Jacobs Solutions Inc. · NYSE:J
Jacobs Solutions — Citi Global Industrial Conference 2020
33 slides from Jacobs Solutions's conference presentation, Feb 20, 2020
Slide 1: Investor Presentation
Investor Presentation February 2020
Slide 2: Disclaimer
Disclaimer Forward-Looking Statement Disclaimer Non-GAAP Financial Measures Pro Forma Figures Certain statements contained in this presentation constitute To supplement the financial results presented in accordance with During this presentation, we may discuss comparisons of current forward-looking
Slide 3: Jacobs: Delivering innovative solutions & disciplined execution
Jacobs: Delivering innovative solutions & disciplined execution ($ in billions) Reimbursable and Net Revenue TTM Lower Risk Fixed Public/Private Pro forma for KeyW Gross Backlog Q1 U.S./Int’l Mix Talent Base Price Services Sector 75%/25% ~52,000 93% 69%/31% ▪ Increasing portfolio mix in high value s
Slide 4: Strong execution against strategic and financial goals
Strong execution against strategic and financial goals 2016-2018 2017 2019 Water, Environmental and Energy, Chemicals and Mission-IT, Cyber and ISR Operational Improvements Transportation Acquisition Resources (ECR) Sale Acquisition • Aligned lines of business to • Acquired CH2M to accelerate • Sold
Slide 5: Sale of ECR creates stronger, less cyclical portfolio
Sale of ECR creates stronger, less cyclical portfolio Organic Revenue ECR Jacobs excl. ECR1 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 1Historical gross revenue for Jacobs excluding ECR and excluding the first year inorganic impact from material acquisitions 5
Slide 6: Focusing on higher growth, higher margin sectors
Focusing on higher growth, higher margin sectors 2016-2019 Strategy 2019-2021 Strategy (Illustrative) (Illustrative) • Targeting secular growth markets • Exiting direct hire construction • More profitable geographies • Expanding in secular growth markets Higher Technology • Higher margin solutions S
Slide 7: Solutions enabled by digital capability, informed by domain expertise
Solutions enabled by digital capability, informed by domain expertise Applied Automated Internet Predictive Cyber- Geospatial security Design of Things Analytics Science 7
Slide 8: 2021 Financial Targets
2021 Financial Targets 2018 Pro Forma 2019A 2021 Target1 Baseline Organic Net Revenue Growth 16% 12% 3% to 5% CAGR Adj. Net Operating Profit Margin 8.3% 8.8% +125 to 175 bps Double-Digit Adj. EBITDA Growth 13% 13% CAGR Consistent growth plus continued margin expansion to drive higher returns 1Provid
Slide 9: Critical Mission Solutions
Critical Mission Solutions Critical Mission Solutions Snapshot Unique Delivery Model (TTM including KeyW) ▪ One of the largest diversified government services providers U.S. / International 90% / 10% ▪ Leveraging strong technical expertise, localized delivery model and efficient Government ~88% cost
Slide 10: CMS business units create, deliver and succeed with certainty
CMS business units create, deliver and succeed with certainty Annual Revenue: $1.8 Billion ▪ NASA’s largest non-OEM services provider ▪ Leader in design/build of aerodynamic, climatic, altitude and acoustic facilities and intelligent asset management solutions ▪ Delivers warfighter mission support a
Slide 11: CMS business units create, deliver and succeed with certainty
CMS business units create, deliver and succeed with certainty Annual Revenue: $300 million ▪ Integrated, full-service cybersecurity services, including defensive operations, offensive CYBER operations and cyber mission training ▪ OT/ICS security solutions for industrial control environments ▪ Advanc
Slide 12: A foundation of large, multi-year highly technical contracts
A foundation of large, multi-year highly technical contracts Agency Award Size Duration Contract Scope $217M 5 years Supporting the Department of Defense Cyber Crime Center for modernization, design, to 2024 development and delivery of specialized cyber training for its Cyber Training Academy $4.6B
Slide 13: CMS is well positioned in attractive government services markets
CMS is well positioned in attractive government services markets1 State of Play Impact to Jacobs ▪ FY21 President’s Budget Request released Feb 10th kicking ▪ Defense industry expected to see sustained funding, which is a off federal appropriations process with FY21 Defense level at good overall, bu
Slide 14: Critical Missions Solutions Financial Targets
Critical Missions Solutions Financial Targets 2021 Organic Est. KeyW 2018 PF 2019A Targets Additional Impact2 (Feb 2019) >100 Revenue $3.9B +14% 2-3%1 bps >200 Adj. Operating Profit $265M +14% 8-10%1 bps +100 to Adj. Operating Profit Margin ~7% ~7% 150 bps >50 bps 1 Three Year CAGR 2Pro forma impact
Slide 15: People & Places Solutions
People & Places Solutions People & Places Solutions Snapshot (Net Revenue Q1 2020) U.S./International 64% / 36% Growth Underpinned by Multiple Secular Trends Public / Private Sector 59% / 41% ▪ Climate change resiliency driving long-term opportunities Reimbursable and Lower RIsk Fixed ~89% Price Ser
Slide 16: Leading Provider of Global Water Solutions
Leading Provider of Global Water Solutions ▪ Jacobs’ water solutions represent ~20% of People and Places Solutions revenue ▪ The World Economic Forum 2020 Global Risks Report is dominated by environment related risks for the fourth year in a row ▪ Water remains an undervalued and yet increasingly sc
Slide 17: Environmental and Resiliency Challenges Require Deep Expertise
Environmental and Resiliency Challenges Require Deep Expertise Environmental Planning, Permitting, Sustainability and Remediation PFAS Overview ▪ Market drivers: urbanization, climate change, resiliency, emerging ▪ Highly toxic chemicals manufactured for non-stick products, contaminants and water sc
Slide 18: Global connectivity optimizes global platform through integrated delivery
Global connectivity optimizes global platform through integrated delivery Poland PPS Presence Select Design Centers1 Oregon Philippines India Malaysia • Drives innovative solutions • Utilizes best talent around the world • Enhances competitive differentiation Mature global delivery platform enables
Slide 19: People & Places Solutions Financial Targets
People & Places Solutions Financial Targets 2018 PF3 2019 PF3 2021 Targets3 Net Revenue $5.1B 10% 4-6%1 Adj. Operating Profit $629M 14% 10-12%1 +110 to Adj. Operating Profit Margin2 12.2% 12.7% 140 bps 1 Three year CAGR 2 % of Net Revenue 3 Includes GES 19
Slide 20: Fiscal 2020 Q1 results
Fiscal 2020 Q1 results Revenue increased 9.0% y/y and Pro Forma Net Revenue increased 5% y/y GAAP Operating Profit (OP) of $151M (+34%) and Operating Profit Margin of 4.5% (+80 bps) Adj. OP of $237M (+28%) and Net Revenue Adj. OP Margin of 8.9% (+120 bps) GAAP Net Earnings of $179 million and EPS fr
Slide 21: Segment financials
Segment financials $’s in millions Q1 Q1 Y/Y 2019 2020 Critical Mission Solutions Operating Profit 72 90 25% as a % of revenue 7.0% 7.6% +60 bps People & Places Solutions Operating Profit 159 178 12% as a % of net revenue 11.6% 12.1% +50 bps Adjusted Unallocated Corporate Costs1 (46) (32) Adjusted O
Slide 22: M&A and divestiture update
M&A and divestiture update ECR Update ▪ Incurred $206M of ~$230M transaction, separation and restructuring costs ▪ On track to complete majority of separation and restructuring costs by end of Q2 KeyW Acquisition Update ▪ Achieved majority of $15M in run-rate synergies at end of Q1 ▪ Incurred $22M i
Slide 23: Balance sheet and cash flow
Balance sheet and cash flow Annual Free Cash Flow (FCF) Generation Remains On Track ▪ Q1 FCF improved from year ago; impacted by continued restructuring outflows ▪ Q1 DSOs increased; confident in ability to improve during fiscal year 2020 Q1 Leverage Metrics ▪ On track to deliver $450+ million of to
Slide 24: Focused on delivering superior Shareholder Value
Focused on delivering superior Shareholder Value ▪ Inspire a high-performance culture ▪ Capture growth opportunities through innovation ▪ Deliver strong free cash flow generation ▪ Maintain a disciplined capital allocation that drives value creation FY20 Financial Outlook Maintaining outlook of adj.
Slide 25: To create a more connected, sustainable world.
To create a more connected, sustainable world. We do things We challenge the We aim We live right. accepted. higher. inclusion. 25
Slide 26: Recast consolidated financials
Recast consolidated financials PF Q1 $’s in millions Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 20181 Critical Mission Solutions Backlog 6,641 7,174 7,148 7,130 7,130 7,158 7,285 8,393 8,460 8,460 8,473 Revenue 842 924 1,021 1,069 3,856 1,035 1,060 1,156 1,300 4,
Slide 27: Recast consolidated financials
Recast consolidated financials $’s in millions Q1 2018 1 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Backlog 18,910 19,262 19,840 19,955 19,955 20,335 20,713 22,404 22,569 22,569 22,671 Revenue 2,746 2,870 2,934 2,992 11,541 3,084 3,092 3,170 3,393 12,738 3,360 Ne
Slide 28: Other operational metrics from continuing operations
Other operational metrics from continuing operations $’s in thousands Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Depreciation (pre-tax) 25,607 1 26,764 24,423 21,567 98,361 1 18,211 23,491 25,851 20,508 88,061 22,152 Amortization of Intangibles (pre-tax)
Slide 29: Non GAAP financial measures
Non GAAP financial measures Three Months Ended The following tables reconcile the U.S. GAAP values of December 27, 2019 net revenue, net earnings, EPS, operating profit and Effects of Effects of operating profit margin to the corresponding "adjusted" Restructuring and Transaction Costs Other Adjustm
Slide 30: Non GAAP financial measures
Non GAAP financial measures Three Months Ended The following tables reconcile the U.S. GAAP values of net December 28, 2018 revenue, net earnings, EPS, operating profit and operating Effects of Effects of profit margin to the corresponding "adjusted" amounts. For Restructuring and Transaction Costs
Slide 31: Reconciliation of net earnings from continuing operations to adjusted EBITDA
Reconciliation of net earnings from continuing operations attributable to Jacobs to adjusted EBITDA Reconciliation of Net Earnings from Coninuing Operations Attributable to Jacobs to Adjusted EBITDA Three Months Ended 12/27/2019 Adj Net earnings from Continuing Operations (1) $ 161,728 Adj. Income T
Slide 32: Non-GAAP financial measures (cont'd)
Non-GAAP financial measures (cont’d) Net revenue is calculated excluding pass-through revenue of the Company’s People & Places Solutions segment from the Company’s revenue from continuing operations. Adjusted net earnings from continuing operations, adjusted EPS from continuing operations, adjusted
Slide 33: Nice os
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