Jacobs Solutions Inc. · NYSE:J
Jacobs Solutions — Morgan Stanley Global Industrial Conference (September 2020)
31 slides from Jacobs Solutions's conference presentation, Sep 16, 2020
Slide 1: Investor Presentation August 2020
Investor Presentation August 2020
Slide 2: Disclaimer
Disclaimer Forward-Looking Statement Disclaimer Non-GAAP Financial Measures Certain statements contained in this presentation constitute forward-looking statements as such term is To supplement the financial results presented in accordance with generally accepted defined in Section 27A of the Securi
Slide 3: 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. 3
Slide 4: Jacobs: Delivering innovative solutions & disciplined execution
Jacobs: Delivering innovative solutions & disciplined execution Q3 Fiscal 2020 ($ in billions) Reimbursable and Net Revenue TTM Gross Backlog Lower Risk Fixed Public/Private As Reported As Reported U.S./Int’l Mix Talent Base Price Services Sector 76%/24% ~55,000 93% 74%/26% ▪ Increasing portfolio mi
Slide 5: 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 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: Critical Mission Solutions
Critical Mission Solutions Critical Mission Solutions Snapshot (TTM including KeyW and Wood Nuclear) Maintaining Resilient Base while Expanding into Higher Value Solutions U.S. / International 85% / 15% ▪ Quickly ramped to virtual and COVID compliant on-site client requirements Government ~88% ▪ Bac
Slide 8: CMS creates, delivers and succeeds with certainty for customers
CMS creates, delivers and succeeds with certainty for customers Annual Revenue: $2.0 Billion (37%) ▪ NASA’s largest non-OEM services provider ▪ Leader in design/build of aerodynamic, climatic, altitude and acoustic facilities and intelligent asset management solutions ▪ Leading Tier-1 nuclear servic
Slide 9: CMS creates, delivers and succeeds with certainty for customers
CMS creates, delivers and succeeds with certainty for customers Annual Revenue: $1.0 billion (19%) ▪ Delivers warfighter mission support and provides satellite operations in support of ballistic missile defense system testing ▪ 4th largest information network in the DoD and 10th largest telephony ne
Slide 10: A foundation of large, multi-year highly technical contracts
A foundation of large, multi-year highly technical contracts Agency Award Size Duration Contract Scope $4.6B 8.5 years Missile Defense Agency (IRES) - Operating the Missile Defense Integrated Operations Center, supporting its to 2025 network infrastructure, modeling and simulation and development of
Slide 11: People & Places Solutions
People & Places Solutions People & Places Solutions Snapshot (Net Revenue Q3 2020) Growth Through Competitive Advantage and Secular Trend Alignment U.S./International 67% / 33% Public / Private Sector 62% / 38% ▪ Globally connected talent driving integrated delivery and innovation Reimbursable and
Slide 12: Solutions & Technology
Solutions & Technology Value Driven Innovation S&T is a formal business function that stewards our technical experts, providing the global connectivity across markets. Our mission is to partner and support the business through talent management, strategy & growth, innovation, global connectivity, an
Slide 13: Market-based Organization Supports a Connected Expertise
Market-based Organization Supports a Connected Expertise • Industrial Water 13 ©Jacobs 2020
Slide 14: Connectivity optimizes global platform through integrated delivery
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 talent
Slide 15: Leading Provider of Global Water Solutions
Leading Provider of Global Water Solutions • Jacobs’ water solutions represent ~20% of People and Places Solutions revenue Data as of June 2020 15
Slide 16: Proprietary IP: AquaDNA, Replica and AI Solutions
Proprietary IP: AquaDNA, Replica and AI Confidential Solutions A digital replica of physical assets, processes and AquaDNA – predictive analytics platform that systems that can be used for synthetic data integrates innovative technologies for wastewater generation, prediction, optimization and pump
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: Environmental, Social and Governance (ESG) Summary
Environmental, Social and Governance (ESG) Summary Jacobs ESG Investor Page 2019 ESG Data Disclosure for Analysts Water Business Overview Environmental and PFAS Overview Jacobs FY19 revenue for global Environmental Market as defined by ENR was $4.3B 18
Slide 19: Fiscal 2020 Q3 results
Fiscal 2020 Q3 results Revenue increased 3% y/y and Pro Forma Net Revenue decreased 4% y/y GAAP Operating Profit (OP) of $194M (+116%) and OP Margin of 6.0% (+310 bps) Adj. OP of $239M (+3%) and Net Revenue Adj. OP Margin of 8.9% (+10 bps) GAAP Net Earnings of $227M and EPS from Continuing Operation
Slide 20: Segment financials
Segment financials $’s in millions Q3 Q3 Y/Y 2019 2020 Critical Mission Solutions Operating Profit 76 90 17% as a % of revenue 6.6% 7.4% 80 bps People & Places Solutions Operating Profit 183 190 4% as a % of net revenue 12.4% 13.0% 60 bps Adjusted Unallocated Corporate Costs1 (27) (41) (14) Adjusted
Slide 21: Integration and divestiture update
Integration and divestiture update ECR Update ▪ Incurred ~$215M to date of expected ~$230M transaction, separation and restructuring costs ▪ Final stages of separation and restructuring to be reached by end of year Wood Nuclear Acquisition Update ▪ Closed Wood acquisition on March 6, 2020 ▪ On track
Slide 22: Balance sheet and cash flow
Balance sheet and cash flow Positive Free Cash Flow (FCF) Generation for Remainder of 2020 Q3 Leverage Metrics $ billions FY20 Q3 ▪ Q3 positive FCF1 of $332M; includes net ~$25M benefit from one-time items ▪ Now expect total FY20 reported FCF1 to approach $400M, including Q3 Net Debt Position $1.1 B
Slide 23: Outlook & Summary
Outlook & Summary Underlying Fiscal 2020 and 2021 COVID-19 Related Assumptions ▪ Fiscal 2020 outlook reflects continued virtual work environment with gradual improvement in on-site client delivery ▪ Physical distancing headwinds likely continuing into early fiscal 2021 Updating Fiscal Year 2020 Outl
Slide 24: Resilient business driven by strong culture and diversified portfolio aligned to growth opportunities
Resilient business driven by strong culture and diversified portfolio aligned to growth opportunities ▪ Continue to prioritize employee health and safety during COVID-19 crisis ▪ Launched action plan for advancing justice and equality As part of NASA's Mars 2020 Mission launch on July 30, Jacobs ▪ A
Slide 25: Recast consolidated financials
Recast consolidated financials $’s in millions PF Q1 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 Q3 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 9,135 9,066 Revenue 842 924 1,021 1,069 3,85
Slide 26: Recast consolidated financials
Recast consolidated financials $’s in millions Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 Q3 2020 1 Backlog 18,910 19,262 19,840 19,955 19,955 20,335 20,713 22,404 22,569 22,569 22,671 23,291 23,674 Revenue 2,746 2,870 2,934 2,992 11,541 3,084 3,0
Slide 27: 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 Q2 2020 Q3 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 22,566 22,276 Amortiza
Slide 28: Non GAAP financial measures
Non GAAP financial measures Three Months Ended The following tables reconcile the U.S. GAAP values of June 26, 2020 net revenue, net earnings, EPS, operating profit and Effects of operating profit margin to the corresponding Restructuring, "adjusted" amounts. For the comparable periods Transaction a
Slide 29: Non GAAP financial measures
Non GAAP financial measures The following tables reconcile the U.S. GAAP values of net revenue, net earnings, EPS, operating profit and operating profit margin to the corresponding "adjusted" amounts. For Three Months Ended the comparable periods presented below, such adjustments June 28, 2019 consi
Slide 30: 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 Continuing Operations Attributable to Jacobs to Adjusted EBITDA Three Months Ended Three Months Ended 6/28/2019 6/26/2020 Adj Net earnings from Continuing Operation
Slide 31: 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
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