Fluor’s new strategy focuses on non-traditional oil and gas segments

David E. Constable, CEO, Fluor Corp.

Fluor Corporation has outlined a new strategy to “become the preeminent leader of professional and technical solutions,” building upon the previously announced realigning of its operations into three new business segments.

The latest plan was unveiled at its 2021 Strategy Day called “Building a Better Future.”

“My top priority since being named Fluor’s CEO has been to work closely with the Board and the management team to develop a strategy that addresses the mega trends that are impacting how we do business,” said David Constable, who took on the role of chief executive officer on January 1. “With an emphasis on sustainable outcomes and creating shareholder value, our new strategy leverages our world-class expertise and rewards Fluor for the value we provide while improving our financial position and creating a fit-for-purpose organization.”

At the Strategy Day event, Fluor’s leadership team outlined four strategic priorities:

• Drive growth across Fluor’s portfolio – By 2023, Fluor expects 70% of revenue will come from non-traditional oil and gas segments.
• Pursue contracts with fair and balanced terms – Fluor claims it will improve the quality of its backlog by only pursuing and executing work with fair and balanced terms. Fluor’s backlog will be more than 75% reimbursable by 2024, which is similar to historical norms.
• Reinforce financial discipline – By 2024, Fluor plans to lower and maintain a debt to capitalization ratio corridor between 20% to 40%, generate return on invested capital in excess of 20%, secure investment-grade credit ratings and deliver top-quartile shareholder returns. Fluor is targeting a 2024 earnings per share range of $3.00 to $3.50.
• Foster a high-performance culture with purpose – Fluor is committed to increasing women and diversity in leadership roles and creating a positive and inclusive culture that can drive strong individual and collective performance. In addition, the company has committed to achieve Net Zero for scopes 1 and 2 CO2 equivalent emissions by the end of 2023.

Earlier this month, Texas-based Fluor announced its plan to realign its operations into three new business segments: Urban Solutions, Mission Solutions and Energy Solutions. The updated organizational and reporting structure aligns Fluor’s business with identified growth markets, and will be implemented in the first quarter of 2021.

In December, Fluor announced financial results for its quarter ended September 30, 2020, reporting $129 million in consolidated quarterly profit over $79 million for the same period last year, thanks to its Energy & Chemicals, Infrastructure & Power, and Government segments.

Revenue for the quarter was relatively flat at $3.8 billion, compared to $3.9 billion reported in 2019, and net earnings from continuing operations attributable to Fluor was $19 million. Operating cash flow in the quarter was $80 million.