Fluor Corp. recently unveiled a new strategy to boost shareholder value by generating a bulk of its revenue from “nontraditional” oil and gas segments.

“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 megatrends that are impacting how we do business,” Fluor CEO David Constable said in a statement on Jan. 28. “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.”

Headquartered in Irving, Texas, Fluor has provided engineering, procurement and construction services for more than 100 years. Constable was named CEO in late 2020 as part of a strategic review Fluor had taken to transform the century-old company to align its businesses with identified growth markets.

Already this year, Fluor announced plans to sell its maintenance services business, Stork, and realign its remaining operations into three new business segments: Urban Solutions, Mission Solutions and Energy Solutions.

Further, at the company’s 2021 strategy day event on Jan. 28, Fluor’s leadership team outlined the four strategic priorities for driving value creation:

  • Drive growth across Fluor’s portfolio. By 2023, Fluor expects 70% of revenue will come from nontraditional oil and gas segments. This includes chemicals, mining and life sciences plus energy transition projects that focus on a shift from fossil-based production and consumption.
  • Pursue contracts with fair and balanced terms. Fluor 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 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.

Fluor’s new strategic priorities build upon the previously announced realigning of its operations. The updated organizational and reporting structure aligns Fluor’s business with identified growth markets, and will be implemented in first-quarter 2021.

Energy Solutions, led by Jim Breuer, will be focused on energy transition, chemicals and traditional oil and gas opportunities. Urban Solutions, led by Terry Towle, will pursue opportunities in mining, metals, advanced technologies, manufacturing, life sciences, infrastructure, and will include Fluor’s professional staffing (TRS) unit. Mission Solutions, led by Tom D’Agostino, will be primarily focused on delivering solutions to federal agencies across the U.S. government and to select international opportunities.

Additionally, Fluor also established two newly-consolidated functional organizations: Project Execution, led by Mark Fields; and Corporate Development and Sustainability, led by Al Collins.