Babcock & Wilcox Enterprises, Inc. · NYSE:BW
Babcock & Wilcox Enterprises — CJS Securities 15th Annual Summer New Ideas Conference (July 2015)
21 slides from Babcock & Wilcox Enterprises's conference presentation, Jul 14, 2015
Slide 1: CJS Securities 15th Annual Summer New Ideas Conference
CJS Securities 15th Annual Summer New Ideas Conference July 14, 2015 1 © Babcock & Wilcox Enterprises, Inc. All rights reserved.
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-looking statements. The Babcock & Wilcox Company (“B&W”) cautions that this presentation contains forward-looking statements, including, without limitation, statements relating to the timing of and expected benefits associated with the planned spin-off of Babcock & Wilc
Slide 3: B&W Company Profile
B&W Company Profile • Global leader in energy and environmental technologies and services for the power and industrial markets Headquarters: Charlotte, NC • Installed electricity generation capacity of more than 300,000 MW Incorporation: Delaware in more than 90 countries Chairman & CEO: E. James Fe
Slide 4: Spin-Off Overview
Spin-Off Overview Overview Ticker BW Exchange NYSE Distribution Ratio 1:2 (BW to BWC) Expected Sharecount ~53.5M fully diluted shares outstanding Record Date June 18, 2015 Distribution Date June 30, 2015 Trading Begins July 1, 2015 4 © Babcock & Wilcox Enterprises, Inc. All rights reserved.
Slide 5: Three-Pronged Strategy Drives EPS Growth and Shareholder Value
Three-Pronged Strategy Drives EPS Growth and Shareholder Value Optimize Pursue Growth Traditional Opportunities in Business to Align International with Changing Market Market (Increase Revenue) (Increase Margin) Continue Disciplined Acquisition Program (Increase Revenue and Margin) 5 © Babcock & Wil
Slide 6: Post-Spin Benefits and Opportunities
Post-Spin Benefits and Opportunities Increases Management Focus on Operations Better Positions B&W for Changing Industry Dynamics Increases International Tax Optionality Facilitates Board Emphasis on Long-Term Strategy 6 © Babcock & Wilcox Enterprises, Inc. All rights reserved.
Slide 7: Business Model Delivers Maximum Customer Value
Business Model Delivers Maximum Customer Value B&W engineers custom solutions that are difficult to replicate and are fundamental to reliable operations and regulatory compliance Manufacturing Complex Strategic Project Customer Custom Engineering Management Sourcing Technology Relationship and Desig
Slide 8: Consolidated Revenue Overview
Consolidated Revenue Overview 2015E B&W Revenue Breakdown Other Asia 7% Other 9% 21% Coal Europe North Renewables 55% 19% America 18% 65% Gas 6% Aftermarket coal will be a solid base for the business while our strategy drives growth and diversification 8 © Babcock & Wilcox Enterprises, Inc. All righ
Slide 9: Business Segments Align with Growth Strategy
Business Segments Align with Growth Strategy Global Services • Retrofits and upgrades Optimize Traditional • Construction project services Business to Align • Operations and maintenance with Changing • Replacement parts Markets • Auxiliary equipment Global Power Pursue Growth • Utility steam generat
Slide 10: Global Services Overview
Global Services Overview 2014 Revenue by Segment • Aftermarket products and services for steam generating equipment and associated environmental and auxiliary equipment 69% Service Construction • Servicing B&W installed electricity generation U.S. Projects Services capacity of approximately 300,000
Slide 11: Market Overview
Market Overview 2014 Total Revenue Breakdown 2014 Non-Coal Revenue Breakdown Renewable 53% Natural • Biomass International Gas • Waste to Energy Non-Coal 15% U.S. General Industry 30% General Coal Renewable • Petrochemical, 55% Industry Refinery 27% Intl. Coal 58% • Pulp & Paper 47% • Manufacturing
Slide 12: Ongoing Rationalization of Operations
Ongoing Rationalization of Operations Cambridge, B&W Foundry Melville, Diamond Power Ongoing Pipeline Ontario (Barberton, OH) Saskatchewan Restructuring of Initiatives Ceased fossil Operations to be Plant to be mothballed Integration of parts B&W continues to work operations in 2014 closed in June 2
Slide 13: Global Power Overview
Global Power Overview 2014 Revenue by Segment • Steam generating systems for fossil fuels and renewable energy conversion for power generation and industrial uses 57% U.S. • Environmental solutions include New Build Environmental emissions control products and 36% related equipment $471.9M • Complex
Slide 14: Market Opportunity
Market Opportunity Select Fuels Generating Capacity (GWe) by Region 3,000 Coal Natural Gas Renewables 2,000 1,000 0 2014 2025 2014 2025 2014 2025 2014 2025 NorthNorth America EMEA CtlCentral & So America / South Asia Pacific EMEA Asia Pacific America America Source: IHS Energy Scenarios (Rivalry), J
Slide 15: Recent Project Awards Demonstrate Global Expansion is Underway
Recent Project Awards Demonstrate Global Expansion is Underway Emissions Control Project in Colorado March 2015 – $40.3M Biomass Power Plant in England March 2015 – >$220M Biomass Power Plant in Wales January 2015 – >$200M Supercritical Coal-Fire Boiler and SCR System in Vietnam January 2015 Waste-t
Slide 16: Industrial Environmental Overview
Industrial Environmental Overview 2014 Revenue by Segment(1) • B&W acquired MEGTEC Systems, Inc. on June 20, 2014 • 40+ year history with ~600 employees across 13 offices globally 53% • Asset-light flexible manufacturing platform U.S. Aftermarket • Significantly expanded B&W’s industrial environment
Slide 17: Market Opportunity
Market Opportunity • Industrial environmental business provides engineered solutions to a wide range of problems and processes in diverse and naturally growing end markets 5% projected annual market growth • Broad customer base includes ~3,100 businesses stretching across six continents and over 60
Slide 18: Competitive Landscape
Competitive Landscape (Belco®) (AirTech) (Bischoff) Footnote: Trademarks are the property of their respective owners. 18 © Babcock & Wilcox Enterprises, Inc. All rights reserved.
Slide 19: Investment Highlights
Investment Highlights Strong Foundation Significant Earnings Upside Great Brand Associated with Quality, Three-Pronged Growth Strategy Reliable Delivery and Innovation Aligned with Businesses Customer and Strategic Technology Leader in Partner Relationships Global Power Generation Established Platfo
Slide 20: Skilled Management Team
Skilled Management Team Chairman and Chief Executive Officer Finance Jim Ferland Jenny Apker Senior Vice President & Chief Financial Officer Global Services Global Power Industrial Division Division Environmental Division Mark Low Paul Scavuzzo Ken Zak Senior Vice President Senior Vice President Sen
Slide 21: Experienced Board of Directors
Experienced Board of Directors Thomas A. Christopher Former Vice Chairman of AREVA, Mr. Christopher also served as its President and CEO from 2000 to 2009. Before that, he held a number of positions at Westinghouse, including Vice President and General Manager, Westinghouse Power Services. Cynthia S