement

71%

Achieved

$(265)m

Threshold

$(152)

Target

$(132)m

Maximum

$(112)m

% max achievement

Threshold

$337m

Target

$397m

Maximum

$457m

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

85%

100%

115%

Measure payout as % of target

Achievement against target

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

141

Governance

Financial statements

Long-term incentives – Long Term Incentive Plan (LTIP 2021-2023)

The figures set out in the single figure o

f remuneration table are related to the performance period which ended on 31 December

2023. The participation level for Ken was 125% (based on his previous role as COO, and awarded as part of his buy-out

arrangements upon joining, with a guaranteed minimum payout of $900,000); and for David it was 175%. To provide assurance of

achievement outcomes against targets within variable incentives, performance is considered and approved by Internal Audit and

the Safety & Sustainability Committee, with a further external independent audit carried out following the end of the

financial

year as appropriate. For the TSR and ESG performance measures, upon reaching the threshold, 25% of the relevant measure

becomes payable; and on reaching the maximum, 100% of the relevant measure becomes payable. For EBITDA margin percentage

improvement and revenue growth, 10% of that element of the award becomes payable on reaching threshold and 100% is payable

on reaching maximum performance.

For achievement between threshold and maximum, the allocation is on a straight-line basis. No award is made for less than

threshold performance. The targets for LTIP 2021-2023, including the weightings of the performance measures and the extent to

which they were achieved, are set out in the table below.

As disclosed last year to ensure a like for like comparison between the performance assessed and the targets set, targets were

adjusted as a result of the sale of the Built Environment Consulting business. The Committee is satis

fied that the adjustment to the

targets is fair and reasonable and that the revised targets are of commensurate stretch to the original targets.

Measure

Weighting

Threshold

Maximum

Achieved

Award %

TSR

50%

percentile

Below 25

percentile

EBITDA margin percentage improvement

30%

7.8%

7.1%

Revenue growth ($bn)

10%

$6.4bn

$7.2bn

$6bn

Carbon Emission Reduction

19%

31%

71%

Leadership gender diversity

32%

34%

35%

Notes

Total Shareholder Return (TSR) is a measure of the growth in John Wood Group PLC (JWG) share price plus dividends and other shareholder returns over

the period; performance is measured relative to a peer group of comparative companies. Each company is ranked and JWG’s position in this group used to

measure success.

TSR peer group companies

The TSR peer group for the performance period comprised the following companies – Aker Solutions, Fluor, Hunting, KBR, Maire

Tecnimont, Petrofac, Saipem, SBM Offshore, SNC Lavalin, Technip Energies, TechnipFMC, Tecnicas Reunidas, and Worley. As

communicated in last year’s report, the TSR peer group was adjusted following the sale of Built Environment Consulting in 2022

with the removal of Jacobs, WSP, Stantec, Tetratech and Aecom. Maire Technimont and Tecnicas Reunidas were added due to

energy focus.

The Committee applies the following approach when the TSR peer group is impacted by acquisition or other corporate activities

during the performance period – if a company has been in the peer group for more than half the performance period then this

company will be retained in the peer group, adjusting to the end of the period for the movement in the acquiror’s share price. If a

company has not been in for half of the performance period, then it will be removed and not replaced.

LTIP award achievement summary

TSR performance was below median against the comparator group was therefore below threshold performance and therefore no

portion of the award related to these elements (50% of maximum) will vest. Performance under EBITDA margin improvement and

revenue growth did not achieve threshold performance, therefore no portion of the award related to these measures will vest (40%

of maximum). Wood achieved two of the performance measures, carbon emissions reductions and leadership gender diversity,

and this has been independently assured. Carbon emissions reduction was 71% compared to 2019 reflecting the actions we took to

reduce carbon emissions across our real estate portfolio by switching to renewable energy tariffs, the sale of the Martinez power

plant in 2022, and lower on-site fuel usage at major project sites.

Women represented 35% of leadership roles for 2023 re

flecting

our strong progress in improving our gender diversity. Having considered the discretionary matrix, there will be no use of discretion

and 10% of the award will vest.

Ken Gilmartin participated in LTIP 2021-2023 subject to performance, but with a

fixed minimum vesting value o

f $900,000 as

part of his buy-out arrangements upon joining Wood in 2021, prior to his qualifying service as an executive director. Ken will receive

20,901 shares vesting from the LTIP award which will be delivered 80% in April 2024 and 20% in April 2026.

He will receive the

balance of the amount of $860,323 (£674,816) in cash.

Ken intends to use this cash payment to further invest in Wood shares to

enhance his long-term alignment with shareholders.

The discretionary decision matrix can be found at

woodplc.com/discretionarymatrix

John Wood Group PLC

Annual Report and Financial Statements 2023

142

Executive directors’ remuneration

continued

Leaving arrangements for David Kemp

As announced in November 2023, David will step down from the position of CFO and the board on 14 April 2024, with his

remuneration arrangements in connection with this stepping down complying with the Policy. David’s leaving arrangements will be

disclosed in due course.

Joining arrangement Arvind Balan

Arvind Balan will be appointed CFO, and a member of the Board, from 15 April 2024. He will receive the following remuneration,

which is fully compliant with the Remuneration Policy:

•

Base salary of £550,000. Arvind’s base salary was set just more than 4% higher than David’s base salary for 2023, which re

flects

the level of salary increase received for UK employees with 2024.

•

Pension contributions (or a fixed cash allowance in place o

f such contribution) of up to 9% of base salary, in line with the

maximum pension rate applicable to the wider workforce in the United Kingdom.

•

Participation in the short-term incentive plan, with a maximum opportunity of 170% of base salary. This is in lieu of buying out

any equivalent award for 2024 from his previous employer.

•

Eligibility to participate in Wood’s Long Term Incentive Plan with a maximum opportunity of 185% of base salary, subject to the

rules and limits of the plan and performance conditions being met which will be set in line with the Policy.

•

Taking into account Arvind’s commencement date and in lieu of a direct buy-out of his forfeited 2024 bonus and long-term

incentive award, he will be eligible to participate in Wood’s 2024 incentives with no time pro-rating.

•

Incentive opportunities have been set slightly higher than for the previous incumbent but are still below those for the CEO and are

within the limits of the shareholder approved Directors’ Remuneration Policy. The Committee considered that it was appropriate

to increase the incentive opportunities to attract a candidate of Arvind’s quality and experience and to incentivise him to deliver

Company performance.

• Annual transport allowance of £12,360.

•

Insured benefits, aligned to the UK work

force, including eligibility for group income protection insurance, private medical

insurance, and life assurance of four times base salary (subject to underwriting).

• To support with relocation, a gross allowance of £60,000, against receipts.

To compensate Arvind for incentive arrangements that will be forfeited on leaving his previous employer, and as permitted under

the Policy, he will be receive certain buy-out awards.

These buy-out awards have been structured on a ‘like-for-like’ basis with

remuneration forfeited and will be of equivalent value and vest on a similar timeline to the original awards. The following buy-out

arrangements will be awarded:

•

2023 Annual Bonus: the amount of any bonus which is due by, but not paid by, his previous employer for 2023. 50% of the amount

will be paid in cash in April 2024, and 50% will be deferred into conditional awards over shares, vesting March 2025. This award

will not be subject to shareholding requirements.

• Share plans:

•

2021 LTIP Award – To compensate him for 415,000 restricted shares (with no performance conditions) (value c.£1.6m) in his

previous employer, in respect of the 2021 LTIP that were due to vest in March 2024, an award of Wood restricted shares vesting

April 2024. This award will not be subject to shareholding requirements or performance conditions.

•

2022 LTIP Award - To compensate him for 460,000 restricted shares (with no performance conditions) (value c£1.8m) in his

previous employer, in respect of the 2022 LTIP that were due to vest in March 2025, an award of Wood restricted shares will be

granted, vesting March 2025. This award will not be subject to shareholding requirements or performance conditions.

•

2023 LTIP Award - In lieu of the 420,000 shares (subject to performance conditions) (value c.£1.6m) in his previous employer,

Arvind will receive an award of comparable value to the forfeited award which will vest subject to the achievement of the same

performance conditions as those that apply to the Wood’s 2023-2025 LTIP. This award will vest in March 2026, with a holding

period until March 2028, and be subject to shareholding requirements and performance conditions.

•

For determining the number of shares awarded under each of the share awards above, the average share price for Arvind’s

former employer and Wood over the two weeks prior to 15 April 2024 will be used to calculate the number of Wood shares to be

awarded.

•

Relocation: in the event Arvind is required to repay relocation payment to his previous employer, he will receive a payment from

the company in the first month o

f employment of up to £50,000 gross; this will be subject to clawback if he leaves employment

with Wood within two years of his commencement date, 15 April 2024

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

143

Governance

Financial statements

Share based interests awarded during the year*

The following table sets out the awards made to executive directors under LTIP for the performance period 2023-2025 as detailed

in our previous report. As disclosed in last year’s report and in line with our Policy, performance measures are based on relative TSR

(30% weighting), EBITDA (60% weighting) and an ESG framework (10% weighting). For all measures, 25% becomes payable on

reaching threshold; and for all measures 100% becomes payable on reaching maximum. These awards will continue to be monitored

for windfall gains and the Committee can apply discretion as appropriate at the end of the performance cycle, informed by the

discretionary decision matrix.

Ken’s participation was anchored at 200% of his base salary and David’s participation level was anchored at 175% of his base salary.

However, having carefully considered the material reduction in the share price during 2022 and feedback received, the Committee

reduced the participation level of Ken and David to 170% and 149%, respectively for 2023.

Executive

director

Type

of award

Participation

level

Salary relevant

to performance

cycle

Face value

of award

Performance

period

Holding period

for 100% of

award

Dividends

Ken Gilmartin

Conditional

award of

awarded under

the LTP rules

170%

£772,500

£1,313,250

1 Jan 2023 - 31

Dec 2025

Two years

from vesting

Dividend equivalents are

paid on the vesting date

based on the number of

vested shares at the end

of the performance period

David Kemp

Conditional

award of

awarded under

the LTP rules

149%

£526,355

£784,269

1 Jan 2023 - 31

Dec 2025

Two years

from vesting

Dividend equivalents are

paid on the vesting date

based on the number of

vested shares at the end

of the performance period

Notes

The awards above were granted as conditional share awards based on base salary x participation level, calculated using the 20 days’ trading average of

£1.3158 as at 1 January 2023.

Performance is measured over a period of three

financial years, with 100% o

f any award deferred for a period of two years

following the end of the performance period. This timeline for executive director awards is demonstrated below:

LTIP timeline

Year 1

Year 2

Year 3

Year 4

Year 5

Award

granted

Performance outcomes

award vest

available

Three-year performance period

Two-year holding period

John Wood Group PLC

Annual Report and Financial Statements 2023

144

Executive directors’ remuneration

continued

Statement of directors’ shareholding and share interests

Share interests summary*

The table below sets out the total number of shares held by each executive director as at 31 December 2023, with and without

performance conditions; the declaration includes shares held by connected persons as de

fined

for the purposes of section 96B (2)

of the Financial Services and Markets Act 2000. Where applicable, the

figures include interest in retained long-term plan awards.

Changes in the shareholding of directors between 31 December 2023 and 28 March 2024 are related to permitted purchases

under the Wood employee share plans. Ken acquired an additional 12,860 during this period. None of the executive directors had a

material interest in any contract, other than a service contract, with the Company or any of its subsidiary undertakings.

Beneficial interest

Shares owned

outright as at

1 January 2023

Shares owned

outright as at

31 December 2023

Unvested share awards

Vested

unexercised

Share interests without

performance conditions

Share interests with

performance conditions

Executive directors

Ken Gilmartin

309,000

697,206

93,859

1,499,925

–

David Kemp

168,968

217,783

131,434

1,251,124

65,091

Shareholding requirements

The revised Policy approved at our 2023 AGM made no changes to the requirement for the CEO to hold shares valued at 250%

of base salary and the other executive directors to hold shares valued at 200% of base salary. There is no time period in which

they must achieve the requirement. The extent to which each director met the shareholding guidelines as at 31 December 2023 is

shown in the chart and tables below shown as two separate calculations (neither include shares held by connected persons as per

shareholding requirements detailed in our Policy):

•

Calculation 1: Shareholding and shares not subject to any further performance conditions but may be subject to other conditions

such as continued employment

• Calculation 2: Shareholding not subject to any further performance or other conditions

Notes to shareholding guidelines achievement

Shareholding is calculated using the closing mid-market share price on 31 December 2023 of £1.72 and base salary levels at the same date. For the purposes of

calculation 1, a 50% reduction has been applied (on the assumption of a “sell to cover” at point of exercise) to account for any tax liabilities on awards.

Although neither executive director has reached their required shareholding, this reflects that the LTIP per

formance has resulted

in minimal outcomes over recent years, compounded by the fall in share price and Ken’s recent appointment to the role of CEO. To

assist in achieving the shareholding requirement, Ken and David continued to purchase shares over and above any awards earned

during his employment via the Wood Employee Share Plans. During the course of the 2023, Ken and David contributed £64,750

and £38,709, respectively. Ken has also paid approximately £74,500 to date from his own cash resources to meet the tax liability

on vesting shares over the last two years to ensure that he maximises his alignment with shareholder interests, although the Policy

does allow him to sell shares to meet such liability. Additionally, Ken purchased an additional 300,000 shares during 2023 from his

own resources to assist in building his shareholding further.

Ken Gilmartin

Shareholding

requirement

50%

100%

150%

200%

250%

David Kemp

Shareholding

requirement

50%

100%

150%

200%

250%

300%

155%

166%

71%

97%

Calculation 1

Calculation 2

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

145

Governance

Financial statements

Share interests table*

Details of executive directors’ interests in long-term incentive and bonus plans as at 31 December 2023; all interests are awarded as

share options or conditional share awards:

Date of

award/

performance

period

Performance

conditions

Y/N

Earliest

exercise

date

Exercise

price per

Market

value at

date of

exercise

per

Number

as at 1

Jan 2023

Granted

in 2023

Exercised

in 2023

Lapsed in

2023

Dividends

awarded

additional

options

Number

as at 31

December

2023

Ken Gilmartin

LTIP

2020 – 2022

Mar 2025

–

187,771

LTIP

2021 – 2023

Mar 2026

–

209,018

LTIP

2022 – 2024

Mar 2027

–

292,845

LTIP

2023 – 2025

Mar 2028

998,062

ABP 2022

18 Apr 2023

Mar 2025

74,756

Discretionary

Award

30 Sept 2021

Sept 2023

£1.58

50,000

Total

739,634

1,072,818

50,000

187,771

1,574,681

David Kemp

LTIP

2018 – 2020

Mar 2023

–

65,091

LTIP

2019 – 2021

Mar 2024

–

38,898

LTIP

2020 – 2022

Mar 2025

–

203,893

LTIP

2021 – 2023

Mar 2026

–

275,061

LTIP

2022 – 2024

Mar 2027

–

380,024

LTIP

2023 - 2025

Mar 2028

596,039

ABP 2019

01 Mar 2020

Mar 2022

£1.35

30,312

ABP 2021

28 Apr 2022

Mar 2024

14,888

ABP 2022

18 Apr 2023

Mar 2025

–

52,349

52,349,

Total

1,008,167

648,388

30,312

203,893

1,422,350

Total for all executive directors

1,747,801

1,721,206

80,312

391,664

2,997,031

Notes to incentive plan interests table

For 2019-2021 and LTIP 2021-2023, awards vest and are available after a two-year deferral period. For all awards, dividends accrue on 100% of the

final award,

where applicable. There has been no change to the exercise price or date of vesting of shares as outlined in this table. Awards under LTIP 2021-2023 for Ken

Gilmartin, which was made before his promotion to CEO, will vest on the basis of 80% of the award being available in March 2024 with the remaining 20%

deferred for two year until March 2026.

Pay ratio of CEO

The CEO pay ratio is calculated at the 25th, 50th and 75th percentiles for total pay and bene

fits

for all UK employees for the

relevant financial year on the same basis as the single figure table. Option B (utilising gender pay gap data as at 5 April 2023) is

used to identify best equivalents for the calculation as it includes all UK employees. It is the most appropriate method of calculation

due to our various pay structures and employee groups which exist across our UK organisation. We believe that the best equivalents

are representative P25, P50 and P75 employees and their remuneration is consistent with that of the wider workforce

The CEO pay has been adjusted to not include one off relocation arrangements to provide meaningful comparison. Figures are

adjusted accordingly (such as pension contributions) to ensure, best representation of full time equivalent (FTE) employees for the

purposes of calculation. Salary and total pay values are included for maximum clarity. The Committee believes that the pay ratio

results reflect the Company’s internally

fair approach to pay through aligned and consistent frameworks. The total pay across

the wider workforce is consistent with externally competitive remuneration required for the professional workforce which Wood

employs, assisting with an above average pay ratio. We continue to monitor year-on-year changes to the pay ratio as they continue

to fluctuate with the evolution o

f our workforce through integration, divestment, and acquisitive growth. We are con

fident the pay

ratio remains relatively static reflective o

f aligned remuneration application between executive directors and our wider workforce.

Year

Method

Ratio of CEO pay to employee pay

percentile

Median

percentile

Ratio

Value (000s)

Ratio

Value (000s)

Ratio

Value (000s)

2023

Option B

Salary

16:1

£48

11:1

£68

9:1

£86

Total Pay

41:1

£52

29:1

£75

21:1

£99

2022

Option B

Salary

18:1

£42

12:1

£62

10:1

£75

Total pay

28:1

£47

19:1

£68

14:1

£93

2021

Option B

Salary

19:1

£41

13:1

£62

11:1

£70

Total pay

28:1

£45

18:1

£68

15:1

£86

2020

Option B

Salary

19:1

£38

14:1

£54

11:1

£68

Total pay

29:1

£42

18:1

£66

15:1

£80

2019

Option C

Salary

24:1

£32

18:1

£42

13:1

£59

Total pay

48:1

£35

36:1

£46

25:1

£68

2018

Option C

Salary

20:1

£34

14:1

£49

11:1

£64

Total pay

50:1

£38

35:1

£53

26:1

£71

Notes

We reported our CEO pay ratio for the

first time in our 2018 annual report using pay data

for employees in our integrated systems which represented 64% of all

UK employees. In 2019 our calculations included all full pay relevant UK employees in line with Gender Pay Gap calculations. From 2020, our calculations are based

on only our Gender Pay Gap report data using the Option B calculation method.

John Wood Group PLC

Annual Report and Financial Statements 2023

146

Executive directors’ remuneration

continued

TSR performance summary & CEO remuneration

In accordance with the reporting regulations, the TSR performance summary is maintained at a 10-year disclosure period. As the

Company is included in the UK FTSE 250 index but has been included in the FTSE 100 index for part of the period under review,

both the UK FTSE 250 and UK FTSE 100 indices are shown, by way of providing a reasonable TSR comparison. The graph below

compares the TSR on a holding of shares in John Wood Group PLC with the TSR on a holding of shares in the companies in the UK

FTSE 250 and 100 indices for the last ten

financial years.

The total remuneration for the CEO over the same period as the TSR performance graph detailed is listed in the following table.

This table includes details of the annual bonus received in each year as a percentage of the maximum opportunity that was

available, as well as the long-term incentives which vested in each year as a percentage of the maximum number of shares that

could have been received.

CEO remuneration (£000)

Year

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

CEO

Bob

Keiller

Bob

Keiller

Bob

Keiller

Robin

Watson

Robin

Watson

Robin

Watson

Robin

Watson

Robin

Watson

Robin

Watson

Ken

Gilmartin

Ken

Gilmartin

CEO single figure o

f total

remuneration (£’000)

£1,330

£1,146

£1,179

£1,417

£1,875

£1,690

£1,214

£1,260

£1,063

£958

£2,265

Annual bonus award as

a % of maximum opportunity

48%

37%

43%

59%

88%

62%

14%

36%

42%

Long-term incentive vesting as

a % of maximum opportunity

51%

16%

25%

11%

50%

25%

–

10%

Notes to CEO remuneration table

Ken Gilmartin was appointed as CEO on 1 July 2022. Long-term incentives vesting during the year were awarded during his time as Chief Operating Of

ficer and

vested based on Group performance and the terms of his buy-out arrangement upon joining Wood in 2021, prior to his qualifying service as an executive director

(see page 142 for details).

Wood

FTSE 100

FTSE 250

100

120

140

160

180

200

Dec-13

Dec-14

Dec-15

Dec-16

Dec-17

Dec-18

Dec-19

Dec-20

Dec-21

Dec-22

Dec-23

161.2%

168.0%

31.3%

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

147

Governance

Financial statements

Percentage change remuneration of all directors and all employees

In line with The Companies Regulations 2022, (Directors’ Remuneration Policy and Directors’ Remuneration Report), the below table

illustrates the percentage change in remuneration for the CEO, CFO and non-executive directors as per the single

figures reported

each year, and all other employees within the Group. This table will accumulate over a five-year rolling period and excludes long-

term incentives and pension in line with the regulations.

Executive directors’ salaries were increased by a lower percentage than the wider workforce from 1 January 2023. Change in

employee benefits is related to the sale o

f the Built Environment Consulting business in 2022, but there has been no change to

Company funded bene

fit provision in line with executive directors.

The changes to non-executive directors fees are in line with the proposed increases effective 1 January 2023 as disclosed in our 2022

report.

For further commentary on year-on-year changes, refer to previous annual remuneration report disclosures.

Year-on-

year change

(%)

2019 – 2020

2020 – 2021

2021 – 2022

2022 – 2023

Salary Benefits

Bonus

Salary

Benefits

Bonus

Salary

Benefits

Bonus

Salary

Benefits

Bonus

All

employees

–1%

–100%

16%

100%

105%

-22%

38%

Executive

directors

Ken

Gilmartin

107%

136%

David Kemp

–3%

–100%

100%

145%

19%

Non-

executive

directors

Roy Franklin

47%

Birgitte

Brinch

Madsen

24%

2.5%

Jacqueline

Ferguson

15%

Adrian

Marsh

36%

Nigel Mills

42%

Brenda

Reichelderfer

36%

2.2%

Susan Steele

49%

9.8%

Notes to the percentage change in CEO remuneration

Salary and benefits percentage change

for all employees is calculated on a per capita basis using total annual spend (excl. executive directors and bonus values)/

average number of employees in the year as disclosed in Note 32 of the

financial statements.

Bonus is calculated as the average award paid to all participants of the Annual Bonus Plan.

In line with regulations, pensions and long-term incentives are not required to be included in this table.

Non-executive directors do not receive benefits or bonuses.

The percentage increase in executive director salary and non-executive director fees reported between 2020-2021 re

flects the reinstatement o

f the voluntary 10%

reduction with effect from 1 January 2021.

Relative importance of spend on pay

The table below is provided to assist shareholders in assessing the relative importance of the Company’s spend on pay. It contains

details of the remuneration paid to or received by all employees of the Company as well as the value of distributions to shareholders

by way of dividends and share buyback over the previous two years. The

figures displayed in this table are impacted by movements

in the number of employees each year.

2023

($m)

2022

($m)

Difference

($m)

change

Remuneration paid to or received by all employees

2,714.8

3,130.0

-415.20

-13.27%

Distributions to shareholders by way of dividend and share buyback

–

John Wood Group PLC

Annual Report and Financial Statements 2023

148

Executive directors’ remuneration

continued

% mix

of pay

% mix

of pay

Arvind Balan

CFO

Ken Gilmartin

CEO

21%

36%

41%

21%

36%

Maximum value £3.92m

Maximum value £2.57m

Illustrations of future application of Policy

As detailed in the future Policy table, a signi

ficant proportion o

f remuneration for executive directors is linked to variable pay

opportunity, particularly at maximum performance levels, through the short- and long-term incentives, with the intention to ensure

a greater link between Company performance and individual reward.

Pay mix chart

The below charts illustrate the percentage mix of

fixed and variable pay elements

for executive directors based on maximum

variable reward outcomes. The total value displayed for each executive director is an illustration of the maximum proposed future

policy application as further detailed below.

The charts below provide an indication of the level of remuneration, as a value, which could be received by each executive director

under the Remuneration Policy as a fixed value, target and maximum per

formance, as well as an illustration of maximum plus 50%

share price growth. These charts are for illustrative purposes only and actual outcomes may differ from those shown.

Arvind Balan

CFO

(£000’s)

Ken Gilmartin

CEO

(£000’s)

500

1000

1500

2000

2500

3000

3500

4000

4500

5000

Fixed

Target

Maximum

+ 50% share

growth

£0.90m

£2.41m

£3.92m

£4.72m

Notes to the illustrations of future application of Policy

In all scenarios, fixed remuneration comprises base salary, benefits, and pension. The figures used in preparing the charts are as

follows:

• Fixed pay is the salary at 1 January 2024 for Ken and as at 15 April 2024 for Arvind.

• Benefits;

for Ken is the last known

figure as set out in the single figure o

f remuneration table for 2023 calculated on an annualised basis, minus the £100,000

relocation payment. For Arvind the benefit calculation is the standard benefits aligned to the wider work

force - private medical and car allowance.

• Pension related benefits are based on 9% o

f the base salary, covering de

fined contribution pension or cash allowance in lieu o

f pension

• Short-term incentives is the annual bonus plan (ABP) and is based on the proposed application of the Policy for 2024 and the base salary. The illustrations above

reflect maximum potential opportunity as a percentage o

f base salary; 175% for the CEO and 170% for the CFO

• Long-term incentives includes the Long Term Incentive Plan (LTIP) awards. The illustrations above reflect the Policy maximum o

f 200% of base salary. For

clarity, any dividend accrual has been excluded from the charts above.

Fixed

– It been assumed that each executive director receives base salary, benefits, and pension related benefits only; there are no elements o

f variable reward

included.

Target

– It has been assumed that short-term incentives have met target levels, which results in payout at 50% of maximum and that long-term incentive

performance is such that awards have vested at 50%.

Maximum performance

– It has been assumed that short-term incentives have met maximum levels and that long-term incentive performance is such that

awards have vested at maximum level.

Maximum performance plus 50% share price growth

– the same assumptions as the ‘maximum performance’ scenario have been used. The additional impact of

share price growth of 50% has been applied to maximum long-term incentive awards.

Fixed pay

Benefits & Pension

Short-term incentives

Long-term incentives

Fixed pay

Benefits & Pension

Short-term incentives

Long-term incentives

40%

500

1000

1500

2000

2500

3000

3500

Fixed

Target

Maximum

+ 50% share

growth

£0.61m

£1.59m

£2.57m

£3.07m

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

149

Governance

Financial statements

A full copy of the Remuneration Policy can be found at:

woodplc.com/rempolicy

Statement of implementation of Policy in the following

financial year

This section provides an overview of how the Committee will implement the Policy in 2024. In determining the Policy application, the

Committee has complied with Provision 40 disclosures within the UK Corporate Governance Code as outlined earlier in the report.

Pension related

benefits

Executive directors pension benefits are aligned to their country

of employment. In the UK, this is 9%, aligned with the wider

workforce.

Benefits

The current executive directors will continue to participate in

existing benefit arrangements in line with the agreed Policy.

Ken will continue to receive additional US benefits

for his

dependents as part of his relocation arrangement.

All executive directors will be eligible to participate in the

employee share plans, with contributions of up to 10% of,

gross salary, subject to plan rules. David will remain eligible for

the duration of his employment. Arvind will be eligible to join

following three months of employment.

Arvind will also receive a gross relocation allowance (subject to

receipts) of £60,000 to support relocation.

Salary

Base salaries for Ken and David will increase by 4%;. Ken’s

annual salary will be £803,400; and David’s will be £547,409

from 1 January 2024, which is aligned to the wider workforce

increase of 4%. Arvind commences employment on 15 April 2024

and shall receive a base salary of £550,000.

The annual bonus plan (ABP) for 2024 will provide a

maximum opportunity of base salary, for each executive

director in 2024 as stated.

For David Kemp, any bonus will be pro-rated to the duration

of tenure during 2024.

• 175% for the position as CEO: Ken Gilmartin

• 170% for the position as CFO: Arvind Balan

• 150% for the position as CFO: David Kemp

The 2024 ABP will be measured against a mix of

financial and

ESG performance measures

• 90% Financial measures that will be weighted as follows:

• 40% EBITDA

•

40% cash generation

•

10% Revenue backlog additions

• 10% ESG Measures

• 5% Voluntary turnover

•

2.5% Safety leadership engagement

•

2.5% Fatality & Permanent Impairment (FPI)

Achievement of the safety measures will be overseen by the

Safety & Sustainability Committee.

As in prior years, assurance of achievements against

measures will be carried out by internal audit and validated

by the Safety & Sustainability Committee and external

auditors as appropriate.

For 2024, the cash generation measure will be based on

operating cash flow.

The Committee considered that it was

appropriate to incentivise management to continue to drive

cash from operations as this is considered to be critical to the

long-term strength of the business.

The Committee set the targets for the annual bonus plan for

the year ending 31 December 2024 at its meeting in March

2024. It is the opinion of the Committee that these are

commercially sensitive and in line with previous practice; The

details of annual bonus targets and the extent to which the

targets are met will be disclosed in detail retrospectively in

next year’s report.

David Kemp will continue to be eligible for a 2024 annual

bonus for his period of employment to cessation of

employment based on a maximum bonus opportunity of

150% of base salary.

Short-term

incentives

John Wood Group PLC

Annual Report and Financial Statements 2023

150

Executive directors’ remuneration

continued

The LTI plan for 2024 will provide a participation percentage of

base salary, for each executive director in 2024 as stated.

• 200% for the position as CEO: Ken Gilmartin

• 185% for role the position as CFO: Arvind Balan

The LTI for 2024 will consist of the following performance

measures:

Performance

Measure

Weighting %

Targets

Threshold

Maximum

EBITDA

60%

$525m

$644m

TSR

30%

50th percentile

75th percentile

Carbon emission

reduction

50%

75%

Improvement in

leadership gender

diversity

35%

37%

Our ESG measures align closely with our long-term

sustainability goals to reduce our carbon emissions (scope 1 and

2) by 40% building on progress made to date, and to achieve

our target of 40% female gender representation by 2030.

The bespoke TSR peer group will be Aker Solutions, Fluor,

Hunting, KBR, Maire Tecnimont, Petrofac, Saipem, SBM

Offshore, SNC Lavalin, Technip Energies, TechnipFMCm

Tecnicas Reunidas and Worley.

No award will be made for less than threshold performance;

25% becomes payable on reaching threshold and 100% is

payable on reaching maximum performance. As in prior years,

assurance of achievements against measures will be carried out

by internal audit and validated by the Safety & Sustainability

Committee and external auditors, as appropriate.

The Committee is mindful and will monitor these awards for

windfall gains over the vesting period, and continue to make use

of the discretionary matrix in line with stakeholder experience,

as appropriate.

Long-term incentives

(LTI)

Shareholding

requirements

As detailed in line our Policy, shareholding requirements are

250% for the CEO and 200% for all other executives.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

151

Governance

Financial statements

Single figure o

f remuneration*

In line with our Policy, non-executive directors receive a base fee

in relation to their role. The remuneration of the non-executive

directors is reviewed annually by the Chair, CEO and Company

Secretary, who make a recommendation to the Board, with

changes ordinarily effective from 1 January. Additional fees

may be paid for related duties including the senior independent

directorship and for chairing, and membership, of certain Board

Committees as outlined in our fee structure table. The following

table sets out the total single figure o

f remuneration for the

Chair and each of the non-executive directors in the

financial

year.

Year

Total fees

(£’000)

Roy Franklin

2023

£292.7

2022

£287.0

Birgitte Brinch Madsen

2023

£59.6

2022

£58.5

Jacqui Ferguson

2023

£70.2

2022

£68.8

Adrian Marsh

2023

£70.2

2022

£68.8

Nigel Mills

2023

£70.2

2022

£68.8

Brenda Reichelderfer

2023

£59.6

2022

£58.5

Susan Steele

2023

£70.2

2022

£63.9

Thomas Botts (to 22 June 2022)

2022

£32.9

Note:

Fees include base fee and additional Committee fees in line with our

fee structure and are calculated pro-rata based on the time in the role. Non-

executive directors do not receive any taxable benefits which require to be

reported.

Shareholdings*

Non-executive directors are not permitted to participate in any

of the Company’s incentive arrangements. The table below

details the shareholding of the non-executive directors as at 31

December 2023, including those held by connected persons. As

at the date of this report, there have been no other changes

to non-executive director shareholding detailed below since 31

December 2023.

Shares owned

outright as at 1

January 2023

Shares owned

outright as at 31

December 2023

Roy Franklin

37,000

74,000

Birgitte Brinch Madsen

5,000

Jacqui Ferguson

20,084

27,194

Adrian Marsh

27,000

Nigel Mills

7,341

Brenda Reichelderfer

15,000

Susan Steele

8,500

21,500

Agreements for service

Non-executive directors and the Chair have an agreement for

service with an initial three-year term, at the end of which a

rolling agreement takes effect with no

fixed expiry date. The

agreement for service can be terminated by either party giving

90 days’ notice. Non-executive directors and the Chair are

subject to annual re-election (or election for new appointments)

at the Annual General Meeting (AGM). The table below details

the terms for current directors between the 2022 AGM and

expiry of the current term of their agreements if applicable.

Date of

Appointment

Notice

period

Current term

expiry

Roy Franklin

06 October 2017

90 days

No fixed expiry

Birgitte Brinch

Madsen

01 March 2020

90 days

No fixed expiry

Jacqui Ferguson

01 December 2016

90 days

No fixed expiry

Adrian Marsh

10 May 2019

90 days

No fixed expiry

Nigel Mills

01 May 2020

90 days

No fixed expiry

Brenda

Reichelderfer

31 March 2021

90 days

31 March 2024

Susan Steele

31 March 2021

90 days

31 March 2024

Fee structure

The Chair and non-executive director fee structure for 2023

and 2024 are set out below. Following market benchmarking

analysis the Board and Committee determined the Chair fee

would increase by 4%, non-executive directors, fees by 4% and

additional fees would increase by 19%, effective 1 January 2024.

Fees will be reviewed again for 2025 during the annual process.

The fee structure re

flects the time commitment o

f Committee

responsibilities and ensures we continue to attract and retain

from a diverse range of backgrounds.

2023

fees per

annum

2024

fees per

annum

Chair of the Board annual fee

£292,740

£304,450

Annual non-executive director fee inclusive

of all Committee attendance

£59,670

£62,050

Additional annual fee for Senior

Independent Director

£10,500

£12,500

Additional annual fee for Audit, Risk

& Ethics/Remuneration/Safety &

Sustainability Chairs

£10,500

£12,500

Changes during the year

Directors appointed

David Lockwood was appointed to the Board on 12 March

2024.

Director changes

There were no changes to non-executive directors during

the year.

Directors resigned

There were no resignations of non-executive directors

during the year. As announced on 11 December 2023,

Jacqui Ferguson will step down as a member of the Board

following the conclusion at the AGM in May 2024.

Chair of the Board and non-executive directors

John Wood Group PLC

Annual Report and Financial Statements 2023

152

The directors submit their report together

with the audited financial statements o

f the

Group for the year ended 31 December 2023.

Information relevant to and forming part of the directors’ report is to be found

in the following sections of the Annual report and

financial statements:

The Group consolidated income statement for the year is set out on page 168.

Governance and the Board

Corporate governance statement

Application of Governance Code Principles

Corporate governance arrangements

Directors’ responsibilities under s172 of the Companies Act 2006

117

Statement of directors’ responsibilities

156

Other Statutory Disclosures

154

The names of the directors who were appointed during the year

Board of directors and biographies

94 to 97

Business review

Principal activities and business review

118 and 119

Future development of the business of the Company and its

Subsidiaries

Financial Information

Fair, balanced and understandable

167

Going concern

175

Viability statement

Post balance sheet events

234

Financial instruments

210 to 213

Risk

Risk management and internal control

Principal risks and uncertainties

Monitoring climate change related risk

Health, safety, security, ethics & sustainability

44 to 82

Environment

Managing and reducing environmental impact

Greenhouse gas emissions and energy and carbon information

Employees

Employment policies

64 to 69

Policies on recruitment, training and career development of disabled

persons

122 and 123

Investing in and rewarding the workforce

136

Diversity & Inclusion statement

122

Employment engagement

110

Supplier engagement

115

Client engagement

112

Share capital structure

154

Substantial shareholders

155

Directors’ interests in ordinary shares

145

Directors’ interests in options over ordinary shares

146

Subsidiaries

Divestments

Subsidiaries, branches and joint ventures

234 to 244

Directors’ report

Going concern

In applying the going concern basis for

preparing the financial statements,

the directors have considered the

Group’s objectives and strategy, the

risks and uncertainties in achieving

those objectives, and reviewed business

performance.

Accordingly, the directors continue

to adopt the going concern basis in

preparing the financial statements.

More information on Going concern can

be found on page 85.

Dividend

Due to the cash performance of the

Group, the Board gave priority to

maintaining a strong balance sheet and

decided not to propose a final dividend in

relation to the year ending 31 December

2023. No final dividend was declared in

relation to the year ending 31 December

2022, therefore no dividend was paid to

shareholders during 2023.

The Board recognises the importance

of dividends to shareholders and will

consider its approach to dividends in

2024 and beyond, alongside other capital

allocation options.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

153

Governance

Financial statements

Statement by the directors in

performance of their statutory duties

in accordance with s172 Companies Act

2006 can be found on page 117.

Disclosures under Listing Rule 9.8.4R

Disclosures in relation to listing rule LR

9.8.4R where applicable are included in

note 24 to the financial statements in

relation to long-term incentive plans.

Energy usage and carbon emissions

We recognise the impact of energy use

and carbon emissions on climate change

and are committed to minimising our

environmental footprint.

The Company’s approach to governance,

mitigation, monitoring and assurance of

climate change-related risk is set out on

pages 47 to 57 and details of the actions

the Company is taking to manage and

minimise our impact are set out on pages

59 and 60.

Detailed information on our energy

usage in line with the Streamlined Energy

& Carbon Reporting framework (SECR),

is set out on page 59.

Political donations

During the year ended 31 December

2023, no political donations were made

and no political expenditure was incurred,

as defined in Part 14 o

f the Companies

Act 2006. No donation, contribution or

expenditure was made to any non-UK

political party during the year.

Charitable donations

The employee-matched funding

initiative supports employee fundraising

efforts for employee personal choice

charities, with Wood matching up

to 100% of the amounts raised by

employees, up to a specified limit.

This initiative is the foundation of our

charitable donation programme.

More information on employee-matched

funding can be found on page 73.

Articles of Association

The Company’s Articles of Association

may only be amended by special

resolution at a General Meeting of

shareholders and are filed with the

Registrar of Companies.

Share capital and rights

As at the date of this report, the

Company’s issued share capital,

quoted on the London Stock Exchange,

consisted of 691,839,369 ordinary shares,

each carrying one vote. The total voting

rights at the date of this report are

accordingly 691,839,369. No person has

any special rights of control over the

Company’s share capital and there

are no shares carrying special rights or

restrictions on voting rights. All issued

shares are fully paid.

There are no restrictions on the transfer

of ordinary shares in the capital of the

Company other than certain restrictions

which may, from time to time, be

imposed by law, for example, insider

trading regulations. The Company is

not aware of any agreements between

shareholders that may result in

restrictions on the transfer of securities

and/or voting rights.

Details of signi

ficant direct or indirect

holders of securities in the Company can

be found on page 155.

The John Wood Group PLC Employee

Share Trust holds shares to meet

its obligations under the Company’s

employee share plans and rights in

respect of those shares are not directly

exercisable by employees. The Trust

refrains from exercising its voting rights.

Acquisitions and purchases

of own shares

Subject to applicable law and the

Company’s Articles of Association, the

directors may exercise all powers of

the Company to authorise the issue and/

or market purchase of the Company’s

shares, subject to an appropriate

authority being given to the directors

by shareholders in a General Meeting

and any conditions attaching to

such authority.

At the 2023 annual general meeting,

shareholders passed a resolution

authorising the Company to purchase its

own shares up to a maximum number

of 69,183,936 ordinary shares. During

the year ended 31 December 2023, the

Company made no acquisitions of its

own shares and the authority granted by

this resolution has not been used.

Post-balance sheet events

Important post-balance sheet events

are detailed in the notes to the financial

statements. See Note 37 for further

details.

Research and development activity

Wood has substantial industry know-how

that is shared across the business and

we work with clients to create innovative

solutions. We have active research and

development projects in areas such as

software development, process design,

clean energy, digital and decarbonisation,

and we utilise the outcomes to improve

current processes and practices as

appropriate.

Appointment, retirement

and removal of directors

The rules governing appointment,

retirement and removal of directors are

detailed in the Articles of Association.

A director may be appointed by an

ordinary resolution of shareholders in a

General Meeting following nomination

by the Board or a member (or members)

entitled to vote at such a meeting. The

directors may appoint a director during

any year provided that the individual

stands for election by shareholders at the

next annual general meeting.

Statutory disclosures

Our Articles of Association are available at:

woodplc.com/articlesofassociation

John Wood Group PLC

Annual Report and Financial Statements 2023

154

Directors’ report

continued

Powers of directors

Subject to applicable law and the

Company’s Articles of Association,

the directors may exercise all powers

of the Company.

Indemnity of of

ficers

Under Article 137 of the Articles, the

Company may indemnify any director

or former director against any liability,

subject to the provisions of the

Companies Act. Under the authority

conferred by Article 137, the Company

has granted indemnities to the directors

of the Company. The indemnities do not

apply to any claim which arises out of

fraud, default, negligence or breach of

fiduciary duty or trust by the indemnified

person. In addition, the Company may

purchase and maintain for any director

or other of

ficer, insurance against

any liability. The Company maintains

appropriate insurance cover against legal

action brought against its directors and

ficers, and the directors and o

ficers o

its subsidiaries.

Substantial shareholdings

The table below shows the holdings of

major shareholders in the Company’s

issued ordinary share capital, as at

31 December 2023, as notified and

disclosed to the Company in accordance

with the Disclosure Guidance and

Transparency Rules.

Shareholders

No of

% of

FIL Limited

FMR LLC

67,315,371

9.73%

Liontrust Investment

Partners LLP

72,582,002

41,452,814

10.49%

5.99%

abrdn plc

34,373,800

4.99%

Pzena Investment

Management, Inc.

34,507,237

4.98%

Franklin Templeton

Institutional, LLC

33,950,724

4.90%

Schroder Plc

33,900,442

4.90%

Ameriprise Financial

33,776,060

4.88%

Artisan Partners

Limited Partnership

33,601,505

4.85%

Kiltearn Partners LLP

23,028,390

3.32%

Percentages provided were correct at the dates

of noti

fication.

The following changes in the interests

disclosed to the Company have been

notified between 31 December 2023 and

26 March 2024:

•

On 16 January 2024, FIL Limited

disclosed its percentage interest in the

ordinary share capital of the Company

was 11.01% (76,175,141 ordinary shares)

•

On 30 January 2024, FIL Limited

disclosed its percentage interest in the

ordinary share capital of the Company

was 10.89% (75,372,110 ordinary

shares)

•

On 5 March 2024, FIL Limited disclosed

its percentage interest in the ordinary

share capital of the Company was

11.07% (76,573,250 ordinary shares)

Approval of the directors’ report

The strategic report set out on pages 01

to 90 and the directors’ report set out on

pages 153 to 156, were approved by the

Board on 28 March 2024 and have been

signed by the Company Secretary on

behalf of the Board.

Martin J McIntyre

Company Secretary

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

155

Governance

Financial statements

Directors’ responsibility statement

The directors confirm that, to the best o

their knowledge:

•

The financial statements, prepared

in accordance with the applicable set

of accounting standards, give a true

and fair view of the assets, liabilities,

financial position and profit or loss o

the Company and the undertakings

included in the consolidation taken

as a whole

•

The strategic report and directors’

report include a fair review of the

development and performance of

the business and the position of

the Company and the undertakings

included in the consolidation taken as

a whole, together with a description

of the principal risks and uncertainties

that they face

•

The directors consider the Annual

report and financial statements,

taken as a whole, are fair, balanced

and understandable and provide

the information necessary for

shareholders to assess the Group’s

position and performance, business

model and strategy

So far as the directors are aware, there

is no relevant audit information of which

the Company’s auditors are unaware.

Each director has taken all reasonable

steps that they ought to have taken as

a director to make themselves aware of

any relevant audit information and to

establish that the Company’s auditors

are aware of that information. Relevant

information is de

fined as ‘in

formation

needed by the Company’s auditors in

connection with preparing their report’.

This responsibility statement was

approved by the Board of Directors

on 28 March 2024 and is signed on its

behalf by:

Ken Gilmartin

Chief Executive Of

ficer

David Kemp

Chief Financial Of

ficer

The following statement, which

should be read in conjunction with the

directors’ report and statement of the

Auditor’s responsibilities set out on

page 167, describes the responsibilities

of the directors with respect to the

financial statements.

The directors are responsible for

preparing the Annual report and financial

statements, the annual report on

directors’ remuneration and the financial

statements of the Group and the

Company in accordance with applicable

law and regulations.

Company law requires the directors to

prepare Group and parent Company

financial statements

for each

financial

year. Under that law, they are required to

prepare the Group financial statements

in accordance with UK-adopted

international accounting standards

and applicable law and have elected to

prepare the parent Company financial

statements on the same basis. In

addition, the Group financial statements

are required under the UK Disclosure

Guidance and Transparency Rules to be

prepared in accordance with UK-adopted

international accounting standards.

The Company financial statements are

prepared in accordance with FRS 101

Reduced Disclosure Framework.

Under company law the directors must

not approve the financial statements

unless they are satisfied that they give a

true and fair view of the state of affairs

of the Group and Company and of their

profit or loss

for that period.

In preparing each of the Group and

Company financial statements, the

directors are required to:

•

Select suitable accounting policies and

then apply them consistently

•

State whether they have been

prepared in accordance with UK-

adopted international accounting

standards

•

Assess the Group and Company’s

ability to continue as a going concern,

disclosing, as applicable, matters

related to going concern

•

Use the going concern basis of

accounting unless it is intended to

liquidate the Group or the Company

or to cease operations, or have no

realistic alternative but to do so

•

make judgements and estimates that

are reasonable, relevant, reliable and

prudent

The directors are also responsible for:

•

Keeping adequate accounting records

that are suf

ficient to show and explain

the Company’s transactions and

disclose with reasonable accuracy at

any time the financial position o

f the

Company and the Group and to enable

them to ensure that the financial

statements and the annual report on

directors’ remuneration comply with the

Companies Act 2006 and, as regards

the Group financial statements, Article

4 of the IAS Regulation

•

Implementing such internal controls

as they determine are necessary to

enable the preparation of

financial

statements that are free from

material misstatement, whether due

to fraud or error

•

Taking reasonable steps to safeguard

the assets of the Group and to

prevent and detect fraud and other

irregularities

•

Preparing a strategic report, directors’

report, annual report on directors’

remuneration and Corporate

Governance statement that complies

with applicable law and regulations

•

Ensuring the maintenance and

integrity of the corporate and

financial

information included on the Company’s

website. Legislation in the United

Kingdom governing the preparation

and dissemination of

financial

statements may differ from legislation

in other jurisdictions

Directors’ responsibilities

John Wood Group PLC

Annual Report and Financial Statements 2023

156

Directors’ report

continued

Financial statements

Group financial statements

The audited financial statements

of Wood for the year ended

31 December 2023.

Independent auditor’s report

158

Consolidated income statement

168

Consolidated statement of

comprehensive income/expense

169

Consolidated balance sheet

170

Consolidated statement of changes

in equity

171

Consolidated cash flow statement

173

Notes to the financial statements

175

Company financial statements

Company balance sheet

246

Statement of changes in equity

247

Notes to the Company financial

statements

248

Five year summary

255

Information for shareholders

256

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

157

Governance

Financial statements

Independent auditor’s report

to the members of John Wood Group PLC

1. Our opinion is unmodified

We have audited the financial statements o

f John Wood

Group Plc (“the Company”) for the year ended 31 December

2023 which comprise the Consolidated Income Statement,

Consolidated Statement of Comprehensive Income/Expense,

the Consolidated Balance Sheet, the Consolidated Statement

of Changes in Equity, the Consolidated Cash Flow Statement,

the Company Balance Sheet, the Company Statement

of Changes in Equity and the related notes, including the

accounting policies on pages 175 to 183.

In our opinion:

•

the financial statements give a true and

fair view of the state

of the Group’s and of the parent Company’s affairs as at

31 December 2023 and of the Group’s loss for the year then

ended;

•

the Group financial statements have been properly prepared

in accordance with UK-adopted international accounting

standards;

•

the parent Company financial statements have been properly

prepared in accordance with UK accounting standards,

including FRS 101 Reduced Disclosure Framework; and

•

the financial statements have been prepared in accordance

with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International

Standards on Auditing (UK) (“ISAs (UK)”) and applicable law.

Our responsibilities are described below.

We believe that the

audit evidence we have obtained is a suf

ficient and appropriate

basis for our opinion.

Our audit opinion is consistent with our

report to the audit, risk and ethics committee.

We were first appointed as auditor by the shareholders on

11 May 2018.

The period of total uninterrupted engagement

is for the six

financial years ended 31 December 2023. We

have ful

filled our ethical responsibilities under, and we remain

independent of the Group in accordance with, UK ethical

requirements including the FRC Ethical Standard as applied to

listed public interest entities.

No non-audit services prohibited

by that standard were provided.

Overview

Materiality:

group financial

statements as a whole

$30m (2022: $30m)

0.5% (2022: 0.5%) of revenue

Coverage

79% (2022: 79%) of group revenue

Key audit matters

vs 2022

Recurring risks

Goodwill impairment relating

to Projects CGU

Revenue recognition on fixed

price contracts

New risk

Litigation and contract

related provisions and

contingent liabilities

Parent Company

recurring risk

Recoverability of Parent

Company’s investment in

subsidiary

John Wood Group PLC

Annual Report and Financial Statements 2023

158

2. Key audit matters: our assessment of risks of material misstatement

Key audit matters are those matters that, in our professional judgement, were of most signi

ficance in the audit o

f the

financial

statements and include the most significant assessed risks o

f material misstatement (whether or not due to fraud) identi

fied by us,

including those which had the greatest effect on: the overall audit strategy; the allocation of resources in the audit; and directing

the efforts of the engagement team.

We summarise below the key audit matters, in decreasing order of audit signi

ficance, in

arriving at our audit opinion above, together with our key audit procedures to address those matters and, as required for public

interest entities, our results from those procedures.

These matters were addressed, and our results are based on procedures

undertaken, in the context of, and solely for the purpose of, our audit of the

financial statements as a whole, and in

forming our

opinion thereon, and consequently are incidental to that opinion, and we do not provide a separate opinion on these matters.

The risk

Our response

Goodwill impairment

relating to Projects CGU

(Goodwill relating to

Projects CGU - $2,195.7

million; 2022: $2,280.8

million).

(Goodwill impairment

relating to Projects - $nil;

2022: $nil).

Refer to pages 124 to 127

(Audit, Risk and Ethics

Committee Report), pages

175 to 183 (accounting

policies) and Note 10

(financial disclosures).

Forecast-based assessment:

The Group estimates recoverable amounts

based on value in use which requires

significant estimation in

forecasting future

cash flows and determining growth rates

and discount rates.

Global market conditions continue to be

challenging which is impacting the global

economy. This includes increases in the risk

free rate and rising prices, which result in

higher discount rates and may impact the

margins of the group.

The effect of these matters is that, as part

of our risk assessment, we determined that

the value in use of goodwill relating to the

Projects cash generating unit (‘CGU’) has a

high degree of estimation uncertainty, with

a potential range of reasonable outcomes

greater than our materiality for the

financial

statements as a whole and possibly

many times that amount. The financial

statements (Note 10) disclose the sensitivity

estimated by the Group.

Our procedures included:

•

Assessing methodology:

we assessed whether the principles

and integrity of the cash

flow model are in accordance with

applicable standards.

•

Historical comparisons:

we assessed the ability of the Group

to forecast accurately, by comparing prior period forecasts of

revenue growth assumptions to the actual outcomes.

•

Benchmark assumptions:

we challenged the revenue and

long-term growth rate assumptions used in the value in

use calculations by comparing the Group’s assumptions of

growth against external data (such as GDP and industry

sector forecasts (including current market expectations of the

impact of climate where available)).

•

Our valuation expertise:

we challenged the assumptions

used by the Group in the calculation of the discount rates by

involving our own valuation specialist to assist us in assessing

the discount rate assumptions applied.

•

Sensitivity analysis:

we performed our own sensitivity

analysis including a reasonably possible reduction in forecast

cash flows, alternative higher discount rate assumption and

lower revenue growth to assess the level of sensitivity to

these assumptions.

•

Assessing transparency:

we assessed whether the Group’s

disclosures, relating to the sensitivity of the outcome of the

impairment assessment to a reasonably possible adverse

change in the discount rate, revenue growth rate and

long-term growth rate, reflected the risks inherent in the

recoverable amount of goodwill.

We performed the tests above rather than seeking to rely on

any of the Group’s controls because the nature of the balance

is such that we would expect to obtain audit evidence primarily

through the detailed substantive procedures described.

Our results

•

We found the Group’s conclusion that there is no impairment

of goodwill to be acceptable (2022: We found the carrying

amounts of goodwill relating to the Projects CGU to be

acceptable).

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

159

Governance

Financial statements

2. Key audit matters: our assessment of risks of material misstatement

(continued)

The risk

Our response

Revenue recognition on

fixed price contracts

(Revenue from lump sum

contracts - $1,195.3 million;

2022: $1,179.8 million)

Refer to pages 124 to 127

(Audit, Risk and Ethics

Committee Report), pages

175 to 183 (accounting

policies) and note 2

(financial disclosures).

Subjective estimate:

Fixed price (“lump sum”) contracts include

both complex technical and commercial

requirements and may last for a number of

years. Recognition of revenue and pro

fit on

such contracts relies on:

•

estimating the forecast costs to complete

the contract, as revenue is recognised

with reference to the percentage of costs

incurred relative to forecast total costs on

the contract;

•

incorporating an allowance in the

assessment of contract revenue and costs

for technical and commercial risks arising

either from customer claims or contract

penalties (liquidated damages);

•

estimating the amount of variation

orders that can be claimed under the

existing contracts and the proportion of

these that satisfy the highly probable

revenue recognition criteria for variable

consideration, as well as determining

whether the company has an enforceable

right to payment; and

•

appropriately identifying, estimating and

providing for loss making contracts.

The estimates above impacted revenue for

the period, receivables and contract assets,

contract liabilities and provisions, including

those from onerous contracts.

Our view is that the risk has slightly reduced

in the current year as the group is entering

into fewer large

fixed price contracts and

continues to settle legacy matters and due

to the fact that the Aegis Poland contract

(by far the group’s largest

fixed price

contract) is physically complete and has

moved into the settlement phase.

The effect of these matters is that, as part

of our risk assessment, we determined that

revenue from

fixed price contracts has a

high degree of estimation uncertainty, with

a potential range of reasonable outcomes

greater than our materiality for the

financial

statements as a whole and possibly

many times that amount. This includes

the Aegis Poland contract, which has the

single greatest effect on the estimate. The

financial statements (Page 176 and Note 2)

disclose the estimations made by the Group.

Professional standards require us to make

a rebuttable presumption that the fraud

risk associated with revenue recognition is

a significant risk. The incentive/pressures

on management to achieve bonus targets

and/or market consensus increase the risk

of fraudulent revenue recognition. The

opportunity is considered to apply to these

long term fixed price contracts, given the

factors noted above

We focused our work on a number of contracts where we

consider there to be the highest degree of management

judgment or estimation and designed specific procedures

targeted at addressing the associated risks. Our procedures

included:

•

Historical comparisons:

we assessed the Group’s ability to

accurately forecast end of life contract margins by comparing

the previous estimates of forecast total costs and variable

consideration to final outcomes.

•

Personnel interviews:

we obtained an understanding of the

performance and status of selected contracts, including

Aegis, through discussions with operational and finance

contract project teams and both the Group’s internal and

external counsel where applicable, to consider whether

relevant information was included in cost and revenue

forecasts.

•

Test of detail:

for selected contracts in litigation or pre-

litigation, including Aegis, we inspected representation

letters from external legal counsel to assess

whether

this corroborates or contradicts the Group’s position. We

performed further inquiries of the Group’s external counsel to

scrutinise the assessment of customer claims.

•

Test of detail:

for selected contracts, including Aegis, we

inspected the contracts and correspondence with customers

to verify that where variation orders led to recognition of

revenue these were either due to contract modifications that

were determined to be approved, or variable consideration

that was included in the existing contracts and considered to

be highly probable.

•

Test of detail:

inspected selected contracts for key

financial

clauses, such as liquidated damages, and correspondence

with customers. We assessed whether such clauses were

appropriately reflected in the revenue amounts recognised

for

each contract and challenged where different.

•

Our project expertise:

we challenged the appropriateness

of cumulative revenue and provisions recognised in relation

to the Aegis contract by utilising our own Project specialists

to identify the risks and opportunities associated with the

contract and develop a range of possible contract out-turns.

•

Test of detail:

for selected contracts, we reperformed the

calculation of revenue based on percentage of completion,

with reference to costs incurred.

•

Site visits:

for a selected contract where physical progress

could be observed, we performed an in-person site visit to

inspect the physical progress on site and identify areas of

complexity through observation and discussion with site

personnel.

•

Assessing transparency:

we assessed the adequacy of the

Group’s disclosures about the degree of estimation involved in

arriving at the estimated revenue.

We performed the tests above rather than seeking to rely on

any of the Group’s controls because the nature of the balance

is such that we would expect to obtain audit evidence primarily

through the detailed substantive procedures described.

Our results

•

We considered the amount of revenue recognised on

fixed

price contracts to be acceptable. (2022: acceptable)

Independent auditor’s report

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

160

2. Key audit matters: our assessment of risks of material misstatement

(continued)

The risk

Our response

Litigation and contract

related provisions and

contingent liabilities

(Certain amounts forming

part of Litigation related

provisions – $25.0 million,

2022: $12.8 million and

certain amounts forming

part of Project related

provisions - $42.2m, 2022:

$63.3m, as disclosed in

note 22)

Refer to pages 124 to 127

(Audit, Risk and Ethics

Committee Report), pages

175 to 183 (accounting

policies) and notes 22 and

34 (financial disclosures).

Omitted exposures

In the normal course of business, potential

exposures may arise from certain forms of

adversarial claims proceedings, including

litigation, arbitration or other forms of

customer contractual disputes in respect of

work carried out on customer projects or as

a subcontractor to others.

The uncertainties in line with IAS 37 are

the determination of the probability of

economic outflow and the assessment o

the extent to which such outflow can be

reliably measured, based on the information

available to the Group.

Dispute outcome

The amounts involved are potentially

significant, and the application o

f accounting

standards to determine the amount, if any,

to be provided as a liability, is inherently

subjective.

A number of signi

ficant customer claims

exist, where the potential exposure could be

material. We consider those with a potential

exposure greater than $20 million to be the

most significant. The outcome o

f any such

claims is uncertain and any position taken

by management typically involves significant

judgements and estimates. The degree of

estimation is generally dependent on the

extent of information available at a point

in time and many complex matters may

require several years to be resolved. Ultimate

resolution may be via negotiated settlement

between the parties or formal process, such

as mediation, arbitration or litigation.

The effect of these matters is that, as part

of our risk assessment, we determined that

the provisions and contingent liabilities for

such forms of claims has a high degree of

estimation uncertainty, with a potential range

of reasonable outcomes greater than our

materiality for the

financial statements as a

whole, and possibly many times that amount.

The financial statements (notes 22 and 34)

disclose the estimations made by the Group.

Our procedures included:

•

Enquiry of lawyers:

On all significant litigation cases and

other higher risk legal cases to which counsel is appointed, we

performed an assessment of correspondence with the group’s

external counsel accompanied by discussions and formal

confirmations

from that counsel in order to corroborate our

understanding of these matters.

•

Assessment of Lawyers:

For each scoped matter where

enquiries of external counsel was performed, the audit team

performed a detailed assessment of the competence and

objectivity of external counsel by inspecting their terms of

engagement, qualifications and credentials.

•

Personnel interviews:

on all significant matters subject

to adversarial proceedings, we discussed the status of

those matters with internal counsel and considered the

documentation available to support the assessment as to

whether the matter should be recognised as a provision or

disclosed as a contingent liability.

•

Completeness and Accuracy:

we tested the completeness and

accuracy of the Global Litigations Report and Pre-litigation

report by identifying litigations from our board minute review,

component audit team reporting, enquiries with external

counsel and verifying that these matters were captured in the

aforementioned reports.

•

Assessing provisions:

where provisions were required

we considered the case specific documentation (such as

contracts, claim letters, expert reports) or other forms of

evidence available (such as legal counsel representations),

evaluated the assumptions used in determining the likely

economic outflow (such as the probability o

f settlement or

the outcome of certain legal principles) and assessed the

basis of management’s estimate based on that evidence.

•

Our project expertise:

for contract claims where we

considered it appropriate, we engaged our projects analysis

specialists to support our review of the claim documentation,

identify the risks and opportunities associated with the

dispute and assess the adequacy of the provision.

•

Historical comparisons:

We compared the value of settlement

of historical litigations and contract related cases with similar

fact patterns to assess the Group’s estimate of provisions.

•

Tests of detail:

We also tested settlements exceeding $5m

following the period end to ensure these are appropriately

accounted for as at the balance sheet date.

•

Assessing transparency:

we assessed whether the Group’s

disclosures detailing significant adversarial claims adequately

disclose the potential liabilities of the Group, including the

determination of matters that are contingent liabilities and

the extent of speci

fic disclosure required.

We performed the tests above rather than seeking to rely on

any of the group’s controls because the nature of the balance

is such that we would expect to obtain audit evidence primarily

through the detailed substantive procedures described.

Our results

•

We considered the provision recognised, and the contingent

liability disclosures made, to be acceptable (2022: acceptable)

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

161

Governance

Financial statements

2. Key audit matters: our assessment of risks of material misstatement

(continued)

The risk

Our response

Parent Company risk:

Recoverability of Parent

Company’s investment in

subsidiary

(Investment in subsidiary

- $4,410.7 million; 2022:

$4,391.1 million).

(Investment in subsidiary

impairment - $nil; 2022:

$nil).

Refer to pages 124 to 127

(Audit, Risk and Ethics

Committee Report), pages

175 to 183 (accounting

policies) and Note 1 of

the Company financial

statements (financial

disclosures).

Forecast-based assessment:

The carrying amount of the Parent

Company’s investment in subsidiary

represents 50% of the Company’s total

assets. Due to its materiality, in the

context of the Parent Company

financial

statements, this is considered to be the area

that had the greatest overall effect on our

Parent Company audit.

Global market conditions continue to be

challenging which is impacting the global

economy. This includes increases in the risk

free rate and rising prices, which result in

higher discount rates and may impact the

margins of the group.

The market capitalisation of the group

continues to be significantly below the

carrying value of net assets.

The effect of these matters is that, as part

of our risk assessment, we determined

that the recoverable amount of the parent

company’s investment in subsidiary has a

high degree of estimation uncertainty, with

a potential range of reasonable outcomes

greater than our materiality for the

financial

statements as a whole. The parent company

financial statements (Note 1) disclose the

sensitivity estimated by the company.

Our procedures included:

•

Comparing valuations:

we compared the carrying amount

of the investment with the recoverable amount of the

investment. The recoverable amount of the investment was

derived from the net present value of relevant cash

flows

of the parent company’s subsidiaries adjusted for the fair

value of debt and other surplus assets and liabilities held by

subsidiaries of the parent company.

Our audit procedures over the net present value of relevant

cash flows o

f the parent company’s subsidiaries

included

those performed in the group Goodwill key audit matter

above.

We assessed the appropriateness of the adjustments made

relating to the fair value of debt and other surplus assets and

liabilities held by subsidiaries of the parent company.

•

Assessing transparency:

we assessed whether the Group’s

disclosures, relating to the sensitivity of the outcome of the

impairment assessment to a reasonably possible adverse

change in the discount rate, revenue growth rate and

long-term growth rate, reflected the risks inherent in the

recoverable amount of the Parent Company’s investment in

subsidiary.

We performed the tests above rather than seeking to rely on

any of the Parent Company’s controls because the nature of the

balance is such that we would expect to obtain audit evidence

primarily through the detailed substantive procedures described.

Our results

•

We found the carrying amount of the investment in subsidiary,

with no impairment, to be acceptable. (2022: We found the

carrying amount of the investment in subsidiary, with no

impairment, to be acceptable).

Goodwill impairment

We continue to perform procedures over goodwill impairment relating to Operations. However, in the current year, reasonable possible

changes in the discount rate, long term growth rate and revenue growth rate would not result in an impairment and therefore we have not

assessed the impairment risk relating to the Operations cash generating unit as one of the most signi

ficant risks in our current year audit

and, therefore, it is not separately identi

fied in our report this year.

US asbestos related provisions

We continue to perform procedures over US asbestos related provisions. However, relative to the other key audit matters identi

fied in this

report, the matter did not have the most significant impact on the overall audit strategy and allocation o

f audit resources and therefore we

have not assessed this as one of the most signi

ficant risks in our current year audit and, there

fore, it is not separately identi

fied in our report

this year.

3. Our application of materiality and an overview of the scope of our audit

Materiality for the Group

financial statements as a whole was set at $30m (2022: $30m), determined with re

ference to a

benchmark of Group revenue from continuing operations, of $5,900.7m, of which it represents 0.5% (2022: 0.5%). We consider

Group revenue to be the most appropriate benchmark as it provides a more stable measure year on year than Group profit be

fore

tax. This is consistent with 2022.

Materiality for the parent Company

financial statements as a whole was set at $29m (2022: $29m), determined with re

ference to a

benchmark of Company total assets, of which it represents 0.4% (2022: 0.4%).

In line with our audit methodology, our procedures on individual account balances and disclosures were performed to a lower

threshold, performance materiality, so as to reduce to an acceptable level the risk that individually immaterial misstatements in

individual account balances add up to a material amount across the financial statements as a whole.

Performance materiality was set at 75% (2022: 75%) of materiality for the

financial statements as a whole, which equates to

$22.5m (2022: $22.5m) for the Group and $21.75m (2022: $21.75m) for the parent Company. We applied this percentage in our

determination of performance materiality because we did not identify any factors indicating an elevated level of risk.

Independent auditor’s report

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

162

3. Our application of materiality and an overview

of the scope of our audit

(continued)

We agreed to report to the Audit, Risk and Ethics Committee

any corrected or uncorrected identified misstatements

exceeding $1.5m (2022: $1.5m), in addition to other identified

misstatements that warranted reporting on qualitative

grounds.

Of the Group’s 24 (2022: 23) reporting components, we

subjected 6 (2022: 6) to full scope audits for group purposes

and 18 (2022: 17) to specified risk-

focused audit procedures. The

components for which we performed work other than audits

for group reporting purposes were not individually signi

ficant

but were included in the scope of our group reporting work

in order to provide further coverage over the group’s results.

We subjected 16 (2022: 13) components to specified risk-

focused audit procedures over: revenue and trade receivables;

cost of sales (17 components (2022: 13)); gross amounts due

from customers (14 components (2022: 13)); trade payables

(11 components (2022: 9)); cash (15 components (2022: 15));

accruals and deferred income (13 components (2022: 11));

provisions (3 components (2022: 3)); administrative expenses

(5 components (2022: 4); prepayments (2 components (2022:

1)); other receivables (6 components (2022: 2)); amortisation (0

components (2022: 1)); and profit

from discontinued operations,

net of tax (nil components (2022: 1)).

The group operates 1 shared service centre in India, the

outputs of which are included in the

financial in

formation of

the reporting components it services and therefore it is not a

separate reporting component. This service centre is subject

to specified risk-

focussed audit procedures, predominantly the

testing of transaction processing and controls.

The components within the scope of our work accounted for the

percentages illustrated opposite.

For the residual components, we performed analysis at an

aggregated group level to re-examine our assessment that

there were no significant risks o

f material misstatement within

these.

The Group team instructed component auditors as to the

significant areas to be covered, including the relevant risks

detailed above and the information to be reported back.

The Group team approved the component materiality’s, which

ranged from $1.7m to $14m (2022: $2.7m to $18m), having

regard to the mix of size and risk pro

file o

f the Group across the

components.

The work on 20 of the 24 components (2022: 21 of the 23

Components) was performed by the component auditors

and the rest, including the audit of the parent company, was

performed by the Group team.

The Group team visited 4 (2022: 3) component locations in

the United States of America, Italy and the United Kingdom

(2022: the United States of America and the United Kingdom),

to assess the audit risk and strategy. Video and telephone

conference meetings were also held with these component

auditors and others that were not physically visited. At these

visits and meetings, the findings reported to the Group team

were discussed in more detail, and any further work required by

the Group team was then performed by the component auditor.

The scope of the audit work performed was predominately

substantive as we placed limited reliance upon the Group’s

internal control over financial reporting.

Group

revenue

Revenue

$30m

Whole financial

statements materiality

(2022: $30m)

$14m

Range of materiality at 22

components ($1.7m-$14m)

(2022: $2.7m to $18m)

$1.5m

Misstatements reported to

the Audit, Risk and Ethics

committee (2022: $1.5m)

$5,900.7m (2022*: $5,432.2m)

*As reported in the 2022

financial statements

Group materiality

$30m (2022: $30m)

Group Revenue

Group materiality

Total profits and

losses that made up

group loss before tax

Group

total assets

Full scope for group audit purposes 2023

Specified risk-

focused audit procedures 2023

Full scope for group audit purposes 2022

Specified risk-

focused audit procedures 2022

Residual components

$22.5m

Whole financial statements

performance materiality

(2022: $22.5m)

86%

(2022: 85%)

68%

(2022: 79%)

79%

(2022: 79%)

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

163

Governance

Financial statements

We considered whether these risks could plausibly affect

the liquidity or covenant compliance in the going concern

period by assessing the directors’ sensitivities over the level

of available

financial resources and covenant thresholds

indicated by the Group’s financial

forecasts taking account

of severe, but plausible adverse effects that could arise from

these risks individually and collectively.

Our procedures also included:

•

Inspecting the Revolving Credit Facility Agreement (the “RCF

Agreement”), the term loan agreement and the US private

placement loan note agreements, evaluating if there were

any restrictions in the use of the funds. We inspected these

agreements to understand the terms, including assessing

the definitions o

f covenant metrics such as Adjusted EBITA

and Net Interest Charges and whether the forecasts used

for the purpose of assessing compliance with covenants

appropriately reflected those definitions. We reper

formed

calculations for key

financial covenants at each test date

falling into the going concern assessment period, in order

to test the expected compliance with these covenants and

mathematical accuracy of the Directors’ calculations.

•

Assessing the ability of the Group to forecast accurately, by

comparing budgets to historical results for key metrics. We

challenged the current forecast assumptions by reference

to the findings

from the above and assessed whether they

reflected market

forecasts and the Group’s strategy.

•

Evaluating whether the key assumptions over revenue

growth, Adjusted EBITA and Adjusted EBITDA margin are

realistic, achievable and consistent with the external and

internal environment and other matters identified in the

audit.

We considered whether the going concern disclosure on page

175 of the

financial statements gives a

full and accurate

description of the directors’ assessment of going concern,

including the identified risks, dependencies and related

sensitivities.

Our conclusions based on this work:

•

we consider that the directors’ use of the going concern basis

of accounting in the preparation of the

financial statements

is appropriate;

•

we have not identified, and concur with the directors’

assessment that there is not, a material uncertainty related

to events or conditions that, individually or collectively, may

cast significant doubt on the Group’s or Company’s ability to

continue as a going concern for the going concern period;

•

we have nothing material to add or draw attention to in

relation to the directors’ statement on page 175 to the

financial statements on the use o

f the going concern basis

of accounting with no material uncertainties that may cast

significant doubt over the Group and Company’s use o

f that

basis for the going concern period, and we found the going

concern disclosure on page 175 to be acceptable; and

•

the related statement under the Listing Rules set out on

pages 85 and 86 is materially consistent with the financial

statements and our audit knowledge.

However, as we cannot predict all future events or conditions

and as subsequent events may result in outcomes that are

inconsistent with judgements that were reasonable at the time

they were made, the above conclusions are not a guarantee

that the Group or the Company will continue in operation.

4. The impact of climate change on our audit

In planning our audit, we have considered the potential impact

of climate change on the Group’s business and its

financial

statements.

The Group has set out its commitments on climate change to

reduce scope 1 and 2 carbon emissions by 40% by 2030.

Climate change impacts the Group in a variety of ways creating

both risks and opportunities to the group. The opportunities

include potential for capitalising on the growth in markets

arising from energy transition. The risks include demand

uncertainty relating to the market’s response to climate issues,

the pattern of energy transition, and the group’s ability to

respond to this.

As part of our audit we have made enquiries of management

to understand the extent of the potential impact of climate

change risk on the Group’s financial statements. We have

performed a risk assessment of how the impact of climate

change may affect the

financial statements and our audit. Our

risk assessment focused on the risk climate change may pose

to the determination of future cash

flows used in assessments

such as impairment. We held discussions with our own climate

change professionals to challenge our risk assessment.

On the basis of our risk assessment, we determined that

goodwill impairment is the area which will be the most

impacted area of our audit.

As explained in Note 10 of the

financial statements, in preparing

the value-in-use calculations, management has projected

growth in the Cash Generating Unit (“CGU”) based on the

assumptions of increase in market share in future climate

related projects. Our audit response to the goodwill impairment

key audit matter includes specific procedures to address the

risks arising from climate change. Please refer to that key

audit matter response for further details. In our response

we explain how we have challenged management’s growth

assumptions by comparing them against external data and

performing sensitivity analysis of the carrying amount to the

growth assumptions. Taking into account our risk assessment

procedures and the relatively short-term nature of other assets

we have not identified any other key audit matters relating to

climate change.

We read the disclosure of climate related information in the

front half of the annual report and considered consistency with

the financial statements and our audit knowledge.

5. Going concern

The directors have prepared the financial statements on the

going concern basis as they do not intend to liquidate the

Group or the Company or to cease their operations, and as

they have concluded that the Group’s and the Company’s

financial position means that this is realistic. They have also

concluded that there are no material uncertainties that could

have cast significant doubt over their ability to continue as a

going concern for at least a year from the date of approval of

the financial statements (“the going concern period”).

We used our knowledge of the Group, its industry, and the

general economic environment to identify the inherent risks

to its business model and analysed how those risks might

affect the Group’s and Company’s

financial resources or

ability to continue operations over the going concern period.

The risks that we considered most likely to adversely affect

the Group’s and the Company’s available financial resources

and metrics relevant to debt covenants over this period

were worsening economic conditions which could lead

to unexpected deferrals or cancellations of contracts by

customers, higher interest rates or a combination of these.

Independent auditor’s report

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

164

6. Fraud and breaches of laws and regulations –

ability to detect

Identifying and responding to risks of material

misstatement due to fraud

To identify risks of material misstatement due to fraud (“fraud

risks”) we assessed events or conditions that could indicate an

incentive or pressure to commit fraud or provide an opportunity

to commit fraud. Our risk assessment procedures included:

• Enquiring of directors, the Audit Risk and Ethics committee,

internal audit, the ethics and compliance team, the internal

legal team, external law firms and inspection o

f policy

documentation as to the Group’s high-level policies and

procedures to prevent and detect fraud, including the internal

audit function, and the Group’s channel for “whistleblowing”,

as well as whether they have knowledge of any actual,

suspected or alleged fraud.

• Reading Board, Audit Risk and Ethics committee,

Remuneration committee, Nomination committee and Safety

Assurance and Business Ethics committee minutes.

• Considering remuneration incentive schemes and

performance targets for management and directors including

the annual bonus plan and long-term incentive plan.

• Using analytical procedures to identify any unusual or

unexpected relationships.

• Our forensic specialists assisted us in identifying key fraud

risks. This included holding a discussion with the engagement

partner, engagement manager and engagement quality

control reviewer, and assisting with designing and executing

relevant audit procedures to respond to the identified

fraud

risks.

We communicated identified

fraud risks throughout the audit

team and remained alert to any indications of fraud throughout

the audit. This included communication from the Group

audit team to component audit teams of relevant fraud risks

identified at the Group level and request to component audit

teams to report to the Group audit team any instances of fraud

that could give rise to a material misstatement at the Group

level.

As required by auditing standards, and taking into account

possible pressures to meet profit targets and external debt

covenant thresholds, we perform procedures to address the risk

of management override of controls and the risk of fraudulent

revenue recognition, in particular over fixed price contracts

where there is increased judgement in determining key metrics

impacting revenue recognition and the risk of bias in accounting

estimates and judgements such as goodwill impairment

assumptions.

We did not identify any additional fraud risks.

Further detail in respect of revenue recognition on

fixed price

contracts is set out in the key audit matter disclosures in section

2 of this report.

We performed procedures including:

• Identifying journal entries and other adjustments to test at

Group-level and for all in-scope components based on risk

criteria and comparing the identified entries to supporting

documentation. These included those containing key words

which may indicate a high risk, those posted to unusual

accounts and all material post-close journal entries.

• Assessing whether the judgements made in making

accounting estimates are indicative of a potential bias,

including assessing revenue recognition on fixed price

contracts for bias.

Identifying and responding to risks of material

misstatement due to non-compliance with laws and

regulations

We identified areas o

f laws and regulations that could

reasonably be expected to have a material effect on the

financial statements

from our general commercial and sector

experience, through discussion with the directors and other

management (as required by auditing standards), and from

inspection of the Group’s regulatory and legal correspondence

and discussed with the directors and other management the

policies and procedures regarding compliance with laws and

regulations.

We communicated identified laws and regulations throughout

our team and remained alert to any indications of non-

compliance throughout the audit. This included communication

from the Group audit team to component audit teams of

relevant laws and regulations identified at the Group level,

and a request for component auditors to report to the Group

audit team any instances of non-compliance with laws and

regulations that could give rise to a material misstatement at

the Group level.

The potential effect of these laws and regulations on the

financial statements varies considerably.

Firstly, the Group is subject to laws and regulations that

directly affect the

financial statements including financial

reporting legislation (including related companies legislation),

distributable profits legislation, taxation legislation, and

pensions legislation in respect of de

fined benefit pension

schemes and we assessed the extent of compliance with these

laws and regulations as part of our procedures on the related

financial statement items.

Secondly, the Group is subject to many other laws and

regulations where the consequences of non-compliance could

have a material effect on amounts or disclosures in the

financial

statements, for instance through the imposition of

fines or

litigation. We identified the

following areas as those most

likely to have such an effect: health and safety, anti-bribery

and anti-corruption, money laundering legislation, employment

law and social security legislation, contract legislation, Foreign

Corrupt Practices Act, environmental protection legislation,

federal acquisition regulations and certain aspects of company

legislation recognising the nature of the Group’s activities

and its legal form. Auditing standards limit the required audit

procedures to identify non-compliance with these laws and

regulations to enquiry of the directors and other management

and inspection of regulatory and legal correspondence, if any.

Therefore if a breach of operational regulations is not disclosed

to us or evident from relevant correspondence, an audit will not

detect that breach.

For the asbestos related litigation and contingent liability

matters discussed in notes 21 and 34, we assessed disclosures

against our understanding gained through the audit procedures

performed including inspection of legal correspondence.

We discussed with the Audit, Risk and Ethics committee

matters related to actual or suspected breaches of laws

or regulations, for which disclosure is not necessary, and

considered any implications for our audit.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

165

Governance

Financial statements

6. Fraud and breaches of laws and regulations –

ability to detect

(continued)

Context of the ability of the audit to detect fraud or

breaches of law or regulation

Owing to the inherent limitations of an audit, there is an

unavoidable risk that we may not have detected some material

misstatements in the financial statements, even though we

have properly planned and performed our audit in accordance

with auditing standards. For example, the further removed non-

compliance with laws and regulations is from the events and

transactions reflected in the financial statements, the less likely

the inherently limited procedures required by auditing standards

would identify it.

In addition, as with any audit, there remained a higher risk of

non-detection of fraud, as these may involve collusion, forgery,

intentional omissions, misrepresentations, or the override of

internal controls. Our audit procedures are designed to detect

material misstatement. We are not responsible for preventing

non-compliance or fraud and cannot be expected to detect

non-compliance with all laws and regulations.

7. We have nothing to report on the other

information in the Annual Report

The directors are responsible for the other information

presented in the Annual Report together with the financial

statements.

Our opinion on the financial statements does not

cover the other information and, accordingly, we do not express

an audit opinion or, except as explicitly stated below, any form

of assurance conclusion thereon.

Our responsibility is to read the other information and, in

doing so, consider whether, based on our financial statements

audit work, the information therein is materially misstated

or inconsistent with the financial statements or our audit

knowledge.

Based solely on that work we have not identified

material misstatements in the other information.

Strategic report and Directors’ report

Based solely on our work on the other information:

•

we have not identified material misstatements in the

strategic report and the directors’ report;

•

in our opinion the information given in those reports for the

financial year is consistent with the financial statements; and

•

in our opinion those reports have been prepared in

accordance with the Companies Act 2006.

Directors’ remuneration report

In our opinion the part of the Directors’ Remuneration Report to

be audited has been properly prepared in accordance with the

Companies Act 2006.

Disclosures of emerging and principal risks and longer-

term viability

We are required to perform procedures to identify whether there

is a material inconsistency between the directors’ disclosures in

respect of emerging and principal risks and the viability statement,

and the financial statements and our audit knowledge.

Based on those procedures, we have nothing material to add or

draw attention to in relation to:

•

the directors’ confirmation within the Viability statement

page 86 that they have carried out a robust assessment of

the emerging and principal risks facing the Group, including

those that would threaten its business model, future

performance, solvency and liquidity;

Independent auditor’s report

continued

•

the Analysis of Principal Risks disclosures describing these

risks and how emerging risks are identified, and explaining

how they are being managed and mitigated; and

•

the directors’ explanation in the Viability statement of how

they have assessed the prospects of the Group, over what

period they have done so and why they considered that period

to be appropriate, and their statement as to whether they

have a reasonable expectation that the Group will be able to

continue in operation and meet its liabilities as they fall due

over the period of their assessment, including any related

disclosures drawing attention to any necessary qualifications

or assumptions.

We are also required to review the Viability statement, set

out on page 86 under the Listing Rules.

Based on the above

procedures, we have concluded that the above disclosures are

materially consistent with the financial statements and our

audit knowledge.

Our work is limited to assessing these matters in the context

of only the knowledge acquired during our

financial statements

audit.

As we cannot predict all future events or conditions

and as subsequent events may result in outcomes that are

inconsistent with judgements that were reasonable at the

time they were made, the absence of anything to report on

these statements is not a guarantee as to the Group’s and

Company’s longer-term viability.

Corporate governance disclosures

We are required to perform procedures to identify whether

there is a material inconsistency between the directors’

corporate governance disclosures and the financial statements

and our audit knowledge.

Based on those procedures, we have concluded that each of the

following is materially consistent with the

financial statements

and our audit knowledge:

•

the directors’ statement that they consider that the annual

report and financial statements taken as a whole is

fair,

balanced and understandable, and provides the information

necessary for shareholders to assess the Group’s position and

performance, business model and strategy;

•

the section of the annual report describing the work of the

Audit Risk and Ethics Committee, including the significant

issues that the Audit Risk and Ethics Committee considered

in relation to the financial statements, and how these issues

were addressed; and

•

the section of the annual report that describes the review

of the effectiveness of the Group’s risk management and

internal control systems.

We are required to review the part of the Corporate

Governance Statement relating to the Group’s compliance with

the provisions of the UK Corporate Governance Code speci

fied

by the Listing Rules for our review.

We have nothing to report in this respect.

John Wood Group PLC

Annual Report and Financial Statements 2023

166

8. We have nothing to report on the other matters

on which we are required to report by exception

Under the Companies Act 2006, we are required to report to

you if, in our opinion:

• adequate accounting records have not been kept by the

parent Company, or returns adequate for our audit have not

been received from branches not visited by us; or

• the parent Company financial statements and the part o

the Directors’ Remuneration Report to be audited are not in

agreement with the accounting records and returns; or

• certain disclosures of directors’ remuneration speci

fied by law

are not made; or

• we have not received all the information and explanations we

require for our audit.

We have nothing to report in these respects.

9. Respective responsibilities

Directors’ responsibilities

As explained more fully in their statement set out on page

156, the directors are responsible for: the preparation of the

financial statements including being satisfied that they give

a true and fair view; such internal control as they determine is

necessary to enable the preparation of

financial statements

that are free from material misstatement, whether due to

fraud or error; assessing the Group and parent Company’s

ability to continue as a going concern, disclosing, as applicable,

matters related to going concern; and using the going concern

basis of accounting unless they either intend to liquidate the

Group or the parent Company or to cease operations, or have

no realistic alternative but to do so.

Auditor’s responsibilities

Our objectives are to obtain reasonable assurance about

whether the financial statements as a whole are

free from

material misstatement, whether due to fraud or error, and to

issue our opinion in an auditor’s report.

Reasonable assurance is

a high level of assurance, but does not guarantee that an audit

conducted in accordance with ISAs (UK) will always detect a

material misstatement when it exists.

Misstatements can arise

from fraud or error and are considered material if, individually

or in aggregate, they could reasonably be expected to influence

the economic decisions of users taken on the basis of the

financial statements.

A fuller description of our responsibilities is provided on the

FRC’s website at

www.frc.org.uk/auditorsresponsibilities.

The Company is required to include these financial statements

in an annual financial report prepared under Disclosure

Guidance and Transparency Rule 4.1.17R and 4.1.18R.

This

auditor’s report provides no assurance over whether the annual

financial report has been prepared in accordance with those

requirements.

10. The purpose of our audit work and to whom we

owe our responsibilities

This report is made solely to the Company’s members, as a

body, in accordance with Chapter 3 of Part 16 of the Companies

Act 2006.

Our audit work has been undertaken so that we

might state to the Company’s members those matters we

are required to state to them in an auditor’s report and for no

other purpose.

To the fullest extent permitted by law, we do

not accept or assume responsibility to anyone other than the

Company and the Company’s members, as a body, for our audit

work, for this report, or for the opinions we have formed.

Paul Glendenning (Senior Statutory Auditor)

for and on behalf of KPMG LLP, Statutory Auditor

Chartered Accountants

1 Marischal Square

Broad Street

Aberdeen

AB10 1DD

28 March 2024

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

167

Governance

Financial statements

Consolidated income statement

for the year ended 31 December 2023

2023

2022 (re-presented*)

Note

Pre–

exceptional

items

Exceptional

items

Total

Pre–

exceptional

items

Exceptional

items

Total

Continuing operations

Revenue

1,2,5

5,900.7

5,469.3

(8.0)

5,461.3

Cost of sales

(5,191.1)

(24.7)

(5,215.8)

(4,800.6)

(17.0)

(4,817.6)

Gross profit

709.6

(24.7)

684.9

668.7

(25.0)

643.7

Administrative expenses

(614.4)

(31.6)

(646.0)

(600.8)

(96.2)

(697.0)

Impairment loss on trade receivables and contract

assets

(23.8)

(20.4)

(44.2)

Impairment of goodwill and intangible assets

(542.3)

Share of post-tax pro

fit

from joint ventures

42.8

30.4

Operating profit/(loss)

114.2

(76.7)

37.5

98.3

(663.5)

(565.2)

Finance income

19.4

6.9

Finance expense

3,5

(108.5)

(11.1)

(119.6)

(127.2)

(5.9)

(133.1)

Profit/(loss) be

fore taxation from continuing

operations

4,5

25.1

(87.8)

(62.7)

(22.0)

(669.4)

(691.4)

Taxation

5,6

(54.6)

(10.4)

(65.0)

(47.3)

36.4

(10.9)

Loss for the year from continuing operations

(29.5)

(98.2)

(127.7)

(69.3)

(633.0)

(702.3)

Discontinued operations

(Loss)/profit

from discontinued operations, net of tax

(10.2)

32.7

22.5

60.2

290.4

350.6

Loss for the period

(39.7)

(65.5)

(105.2)

(9.1)

(342.6)

(351.7)

(Loss)/profit attributable to

Owners of the parent

(45.2)

(65.5)

(110.7)

(13.7)

(342.6)

(356.3)

Non-controlling interests

5.5

–

5.5

4.6

–

4.6

(39.7)

(65.5)

(105.2)

(9.1)

(342.6)

(351.7)

Earnings per share (expressed in cents per share)

Basic

(16.1)

(52.4)

Diluted

(16.1)

(52.4)

Earnings per share – continuing operations (expressed

in cents per share)

Basic

(19.4)

(103.9)

Diluted

(19.4)

(103.9)

The notes on pages 175 to 244 are an integral part of these consolidated

financial statements.

The comparative information has been re-presented in line with the requirements of IFRS 5, paragraph 36, due to the reclassi

fication o

f Built Environment

Consulting Saudi Arabia from discontinued into continuing operations following a decision not to dispose of that business (note 7).

John Wood Group PLC

Annual Report and Financial Statements 2023

168

Consolidated statement of comprehensive income/expense

for the year ended 31 December 2023

Note

2023

2022

*restated

Loss for the year

(105.2)

(351.7)

Other comprehensive (expense)/income from continuing operations

Items that will not be reclassified to profit or loss

Re-measurement (losses)/gains on retirement benefit obligations

(82.2)

168.0

Movement in deferred tax relating to retirement bene

fit obligations

18.0

(41.6)

Total items that will not be reclassified to profit or loss

(64.2)

126.4

Items that may be reclassified subsequently to profit or loss

Cash flow hedges

3.8

5.1

Tax on derivative financial instruments

(0.4)

(1.7)

Exchange movements on retranslation of foreign operations

58.2

(165.1)

Total items that may be reclassified subsequently to profit or loss

61.6

(161.7)

Other comprehensive expense from continuing operations for the year, net of tax

(2.6)

(35.3)

Other comprehensive (expense)/income from discontinued operations

Re-measurement gains on retirement benefit schemes

2.9

Net exchange movements on disposal of foreign currency operations*

54.5

Exchange movements on retranslation of foreign operations

(57.9)

Other comprehensive expense from discontinued operations for the year, net of tax

(0.5)

Total comprehensive expense for the year

(107.8)

(387.5)

Total comprehensive expense for the year is attributable to:

Owners of the parent

(113.3)

(392.1)

Non-controlling interests

5.5

4.6

(107.8)

(387.5)

Exchange movements on the retranslation of foreign operations could be subsequently reclassi

fied to profit or loss in the event o

the disposal of a business.

Based on the requirements of IAS 1 Presentation of Financial Statements, the net exchange movements on disposal of foreign currency operations of $54.5m

should have been deducted from the statement of comprehensive income and expense for the year ending 31 December 2022, and the prior year comparative

has been adjusted to reflect this. This matter came to the attention o

f the directors following the Financial Reporting Council’s Corporate Reporting Review

Team (“FRC”) enquiry, as described in more detail in the Audit, Risks and Ethics Committee report on page 127. The reclassification adjustment had no impact

on loss for the year, cash

flows or any o

f the balance sheet captions in the current or prior period.

The notes on pages 175 to 244 are an integral part of these consolidated

financial statements.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

169

Governance

Financial statements

Consolidated balance sheet

as at 31 December 2023

Note

2023

2022

Assets

Non-current assets

Goodwill and other intangible assets

4,319.0

4,309.1

Property plant and equipment

65.3

82.4

Right of use assets

355.9

276.0

Investment in joint ventures

178.1

156.5

Other investments

51.3

56.0

Long term receivables

184.2

129.5

Retirement benefit scheme surplus

391.9

432.4

Deferred tax assets

43.1

61.2

5,588.8

5,503.1

Current assets

Inventories

16.3

11.1

Trade and other receivables

1,554.4

1,545.0

Financial assets

9.2

10.8

Income tax receivable

57.9

40.7

Assets held for sale

21.0

Cash and cash equivalents

434.0

536.7

2,071.8

2,165.3

Total assets

7,660.6

7,668.4

Liabilities

Current liabilities

Borrowings

315.3

345.9

Trade and other payables

1,706.7

1,687.6

Income tax liabilities

115.8

218.1

Lease liabilities

83.4

83.2

Provisions

57.6

44.9

Liabilities held for sale

20.6

2,278.8

2,400.3

Net current liabilities

(207.0)

(235.0)

Non-current liabilities

Borrowings

812.2

584.0

Deferred tax liabilities

76.6

100.1

Retirement benefit scheme deficit

80.1

73.2

Lease liabilities

317.4

259.7

Other non-current liabilities

69.4

106.8

Asbestos related litigation

306.5

311.4

Provisions

77.7

103.4

1,739.9

1,538.6

Total liabilities

4,018.7

3,938.9

Net assets

3,641.9

3,729.5

Equity attributable to owners of the parent

Share capital

41.3

Share premium

63.9

Retained earnings

1,312.9

1,224.4

Merger reserve

2,298.8

2,540.8

Other reserves

(80.4)

(142.4)

Total equity attributable to owners of the parent

3,636.5

3,728.0

Non-controlling interests

5.4

1.5

Total equity

3,641.9

3,729.5

The financial statements on pages 168 to 244 were approved by the board o

f directors on 28 March 2024 and signed on its behalf by:

Ken Gilmartin, Director

David Kemp, Director

The notes on pages 175 to 244 are an integral part of these consolidated

financial statements.

John Wood Group PLC

Annual Report and Financial Statements 2023

170

Consolidated statement of changes in equity

for the year ended 31 December 2023

*restated

Note

capital

premium

Retained

earnings

Merger

reserve

Other

reserves

Equity

attributable

to owners of

the parent

Non–

controlling

interests

Total

equity

At 1 January 2022

41.3

63.9

1,415.0

2,540.8

21.0

4,082.0

3.3

4,085.3

(Loss)/Profit

for the year

–

(356.3)

–

(356.3)

4.6

(351.7)

Other comprehensive income/(expense):

Re-measurement gains on retirement benefit

schemes

–

168.0

–

168.0

–

168.0

Re-measurement gains on retirement benefit

schemes (discontinued)

–

2.9

–

2.9

–

2.9

Movement in deferred tax relating to retirement

benefit schemes

–

(41.6)

–

(41.6)

–

(41.6)

Cash flow hedges

–

5.1

–

5.1

Tax on derivative financial instruments

–

(1.7)

–

(1.7)

–

(1.7)

Net exchange movements on retranslation of foreign

operations

–

(165.1)

–

(165.1)

Net exchange movements on disposal of foreign

currency operations*

–

54.5

–

54.5

Net exchange movements on retranslation of foreign

operations (discontinued)

–

(57.9)

–

(57.9)

Total comprehensive (expense)/income for the year*

–

(228.7)

–

(163.4)

(392.1)

4.6

(387.5)

Transactions with owners:

Dividends paid

8,30

–

(1.1)

Credit relating to share based charges

–

20.7

–

20.7

–

20.7

Deferred tax impact of rate change in equity

–

(0.8)

–

(0.8)

–

(0.8)

Other tax movements in equity

–

(1.3)

–

(1.3)

–

(1.3)

Exchange movements in respect of shares held by

employee share trusts

–

12.5

–

12.5

–

12.5

Purchase of company shares by employee share trust

for the Share Incentive Plan (SIP)

–

1.7

–

1.7

–

1.7

Transactions with non-controlling interests

–

5.3

–

5.3

(5.3)

At 31 December 2022

41.3

63.9

1,224.4

2,540.8

(142.4)

3,728.0

1.5

3,729.5

Based on the requirements of IAS 1 Presentation of Financial Statements, the net exchange movements on disposal of foreign currency operations of $54.5m

should have been deducted from the statement of comprehensive income and expense for the year ending 31 December 2022. Within the Consolidated

statement of changes in equity, the $54.5m was previously presented as a transaction with owners and so has been reclassi

fied to total comprehensive income

and expense. This matter came to the attention of the directors following the Financial Reporting Council’s Corporate Reporting Review Team (“FRC”) enquiry,

as described in more detail in the Audit, Risks and Ethics Committee report on page 127. The reclassification adjustment had no impact on loss

for the year,

cash flows or any o

f the balance sheet captions in the current or prior period.

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

171

Governance

Financial statements

Note

capital

premium

Retained

earnings

Merger

reserve

Other

reserves

Equity

attributable

to owners of

the parent

Non–

controlling

interests

Total

equity

At 1 January 2023

41.3

63.9

1,224.4

2,540.8

(142.4)

3,728.0

1.5

3,729.5

(Loss)/Profit

for the year

–

(110.7)

–

(110.7)

5.5

(105.2)

Other comprehensive income/(expense):

Re-measurement losses on retirement benefit

schemes

–

(82.2)

–

(82.2)

–

(82.2)

Movement in deferred tax relating to retirement

benefit schemes

–

18.0

–

18.0

–

18.0

Cash flow hedges

–

3.8

–

3.8

Tax on derivative financial instruments

–

(0.4)

–

(0.4)

–

(0.4)

Net exchange movements on retranslation of foreign

operations

–

58.2

–

58.2

Total comprehensive (expense)/income for the year

–

(175.3)

–

62.0

(113.3)

5.5

(107.8)

Transactions with owners:

Dividends paid

8,30

–

(1.6)

Credit relating to share based charges

–

19.6

–

19.6

–

19.6

Deferred tax impact of rate change in equity

–

0.7

–

0.7

–

0.7

Other tax movements in equity

–

(0.1)

–

(0.1)

–

(0.1)

Purchase of company shares by employee share trust

for the Share Incentive Plan (SIP)

–

1.6

–

1.6

–

1.6

Transfer from merger reserve to retained earnings

–

242.0

(242.0)

–

At 31 December 2023

41.3

63.9

1,312.9

2,298.8

(80.4)

3,636.5

5.4

3,641.9

During 2023, John Wood Group Holdings Limited paid $242.0m to John Wood Group PLC in a partial settlement of the promissory

note, which was put in place during 2019. The repayment represented qualifying consideration and as a result the Company

transferred an equivalent portion of the merger reserve to retained earnings.

Other reserves include the capital redemption reserve, capital reduction reserve, currency translation reserve and the hedging

reserve.

The notes on pages 175 to 244 are an integral part of these consolidated

financial statements.

Consolidated statement of changes in equity

continued

for the year ended 31 December 2023

John Wood Group PLC

Annual Report and Financial Statements 2023

172

Consolidated cash flow statement

for the year ended 31 December 2023

Note

2023

2022

Reconciliation of loss to cash generated from operations:

Loss for the period

(105.2)

(351.7)

Adjustments:

Depreciation

21.0

25.2

Depreciation on right of use assets

95.2

82.3

Gain on disposal of leases

(1.7)

–

Gain on disposal of property plant and equipment

(2.6)

(1.6)

Impairment of goodwill and intangible assets

–

542.3

Impairment of property, plant and equipment

1.8

0.4

Impairment of joint ventures

–

2.0

Gain on disposal of investment in joint ventures

(6.2)

–

Amortisation of intangible assets

159.7

151.9

Share of post-tax pro

fit

from joint ventures

(42.8)

(30.4)

Gain on disposal of business

(33.0)

(514.5)

Net finance costs

100.2

127.9

Share based charges

19.6

20.7

Decrease in provisions and employee benefits

(91.0)

(123.1)

Dividends from joint ventures

15.6

30.1

Other exceptional items – non-cash impact

84.5

35.3

Tax charge

58.3

236.2

Changes in working capital (excluding effect of acquisition and divestment of subsidiaries)

Decrease/(increase) in inventories

1.5

(1.6)

Increase in receivables

(77.5)

(97.5)

Decrease in payables

(54.4)

(398.9)

Exchange movements

3.1

8.1

Cash generated from/(used in) operations

146.1

(256.9)

Tax paid

(97.7)

(103.9)

Net cash generated from /(used in) operating activities

48.4

(360.8)

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

173

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

174

Consolidated cash flow statement

continued

Note

2023

2022

Cash flows

from investing activities

Disposal of businesses (net of cash disposed and tax paid)

(22.5)

1,751.4

Proceeds from disposal of investment in joint ventures

15.9

–

Purchase of property plant and equipment

(18.8)

(27.6)

Proceeds from sale of property plant and equipment

8.2

7.1

Purchase of intangible assets

(126.4)

(109.2)

Interest received

1.1

4.5

Net cash (used in)/ generated from investing activities

(142.5)

1,626.2

Cash flows

from

financing activities

Repayment of short-term borrowings

(133.5)

(35.0)

Proceeds from short-term borrowings

–

88.0

Proceeds from long term borrowings

515.0

–

Repayment of long-term borrowings

(200.0)

(1,039.1)

Payment of lease liabilities

(113.3)

(121.6)

Proceeds from SIP shares

1.6

1.7

Interest paid

(81.7)

(98.1)

Dividends paid to non-controlling interests

(1.6)

(1.1)

Net cash used in financing activities

(13.5)

(1,205.2)

Net (decrease)/increase in cash and cash equivalents

(107.6)

60.2

Effect of exchange rate changes on cash and cash equivalents

4.9

(26.5)

Opening cash and cash equivalents

536.7

503.0

Closing cash and cash equivalents

434.0

536.7

Cash at bank and in hand at 31 December 2023 includes $127.7m (2022: $328.4m) that is part of the Group’s cash pooling

arrangements. For internal reporting and for the purposes of the calculation of interest by the bank, this amount is netted with

short-term overdrafts. However, in preparing these

financial statements, the Group is required to gross up both its cash and short-

term borrowings figures by this amount. Movement in short-term overdra

fts are presented as part of the cash

flows

from

financing

activities as the overdraft facilities form part of the Group’s

financing.

The proceeds from long-term borrowings of $515.0m re

flects the increased utilisation o

f the long-term revolving credit facility and

the new $200.0m term loan which was issued in December 2023. The new term loan of $200.0m led to the early repayment of the

UKEF loan.

Payment of lease liabilities includes the cash payments for the principal portion of lease payments of $94.6m (2022: $103.7m) and

for the interest portion of $18.7m (2022: $17.9m). The classi

fication o

f interest paid within

financing activities is in line with the

Group accounting policy.

The Group has elected to present a cash flow statement that includes an analysis o

f all cash

flows in total, including both

continuing and discontinued operations. Amounts related to the discontinued operation by operating, investing and financing

activities are disclosed in note 7.

Included in the disposal of businesses are proceeds received of $27.1m relating to the sale of Built Environment Consulting and

$17.5m on the Gulf of Mexico asset sale, offset by $65.0m of tax paid and $2.1m professional fees.

The notes on pages 175 to 244 are an integral part of these consolidated

financial statements.

for the year ended 31 December 2023

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

175

General information

John Wood Group PLC, its subsidiaries and joint ventures,

(‘the Group’) delivers comprehensive services to support its

customers across the complete lifecycle of their assets, from

concept to decommissioning, across a range of energy and

materials markets. Details of the Group’s activities during the

year are provided in the Strategic Report. John Wood Group

PLC is a public limited company, incorporated and domiciled in

the United Kingdom and listed on the London Stock Exchange.

Copies of the Group

financial statements are available

from

the Company’s registered of

fice at Sir Ian Wood House,

Hareness Road, Altens Industrial Estate, Aberdeen AB12 3LE.

Accounting Policies

Basis of preparation

These financial statements have been prepared in accordance

with UK-adopted international accounting standards. The

Group financial statements have been prepared on a going

concern basis under the historical cost convention as modified

by the revaluation of

financial assets and liabilities at

fair

value through the income statement. The financial statements

are presented in US dollars and all values are rounded to the

nearest $0.1m, unless otherwise stated.

Going concern

The directors have undertaken a rigorous assessment of going

concern and liquidity over a period of at least 12 months from

the date of approval of these

financial statements (the going

concern period), which includes financial

forecasts up to the end

of 2025 to re

flect severe, but plausible scenarios. The directors

have considered as part of this assessment the impact of the

events that happened post balance sheet date and up to the

date of issue of these

financial statements.

To satisfy themselves that the Group has adequate resources

for the going concern assessment period, the directors have

reviewed the Group’s existing debt levels, the forecast compliance

with debt covenants, and the Group’s ability to generate cash

from trading activities. As of 31 December 2023, the Group’s

principal debt facilities comprise a $1,200.0m revolving credit

facility maturing in October 2026; a $200.0m term loan which

matures in October 2026 and $352.5m of US private placement

debt repayable in various tranches between July 2024 and July

2031, with around 75% due after the end of 2025. The weighted

average maturity of the Group’s debt pro

file has been extended

as a result of a new term loan being put in place which replaced

an existing facility of the same value and that was due to

mature in September 2024. At 31 December 2023, the Group

had headroom of $843.1m under its principal debt facilities and a

further $59.8m of other undrawn borrowing facilities. The Group

also expects to have suf

ficient levels o

f headroom in the severe

but plausible downside scenarios modelled.

At 31 December 2023, the Group had net current liabilities of

$207.0m (2022: $235.0m).

The directors have considered a range of scenarios on the

Group’s future

financial per

formance and cash

flows. These

scenarios reflect our outlook

for the energy and materials

end markets. Energy includes oil and gas and the Group

forecasts growth in this area underpinned by increased

focus on energy security and decarbonisation of operations.

During 2023, for example, the Group secured a new long-

term strategic partnership around the management of UK

North Sea Operations and deployed the Group’s expertise

in decarbonisation, digitalisation and asset life extension to

enhance an international energy company’s global portfolio of

assets. Materials includes minerals, chemicals and life sciences

which are underpinned by growing populations and global net

zero ambitions.

The order book gives significant coverage over 2024 and 2025

revenues. Further, the order book is 86% reimbursable which

reflects the lower risk profile o

f the Group’s forecast cash

flows

over the going concern period.

The directors have also considered severe, but plausible,

downside scenarios which reflect material reductions in 2024

and 2025 revenue of 7% and 5% respectively and reductions

of 1% in gross margin percentage from the base, board

approved, scenario. The directors believe that the additional

reductions represent a severe, but plausible, downside case.

This could result from a worsening economic climate which

could lead to unexpected deferrals or cancellations of contracts

by our clients. In each of the scenarios modelled, the

financial

covenants were passed with significant

facility headroom

remaining available. The interest cover covenant has increased

levels of headroom after adjusting for the non-recurring

interest related to facilities repaid and cancelled within the

12-month period up to 31 December 2023. The directors included

the impact of the removal of the receivables

financing

facilities

(which are not committed) of $200m in the base scenario and

the impact of additional adverse movements in working capital

as additional, more severe, downside scenarios. The Group still

had suf

ficient headroom to meet its liabilities as they

fall due

with these additional sensitivities.

Consequently, the directors are confident that the Group and

company will have suf

ficient

funds to continue to meet its

liabilities as they fall due for at least 12 months from the date

of approval of the

financial statements and there

fore have

prepared the financial statements on a going concern basis.

Significant accounting policies

The Group’s significant accounting policies adopted in the

preparation of these

financial statements are set out below.

These policies have been consistently applied to all the years

presented.

Critical accounting judgements and estimates

The preparation of the

financial statements requires the

use of estimates and assumptions that affect the reported

amounts of assets and liabilities at the date of the

financial

statements and the reported amounts of revenue and expenses

during the year. These estimates and judgements are based

on management’s best knowledge of the amount, event or

actions and actual results ultimately may differ from those

estimates. Group management believe that the estimates and

assumptions listed below have a significant risk o

f resulting in

a material adjustment to the carrying amounts of assets and

liabilities.

(a)

Revenue recognition on fixed price and long-term

contracts (estimate)

The Group has a large number of

fixed price long-term

contracts which are accounted for in accordance with IFRS 15

and require estimates to be made for contract revenue.

Fixed

price contracts revenue from continuing operations amounted

to $1,195.3m in 2023 (2022: $1,179.8m), and is comprised of

several hundred relatively low value contracts which are ongoing

at any one point in time and these often span reporting periods

and include small short duration consultancy contracts. They

are all at varying stages of completion and carry their own

unique risks. Hence, with the exception of the Aegis contract,

which is described further in note 2, it is impracticable to

provide any meaningful disclosure on the key sensitivities that

would impact on revenue recognition, such as those outlined

below.

Notes to the financial statements

for the year ended 31 December 2023

John Wood Group PLC

Annual Report and Financial Statements 2023

176

Notes to the financial statements

continued

Uncertainties include the estimation of:

Forecast costs to complete the contract

At the end of the reporting period the Group is required to

estimate costs to complete on fixed price contracts based

on the work to be performed after the reporting date, which

may span more than one reporting period. This involves an

objective evaluation of project progress against the delivery

schedule, evaluation of the work to be performed and the

associated costs to fully deliver the contract to the customer

and contingencies. These factors are affected by a variety of

uncertainties that depend on the outcome of future events,

and so often need to be revised as events unfold, and therefore

it is not practically possible to present these sensitivities which

will be different across a large number of relatively low value

contracts. The estimates from these contracts, in aggregate,

could nevertheless have a possible material impact on revenue,

cost of sales, gross amounts due to customers and gross

amounts due from customers.

Recognition of revenue from variation orders (“VOs”)

As contracts progress management may deem that the

company is entitled to VOs increasing the contract price

under the existing contracts (variable considerations). In some

instances, changes to the scope or requirements of a project

equate to changing the contract in a way that entitles the

Company to additional consideration (contract modifications).

Where VOs are linked to variable consideration management

estimate the value of revenue to be recognised such that it is

considered highly probable that a significant reversal in the

amount of cumulative revenue recognised to date will not occur

when the uncertainty associated with the VO is subsequently

resolved. This assessment is reconsidered at each reporting

date. The assessment is based on discussions with the customer

and a range of factors, including contractual entitlement, prior

experience of the customer and of similar contracts with other

customers.

Where VOs are linked to contract modifications, management

recognise associated revenue when such modifications are

approved and when the company has an enforceable right

to payment. In cases where the price has not been agreed,

management estimate the value of revenue to be recognised

such that it is considered highly probable that a significant

reversal in the amount of cumulative revenue recognised

to date will not occur when the final price

for the contract

modification has been agreed. The Group has governance

processes in place, whereby unapproved variation orders in

excess of $5m require approval by senior management. As

at the year end, there were two unapproved variation orders

totalling $17m which were approved under this process.

Revenue recognised in 2023 and 2022 associated with

unapproved variation orders was immaterial.

On the Aegis contract, management deem that the Company is

entitled to variable consideration under the existing contractual

arrangements. Only the proportion of this deemed entitlement

that is assessed as highly probable is recognised as part of

the revenue calculation. The assessment of the proportion of

the deemed entitlement to VOs that is considered to be highly

probable is a judgement made by management in consultation

with internal and external experts. The amount of the

accumulated recognised VOs in relation to the Aegis contract is

material.

Liquidated damages (“LDs”)

LDs are designated damages (negative variable considerations)

that are paid by the defaulting party in the event that certain

contractual requirements are not met. Management make

an assessment of the value of LDs to be provided at the

reporting date such that it is considered highly probable that

a significant reversal in the amount o

f cumulative revenue

recognised will not occur when the uncertainty associated

with the LDs is subsequently resolved. This initial assessment

is reconsidered at each reporting date. The assessment is

based on a best estimate of the monetary amount of LDs

payable which involves a number of management assumptions

and judgements including discussions with the customer,

contractual entitlement, prior experience of the customer, prior

experience of similar contracts with other customers and other

forms of documentary evidence. Other than the Aegis contract,

there were no other individually material contractual liquidated

damages as at the year ended 31 December 2023. On Aegis,

given the delay in achieving completion, there is potential under

the contract for LDs to be material, although we believe that

we have strong arguments for extension of time and dispute

how the damages are being applied. As at 31 December 2023

management has assessed the extent to which LDs are likely to

apply and these have been deducted from cumulative revenue

recognised. Refer to note 2 for further details of this contract.

Estimates are updated regularly, and significant changes are

highlighted through established internal review procedures. The

contract reviews focus on the timing and recognition of revenue

including income from incentive payments, scope variations and

claims.

See note 2 for further details.

(b)

Impairment of goodwill (estimate)

The Group carries out impairment reviews whenever events

or changes in circumstance indicate that the carrying value of

goodwill may not be recoverable. In addition, the Group carries

out an annual impairment review. Management expectations

are formed in line with performance to date and experience, as

well as available external market data.

An impairment loss is recognised when the recoverable amount

of goodwill is less than the carrying amount. The impairment

tests are carried out by CGU (‘Cash Generating Unit’) and

reflect the latest Group budgets and

forecasts as approved

by the Board. The budgets and forecasts are based on various

assumptions relating to the Group’s businesses including

assumptions relating to market outlook, resource utilisation,

contract awards and contract margins. The outlook for the

Group is discussed in the Chief Executive’s Review. The discount

rate, revenue CAGR and long term growth rates are critical

assumptions. Pre-tax discount rates of between 10.8% and

12.3% have been used to discount the CGU cash flows and a

terminal value is applied using long term growth rates of 2.4%.

The revenue CAGR assumption ranges from 8.3% to 13.4%. A

sensitivity analysis has been performed allowing for possible

changes to the key assumptions used in the impairment model.

See note 10 for further details.

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

177

(c)

Provisions and contingent liabilities (judgement

and estimate)

The Group records provisions where it has a present obligation

(legal or constructive) as a result of a past event, it is probable

that an outflow o

f resources will be required to settle the

obligation and a reliable estimate of the obligation can be

made. Where the outcome is less than probable, but more than

remote, or a reliable estimate cannot be made, no provision is

recorded but a contingent liability is disclosed in the financial

statements, if material. The recording of provisions is an area

which requires the exercise of management judgement relating

to the nature, timing and probability of the liability and typically

the Group’s balance sheet includes contract provisions and

provisions for pending legal issues.

As a result of the acquisition of Amec Foster Wheeler (“AFW”)

in 2017, the Group has acquired a significant asbestos related

liability. Some of AFW’s legacy US and UK subsidiaries are

defendants in asbestos related lawsuits and there are out of

court informal claims pending in both jurisdictions. Plaintiffs

claim damages for personal injury alleged to have arisen

from exposure to the use of asbestos in connection with work

allegedly performed by subsidiary companies in the 1970s and

earlier. The provision for asbestos liabilities is the Group’s best

estimate of the obligation required to settle claims up until

2050. Group policy is to record annual changes to the underlying

gross estimates where they move by more than 5%.

The critical assumptions applied in determining the asbestos

provision include: indemnity settlement amount, forecasted

number of new claims, estimated defence costs and the

discount rate. The Group uses a blended yield curve rate to

discount its asbestos liabilities. This rate is matched to the

expected duration of the liabilities and the rate used at the end

of December 2023 is 3.64%.

The Group’s subsidiaries have been effective in managing the

asbestos litigation, in part, because the Group has access

to historical project documents and other business records

going back more than 50 years, allowing it to defend itself by

determining if the claimants were present at the location of the

alleged asbestos exposure and, if so, the timing and extent of

their presence.

The Group has recorded a $29.4m exceptional charge with

respect to the asbestos liability in the period and is principally as

a result of an updated actuarial review which updated the best

estimate for recent claims experience and latest projections.

Further details of the asbestos liabilities are provided in note 21

including a sensitivity analysis showing the impact of changes

to the key assumptions.

(d)

Retirement benefit schemes (estimate)

The value of the Group’s retirement bene

fit schemes’ surplus/

deficit is determined on an actuarial basis using several

assumptions. Changes in these assumptions will impact the

carrying value of the surplus/de

ficit. A sensitivity analysis

showing the impact of changes to these assumptions is

provided in note 33. The principal assumptions that impact

the carrying value are the discount rate, the inflation rate

and life expectancy. The Group determines the appropriate

assumptions to be used in the actuarial valuations at the end of

each financial year

following consultation with the retirement

benefit schemes’ actuaries. In determining the discount rate,

consideration is given to the interest rates of high-quality

corporate bonds in the currency in which the benefits will be

paid and that have terms to maturity similar to those of the

related retirement benefit obligation. The inflation rate is

derived from the yield curve used in deriving the discount rate

and adjusted by an agreed risk premium.

Assumptions regarding future mortality are based on published

statistics and the latest available mortality tables. The Group, in

conjunction with the schemes’ actuaries, continues to monitor

the impact of the Covid-19 pandemic on mortality data. The

tax rate applied to the surplus of the UK scheme is 25%, on

the basis that there is no expectation that the manner of any

future recovery would be in the form of a refund, which would

be taxed at 35%. Following the Authorised Surplus Payments

Charge (Variation of Rate) Order 2024, the tax rate of 35% will

be reduced to 25% from 6 April 2024. As at the balance sheet

date, there are no plans to request a refund and other avenues

are being explored to use the surplus. The technical surplus is

not as large as the IAS 19 surplus and so there is a lower limit to

what could be accessed in any event.

The majority of pension scheme assets have quoted prices in

active markets. Scheme assets are revalued at least once per

annum to reflect their

fair value. Fair value is based on market

price information. If this is not available, the most recent

transaction price, revenue or earnings-based valuations using

unobservable inputs may be used for level 3 investments in the

fair value hierarchy.

Further details of the assumptions and measurements outlined

can be seen in note 33.

Basis of consolidation

The Group financial statements are the result o

f the

consolidation of the

financial statements o

f the Group’s

subsidiary undertakings from the date of acquisition or up

until the date of divestment as appropriate. Subsidiaries are

entities controlled by the Group. The Group ‘controls’ an entity

when it is exposed to, or has rights to, variable returns from

its involvement with the entity and has the ability to affect

those returns through its power over the entity. All Group

companies apply the Group’s accounting policies and prepare

financial statements to 31 December. Intra-group balances and

transactions, and any unrealised income and expenses arising

from intra-group transactions, are eliminated.

Joint ventures and joint operations

A joint venture is a type of joint arrangement where the

parties to the arrangement share rights to its net assets. A

joint arrangement is an arrangement of which two or more

parties have joint control. Joint control is the contractually

agreed arrangement which exists only when decisions about

the relevant activities require unanimous consent of the parties

sharing control. The considerations made in determining joint

control are similar to those necessary to determine control over

subsidiaries.

The Group’s interests in joint ventures are accounted for using

equity accounting. Under the equity method, the investment

in a joint venture is initially recognised at cost. The carrying

amount of the investment is adjusted to recognise changes in

the Group’s share of net assets of the joint venture from the

acquisition date. The results of the joint ventures are included

in the consolidated financial statements

from the date the

joint control commences until the date that it ceases. The

Group includes its share of joint venture pro

fit on the line ‘Share

of post-tax pro

fit

from joint ventures’ in the Group income

statement and its share of joint venture net assets in the

‘investment in joint ventures’ line in the Group balance sheet.

A joint operation is a joint arrangement whereby the parties

that have joint control of the arrangement have rights to

the assets and obligations for the liabilities relating to the

arrangement. The Group accounts for joint operations by

recognising the appropriate proportional share of revenue,

expenses, assets and liabilities.

John Wood Group PLC

Annual Report and Financial Statements 2023

178

Notes to the financial statements

continued

Presentational currency

The Group’s earnings stream is primarily US dollars and the

Group therefore uses the US dollar as its presentational

currency.

The following exchange rates have been used in the preparation

of these

financial statements:


	2023	2022
Average rate £1 = $	1.2425	1.2324
Closing rate £1 = $	1.2749	1.2029

Foreign currencies

In each individual entity, transactions in foreign currencies are

translated into the relevant functional currency at the exchange

rates ruling at the date of the transaction. Monetary assets and

liabilities denominated in foreign currencies are retranslated

at the exchange rates ruling at the balance sheet date. Any

exchange differences are taken to the income statement.

Income statements of entities whose functional currency is

not the US dollar are translated into US dollars at average

rates of exchange for the period and assets and liabilities are

translated into US dollars at the rates of exchange ruling at the

balance sheet date. Exchange differences arising on translation

of net assets in such entities held at the beginning of the year,

together with those differences resulting from the restatement

of pro

fits and losses

from average to year end rates, are taken

to the currency translation reserve.

The assets and liabilities of foreign operations, including

goodwill and fair value adjustments arising on the acquisition

of a foreign entity are treated as assets and liabilities of the

foreign entity and translated at the exchange rate ruling at the

balance sheet date with any exchange differences taken to the

currency translation reserve.

Foreign currency differences are recognised in Other

Comprehensive Income (“OCI”) and accumulated in the

translation reserve, except to the extent that the translation

difference is allocated to Non-Controlling Interests (“NCI”).

When a foreign operation is disposed of in its entirety or

partially such that control, significant influence or joint control

is lost, the cumulative amount in the translation reserve related

to the foreign operation is reclassi

fied to profit or loss as part

of the gain or loss on disposal. If the Group disposes of part of

its interest in a subsidiary but retains control, then the relevant

proportion of the cumulative amount is reattributed to NCI.

When the Group disposes of only part of an associate or joint

venture while retaining significant influence or joint control, the

relevant proportion of the cumulative amount is reclassi

fied

to profit or loss. The directors consider it appropriate to record

sterling denominated equity share capital in the financial

statements of John Wood Group PLC at the exchange rate

ruling on the date it was raised.

Revenue recognition

Revenue comprises the fair value of the consideration speci

fied

in a contract with a customer and is stated net of sales taxes

(such as VAT) and discounts. The Group recognises revenue

when it transfers control over a good or service to a customer.

With regard to cost reimbursable projects and fixed price

contracts, further detail is provided below about the nature

and timing of the satisfaction of performance obligations in

contracts with customers, including payment terms and the

related revenue recognition policies.

Cost reimbursable projects

Revenue is recognised over time as the services are provided

based on contractual rates per man hour in respect of multi-

year service contracts. The amount of variable revenue related

to the achievement of key performance indicators (KPIs)

is estimated at the start of the contract, but any revenue

recognised is constrained to the extent that it is highly probable

there will not be a significant reversal in

future periods.

Fixed price contacts

Revenue on fixed price contracts

for services, construction

contracts and fixed price long-term service agreements is

recognised over time according to the stage of completion

reached in the contract by measuring the proportion of costs

incurred for work performed to total estimated costs. Margin

is only recognised when the outcome of the contract can be

measured reliably.

Contract modifications are generally not distinct

from those in

the original contract due to the significant integration service

provided in the context of the contract and are priced according

to the same standalone selling prices of the original contract.

Therefore, modi

fications are accounted

for as a modi

fication

of the existing contract and performance obligations with a

cumulative catch-up adjustment recognised within revenue.

Management assess the value of revenue to be recognised

in respect of variation orders based on the considerations

described in the critical accounting judgements and estimates

section above in the paragraph regarding recognition of

revenue from variation orders (“VOs”).

A claim is an amount that the contractor seeks to collect from

the customer as reimbursement for costs whose inclusion in

the contract price is disputed, and may arise from, for example,

delays caused by the customer, errors in specification or design

and disputed variations in contract work. Claims are also

usually variable considerations and are included in contract

revenue only to the extent that it is highly probable that a

significant reversal o

f revenue will not occur. Appropriate

legal advice is taken in advance of any material revenue being

recognised in respect of claims.

The related contract costs are recognised in the income

statement when incurred. When it is probable that total

contract costs will exceed total contract revenue, the expected

loss is recognised immediately.

The Group’s payment terms state that all invoices are generally

payable within 30 days.

Details of the services provided by the Group are provided under

the ‘Segmental Reporting’ heading.

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

179

Contract balances

A contract asset includes gross amounts due from customers

which reflects work completed

for the client which has

not yet been billed at the reporting date. Gross amounts

due from customers re

flects revenue recognised on the

contract according to the stage of completion, less any

progress payments received, and amounts are transferred to

trade receivables when the right to consideration becomes

unconditional. Contract assets are adjusted for any expected

credit loss allowance considering the probability of default by

the counterparty.

Contract liabilities include gross amounts due to customers

and primarily relate to advance consideration received from

customers, for which revenue is recognised over time.

Exceptional items

Exceptional items are those significant items which are

separately disclosed by virtue of their size or incidence to enable

a full understanding of the Group’s

financial per

formance.

Transactions which may give rise to material exceptional

items include gains and losses on divestment of businesses;

write downs or impairments of assets including goodwill;

restructuring and redundancy costs or provisions; litigation or

regulatory settlements; asbestos related income or charges;

tax provisions or payments; provisions for onerous contracts

and acquisition and divestment costs. The tax impact on these

transactions is shown separately in the exceptional items note

to the financial statements (note 5).

Restructuring and redundancy costs or provisions will

include those costs associated with major Board approved

programmes which will deliver longer term benefits to the

Group. If this involves closure of a material of

fice, discrete

operating unit or service line the exceptional cost will include

redundancy and severance of impacted employees, onerous

contract provisions, the write off any unrecoverable net assets

and any reversals in future periods. Provisions for restructuring

will be recognised in line with the policy on Provisions below.

Finance expense/income

Interest income and expense is recorded in the income

statement in the period to which it relates. Arrangement

fees and expenses in respect of the Group’s debt facilities are

amortised over the period which the Group expects the facility

to be in place. Interest relating to the unwinding of discount on

deferred and contingent consideration, IFRS 16 lease liabilities

and asbestos liabilities is included in finance expense. Interest

expense and interest income on scheme assets relating to the

Group’s retirement benefit schemes are also included in finance

income/expense. See note 3 for further details.

Interest income or expense is recognised using the effective

interest method. The ‘effective interest rate’ is the rate that

exactly discounts estimated future cash payments or receipts

through the expected life of the

financial instrument to:

• The gross carrying amount of the

financial asset; or

• The amortised cost of the

financial liability.

Dividends payable

Dividends to the Group’s shareholders are recognised as a

liability in the period in which the dividends are approved by

shareholders. Interim dividends are recognised when paid. See

note 8 for further details.

Business combinations

The Group accounts for business combinations using the

acquisition method of accounting when control is transferred

to the Group. The consideration transferred is measured at fair

value, as are the identifiable net assets acquired. Any goodwill

that arises is tested annually for impairment. Intangible assets

arising on business combinations are tested for impairment

when indicators of impairment exist. Acquisition costs are

expensed and included in administrative expenses in the income

statement.

Goodwill

Goodwill represents the excess of the cost of an acquisition over

the fair value of the net assets acquired. Goodwill is carried

at cost less accumulated impairment losses. Goodwill is not

amortised.

Intangible assets

Intangible assets are carried at cost less accumulated

amortisation. Intangible assets are recognised if it is probable

that there will be future economic bene

fits attributable to

the asset, the cost of the asset can be measured reliably, the

asset is separately identifiable and there is control over the use

of the asset. Where the Group acquires a business, intangible

assets on acquisition are identified and evaluated to determine

the carrying value on the acquisition balance sheet. Intangible

assets are amortised over their estimated useful lives on a

straight-line basis, as follows:

Software	3-5 years
Development costs and licenses	3-5 years
Intangible assets on acquisition
Customer contracts and relationships	5-13 years
Order backlog	2-5 years
Brands	16 years

Property plant and equipment

Property plant and equipment (PP&E) is stated at cost less

accumulated depreciation and impairment. No depreciation is

charged with respect to freehold land and assets in the course

of construction.

Depreciation is calculated using the straight-line method over

the following estimated useful lives of the assets:

Freehold buildings	25-50 years
Leasehold improvements	period of lease
Plant and equipment	3-10 years

When estimating the useful life of an asset group, the principal

factors the Group takes into account are the durability of the

assets, the intensity at which the assets are expected to be

used and the expected rate of technological developments.

Asset lives and residual values are assessed at each balance

sheet date.

Refer to the Leases policy for the Group’s policy with respect to

the right of use assets.

John Wood Group PLC

Annual Report and Financial Statements 2023

180

Notes to the financial statements

continued

Impairment

The Group performs impairment reviews in respect of PP&E,

investment in joint ventures and intangible assets whenever

events or changes in circumstance indicate that the carrying

amount may not be recoverable. In addition, the Group carries

out impairment reviews in respect of goodwill, at least annually.

An impairment loss is recognised when the recoverable amount

of an asset, which is the higher of the asset’s fair value less

costs to sell and its value in use, is less than its carrying amount.

Impairment losses are recognised in profit or loss. They are

allocated to first reduce the carrying amount o

f any goodwill

allocated to the CGU, and then to reduce the carrying amounts

of the other assets in the CGU on a pro-rata basis.

For the purposes of impairment testing, assets are grouped

together into the smallest group of assets that generates cash

inflows

from continuing use that are largely independent of the

cash inflows o

f other assets or cash generating units (“CGUs”).

Goodwill arising from a business combination is allocated to

the appropriate CGU or groups of CGUs that are expected to

benefit

from the synergies of the combination. The CGUs are

aligned to the structure the Group uses to manage its business.

Cash flows are discounted in determining the value in use.

See note 10 for further details of goodwill impairment

testing and note 13 for details of impairment of investment

in joint ventures.

Cash and cash equivalents

Cash and cash equivalents include cash in hand and other

short-term bank deposits with original maturities of three

months or less. Bank overdrafts are included within borrowings

in current liabilities. The Group presents balances that are part

of a pooling arrangement with no right of offset on a gross

basis in both cash and short-term borrowings.

Trade receivables

Trade receivables are recognised initially at fair value and

subsequently measured at amortised cost using the effective

interest method, less provision for impairment. Trade

receivables are typically classified as Held to Collect.

The Group recognises loss allowances for Expected Credit

Losses (‘ECLs’) on trade receivables and gross amounts due

from customers, measured at an amount equal to lifetime

ECLs. ECLs are a probability-weighted estimate of credit

losses. Credit losses are measured as the present value of all

cash shortfalls (i.e. the difference between the cash

flows due

to the entity in accordance with the contract and the cash flows

that the Group expects to receive). ECLs are discounted at the

effective interest rate of the

financial asset.

At each reporting date, the Group assesses whether financial

assets carried at amortised cost are credit-impaired. A financial

asset is ‘credit-impaired’ when one or more events that have

a detrimental impact on the estimated future cash

flows o

the financial asset have occurred. Evidence that a financial

asset is credit-impaired includes a customer being in significant

financial di

ficulty or a breach o

f contract such as a default.

The gross carrying amount of a

financial asset is written o

when the Group has no reasonable expectation of recovering a

financial asset in its entirety or a portion thereo

f. For individual

customers, the Group individually makes an assessment with

respect to the timing and amount of write-off based on

whether there is a reasonable expectation of recovery.

The Group has non-recourse financing arrangements in which

funds are received in relation to trade receivable balances

before the due date for payment. Trade receivables are

derecognised on receipt of the payment from the bank. See

note 15 for further details.

Asbestos related receivables

Asbestos related receivables represents management’s best

estimate of insurance recoveries relating to liabilities for

pending and estimated future asbestos claims. They are only

recognised when it is virtually certain that the claim will be paid.

Asbestos related assets under executed settlement agreements

with insurers due in the next 12 months are recorded within

Trade and other receivables and beyond 12 months are recorded

within Long term receivables. The Group’s asbestos related

assets have been discounted using an appropriate rate of

interest.

Trade payables

Trade payables are recognised initially at fair value and

subsequently measured at amortised cost.

Borrowings

Borrowings are recognised initially at fair value, net of

transaction costs incurred. Borrowings are subsequently stated

at amortised cost using the effective interest method.

Taxation

Tax provisions are based on management’s interpretation

of country speci

fic tax law and the likelihood o

f settlement.

This involves a significant amount o

f judgement as tax

legislation can be complex and open to different interpretation.

Management uses in-house tax experts, professional

firms

and previous experience when assessing tax risks. When actual

liabilities differ from the provisions, adjustments are made

which can have a material impact on the Group’s tax charge for

the year.

Deferred tax asset recognition is based on two factors. Firstly,

deferred tax liabilities in the same jurisdiction as assets that

are legally capable of being offset and the timing of the

reversal of the asset and liability would enable the deduction

from the asset to be utilised against the taxable income from

the liability. Secondly, forecast pro

fits support the recognition

of deferred tax assets not otherwise supported by deferred

tax liabilities. Management uses in-house tax experts to

determine the forecast period to support recognition, this is

considered by jurisdiction or entity dependent on the tax laws

of the jurisdiction. If actual results differ from the forecasts

the impact of not being able to utilise the expected amount of

deferred tax assets can have a material impact on the Group’s

tax charge for the year.

See note 6 and 23 for details.

The tax charge represents the sum of tax currently payable

and deferred tax. Tax currently payable is based on the taxable

profit

for the year. Taxable pro

fit di

ffers from the pro

fit

reported in the income statement due to items that are not

taxable or deductible in any period and also due to items that

are taxable or deductible in a different period. The Group’s

liability for current tax is calculated using tax rates enacted or

substantively enacted at the balance sheet date.

Tax is recognised in the income statement except to the extent

that it relates to items recognised in other comprehensive

income or equity, in which case it is recognised in other

comprehensive income or equity as appropriate.

A current tax provision is recognised when the Group has a

present obligation as a result of a past event, it is probable

that the Group will be required to settle that obligation and a

reliable estimate can be made of the amount of the obligation.

In line with IFRIC 23, depending on the circumstances, the

provision is either the single most likely outcome, or a probability

weighted average of all potential outcomes.

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

181

The provision incorporates tax and penalties where appropriate.

Separate provisions for interest are also recorded. Interest in

respect of the tax provisions is not included in the tax charge,

but disclosed within profit be

fore tax.

Deferred tax is provided, using the full liability method, on

temporary differences arising between the tax bases of assets

and liabilities and their carrying amounts in the consolidated

financial statements. The principal temporary di

fferences arise

from depreciation on PP&E, tax losses carried forward and, in

relation to acquisitions, the difference between the fair values

of the net assets acquired and their tax base. Tax rates enacted,

or substantively enacted, at the balance sheet date are used to

determine deferred tax.

Deferred tax liabilities are recognised for taxable temporary

differences arising on investments in subsidiaries and joint

ventures, except where the Group is able to control the

reversal of the temporary difference and it is probable that the

temporary difference will not reverse in the foreseeable future.

Tax assets and liabilities are offset when they relate to income

taxes levied by the same taxation authority and it is intended

that they will be settled on a net basis.

The Group has applied the exception in the Amendments to IAS

12 issued in May 2023 and has neither recognised nor disclosed

information about deferred tax assets or liabilities relating to

Pillar Two income taxes.

Accounting for derivative

financial instruments and

hedging activities

Derivatives are initially recognised at fair value on the date the

contract is entered into and are subsequently re-measured

at fair value. Where hedging is to be undertaken, the Group

documents the relationship between the hedging instrument

and the hedged item at the inception of the transaction,

as well as the risk management objective and strategy for

undertaking the hedge transaction. The Group also documents

its assessment, both at hedge inception and on an ongoing

basis, of whether the derivatives that are used in hedging

transactions are highly effective in offsetting changes in fair

values or cash flows o

f the hedged items.

Fair value measurement

‘Fair value’ is the price that would be received to sell an asset

or paid to transfer a liability in an orderly transaction between

market participants at the measurement date in the principal

or, in its absence, the most advantageous market to which

the Group has access at that date. The fair value of a liability

reflects its non-per

formance risk. A number of the Group’s

accounting policies and disclosures require the measurement

of fair values, for both

financial and non-financial assets and

liabilities.

When one is available, the Group measures the fair value of

an instrument using the quoted price in an active market for

that instrument. If there is no quoted price in an active market,

then the Group uses valuation techniques that maximise

the use of relevant observable outputs and minimise the use

of unobservable outputs. The chosen valuation technique

incorporates all of the factors that market participants would

take into account in pricing a transaction.

The fair value of interest rate swaps is calculated as the present

value of their estimated future cash

flows. The

fair value

of forward foreign exchange contracts is determined using

forward foreign exchange market rates at the balance sheet

date. The fair values of all derivative

financial instruments

are verified by comparison to valuations provided by financial

institutions.

The carrying values of trade receivables and payables

approximate to their fair values.

The fair value of

financial liabilities is estimated by discounting

the future contractual cash

flows at the current market

interest rate that is available to the Group for similar

financial

instruments.

Leases

At inception of a contract, the Group assesses whether a

contract is, or contains, a lease. A contract is, or contains,

a lease if the contract conveys the right to control or use

an identified asset

for a period of time in exchange for

consideration. To assess whether a contract conveys the right

to control the use of an asset, the Group uses the de

finition o

f a

lease in IFRS 16.

The Group recognises a right of use asset and a lease liability

at the lease commencement date. The right of use asset is

initially measured at cost, and subsequently at cost less any

accumulated depreciation and impairment losses and adjusted

for certain remeasurements of the lease liability.

The Group leases real estate, including land, buildings and

warehouses, machinery/equipment, vehicles and IT equipment.

The right of use assets generate cash

flows as part o

f the cash

generating units disclosed in note 10. The majority of the lease

liability relates to real estate with leases generally entered

into for

fixed periods o

f up to

five years, unless o

f strategic

importance to the Group. Some leases have extension options

as described below. Lease terms are negotiated on an individual

basis and contain a wide range of terms and conditions. The

lease agreements do not impose any covenants other than

the security interests in the leased assets that are held by the

lessor. Leased assets are not used as security for borrowing

purposes.

The right of use asset is subsequently depreciated using the

straight-line method from the commencement date to the

end of the lease term. The right of use asset is periodically

reduced by impairment losses, if any, and adjusted for certain

remeasurements of the lease liability.

The lease liability is initially measured at the present value of

the lease payments that are not paid at the commencement

date, discounted using the Group’s incremental borrowing rate

(“IBR”) and is subsequently increased by the interest cost on

the lease liability and reduced by repayments. It is remeasured

when there is a change in future lease payments arising from

a change in an index or rate, a change in the assessment

of whether an extension option is reasonably certain to be

exercised or a termination option is reasonably certain not to be

exercised.

The lease payments are discounted using the interest rate

implicit in the lease. If that rate cannot be readily determined,

which is generally the case for leases in the Group, the Group’s

IBR is used. The IBR is the rate that the individual lessee would

have to pay to borrow the funds necessary to obtain an asset

of similar value to the right of use asset in a similar economic

environment with similar terms, security and conditions.

The Group has applied judgement to determine the lease term

for some lease contracts in which it is a lessee that includes

renewal options. The assessment of whether the Group is

reasonably certain to exercise such options impacts the lease

term, which may affect the amount of lease liabilities and right

of use assets recognised.

John Wood Group PLC

Annual Report and Financial Statements 2023

182

Notes to the financial statements

continued

The Group applies the practical expedient for short-term leases

in which a lessee is permitted to make an accounting policy

election not to recognise lease assets and lease liabilities for

leases with a term of 12 months or less and do not include an

option to purchase the underlying asset. Lease costs of short-

term leases are recognised on a straight-line basis over the

term of the lease term and disclosed within the consolidated

financial statements. The Group believes short-term lease

commitments are not materially different than the short-term

lease cost for the period.

Retirement benefit scheme surplus/deficit

The Group operates a number of de

fined benefit and defined

contribution pension schemes. The surplus or deficit recognised

in respect of the de

fined benefit schemes represents the

difference between the present value of the de

fined benefit

obligations and the fair value of the scheme assets. The assets

of these schemes are held in separate trustee administered

funds. The schemes are largely closed to future accrual.

The defined benefit schemes’ assets are measured using

fair

values. Pension scheme liabilities are measured annually by

an independent actuary using the projected unit method and

discounted at the current rate of return on a high-quality

corporate bond of equivalent term and currency to the liability.

The increase in the present value of the liabilities of the Group’s

defined benefit schemes expected to arise

from employee

service in the period is charged to operating profit. The interest

income on scheme assets and the increase during the period

in the present value of the scheme’s liabilities arising from the

passage of time are netted and included in

finance income/

expense. Re-measurement gains and losses are recognised in

the statement of comprehensive income in full in the period in

which they occur. The defined benefit schemes surplus or deficit

is recognised in full and presented on the face of the Group

balance sheet.

Group management consider it appropriate to recognise the

IAS 19 surplus in the Wood Pension Plan as the rules governing

the scheme provide an unconditional right to a refund assuming

the gradual settlement of the scheme’s liabilities over time until

there are no members left, as per IFRIC 14.11 (b). On a winding

up scenario, any surplus would be returned to the Group.

The Group’s contributions to defined contribution schemes are

charged to the income statement in the period to which the

contributions relate.

The Group operates a Supplemental Executive Retirement Plan

(SERP) pension arrangement in the US for certain employees.

Contributions are paid into a separate investment vehicle and

invested in a portfolio of US funds that are recognised by the

Group in other investments with a corresponding liability in

other non-current liabilities. Investments are carried at fair

value. The fair value of listed equity investments and mutual

funds is based on quoted market prices and so the fair value

measurement can be categorised in Level 1 of the fair value

hierarchy.

Provisions

Provisions are recognised where the Group is deemed to have

a legal or constructive obligation, it is probable that a transfer

of economic bene

fits will be required to settle the obligation,

and a reliable estimate of the obligation can be made.

Where

amounts provided are payable after more than one year the

estimated liability is discounted using an appropriate rate of

interest.

The Group has taken internal and external advice in considering

known and reasonably likely legal claims made by or against the

Group. It carefully assesses the likelihood of success of a claim

or action. Appropriate provisions are made for legal claims

or actions against the Group on the basis of likely outcome,

but no provisions are made for those which, in the view of the

directors, are less than probable or for which no amount can be

reliably measured.

See note 22 for further details.

Where the outcome is less than probable, but more than

remote or a reliable estimate cannot be made, no provision is

recorded but a contingent liability is disclosed in the financial

statements, if material.

Share based charges relating to employee share

schemes

The Group has recorded share based charges in relation to a

number of employee share schemes.

Charges are recorded in the income statement as an employee

benefit expense

for the fair value of share options (as at the

grant date) expected to be exercised under the Executive

Share Option Schemes (‘ESOS’). Amounts are accrued over

the vesting period with the corresponding credit recorded in

retained earnings.

Awards are allocated under the Group’s Long Term Plan (‘LTP’)

or the new Discretionary Share Plan (‘DSP’) which are the

incentive plans in place for executive directors and certain senior

executives. The charge for awards granted under the LTP/DSP

are based on the fair value of those awards at the grant date,

spread over the vesting period. The corresponding credit is

recorded in retained earnings. For awards that have a market

related performance measure, the fair value of the market

related element is calculated using a Monte Carlo simulation

model.

Employees may also be granted non-performance awards

either in the form of conditional share awards or share options.

These awards typically have a three year vesting period.

The Group has an Employee Share Plan (‘ESP’) under which

employees contribute regular monthly amounts of up to a

maximum of 10% of their gross salary which are used to

purchase shares over a one year period. At the end of the

year the participating employees are awarded one free share

for every two shares purchased providing they remain in

employment for a further year. A charge is calculated for the

award of free shares and accrued over the vesting period with

the corresponding credit taken to retained earnings.

Under the plan the Group also has a UK Share Incentive Plan

(‘SIP’), which is recognised by HM Revenue and Customs,

employees contribute regular monthly amounts of up to £150

per month to purchase shares. The participating employees

are awarded one free share for every two purchased, provided

that they hold the purchased shares for 3 years and remain in

employment.

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

183

Share capital

John Wood Group PLC has one class of ordinary shares and

these are classified as equity. Dividends on ordinary shares are

not recognised as a liability or charged to equity until they have

been approved by shareholders.

The Group is deemed to have control of the assets, liabilities,

income and costs of its employee share trusts, therefore they

have been consolidated in the financial statements o

f the

Group. Shares acquired by and disposed of by the employee

share trusts are recorded at cost. The cost of shares held by the

employee share trusts is deducted from equity.

Merger reserve

Where an acquisition qualifies

for merger relief under Section

612 of the Companies Act 2006, the premium arising on the

issue of shares to fund the acquisition is credited to a merger

reserve. See note 28 for further information.

Discontinued operations

The Group classified its Built Environment Consulting business

as a discontinued operation for the reporting period ending 31

December 2022. A discontinued operation is a component of

the Group’s business, the operations and cash flows o

f which

can be clearly distinguished from the rest of the Group and

which:

• represents a separate major line of business or geographic

area of operations;

• is part of a single co-ordinated plan to dispose of a separate

major line of business or geographic area of operations; or

• is a subsidiary acquired exclusively with a view to resale.

Classification as a discontinued operation occurs at the

earlier of disposal or when the operation meets criteria to be

classified as held

for sale. When an operation is classi

fied as

a discontinued operation, the comparative income statement

and statement of comprehensive income are presented as

if the operation had been discontinued from the start of the

comparative period. Classification as held

for sale was from 1

January 2022 and in September 2022, the sale of this business

was completed. Details are outlined in note 7.

Segmental reporting

The Group has determined that its operating segments are

based on management reports reviewed by the Chief Operating

Decision Maker (‘CODM’), the Group’s Chief Executive. Our

financial reporting segments reflect our current operating

model which consists of Projects, Operations, Consulting and

Investment Services (“IVS”). Projects is focused on providing

front-end engineering services, procurement and project

management. Our Operations segment focuses on improving

operational ef

ficiency by providing maintenance, modification

and operation services. Consulting is a multi-sector specialist

technical consultancy division providing innovative thinking

needed to maximise value at every stage of the asset life cycle.

Investment Services manages a range of legacy or non-core

businesses and investments with a view to generating value via

remediation and restructuring.

The comparative information has been re-presented due to the

reclassification o

f Built Environment Consulting Saudi Arabia

from discontinued into continuing operations. This relates to the

sale of a subsidiary, previously classi

fied as held

for sale, which

did not complete during 2023 and will now be retained by the

Group.

The Chief Executive measures the operating performance

of these segments using ’Adjusted EBITDA’ (Earnings before

interest, tax, depreciation and amortisation). Operating

segments are reported in a manner consistent with the internal

management reports provided to the Chief Executive who is

responsible for allocating resources and assessing performance

of the operating segments.

Assets and liabilities held for sale

Disposal groups are classified as assets and liabilities held

for

sale if it is highly probable that they will be recovered primarily

through sale rather than continuing use. Disposal groups are

measured at the lower of carrying value and fair value less costs

to sell and their assets and liabilities are presented separately

from other assets and liabilities on the balance sheet.

Research and development government credits

The Group claims research and development government

credits predominantly in the UK, US, Canada and Australia.

These credits are similar in nature to grants and are offset

against the related expenditure category in the income

statement. The credits are recognised when there is reasonable

assurance that they will be received, which in some cases can be

some time after the original expense is incurred.

Government grants

The Group recognises a government grant when it has

reasonable assurance that it will comply with the relevant

conditions and that the grant will be received. This may be

a judgemental matter, particularly when governments are

introducing new programmes that may require new legislation,

or for which there is little established practice for assessing

whether the conditions to receive a grant are met. If the

conditions are met, then the Group recognises government

grants as a credit in profit or loss in line with its recognition o

the expenses that the grants are intended to compensate.

The Disclosure of impact of new and future accounting

standards

Standards issued but not yet effective

The Group is required to comply with the requirements of IFRS

Insurance Contracts

for reporting periods beginning on or

after 1 January 2023. The new accounting standard sets out

the requirements that the Group should apply in reporting

information about insurance contracts it issues and reinsurance

contracts it holds. The Group has undertaken an assessment

of its insurance contracts including those held under its captive

insurance company, Garlan Insurance Limited. The impact of

the accounting standard does not have any material impact on

the Group financial statements.

The Group has early adopted the amendments to IAS 1 –

Classification o

f Liabilities as Current or Non-current and

Non-current Liabilities with Covenants

which are required to be

effective from 1 January 2024. The impact of the amendments

does not have any material impact on the Group financial

statements.

Amendments to other existing standards do not have a

material impact on the financial statements.

John Wood Group PLC

Annual Report and Financial Statements 2023

184

Notes to the financial statements

continued

Segmental reporting

During the year, the Group monitored activity and performance through four operating segments; Projects, Operations, Consulting

and Investment Services (‘IVS’) plus the legacy Built Environment Consulting segment (divested in September 2022).

Under IFRS 11 ‘Joint arrangements’, the Group is required to account for joint ventures using equity accounting. Adjusted EBITDA as

shown in the table below includes our share of joint venture pro

fits and excludes exceptional items, which is consistent with the way

management review the performance of the business units. Joint venture results are reported on an equity accounting basis and

therefore revenue

figures exclude joint venture revenue.

The segment information provided to the Group’s Chief Executive for the reportable operating segments for the year ended 31

December 2023 includes the following:



	Revenue (3)		Adjusted EBITDA (1)		Operating profit/(loss)
	2023	2022	2023	2022	2023	2022
Reportable operating segments	$m	$m	$m	$m	$m	$m
Projects	2,424.2	2,211.2	177.2	168.7	11.2	(125.3)
Operations	2,482.2	2,406.9	165.2	147.6	88.0	(344.3)
Consulting (re-presented) (4)	739.1	652.4	79.5	76.2	50.4	(3.1)
Built Environment Consulting (discontinued) (4)	–	854.0	(10.2)	69.8	(15.2)	63.1
Investment Services	255.2	198.8	77.1	69.3	23.0	46.2
Central costs (2)	–	–	(76.3)	(73.6)	(135.1)	(138.7)
Total Group	5,900.7	6,323.3	412.5	458.0	22.3	(502.1)
Elimination of discontinued operation (4)	–	(854.0)	10.2	(69.8)	15.2	(63.1)
Total (continuing operations)	5,900.7	5,469.3	422.7	388.2	37.5	(565.2)

Finance income					19.4	6.9
Finance expense					(119.6)	(133.1)
Loss before taxation from continuing operations					(62.7)	(691.4)
Taxation					(65.0)	(10.9)
Loss for the year from continuing operations					(127.7)	(702.3)
Profit from discontinued operation, net of tax					22.5	350.6
Loss for the year					(105.2)	(351.7)

Notes

A reconciliation of operating pro

fit/(loss) to Adjusted EBITDA is provided in the table below. Adjusted EBITDA is provided as it is a unit o

f measurement used by

the Group in the management of its business. Adjusted EBITDA is stated before exceptional items (see note 5).

Central includes the costs of certain Group management personnel, along with an element of Group infrastructure costs.

Revenue arising from sales between segments is not material, and does not include the impact of the exceptional item disclosed on the face of the income

statement of $nil (2022: $8.0m) which is in respect of the Projects operating segment.

The comparative periods have been re-presented due to a reclassification o

f a business operation from discontinued into continuing operations for the year

ended 31 December 2023 (see note 7). The revenue of this business for the period to 31 December 2022 was $27.1m and Adjusted EBITDA was $3.1m.


		2022 (re-
	2023	presented)
Reconciliation of Alternative Performance Measures	$m	$m
Operating profit/(loss) per income statement	37.5	(565.2)
Share of joint venture finance expense and tax (note 13)	16.3	14.3
Exceptional items (note 5)	76.7	663.5
Amortisation (including joint ventures)	161.1	153.4
Depreciation (including joint ventures)	26.2	29.3
Depreciation of right of use assets	103.1	90.5
Impairment of joint venture investments and PPE	1.8	2.4
Adjusted EBITDA (continuing operations)	422.7	388.2
Discontinued operation
Operating (loss)/profit (discontinued)	(15.2)	63.1
Exceptional items	5.0	6.7
Adjusted EBITDA (discontinued operation)	(10.2)	69.8
Total Group Adjusted EBITDA	412.5	458.0

Upon classification as a discontinued operation and held

for sale on 1 January 2022, the Built Environment Consulting disposal

group was not depreciated or amortised in line with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations.

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

185

Segmental reporting

(continued)

	Adjusted EBITDA(1)		Operating profit
	2023	2022	2023	2022
Analysis of joint venture pro fits by segment	$m	$m	$m	$m
Projects	3.4	3.9	3.1	3.5
Operations	13.0	15.2	11.3	13.0
Investment Services	57.2	39.4	44.7	28.2
Total	73.6	58.5	59.1	44.7

The main joint ventures contributing to Adjusted EBITDA and Operating Profit within the Investment Services segment are

EthosEnergy and RWG.

The results of these joint ventures are disclosed further in note 13.

Other segment items

				Built Environment	Investment
	Projects	Operations	Consulting	Consulting	Services	Unallocated	Total
At 31 December 2023	$m	$m	$m	$m	$m	$m	$m
Capital expenditure
PP&E	6.5	6.0	2.5	–	4.3	1.2	20.5
Intangible assets	47.2	55.6	20.4	–	1.9	5.9	131.0
Non-cash expense
Depreciation	6.9	6.0	1.3	–	2.4	4.4	21.0
Depreciation of right of use assets	33.3	25.0	8.6	–	15.2	13.1	95.2
Amortisation	81.7	41.1	19.2	–	–	17.7	159.7
Exceptional items (non-cash element)	43.4	–	–	5.0	–	36.1	84.5

				Built Environment	Investment
	Projects	Operations	Consulting	Consulting	Services	Unallocated	Total
At 31 December 2022	$m	$m	$m	$m	$m	$m	$m
Capital expenditure
PP&E	7.3	11.6	1.3	3.1	3.2	1.1	27.6
Intangible assets	43.3	49.5	18.2	0.2	–	4.7	115.9
Non-cash expense
Depreciation	8.7	10.3	1.0	–	1.1	4.1	25.2
Depreciation of right of use assets	34.4	17.5	8.3	–	10.6	11.5	82.3
Amortisation	77.7	36.7	27.5	–	–	10.0	151.9
Impairment of intangible assets	113.3	396.3	32.7	–	–	–	542.3
Exceptional items (non-cash element)	14.3	–	1.8	–	–	19.2	35.3

The figures in the tables above exclude the share o

f joint ventures.

Depreciation in respect of joint ventures totals $5.2m (2022: $4.1m), depreciation in respect of joint venture right of use assets

totals $7.9m (2022: $8.2m) and joint venture amortisation amounts to $1.4m (2022: $1.5m).

Non-cash exceptionals of $84.5m (2022: $35.3m) primarily comprises $43.4m relating to the Power and Industrial EPC charges,

$38.4m of asbestos charges and the disposal of the built environment business has led to a R&D tax credit being determined to be

unrecoverable in the foreseeable future, and a non-cash charge of $5.0m has been recognised in addition to the charge previously

recognised in 2022, following the

filing o

f the relevant 2022 tax returns. Further detail of these charges is outlined in notes 5 and 7.

	Non-current assets		Revenue (continuing operations)
	2023	2022	2023	2022
Geographical segments	$m	$m	$m	$m
United States of America	2,037.7	2,082.2	1,402.1	1,423.5
United Kingdom	949.4	803.4	792.7	731.5
Canada	439.6	436.8	379.6	383.2
Australia	147.9	150.3	330.1	331.9
Singapore	93.6	96.6	301.1	109.0
Norway	103.0	103.2	283.2	342.3
Brunei	8.8	10.2	255.6	232.9
Saudi Arabia	101.7	102.6	245.7	214.6
Iraq	0.8	0.4	235.1	197.5
South Africa	4.1	2.0	151.7	102.8
Papua New Guinea	–	–	153.2	125.9
Rest of the world	1,083.0	1,092.3	1,370.6	1,274.2
Total	4,969.6	4,880.0	5,900.7	5,469.3

Non-current assets includes goodwill and other intangible assets, property plant and equipment, right of use assets, investment

in joint ventures and other investments. Revenue in the table above analyses total revenue and in 2022 does not reflect the $8.0m

exceptional item as disclosed on the Income Statement.

John Wood Group PLC

Annual Report and Financial Statements 2023

186

Notes to the financial statements

continued

Revenue

Revenue by geographical segment is based on the location of the ultimate project. Revenue is attributable to the provision of

services.

In the following table, revenue is disaggregated by primary geographical market and major service line. The tables provided below

analyses total revenue excluding our share of joint venture revenue.


		Projects				Consulting				Total
		2022				2022				2022
	Projects	(re-	Operations	Operations	Consulting	(re-	IVS	IVS	Total	(re-
Primary geographical	2023	presented)	2023	2022	2023	presented)	2023	2022	2023	presented)
market	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
USA	535.5	593.7	387.9	457.5	274.0	233.3	204.7	139.0	1,402.1	1,423.5
Europe	407.4	379.1	843.2	820.4	202.0	188.2	8.0	27.5	1,460.6	1,415.2
Rest of the world	1,481.3	1,238.4	1,251.1	1,129.0	263.1	230.9	42.5	32.3	3,038.0	2,630.6
Revenue	2,424.2	2,211.2	2,482.2	2,406.9	739.1	652.4	255.2	198.8	5,900.7	5,469.3
Major
service lines
Energy
Oil & Gas	902.9	694.7	2,095.2	1,989.7	357.1	316.6	18.3	18.7	3,373.5	3,019.7
Power, Renewables,	144.2	157.5	112.6	122.1	151.3	85.5	55.5	44.0	463.6	409.1
Hydrogen and Carbon
Capture
Materials
Refining & chemicals	881.9	801.3	237.4	224.9	96.8	62.5	–	–	1,216.1	1,088.7
Minerals Processing and	357.0	417.4	18.6	19.5	28.5	43.9	–	–	404.1	480.8
Life Sciences
Other
Built Environment	9.7	5.4	14.2	44.2	2.1	37.3	166.2	136.1	192.2	223.0
Industrial Processes and	128.5	134.9	4.2	6.5	103.3	106.6	15.2	–	251.2	248.0
other
Revenue	2,424.2	2,211.2	2,482.2	2,406.9	739.1	652.4	255.2	198.8	5,900.7	5,469.3
Sustainable solutions	727.8	664.2	263.6	228.7	226.9	154.8	55.6	62.7	1,273.9	1,110.4

The comparative periods have been re-presented due to a reclassification o

f a business operation from discontinued into continuing operations for the year ended

31 December 2023 (see note 7). The revenue of this business for the period to 31 December 2022 was $27.1m.

The Group’s revenue is largely derived from the provision of services over time.

Sustainable solutions consist of activities related to renewable energy, hydrogen, carbon capture & storage, electri

fication and

electricity transmission & distribution, LNG, waste to energy, sustainable fuels & feedstocks and recycling, processing of energy

transition minerals, life sciences, decarbonisation in oil & gas, re

fining & chemicals, minerals processing and other industrial

processes. In the case of mixed scopes including a decarbonisation element, these are only included in sustainable solutions if 75% or

more of the scope relates to that element, in which case the total revenue is recorded in sustainable solutions. Sustainable solutions

with respect to the discontinued operation have not been captured.

Revenue from continuing operations in 2023 included $4,705.4m (80%) (2022: $4,289.5m, 78%) from reimbursable contracts and

$1,195.3m (20%) (2022: $1,179.8m, 22%) from

fixed price contracts. The calculation o

f revenue from lump sum contracts is based on

estimates and the amount recognised could increase or decrease.


	Continuing operations		Discontinued operations		Total
	2023	2022 (re-presented)	2023	2022 (re-presented)	2023	2022
	$m	$m	$m	$m	$m	$m
Total revenue	5,900.7	5,469.3	–	854.0	5,900.7	6,323.3

Total revenue in 2022 does not reflect the $8.0m exceptional item as disclosed on the Income Statement. This exceptional item

related to the Projects business unit.

Contract balances

The following table provides a summary of receivables, contract assets and liabilities arising from the Group’s contracts with

customers.


	2023	2022
	$m	$m
Trade receivables	729.5	679.6
Non-current contract assets	153.7	97.0
Gross amounts due from customers	522.9	556.9
Gross amounts due to customers	(99.0)	(113.0)
	1,307.1	1,220.5

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Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

187

Revenue

(continued)

The contract balances include amounts the Group has invoiced to customers (trade receivables) as well as amounts where the

Group has the right to receive consideration for work completed which has not been billed at the reporting date (gross amounts due

from customers). Gross amounts due from customers are transferred to trade receivables when the rights become unconditional

which usually occurs when the customer is invoiced. Gross amounts due to customers primarily relates to advance consideration

received from customers, for which revenue is recognised over time.

Non-current contract assets of $153.7m (2022: $97.0m) includes $81.2m (2022: $72.9m) of gross amounts due from customers

and $15.5m (2022: $1.4m) of trade receivables in relation to the Aegis contract as at 31 December 2023. See further details on this

contract below. The increase in the non-current contract assets is mainly as a result of reclassi

fications

from current to non-current

and the Aegis contract completion in the year. The Group has classified certain receivable balances, including Aegis as non-current

due to the element of uncertainty surrounding the timing of the receipt of these balances. Provisions held in relation to the Aegis

contract are not material.

Trade receivables and gross amounts due from customers are included within the ‘Trade and other receivables’ heading in the Group

balance sheet. Gross amounts due to customers are included within the ‘Trade and other payables’ heading in the Group balance

sheet.

Revenue recognised in 2023 which was included in gross amounts due to customers and deferred income at the beginning of the

year of $127.0m represents amounts included within contract liabilities, including $20.6m previously disclosed within held for sale

liabilities at 1 January 2023. Revenue recognised from performance obligations satis

fied in previous periods o

f $6.6m represents

revenue recognised in 2023 for performance obligations which were considered operationally complete at 31 December 2022.

Aegis Poland

This legacy AFW project involved the construction of various buildings to house the Aegis Ashore anti-missile defence facility

for the United States Army Corps of Engineers (“USACE”). Wood’s construction scope is now complete and the facilities were

formally handed over to USACE in July 2023. The corresponding warranty period for facilities will end at various points through

to July 2024. There has been no change in management’s assessment of the loss at completion which remains at $222m. The full

amount of this loss has been recognised to date. The Group’s assessment of the ultimate loss includes change orders which have

not been approved by the customer. As at 31 December 2023, $186m of certi

fied claims had been submitted to our client, and we

continue to progress further claims which could be material. The revenue recognised is estimated based on the amount that is

deemed to be highly probable to be recovered. That estimation is made considering the risks and likelihood of recovery of change

orders. The Group’s assessment of liquidated damages also involves an expectation of relief from possible obligations linked to

delays on the contract. These liquidated damages and relief assumptions are estimates prepared in conjunction with the change

orders estimates noted above. Disclosure of the value of liquidated damages included in the loss at completion is not disclosed as

the directors believe that this would be seriously prejudicial while commercial settlement negotiations are ongoing. The range of

possible outcomes in respect to the change orders that are highly likely to be recoverable and the liquidated damages for which a

relief will be obtained is material. The Group has classi

fied the receivable balances as non-current, due to the element o

f uncertainty

surrounding the timing of the receipt of these balances. The ultimate loss also includes the Group’s assessment of the total legal

costs necessary to achieve recovery of the amounts believed to be recoverable and defend our position on liquidated damages.

At this point in time this is an estimate based on a weighted average of several possible outcomes and the actual costs could

be materially higher or lower depending on actual route to settlement. If the amounts agreed are different to the assumptions

made, then the ultimate loss could be materially different. In reaching its assessment of this loss, management have made certain

estimates and assumptions relating to the date of completion and recovery of costs from USACE. If the actual outcome differs

from these estimates and assumptions, the ultimate loss will be different.

Transaction price allocated to the remaining performance obligations

The transaction price allocated to the remaining performance obligations (unsatis

fied or partially unsatisfied) as at 31 December

2023 was as follows:

$m	Year 1	Year 2	Total
Revenue	3,497.3	2,140.2	5,637.5

The Group has not adopted the practical expedients permitted by IFRS 15, therefore all contracts which have an original expected

duration of one year or less have been included in the table above. The estimate of the transaction price represents contractually

agreed backlog and does not include any amounts of variable consideration which are constrained. The Group continues to move

into a reimbursable contract model, moving away from turnkey lump sum contracts which are inherently riskier. 86% of future

performance obligations relate to reimbursable contracts and the remainder to

fixed price.

John Wood Group PLC

Annual Report and Financial Statements 2023

188

Notes to the financial statements

continued

Finance expense/(income)


	2023	2022
	$m	$m
Interest payable on senior loan notes	16.6	40.3
Interest payable on borrowings	59.4	47.2
Amortisation of bank facility fees	4.2	10.5
Unwinding of discount on other liabilities	1.2	0.9
Lease interest (note 12)	18.7	16.4
Other interest expense	8.4	11.9
Finance expense – continuing operations (pre-exceptional items)	108.5	127.2
Unwinding of discount on asbestos provision (note 5)	11.1	5.9
Finance expense – total	119.6	133.1
Interest receivable	(1.1)	(4.5)
Interest income – retirement benefit obligations (note 33)	(18.3)	(2.4)
Finance income	(19.4)	(6.9)
Finance expense – total – net	100.2	126.2

Net interest expense of $6.5m (2022: $4.4m) has been deducted in arriving at the share of post-tax pro

fit

from joint ventures.

The unwinding of discount on the asbestos provision is $11.1m (2022: $5.9m) and includes the unwinding of discount on long-term

asbestos receivables (note 21). This is presented within exceptional items in line with the Group’s accounting policies.

Profit be

fore taxation


	2023	2022
	$m	$m
The following items have been charged/(credited) in arriving at pro fit be fore taxation:
Employee benefits expense (note 32)	2,714.8	3,130.0
Amortisation of intangible assets (note 10)	159.7	151.9
Depreciation of property plant and equipment (note 11)	21.0	25.2
Depreciation of right of use assets (note 12)	95.2	82.3
Gain on disposal of property plant and equipment	(2.6)	(1.6)
Impairment of intangible assets	–	542.3
Foreign exchange losses	1.0	4.2

Depreciation of property plant and equipment is included in cost of sales or administrative expenses in the income statement.

Amortisation of intangible assets is included in administrative expenses in the income statement.

An impairment charge of $542.3m was recorded in the prior year against intangible assets and related to goodwill, brands and

customer relationships.

Services provided by the Group’s auditors and associate firms

During the year the Group obtained the following services from its auditors, KPMG and associate

firms at costs as detailed below:


	2023	2022
	$m	$m
Fees payable to the Group’s auditors and its associate firms for
Audit of parent company and consolidated financial statements	7.5	8.7
Audit of financial statements o f subsidiaries of the Company	2.7	2.4
Total statutory audit fees	10.2	11.1
Fees payable to the Group’s auditor for the audit on non-statutory financial statements	–	0.6
Audit related assurance services	0.5	0.5
Other assurance services	–	1.4
Tax and other services	–	–
	10.7	13.6

The fees of $8.7m disclosed for ‘Audit of parent company and consolidated

financial statements’ in 2022 include $1.8m relating to

audit work performed in respect of the 2021 consolidated

financial statements.

Fees payable to the Group’s auditor for the audit of non-statutory

financial statements in 2022 relate to the audit o

f carve-out

financial statements o

f Built Environment Consulting.

Other assurance services in 2022 are Reporting Accountant services performed by KPMG in relation to the Built Environment

Consulting disposal.

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

189

Exceptional items

	2023	2022
	$m	$m
Exceptional items included in continuing operations
Power and Industrial EPC losses	45.1	25.0
Impairment of goodwill and intangible assets (note 10)	–	542.3
Apollo related costs	4.8	–
Redundancy, restructuring and integration costs	–	30.1
Investigation support costs and provisions	(2.6)	(4.2)
Enterprise settlement	–	35.6
Asbestos yield curve, costs and charges	29.4	21.5
Russia exit costs and charges	–	13.2
Exceptional items included in continuing operations, before interest and tax	76.7	663.5
Unwinding of discount on asbestos provision	11.1	5.9
Tax (credit)/charge in relation to exceptional items	(0.2)	5.2
Release of uncertain tax provision	(7.4)	–
Derecognition/(recognition) of deferred tax assets due to UK pension actuarial movements	18.0	(41.6)
Exceptional items included in continuing operations, net of interest and tax	98.2	633.0

Exceptional items are those significant items which are separately disclosed by virtue o

f their size or incidence to enable a full

understanding of the Group’s

financial per

formance.

Power and Industrial EPC losses

The Group made a strategic decision in 2021 to exit certain business segments within the Power and Industrials sub business group.

Following that decision, we ceased to operate in the large-scale or lump sum turnkey business segment.

The costs of exiting that business and any subsequent costs related to the wind down of contracts in that business, to the extent

they are material in size, have been treated as exceptional on the basis that they relate to a segment in which the Group no longer

operates.

In the first hal

f of 2023 the Group recorded a non-cash exceptional charge of $20.4m relating to a write down of receivable

balances arising from activity in the Power and Industrial EPC business. The Group had expected to recover these balances, but

these have since been disputed.

In the second half of 2023, a former client raised an arbitration claim against the Group in respect of alleged damages and costs

arising from a legacy Power and Industrial contract. Following evaluation of the claim, the Group has recognised a provision of

$23.0m with a charge to exceptional items, representing our assessment of probable out

flows arising

from the matter.

During the year additional costs relating to the discontinued business of $1.7m were recorded as an exceptional charge. This

follows previous write downs made during 2022 of $25.0m, including a revenue reversal of $8.0m which represents the impact of a

reduction in total value of the contract and is in relation to revenue recognised in prior years.

Apollo related costs

The Group incurred $4.8m in relation to legal and advisor costs arising from Apollo’s preliminary approach to potentially acquire the

ordinary share capital of the Group, which did not ultimately lead to an offer.

Investigation support costs and provisions

The regulatory investigations were all closed out during 2021 and the agreed settlements were materially in line with the provision

made in 2020. The $2.6m credit relates to the release of provisions made for additional legal and other costs which were ultimately

not needed.

Asbestos

All asbestos costs have been treated as exceptional on the basis that movements in the provision are non-trading and can be large

and driven by market conditions which are out with the Group’s control. Excluding these amounts from the trading results improves

the understandability of the underlying trading performance of the Group.

The $29.4m charge (2022: $21.5m) principally comprises a $34.2m charge (2022: $52.8m) in the period that was a result of an

updated actuarial review which updated the best estimate for recent claims experience and $5.4m (2022: $4.3m) of costs in

relation to managing the claims. These are offset by a credit of $10.0m which relates to the collection of insurance proceeds from

an insolvent insurer and a yield curve credit of $0.2m (2022: $35.6m). The lower yield curve credit recognised in 2023 is principally

due to the 27 year blended yield curve rate of 3.64% not being materially different to the 30 year

flat rate o

f 3.97% in 2022.

$11.1m of interest costs which relate to the unwinding of discount on the asbestos provision are also shown as exceptional (2022:

$5.9m).

Exceptional items

(continued)

John Wood Group PLC

Annual Report and Financial Statements 2023

190

Notes to the financial statements

continued

Redundancy, restructuring and integration costs

No costs were incurred in 2023. In the prior year, $30.1m was incurred in relation to redundancy and restructuring activities.

Enterprise settlement

In the prior year, the Enterprise claim was concluded, with the amount settled being in excess of the amount provided for. The

charge in the prior year was classed as an exceptional both by its nature (historic litigation settlement) and by size.

Tax

An exceptional tax charge of $10.4m (2022: $36.4m credit) has been recorded during the period. It consists of a tax credit of $0.2m

on exceptional items (2022: $5.2m charge), a $7.4m credit in relation to the release of an uncertain tax provision created through

exceptional items on the disposal of the Well Support business in 2011, offset by an exceptional charge of $18.0m (2022: $41.6m

credit) recognised due to the actuarial loss in relation to the UK defined benefit pension scheme. As de

ferred tax liabilities support

the recognition of deferred tax assets, the reduction of $18.0m of deferred tax assets have been recognised through exceptional

items based on its size.

Taxation


	2023	2022
	$m	$m
Current tax
Current year	86.1	188.5
Adjustment in respect of prior years	(38.3)	(14.8)
	47.8	173.7
Deferred tax
Origination and reversal of temporary differences	17.0	62.7
Adjustment in respect of prior years	(6.5)	(0.2)
	10.5	62.5
Total tax charge	58.3	236.2
Comprising
Tax on continuing operations before exceptional items	54.6	47.3
Tax (credit)/charge in relation to exceptional items (note 5)	(7.6)	5.2
Derecognition/(recognition) of deferred tax assets due to UK pension actuarial movements (note 5)	18.0	(41.6)
Tax on discontinued operations	(6.7)	225.3
Total tax charge	58.3	236.2
	2023	2022
Tax (credited)/charged to other comprehensive income/expense	$m	$m
Deferred tax movement on retirement bene fit liabilities	(18.0)	41.6
Tax on derivative financial instruments	0.4	1.7
Total (credited)/charged to other comprehensive income/expense	(17.6)	43.3
	2023	2022
Tax (credited)/charged to equity	$m	$m
Deferred tax impact of rate change	(0.7)	0.8
Other	0.1	1.3
Total (credited)/charged to equity	(0.6)	2.1

Tax payments differ from the current tax charge primarily due to the time lag between tax charge and payments in most

jurisdictions and movements in uncertain tax provisions differing from the timing of any related payments.

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

191

Taxation

(continued)

	2023	2022
Reconciliation of applicable tax charge at statutory rates to tax charge	$m	$m
Loss before taxation from continuing operations	(62.7)	(691.4)
(Loss)/profit be fore taxation from discontinued operations (note 7)	(15.2)	61.4
Gain on sale of discontinued operation (note 7)	31.0	514.5
Less: Share of post-tax pro fit from joint ventures (note 13)	(42.8)	(30.4)
Loss before taxation from total operations (excluding pro fits from joint ventures)	(89.7)	(145.9)
Applicable tax charge at statutory rates	(1.4)	36.5
Effects of:
Non-deductible expenses	18.7	8.2
Non-taxable income	–	(1.0)
Non-deductible expenses – exceptional	4.1	332.8
Non-taxable income – exceptional	(9.9)	(0.3)
Deferred tax recognition:
Recognition of deferred tax assets not previously recognised	(5.5)	(4.3)
Utilisation of tax assets not previously recognised	(3.4)	(12.4)
Current year deferred tax assets not recognised	62.0	37.7
Write off of previously recognised deferred tax assets	2.2	5.2
Derecognition/(recognition) due to UK pension actuarial movements	18.0	(41.6)
Utilisation of unrecognised deferred tax assets due to the Built Environment Consulting disposal	–	(145.5)
Irrecoverable withholding tax	14.3	20.4
US Base Erosion and Anti-abuse Tax	–	6.7
CFC charges	5.7	2.3
Uncertain tax provisions	(0.4)	7.5
Uncertain tax provisions - exceptional	0.6	–
Uncertain tax provisions prior year adjustments	(10.6)	(26.7)
Uncertain tax provisions prior year adjustments – exceptional	(7.4)	1.5
Prior year adjustments	(14.4)	7.7
Prior year adjustments – exceptional	(11.2)	2.5
Impact of change in rates on deferred tax	(3.1)	(1.0)
Total tax charge	58.3	236.2
Comprising
Tax charge on continuing operations	65.0	10.9
Tax (credit)/charge on discontinued operations	(6.7)	225.3
Total tax charge	58.3	236.2

The weighted average of statutory tax rates is 1.5% in 2023 (2022: (25.0%)). The low tax rate re

flects an overall loss, however

profits in jurisdictions with higher tax rates outweigh those at lower tax rates such that there is a small net tax amount at the

Group weighted average tax level.

The adjustments in respect of prior years largely relate to the release of uncertain tax positions as the

final outcome on certain

issues was agreed with tax authorities during the year or the statute of limitations for audit by the tax authorities expiring without

challenge, and amendments in respect of the US following more detailed analysis as part of the tax return work. The most

significant uncertain tax position release elements relate to the release o

f legacy Well Support business related provisions of $7.4m

within exceptional items and final assessments received without a penalty which had previously been provided

for of $7.0m. US

related prior year adjustments are a credit of $15.9m and relate to technical areas of the tax return around the availability of losses

due to change of ownership rules, the apportionment of pro

fits between states

factoring in the Built Environment disposal and a

full analysis of the level of Base Erosion and Anti-Abuse tax payable.

During the year, the UK defined benefit pension

fund asset on the Wood Pension Plan decreased due to actuarial losses of $82.8m,

resulting in the associated deferred tax liability decreasing, with a credit shown in Other Comprehensive Income. The deferred tax

liability supports the recognition of deferred tax assets, and as a result $18.0m (2022: $41.6m additional recognition) has been

derecognised and a corresponding debit recognised in the profit and loss account. Consistent with the prior year, this has been

recognised as an exceptional item.

John Wood Group PLC

Annual Report and Financial Statements 2023

192

Notes to the financial statements

continued

Taxation

(continued)

Net income tax liabilities in the Group balance sheet include $87.1m (2022: $108.0m) relating to uncertain tax positions where

management has had to exercise judgement in determining the most likely outcome in respect of the relevant issue. The larger

amounts relate to recoverability of withholding taxes ($38.0m, 2022: $36.4m), group

financing ($25.7m, 2022: $25.2m) and trans

fer

pricing and tax residence ($9.4m, 2022: $9.6m). Where the final outcome on these issues di

ffers to the amounts provided, the

Group’s tax charge will be impacted.

Of the uncertain tax positions, $80.4m are currently under audit by tax authorities and the provision re

flects the maximum

potential liability reflecting the outcome o

f the audits being either no liability or the full risk being challenged. The outcome of the

audits will determine if there is a credit to taxation in 2024. The remaining $6.7m comprises uncertain tax positions not yet under

audit, none of which are individually material. Of the $6.7m, $0.9m will become statute barred for tax authority audit during 2024 if

the tax authorities do not commence an audit.

Factors affecting the tax charge in future years

There are a number of factors that may affect the Group’s future tax charge including the resolution of open issues with the tax

authorities, corporate acquisitions and disposals, the use of brought forward losses and changes in tax legislation and rates. The

following outlines key factors that may impact on future tax charges.

On 8 October 2021, 136 countries signed up to the OECDs Inclusive Framework (Pillar II). This includes an agreement for a minimum

level of tax of 15% which applies to the Group from 1 January 2024. Based on the 2023 results and an analysis of the jurisdictions

to which a Pillar II charge may apply, the anticipated range of the additional charge is between $1m and $4m depending on the

outcome of technical uncertainties on which guidance has yet to be provided by the OECD. The Jurisdictions Pillar II will have the

greatest impact in relation to are the UAE and the captive insurance company incorporated in Guernsey but UK tax resident.

During 2022, the actuarial loss in relation to the UK pension fund has resulted in a derecognition of deferred tax assets as less

can now be supported by the deferred tax liability related to the pensions asset. Whilst the movement in the deferred tax liability

is taken to Other Comprehensive Income, the additional recognition of assets is taken to the Income Statement. The future tax

charge will therefore be impacted by movements in the pension asset valuation with actuarial gains increasing deferred tax asset

recognition and actuarial losses decreasing recognition. The deferred tax liability in relation to the UK pension fund at 31 December

2023 is $100.8m.

The UK Government announced in its budget on 3 March 2021, a rise in the rate of Corporation Tax from 19% to 25% from 1 April

2023. The increase is reflected in de

ferred tax in the accounts, however there is no impact as deferred tax assets are only recognised

to the extent there are deferred tax liabilities in the UK. We anticipate the tax charge and cash tax payable is likely to increase from

the 2024 year end onwards as a result of the rate rise to full calendar years from then on.

Tax Policy

The Group is committed to complying with all relevant tax laws, rules, regulations and reporting and disclosure requirements

wherever it operates. All tax planning undertaken is consistent with the Group’s overall strategy and approach to risk. The Group

aims to use incentives and reliefs to minimise the tax cost of conducting business but will not use them for purposes which are

knowingly contradictory to the intent of the legislation. A full copy of the Group’s tax strategy can be found on the Group’s website

at www.woodplc.com

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

193

Discontinued operation

In September 2022, the Group announced it had completed an agreement to sell the Built Environment Consulting business, which

is included within the Built Environment Consulting operating segment. The Built Environment Consulting business was classified as

a discontinued operation from 1 January 2022, at which point the conditions under IFRS 5 were met. The Group income statement

and statement of comprehensive income were re-presented to show the discontinued operation separately from continuing

operations.

As per the terms of the agreement, the Group had a residual element of the transaction classi

fied as held

for sale in the 2022

Annual Report. The sale of the remaining underlying subsidiary, residing in Saudi Arabia, did not complete during 2023 and will now

be retained by the Group. The results in the comparative periods arising from discontinued operations have been re-presented in

the table below, with the performance of this subsidiary now showing within the Group income statement as part of continuing

operations. This restatement is in accordance with the requirements of IFRS 5 paragraph 36. The revenue and pro

fit be

fore tax

associated with this subsidiary in 2022 was $27.1m and $3.1m respectively.

(i)

Results of discontinued operation


			2022 (re-
		2023	presented)
	Note	$m	$m
External revenue		–	854.0
Cost of sales		(10.2)	(735.8)
Gross (loss)/profit		(10.2)	118.2
Administrative expenses		–	(48.4)
Exceptional items – administrative expenses		(5.0)	(6.7)
Operating (loss)/profit		(15.2)	63.1
Finance expense		–	(1.7)
(Loss)/profit be fore tax		(15.2)	61.4
Taxation		–	(7.9)
Results from operating activities, net of tax		(15.2)	53.5
Gain on sale of discontinued operation		31.0	514.5
Income tax on gain on sale of discontinued operation (exceptional)		6.7	(217.4)
Profit from discontinued operation, net of tax		22.5	350.6
Earnings per share (cents)
Basic	9	3.3	51.5
Diluted	9	3.3	51.5

The profit

from the discontinued operation, net of tax of $22.5m (2022: $350.6m) is attributable entirely to the owners of the

Company. Cost of sales of $10.2m relates to contract costs incurred in respect of the Built Environment Consulting business prior

to its sale that were not known at the time of the disposal and should have been accrued in that business in the prior year. As the

adjustment is not material the prior year comparatives have not been restated and the charge included in 2023.

The final proceeds

from the disposal of the Built Environmental Consulting business were agreed during 2023 upon agreement of

the completion balance sheet between the Group and WSP. This has resulted in an additional gain of $31.0m, comprising $27.1m of

cash proceeds and the release of completion accruals, being recognised in discontinued operations.

The disposal of the built environment business has led to a R&D tax credit being determined to be unrecoverable in the foreseeable

future, and a charge of $5.0m has been recognised in addition to the charge previously recognised in 2022, following the

filing o

f the

relevant 2022 tax returns.

(ii)

Cash flows

from/(used in) discontinued operation


		2023	2022
	Note	$m	$m
Net cash used in operating activities		–	(6.0)
Net cash (used in)/generated from investing activities		(40.0)	1,748.4
Net cash flows for the period		(40.0)	1,742.4

John Wood Group PLC

Annual Report and Financial Statements 2023

194

Notes to the financial statements

continued

Dividends

No decision has been taken to resume the dividend and this will be kept under review by the directors. Any decision to resume

payment of a dividend will consider the Group’s future pro

fitability and cash requirements.

Earnings per share


	2023			2022
	(Losses)/earnings			Earnings/(losses)
	attributable to		Earnings/	attributable to		Earnings/
	owners of	Number	(losses) per	owners of	Number	(losses) per
	the parent	of shares	share	the parent	of shares	share
	$m	m	cents	$m	m	cents
Basic pre-exceptional	(45.2)	685.9	(6.6)	(13.7)	680.4	(2.0)
Exceptional items, net of tax	(65.5)	–	(9.5)	(342.6)	–	(50.4)
Basic	(110.7)	685.9	(16.1)	(356.3)	680.4	(52.4)
Diluted	(110.7)	685.9	(16.1)	(356.3)	680.4	(52.4)
Adjusted diluted earnings per share calculation
Basic	(110.7)	685.9	(16.1)	(356.3)	680.4	(52.4)
Exceptional items, net of tax	65.5	–	9.5	342.6	–	50.4
Amortisation related to acquisitions, net of tax	50.8	–	7.4	52.5	–	7.7
Adjusted diluted	5.6	685.9	0.8	38.8	680.4	5.7
Adjusted basic	5.6	685.9	0.8	38.8	680.4	5.7

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Annual Report and Financial Statements 2023

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Earnings per share

(continued)

(Losses)/earnings attributable to equity shareholders


		2023			2022
				Continuing	Discontinued
	Continuing	Discontinued		operations (re-	operations (re-	Total
	operations	operations	Total	presented)	presented)	(re-presented)
	$m	$m	$m	$m	$m	$m
(Losses)/earnings attributable to equity
shareholders (basic pre-exceptional)	(35.0)	(10.2)	(45.2)	(73.9)	60.2	(13.7)
Exceptional items, net of tax	(98.2)	32.7	(65.5)	(633.0)	290.4	(342.6)
(Losses)/earnings attributable
to equity shareholders	(133.2)	22.5	(110.7)	(706.9)	350.6	(356.3)
Number of shares (basic)	685.9	685.9	685.9	680.4	680.4	680.4
Number of shares (diluted)	685.9	685.9	685.9	680.4	680.4	680.4
Basic earnings per share (cents)	(19.4)	3.3	(16.1)	(103.9)	51.5	(52.4)
Diluted earnings per share (cents)	(19.4)	3.3	(16.1)	(103.9)	51.5	(52.4)


		2023			2022
				Continuing	Discontinued
	Continuing	Discontinued		operations (re-	operations (re-	Total
	operations	operations	Total	presented)	presented)	(re-presented)
	$m	$m	$m	$m	$m	$m
(Losses)/earnings attributable to equity	(133.2)	22.5	(110.7)	(706.9)	350.6	(356.3)
shareholders
Exceptional items, net of tax	98.2	(32.7)	65.5	633.0	(290.4)	342.6
Amortisation of intangibles on
acquisition, net of tax	50.8	-	50.8	52.5	–	52.5
(Losses)/earnings attributable
to equity shareholders (adjusted diluted)	15.8	(10.2)	5.6	(21.4)	60.2	38.8
(Losses)/earnings attributable to equity
shareholders (adjusted basic)	15.8	(10.2)	5.6	(21.4)	60.2	38.8
Number of shares (diluted)	685.9	685.9	685.9	680.4	680.4	680.4
Number of shares (basic)	685.9	685.9	685.9	680.4	680.4	680.4
Adjusted diluted (cents)	2.3	(1.5)	0.8	(3.1)	8.8	5.7
Adjusted basic (cents)	2.3	(1.5)	0.8	(3.1)	8.8	5.7

The calculation of basic earnings per share is based on the earnings attributable to owners of the parent divided by the weighted

average number of ordinary shares in issue during the year excluding shares held by the Group’s employee share trusts. For the

calculation of diluted earnings per share, the weighted average number of ordinary shares in issue is adjusted to assume conversion

of dilutive potential ordinary shares, only when there is a pro

fit per share. The Group’s dilutive ordinary shares comprise share

options granted to employees under Executive Share Option Schemes, shares and share options awarded under the Group’s Long-

Term Plan and shares awarded under the Group’s Employee Share Plan and Share Incentive Plan. Adjusted basic and adjusted

diluted earnings per share are disclosed to show the results excluding the impact of exceptional items and amortisation related to

acquisitions, net of tax.

For the year ended 31 December 2023, the Group reported a basic loss (2022: loss) per ordinary share, therefore the effect of

dilutive ordinary shares are excluded (2022: excluded) in the calculation of diluted earnings per share. Where pro

fits have been made

when disaggregating discontinued and continuing operations, the calculation of diluted earnings per share was performed on the

same basis as the whole Group. Had the result been a profit, an additional 22.0m o

f dilutive potential shares would have been used

in the calculation of diluted EPS metrics, which would have reduced the adjusted diluted EPS by 0.01 cents.

John Wood Group PLC

Annual Report and Financial Statements 2023

196

Notes to the financial statements

continued

Goodwill and other intangible assets

		Software and	Customer contracts	Order
	Goodwill	development costs	and relationships	backlog	Brands	Total
	$m	$m	$m	$m	$m	$m
Cost
At 1 January 2023	4,277.4	343.2	656.1	157.0	479.4	5,913.1
Exchange movements	49.4	24.1	4.8	1.2	5.4	84.9
Additions	–	131.0	–	–	–	131.0
Disposals	–	(2.1)	–	–	–	(2.1)
Businesses divested	(15.0)	–	–	–	–	(15.0)
At 31 December 2023	4,311.8	496.2	660.9	158.2	484.8	6,111.9
Amortisation and impairment
At 1 January 2023	488.8	239.4	547.7	157.0	171.1	1,604.0
Exchange movements	6.5	19.0	2.8	1.2	1.8	31.3
Amortisation charge	–	105.2	26.3	–	28.2	159.7
Disposals	–	(2.1)	–	–	–	(2.1)
At 31 December 2023	495.3	361.5	576.8	158.2	201.1	1,792.9
Net book value at 31 December 2023	3,816.5	134.7	84.1	–	283.7	4,319.0
Cost
At 1 January 2022	5,226.2	288.8	815.7	183.9	661.0	7,175.6
Exchange movements	(173.2)	(40.3)	(21.8)	(2.8)	(13.3)	(251.4)
Additions	–	115.9	–	–	–	115.9
Disposals	–	(3.4)	–	–	–	(3.4)
Businesses divested	(775.6)	(17.8)	(137.8)	(24.1)	(168.3)	(1,123.6)
At 31 December 2022	4,277.4	343.2	656.1	157.0	479.4	5,913.1
Amortisation and impairment
At 1 January 2022	0.8	205.7	581.2	171.7	140.9	1,100.3
Exchange movements	(5.2)	(33.4)	(15.8)	(2.5)	(3.0)	(59.9)
Amortisation charge	–	87.5	28.4	11.9	24.1	151.9
Impairment	493.2	–	4.2	–	44.9	542.3
Disposals	–	(3.4)	–	–	–	(3.4)
Businesses divested	–	(17.0)	(50.3)	(24.1)	(35.8)	(127.2)
At 31 December 2022	488.8	239.4	547.7	157.0	171.1	1,604.0
Net book value at 31 December 2022	3,788.6	103.8	108.4	–	308.3	4,309.1

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John Wood Group PLC

Annual Report and Financial Statements 2023

197

Goodwill and other intangible assets

(continued)

General

In accordance with IAS 36 ‘Impairment of assets’, goodwill was tested for impairment during the year. The impairment tests were

carried out by Cash Generating Unit (‘CGU’) as at 31 December 2023 (the “test date”). The Group has five CGUs and Goodwill is

monitored by management at CGU level. The allocation of Goodwill by CGU as at the test date is shown in the table below.

The carrying value of the goodwill for each CGU as at the test date is shown in the table below.

	Goodwill carrying	Goodwill carrying
	value	value
	2023 Test date	2022 Test date
Cash Generating Unit	$m	$m
Projects	2,195.7	2,280.8
Operations	1,231.2	1,594.8
Consulting	356.4	372.4
Kelchner	16.9	16.9
Swaggart	16.3	16.3

Basis for determining recoverable amount

The recoverable amount was determined by preparing value-in-use calculations prepared for each CGU using the cash

flow

projections included in the financial

forecasts prepared by management and approved by the Board for the period 2024 through

to 2028. Management have updated the forecasts which were underpinned by the new strategy announced in November 2022

based on an updated assessment of market outlook; growth in market share; resource utilisation; contract backlog; contract

margins; assumed contract awards based on the current pipeline; and actual performance in 2023. The key market drivers, within

energy, include energy security driven by the ongoing conflict in Ukraine and supporting energy transition in our

focus markets. Our

materials growth drivers are also underpinned by transition to net zero, as well as increased consumer demand driven by population

growth and higher standards of living.

The projected growth in the CGUs is underpinned by the Group’s strategy to fully capitalise on the engineering capabilities of

each of the CGUs to help our clients move to net zero through energy transition and decarbonisation. In addition to applying

decarbonization capabilities within each CGU across each of the growth markets, digitization is another key driver which is

expected to draw demand for the digital tools, products and capabilities offered by the Consulting CGU. During 2023 each of the

CGUs have had significant contract wins in energy transition and decarbonisation and are there

fore well placed to bene

fit

from

significant levels o

f investment required by our clients to achieve net zero. The Group have also considered that there are risks

associated with energy transition, including energy transition and industrial decarbonisation markets not generating suf

ficient

revenues to meet targets, which may also impact the Group’s ability to attract or retain the appropriately skilled workforce which

could prevent the Group from competing for work in this space. However, offsetting this risk is the large near-term addressable

market focused on energy security within oil and gas along with the desire of those clients to pursue net-zero and decarbonization

efforts. These projects are supporting the energy security agenda as major economies aim to reduce their dependency on Russian oil

and gas, whilst also ensuring affordable energy for consumers.

Critical assumptions

The revenue CAGR for each of the CGUs ranges from 8.3% to 13.4% (2022: 4.8% to 14.2%). The Projects revenue CAGR includes

growth from its Middle East region, process and chemicals sector and minerals and processing sectors. Projects is expected to

leverage from its existing engineering capabilities and client relationships to grow its market share in the minerals sectors, whilst

population growth is expected to underpin growth in the process and chemicals sector.

The Projects Middle East business is

underpinned by the Group’s deep history in that region.

If this growth does not materialise, there is a risk of an impairment in the

Projects CGU.

The Operations revenue CAGR includes growth from the oil and gas sector in Europe and the Middle East and is underpinned by a

global focus on energy security and supporting the energy transition. Operations have secured a number of contract awards with

large, multinational energy companies during 2023, and this is reflected in a higher orderbook as at 31 December 2023 compared

with 31 December 2022. Reasonably possible changes in the critical assumptions used in the Operations impairment test did not

result in an impairment.

The terminal growth rates assumed from 2028 do not exceed the long-term average historical growth rates for the regions and

sectors in which the CGUs operate. The Group is well placed to benefit

from the signi

ficant long term growth opportunities

from

Energy Transition, which has been considered in determining long term growth rates. Management reviewed independent forecasts

which set out the long-term investment required in order to achieve net zero. This long-term annual growth was then applied to

each of the CGUs based on current activity levels. Accordingly, the long-term growth rates assumed in the model are 2.4% for

Operations (2022: 2.4%); 2.4% for Projects (2022: 2.4%); and 2.4% (2022: 2.4%) for Consulting.

Goodwill and other intangible assets

(continued)

John Wood Group PLC

Annual Report and Financial Statements 2023

198

Notes to the financial statements

continued

The cash flows have been discounted using discount rates appropriate

for each CGU, and these rates are reviewed for each

impairment review performed. The discount rate is a critical assumption in the impairment test and the signi

ficant volatility in

financial markets has led to an increase in the discount rate. The Group have considered the additional specific risks related to

each business such as country risk and forecasting risk. The Group have considered the ongoing con

flict in Israel on its operations

in the Middle East as part of its assessment of country risk premium. The pre-tax rates used for the 2023 review are tabulated as

follows and were derived from the Group WACC calculation with speci

fic adjustments

for CGU speci

fic risks including country risk

premiums.

The discount rates tabulated below reflect the view that the cash flows have been risk adjusted in 2023, whereas risk adjustments

were reflected in the discount rate in 2022. The 2023 pre-tax discount rates, with risk reflected in the discount rate would have been

13.1% for Projects, 13.7% for Operations, 12.3% for Consulting, 12.9% for Kelchner and 13.1% for Swaggart.


	Pre–tax	Pre–tax	Post–tax	Post–tax
	discount rate	discount rate	discount rate	discount rate
	2023	2022	2023	2022
Cash Generating Unit	%	%	%	%
Projects	12.0	13.2	10.3	11.0
Operations	12.3	12.9	10.5	10.5
Consulting	12.0	12.2	10.3	9.9
Kelchner	10.8	12.4	9.4	10.4
Swaggart	11.0	12.8	9.4	10.4

Sensitivity analysis

In order to reduce headroom to $nil in 2023, the post-tax discount rate would need to increase to:


Cash Generating Unit	%
Projects	10.7
Operations	13.0
Consulting	16.8
Kelchner	20.0
Swaggart	17.4

The headroom for Projects was $112m based on the assumptions described above. The key assumptions used in the impairment

model for the CGU include discount rate, long term growth rate and revenue growth. There are reasonably possible changes

in assumptions that would result in an impairment for Projects. If the post-tax discount rate was 1.0% higher for Projects, the

impairment would be $171m. A 1.2% reduction in revenue CAGR over the forecast period would reduce headroom to $nil and a 0.5%

reduction in the long-term growth rate would also reduce headroom to $nil.

Reasonably possible changes in the assumptions used in the impairment tests in the other CGUs did not result in an impairment.

Group test

The carrying values of the corporate assets that were not allocated to the above cash generating units above were $111.8m (2022:

$73.2m) and were tested for impairment at the group level, taking into account the estimates and assumptions discussed above in

respect of the Group’s cash generating units. The Group post tax discount rate was 9.6% (pre-tax 11.2%) and a terminal growth rate

of 2.4% was applied to the forecast consolidated cash

flows o

f the Group, including the unallocated central costs. The recoverable

amount of the Group at the test date was $4,767m. The Group post-tax discount rate would need to be 0.5% higher to reduce the

headroom to $nil.

Intangibles

Customer relationships relate mainly to the acquisition of Amec Foster Wheeler in 2017 and are being amortised over periods of 5

to 13 years. Order backlog relates entirely to the acquisition of AFW and was being amortised over periods of 2 to 5 years and has

fully amortised. Brands recognised relate entirely to the acquisition of AFW and the remaining carrying value is being amortised

over a period of 11 years.

Software and development costs includes internally generated assets with a net book value of $47.5m at 31 December 2023 (2022:

$36.9m). $18.7m (2022: $19.9m) of internally generated intangibles is included in additions in the year.

The software disposals relate to the write off of fully depreciated assets that are no longer in use.

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Annual Report and Financial Statements 2023

199

Property plant and equipment

	Land and Buildings	Plant and equipment	Total
	$m	$m	$m
Cost
At 1 January 2023	51.6	79.3	130.9
Exchange movements	1.9	4.1	6.0
Additions	2.7	17.8	20.5
Disposals	(17.4)	(25.7)	(43.1)
Reclassifications	-	(14.8)	(14.8)
At 31 December 2023	38.8	60.7	99.5
Accumulated depreciation and impairment
At 1 January 2023	28.5	20.0	48.5
Exchange movements	0.9	3.3	4.2
Charge for the year	5.1	15.9	21.0
Disposals	(12.1)	(25.4)	(37.5)
Impairment	1.1	0.7	1.8
Reclassifications	-	(3.8)	(3.8)
At 31 December 2023	23.5	10.7	34.2
Net book value at 31 December 2023	15.3	50.0	65.3
Cost
At 1 January 2022	86.7	115.7	202.4
Exchange movements	(5.3)	(10.9)	(16.2)
Additions	1.5	26.1	27.6
Disposals	(11.0)	(21.7)	(32.7)
Businesses divested (note 7)	(22.1)	(28.1)	(50.2)
Reclassifications	1.8	(1.8)	–
At 31 December 2022	51.6	79.3	130.9
Accumulated depreciation and impairment
At 1 January 2022	50.5	49.7	100.2
Exchange movements	(3.5)	(11.4)	(14.9)
Charge for the year	5.5	19.7	25.2
Disposals	(7.5)	(19.4)	(26.9)
Businesses divested (note 7)	(18.3)	(17.2)	(35.5)
Reclassifications	1.8	(1.8)	–
Impairment	–	0.4	0.4
At 31 December 2022	28.5	20.0	48.5
Net book value at 31 December 2022	23.1	59.3	82.4

The net book value of Land and Buildings includes $7.9m (2022: $14.0m) of Long Leasehold and Freehold property and $7.4m (2022:

$9.1m) of Short Leasehold property. There were no material amounts in assets under construction at 31 December 2023.

During the year there were finance lease assets with a net book value o

f $11.5m transferred from Plant and Equipment to Right of

Use Assets.

John Wood Group PLC

Annual Report and Financial Statements 2023

200

Notes to the financial statements

continued

Leases

	Land and Buildings	Plant and equipment	Total
Right of use assets	$m	$m	$m
Net book value
At 1 January 2023	249.5	26.5	276.0
Exchange movements	10.3	0.8	11.1
Additions	121.2	35.0	156.2
Disposals	(2.8)	(0.9)	(3.7)
Reclassifications	-	11.5	11.5
Depreciation of right of use assets	(61.4)	(33.8)	(95.2)
At 31 December 2023	316.8	39.1	355.9
Lease liabilities
At 1 January 2023			342.9
Exchange movements			10.3
Additions			147.6
Disposals			(5.4)
Interest expense related to lease liabilities			18.7
Repayment of lease liabilities			(113.3)
At 31 December 2023			400.8
Right of use assets
Net book value
At 1 January 2022	316.6	39.5	356.1
Exchange movements	(17.5)	(2.1)	(19.6)
Additions	67.8	27.0	94.8
Disposals	(1.5)	–	(1.5)
Businesses divested (note 7)	(53.7)	(17.8)	(71.5)
Depreciation of right of use assets	(62.2)	(20.1)	(82.3)
At 31 December 2022	249.5	26.5	276.0
Lease liabilities
At 1 January 2022			449.8
Exchange movements			(27.0)
Additions			91.9
Disposals			(5.4)
Businesses divested (note 7)			(62.7)
Interest expense related to lease liabilities			17.9
Repayment of lease liabilities			(121.6)
At 31 December 2022			342.9

Included in the above, the Group has finance leases liabilities totalling $17.7m (2022: $16.2m) in addition to the IFRS 16 lease

liabilities in respect of leases previously classi

fied as operating leases under IAS 17.

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Annual Report and Financial Statements 2023

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Leases

(continued)

A maturity analysis of the Group’s total lease liability is shown below:


	2023	2022
	$m	$m
Current lease liability	83.4	83.2
Non-current lease liability	317.4	259.7
Total lease liability	400.8	342.9

The following table shows the breakdown of lease expense between amounts charged to operating pro

fit and amounts charged to

finance costs.


	$m	$m
Depreciation charge for right of use assets
Property	61.4	62.2
Plant and equipment	33.8	20.1
Charged to operating profit	95.2	82.3
Interest expense related to lease liabilities	18.7	17.9
Charge to profit/(loss) be fore taxation for leases	113.9	100.2

John Wood Group PLC

Annual Report and Financial Statements 2023

202

Notes to the financial statements

continued

Investment in joint ventures and other investments

The Group operates a number of joint ventures companies, the most signi

ficant o

f which are its turbine JV’s, EthosEnergy Group

Limited and RWG (Repair & Overhauls) Limited. The Group considers these to be joint arrangements on the basis that two or more

parties have joint control, which is defined as the contractually agreed sharing o

f control and exists only when decisions about

the relevant activities of the joint arrangement require the unanimous consent of the parties sharing control. The Group has a

51% shareholding in EthosEnergy, a provider of rotating equipment services and solutions to the power, oil and gas and industrial

markets. EthosEnergy is domiciled and headquartered in Aberdeen, Scotland. The Group has a 50% shareholding in RWG, a

provider of repair and overhaul services to the oil and gas, power generation and marine propulsion industries. RWG is based in

Aberdeen, Scotland.

The assets, liabilities, income and expenses of the EthosEnergy and RWG are shown below. The

financial in

formation below has

been extracted from the management accounts for these entities.

	EthosEnergy (100%)		RWG (100%)
	2023	2022	2023	2022
	$m	$m	$m	$m
Non-current assets	145.7	137.9	58.7	57.9
Current assets	534.7	520.7	160.8	141.4
Current liabilities	(353.8)	(347.7)	(78.5)	(74.6)
Non-current liabilities	(65.7)	(78.7)	(2.7)	(7.7)
Net assets	260.9	232.2	138.3	117.0
Wood Group share	133.1	118.4	69.2	58.5
Accumulated impairments and other adjustments	(65.9)	(65.9)	-	–
Wood Group investment	67.2	52.5	69.2	58.5
Revenue	861.0	824.8	253.4	234.3
Cost of sales	(726.2)	(721.5)	(181.6)	(169.8)
Administrative expenses	(86.9)	(80.5)	(31.1)	(31.2)
Exceptional items	-	–	-	–
Operating profit	47.9	22.8	40.7	33.3
Finance expense	(11.7)	(7.5)	(1.0)	(0.8)
Profit be fore tax	36.2	15.3	39.7	32.5
Tax	(5.9)	(6.4)	(7.1)	(6.5)
Post-tax profit from joint ventures	30.3	8.9	32.6	26.0
Wood Group share	15.5	4.5	16.3	13.0

Cash and cash equivalents amounted to $30.8m (2022: $48.2m) and $3.2m (2022: $13.9m) for EthosEnergy and RWG respectively.

Depreciation amounted to $17.0m (2022: $29.0m) and $4.6m (2022: $9.2m) for EthosEnergy and RWG respectively.

Amortisation amounted to $1.0m (2022: $0.9m) and $1.9m (2022: $2.1m) for EthosEnergy and RWG respectively.

EthosEnergy’s net debt at 31 December 2023 amounted to $75.9m (2022: $85.7m).

RWG had net debt at 31 December 2023 of $0.5m (2022: $5.1m net cash).

The aggregate carrying amount of the Group’s other equity accounted joint ventures, which individually are not material, amounted

to $41.7m at 31 December 2023 (2022: $45.5m).

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Investment in joint ventures and other investments

(continued)

The Group’s share of its joint venture income and expenses is shown below:

	2023	2022
	$m	$m
Revenue	733.5	754.7
Cost of sales	(602.5)	(641.8)
Administrative expenses	(71.9)	(68.2)
Operating profit	59.1	44.7
Net finance expense	(6.5)	(4.4)
Profit be fore tax	52.6	40.3
Tax	(9.8)	(9.9)
Share of post-tax pro fit from joint ventures	42.8	30.4

The movement in investment in joint ventures is shown below:

	2023	2022
	$m	$m
At 1 January	156.5	169.7
Exchange movements on retranslation of net assets	3.9	(11.9)
Share of pro fit a fter tax	42.8	30.4
Dividends received	(15.6)	(30.1)
Impairment of joint ventures	–	(2.0)
Additions	0.2	0.4
Disposals	(9.7)	–
At 31 December	178.1	156.5

The joint ventures have no significant contingent liabilities to which the Group is exposed, nor has the Group any significant

contingent liabilities in relation to its interest in the joint ventures other than those decribed in note 34.

A full list of subsidiary and joint venture entities is included in note 38.

Other investments

Other investments of $51.3m (2022: $56.0m) relates to the US SERP de

fined contribution scheme re

ferred to in note 33. The SERP

invests in a mixture of equities, bonds and money market funds as part of a pension arrangement for US based employees. The

liabilities of the SERP are included in non-current liabilities (see note 19).

John Wood Group PLC

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204

Notes to the financial statements

continued

Inventories

	2023	2022
	$m	$m
Materials	7.8	3.1
Finished goods and goods for resale	8.5	8.0
	16.3	11.1

Trade and other receivables

	2023	2022
	$m	$m
Trade receivables	805.4	744.6
Less: provision for impairment of trade receivables	(75.9)	(65.0)
Trade receivables – net	729.5	679.6
Gross amounts due from customers	522.9	556.9
Prepayments	76.3	84.6
Amounts due from joint ventures	9.8	8.9
Asbestos related insurance recoveries	5.6	11.1
Research and development credits	26.9	24.7
Other receivables	183.4	179.2
Trade and other receivables – current	1,554.4	1,545.0
Long term receivables – asbestos related insurance recoveries	23.2	24.4
Long term receivables – other	161.0	105.1
Total receivables	1,738.6	1,674.5

As at 31 December 2023, the Group had received $198.2m (2022: $200.0m) of cash relating to non-recourse

financing

arrangements. An equivalent amount of trade receivables was derecognised on receipt of the cash. At 31 December 2023, $111.7m

(2022: $113.6m) had been received from customers in the normal course of business in relation to the same amounts received from

the factors. This $111.7m (2022: $113.6m) is due to be paid over to the factors and is included in trade payables. The impact of both

the cash received from the facility and the cash received from customers is included within cash generated from operations.

Included within other long-term receivables of $161.0m (2022: $105.1m) are contract assets of $96.7m (2022: $74.3m) in relation to

the Aegis contract.

Financial assets

	2023	2022
	$m	$m
Derivative financial instruments (note 20)	9.2	10.8
	9.2	10.8

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205

Trade and other receivables

(continued)

The Group’s trade receivables balance is shown in the table below.

	Trade		Trade
	receivables –	Provision for	receivables –
	Gross	impairment	Net	Receivable
31 December 2023	$m	$m	$m	days
Projects	420.5	(40.4)	380.1	93
Operations	218.7	(4.7)	214.0	49
Consulting	96.2	(5.2)	91.0	51
Investment Services	70.0	(25.6)	44.4	131
Total Group	805.4	(75.9)	729.5	75

	Trade		Trade
	receivables –	Provision for	receivables –
	Gross	impairment	Net	Receivable
31 December 2022	$m	$m	$m	days
Projects	371.1	(40.4)	330.7	76
Operations	197.4	(5.3)	192.1	42
Consulting	105.1	(3.8)	101.3	75
Investment Services	71.0	(15.5)	55.5	73
Total Group	744.6	(65.0)	679.6	67

Receivable days are calculated by allocating the closing trade receivables and gross amounts due from customers balances to

current revenue. A receivable days calculation of 75 indicates that closing trade receivables represent on average the most recent 75

days of revenue.

Receivable days for Investment Services has been adjusted to exclude the impact of the Aegis project for both 2023 and 2022. The

Total Group Receivable days reflects all Group activity including Aegis.

The ageing of the provision for impairment of trade receivables is as follows:

	2023	2022
	$m	$m
Up to 3 months	0.2	2.6
Over 3 months	75.7	62.4
	75.9	65.0

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206

Notes to the financial statements

continued

Trade and other receivables

(continued)

The movement on the provision for impairment of trade receivables is as follows:

				Built
				Environment	Investment
	Projects	Operations	Consulting	Consulting	Services	Total
2023	$m	$m	$m	$m	$m	$m
At 1 January	40.4	5.3	3.8	–	15.5	65.0
Exchange movements	1.0	(0.1)	0.2	–	0.1	1.2
Reclassed during year	(20.7)	–	1.7	–	–	(19.0)
Provided during year	20.0	1.5	0.4	–	18.2	40.1
Utilised during year	(0.3)	(0.6)	–	–	(6.8)	(7.7)
Released during year	–	(1.4)	(0.9)	–	(1.4)	(3.7)
At 31 December	40.4	4.7	5.2	–	25.6	75.9
2022
At 1 January	43.7	8.2	3.7	5.1	15.2	75.9
Exchange movements	(2.7)	(0.1)	0.1	–	(0.6)	(3.3)
Disposed during year	–	–	–	(4.1)	–	(4.1)
Reclassed during year	(0.1)	0.2	(0.9)	-	0.1	(0.7)
Provided during year	4.2	0.7	1.6	(0.2)	1.5	7.8
Utilised during year	(3.5)	(3.3)	(0.2)	–	–	(7.0)
Released during year	(1.2)	(0.4)	(0.5)	(0.8)	(0.7)	(3.6)
At 31 December	40.4	5.3	3.8	–	15.5	65.0

Other receivables of $183.4m includes an impairment charge of $2.3m against a foreign VAT receivable. The other classes within

trade and other receivables do not contain impaired assets. Of the $40.1m provided during the year, $23.8m remains subject to

enforcement activity.

The total expected credit loss was $44.2m in 2023 and includes a $20.4m exceptional charge in relation to a receivable balance

within the Power and industrial EPC business, see note 5 for further details. The remaining balance of $23.8m principally arose

within the Projects business unit.

Included within gross trade receivables of $805.4m above (2022: $744.6m) and gross amounts due from customers of $522.9m

(2022: $556.9m) are contract assets of $299.2m (2022: $244.6m) which were past due. These relate to customers for whom there is

no recent history or expectation of default. The ageing analysis of these contract assets is as follows:

	2023	2022
	$m	$m
Up to 3 months overdue	149.0	117.9
Over 3 months overdue	150.2	126.7
	299.2	244.6

The above analysis excludes retentions relating to contracts in progress of $64.5m (2022: $67.2m).

Cash and cash equivalents

	2023	2022
	$m	$m
Cash at bank and in hand	356.2	521.7
Short-term bank deposits	28.4	–
Restricted cash	49.4	15.0
	434.0	536.7

Cash at bank and in hand at 31 December 2023 includes $127.7m (2022: $328.4m) that is part of the Group’s cash pooling

arrangements and both cash and borrowings are grossed up by this amount in the financial statements.

The effective interest rate on short-term deposits at 31 December 2023 was 6.65% (2022: nil%) and these deposits have no

maturity date.

The restricted cash balance comprises $38.1m (2022: not considered restricted) of cash held in Equatorial Guinea where the Group

are seeking Central Bank approval in order to repatriate cash from a subsidiary via dividends or intercompany loans. A further

$9.3m (2022: $10.0m) of cash is held in jurisdictions where there is insuf

ficient liquidity in the local market to allow

for immediate

repatriation. The remaining $2.0m (2022: $5.0m) relates to balances held within Russia that are impacted by the sanctions

associated with Russia’s invasion of Ukraine. Management considers it appropriate to include the restricted cash balance in the

Group’s net debt figure on the basis that it meets the definition o

f cash, albeit is not readily available to the Group.

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Annual Report and Financial Statements 2023

207

Trade and other payables


	2023	2022
	$m	$m
Trade payables	639.2	550.6
Gross amounts due to customers	99.0	113.0
Other tax and social security payable	57.2	58.2
Accruals	570.2	637.0
Derivative financial instruments	3.4	10.8
Amounts due to joint ventures	12.1	0.3
Asbestos related payables	50.4	59.5
Other payables	275.2	258.2
	1,706.7	1,687.6

Trade payables includes $111.7m (2022: $113.6m) relating to cash received from customers which is due to be paid over to the bank.

Gross amounts due to customers included above represent payments on account received in excess of amounts due from customers

on fixed price contracts.

Accruals includes amounts due to suppliers and sub-contractors that have not yet been invoiced, unpaid wages, salaries and

bonuses.

Other payables includes project related and other liabilities which include the amounts due under the investigation which was

concluded in 2021. At 31 December 2023 there is one remaining payment in relation to the investigation of $35.6m which was paid in

January 2024.

Borrowings


	2023	2022
	$m	$m
Bank loans and overdrafts due within one year or on demand
Unsecured	225.7	345.9
Senior loan notes
Unsecured	89.6	–
Total current borrowings	315.3	345.9
Non-current bank loans
Unsecured	549.3	232.0
Senior loan notes
Unsecured	262.9	352.0
Total non-current borrowings	812.2	584.0

Borrowings of $127.7m (2022: $328.4m) that are part of the Group’s cash pooling arrangements, and are netted against cash for

internal reporting purposes, are grossed up in the short-term borrowings figure above.

Bank overdrafts are denominated in a number of currencies and bear interest based on the Bank of England base rate or the

relevant foreign currency equivalent.

Following the disposal of the Built Environment Consulting business in September 2022, the Group repaid $400.0m of the

$600.0m term loan and agreed the early repayment of the US Private Placement loan notes totalling $416.3m. The Group had total

facilities of $1,901.9m as at 31 December 2023, which comprises of a $200.0m term loan maturing in October 2026, $1,200.0m of

Revolving Credit Facility maturing in October 2026, $352.5m of senior loan notes in the US private placement market with varying

maturities and $149.4m of other banking facilities.

Of the non-current borrowings of $812.2m, $366.5m is denominated in sterling and the balance in US dollars.

As noted in the Basis of Preparation, based on the latest forecasts approved by the directors, the Group expect to pass the

covenant requirements during the forecast period, including in the severe but plausible downside scenario. Given that the June and

December 2023 covenants were passed, all debts under the RCF facility were disclosed as non-current.

John Wood Group PLC

Annual Report and Financial Statements 2023

208

Notes to the financial statements

continued

Borrowings

(continued)

The Group’s principal borrowing facilities at 31 December 2023 are set out in the table below.

		Drawn at 31	Undrawn at 31
	Total available	December 2023	December 2023
Facility	$m	$m	$m	Repayable
Term loan	200.0	200.0	–	October 2026
Revolving credit facility	1,200.0	356.9	843.1	October 2026
Senior loan notes	352.5	352.5	–	Various dates
Other facilities	149.4	89.6	59.8	Various dates
Accrued interest	–	8.4	(8.4)	N/A
Unamortised fees	–	(7.6)	7.6	N/A
	1,901.9	999.8	902.1

The above table excludes borrowings of $127.7m that are part of the Group’s cash pooling arrangements and are offset by

equivalent cash balances.

The Group has $352.5m (2022: $352.0m) of unsecured senior loan notes issued in the US private placement market. The notes

mature at varying dates between 2024 and 2031 as shown in the table below. Interest is payable at an average rate of 4.58% (2022:

4.58%).

Repayable

	2023	2022
	$m	$m
July 2024	11.5	11.5
August 2024	55.1	55.1
November 2024	23.0	23.0
July 2026	57.9	57.4
August 2026	58.8	58.8
February 2027	18.4	18.4
February 2029	46.0	46.0
July 2029	59.5	59.5
July 2031	22.3	22.3
	352.5	352.0

The effective interest rates on the Group’s bank loans and overdrafts at the balance sheet date were as follows:

	2023	2022
	%	%
US dollar	7.07	4.79
Sterling	6.67	5.09
Euro	4.95	3.02

The carrying amounts of the Group’s borrowings, including those held within pooling arrangements, are denominated in the

following currencies:

	2023	2022
	$m	$m
US Dollar	658.7	611.6
Sterling	371.8	176.7
Euro	67.0	120.0
Other	30.0	21.6
	1,127.5	929.9

The Group is required to issue tender bonds, performance bonds, retention bonds, advance payment bonds and standby letters of

credit to certain customers. Management have assessed that the possibility of these being triggered is remote. At 31 December

2023, the Group’s bank facilities relating to the issue of bonds, guarantees and letters of credit amounted to $1,230.9m (2022:

$1,244.2m). At 31 December 2023, these facilities were 58% utilised (2022: 61%).

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Annual Report and Financial Statements 2023

209

Borrowings

(continued)

Borrowing facilities

The Group has the following undrawn borrowing facilities available at 31 December:

	2023	2022
	$m	$m
Expiring within one year	59.8	109.7
Expiring between one and two years	-	–
Expiring between two and five years	842.3	1,155.7
	902.1	1,265.4

All undrawn borrowing facilities are

floating rate

facilities. The facilities expiring within one year are annual facilities subject to

review at various dates during 2024. The Group was in compliance with its bank covenants throughout the year.

A reconciliation of movements of borrowings and lease liabilities to cash

flows arising

from

financing activities is presented in the

table below.

	Short term	Long term
	borrowings	borrowings	Lease liabilities	Total
	$m	$m	$m	$m
Balance 1 January 2023	345.9	584.0	342.9	1,272.8
Changes from financing cash flows
Repayments of long-term borrowings	–	(200.0)	–	(200.0)
Repayments of short-term borrowings	(133.5)	–	–	(133.5)
Proceeds from long-term borrowings	–	515.0	–	515.0
Payment of lease liabilities (note 12)	–	–	(113.3)	(113.3)
Total changes from financing activities	(133.5)	315.0	(113.3)	68.2
Effects of changes in foreign exchange rates (note 31)	17.1	0.4	10.3	27.8
Other changes
New leases (note 12)	–	–	142.2	142.2
Reclassification o f senior loan notes	89.6	(89.6)	–	–
Interest expense	–	81.7	18.7	100.4
Interest paid	–	(81.7)	–	(81.7)
Other movements	(3.8)	2.4	–	(1.4)
Total liability other changes	85.8	(87.2)	160.9	159.5
Balance at 31 December 2023	315.3	812.2	400.8	1,528.3

	Short term	Long term
	borrowings	borrowings	Lease liabilities	Total
	$m	$m	$m	$m
Balance 1 January 2022	281.9	1,614.1	449.8	2,345.8
Changes from financing cash flows
Repayment of long-term borrowings	–	(1,039.1)	–	(1,039.1)
Repayment of short-term borrowings	(35.0)	–	–	(35.0)
Proceeds from short-term borrowings	88.0	–	–	88.0
Payment of lease liabilities (note 12)	–	–	(121.6)	(121.6)
Total changes from financing activities	53.0	(1,039.1)	(121.6)	(1,107.7)
Effects of changes in foreign exchange rates (note 31)	(1.2)	0.1	(27.0)	(28.1)
Other changes
New leases (note 12)	–	–	23.8	23.8
Interest expense	–	98.1	17.9	116.0
Interest paid	–	(98.1)	–	(98.1)
Other movements	12.2	8.9	–	21.1
Total liability other changes	12.2	8.9	41.7	62.8
Balance at 31 December 2022	345.9	584.0	342.9	1,272.8

John Wood Group PLC

Annual Report and Financial Statements 2023

210

Notes to the financial statements

continued

Other non-current liabilities


	2023	2022
	$m	$m
Other payables	69.4	106.8
	69.4	106.8

Other payables include $51.3m (2022: $55.6m) relating to the US SERP pension arrangement referred to in note 33 and

unfavourable leases of $nil (2022: $3.3m). The SERP payables are offset by investments of $51.3m which are included in note 13.

Unfavourable lease liabilities represent non-lease components, such as facilities costs which are not included within the IFRS 16

lease liability.

Financial instruments

The Group’s activities give rise to a variety of

financial risks: market risk (including

foreign exchange risk and cash

flow interest rate

risk), credit risk and liquidity risk. The Group’s overall risk management strategy is to hedge exposures wherever practicable in order

to minimise any potential adverse impact on the Group’s financial per

formance.

Risk management is carried out by the Group Treasury department in line with the Group’s Treasury policies. Group Treasury,

together with the Group’s business units identify, evaluate and where appropriate, hedge

financial risks. The Group’s Treasury

policies cover specific areas, such as

foreign exchange risk, interest rate risk, use of derivative

financial instruments and investment

of excess cash.

Where the Board considers that a material element of the Group’s pro

fits and net assets are exposed to a country in which there is

significant geo-political uncertainty a strategy is agreed to ensure that the risk is minimised.

(a)

Market risk

(i)

Foreign exchange risk

The Group is exposed to foreign exchange risk arising from various currencies. The Group has subsidiary companies whose revenue

and expenses are denominated in currencies other than the US dollar. Where possible, the Group’s policy is to eliminate all

significant currency exposures at the time o

f the transaction by using

financial instruments such as

forward currency contracts.

Changes in the forward contract fair values are booked through the income statement, except where hedge accounting is used in

which case the change in fair value is recorded in equity.

Hedging of foreign currency exchange risk – cash

flow hedges

The notional contract amount, carrying amount and fair values of forward contracts and currency swaps designated as cash

flow

hedges at the balance sheet date are shown in the table below.


	2023	2022	2023	2022
	Notional	Notional	Carrying	Carrying
	contract	contract	amount and	amount and
	amount	amount	fair value	fair value
	$m	$m	$m	$m
Current assets	136.1	144.9	2.1	2.1
Current liabilities	(42.1)	(180.7)	(0.9)	(4.8)

A net foreign exchange gain of $3.8m (2022: loss $3.0m) was recognised in the hedging reserve as a result of fair value movements

on forward contracts and currency swaps designated as cash

flow hedges.

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John Wood Group PLC

Annual Report and Financial Statements 2023

211

Financial instruments

(continued)

Hedging of foreign currency exchange risk – fair value through income statement

The notional contract amount, carrying amount and fair value of all other forward contracts and currency swaps at the balance

sheet date are shown in the table below.

	2023	2022	2023	2022
	Notional	Notional	Carrying	Carrying
	contract	contract	amount and	amount and
	amount	amount	fair value	fair value
	$m	$m	$m	$m
Current assets	930.1	990.4	7.1	8.7
Current liabilities	(443.4)	(337.8)	(2.5)	(6.0)

The Group’s largest foreign exchange risk relates to movements in the sterling/US dollar exchange rate. Movements in the sterling/

US dollar rate can impact the translation of sterling pro

fit earned in the UK and the translation o

f sterling denominated net assets.

A weakening of the pound has a negative impact on translation of UK companies’ pro

fits and net assets. Sterling denominated

trading profits in the UK are o

ffset by the Group’s corporate overhead and a 10% change in the sterling/dollar rate would result in a

change to Adjusted EBITDA of less than 1%. A 10% change in the sterling/dollar rate would impact net assets by less than 1%. 10%

has been used in these calculations as it represents a reasonable possible change in the sterling/US dollar exchange rate. The Group

also has foreign exchange risk in relation a number of other currencies, such as the Australian dollar, the Canadian dollar and the

Euro.

(ii)

Interest rate risk

The Group finances its operations through a mixture o

f retained pro

fits and debt. The Group borrows in the desired currencies

at a mixture of

fixed and floating rates o

f interest to manage the Group’s exposure to interest rate

fluctuations. At 31 December

2023, 30% (2022: 53%) of the Group’s borrowings were at

fixed rates. The Group is also exposed to interest rate risk on cash held

on deposit. The Group’s policy is to maximise the return on cash deposits and where possible and deposit cash with a financial

institution with a credit rating of BBB+ or better.

If average interest rates had been 2% higher or lower during 2023 (2022: 2%), post-tax pro

fit

for the year would have been $10.3m

lower or higher respectively (2022: $5.8m). 2% has been used in this calculation as it represents a reasonable possible change in

interest rates.

(iii)

Price risk

The Group is not exposed to any significant price risk in relation to its financial instruments.

(b)

Credit risk

The Group’s credit risk primarily relates to its trade receivables. The Group assumes that the credit risk on a financial asset has

increased significantly i

f it is more than 6 months past due and considers a

financial asset to be in de

fault when the

financial asset

is more than 12 months past due. Responsibility for managing credit risk lies within the businesses with support being provided by

Group and divisional management where appropriate.

The credit risk associated with customers is considered as part of each tender review process and is addressed initially through

contract payment terms. Trade finance instruments such as letters o

f credit, bonds, guarantees and credit insurance are used to

manage credit risk where appropriate. Credit control practices are applied thereafter during the project execution phase. A right to

interest and suspension is normally sought in all contracts. There is significant management

focus on customers that are classi

fied

as high risk in the current challenging market although the Group had no material write offs in the year.

The Group’s major customers are typically large companies which have strong credit ratings assigned by international credit rating

agencies. Where a customer does not have suf

ficiently strong credit ratings, alternative

forms of security such as the trade

finance

instruments referred to above may be obtained.

The Group uses the simplified provision matrix when calculating expected credit losses on financial assets. The provision matrix

is based on historical default rates and is adjusted for forward looking estimates. The historical default rate is determined by

comparing actual contract write offs against revenue recognised over each of the prior

five years. The average write o

ff over

the historical period can be applied to current year revenue. The forward-looking assessment also considers post-year end cash

collection, country risk scoring, customer disputes and specific financial uncertainties.

Management review trade receivables based on receivable days calculations to assess performance. A table showing trade

receivables and receivable days is provided in note 15. Receivable days calculations are not provided on non-trade receivables as

management do not believe that this information is a relevant metric.

The maximum credit risk exposure on cash and cash equivalents and bank deposits (more than three months) at 31 December 2023

was $434.0m (2022: $536.7m). The Group treasury department monitors counterparty exposure on a global basis to avoid any over

exposure to any one counterparty. The Group’s policy is to deposit cash at institutions with a credit rating of at least BBB+. 100% of

cash held on deposit at 31 December 2023 was held with such institutions.

John Wood Group PLC

Annual Report and Financial Statements 2023

212

Notes to the financial statements

continued

Financial instruments

(continued)

(c)

Liquidity risk

The Group’s policy is to ensure the availability of an appropriate amount of funding to meet both current and future forecast

requirements consistent with the Group’s budget and strategic plans. The Group will finance operations and growth

from its

existing cash resources and the $902.1m undrawn portion of the Group’s committed banking facilities. The 2023 average net debt

(excluding leases) was $846.4m (2022: $1,489.1m). The cash balance and undrawn portion of the Group’s committed banking

facilities can

fluctuate throughout the year. Around the covenant remeasurement dates o

f 30 June and 31 December the Group’s

net debt is typically lower than these averages due to a combination of factors including a strong focus on collection of receipts

from customers. Although revenue is typically weighted towards the second half of the year it is usually higher in June than in

December, which means the level of working capital required is typically higher at the end of June and net debt is typically lower by

the end of December.

At 31 December 2023, 100% (2022: 100%) of the Group’s principal borrowing facilities (including senior loan notes) were due to

mature in more than one year. Based on the Group’s latest forecasts the Group has suf

ficient

funding in place to meet its future

obligations.

The Group’s total bank facilities comprise of a $200.0m term loan maturing in October 2026 and a $1,200.0m revolving credit

facility which matures in October 2026. The revolving credit facility includes KPIs linked to growing revenues related to energy

transition and sustainable infrastructure and reducing scope 1 and 2 carbon emissions.

The Group has $352.5m of unsecured senior loan notes issued in the US private placement market. The notes mature in various

tranches between July 2024 and 2031.

(d)

Capital risk

The Group seeks to maintain an optimal capital structure by monitoring its ratio of net debt to adjusted EBITDA, its interest cover

and its gearing ratio.

The ratio of net debt to Adjusted EBITDA at 31 December 2023 was 2.08 times (2022: 1.3 times). This ratio is calculated by dividing

net debt before leases by Adjusted EBITDA on a frozen GAAP basis which excludes the impact of IFRS 16.

Interest cover is calculated by dividing Adjusted EBITA, excluding the impact of IFRS 16, by net recurring

finance expense and was

4.0 times for the year ended 31 December 2023 (2022: 4.2 times).

Gearing is calculated by dividing net debt, before leases, by equity attributable to owners of the parent. Gearing at 31 December

2023 was 19.1% (2022: 10.5%).

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John Wood Group PLC

Annual Report and Financial Statements 2023

213

Financial instruments

(continued)

Financial liabilities

The table below analyses the Group’s financial liabilities into relevant maturity groupings based on the remaining period

from the

balance sheet date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash

flows which are not usually closed out be

fore contractual maturity.

	Less than	Between	Between	Over 5
	1 year	1 and 2 years	2 and 5 years	years
At 31 December 2023	$m	$m	$m	$m
Borrowings	365.2	55.6	855.9	24.0
Trade and other payables	1,706.7	–	–	–
Lease liabilities	104.1	74.4	138.9	228.3
Other non-current liabilities	–	17.7	51.7	–
At 31 December 2022
Borrowings	361.2	116.2	431.2	132.7
Trade and other payables	1,628.7	–	–	–
Lease liabilities	107.0	80.5	123.6	145.2

Other non-current liabilities

–

51.2

55.6

–

Fair value of non-derivative

financial assets and financial liabilities

The fair value of short-term borrowings, trade and other payables, trade and other receivables,

financial assets, short-term

deposits and cash at bank and in hand approximates to the carrying amount because of the short maturity of interest rates in

respect of these instruments.

The fair value of non-current bank borrowings as at 31 December 2023 was $256.0m (book value $242.9m) (2022: $231.1m, book

value $244.3m). The fair value of the US Private Placement debt at 31 December 2023 was $360.3m (book value $352.5m) (2022:

$358.1m, book value $352.0m).

Fair values (excluding the fair value of assets and liabilities classi

fied as held

for sale) are determined using observable market prices

(level 2 as defined by IFRS 13 ‘Fair Value Measurement’) as

follows:

•

The fair value of forward foreign exchange contracts is estimated by discounting the difference between the contractual forward

price and the current forward price for the residual maturity of the contract using a risk-free interest rate.

•

The fair value of interest rate swaps is estimated by discounting estimated future cash

flows based on the terms and maturity o

each contract and using market rates.

All derivative fair values are veri

fied by comparison to valuations provided by the derivative counterparty banks.

The Group determines whether transfers have occurred between levels in the hierarchy by reassessing categorisation (based on the

lowest level input that is significant to the

fair value measurement as a whole) at the end of each reporting period. During the year

ended 31 December 2023 and 31 December 2022, there were no transfers into or out of level 2 fair value measurements.

John Wood Group PLC

Annual Report and Financial Statements 2023

214

Notes to the financial statements

continued

Asbestos related litigation

2023

	$m
At 1 January 2023	311.4
Reclassifications	9.5
Utilised	(58.4)
Charge to income statement	45.1
Release of provisions	(2.6)
Exchange movements	1.5
At 31 December 2023	306.5
Presented as
Current	–
Non-current	306.5
2022
At 1 January 2022	342.1
Reclassifications	(5.6)
Utilised	(44.1)
Charge to income statement	59.6
Release of provisions	(37.0)
Exchange movements	(3.6)
At 31 December 2022	311.4
Presented as
Current	–
Non-current	311.4

Asbestos related litigation

The Group assumed the majority of its asbestos-related liabilities when it acquired Amec Foster Wheeler in October 2017. Whilst

some of the asbestos claims have been and are expected to be made in the United Kingdom, the overwhelming majority have been

and are expected to be made in the United States.

Some of Amec Foster Wheeler’s US subsidiaries are defendants in numerous asbestos-related lawsuits and out-of-court informal

claims pending. Plaintiffs claim damages for personal injury alleged to have arisen from exposure to, or use of, asbestos in

connection with work allegedly performed during the 1970s and earlier. The estimates and averages presented have been calculated

on the basis of the historical US asbestos claims since the initiation of claims

filed against these entities.

The number and cost of current and future asbestos claims in the US could be substantially higher than estimated and the timing

of payment of claims could be sooner than estimated, which could adversely affect the Group’s

financial position, its results and its

cash flows.

The Group expects these subsidiaries to be named as defendants in similar suits and that new claims will be

filed in the

future. For

purposes of these

financial statements, management have estimated the indemnity and de

fence costs to be incurred in resolving

pending and forecasted claims through to 2050. Although we believe that these estimates are reasonable, the actual number of

future claims brought against these subsidiaries and the cost of resolving these claims could be higher.

Some of the factors that may result in the costs of asbestos claims being higher than the current estimates include:

•

an increase in the rate at which new claims are filed and an increase in the number o

f new claimants

• increases in legal fees or other defence costs associated with asbestos claims

•

increases in indemnity payments, decreases in the proportion of claims dismissed with zero payment and payments being

required to be made sooner than expected

The Group has worked with its advisors with respect to projecting asbestos liabilities and to estimate the amount of asbestos-

related indemnity and defence costs at each year-end through to 2050. Each year the Group records its estimated asbestos liability

at a level consistent with the advisors’ reasonable best estimate. The Group’s advisors perform a quarterly and annual review of

asbestos indemnity payments, defence costs and claims activity and compare them to the forecast prepared at the previous year-

end. Based on its review, they may recommend that the assumptions used to estimate future asbestos liabilities are updated, as

appropriate.

The total liability recorded in the Group’s balance sheet at 31 December 2023 is based on estimated indemnity and defence costs

expected to be incurred to 2050. Management believe that any new claims filed a

fter 2050 will be minimal.

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John Wood Group PLC

Annual Report and Financial Statements 2023

215

Asbestos related litigation

(continued)

Asbestos related liabilities and assets recognised on the Group’s balance sheet are as follows:

		2023			2022
	US	UK	Total	US	UK	Total
	$m	$m	$m	$m	$m	$m
Asbestos related provision
Gross provision	409.5	31.1	440.6	425.4	32.5	457.9
Effect of discounting	(83.8)	–	(83.8)	(87.0)	–	(87.0)
Net provision	325.7	31.1	356.8	338.4	32.5	370.9
Insurance recoveries
Gross recoveries	–	(28.7)	(28.7)	(6.0)	(29.5)	(35.5)
Effect of discounting	–	–	–	–	–	–
Net recoveries	–	(28.7)	(28.7)	(6.0)	(29.5)	(35.5)
Net asbestos related liabilities	325.7	2.4	328.1	332.4	3.0	335.4
Presented in accounts as follows
Provisions – non-current			306.5			311.4
Trade and other payables			50.4			59.5
Trade and other receivables			(5.6)			(11.1)
Long term receivables			(23.2)			(24.4)
			328.1			335.4

The gross US asbestos related provision of $409.5m (2022: $425.4m) includes $23.3m (2022: $35.4m ) relating to agreed

settlements which have not been paid at 31 December 2023. The remaining $386.2m (2022: $390.0m) represents the gross US

asbestos related provision which is discounted to a net present value of $302.4m (2022: $303.0m).

A net interest charge of $11.1m (2022: $5.9m) representing the unwinding of the discount over time and a yield curve credit of

$0.2m (2022: $35.6m) are included within exceptional items since the movements in the provision are non-trading, can be large and

are driven by market conditions which are out with the Group’s control.

An additional $34.2m has been charged to the income statement in the year, reflecting

future actuarial adjustments in the overall

plan estimates. The increase to the estimates are driven by a higher number of

filings compared to the underlying actuarial model,

an increased number of settlements at higher settlement values and updated future in

flation rates. A

further credit or income

of $10.0m has been recorded to the income statement in the year as a result of collecting insurance proceeds from an insolvent

insurer, not previously recognised.

A summary of the Group’s US asbestos claim activity is shown in the table below:

	2023	2022
Number of open claims	Number	Number
At 1 January	57,200	57,490
New claims	2,410	2,330
Claims resolved	(5,640)	(2,620)
At 31 December	53,970	57,200
Claims not valued in liability	(38,900)	(42,170)
Open claims valued in liability at 31 December	15,070	15,030

Claims not valued in the liability include claims on certain inactive court dockets, claims over six years old that are considered

abandoned and certain other items.

Based on 2023 activity, the Group’s current forecast liabilities have been adjusted for payments made in 2023 of $58.4m and to

reflect the impact o

f discounting.

In 2023, the liability for asbestos indemnity and defence costs to 2050 was calculated at a gross nominal amount of $440.6m

(present value $356.8m), which brought the liability to a level consistent with our advisor’s reasonable best estimate. The total

asbestos-related liabilities are comprised of estimates for liabilities relating to open (outstanding) claims being valued and the

liability for future unasserted claims to 2050.

The estimate takes account of the following information and/or assumptions:

• number of open claims

• forecasted number of future claims

•

estimated average cost per claim by disease type – mesothelioma, lung cancer and non-malignancies

John Wood Group PLC

Annual Report and Financial Statements 2023

216

Notes to the financial statements

continued

Asbestos related litigation

(continued)

The total estimated liability, which has been discounted for the time value of money, includes both the estimate of forecasted

indemnity amounts and forecasted defence costs. Total defence costs and indemnity liability payments are estimated to be

incurred through to 2050. The Group believes that it is likely that there will be some claims filed a

fter 2050, however these are

projected to be minimal.

In the last 5 years from 2019 to 2023, the US average combined indemnity and defence cost per resolved claim has been

approximately $10k. The average cost per resolved claim is increasing and management believe it will continue to increase in

the future as the Group continues to resolve the current and estimated future claims inventory. A sensitivity analysis on average

indemnity settlement and defence costs is included in the table below.

Asbestos related receivables represents management’s best estimate of insurance recoveries relating to liabilities for pending and

estimated future asbestos claims through to 2050. The receivables are only recognised when it is virtually certain that the claim will

be paid.

The following table sets out the sensitivities associated with a change in certain estimates used in relation to the US asbestos-

related liabilities:

	Impact on asbestos
	liabilities (range)
Assumption	$m
25% change in average indemnity settlement amount	50–60
25% change in forecasted number of new claims	50–60
25% change in estimated defence costs	40–50

In addition to the above, the impact on the income statement in the year is sensitive to changes in the discount rate used to

calculate the time value of money.

The Group has used a 27-year blended yield curve rate, based on US Treasury strip rates, to discount its asbestos liabilities. The rate

as at 31 December 2023 is 3.64% (2022: 3.97% using a 30-year US Treasury Bond rate). A change of 0.1% in the 27-year blended yield

curve rate would give rise to a change to the income statement charge/credit of approximately $1.7m.

The Group’s subsidiaries have been effective in managing the asbestos litigation, in part, because the Group has access to historical

project documents and other business records going back more than 50 years, allowing it to defend itself by determining if the

claimants were present at the location of the alleged asbestos exposure and, if so, the timing and extent of their presence. In

addition, the Group has identified and validated insurance policies issued since 1952 and has consistently and vigorously de

fended

claims that are without merit and settled meritorious claims for reasonable amounts.

The table below summarises the asbestos-related net cash impact for indemnity and defence costs and collection of

insurance proceeds:

	2023	2022
	$m	$m
Asbestos litigation, defence and case resolution payments	58.4	44.1
Insurance proceeds	(16.4)	(7.7)
Net asbestos related payments	42.0	36.4

The Group expects to have a net cash outflow o

f approximately $35m as a result of asbestos liability indemnity and defence

payments in excess of insurance proceeds during 2024. This estimate assumes no elections by the Group to fund additional

payments. The Group has discounted the expected future cash

flows with respect to the asbestos related liabilities using the

blended yield curve rates.

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Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

217

Provisions


			Litigation related	Project related
	Insurance	Property	provisions	provisions	Total
2023	$m	$m	$m	$m	$m
At 1 January 2023	46.2	26.0	12.8	63.3	148.3
Reclassifications	1.3	–	–	–	1.3
Utilised	–	(0.4)	(11.2)	(17.0)	(28.6)
Charge to income statement	12.4	2.9	23.0	13.0	51.3
Release of provisions	(19.2)	(1.7)	–	(18.4)	(39.3)
Exchange movements	–	0.6	0.4	1.3	2.3
At 31 December 2023	40.7	27.4	25.0	42.2	135.3
Presented as
Current	–	7.4	23.0	27.2	57.6
Non-current	40.7	20.0	2.0	15.0	77.7


			Litigation related	Project related
	Insurance	Property	provisions	provisions	Total
2022	$m	$m	$m	$m	$m
At 1 January 2022	55.2	32.4	93.3	112.2	293.1
Reclassifications	1.3	–	1.1	4.5	6.9
Utilised	–	(3.2)	(88.5)	(45.5)	(137.2)
Divestments	–	–	–	(0.7)	(0.7)
Charge to income statement	17.4	0.4	10.0	15.3	43.1
Release of provisions	(27.7)	(2.3)	(2.5)	(18.1)	(50.6)
Exchange movements	–	(1.3)	(0.6)	(4.4)	(6.3)
At 31 December 2022	46.2	26.0	12.8	63.3	148.3
Presented as
Current	–	3.3	11.0	30.6	44.9
Non-current	46.2	22.7	1.8	32.7	103.4

Insurance provisions

The Group has liabilities in relation to its captive insurance companies of $40.7m (2022: $46.2m).

The Group currently has one captive insurance company, Garlan Insurance Limited, which is active and is registered in Guernsey

with tax domicile in the UK. The company provides insurance solely to other Group companies and does not provide any insurance to

third parties. The provisions recorded represent amounts payable to external parties in respect of claims, the value of which is based

on actuarial reports which assess the likelihood and value of these claims. These are reassessed annually, with movements in claim

reserves being recorded in the income statement.

Property provisions

Property provisions total $27.4m (2022: $26.0m). Property provisions mainly comprise of dilapidations relating to the cost of

restoring leased property back into its original, pre-let condition. The estimate of costs is the greatest area of uncertainty and the

timing of future cash out

flows is linked to the term dates o

f numerous individual leases.

Litigation related provisions

The Group is party to litigation involving clients and sub-contractors arising from its contracting activities. Management has taken

internal and external legal advice in considering known or reasonably likely legal claims and actions by and against the Group. Where

a known or likely claim or action is identified, management care

fully assesses the likelihood of success of the claim or action. A

provision is recognised only in respect of those claims or actions where management consider it is probable that a cash out

flow will

be required.

John Wood Group PLC

Annual Report and Financial Statements 2023

218

Notes to the financial statements

continued

Provisions

(continued)

Provision is made for management’s best estimate of the likely settlement costs and/or damages to be awarded for those

claims and actions that management considers are likely to be successful. Due to the inherent commercial, legal and technical

uncertainties in estimating project claims, the amounts ultimately paid or realised by the Group could differ from the amounts that

are recognised in the financial statements.

In the second half of 2023, and as noted in note 5, a third party raised an arbitration claim against the Group in respect of alleged

damages and costs arising from a

fixed price contract in the discontinued Power and Industrial EPC business. Management have

recognised a provision of $23.0m as an exceptional charge, representing their assessment of probable out

flows arising

from the

matter.

Investigations

At 31 December 2023, the Group continues to recognise the final instalment o

f outstanding penalties of $35.6m (2022: $37.3m)

within Trade and other payables. The final instalment was paid in January 2024.

Project related provisions

The Group has numerous provisions relating to the projects it undertakes for its customers. The value of these provisions relies on

specific judgements in areas such as the estimate o

f future costs or the outcome of disputes and litigation.

Whether or not each

of these provisions will be required, the exact amount that will require to be paid and the timing of any payment will depend on the

actual outcomes. The balance is made up of a large number of provisions, which are not individually material or signi

ficant.

Certain of the jurisdictions in which the Group operates, in particular the US and the EU, have environmental laws under which

current and past owners or operators of property may be jointly and severally liable for the costs of removal or remediation of toxic

or hazardous substances on or under their property, regardless of whether such materials were released in violation of law and

whether the operator or owner knew of, or was responsible for, the presence of such substances. Largely as a consequence of the

acquisition of Amec Foster Wheeler, the Group currently owns and operates, or owned and operated, industrial facilities. It is likely

that, as a result of the Group’s current or former operations, hazardous substances have affected the property on which those

facilities are or were situated.

As described in note 34, the Group agreed to indemnify certain third parties relating to businesses and/or assets that were

previously owned by the Group and were sold to them. These principally relate to businesses that were sold by Amec Foster Wheeler

prior to its acquisition by the Group.

Strategic report

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Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

219

Deferred tax

Deferred tax is calculated in full on temporary differences under the liability method using the tax rate applicable to the territory

in which the asset or liability has arisen. The Group has provided deferred tax in relation to UK companies at 25% (2022: 25%). The

movement on the deferred tax account is shown below:


	Re-presented
	As at				As at
	1 January	Income			31 December
	2023	statement	OCI	Other	2023
	$m	$m	$m	$m	$m
Accelerated capital allowances	(31.5)	(2.6)	(1.8)	–	(35.9)
Intangibles	179.8	(4.7)	3.1	–	178.2
Pension	106.8	4.1	(11.8)	–	99.1
Share based charges	(1.4)	(0.3)	-	–	(1.7)
Other temporary differences	8.4	(2.4)	(3.3)	(0.6)	2.1
Provisions	(47.7)	13.7	(1.0)	–	(35.0)
Unremitted earnings	23.5	2.7	0.4	–	26.6
Deferred interest deduction	–	(3.8)	(0.2)	–	(4.0)
Tax credits	–	(0.2)	–	0.2	–
Losses	(199.0)	4.0	0.7	(1.6)	(195.9)
Total	38.9	10.5	(13.9)	(2.0)	33.5


						Re-presented
	As at					As at
	1 January	Income				31 December
	2022	statement	OCI	Other	Disposals	2022
(Asset)/liability	$m	$m	$m	$m	$m	$m
Accelerated capital allowances	(26.8)	(7.1)	2.4	–	–	(31.5)
Intangibles	240.3	1.2	(4.5)	–	(57.2)	179.8
Pension	63.6	10.0	33.2	–	–	106.8
Share based charges	(2.3)	0.9	–	–	–	(1.4)
Other temporary differences	(3.3)	7.5	4.6	(0.4)	–	8.4
Provisions	(50.7)	0.8	1.8	–	0.4	(47.7)
Unremitted earnings	21.7	3.1	(1.3)	–	–	23.5
Deferred interest deduction	(54.2)	54.2	–	–	–	–
Tax credits	–	1.5	–	(1.5)	–	–
Losses	(191.5)	(9.6)	1.9	(0.1)	0.3	(199.0)
Total	(3.2)	62.5	38.1	(2.0)	(56.5)	38.9

Deferred tax is presented in the

financial statements as

follows:


	2023	2022
	$m	$m
Deferred tax assets	(43.1)	(61.2)
Deferred tax liabilities	76.6	100.1
Net deferred tax (asset)/liability	33.5	38.9

No deferred tax liability has been recognised in respect of $20,776.0m (2022: $21,722.0m) of unremitted reserves of subsidiaries

because the Group is in a position to control the timing of the reversal of the temporary difference and it is not probable that such

differences will reverse in the foreseeable future. The amount of unrecognised deferred tax liabilities in respect of these unremitted

reserves is estimated to be $49.4m (2022: $61.8m).

John Wood Group PLC

Annual Report and Financial Statements 2023

220

Notes to the financial statements

continued

Deferred tax

(continued)

The deferred tax balances are analysed below.

31 December 2023

	Accelerated			Share	Other			Deferred
	capital			based	temporary		Unremitted	interest
	allowances	Intangibles	Pension	charges	differences	Provisions	earnings	deduction	Losses	Netting	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Deferred tax assets	(49.6)	–	(1.8)	(1.7)	(1.5)	(35.0)	–	(4.0)	(195.9)	246.4	(43.1)
Deferred tax	13.7	178.2	100.9	–	3.6	–	26.6	–	–	(246.4)	76.6
liabilities
Net	(35.9)	178.2	99.1	(1.7)	2.1	(35.0)	26.6	(4.0)	(195.9)	–	33.5

The prior year allocation of deferred tax has been reviewed and items previously classi

fied as other temporary di

fferences have been

reallocated into categories that provide improved disclosure of what they relate to. Other temporary differences primarily relate to

differences between IFRS and local GAAP accounts and temporary differences related to leases.

Included in the $195.9m (2022: $199.0m) of deferred tax assets in respect of losses is an amount of $104.5m (2022: $97.4m) relating

to the UK tax group which has suf

ficient de

ferred tax liabilities to offset, and $84.4m (2022: $91.3m) relating to the US tax group of

which no asset (2022: no asset) is recognised based on forecast pro

fits o

f the US business, the balance is supported by deferred tax

liabilities.

31 December 2022

	Accelerated			Share	Other			Deferred
	capital			based	temporary		Unremitted	interest
	allowances	Intangibles	Pension	charges	differences	Provisions	earnings	deduction	Losses	Netting	Total
	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m	$m
Deferred tax assets	(61.7)	-	(1.3)	(1.4)	(4.0)	(47.7)	–	–	(199.0)	253.9	(61.2)
Deferred tax	30.2	179.8	108.1	–	12.4	–	23.5	–	–	(253.9)	100.1
liabilities
Net	(31.5)	179.8	106.8	(1.4)	8.4	(47.7)	23.5	–	(199.0)	–	38.9

The expiry dates of unrecognised gross deferred tax assets carried forward are as follows:

	Tax losses	Deductible temporary differences	Total
31 December 2023	$m	$m	$m
Expiring within 5 years	711.0	123.1	834.1
Expiring within 6-10 years	19.6	–	19.6
Expiring within 11-20 years	170.1	–	170.1
Unlimited	7,047.3	1,511.7	8,559.0
	7,948.0	1,634.8	9,582.8

	Tax losses	Deductible temporary differences	Total
31 December 2022	$m	$m	$m
Expiring within 5 years	695.3	131.9	827.2
Expiring within 6-10 years	32.0	7.5	39.5
Expiring within 11-20 years	137.7	–	137.7
Unlimited	7,046.9	1,177.8	8,224.7
	7,911.9	1,317.2	9,229.1

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Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

221

Share based charges

The Group currently has a number of share plans that give rise to equity settled share based charges. These are the Executive

Share Option Scheme (‘ESOS’), the Long Term Plan (‘LTP’), the Employee Share Plan (‘ESP’) and the Share Incentive Plan (‘SIP’).

The charge to operating profit

for these plans for the year amounted to $19.6m (2022: $20.7m) and is included in administrative

expenses with the corresponding credit included in retained earnings.

Long Term Plan and Discretionary Share plan

The Group’s Long-Term Plan (‘LTP’) was introduced in 2013. The plan was replaced at the Group’s Annual General Meeting in 2023

with the new Discretionary Share Plan (“DSP”). There are two distinct awards made under the DSP, performance-based awards

to the executive leadership team made based on achievement of performance measures and non-performance awards to senior

management either in the form of conditional share awards or nil cost share options.

The performance measures relevant to active cycles are total shareholder return, EBITDA margin, revenue growth, EBITDA and ESG

targets including reducing carbon emissions and leadership gender diversity. Participants may be granted conditional share awards

or nil cost options at the start of the cycle. Where performance applies, this is measured over a three year period and up to 80% of

an award may vest based on the performance over that period. The vesting of at least 20% of any award is normally deferred for a

further period of at least two years.

Employees may also be granted non-performance awards either in the form of conditional share awards or share options. These

awards typically have a three-year vesting period. From 2022, a large portion of senior management who were previously eligible for

the performance-based element of the LTP were instead awarded these non-performance awards.

Performance based awards

Details of the LTP awards are set out in the table below. The charge for market related performance targets has been calculated

using a Monte Carlo simulation model taking account of share price volatility against peer group companies, risk free rate of return,

dividend yield and the expected lifetime of the award. Further details of the LTP are provided in the Directors’ Remuneration

Report.


			Awards outstanding	Awards outstanding
Cycle	Performance period	Fair value of award	31 December 2023	31 December 2022
11	2018-20	£6.67	130,233	405,899
12	2019-21	£5.69	227,146	257,082
13	2020-22	£3.64	-	6,987,812
14	2021-23	£3.17	7,048,776	7,634,392
15	2022-24	£1.88	1,354,999	1,647,844
16	2023-25	£1.32	3,567,754	–
			12,328,908	16,933,029

3,567,754 awards were made during the year, 299,928 awards were exercised during the year and 7,871,947 awards lapsed or were

cancelled due to performance targets not being achieved.

The awards outstanding under cycle 11 and 12 represent 100% of the deferred award for directors and 20% of the award for all

other participants at vesting which is deferred for two years. Zero awards remain outstanding under cycle 13 as performance

measures were missed. Awards under cycle 15 and 16 were granted to directors and the executive leadership team only, with other

senior management receiving non-performance LTP awards.

Further details on the LTP are provided in the Directors’ Remuneration Report.

ESOS

For the purposes of calculating the fair value of the share options, a Black-Scholes option pricing model has been used. Based on

past experience, it has been assumed that options will be exercised, on average, six months after the earliest exercise date, which is

four years after grant date, and a lapse rate of 25% has been assumed. The share price volatility used in the calculation of 40% is

based on the actual volatility of the Group’s shares as well as that of comparable companies. The risk-free rate of return is based

on the implied yield available on zero coupon gilts with a term remaining equal to the expected lifetime of the options at the date of

grant.

John Wood Group PLC

Annual Report and Financial Statements 2023

222

Notes to the financial statements

continued

Share based charges

(continued)

Share awards

A summary of the basis for the charge for ESOS and LTP options is set out below together with the number of awards granted,

exercised and lapsed during the year.

	ESOS		LTP and deferred bonus
	2023	2022	2023	2022
Number of participants	156	218	261	349
Lapse rate	25%	25%	10%	10%
Risk free rate of return on grants during year	N/A	N/A	3.69%	0.43%
Share price volatility	40%	40%	40%	40%
Dividend yield on grants during year	N/A	N/A	0%	0%
Fair value of options granted during year	N/A	N/A	£1.41-£2.25	£1.91–£2.39
Weighted average remaining contractual life	0.3 years	0.7 years	1.8 years	2.2 years
Options outstanding 1 January	995,000	1,540,288	8,254,534	3,284,268
Options granted during the year	–	–	7,942,031	7,673,780
Options exercised during the year	–	–	(1,406,735)	(1,456,502)
Options lapsed during the year	(545,500)	(545,288)	(1,189,312)	(1,247,012)
Dividends accrued on options	–	–	–	–
Options outstanding 31 December	449500	995,000	13,600,518	8,254,534
No. of options exercisable at 31 December	449,500	995,000	597,733	296,531
Weighted average share price of options exercised during year	N/A	N/A	£1.85	£1.58

Executive Share Option Schemes

The following options to subscribe for new or existing shares were outstanding at 31 December:

	Number of ordinary
	shares under option
			Exercise price	Exercise
Year of Grant	2023	2022	(per share)	period
2012	–	–	680½p	2016–2022
2013	–	518,500	845⅓p	2017–2023
2014	449,500	476,500	767⅔p	2018–2024

449,500

995,000

Share options are granted at an exercise price equal to the average mid-market price of the shares on the three days prior to the

date of grant.

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Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

223

Share based charges

(continued)

Nil value share awards

The following options granted under the Group’s LTP/DSP were outstanding at 31 December:

	Number of ordinary
	shares under option
			Exercise price	Exercise
Year of Grant	2023	2022	(per share)	period
2018	–	79,348	0.00p	2022-2023
2020	–	227,183	0.00p	2022-2023
2020	5,000	5,000	0.00p	2023-2024
2021	627,000	1,544,000	0.00p	2025-2026
2022	83,222	101,337	0.00p	2024-2025
2022	880,000	900,000	0.00p	2025-2026
2022	4,606,367	5,397,666	0.00p	2025
2023	465,634	–	0.00p	2025-2026
2023	6,933,295	–	0.00p	2026
	13,600,518	8,254,534

Awards are granted under the Group’s LTP/DSP at nil value. There are no performance criteria relating to the exercise of the

options. Further details on the LTP/DSP are provided in the Directors’ Remuneration Report.

Employee share plan

The Group introduced the ESP in 2016. Under the plan employees contribute regular monthly amounts which are used to purchase

shares over a one-year period. At the end of the year, the participating employees are awarded one free share for every two shares

purchased, providing they remain in employment for a further year. During 2023, 2,192,616 shares were awarded in relation to the

ESP, of which 599,218 and 1,593,398 shares related to the 2022/23 and 2023/24 schemes respectively.

Share incentive plan

The Group introduced the SIP in 2021 for UK employees. Under the plan, which is recognised by HM Revenue and Customs,

employees contribute regular monthly amounts of up to £150 per month to purchase shares. The participating employees

are awarded one free share for every two purchased, provided that they hold the purchased shares for 3 years and remain in

employment. During 2023, 845,381 partnership shares and 422,563 matching shares were awarded.

Share capital

Ordinary shares of 42/7 pence each (

2022: 4

2/7 pence)

		2023		2022
Authorised, issued and fully paid	shares	$m	shares	$m
At 1 January and 31 December	691,839,369	41.3	691,839,369	41.3

Holders of ordinary shares are entitled to receive any dividends declared by the Company and are entitled to vote at general

meetings of the Company.

John Wood Group PLC

Annual Report and Financial Statements 2023

224

Notes to the financial statements

continued

Share premium

	2023	2022
	$m	$m
At 1 January and 31 December	63.9	63.9

The shares allocated to the trust during the year were issued at 42/7 pence (

2022: 4

2/7 pence).

Retained earnings

	2023	2022
	$m	$m
At 1 January	1,224.4	1,415.0
Loss for the year attributable to owners of the parent	(110.7)	(356.3)
Credit relating to share based charges (note 24)	19.6	20.7
Re-measurement (loss)/gain on retirement benefit liabilities (note 33)	(82.2)	170.9
Movement in deferred tax relating to retirement bene fit liabilities	18.0	(41.6)
Deferred tax impact of rate change in equity	0.7	(0.8)
Tax on derivative financial instruments	(0.4)	(1.7)
Other tax movements in equity	(0.1)	(1.3)
Exchange movements in respect of shares held by employee share trusts	–	12.5
Purchase of shares by employee share trusts for the Share Incentive Plan (SIP)	1.6	1.7
Transfer from merger reserve	242.0	–
Transactions with non-controlling interests	–	5.3
At 31 December	1,312.9	1,224.4

Retained earnings are stated after deducting the investment in own shares held by employee share trusts. No options have been

granted over shares held by the employee share trusts (2022: nil).

Shares held by employee share trusts

	2023		2022
	Shares	$m	Shares	$m
Balance 1 January	8,442,031	99.4	14,358,014	111.9
Shares issued to satisfy option exercises	(1,406,735)	–	(1,456,502)	–
Shares issued to satisfy awards under Long Term Incentive Plan	(299,928)	–	(1,438,398)	–
Shares issued to satisfy awards under Employee Share Plan	(1,114,466)	–	(1,984,772)	–
Shares issued to satisfy awards under Share Incentive Plan	(1,267,944)	–	(1,036,311)	–
Other share transactions	–	–	–	–
Exchange movement	–	–	–	(12.5)
Balance 31 December	4,352,958	99.4	8,442,031	99.4

Shares acquired by the employee share trusts are purchased in the open market using funds provided by John Wood Group PLC to

meet obligations under the Employee Share Option Schemes and LTP. Shares are allocated to the employee share trusts in order to

satisfy future option exercises at various prices.

The costs of funding and administering the trusts are charged to the income statement in the period to which they relate. The

market value of the shares at 31 December 2023 was $9.5m (2022: $13.7m) based on the closing share price of £1.72 (2022: £1.35)

and closing exchange rate of 1.2749 (2022: 1.2029). The employee share trusts have waived their rights to receipt of dividends on

ordinary shares.

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Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

225

Merger reserve


	2023	2022
	$m	$m
At 1 January	2,540.8	2,540.8
Transfer to retained earnings	(242.0)	–
At 31 December	2,298.8	2,540.8

On 6 October 2017, 294,510,217 new shares were issued in relation to the acquisition of Amec Foster Wheeler Group. As the

acquisition resulted in the Group securing 90% of Amec Foster Wheeler’s share capital, the acquisition quali

fied

for merger relief

under section 612 of the Companies Act 2006 and the premium arising on the issue of the shares was credited to a merger reserve

rather than the share premium account.

In November 2019, John Wood Group PLC (the Company) sold its investment in Amec Foster Wheeler Limited and other

subsidiaries to another subsidiary company, John Wood Group Holdings Limited for $2,815.2m in exchange for a promissory note.

To the extent that the promissory note is settled by qualifying consideration, the related portion of the merger reserve is considered

realised and becomes available for distribution.

In 2023, John Wood Group Holdings Limited paid $242.0m to John Wood Group PLC in a partial settlement of the promissory note.

The repayment represented qualifying consideration and as a result the Company transferred an equivalent portion of the merger

reserve to retained earnings.

Other reserves


	Capital	Capital	Currency
	reduction	redemption	translation	Hedging
	reserve	reserve	reserve	reserve	Total
	$m	$m	$m	$m	$m
At 1 January 2022	88.1	439.7	(497.0)	(9.8)	21.0
Cash flow hedges	–	–	–	5.1	5.1
Exchange movement on retranslation of foreign operations	–	–	(223.0)	–	(223.0)
Exchange movement on disposal of foreign operations	–	–	54.5	–	54.5
At 31 December 2022	88.1	439.7	(665.5)	(4.7)	(142.4)
Cash flow hedges	–	–	–	3.8	3.8
Exchange movement on retranslation of foreign operations	–	–	58.2	–	58.2
Exchange movement on disposal of foreign operations	–	–	–	–	–
At 31 December 2023	88.1	439.7	(607.3)	(0.9)	(80.4)

The capital reduction reserve was created subsequent to the Group’s IPO in 2002 and is a distributable reserve.

The capital redemption reserve was created following a share issue that formed part of a return of cash to shareholders in 2011.

This is not a distributable reserve.

The currency translation reserve relates to the retranslation of foreign currency net assets on consolidation. This was reset to zero

on transition to IFRS at 1 January 2004. The movement during the year relates to the retranslation of foreign operations, including

goodwill and intangible assets recognised on acquisition.

The hedging reserve relates to the accounting for derivative

financial instruments under IFRS 9. Fair value gains and losses in

respect of effective cash

flow hedges are recognised in the hedging reserve.

Non-controlling interests


	2023	2022
	$m	$m
At 1 January	1.5	3.3
Share of pro fit for the year	5.5	4.6
Dividends paid to non-controlling interests	(1.6)	(1.1)
Transactions with non-controlling interests	–	(5.3)
At 31 December	5.4	1.5

John Wood Group PLC

Annual Report and Financial Statements 2023

226

Notes to the financial statements

continued

Analysis of net debt


					At 31
	At 1 January	Cash		Exchange	December
	2023	flow	Other	movements	2023
2023	$m	$m	$m	$m	$m
Short term borrowings	(345.9)	133.5	(85.8)	(17.1)	(315.3)
Long term borrowings	(584.0)	(315.0)	87.2	(0.4)	(812.2)
	(929.9)	(181.5)	1.4	(17.5)	(1,127.5)
Cash and cash equivalents	536.7	(107.6)	-	4.9	434.0
Net debt excluding leases	(393.2)	(289.1)	1.4	(12.6)	(693.5)
Leases	(342.9)	113.3	(160.9)	(10.3)	(400.8)
Net debt including leases	(736.1)	(175.8)	(159.5)	(22.9)	(1,094.3)


					At 31
	At 1 January	Cash		Exchange	December
	2022	flow	Other	movements	2022
2022	$m	$m	$m	$m	$m
Short term borrowings	(281.9)	(53.0)	(12.2)	1.2	(345.9)
Long term borrowings	(1,614.1)	1,039.1	(8.9)	(0.1)	(584.0)
	(1,896.0)	986.1	(21.1)	1.1	(929.9)
Cash and cash equivalents	503.0	60.2	–	(26.5)	536.7
Net debt excluding leases	(1,393.0)	1,046.3	(21.1)	(25.4)	(393.2)
Leases	(449.8)	121.6	(41.7)	27.0	(342.9)
Net debt including leases	(1,842.8)	1,167.9	(62.8)	1.6	(736.1)

Cash at bank and in hand at 31 December 2023 includes $127.7m (2022: $328.4m) that is part of the Group’s cash pooling

arrangements. For internal reporting and the calculation of interest, this amount is netted with short-term overdrafts and is

presented as a net figure on the Group’s balance sheet. In preparing these financial statements, the Group is required to gross up

both its cash and short-term borrowings figures by this amount.

Cash and cash equivalents of $434.0m (2022: $536.7m) includes restricted cash of $49.4m (2022: $15.0m). The restricted cash

balance comprises $38.1m (2022: not considered restricted) of cash held in Equatorial Guinea where the Group are seeking Central

Bank approval in order to repatriate cash from a subsidiary via dividends or intercompany loans. A further $9.3m (2022: $10.0m) of

cash is held in jurisdictions where there is insuf

ficient liquidity in the local market to allow

for immediate repatriation. The remaining

$2.0m (2022: $5.0m) relates to balances held within Russia that are impacted by the sanctions associated with Russia’s invasion

of Ukraine. Management considers it appropriate to include the restricted cash balance in the Group’s net debt

figure on the basis

that it meets the definition o

f cash, albeit is not readily available to the Group.

The lease liability at 31 December 2023 is made up of non-current leases of $317.4m (2022: $259.7m) and current leases of $83.4m

(2022: $83.2m).

The other movements of $159.5m (2022: $62.8m) in the above table represents new leases entered into of $142.2m (2022: $23.8m),

interest expense of $18.7m (2022: $17.9m), amortisation of bank facility fees of $2.4m (2022: $8.9m) and accrued interest on loan

notes of $3.8m (2022: $12.2m). In addition, senior loan notes amounting to $89.6m were reclassi

fied

from long term borrowings to

short term as they fall due within the next 12 months.

As at 31 December 2023, the Group had received $198.2m (2022: $200.0m) of cash relating to non-recourse

financing

arrangements. An equivalent amount of trade receivables was derecognised on receipt of the cash. At 31 December 2023, $111.7m

(2022: $113.6m) had been received from customers in the normal course of business in relation to the same amounts received from

the factors. This $111.7m (2022: $113.6m) is due to be paid over to the factors and is included in trade payables. The impact of both

the cash received from the facility and the cash received from customers is included within cash generated from operations.

Strategic report

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Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

227

Employees and directors

Employee benefits expense

	2023	2022
	$m	$m
Wages and salaries	2,414.3	2,808.0
Social security costs	180.6	196.1
Pension costs – defined benefit schemes (note 33)	2.9	1.7
Pension costs – defined contribution schemes (note 33)	97.4	103.5
Share based charges (note 24)	19.6	20.7
	2,714.8	3,130.0

	2023	2022
Average monthly number of employees (including executive directors)	No.	No.
By geographical area:
UK	4,928	5,601
US	6,443	9,128
Rest of the World	20,701	20,721
	32,072	35,450

The average number of employees excludes contractors and employees of joint venture companies.

	2023	2022
Key management compensation	$m	$m
Salaries and short-term employee benefits	9.0	13.9
Amounts receivable under long-term incentive schemes	0.8	0.7
Social security costs	0.8	1.0
Post-employment benefits	0.2	0.3
Share based charges	2.5	3.6
Termination benefits	-	0.9
	13.3	20.4

Key management compensation represents the charge to the income statement in respect of the remuneration of the Group board

and Group Executive Leadership Team (‘ELT’) members. At 31 December 2023, key management held 0.2% of the voting rights of

the company.

	2023	2022
Directors	$m	$m
Aggregate emoluments	3.6	3.8
Aggregate amounts receivable under long-term incentive schemes	0.3	0.3
Aggregate gains made on the exercise of share options	0.1	0.3
Share based charges	1.1	1.6
	5.1	6.0

At 31 December 2023, two directors (2022: one) had retirement benefits accruing under a defined contribution pension plan and no

directors (2022: none) had benefits accruing under a defined benefit pension scheme. Further details o

f directors’ emoluments are

provided in the Directors’ Remuneration Report.

John Wood Group PLC

Annual Report and Financial Statements 2023

228

Notes to the financial statements

continued

Retirement benefit schemes

The Group operates a number of de

fined benefit pension schemes which are largely closed to

future accrual. The assets of the

defined benefits schemes are held separately

from those of the Group, being invested with independent investment companies

in trustee administered funds. The trustees of the pension schemes are required by law to act in the best interests of the scheme

participants and are responsible for setting certain policies (such as investment, contribution and indexation policies) for the schemes.

At 31 December 2023, the largest schemes by gross obligation are the Wood Pension Plan (‘WPP’) in the UK, the Foster Wheeler Inc

Salaried Employees Pension Plan (‘FW Inc SEPP’) in the US and the Foster Wheeler Inc Pension Plan for Certain Employees (‘FW Inc

PPCE’) in the US. These pension plans provide certain former employees with leaving service bene

fits that are generally based on

service and salary.

The scheme valuations are based on the membership data contained within the triennial valuation of Wood Pension Plan as

at 31 March 2023, and the valuation of the Foster Wheeler Inc SEPP/PPCE as at 1 January 2023. The scheme valuations have

been updated by the schemes’ actuaries for the requirement to assess the present value of the liabilities of the schemes as at 31

December 2023. The assets of the schemes are stated at their aggregate market value as at 31 December 2023. It is expected that

the Group will make funding and expense contributions to these pension plans totalling $6.9m in the calendar year 2024 (nil in 2023)

in line with the funding requirements agreed for the plans.

The actuarial valuation method is prescribed by the IAS 19 accounting standard and uses discount rates determined by the yields

on high quality, AA rated, bonds at the measurement date. Conversely, each pension scheme is subject to a separate technical

provisions or funding basis valuation which is considered to be more prudent than the IAS 19 methodology. Under IAS 19, the Wood

Pension Plan is 116% funded on 31 December 2023 compared to 109% funded on the technical provisions basis.

Management have considered the requirements of IFRIC 14, ‘The Limit on a De

fined Benefit Asset, Minimum Funding Requirements

and their Interaction’ and consider it is appropriate to recognise the IAS 19 surplus in the Wood Pension Plan. The rules governing

these schemes provide an unconditional right to a refund assuming the gradual settlement of the scheme’s liabilities over time until all

members have left the schemes. The requirements of IFRIC 14 also mean there is no requirement to recognise any additional liabilities

in relation to deficit

funding requirements. At the balance sheet date, there are no plans to exercise the unconditional right to a refund

and other assets are being explored to use the surplus, and therefore the tax rate applied to the surplus of the UK scheme is 25%.

Scheme membership at the date of the most recent scheme census was as follows:

	2023			2022
	Wood	2023	2023	Wood	2022	2022
	Pension	FW Inc	FW Inc	Pension	FW Inc	FW Inc
	Plan	SEPP	PPCE	Plan	SEPP	PPCE
Active members	303	30	22	494	44	28
Deferred members	7,190	734	266	8,313	622	437
Pensioner members	10,178	2,245	833	10,149	2,233	871

Active members includes deferred members still employed but not actively contributing to the scheme.

The principal assumptions made by the actuaries at the balance sheet date were:

	2023			2022
	Wood	2023	2023	Wood	2022	2022
	Pension	FW Inc	FW Inc	Pension	FW Inc	FW Inc
	Plan	SEPP	PPCE	Plan	SEPP	PPCE
	%	%	%	%	%	%
Discount rate	4.8	4.9	4.9	5.0	5.2	5.2
Rate of increase in pensions in payment and deferred pensions	2.8	N/A	N/A	2.8	N/A	N/A
Rate of retail price index in flation	3.0	N/A	N/A	3.1	N/A	N/A
Rate of consumer price index in flation	2.6	N/A	N/A	2.6	N/A	N/A

The assumptions on the FW Inc SEPP and FW Inc PPCE in the above table are not applicable since there are no post-retirement

increases or cost of living adjustments provided in these plans. With no cost of living adjustments, there are no underlying retail

price index or consumer price index assumptions to consider.

The mortality assumptions used to determine pension liabilities in the main schemes at 31 December 2023 were as follows –

Scheme	Mortality assumption
Wood Pension Plan	Base table
	Non-pensioners: Males: 102% of S3PMA Females: 104% of S3PFA_M Pensioners: Males: 97%
	of S3PMA Females: 99% of S3PFA_M
	Future improvements
	Scheme specific table with CMI 2022 (Sk =7.0) projections and a long-term rate o f
	improvement of 1.25% pa, initial addition (“A” parameter) of 0.3, 25% weight on 2022 data
	and no weight on 2020 and 2021 data
	Pri-2012 Employee and Annuitant tables for males and females with generational projection
	using Scale MP-2021 with no collar adjustments and Pri-2012 Contingent Annuitant mortality
FW Inc SEPP and FW Inc PPCE	for spouses and bene ficiaries with generational projection using Scale MP-2021 with no collar
	adjustments

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Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

229

Retirement benefit schemes

(continued)

The mortality assumption uses data appropriate to each of the Group’s schemes adjusted to allow for expected future improvements in

mortality using the latest projections. Assumptions regarding future mortality are based on published statistics and the latest available

mortality tables. In relation to the Wood Pension Plan, the Group has reflected the latest available data on the mortality characteristics

of plan members following a mortality study undertaken since the prior year-end. The Group has also adopted the CMI_2022 model for

projecting future improvements in life expectancy with the following parameters: s-kappa of 7.0, no weight to 2020 and 2021 death data

and 25% weight to 2022 death data and an initial addition parameter of 0.3. The impact of adopting this revised mortality assumption,

compared to the assumption adopted for the prior year, is around a 3% reduction in the value of the de

fined benefit obligation. In setting

the assumptions, the Group has also reflected the results o

f a separate demographic study which assessed the proportion of plan

members who are expected to have an eligible dependant and the likely age difference of any dependant. The impact of adopting these

revised assumptions is around 2.3% increase in the value of the de

fined benefit obligation compared to the prior year.

For the schemes referred to above the assumed life expectancies are shown in the following table:

	2023			2022
	Wood	2023	2023	Wood	2022	2022
	Pension	FW Inc	FW Inc	Pension	FW Inc	FW Inc
	Plan	SEPP	PPCE	Plan	SEPP	PPCE
Life expectancy at age 65 of male aged 45	22.9	22.2	22.2	23.8	22.1	22.1
Life expectancy at age 65 of male aged 65	22.0	20.7	20.7	22.5	20.6	20.6
Life expectancy at age 65 of female aged 45	24.8	24.1	24.1	25.5	24.0	24.0
Life expectancy at age 65 of female aged 65	23.7	22.6	22.6	24.0	22.6	22.6

The amounts recognised in the income statement are as follows:

	2023	2022
	$m	$m
Current service cost	2.9	1.7
Past service credit	–	–
Total expense included within operating profit	2.9	1.7
Interest cost	126.7	78.0
Interest income on scheme assets	(145.0)	(80.4)
Total included within finance income	(18.3)	(2.4)

The amounts recognised in the balance sheet are determined as follows:

	2023	2022
	$m	$m
Present value of funded obligations	(2,707.3)	(2,533.0)
Fair value of scheme assets	3,019.1	2,892.2
Net surplus	311.8	359.2

Changes in the present value of the de

fined benefit liability are as

follows:

	2023	2022
	$m	$m
Present value of funded obligations at 1 January	2,533.0	4,626.6
Current service cost	2.9	1.7
Interest cost	126.7	78.0
Re-measurements:
- actuarial losses/(gains) arising from changes in financial assumptions	48.1	(1,544.5)
- actuarial gains arising from changes in demographic assumptions	(16.9)	(31.4)
- actuarial losses arising from changes in experience	41.6	72.0
Benefits paid	(164.4)	(177.3)
Decrease due to divestments	-	(58.7)
Exchange movements	136.3	(433.4)
Present value of funded obligations at 31 December	2,707.3	2,533.0

John Wood Group PLC

Annual Report and Financial Statements 2023

230

Notes to the financial statements

continued

Retirement benefit schemes

(continued)

Changes in the fair value of scheme assets are as follows:

	2023	2022
	$m	$m
Fair value of scheme assets at 1 January	2,892.2	4,811.5
Interest income on scheme assets	145.0	80.4
Contributions	3.1	42.5
Benefits paid	(164.4)	(177.3)
Re-measurement losses on scheme assets	(9.4)	(1,333.0)
Expenses paid	(7.6)	(7.4)
Decrease due to divestments	-	(55.9)
Exchange movements	160.2	(468.6)
Fair value of scheme assets at 31 December	3,019.1	2,892.2

Analysis of the movement in the balance sheet surplus:

	2023	2022
	$m	$m
Surplus at 1 January	359.2	184.9
Current service cost	(2.9)	(1.7)
Finance income	18.3	2.4
Contributions	3.1	42.5
Re-measurement (losses)/gains recognised in the year	(82.2)	170.9
Expenses paid	(7.6)	(7.4)
Increase due to divestments (note 7)	-	2.8
Exchange movements	23.9	(35.2)
Surplus at 31 December	311.8	359.2

The increased surplus due to divestments of $2.8m in 2022 relates to sale of a net pension liability on a small US scheme. This forms

part of the disposal of the Built Environment Consulting business outlined in note 7.

The net surplus at 31 December is presented in the Group balance sheet as follows:

	2023	2022
	$m	$m
Wood Pension Plan	391.9	432.4
Retirement benefit scheme surplus	391.9	432.4
Foster Wheeler Inc SEPP/PPCE	(52.5)	(49.4)
All other schemes	(27.6)	(23.8)
Retirement benefit scheme deficit	(80.1)	(73.2)
Net surplus	311.8	359.2

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

231

Retirement benefit schemes

(continued)

For the principal schemes the defined benefit obligation can be allocated to the plan participants as

follows:

	2023			2022
	Wood	2023	2023	Wood	2022	2022
	Pension	FW Inc	FW Inc	Pension	FW Inc	FW Inc
	Plan	SEPP	PPCE	Plan	SEPP	PPCE
	%	%	%	%	%	%
Active members	3.9	2.4	1.6	5.6	3.5	1.7
Deferred members	32.9	24.6	12.8	38.5	23.1	12.9
Pensioner members	63.2	73.0	85.6	55.9	73.4	85.4

The weighted average duration of the de

fined benefit obligation is as

follows:

		2023			2022
		Wood	2023	2023	Wood	2022	2022
		Pension	FW Inc	FW Inc	Pension	FW Inc	FW Inc
		Plan	SEPP	PPCE	Plan	SEPP	PPCE
		years	years	years	years	years	years
Duration of de	fined benefit obligation	13.0	8.1	7.3	13.0	8.1	7.3

The major categories of scheme assets as a percentage of total scheme assets are as follows:

	2023			2022			2023	2022
	Wood	2023	2023	Wood	2022	2022	Quoted	Quoted
	Pension	FW Inc	FW Inc	Pension	FW Inc	FW Inc	on active	on active
	Plan	SEPP	PPCE	Plan	SEPP	PPCE	market	market
	$m	$m	$m	$m	$m	$m	%	%
Equities	5.2	26.2	53.1	10.6	31.1	62.4	89.8	93.8
Property a	34.0	-	-	75.7	-	-	–	–
Bonds (including gilts)	1,398.2	39.8	48.5	1,254.7	37.2	44.3	100.0	100.0
Liability-Driven Investments (LDIs)	1,554.5	-	-	1,456.3	-	-	100.0	100.0
Cash	101.9	0.9	1.7	124.3	0.8	1.7	100.0	100.0
Liquidity funds	14.8	-	-	248.6	-	-	100.0	100.0
Derivatives b	(286.0)	-	-	(480.1)	-	-	–	–
Investment funds	-	3.7	7.6	-	3.3	6.8	100.0	100.0
	2,822.6	70.6	110.9	2,690.1	72.4	115.2	n/a	n/a

Notes

a. Property assets are valued based on an analysis of recent market transactions supported by market knowledge derived from third-party, independent valuation experts

b. Derivatives are mainly related to repurchase agreements used to fund liability driven investments

As at 31 December 2023, 108.2% (2022: 113.7%) of total scheme assets in the principal schemes have quoted prices in active markets.

The Plan has a target allocation of 50% of investments held in cash

flow-matching assets, with the remaining 50% allocated

to liability-matching assets, designed to partially offset the movements in the Plan’s liabilities caused by movements in interest

rates and inflation. This asset split reflects the Trustee’s current view o

f the most appropriate investments balancing risk/reward

characteristics of the funds the Plan is invested in. During the accounting period the Plan has continued the process of selling down

the growth assets in the portfolio.

As a result, the value of the property portfolio has declined over the reporting period. This was partly due to two properties being

sold during 2023, totalling £23.9 million disposal proceeds alongside valuation reductions across the property portfolio driven by a

combination of wider property market valuations weakening as well as property speci

fic

factors in the portfolio.

The reduction in the cash allocation over the 12 months to 31 December 2023 is predominantly down to the cash and cash equivalents

balance within the BlackRock LDI mandate. In Q4 2022 the LDI mandate was recapitalised following the UK governments “mini

budget” and the gilts crisis that followed and this resulted in a higher than usual cash balance in the LDI mandate at 31 December

2022. This cash balance has been invested into gilts and other hedging instruments during 2023 reducing the allocation.

The majority of the change in the value of the derivatives allocation can be attributed to a change in the allocation to gilt repos in the LDI

mandate. The remainder of the change is the result of derivatives exposure at the buy and maintain credit managers who use derivatives

to hedge currency risk. As currency pairs fluctuate, the market value o

f derivatives within these mandates will also

fluctuate.

The Trustee’s policy and beliefs in relation to ESG factors for the Plan are set out in the Statement of Investment Principles. The

Trustee also undertake TCFD reporting annually, which assesses the climate impact of the Plan’s portfolio as well as the potential risks

that differing climate change scenarios may pose to the Plan over differing time horizons. Individual investment manager ESG ratings

are reviewed in detail annually and the Trustees discuss ESG related issues when meeting with the Plan’s investment managers.

The Group seeks to fund its pension plans to ensure that all bene

fits can be paid as and when they

fall due. The Group is in the

process of

finalising the 31 March 2023 valuation, but due to the significant surplus, no contribution will be likely.

The US plans are funded to ensure that statutory obligations are met and contributions are generally payable to at least minimum

funding requirements.

John Wood Group PLC

Annual Report and Financial Statements 2023

232

Notes to the financial statements

continued

Retirement benefit schemes

(continued)

Scheme risks

The retirement benefit schemes are exposed to a number o

f risks, the most signi

ficant o

f which are –

Volatility

The defined benefit obligation is measured with re

ference to corporate bond yields and if scheme assets underperform relative to

this yield, this will create a deficit, all other things being equal. The scheme investments are well diversified such that the

failure of a

single investment would not have a material impact on the overall level of assets.

The schemes hold various liability driven investments comprising physical gilts, swap and leveraged gilt exposures to provide asset

protection against interest and inflation

factors inherent in their liability valuations. Collateral buffers have been further strengthened by

de-risking steps taken to disinvest from equities and it is believed the WPP has suf

ficient collateral to withstand a sizable level o

f movement

in interest rates. Of the scheme’s liabilities 105.2% are currently hedged against interest rates and 103.7% against in

flation rate risk.

Changes in bond yields

A decrease in corporate bond yields will increase the defined benefit obligation. This would however be o

ffset to some extent by a

corresponding increase in the value of the scheme’s bond asset holdings.

Inflation risk

The majority of bene

fits in de

ferment and in payment are linked to price in

flation so higher actual inflation and higher assumed

inflation will increase the defined benefit obligation.

Life expectancy

The defined benefit obligation is generally made up o

f bene

fits payable

for life and so increases to members’ life expectancies will

increase the defined benefit obligation, all other things being equal.

Sensitivity of the retirement bene

fit obligation

The impact of changes to the key assumptions on the retirement bene

fit obligation is shown below. The sensitivity is based on a

change in an assumption whilst holding all other assumptions constant. In practice, this is unlikely to occur, and changes in some

of the assumptions may be correlated. When calculating the sensitivity of the de

fined benefit obligation to significant actuarial

assumptions the same method has been applied as when calculating the pension obligation recognised in the Group balance sheet.

	Wood	Wood	FW Inc	FW Inc	FW Inc	FW Inc
	Pension Plan	Pension Plan	SEPP	SEPP	PPCE	PPCE
	2023	2022	2023	2022	2023	2022
Approximate increase/(decrease) on scheme liabilities	$m	$m	$m	$m	$m	$m
Discount rate
Plus 0.5%	(146.6)	(134.0)	(3.2)	(3.2)	(5.2)	(5.4)
Minus 0.5%	163.0	151.5	3.5	3.5	5.6	5.7
Inflation
Plus 0.1%	15.0	13.3	N/A	N/A	N/A	N/A
Minus 0.1%	(14.9)	(13.2)	N/A	N/A	N/A	N/A
Life expectancy
Plus 1 year	86.5	75.5	3.0	2.9	6.2	6.1
Minus 1 year	(87.0)	(73.6)	(3.0)	(2.9)	(6.1)	(6.0)

The sensitivity analysis covering the impact of reasonably plausible movements in pension assumptions are included in the above

table. The 0.5% sensitivity applied is considered to be suf

ficient on the basis o

f minimal movements between 2023 and 2022 on the

interest rates of high-quality corporate bonds in the currency in which the bene

fits will be paid and that have terms to maturity

similar to those of the related retirement bene

fit obligation. The discount rate sensitivities can be extrapolated downwards and

upwards to broadly calculate the impact of a 0.25% and 1% discount rate movement respectively.

Defined contribution plans

Pension costs for de

fined contribution plans were as

follows:

	2023	2022
	$m	$m
Defined contribution plans	97.4	103.5

There were no material contributions outstanding at 31 December 2023 in respect of de

fined contribution plans.

The Group operates a Supplemental Executive Retirement Plan (SERP) pension arrangement in the US for certain employees.

During the year, the Group made contributions of $0.1m (2022: $0.1m) to the arrangement. Contributions are invested in a

portfolio of US funds and the fair value of the funds at the balance sheet date are recognised by the Group in other investments.

Investments held by the Group at 31 December amounted to $51.7m (2022: $55.6m) and will be used to pay benefits when

employees retire. The corresponding liability is recorded in other non-current liabilities.

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

233

Contingent liabilities

General

A contingent liability is a potentially material present obligation that arises from past events but is not recognised because it is not

probable that an outflow o

f resources will be required to settle the obligation or the amount of the obligation cannot be measured

with suf

ficient reliability.

Cross guarantees

At the balance sheet date, the Group had cross guarantees extended to its principal bankers and surety providers in respect of

sums advanced to subsidiaries and certain joint ventures. A liability will only occur in the event of a default by a subsidiary or certain

joint ventures on its obligations.

Legal claims

From time to time, the Group is notified o

f claims in respect of work carried out on customer projects or as subcontractor to others.

For a number of these claims the potential exposure is material. Where management believes we are in a strong position to defend

these claims no provision is made, such that no economic outflow is probable. This includes a civil administrative determination,

made by the Contraloría General de la República de Colombia against two Amec Foster Wheeler subsidiaries, along with 22 others,

in relation to work carried out for Re

fineria de Cartagena, S.A (“Reficar”) between 2009 and 2016. We are continuing to vigorously

challenge this determination and we are confident in our ability to prevail. This also includes commercial disputes which arise

predominantly within our Projects business, some of which may evolve within the next 12 months and these will be reassessed in

future periods as the Group engages in defences to the claims.

At any point in time there are a number of claims where it is too early to assess the merit of the claim, and hence it is not possible

to make a reliable estimate of the potential

financial impact. In per

forming this assessment, the directors considered the nature

of existing litigations or claims, the progress of matters, existing law and precedent, the opinions and views of legal counsel and

other advisors, the Group’s experience in similar cases (where applicable) and other facts available to the Group at the time of

assessment. The director’s assessment of these factors may change over time as individual litigations or claims progress.

The group carries insurance coverage and in the event of future economic out

flow arising with respect to any o

f these

contingencies, an element of reimbursement may occur, subject to any excess or other policy restrictions and limits.

Investigations

Following the settlement of the various regulatory investigations in 2021, it remains possible that there may be other adverse

consequences for the Group’s business including actions by authorities in other jurisdictions. At this time, these consequences

appear unlikely and therefore no provision has made in respect of them in the

financial statements.

Employment claims

The Group received assessments from HMRC into the historical application of employer’s National Insurance Contributions to workers on

the UK Continental Shelf. The assessments have been appealed and our case is stayed for a

fixed period. We believe it is more likely than

not that we will be able to defend this challenge and therefore as a result do not expect that it is probable a liability will arise. The maximum

potential exposure to the Group in relation to tax and interest should we be unsuccessful in our position is approximately $32.5m.

Indemnities and retained obligations

The Group has agreed to indemnify certain third parties relating to businesses and/or assets that were previously owned by

the Group and were sold to them. Such indemnifications relate primarily to breach o

f covenants, breach of representations

and warranties, as well as potential exposure for retained liabilities, environmental matters and third party claims for activities

conducted by the Group prior to the sale of such businesses and/or assets. We have established provisions for those indemnities in

respect of which we consider it probable that there will be a successful claim, to the extent such claim is quanti

fiable. The Group

sold its Built Environment Consulting business to WSP in late 2022 and the share purchase agreement provided an indemnity for

losses on three specified contracts. No provisions were considered necessary

for these contracts as at 31 December 2023.

Tax planning

HMRC have challenged the deductibility of certain interest expenses in relation to loans from Irish resident

finance companies to the UK.

The tax treatment of the Irish

finance companies under the UK controlled

foreign company regime was previously considered as part of the

EU State Aid, but no state aid was found to apply. A signi

ficant amount o

f contemporaneous documentation has been provided to HMRC

regarding the transition from a previous

finance company structure in the Netherlands, and subsequent

funding of acquisitions via the

Irish companies. HMRC continue with their enquiries. We believe that the interest deductions have been appropriately taken in line with tax

legislation and guidance and therefore do not expect any out

flow as a result, however we continue to monitor case law in the area and will

consider the challenges of HMRC when raised. The maximum potential exposure to the Group including interest in relation to the interest

deductions is approximately $39.5m and in the event of any amount ultimately being payable there is no prospect of any reimbursement.

Capital and other financial commitments

	2023	2022
	$m	$m
Contracts placed for future capital expenditure not provided in the financial statements	102.3	74.8

The capital expenditure above relates to software costs which will be included within intangible asset additions when incurred.

John Wood Group PLC

Annual Report and Financial Statements 2023

234

Notes to the financial statements

continued

Related party transactions

The following transactions were carried out with the Group’s joint ventures. These transactions comprise sales and purchases of

goods and services and funding provided in the ordinary course of business. The receivables include loans to joint venture companies.

	2023	2022
	$m	$m
Sale of goods and services to joint ventures	3.6	12.2
Purchase of goods and services from joint ventures	0.6	4.3
Receivables from joint ventures	9.8	8.9
Payables to joint ventures	12.1	0.3

Compensation of key management personnel includes salaries, non-cash bene

fits and contributions to post retirement benefits

schemes disclosed in note 32.

The Group operates a number of de

fined benefit pension arrangements and seeks to

fund these arrangements to ensure that all

benefits can be paid as and when they

fall due. The Group has an agreed schedule of contributions with the UK plan’s trustees

where amounts payable by the Group are dependent on the funding level of the respective scheme. The US plans are funded to

ensure that statutory obligations are met and contributions are generally payable to at least minimum funding requirements. Note

33 sets out details of the Group’s pension obligations under these arrangements.

Post balance sheet events

The directors have reviewed the position of the Group, up to the date authorised for issue of these

financial statements and have

not identified any events arising a

fter the reporting period which require disclosure.

Subsidiaries, joint ventures and other related undertakings

The Group’s subsidiary and joint venture undertakings at 31 December 2023 are listed below. All subsidiaries are fully consolidated in

the financial statements. Ownership interests noted in the table reflect holdings o

f ordinary shares.

Subsidiaries
		Ownership
Company Name	Registered Address	Interest %
Algeria
SARL Wood Group Algeria	Regus Algeria, Tour Nord, Centre Commercial et Administratif de Bab Ezzouar,, Quartier	100
	d’affaires de Bab Ezzouar, Algeria Properties
Wood Group Somias SPA	PO Box 67, Elmalaha Road (Route des Salines), Elbouni, Annaba, Algeria	55
Angola
Production Services Network Angola Limitada	RuaKima Kienda, Edificio SGEP, 2nd Floor, Apartment 16, Boavista District, Ingombota,	49*
	Luanda, Angola
Wood Group Kianda Limitada	No 201, Rua Engenheiro Armindo de Andrade,Bairro Miramar, Simbizanga, Luanda,	41*
	Angola
Argentina
Foster Wheeler E&C Argentina S.A.	Paraguay 1866, Buenos Aires, Argentina	100
ISI Mustang (Argentina) S.A.	Pedro Molina 714, Provincia de Mendoza, Ciudad de Mendoza, Argentina	100
Wood Solar Argentina S.A.U.	Tucuman 1 Floor 4, Buenos Aires, Argentina	100
Wood Wind Argentina S.A.U.	Tucuman 1 Floor 4, Buenos Aires, Argentina	100
Australia
Amec Foster Wheeler Australia Pty Ltd	Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia	100
Aus-Ops Pty Ltd	Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia	100
Innofield Services Pty Ltd	Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia	100
RIDER HUNT INTERNATIONAL (AUSTRALIA)	Level 3, 171 Collins Street, Melbourne, VIC 3000, Australia	100
PTY LTD
SVT Holdings Pty Ltd	Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia	100
Wood Australia Architecture Pty Ltd	Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia	100
Wood Australia Pty Ltd	Level 3, 171 Collins Street ,Melbourne, VIC, 3000, Australia	100
Wood Field Services Pty Ltd	Level 3, 171 Collins Street ,Melbourne, VIC, 3000, Australia	100
Wood Group Australia PTY Ltd	Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia	100
Wood Group Kenny Australia Pty Ltd	Level 1, 240 St Georges Terrace, Perth, WA 6000, Australia	100
Azerbaijan
AMEC Limited Liability Company	37 Khojali Street, Baku, AZ1025, Azerbaijan	100
Wood Group PSN Azerbaijan LLC	Khojali Avenue,Building 37, Khatal District, Baku, AZ1025, Azerbaijan	100
Bermuda
Foster Wheeler Ltd.	Clarendon House, 2 Church Street, Hamilton, HM-11, Bermuda	100
FW Management Operations, Ltd.	Clarendon House, 2 Church Street, Hamilton HM CX, Bermuda	100

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

235

Subsidiaries

		Ownership
Company Name	Registered Address	Interest %
Brazil
Amec Foster Wheeler America Latina, Ltda.	Rua Evaristo da Veiga No. 65, Salas 1101, 1201 e 1202 do Sector 1, Edificio Passeio	100
	Corporate, Centro, Rio de Janeiro, CEP 20.031-040, Brazil
Amec Foster Wheeler Brasil S.A.	Avenida das Americas, n 3.434, Bloco 2, salas 307 e 308, Centro Empresarial Mario	100
	Henrique Simonsen, Barra da Tijuca, CEP 22.640-102, Brazil
AMEC Petroleo e Gas Ltda.	Avenida das Americas, n 3.434, Bloco 2, salas 307 e 308, Centro Empresarial Mario	100
	Henrique Simonsen, Barra da Tijuca, CEP 22.640-102, Brazil
AMEC Projetos e Consultoria Ltda	Rua Professor Moraes No. 476, Loja 5, Sobreloja, Bairro Funcionarios, Belo Horizonte,	100
	Minas Gerais, 30150-370, Brazil
FW Industrial Power Brazil Ltda	Alameda Santos, 1293, Room 63, Cerqueira César, Sao Paulo, 01419-002, Brazil	100
Santos Barbosa Tecnica Comercio e Servicos	Estrada Sao Jose do Mutum, 301 - Imboassica, Cidade de Macae, Rio de Janeiro, CEP	100
Ltda.	27973-030, Brazil
Wood Group Engineering and Production	Rua Ministro Salgado Filho,119, Cavaleiros, Cidade de Macae,CEP 27920-210, Estado do	100
Facilities Brasil Ltda.	Rio de Janeiro
Wood Group Kenny do Brasil Servicos de	Rua Sete de Setembro, 54 - 4 andares, Centro, Rio de Janeiro - RJ, CEP 20050-009,	100
Engenharia Ltda.	Brazil
Brunei Darussalam
Amec Foster Wheeler (B) SDN BHD	Unit No.s 406A-410A, Wisma Jaya, Jalan Pemancha, Bandar Seri Begawan BS8811,	100
	Brunei Darussalam
Bulgaria
AMEC Minproc Bulgaria EOOD	7th Floor, 9-11 Maria Louisa Blvd, Vazrazhdane District, Sofia 1301, Bulgaria	100
Cameroon
Amec Foster Wheeler Cameroun SARL	Cap Limboh, Limbe, BP1280, Cameroon	100
Canada
2292127 Alberta Ltd.	1900, 520 - 3rd Ave. S.W., Calgary, AB, T2P 0R3, Canada	100
Amec Foster Wheeler Canada Ltd.	Borden Ladner Gervais LLP, Centennial Place, East Tower, 1900, 520 - 3rd Ave. S.W.,	100
	Calgary, AB, T2P 0R3, Canada
Rider Hunt International (Alberta) Inc.	900 AMEC Place, 801-6th Avenue S.W., Calgary, AB, T2P 3W3, Canada	100
Wood Canada Limited	1900, 520 - 3rd Avenue SW, Calgary, AB, T2P 0R3, Canada	100
Wood Group Asset Integrity Solutions, Inc.	1900, 520 - 3rd Avenue SW, Calgary, AB, T2P 0R3, Canada	100
Wood Group Canada, Inc.	Borden Ladner Gervais LLP, Centennial Place, East Tower, 1900, 520 - 3rd Ave. S.W.,	100
	Calgary, AB, T2P 0R3, Canada
Wood Solar Canada Ltd.	1900, 520 - 3rd Ave. S.W., Calgary, AB, T2P 0R3, Canada	100
Wood Wind Canada Ltd.	1900, 520 - 3rd Ave. S.W., Calgary, AB, T2P 0R3, Canada	100
Cayman Islands
FW Chile Holdings Ltd.	Codan Trust Company (Cayman) Limited, Cricket Square, Hutchins Drive, PO Box 2681,	100
	George Town, KY1-1111
Wood Group O&M International, Ltd.	Sterling Trust (Cayman) Limited, Whitehall House, 238 North Church Street, George	100
	Town, KY1-1102, Cayman Islands
Chile
Amec Foster Wheeler Talcahuano, Operaciónes	Camino A Ramuntcho 3230, Sector 4 Esquinas, Talcahuano, Chile	100
y Mantenciones Limitada
ISI Mustang Chile SpA	Calle Providencia 337, off. 7, Comuna de Providencia, Santiago, Chile	100
Wood Chile Limitada	Avenida Presidente Riesco 5335, piso 8, Las Condes, Chile	100
Wood Ingenieria y Consultoria Chile Limitada	Avenida Larrain 5862, Piso 11, La Reina, Santiago, 7870154, Chile	100
China
Liaoning Province Pharmaceutical Planning	3rd Floor, Gate 4, 153-10 Chuangxin Road, Hunnan District, Shenyang, Liaoning Province,	100
and Designing Institution Co. Ltd.	China
Shenyang Dongyu Youan Pharmaceutical	Gate 2, 8# Wulihe Street, Heping District, Shenyang, Liaoning Province, China	76
Technology Co. Ltd.
Colombia
Wood Engineering & Consultancy Colombia	Carrera 11 A No. 96-51 5th floor, Bogota D.C., Colombia	100
S.A.S.
Cyprus
WGPS International Limited	Elenion Building, 2nd Floor, 5 Themistocles Street, CY-1066 Nicosia,CY-1310 Nicosia, PO	100
	Box 25549, Cyprus
Wood Group Angola Limited	Elenion Building, 2nd Floor, 5 Themistocles Street, CY-1066 Nicosia,CY-1310 Nicosia, PO	100
	Box 25549, Cyprus
Wood Group Equatorial Guinea Limited	Elenion Building, 2nd Floor, 5 Themistocles Street, CY-1066 Nicosia,CY-1310 Nicosia, PO	100
	Box 25549, Cyprus
Democratic Republic of Congo
MDM Engineering SPRL	32 Avenue 3Z, Commune de Kasuku, Ville de Kindu, Democratic Republic of Congo	100
Egypt
Foster Wheeler Petroleum Services S.A.E.	Al-Amerya General Free Zone, Alexandria, Egypt	100
Equatorial Guinea
Baker Energy International Equatorial Guinea	Bioko, Island Region, Malabo	65
S.A.
Hexagon Sociedad Anonima con Consejo de	c/o Solege, Calle Kenia S/N, Malabo, Equatorial Guinea	65
Administracion

Subsidiaries, joint ventures and other related undertakings

(continued)

John Wood Group PLC

Annual Report and Financial Statements 2023

236

Notes to the financial statements

continued

Subsidiaries

		Ownership
Company Name	Registered Address	Interest %
France
Amec Foster Wheeler France S.A.	14, Place de la Coupole, Charenton-le-Pont, France, 94220	100
Wood Group Engineering Services (France)	6Pl de la Madeleine, 75008, Paris, France	100
SAS
Wood Group France SAS	108 rue de Longchamp 75116 Paris	100
Gabon
Production Services Network Gabon SARL	1.149, Republic Boulevard, CEDAM Building, 6th Floor, Bali - Douala, Douala, PO Box 3586,	100
	Cameroon
Germany
Bauunternehmung Kittelberger GmbH i.L.	Liebigstr. 1-3, Kaiserslautern, 67661, Germany	100
KIG Immobilien Beteiligungsgesellschaft mbH	Hammstrasse 6, 04129 Leipzig, Germany	100
KIG Immobiliengesellschaft mbH & Co. KG	Hammstrasse 6, 04129 Leipzig, Germany	100
Wood E&IS (Renewables) GmbH	Zippelhaus 4, 20457 Hamburg, Germany	100
Ghana
Amec Foster Wheeler Operations Ghana	House Number 4, Momotse Avenue, Behind All Saints Anglican Church, Adabraka, PO	100
Limited	Box GP 1632, Accra, Greater Accra, Ghana
Wood & BBS Ghana Ltd	No 4 Momotsa Avenue, Behind All Saints Anglican Church, Adabraka, Accra, Ghana	80
Wood Group Ghana Limited	20 Jones Nelson Road, Adabraka, Accra, Ghana	49*
Greece
Amec Foster Wheeler Hellas Engineering and	15 Meandrou Street, Athens, 115 28, Greece	100
Construction Societe Anonyme
Guatemala
AMEC Guatemala Engineering and Consulting,	Ciudad Guatemala, Guatemala	100
Sociedad Anonima
Guernsey
AMEC Operations Limited	22 Havilland Street, St Peter Port, GY1 2QB, Guernsey	100
Garlan Insurance Limited	PO Box 33, Maison Trinity, Trinity Square, St Peter Port, GY1 4AT, Guernsey	100
Wood Group Offshore Services Limited	PO Box 119 Martello Court, Admiral Park, St Peter Port, Guernsey, GY1 3HB, Guernsey	100
Wood USA Holdings Limited	22 Havilland Street, St Peter Port, GY1 2QB, Guernsey	100
Hong Kong
AMEC Asia Pacific Limited	3806, Central Plaza, 18 Harbour Road, Wanchai, Hong Kong	99
India
Ingenious Process Solutions Private Limited	307, Atlanta Estate, 3rd Floor, Hanuman Tekdil Road Vitbhatti, Off. W.E. Highway,	100
	Goregaon (East) Mumbai MH 400063
Mustang Engineering India Private Limited	6th Floor, Zenith Building, Ascendas IT Park, CSIR Road, Taramani, Chennai 600 113, India	100
Wood India Engineering & Projects Private	6th Floor, Zenith Building, Ascendas IT Park, CSIR Road, Taramani, Chennai 600 113, India	100
Limited
Wood Group Kenny India Private Limited	15th Floor Tower-B, Building No. 5, DLF Cyber City, ,HR, Phase III Gurgaon Gurgaon,	100
	122002, India
Wood Group PSN India Private Limited	5th Floor, Zenith Building, Ascendas IT Park, CSIR Road, Taramani, Chennai, 600113, India	100
Indonesia
PT AGRA Monenco	c/o 2020 Winston Park Drive, Suite 700, Oakville, ON, L6H 6X7, Canada	100
PT Amec Foster Wheeler Indonesia	Perkantoran Pulo mas Blok VII No. 2, Jl Perintis Kemerdekaan, Pulo Gadung, Jakarta,	55
	Timur, Indonesia
PT Australian Skills Training	Green Town Warehouse No. 2, Bengkong-Batam-Indonesia, Indonesia	95
PT Foster Wheeler O&G Indonesia	Perkantoran Pulo mas Blok VII No.2, Jl. Perintis Kemerdekaan, Pulo Gadung, Jakarta	90
	Timur 13260, Indonesia
PT Harding Lawson Indonesia	c/o 2020 Winston Park Drive, Suite 700, Oakville, ON, L6H 6X7, Canada	95
PT Simons International Indonesia	c/o 2020 Winston Park Drive, Suite 7000, Oakville, Ontario, Canada	100
PT Wood Group Indonesia	Gedung Perkantoran Prudential Centre, Kota Kasablanka, Lantai 22, Unit A, J1,	90
	Cassablanca Kav, 88 Kel. Menteng Dalam, Kec.Tebet, Kota Adm, Jarkarta Selantan, DKI
	Jarkarta, Malaysia
Iran
Foster Wheeler Adibi Engineering	9th Floor Aluminumm Building, Avenue Shah, Tehran	45
Wood Group Iran - Qeshm Company (pjs)	No 2564, Hafez Street, Toola Industrial Park,Qeshm Island, Annaba, Iran	97
Iraq
Ghabet El Iraq for General Contracting and	Suite 24, Building 106,St 19, Sec 213, Al-Kindi St, Al-Haritheeya Qts, Baghdad, Iraq	100
Engineering Services, Engineering Consultancy
(LLC)
Touchstone General Contracting, Engineering	Flat no. 23A, 3rd Floor, near Kahramana Square Anbar Building, District no. 903, Hay Al	100
Consultancy and Project Management LLC	Karada, Baghdad, Iraq
Ireland
Wood Group Kenny Ireland Limited	Second Floor, Blocks 4 and 5, Galway Technology Park, Parkmore, Galway, Ireland	100

Subsidiaries, joint ventures and other related undertakings

(continued)

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

237

Subsidiaries

		Ownership
Company Name	Registered Address	Interest %
Italy
Concetto Green S.r.l	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Concettorinnovabile s.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
ForEarth S.r.l	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Geo Rinnovabile S.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Green2dream s.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Green2grid S.r.l	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Greendream1 S.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Greendream2 S.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
HWF S.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Hybrid Energy S.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Newagro s.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Oro Rinnovabile s.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Orosolare s.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Res4green s.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Res4planet S.r.l	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Res4power s.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Resergy S.r.l	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Transizione s.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Transizioneverde s.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Tre Rinnovabili S.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Versogreen s.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Wood Italiana S.r.l.	Via S. Caboto 15, Corsico, 20094, Italy	100
Wood Solare Italia S.r.l.	Via S. Caboto 15, Corsico, Milan, 20094, Italy	100
Jamaica
Monenco Jamaica Limited	c/o 2020 Winston Park Drive, Suite 700, Oakville, ON, L6H 6X7, Canada	100
Jersey
RHI Talent UK Limited	28 Esplanade, St Helier, JE2 3QA, Jersey	100
Wood Group Engineering Services (Middle	28 Esplanade, St Helier, JE2 3QA, Jersey	100
East) Limited
Wood Group Production Facilities Limited	28 Esplanade, St Helier, JE2 3QA, Jersey	100
Kazakhstan
AMEC Limited Liability Partnership	46 Satpayev St., Atyrau City, Atyrau Oblast, 060011, Kazakhstan	100
Foster Wheeler Kazakhstan LLP	app. 27, h. 64, Bostandykskiy district, Abaya Ave., Almaty City, Kazakhstan	100
QED International (Kazakhstan) Limited	46 Satpayev St., Atyrau City, Atyrau Oblast, 060011, Kazakhstan	100
Liability Partnership
Wood Group Kazakhstan LLP	Satpayev str. 46, Atyrau, 060011, Kazakhstan	100
Kuwait
AMEC Kuwait Project Management and	2nd Floor, Al Mutawa Building, Ahmed Al Jaber Street, Sharq, Kuwait City	49*
Contracting Company W.L.L.
Luxembourg
Financial Services S.à r.l.	15, Boulevard Friedrich Wilhelm Raiffeisen, L-2411, Luxembourg	100
FW Investment Holdings S.à r.l.	15, Boulevard Friedrich Wilhelm Raiffeisen, L-2411, Luxembourg	100
Malaysia
Amec Foster Wheeler OPE Sdn. Bhd.	Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1, Leboh Ampang, Kuala	100
	Lumpur, 50100, Malaysia
BMA Engineering SDN. BHD.	Unit C-12-4, Level 12, Block C, Megan Avenue II, Wilayah Persekutuan,Wilayah	100
	Persekutuan, Kuala Lumpur, 50450, Malaysia
Foster Wheeler (Malaysia) Sdn. Bhd.	Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1, Leboh Ampang, Kuala	100
	Lumpur, 50100, Malaysia
Foster Wheeler E&C (Malaysia) Sdn. Bhd.	Suite 1005, 10th Floor, Wisma Hamzah-Kwong Hing, No. 1, Leboh Ampang, Kuala	70
	Lumpur, 50100, Malaysia
Rider Hunt International (Malaysia) Sdn Bhd	Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara, Damansara	100
	Heights, Kuala Lumpur, 50490, Malaysia
Wood Group Kenny Sdn Bhd	c/o Securities Services (Holdings) Sdn Bhd, level 7, Menara Milenium, Jalan Damanlela,	25*
	Pusat Bandar Damansara, Damansara Heights, ,Kuala Lumpur, Damansara Town
	Centre, Damansa, 50490, Malaysia
Wood Group Mustang (M) Sdn. Bhd.	Level 7, Menara Milenium,Jalan Damanlela, Pusat Bandar Damansara, Damansara	100
	Heights,Wilayah Persekutuan,Wilayah Persekutuan, Kuala Lumpur, 50490, Malaysia
Mauritius
MDM Engineering Investments Ltd	1st Floor, Felix House, 24 Dr Joseph Street, Port Louis, Mauritius	100
MDM Engineering Projects Ltd	1st Floor, Felix House, 24 Dr Joseph Street, Port Louis, Mauritius	100
P.E. Consultants, Inc.	c/o First Island Trust Company Ltd, Suite 308, St. James Court, St. Denis Street, Port	100
	Louis, Mauritius
QED International Ltd	c/o Ocorian Corporate Services (Mauritius) Limited, 6th Floor, Tower A, 1 CyberCity,	100
	Ebene, 72201, Mauritius

Subsidiaries, joint ventures and other related undertakings

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Annual Report and Financial Statements 2023

238

Notes to the financial statements

continued

Subsidiaries

		Ownership
Company Name	Registered Address	Interest %
Mexico
AGRA Ambiental S.A. de C.V.	c/o 2020 Winston Park Drive, Suite 700, Oakville, ON, L6H 6X7, Canada	100
Amec Foster Wheeler Energia Mexico S. de R.L.	Av. Vasconcelos 453, Colonia del Valle 66220 Nuevo Leon, Monterrey (Estados Unidos de	100
de C.V.	México), Mexico
Amec Foster Wheeler Mexico, S.A. de C.V.	David Alfaro Siqueiros No.104, Piso 2, Colonia Valle Oriente, San Pedro Garza Garcia,	100
	Nuevo Leon, C.P. 66269, Mexico
CEC Controls Automatizacion S. de R.L. de C.V.	Libramiento Carr. Silao-León #201, Esq. Prolongación Bailleres, Col. Progreso Silao,	100
	Guanajuato, CP. 36135, Mexico
Foster Wheeler Constructors de Mexico S. de	699 15th Street, 6th Avenue, Agua Prieta, Sonora, Mexico	80
R.L. de C.V.
Global Mining Projects and Engineering, S.A.	Calle Coronado 124, Zona Centro, Chihuahau, Chihuahau, 31000, Mexico	100
de C.V.
Harding Lawson de Mexico S.A. de C.V.	Edificio Omega, Campos Eliseos 345, floors 2, 3 & 11, Chapultepec Polanco 11560 Mexico,	100
	D.F.
ISI Mustang Servicios de Ingenieria de Mexico,	HOMERO 1804 PISO 11,COL. LOS MORALES - DELEGACION MIGUEL HIDALGO,	100
S de R.L. De C.V.	Distrito Federal, Mexico City, C.P. 11540, Mexico
Wood Group de Mexico S.A. de C.V.	Insurgentes Sur #619 piso 10, Colonia Napoles, Municipio Benito Juarez, between Calle	100
	Vermont and Calle Yosemite, Mexico City, 03810, Mexico
Wood Group Management Services de Mexico,	Blvd. Manuel Avila Camacho 40 - 1801, Lomas de Cahpultepec, Delgacion Miguel	100
S.A. de C.V.	Hidalgo, Mexico, D.F. 11000
Mongolia
AMEC LLC	Mongol TV Tower-1005, Chinggis Avenue, Sukhbaatar District, 1st khoroo, Ulaanbaatar,	100
	Mongolia
Mozambique
Amec Foster Wheeler Mozambique Limitada	Mocambique, Maputo Cidade, Distrito Urbano 1, Bairro Sommerschield II, Av. Julius	100
	Nyerere, nº 3412, Maputo, Mozambique
Wood Group Mozambique, Limitada	73 Rua Jose Sidumo, Bairro da Polana, Maputo, Mozambique	100
Netherlands
AMEC GRD SA B.V.	Meander 251, Arnhem, 6825 MC, Netherlands	100
AMEC Holland B.V.	EDGE Amsterdam West, Basisweg 10, 1043 AP, Amsterdam, Netherlands	100
AMEC Investments B.V.	EDGE Amsterdam West, Basisweg 10, 1043 AP, Amsterdam, Netherlands	100
Foster Wheeler Continental B.V.	Naritaweg 165, 1043 BW Amsterdam, Netherlands	100
Foster Wheeler Europe B.V.	Naritaweg 165, 1043 BW Amsterdam, Netherlands	100
John Wood Group B.V.	C/O Centralis Netherlands BV, Zuidplein 126, WTC, Toren H 15e, Amsterdam, 1077XV,	100
	Netherlands
John Wood Group Holdings BV	C/O Centralis Netherlands BV, Zuidplein 126, WTC, Toren H 15e, Amsterdam, 1077XV,	100
	Netherlands
New Zealand
M&O Pacific Limited	26 Manadon Street, Spotswood, New Plymouth, 4310, New Zealand	100
Nigeria
AMEC Contractors (W/A) Limited	13A AJ Marinho Drive, Victoria Island, Lagos, Nigeria	100
AMEC King Wilkinson (Nigeria) Limited	No 3, Hospital Road, PO Box 9289, Lagos, Nigeria	100
AMEC Offshore (Nigeria) Limited	18th Floor, Western House, 8/10 Broad street, Lagos, Nigeria	75
Foster Wheeler (Nigeria) Limited	1 Murtala Muhammed Drive, (Formerly Bank Road), Ikoyi, Lagos, Nigeria	100
Foster Wheeler Environmental Company	c/o Nwokedi & Co., 21 Ajasa Street, Onikan, Nigeria	87
Nigeria Limited
JWG Nigeria Limited	13 Sumbo Jibowu Street, Ikoyi, Lagos, Nigeria	100
Overseas Technical Services Nigeria Limited	No 13 Sumbo Jibowu Street, Ikoyi, Lagos, Nigeria	93
Norway
Wood Group Norway AS	Fokserodveien 12, Sandefjord, 3241, Norway	100
Oman
Wood Engineering Consultancy LLC	PO Box 1469, Postal Code 133, Al-Khuwair, Sultanate of Oman	60
Wood LLC	Bldg No. 89, Way No. 6605, Al Oman Street, Ghala Industrial Area, P.O. Box 293, Al	70
	Khuwair, PC 133, Oman
Papua New Guinea
Wood Engineering PNG Ltd	Deloitte Touche Tohmatsu, Level 9, Deloitte Haus, Macgregor Street, Section 8,	100
	Allotment 19, Port Moresby, National Capital District, Papua New Guinea
Wood Group PNG Limited	Dentons PNG, Level 5, Bsp Haus, Harbour City, Port Moreseby,Papau New Guinea,	100
	National Capital District, Papua New Guinea
Peru
Wood Group Peru S.A.C.	Av. de la Floresta 407, 5th Floor, San Borja, Lima, Peru	100
Philippines
Foster Wheeler (Philippines) Corporation	U-7A, 7/F PDCP Bank Centre,V.A. Rufino St. Corner L.P. Leviste St., Salcedo Village,	100
	Makati City, PH, 1227
Production Services Network Holdings Corp.	585 ME National Road HW, Barangay Alangilan, Batangas City, Batangas, Philippines	100
PSN Production Services Network Philippines	12th Floor, Net One Center,26th Street Corner, 3rd Avenue, Crescent Park West,Taguig,	100
Corp	Metro Manilla, Bonifacio Global City, 1634, Philippines
Poland
Amec Foster Wheeler Consulting Poland Sp.	ul. Chmielna 132/134, Warsaw, 00-805, Poland	100
z o.o.
Portugal
Amec Foster Wheeler (Portugal) Lda	Avenida Barbosa du Bocage 113-4, Lisboa, 1050-031, Portugal	100

Subsidiaries, joint ventures and other related undertakings

(continued)

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

239

Subsidiaries

		Ownership
Company Name	Registered Address	Interest %
Qatar
Production Services Network Qatar LLC	PO Box 2515, Doha, Qatar	49*
Romania
AMEC Operations S.R.L	Rooms 1 and 2, 2nd Floor, No. 59 Strada Grigore Alexandrescu, Sector 1, Bucharest	100
	010623, Romania
Russia
OOO Amec Foster Wheeler	Of fice E-100, Park Place, 113/1, Leninsky Prospekt, 117198, Moscow, Russian Federation	100
	113/1, Leninsky Prospekt, 117198, Moscow, Russian Federation
Production Services Network Eurasia LLC	2-6 Floors,88 Amurskaya, Yuzhno-Sakhalinsk, 693020, Russian Federation	100
Production Services Network Sakhalin LLC	2-6 Floors,88 Amurskaya, Yuzhno-Sakhalinsk, 693020, Russian Federation	99
Saudi Arabia
Amec Foster Wheeler Energy and Partners	Majd Business Center, Tower B, P.O. Box 30920, King Faisal Road, Al-Khobar, 31952, Saudi	75
Engineering Company	Arabia
Mustang and Faisal Jamil Al-Hejailan	PO Box 9175, Almalaz, Salahuddin Alayoubi Street, Riyadh, 11413, Saudi Arabia	70
Consulting Engineering Company
Mustang Saudi Arabia Co. Ltd.	King Fahad Road, Rakah, Po Box 8145, Al-Khobar, 34225, Saudi Arabia	100
Wood Group ESP Saudi Arabia Limited	PO Box 1280, Al-Khobar	51
Singapore
Amec Foster Wheeler Asia Pacific Pte. Ltd.	One Marina Boulevard #28-00, Singapore, 018989, Singapore	100
AMEC Global Resources Pte Limited	991E Alexandra Road, #01 - 25, 119973, Singapore	100
Foster Wheeler Eastern Private Limited	1 Marina Boulevard, #28-00, Singapore 018989	100
OPE O&G Asia Pacific Pte. Ltd.	1 Marina Boulevard, #28-00, One Marina Boulevard, 018989, Singapore	100
Rider Hunt International (Singapore) Pte Limited	24 Raf fles Place, #24-03 Cli fford Centre, Singapore, 048621	100
Simons Pacific Services Pte Ltd.	8 Marina Boulevard #05-02, Marina Bay Financial Centre, Singapore, 018981, Singapore	100
Wood Group International Services Pte. Ltd.	991E Alexandra Road, #01 - 25, 119973, Singapore	100
Slovakia
The Automated Technology Group (Slovakia)	c/o, Kinstellar s.r.o., Hviezdoslavovo nám 13, Bratislava, 811 02, Slovakia	100
s.r.o.
South Africa
Amec Foster Wheeler Properties (Pty) Limited	Waterfall Corporate Campus, Building 6, 74 Waterfall Drive Waterval City, Gauteng,	100
	2090, South Africa
AMEC Minproc (Proprietary) Limited	2 Eglin Road, Sunninghill, 2157, South Africa	100
Wood Minerals and Metals Africa (Pty) Ltd	Building Number 2 - Silverstream Business Park, 10 Muswell Road South, Bryanston,	100
	Gauteng, 2021
Rider Hunt International South Africa (Pty) Ltd	Building No. 2, Silver Stream Business Park, No. 10 Muswell Road South, Bryanston,	83
	South Africa
Wood BEE Holdings (Proprietary) Ltd	Waterfall Corporate Campus, Building 6, 74 Waterfall Drive Waterval City, Gauteng,	58
	2090, South Africa
Wood Mining South Africa (Pty) Ltd	Building No. 2, Silver Stream Business Park, 10 Muswell Road South, Bryanston,	100
	Gauteng, 2021, South Africa
Wood South Africa (PTY) Ltd	Waterfall Corporate Campus, Building 6, 74 Waterfall Drive Waterval City, Gauteng,	70
	2090, South Africa
South Korea
AMEC Korea Limited	KG Tower 5F, 92 Tongil-ro, Jung-gu, Seoul 04517, Korea	100
Spain
Amec Foster Wheeler Energia, S.L.U.	Calle Gabriel Garcia Marquez, no 2, Parque Empresarial Madrid, Las Rozas, 28232 Las	100
	Rozas, Madrid, Spain
Wood Iberia S.L.U.	Calle Gabriel Garcia Marquez, no 2, Parque Empresarial Madrid - Las Rozas, 28230 Las	100
	Rozas, Madrid, Spain
Switzerland
A-FW International Investments GmbH	c/o Intertrust Services (Schweiz) AG, Alpenstrasse 15, 6300, Zug, Zug, Switzerland	100
Wood Engineering AG	Lohweg 6, 4054 Basel, Switzerland	100
Tanzania
MDM Projects-Tanzania Limited	Plot No. 483, Garden Road, Mikocheni Ward, Kinondoni District, Dar es Salaam, 14112,	100
	Tanzania, the United Republic of
Thailand
Amec Foster Wheeler Holding (Thailand)	1st Floor Talaythong Tower, 53 Moo 9, Sukhumvit Road, Thungsukla, Sriracha, Chonburi,	100
Limited	20230, Thailand
Foster Wheeler (Thailand) Limited	53 Talaythong Tower, 1st Floor, Moo 9, Sukhumvit Road, Tambol Tungsukhla, Amphur	100
	Sriracha, Chonburi, 20230, Thailand
Trinidad and Tobago
Wood Group Trinidad & Tobago Limited	18 Scott Bushe Street, Port of Spain, Trinidad and Tobago	100
Turkey
Amec Foster Wheeler Bimas Birlesik Insaat ve	Kucukbakkalkoy Mah, Çardak Sok, No.1A Plaza, 34750 Atasehir, Istanbul, Turkey	100
Muhendislik A.S.
Uganda
Wood Group PSN Uganda Limited	KAA House, Plot 41,Nakasero Road, PO Box 9566, Kampala, Uganda	100
Ukraine
Wood Ukraine LLC	Room 398, Building 26, Obolonskyi Avenue, Kyiv City, 04205, Ukraine	100
United Arab Emirates
Production Services Network Emirates LLC	Unit 1301-CI Tower, Level 13, Al Bateen Street, Khalidiya, Abu Dhabi, PO Box 105828	49*

PSN Overseas Holding Company Limited

The MAZE Tower, 15th Floor, Sheikh Zayed Road, PO Box 9275, Dubai, United Arab Emirates

100

Subsidiaries, joint ventures and other related undertakings

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John Wood Group PLC

Annual Report and Financial Statements 2023

240

Notes to the financial statements

continued

Subsidiaries

		Ownership
Company Name	Registered Address	Interest %
United Kingdom
AFW Finance 2 Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC (F.C.G.) Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC (MH1992) Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC (MHL) Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC (WSL) Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC BKW Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Bravo Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Building Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Capital Projects Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Civil Engineering Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Amec Foster Wheeler (Holdings) Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Amec Foster Wheeler Earth and	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Environmental (UK) Limited
Amec Foster Wheeler Energy Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Amec Foster Wheeler Finance Asia Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Amec Foster Wheeler Finance Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Amec Foster Wheeler Group Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Amec Foster Wheeler International Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Amec Foster Wheeler Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Investments Europe Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Offshore Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Process and Energy Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Project Investments Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Services Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Trustees Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC USA Holdings Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
AMEC Wind Developments Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Automated Technology Group Holdings Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
East Mediterranean Energy Services Limited	c/o Ledingham Chalmers LLP, 3rd Floor, 68-70 George Street, Edinburgh, EH2 2LR,	100
	United Kingdom
Foster Wheeler (G.B.) Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Foster Wheeler (London) Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Foster Wheeler (Process Plants) Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Foster Wheeler E&C Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Foster Wheeler Environmental (UK) Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Foster Wheeler Europe	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Foster Wheeler UK Investments Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Foster Wheeler World Services Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
FW Investments Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
HFA Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Integrated Maintenance Services Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
James Scott Limited	Ground Floor, 15 Justice Mill Lane, Aberdeen, AB11 6EQ, Scotland	100
John Wood Group Holdings Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
JWG Investments Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
JWGUSA Holdings Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Kelwat Investments Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Metal and Pipeline Endurance Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Mustang Engineering Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Press Construction Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Process Plants Suppliers Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Production Services Network (UK) Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Production Services Network Bangladesh	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Limited
PSJ Fabrications Ltd	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
PSN (Angola) Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
PSN (Philippines) Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
PSN Asia Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
PSN Overseas Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom

Subsidiaries, joint ventures and other related undertakings

(continued)

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

241

Subsidiaries

		Ownership
Company Name	Registered Address	Interest %
QED International (UK) Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Rider Hunt International Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Sandiway Solutions (No 3) Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
SgurrEnergy Limited	St Vincent Plaza, 319 St Vincent Street, Glasgow, G2 5LP, Scotland, United Kingdom	100
The Automated Technology Group Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
WGPSN (Holdings) Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
WGPSN Eurasia Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood (Indonesia) Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood and Company Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Wood Finance UK Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Wood Group Algeria Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Algiers Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Annaba Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Arzew Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Engineering & Operations	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
Support Limited	Scotland, United Kingdom
Wood Group Engineering (North Sea) Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Hassi Messaoud Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Holdings (International) Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Investments Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Kenny Corporate Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Kenny Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Wood Group Kenny UK Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Wood Group Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Power Investments Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group Production Services UK Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group UK Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	100
	Scotland, United Kingdom
Wood Group/OTS Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Wood International Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Wood Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Wood Pensions Trustee Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Wood Transmission and Distribution Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
Wood UK Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England	100
United States
4900 Singleton, L.P.	400 North St. Paul, Dallas, TX, 75201	100
AMEC Construction Management, Inc.	United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, Wilmington, New	100
	Castle County, DE, 19810, United States
Amec Foster Wheeler Arabia Ltd.	3411 Silverside Road Tatnall Building #104, Wilmington, New Castle County, DE, 19810,	100
	United States
Amec Foster Wheeler Environmental	3411 Silverside Road Tatnall Building #104, Wilmington, New Castle County, DE, 19810,	100
Equipment Company, Inc.	United States
Amec Foster Wheeler Industrial Power	3411 Silverside Road Tatnall Building #104, Wilmington, New Castle County, DE, 19810,	100
Company, Inc.	United States
Amec Foster Wheeler Martinez, Inc.	United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, Wilmington, New	100
	Castle County, DE, 19810, United States
Amec Foster Wheeler North America Corp.	United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, DE, 19810,	100
	United States
Amec Foster Wheeler Power Systems, Inc.	c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,	100
	Wilmington, DE, 19801
Amec Foster Wheeler USA Corporation	United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, DE, 19810,	100
	United States
AMEC Holdings, Inc.	United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, Wilmington, New	100
	Castle County, DE, 19810, United States
AMEC North Carolina, Inc.	225, Hillsborough Street, Raleigh, NC, 27603, United States	100

Subsidiaries, joint ventures and other related undertakings

(continued)

John Wood Group PLC

Annual Report and Financial Statements 2023

242

Notes to the financial statements

continued

Subsidiaries

		Ownership
Company Name	Registered Address	Interest %
AMEC Oil & Gas World Services, Inc.	United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, Wilmington, New	100
	Castle County, DE, 19810, United States
Barsotti’s Inc.	Perryville Corporate Park, 53 Frontage Road, PO Box 9000, Hampton, NJ, 08827-90000	100
BMA Solutions Inc.	United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, DE, 19810,	100
	United States
C E C Controls Company, Inc.	United Agent Group Inc., 28175 Haggerty RoadD, Novi, MI, 48377, United States	100
Cape Software, Inc.	United Agent Group, 2425 W Loop South #200, Houston, TX, 77027, United States	100
Ceres Solar 1, LLC	8275 South Eastern Avenue #200, Las Vegas, Clark County, NV, 89123, United States	100
Ceres Solar 2, LLC	8275 South Eastern Avenue #200, Las Vegas, Clark County, NV, 89123, United States	100
Ceres Solar 3, LLC	8275 South Eastern Avenue #200, Las Vegas, Clark County, NV, 89123, United States	100
Equipment Consultants, Inc.	Corporation Trust Company, 1209 Orange Street, Wilmington, DE, 19801	100
Energy Transition Developments LLC	5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States	100
Energy Transition Ventures 1 LLC	5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States	100
Energy Transition Ventures 2 LLC	5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States	100
Energy Transition Ventures 3 LLC	5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States	100
Energy Transition Ventures 4 LLC	5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States	100
Energy Transition Ventures 5 LLC	5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States	100
Wood Contract Services LLC	17325 Park Row, Suite 500, Houston, TX, 77084, United States	100
Foster Wheeler Energy Corporation	5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States	100
Foster Wheeler Environmental Corporation	5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States	100
Foster Wheeler Inc.	United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, DE, 19810,	100
	United States
Foster Wheeler Intercontinental	c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,	100
Corporation	Wilmington, DE, 19801
Foster Wheeler International LLC	United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, Wilmington, New	100
	Castle County, DE, 19810, United States
Foster Wheeler LLC	United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, DE, 19810,	100
	United States
Foster Wheeler Realty Services, Inc.	c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,	100
	Wilmington, DE, 19801
Ingenious Inc.	United Agent Group, 2425 W Loop South #200, Houston, TX, 77027, United States	100
ISI Group, L.L.C.	United Agent Group, 2425 W Loop South #200, Houston, TX, 77027, United States	100
JWGUSA Holdings, Inc.	United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, DE, 19810,	100
	United States
Kelchner, Inc.	United Agent Group Inc., 119 E. Court Street, Cincinnati, OH, 45202, United States	100
MACTEC E&C International, Inc.	United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, Wilmington, New	100
	Castle County, DE, 19810, United States
Martinez Cogen Limited Partnership	United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, Wilmington, New	99
	Castle County, DE, 19810, United States
Mustang International, Inc.	5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States	100
Process Consultants, Inc.	United Agent Group Inc., 3411 Silverside Road Tatnall Building #104, Wilmington, New	100
	Castle County, DE, 19810, United States
RHI Talent USA Inc.	United Agent Group Inc., 8275 South Eastern Av., #200, Las Vegas, NV, 89123, United	100
	States
Rider Hunt International (USA) Inc.	United Agent Group, 2425 W Loop South #200, Houston, TX, 77027, United States	100
Swaggart Brothers, Inc.	United Agent Group Inc., 5708 S.E. 136th Avenue, #2, Portland, OR, 97236, United States	100
Swaggart Logging & Excavation LLC	United Agent Group Inc., 5708 S.E. 136th Avenue, #2, Portland, OR, 97236, United States	100
Thelco Co.	c/o The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street,	100
	Wilmington, DE, 19801
Wood Group Alaska, LLC	United Agent Group Inc., 3411 Silverside Road, Tatnall Bldg. #104, Wilmington, DE, 19810,	100
	United States
Wood Group PSN, Inc.	United Agent Group Inc., 8275 South Eastern Av., #200, Las Vegas, NV, 89123, United	100
	States
Wood Group Support Services, Inc.	United Agent Group Inc., 8275 South Eastern Av., #200, Las Vegas, NV, 89123, United	100
	States
Wood Group US Holdings, Inc.	3411 Silverside Road Tatnall Building #104, Wilmington, New Castle County, DE, 19810,	100
	United States
Wood Group USA, Inc.	5444 Westheimer #1000, Houston, Harris County, TX, 77056, United States	100
Wood Programs, Inc.	2475 Northwinds Parkway, #200-260, Alpharetta, GA, 30009, United States	100
Uzbekistan
Wood Energy Solutions LLC	Sulton Darvoza Business Center, 38/1 Shakhrisabz Street, Tashkent, 100060, Uzbekistan	100
Vanuatu
O.T.S. Finance and Management Limited	Law Partners House, Rue Pasteur, Port Vila, Vanuatu	100
Overseas Technical Service International	Law Partners House, Rue Pasteur, Port Vila, Vanuatu	100
Limited
Venezuela
Amec Foster Wheeler Venezuela, C.A.	Avenida Francisco de Miranda, Torre Cavendes, Piso 9, Ofic 903, Caracas, Venezuela	100

Companies consolidated for accounting purposes as subsidiaries on the basis of control. There is no material impact on the

financial statements o

f the

judgements applied in assessing the basis of control for these entities.

** The Group does not have a direct shareholding in these entities but considers them to be under group control.

Subsidiaries, joint ventures and other related undertakings

(continued)

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

243

Joint Ventures

		Ownership
Company Name	Registered Address	Interest %
Australia
Clough AMEC Pty Ltd1	Level 6, QV1 Building, 250 St Georges Terrace, Perth, WA, 6000, Australia	50
Azerbaijan
Socar-Foster Wheeler Engineering LLC	88A Zardaby Avenue,Baku, Azerbaijan	35
Brunei Darussalam
TendrillWood Sdn Bhd	Lot 29 & 30, Tapak Perindustrian Sungai Bera, Kampong Sungai Bera, Seria, Belait,	75
	KB1933, Brunei Darussalam
Canada
ABV Consultants Ltd1	Suite 2300, Bentall 5, 550 Burrard Street, Vancouver, BC, V6C 2B5, Canada	50
AMEC Black & McDonald Limited1	60 Cutler Avenue, Dartmouth, NS, B3B 0J6, Canada	50
ODL Canada Limited	689 Water Street, Newfoundland, St. John's, NL, A1E 1B5, Canada	50
Teshmont Consultants Inc.	1190 Waverley Street, Winnipeg, MB, R3T 0P4, Canada	50
Vista Mustang JV	Suite B12, 6020 2nd Street S. E., Calgary, AB, T2H 2L8, Canada	50
Chile
Consorcio AMEC CADE / PSI Consultores	Av. Jose Domingo, Canas No 2640, Nunoa, Santiago, 7750164, Chile	50
Limitada
Consorcio Consultor Cade Zañartu Limitada	Seminario 714, Ñuñoa, Santiago de Chile	50
Consorcio Consultor Systra / Cade Idepe /	Av. Jose Domingo, Canas No 2640, Nunoa, Santiago, 7750164, Chile	40
Geoconsult Limitada
Consorcio de Ingenieria Geoconsult Cade Idepe	Av. Jose Domingo, Canas No 2640, Nunoa, Santiago, 7750164, Chile	50
Limitada
Consorcio de Ingeniería Systra Cade Limitada	Av. Jose Domingo, Canas No 2640, Nunoa, Santiago, 7750164, Chile	50
Consorcio de Ingenieria Transporte Systra Cade	Jose Domingo Cañas 2640, Ñuñoa, Santiago Chile	50
Idepe Consultores Limitada
Construcciòn e Ingenierìa Chile FI Limitada	Avenida Andrés Bello 2711, Piso 22 - Comuna Las Condens, Santiago, Chile	50
China
Wood Zone Co., Ltd	No. 143 Jinyi Road, Jinshan District, Shanghai, 200540, China	50
Cyprus
Wood Group – CCC Limited	Elenion Building, 2nd Floor, 5 Themistocles Street, CY-1066 Nicosia,CY-1310 Nicosia, PO	50
	Box 25549, Cyprus
Kazakhstan
WOOD KSS JSC	Satpayev str. 46, Atyrau, 060011, Kazakhstan	50
Mexico
AFWA DUBA Salina Cruz, S. de R.L. de C.V.	Carlos Salazar, #2333, Colonia Obrera, Monterrey, Nuevo Leon, Mexico	50
Grupo Industrial de Ingenieria Ecologica III HLA &	Edificio Omega, Campos Eliseos 345, floors 2, 3 & 11, Chapultepec Polanco 11560	51
Iconsa S.A. de C.V.	Mexico, D.F.
Mustang Diavaz, S.A.P.I. de C.V.	Av. Revolucion 468, Col. San Pedro de los Pinos Mexico, D.F., 03800, Mexico	50
Northam Conip Consorcio, S.A. de C.V.	David Alfaro Siqueiros 104 piso 2, Col. Valle Oriente, San Pedro Garza Garcia, Nuevo	50
	Leon, CP. 66269, Mexico
Malaysia
ICE Wood Sdn. Bhd.	Level 7, Menara Milenium,Jalan Damanlela, Pusat Bandar Damansara, Damansara	49
	Heights, Wilayah Persekutuan, Wilayah Persekutuan, Kuala Lumpur, 50490, Malaysia
Netherlands
Wood Group Azerbaijan B.V.	C/O Centralis Netherlands BV, Zuidplein 126, WTC, Toren H 15e, Amsterdam, 1077XV,	51
	Netherlands
New Zealand
Wood Beca Limited	Ground Floor, Beca House, 21 Pitt Street, Auckland, 1010, New Zealand	50
Oman
AMEC Al Turki LLC	c/o Al Alawi, Mansoor Jamal & Co., Barristers & Legal Consultants, Muscat International	35
	Centre, Mezzanine Floor, Muttrah Business District, P.O. Box 686 Ruwi, Oman
Qatar
Wood Black Cat LLC	5th Floor Al Aqaria Tower, Building No. 34, Museum Street, Old Salata Area, Street	49
	970, Zone 18, P.O Box No. 24523 Doha, Qatar
Saudi Arabia
AMEC BKW Arabia Limited1	Al Rushaid Petroleum Investment Co. Building, Prince Hamoud Street, PO Box 31685 –	50
	Al Khobar 31952, Saudi Arabia
Spain
Insolux Monenco Medio Ambiente S.A.	Calle Juan Bravo, 3-C, Madrid, 28006, Spain	49
Trinidad and Tobago
Massy Wood Group Ltd.	4th Floor, 6A Queens Park West, Victoria Avenue, Port of Spain, Trinidad and Tobago	50
United Kingdom
ACM Health Solutions Limited	Booths Park, Chelford Road, Knutsford, Cheshire, WA16 8QZ, England, United Kingdom	33
Ethos Energy Group Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	51
	Scotland, United Kingdom
RWG (Repair & Overhauls) Limited	Sir Ian Wood House, Hareness Road, Altens Industrial Estate, Aberdeen, AB12 3LE,	50
	Scotland, United Kingdom
South Kensington Developments Limited	Ground Floor T3 Trinity Park, Bickenhill Lane, Birmingham, B37 7ES, United Kingdom	50

1 Entities are consolidated as joint operations on the basis of control.

In addition to the subsidiaries listed above, the Group has a number of overseas branches.

Details of the direct subsidiaries of John Wood Group PLC are provided in note 1 to the parent company

financial statements.

Subsidiaries, joint ventures and other related undertakings

(continued)

John Wood Group PLC

Annual Report and Financial Statements 2023

244

Notes to the financial statements

continued

The Group will be exempting the following companies from an audit in 2023 under Section 479A of the Companies Act 2006.

All of these companies are fully consolidated in the Group Financial Statements.

AFW Finance 2 Limited (Registered number 09861575)	Kelwat Investments Limited (Registered number SC203212)
AME Building Limited (Registered number 165287)	Metal and Pipeline Endurance Limited (Registered number 534109)
AMEC (F.C.G) Limited (Registered number 148585)	Mustang Engineering Limited (Registered number SC273548)
AMEC (MH1992) Limited (Registered number 222870)	Press Construction Limited (Registered number 471400)
AMEC (MHL) Limited (Registered number 713103)	Process Plants Suppliers Limited (Registered number 957881)
AMEC (WSL) Limited Registered number 514311)	Production Services Network (UK) Limited
AMEC BKW Limited (Registered number 169831)	(Registered number SC293004)
AMEC Bravo Limited (Registered number 6206015)	Production Services Network Bangladesh Limited
AMEC Capital Projects Limited (Registered number 2804109)	(Registered number 02214332)
AMEC Civil Engineering Limited (Registered number 1265199)	PSJ Fabrications Ltd (Registered number 01205595)
Amec Foster Wheeler (Holdings) Limited	PSN (Angola) Limited (Register number SC311500)
(Registered number 00163609)	PSN (Philippines) Limited (Registered number SC345547)
Amec Foster Wheeler Earth and Environmental (UK) Limited	PSN Asia Limited (Registered number SC317111)
(Registered number 4987981)	PSN Overseas Limited (Registered number SC319469)
Amec Foster Wheeler Energy Limited (Registered number 1361134)	QED International (UK) Limited (Registered number SC106477)
Amec Foster Wheeler Finance Asia Limited	Rider Hunt International Limited (Register number 02305615)
(Registered number 6205760)	Sandiway Solutions (No 3) Limited (Registered number 5318249)
Amec Foster Wheeler Finance Limited (Registered number 1332332)	SgurrEnergy Limited (Registered number SC245814)
Amec Foster Wheeler Group Limited (Registered number 4612748)	The Automated Technology Group Limited
Amec Foster Wheeler International Limited	(Registered number 03109235)
(Registered number 3203966)	WGPSN (Holdings) Limited (Registered number SC288570)
AMEC Investments Europe Limited (Registered number 3704533)	WGPSN Eurasia Limited (Registered number SC470501)
AMEC Offshore Limited (Registered number 1054207)	Wood (Indonesia) Limited (Registered number SC693591)
AMEC Process and Energy Limited Registered number 2028340)	Wood and Company Limited (Registered number 01580678)
AMEC Project Investments Limited (Registered number 2619408)	Wood Group Algeria Limited (Registered number SC299843)
AMEC Services Limited (Registered number 2804093)	Wood Group Algiers Limited (Registered number SC299845)
AMEC Trustees Limited (Registered number 2830098)	Wood Group Annaba Limited (Registered number SC299848)
Amec USA Holdings Limited (Registered number 4041261)	Wood Group Arzew Limited (Registered number SC299850)
Amec Wind Developments Limited (Registered number 8781332)	Wood Group Engineering (North Sea) Limited
Automated Technology Group Holdings Limited	(Registered number SC030715)
(Registered number 07871655)	Wood Group Engineering & Operations Support Limited
East Mediterranean Energy Services Limited	(Registered number SC159149)
(Registered number SC505318)	Wood Group Hassi Messaoud Limited
Foster Wheeler (G.B.) Limited (Registered number 745470)	(Registered number SC299851)
Foster Wheeler (London) Limited (Registered number 887857)	Wood Group Holdings (International) Limited
Foster Wheeler (Process Plants) Limited	(Register number SC169712)
(Registered number 1184855)	Wood Group Investments Limited (Registered number SC301983)
Foster Wheeler E&C Limited (Registered number 2247293)	Wood Group Kenny Corporate Limited
Foster Wheeler Environmental (UK) Limited	(Registered number SC147353)
(Registered number 1657494)	Wood Group Kenny Limited (Registered number 1398385)
Foster Wheeler Europe (Registered number 04127813)	Wood Group Kenny UK Limited (Registered number 2331383)
Foster Wheeler UK Investments Limited	Wood Group Power Investments Limited
(Registered number SC649888)	(Registered number SC454342)
Foster Wheeler World Services Limited	Wood Group Production Services UK Limited
(Registered number 1439353)	(Registered number SC278252)
FW Investments Limited (Registered number 6933416)	Wood Group/OTS Limited (Registered number 1579234)
HFA Limited (Registered number SC129298)	Wood International Limited (Registered number 10517856)
Integrated Maintenance Services Limited	Wood Limited (Registered number 9861563)
(Registered number 3665766)	Wood Finance UK Limited (Registered number 03725076)
James Scott Limited (Registered number SC35281)	Wood Pensions Trustee Limited (Registered number 1889899)
John Wood Group Holdings Limited (Registered number SC642609)	Wood Transmission and Distribution Limited
JWG Investments Limited (Registered number SC484872)	(Registered number 11829648)
JWGUSA Holdings Limited (Registered number SC178512)	Wood UK Limited (Registered number 3863449)

Subsidiaries, joint ventures and other related undertakings

(continued)

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

245

Company financial statements

Company balance sheet

246

Statement of changes in equity

247

Notes to the Company financial

statements

248

Five year summary

255

Information for shareholders

256

Company balance sheet

As at 31 December 2023

			2022
		2023	*restated
	Note	$m	$m
Non-current assets
Investments	1	4,410.7	4,391.1
Long term receivables	2	3,061.7	2,565.2
		7,472.4	6,956.3
Current assets
Trade and other receivables	3	324.4	1,189.3
Income tax receivable		7.5	5.7
Cash and cash equivalents	4	11.7	24.8
		343.6	1,219.8
Current liabilities
Borrowings	5	257.4	234.9
Trade and other payables	6	2,112.3	3,646.8
		2,369.7	3,881.7
Net current liabilities		(2,026.1)	(2,661.9)
Non-current liabilities
Borrowings	5	812.2	584.0
Other non-current liabilities	7	1,034.8	131.7
		1,847.0	715.7
Net assets		3,599.3	3,578.7
Equity
Share capital	9	41.3	41.3
Share premium	10	63.9	63.9
Retained earnings	11	657.1	394.5
Merger reserve	12	2,298.8	2,540.8
Other reserves	13	538.2	538.2
Total equity		3,599.3	3,578.7

As permitted by Section 408 (3) of the Companies Act 2006, no pro

fit and loss account o

f the Company is presented. The pro

fit

for

the financial year o

f the Company was $4.2m (2022: $54.7m loss (restated)).

Refer to page 250 for further details on the prior period restatement.

The financial statements on pages 246 to 254 were approved by the board o

f directors on 28 March 2024, and signed on its behalf by:

Ken Gilmartin, Director

David Kemp, Director

Company Registration Number: SC036219

John Wood Group PLC

Annual Report and Financial Statements 2023

246

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

247

Statement of changes in equity

For the year ended 31 December 2023

		Share	Retained	Merger	Other	Total
	Share capital	premium	earnings	reserve	reserves	equity
	$m	$m	$m	$m	$m	$m
At 1 January 2022	41.3	63.9	416.6	2,540.8	538.2	3,600.8
Loss for the year (*restated)	–	–	(54.7)	–	–	(54.7)
Total comprehensive loss for the year (*restated)	–	–	(54.7)	–	–	(54.7)
Transactions with owners:
Credit relating to share based charges	–	–	20.7	–	–	20.7
Purchase of company shares by employee share trust for the
share incentive plan (SIP)	–	–	1.7	–	–	1.7
Foreign exchange movements on employee share trusts	–	–	10.2	–	–	10.2
At 31 December 2022 (*restated)	41.3	63.9	394.5	2,540.8	538.2	3,578.7
Profit for the year	–	–	4.2	–	–	4.2
Total comprehensive profit for the year	–	–	4.2	–	–	4.2
Transactions with owners:
Credit relating to share based charges	–	–	19.6	–	–	19.6
Purchase of company shares by employee share trust for the
share incentive plan (SIP)	–	–	1.6	–	–	1.6
Foreign exchange movements on employee share trusts	–	–	(4.8)	–	–	(4.8)
Transfer from merger reserve to retained earnings	–	–	242.0	(242.0)	–	–
At 31 December 2023	41.3	63.9	657.1	2,298.8	538.2	3,599.3

During 2023, John Wood Group Holdings Limited paid $242.0m to John Wood Group PLC in a partial settlement of the promissory

note, which was put in place during 2019. The repayment represented qualifying consideration and as a result the Company

transferred an equivalent portion of the merger reserve to retained earnings.

Refer to page 250 for further details on the prior period restatement.

Notes to the Company financial statements

For the year ended 31 December 2023

General information

John Wood Group PLC is a public limited company,

incorporated and domiciled in the United Kingdom and listed on

the London Stock Exchange. The Company’s registered address

is Sir Ian Wood House, Hareness Road, Altens Industrial Estate,

Aberdeen, AB12 3LE.

Summary of signi

ficant accounting policies

The principal accounting policies, which have been applied in the

preparation of the Company

financial statements, are set out

below. These policies have been consistently applied to all the

years presented.

Basis of preparation

These financial statements were prepared in accordance

with Financial Reporting Standard 101 Reduced Disclosure

Framework (“FRS 101”).

In preparing these financial statements, the Company applies

the recognition, measurement and disclosure requirements of

UK-adopted international accounting standards (“UK-adopted

IFRS”) in conformity with the requirements of the Companies

Act 2006 but makes amendments where necessary in order to

comply with Companies Act 2006 and has set out below where

advantage of the FRS 101 disclosure exemptions has been taken.

The Company is a qualifying entity for the purposes of FRS 101.

The application of FRS 101 has enabled the Company to

take advantage of certain disclosure exemptions that would

have been required had the Company adopted International

Financial Reporting Standards in full. The only such exemptions

that the directors consider to be significant are:

• no detailed disclosures in relation to financial instruments;

• no cash flow statement;

• no disclosure of related party transactions with wholly owned

subsidiaries;

• no statement regarding the potential impact of forthcoming

changes in financial reporting standards;

• no disclosure of “key management compensation” for key

management other than the directors; and

• no disclosures relating to the Company’s policy on capital

management;

• no detailed disclosure in relation to share based payments.

Where required, equivalent disclosures are given in the

consolidated financial statements o

f John Wood Group PLC.

The financial statements are presented in US dollars and

all values are rounded to the nearest $0.1m except where

otherwise indicated.

The financial position o

f the Company is shown in the balance

sheet on page 246. Note 8 includes the Company’s objectives,

policies and processes for managing its

financial risks, details

of its

financial instruments and hedging activities, and its

exposures to interest rate risk and liquidity risk. The Company

adopts the going concern basis of accounting in preparing these

financial statements.

In accordance with Section 408(3) of the Companies Act

(2006), the Company is exempt from the requirement to

present its own income statement. The amount of the pro

fit

for

the year is disclosed in the statement of changes in equity.

Going concern

At 31 December 2023, the Company had net current liabilities

of $2,026.1m. The Company has control over the timing of

repayment of current liabilities due to Group undertakings

amounting to $2,005.7m. As a result of this, and the matters

included in the consolidated financial statements on going

concern, the directors are confident that the Company will

have suf

ficient

funds to continue to meet its liabilities as they

fall due for at least 12 months from the date of approval of the

financial statements and there

fore have prepared the

financial

statements on a going concern basis.

Reporting currency

The Company’s transactions are primarily US dollar

denominated and the functional currency is the US dollar.

The following sterling to US dollar exchange rates have been

used in the preparation of these

financial statements:

	2023	2022
Average rate £1=$	1.2425	1.2324
Closing rate £1=$	1.2749	1.2029

Investments in subsidiaries

Investments are measured initially at cost, including transaction

costs. Investments in the Company balance sheet are presented

at cost less any provision for impairment.

Impairment of assets

At each balance sheet date, the Company reviews the carrying

amounts of its investments to assess whether there is an

indication that those assets may be impaired. If any such

indication exists, the Company makes an estimate of the

asset’s recoverable amount. An asset’s recoverable amount is

the higher of its fair value less costs to sell and its value in use.

If the recoverable amount of an asset is estimated to be less

than its carrying amount, the carrying amount of the asset

is reduced to its recoverable amount. An impairment loss is

recognised immediately in the income statement.

Where an impairment loss subsequently reverses, the carrying

amount of the asset is increased to the revised estimate of its

recoverable amount, to the extent that the increased carrying

amount does not exceed the carrying amount that would have

been determined had no impairment loss been recognised for

the asset in prior periods. A reversal of an impairment loss is

recognised immediately in the income statement.

The Company recognises loss allowances for Expected Credit

Losses (‘ECLs’) on loans and receivables measured at an amount

equal to lifetime ECLs. ECLs are a probability-weighted estimate

of credit losses. Credit losses are measured as the present

value of all cash shortfalls (i.e. the difference between the cash

flows due to the entity in accordance with the contract and

the cash flows that the Company expects to receive). ECLs are

discounted at the effective interest rate of the

financial asset.

At each reporting date, the Company assesses whether

financial assets carried at amortised cost are credit-impaired. A

financial asset is ‘credit-impaired’ when one or more events that

have a detrimental impact on the estimated future cash

flows

of the

financial asset have occurred. Evidence that a financial

asset is credit-impaired include a customer being in significant

financial di

ficulty or a breach o

f contract such as a default. The

gross carrying amount of a

financial asset is written o

ff when

the Company has no reasonable expectation of recovering a

financial asset in its entirety or a portion thereo

John Wood Group PLC

Annual Report and Financial Statements 2023

248

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

249

Foreign currencies

Transactions in foreign currencies are translated to the

Company’s functional currencies at the exchange rates ruling

at the date of the transaction. Monetary assets and liabilities

denominated in foreign currencies are retranslated at the

exchange rates ruling at the balance sheet dates or at a

contractual rate, if applicable, and any exchange differences

are taken to the income statement. Non-monetary assets and

liabilities that are measured in terms of historical cost in a

foreign currency are translated using the exchange rate at the

date of the transaction. Non-monetary assets and liabilities

denominated in foreign currencies that are stated at fair value

are translated to the functional currency at foreign exchange

rates ruling at the dates the fair value was determined.

The directors consider it appropriate to record sterling

denominated equity share capital and share premium in the

financial statements o

f John Wood Group PLC at the exchange

rate ruling on the date it was raised.

Financial instruments

The accounting policy for

financial instruments is consistent with

the Group accounting policy as presented in the notes to the Group

financial statements. The Company’s financial risk management

policy is consistent with the Group’s financial risk management

policy outlined in note 20 to the Group financial statements.

Where the Company enters into financial guarantee contracts

to guarantee the indebtedness of other companies within its

group, the Company considers these to be in the scope of IFRS

9 and accounts for them as such. Financial guarantee contracts

issued are initially measured at fair value. Subsequently, they

are measured at the higher of the loss allowance determined

in accordance with IFRS 9 (see 1.5(iv)) and the amount initially

recognised less, when appropriate, the cumulative amount of

income recognised in accordance with the principles of IFRS 15.

Employee share trusts

The Company is deemed to have control of the assets, liabilities,

income and costs of its employee share trusts. They have

therefore been included in the

financial statements o

f the

Company. The cost of shares held by the employee share trusts

is deducted from equity.

Share based charges

The Company has a number of share schemes as detailed

in the Group accounting policies and note 24 to the Group

financial statements. Details relating to the calculation o

f share

based charges are provided in note 24 to the Group financial

statements. In respect of the Company, the charge is shown as

an increase in the Company’s investments, as the employees to

which the charge relates are employed by subsidiary companies.

Dividends

Dividends to the Group’s shareholders are recognised as a

liability in the period in which the dividends are approved

by shareholders. Dividend income is credited to the income

statement when the dividend has been approved by the board

of directors of the subsidiary company making the payment.

Trade receivables

Trade receivables are recognised initially at fair value less an

allowance for any amounts estimated to be uncollectable. An

estimate for doubtful debts is made when there is objective

evidence that the collection of the debt is no longer probable.

Interest-bearing loans and borrowings

All interest-bearing loans and borrowings are initially recognised

at the fair value of the consideration received less directly

attributable transaction costs. Borrowing costs are expensed

through the income statement.

De-recognition of

financial assets and liabilities

A financial asset is derecognised where the rights to receive

cash flows

from the asset have expired. A

financial liability

is derecognised when the obligation under the liability is

discharged, cancelled or expires.

Taxation

The tax expense in the income statement represents the

sum of taxes currently payable and deferred taxes. The tax

currently payable is based on taxable profit

for the year and the

Company’s liability for current tax is calculated using tax rates

that have been enacted or substantively enacted by the balance

sheet date. Taxable profit di

ffers from pro

fit as reported in

the income statement because it excludes items of income or

expense that are taxable or deductible in other periods and it

further excludes items that are never taxable or deductible.

Deferred tax is provided using the liability method on temporary

differences at the balance sheet date between the tax bases

of assets and liabilities and their carrying amounts for

financial

reporting purposes. Deferred tax liabilities are recognised for all

taxable temporary differences.

Deferred tax assets are recognised only to the extent that it is

probable that a taxable profit will be available against which the

deductible temporary differences, carried forward tax credits

or tax losses can be utilised. Deferred tax assets and liabilities

are measured on an undiscounted basis at the tax rates that

are expected to apply when the asset is realised or the liability is

settled, based on tax rates and tax laws enacted or substantively

enacted at the balance sheet date. Deferred tax assets and

liabilities are offset, only if a legally enforceable right exists to set

off current tax assets against current tax liabilities, the deferred

taxes relate to the same taxation authority and that authority

permits the Company to make a single net payment.

Tax is charged or credited directly to equity if it relates to

items that are credited or charged to equity. Otherwise, tax is

recognised in the income statement.

Judgements and key sources of estimation or uncertainty

The preparation of

financial statements requires management

to make judgements, estimates and assumptions that affect

the amounts reported for assets and liabilities as at the

balance sheet date and the amounts reported for revenues and

expenses during the year. However, the nature of estimation

means that actual outcomes could differ from those estimates.

Estimates and assumptions

The key assumptions concerning the future and other key

sources of estimation uncertainty at the balance sheet date,

that have a significant risk o

f causing a material adjustment

to the carrying amounts of assets and liabilities within the next

financial year are discussed below.

Impairment of investments and receivables from Group

companies (estimate)

The Company assesses whether there are any indicators of

impairment of investments or receivables from Group companies

at each reporting date. Investments and receivables from Group

companies are tested for impairment when there are indicators

that the carrying amounts may not be recoverable. Details of

impairments of investments recorded during the year and the

carrying value of investments are contained in note 1.

Prior period restatement

In 2022, an impairment charge of $517.5m was recorded against the investment in John Wood Group Holdings Limited. As noted

in the prior year disclosure an adjustment of $511.4m was applied to the Group’s value in use, in respect of debt and debt like items

which are not included in the impairment model. The $511.4m adjustment included the consolidated Group net debt (borrowings

less cash and cash equivalents) of $393.2m, of which $794.1m related to John Wood Group PLC. Therefore, from the perspective of

the John Wood Group Holdings Limited investment, a negative net debt (borrowings less cash and cash equivalents) adjustment

of $400.9m should have been applied which would have resulted in an increase to the recoverable amount of the investment of

$794.1m. Under the terms of IAS 8, the directors have elected to restate the comparatives with regard to this error.

Under the terms of IAS 8, the directors have elected to restate the comparatives with regard to this adjustment. Consequently, the

prior year comparatives have been restated to fully reverse the impairment charge of $517.5m recognised in the prior year.

	2022	Prior period restatement	2022
	$m	$m	$m
Investments	3,873.6	517.5	4,391.1
Comprehensive loss	572.2	(517.5)	54.7

Net assets and total equity are restated from $3,061.2m to $3,578.7m and retained earnings is restated from ($123.0m) to

$394.5m.

Disclosure impact of new and future accounting standards

The Company is required to comply with the requirements of IFRS 17

Insurance Contracts

for reporting periods beginning on or after

1 January 2023. The new accounting standard sets out the requirements that the Company should apply in reporting information

about insurance contracts it issues and reinsurance contracts it holds. The Company has undertaken an assessment of its

arrangements with wholly owned subsidiaries, as described in note 14, and has concluded that IFRS 17 Insurance Contracts does not

have any material impact on the financial statements.

Investments

	2023	2022 *restated
	$m	$m
Cost
At 1 January	4,391.1	4,370.4
Additions	19.6	20.7
At 31 December	4,410.7	4,391.1
Impairment
At 1 January and 31 December	–	–
Net book value
At 31 December	4,410.7	4,391.1

Refer to page 250 for further details on the prior period restatement.

During the year, the Company contributed $19.6m (2022: $20.7m) of share based charges against John Wood Group Holdings Ltd.

The Directors performed an assessment of the carrying value of the investment in John Wood Group Holdings Limited as at 31

December 2023. A value in use calculation was performed for the Group using cash

flow projections prepared by management and

approved by the Board for the period 2024 through to 2028. The assumptions underpinning the forecasts and impairment model

are discussed in note 10 of the Group

financial statements.

The Group post-tax discount rate was 9.6% (2022: 9.7%) (pre-tax 11.2%) (2022: 11.5%) and a terminal growth rate of 2.4% (2022:

2.4%) was applied to the forecast consolidated cash

flows o

f the Group. The recoverable amount of the Group at the test date was

$4,767m (2022: $4,373m) based on the assumptions described above and note 10 of the Group

financial statements. An adjustment

of ($30.2m) (2022: $294.5m (restated)) was made to the recoverable amount re

flecting the

fair value of debt and surplus assets

and liabilities held by John Wood Group Holdings Limited and subsidiaries.

A 1% increase in the post-tax discount rate would result in an impairment of $271.9m. A 1% reduction in the long-term growth rate

would result in an impairment of $133.9m. A 1% reduction in the revenue CAGR would reduce headroom to $64.1m.

The Company’s direct subsidiaries at 31 December 2023 are listed below. Ownership interests reflect holdings o

f ordinary shares.

Details of other related undertakings are provided in note 38 to the Group

financial statements.

Name of subsidiary	Country of incorporation or registration	Registered address
John Wood Group Holdings Limited	UK	Sir Ian Wood House, Aberdeen

The Company owns 100% of all of the subsidiaries listed above.

Notes to the Company financial statements

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

250

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

251

Long term receivables

	2023	2022
	$m	$m
Loans to Group undertakings	3,061.7	2,565.2

The long-term loan receivable at 31 December 2023 includes the promissory note of $2,323.2m (2022: $2,565.2m), which related

to the transfer of the Company’s investment in Amec Foster Wheeler Limited to John Wood Group Holdings Limited in exchange

for a promissory note during 2019. During 2023, John Wood Group Holdings Limited paid $242.0m to John Wood Group PLC in

a partial settlement of the promissory note. The repayment represented qualifying consideration and as a result the Company

transferred an equivalent portion of the merger reserve to retained earnings. The loan is due to be paid by November 2024, however

management do not expect to realise the assets within twelve months after the reporting period.

Trade and other receivables

	2023	2022
	$m	$m
Loans to Group undertakings	46.8	985.2
Trade receivables – Group undertakings	269.3	191.8
Other receivables	1.2	6.3
Prepayments and accrued income	7.1	6.0
	324.4	1,189.3

Interest on loans to Group undertakings is charged at market rates. At 31 December 2023, $45.7m (2022: $45.7m) of the amounts

owed by Group companies were impaired. These amounts relate to balances due from Group companies from whom there is no

expectation of payment.

The ageing of these amounts is as follows:

	2023	2022
	$m	$m
Over 3 months	45.7	45.7

The movement on the provision for impairment is as follows:

	2023	2022
	$m	$m
At 1 January and 31 December	45.7	45.7

The Company had $230.5m (2022: $84.2m) of outstanding balances that were past due but not impaired at either 31 December

2023 or 31 December 2022. The other classes within receivables do not contain impaired assets.

The ageing of these amounts is as follows:

	2023	2022
	$m	$m
Under 3 months	38.8	11.3
Over 3 months	191.7	72.9
	230.5	84.2

Cash and cash equivalents

	2023	2022
	$m	$m
Cash and cash equivalents	11.7	24.8

Borrowings

	2023	2022
	$m	$m
Current borrowings
Bank overdrafts	167.8	234.9
Senior loan notes	89.6	–
	257.4	234.9
Non-current borrowings
Bank loans	549.3	232.0
Senior loan notes	262.9	352.0
	812.2	584.0

The bank overdrafts relate to the Group’s cash pooling arrangements and are largely denominated in US dollars and pounds

sterling. At 31 December 2023 interest on US dollar overdrafts was payable at 6.48% (2022: 5.48%) and on sterling overdrafts at

6.40% (2022: 4.63%).

Bank loans are unsecured and bear interest based on the Bank of England base rate or foreign currency equivalent. At 31 December

2023, bank loans included $190.4m of US dollar loans and $366.5m of GBP loans. Interest was payable at 7.4% (2022: 6.4%) on the

US dollar loans and 6.71% (2022: 6.42%) on the GBP loans. Non-current bank loans are stated net of unamortised fees totalling

$7.6m (2022: $10.0m).

In December 2023, the Company secured a new term loan of $200.0m which matures in October 2026. The term loan was used to

pay down a former facility of the same value.

The Company has $352.5m (2022: $352.0m) of unsecured senior notes in the US private placement market maturing between 2024

and 2031 at an average fixed rate o

f 4.58% (2022: 4.58%). These notes are largely US dollar denominated. $127.8m (2022: $127.8m)

of the notes are repayable after more than 5 years.

Trade and other payables

	2023	2022
	$m	$m
Loans from Group undertakings	2,005.7	3,560.4
Trade payables – Group undertakings	98.6	61.9
Other creditors	2.0	6.3
Accruals	6.0	18.2
	2,112.3	3,646.8

Interest on loans from Group undertakings is payable at market rates.

Loans from Group undertakings re

flect amounts which are repayable on demand or are due within the next 12 months. The

decrease in the current year is due to the extension of the maturity date on one loan as detailed in note 7.

Other non-current liabilities

	2023	2022
	$m	$m
Amounts due to Group undertakings	1,034.8	131.7

The amounts due to Group undertakings are inter-company loans with varying maturities greater than 1 year. Interest on these

loans is charged at market rates.

The increase in amounts due to group undertakings in 2023 is primarily the result of the extension of the maturity date on one loan

amounting to $1,034.8 million which is now due to be paid by May 2028.

Notes to the Company financial statements

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

252

Strategic report

Governance

Financial statements

John Wood Group PLC

Annual Report and Financial Statements 2023

253

Financial instruments

Financial risk factors

The Company’s activities give rise to a variety of

financial risks: market risk (including

foreign exchange risk and cash

flow interest

rate risk), credit risk and liquidity risk. The Company’s overall risk management strategy is to hedge exposures wherever practicable

in order to minimise any potential adverse impact on the Company’s financial per

formance.

Risk management is carried out by the Group Treasury department in line with the Group’s Treasury policies which are approved

by the Board of Directors. Group Treasury identify, evaluate and where appropriate, hedge

financial risks. The Group Treasury

policies cover specific areas, such as

foreign exchange risk, interest rate risk, credit risk, use of derivative

financial instruments and

investment of excess cash.

(a)

Market risk

(i)

Foreign exchange risk

The Company is exposed to foreign exchange risk arising from various currencies. Where possible the Company’s policy is to

eliminate all significant currency exposures at the time o

f the transaction by using

financial instruments such as

forward currency

contracts. Changes in the forward contract fair values are recorded in the income statement.

(ii)

Interest rate risk

The Company finances its operations through a mixture o

f retained pro

fits and debt. The Company borrows in the desired

currencies at a mixture of

fixed and floating rates o

f interest to generate the desired interest pro

file and to manage the Company’s

exposure to interest rate fluctuations. At 31 December 2023, 38.7% (2022: 52.6%) o

f the Company’s borrowings were at

fixed rates.

The Company is also exposed to interest rate risk on cash held on deposit. The Company’s policy is to maximise the return on cash

deposits whilst ensuring that cash is deposited with a financial institution with a credit rating o

f at least BBB+.

(iii)

Price risk

The Company is not exposed to any significant price risk in relation to its financial instruments.

(b)

Credit risk

The Company’s credit risk primarily relates to its inter-company loans and inter-company receivables. Management believe that no

further risk provision is required in excess of the current provision for impairment.

The Company also has credit risk in relation to cash balances or cash held on deposit. The Company’s policy is to deposit cash at

institutions with a credit rating of at least BBB+.

(c)

Liquidity risk

With regard to liquidity, the Company’s policy is to ensure continuity of funding.

At 31 December 2023, 77% (2022: 73%) of the

Company’s borrowings (including bank overdrafts) were due to mature in more than one year. Based on the current outlook the

Company has suf

ficient

funding in place to meet its future obligations.

(d)

Capital risk

The Company’s capital risk is determined by that of the Group. See note 20 to the Group

financial statements.

Share capital

	2023	2022
	$m	$m
Issued and fully paid
691,839,369 (2022: 691,839,369) ordinary shares of 4 2/7 p each	41.3	41.3

The additional information required in relation to share capital is given in note 25 to the Group

financial statements.

Share premium

	2023	2022
	$m	$m
At 1 January and 31 December	63.9	63.9

The shares allocated to the trust during the year were issued at par value, 42/7 pence (

2022: 4

2/7 pence) and consequently there was

no credit to the share premium account.

Retained earnings (*restated)

Retained earnings are stated after deducting the investment in own shares held by employee share trusts. Investments in own

shares represents the cost of 4,352,958 (2022: 8,442,031) of the Company’s ordinary shares totalling $99.4m (2022: $99.4m).

The Company’s profit

for the

financial year was $4.2m (2022: $54.7m loss (restated)).

The Company does not have any employees other than the directors of the Company. Details of the directors’ remuneration are

provided in the Directors’ Remuneration Report in the Group financial statements. Details o

f dividends paid and proposed are

provided in note 8 to the Group financial statements. Further details o

f share based charges are provided in note 24 to the Group

financial statements.

Refer to page 250 for further details on the prior period restatement.

Merger reserve

	2023	2022
	$m	$m
At 1 January	2,540.8	2,540.8
Transfer to retained earnings	(242.0)	–
At 31 December	2,298.8	2,540.8

In October 2017, 294,510,217 new shares were issued in relation to the acquisition of Amec Foster Wheeler Limited and $2,790.8m

was credited to the merger reserve. The merger reserve was initially considered unrealised on the basis it was represented by

the investment in Amec Foster Wheeler Limited and did not meet the definition o

f qualifying consideration under Tech 02/17BL

Guidance on realised and distributable profits under the Companies Act 2006.

In November 2019, the Company sold its investment in Amec Foster Wheeler Limited to John Wood Group Holdings Limited for

$2,815.2m in exchange for a promissory note. To the extent that the promissory note is settled by qualifying consideration, the

related portion of the merger reserve is considered realised and becomes available for distribution.

During 2023, John Wood Group Holdings Limited paid $242.0m to John Wood Group PLC in a partial settlement of the promissory

note. The repayment represented qualifying consideration and as a result the Company transferred an equivalent portion of the

merger reserve to retained earnings.

Other reserves

	Capital	Capital
	reduction	redemption	Hedging
	reserve	reserve	reserve	Total
	$m	$m	$m	$m
At 1 January 2022, 31 December 2022 and
31 December 2023	88.1	439.7	10.4	538.2

No movements in other reserves have occurred during 2022 or 2023.

The capital reduction reserve was created following the Initial Public Offering in 2002 and is a distributable reserve. The capital

redemption reserve was created in 2011 as part of a return of cash to shareholders and is not a distributable reserve.

Financial guarantee contracts and contingent liabilities

Where the Company enters into financial guarantee contracts in respect o

f its subsidiary companies they are accounted for under

IFRS 9. The Company issues financial guarantee contracts to its subsidiaries regarding drawdowns in the Revolving Credit Facility

(RCF). There were no financial guarantee contracts issued at year-end.

At 31 December 2023, the Company had outstanding guarantees for performance bonds and contracting arrangements given on

behalf of its subsidiaries amounting to $617.6m (2022: $658.0m).

Notes to the Company financial statements

continued

John Wood Group PLC

Annual Report and Financial Statements 2023

254

Five year summary (unaudited)

2023

2022

(re-presented)

2021

2020

2019

Revenue

5,900.7

5,469.3

5,237.7

7,564.3

9,890.4

Adjusted EBITDA

422.7

388.2

404.3

630.4

855.4

Depreciation (including joint ventures)

(129.3)

(119.8)

(121.0)

(180.0)

(182.0)

Amortisation (including joint ventures)

(161.1)

(153.4)

(169.1)

(227.7)

(243.7)

Non-recurring items (including joint ventures)

(78.5)

(665.9)

(161.0)

(247.3)

(107.6)

Net finance expense (including joint ventures)

(106.7)

(130.6)

(113.5)

(119.2)

(160.6)

(Loss)/profit be

fore taxation (including joint ventures)

(52.9)

(681.5)

(160.3)

(143.8)

161.5

Taxation (including joint ventures)

(74.8)

(20.8)

(53.2)

(84.3)

(88.7)

(Loss)/profit

for the year

(127.7)

(702.3)

(213.5)

(228.1)

72.8

Equity attributable to owners of the parent

3,636.5

3,728.0

4,082.0

4,170.0

4,418.8

Net debt excluding leases

693.5

393.2

1,393.0

1,014.3

1,424.0

Net debt/adjusted EBITDA

2.08

1.3

3.3

2.1

2.0

Gearing ratio

19.1%

10.5%

34.1%

24.3%

32.1%

Interest cover

4.0

4.2

4.5

5.5

5.6

Diluted earnings per share (cents)

(16.1)

(52.4)

(20.6)

(34.1)

10.5

Adjusted diluted earnings per share (cents)

0.8

5.7

17.5

23.2

46.0

Dividend per share (cents)

–

35.3

Dividend cover

–

1.3

The comparative information has been re-presented due to a reclassi

fication o

f a business operation from discontinued into continuing operations for the year

outlined in note 7 of the

financial statements.

Figures leading to the loss for the 2023, 2022 and 2021 periods include continuing operations only

Strategic report

John Wood Group PLC

Annual Report and Financial Statements 2023

255

Governance

Financial statements

Information for shareholders

ficers and advisers

Secretary and Registered Of

fice

Registrars

Martin J McIntyre

Equiniti Limited

John Wood Group PLC

Aspect House

Sir Ian Wood House

Spencer Road

Hareness Road

Lancing

Altens Industrial Estate

West Sussex

Aberdeen

BN99 6DA

AB12 3LE

United Kingdom

Corporate brokers

Independent Auditors

JPMorgan Cazenove Limited

KPMG LLP

Morgan Stanley

Chartered Accountants and Statutory Auditors

1 Marischal Square

Broad Street

Aberdeen

AB10 1DD

Company Solicitors

Slaughter and May

Financial calendar

Results announced

26 March 2024

Annual General Meeting

9 May 2024

The Group's Investor Relations website can be accessed at:

woodplc.com/investors

John Wood Group PLC

Annual Report and Financial Statements 2023

256

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John Wood Group PLC

Sir Ian Wood House

Hareness Road

Altens Industrial Estate

Aberdeen, AB12 3LE

Tel +44 1224 851000

Visit our website at:

woodplc.com