Jacobs Solutions Inc. · NYSE:J
Jacobs Solutions — BofA Securities 2022 Global Industrials Conference
41 slides from Jacobs Solutions's conference presentation, Mar 15, 2022
Slide 1: Jacobs Strategy: Boldly moving forward
Jacobs Strategy Boldly moving forward March 2022
Slide 2: Forward-Looking Statement Disclaimer
Forward-Looking Statement Disclaimer Certain statements contained in this presentation constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are i
Slide 3: Our foundation is strong
Our foundation is strong Purpose To create a more connected, sustainable world. Values We do things right. We challenge the accepted. We aim higher. We live inclusion. Employee Value Jacobs. A world where you can. Statement Where you Where you Where you can be you. can do. can grow. 3 ©Jacobs 2021
Slide 4: Our cultural transformation: An inspirational journey for all
Our cultural transformation: An inspirational journey for all + Agile + Learning Culture Innovation + Inclusion & Diversity Empowerment & Accountability When we learn and grow together, we activate Empowerment & Accountability, Inclusion & Diversity, and Innovation. We lead, embrace and anticipate c
Slide 5: An engaged talent ecosystem to fuel long-term growth
An engaged talent ecosystem to fuel long-term growth ▪ Workforce Planning ▪ Performance Management Connect talent with sales pursuits & Rewards and active projects to maximize Connect career development plans, utilization of our global teams. performance management and Talent rewards with client out
Slide 6: FY22 – 24 Organic Targets
FY22 – 24 Organic Targets FY24 Organic Targets Financial (vs FY21) Net Revenue Growth 7% - 10% CAGR Adjusted Operating Profit Margin Expansion +60 to 100 bps Adjusted Operating Profit Growth Double-digit CAGR Adjusted ROIC +125 to 175 bps New Strategic Metrics FY24 Organic Targets Gender diver
Slide 7: Capital deployment has been aligned to organic growth strategy
Capital deployment has been aligned to organic growth strategy 2021 Net Revenue Invested in leading Strategic and Digital Consultancy $2B $ 11.7B PA Consulting 2016A Net Revenue1 $ 8.5B Added series of Data, Cyber and Technologies ~$2B Critical Mission Solutions $ 2.3 Oil/Gas E&C Government Acquired
Slide 8: A diversified business profile; continue to reshape toward higher growth
A diversified business profile; continue to reshape toward higher growth Diversified Revenue Mix Aligned Portfolio Actions Result in Higher Growth to Secular Growth Trends1 Addressable Market PA Consulting Divergent Solutions Digital Modernization Data Analytics 2016-2019 2019-2021 2021-2024 Beyond
Slide 9: Portfolio decisions strongly aligned with most attractive secular growth
Portfolio decisions strongly aligned with most attractive secular growth Jacobs portfolio by market1 ▪ ~$8T addressable market – highly fragmented (approx. from FY’21 Gross Revenue) ▪ Targeting higher growth and higher margin sub-segments Advanced Manufacturing ▪ Client segments expected to outpace
Slide 10: Jacobs deep domain knowledge across diverse markets
Jacobs deep domain knowledge across diverse markets Intel Penn Station Access, Metropolitan Leverage digital replication to design and program Jacobs portfolio by market1 Transportation Authority: manage increased semiconductor manufacturing capacity (approx. from FY’21 Gross Revenue) Prime designer
Slide 11: Highly attractive Lines of Business with strong growth characteristics
Highly attractive Lines of Business with strong growth characteristics FY21 Profile People & Places Solutions Critical Mission Solutions PA Consulting Investment1 ▪ $8B gross revenue ▪ $5B revenue ▪ $1B revenue ▪ $6B net revenue ▪ 8.8% OP Margin ▪ 23.3% OP Margin ▪ 13.0% OP Margin Strong base of rec
Slide 12: Critical Mission Solutions – Driving continued margin expansion
Critical Mission Solutions – Driving continued margin expansion Approx. revenue by market Business breakdown Q1 FY’22 revenue Infrastructure 5% (Telecom) Advanced Manufacturing 3% US / International ~81 / 19% National Security (Auto test & diagnostics) Public / Private ~86 / 14% Cyber and Reimbursab
Slide 13: People & Places Solutions – Capturing infrastructure investment spend
People & Places Solutions – Capturing infrastructure investment spend Approx. revenue by market Business breakdown Q1 FY’22 revenue Advanced Manufacturing 6% (Semiconductors and Data Centers) US / International ~60 / 40% Transportation Public / Private ~62 / 38% 30% Cities & Reimbursable and Lower-r
Slide 14: PA Consulting – Achieving differentiated growth through ingenuity
PA Consulting – Achieving differentiated growth through ingenuity Approx. revenue Approx. revenue Business breakdown Q1 FY’22 revenue by market by capability (December 2021 TTM) (December 2021 TTM) UK / US / Other ~77% / 12% / 11% Public / Private ~50 / 50% Backlog Growth y/y (GBP) +11% Energy & Tra
Slide 15: Three needle-moving accelerators catalyze additional growth across all markets
Three needle-moving accelerators catalyze additional growth across all markets Infrastructure ▪︎ National Security ▪︎ Advanced Manufacturing ▪︎ Health & Life Sciences ▪︎ Energy & Environment ▪︎ Cities & Places ▪︎ Space 15 ©Jacobs 2022
Slide 16: $6B in ESG and Climate Response revenue across all markets
$6B in ESG and Climate Response revenue across all markets Approximate FY’21 ESG revenue by market ITER Fusion Project Green Fleets World’s largest fusion energy experiment: Brisbane Metro Bus Rapid Transit (BRT), Australia: designing and delivering the First Plasma technical advisor for fleet of ne
Slide 17: Combined value proposition drives growth in both organizations
Combined value proposition drives growth in both organizations Broad-based domain expertise Strategic thought leadership Applied science and engineering World-class, end-to-end innovation Global footprint Organizational transformation Large and diverse client base Applied technology Real value creat
Slide 18: Data Solutions – Cyber and robust analytics underpinned by domain knowledge
Data Solutions – Cyber and robust analytics underpinned by domain knowledge Specialized Data and Geospatial and Edge Data Analytics Cyber Consulting Services Computing Technology Software Platforms Critical Infrastructure National Security Landscape of opportunity 18 ©Jacobs 2022
Slide 19: Anticipate 50%+ growth by 2025: New Data Solutions Focused Unit
Establishing New Data Solutions Focused Unit Divergent Solutions >$1B Annual FY22E Revenue Platforms, Cyber & Technical & Technologies & Intelligence Innovative Software Solutions Solutions Solutions ▪ Strategy, Risk & Governance ▪ Advanced Analytics ▪ Collection Automation ▪ Digital Operations Cent
Slide 20: IIJA to drive significant multi-year growth
IIJA to drive significant multi-year growth Jacobs’ market alignment with IIJA spend Spend in $B Advanced M'facturing FY21 Current baseline IIJA 2% Other/Not Aligned (over 5 years) (above-baseline 4% increase) Airports 5% Highways and bridges 47.0 236.0 304.0 +29% Highways & Telecom Bridges Mass tra
Slide 21: FY22 to FY24 Organic Financial Targets
FY22 to FY24 Organic Financial Targets Critical Mission People & PA Consulting Jacobs Solutions Places Net Revenue Growth 6% to 9% 6% to 9% 12% to 15% 7% to 10% (CAGR) Adj. Operating Profit +25 – 100 bps +100 – 150 bps +/- Flat +60 to 100 bps Margin Adj. Operating Profit 10%+ 10%+ 12% to 15% Double-
Slide 22: Jacobs today: Higher value, long-term organic earnings power
Jacobs today: Higher value, long-term organic earnings power Semiconductor, ESG & Infrastructure Data & Consulting Life Sciences & National Security & Modernization Portfolio Electrification Space Ecosystem $7B $2B $1B $1.5B Strong Organic Growth + Continued Margin Expansion ~$10 adjusted EPS in fis
Slide 23: A powerful portfolio exiting 2024 and entering 2025
A powerful portfolio exiting 2024 and entering 2025 People & Places Solutions PA Consulting Critical Mission Solutions Entering 2025 People & Places Solutions Data & Consulting Capability Critical Mission Solutions ~$7B revenue ~$3B revenue ~$5B revenue Divergent Solutions PA Consulting Investment ~
Slide 24: Robust underlying Cash Flow trend with improving GAAP to Adj. results
Targeted based on ~100% of $1,0931 adj. EPS outlook Robust underlying Cash Flow trend with $261M Repayment of Gov’t improving GAAP to Adj. results PA Investment consideration treated as Stimulus Restructuring & deal costs compensation $6991 $199M restructuring and Net restructuring other net charges
Slide 25: Capital deployment accelerates EPS growth
Capital deployment accelerates EPS growth FY 16 FY 21 FY 25 earnings earnings organic Potential FY 25 earnings power (Actual) (Actual) earnings with capital deployment ~$11.00 ~$12.00 ~$10.00 Adj. EPS Adj. EPS Adj. EPS $6.29 Adj. EPS $3.081 Adj. EPS Net Net Net Net Net Leverage Leverage Leverage Lev
Slide 26: Strategy results in value-creating earnings power
Strategy results in value-creating earnings power ▪ Significant advances in culture supporting improved performance ▪ Strong track record of execution and resilience ▪ Diversified business model aligned to multiple secular growth trends ▪ Accelerating organic growth and improved profitability ▪ Robu
Slide 27: Appendix
Appendix ©Jacobs 2022
Slide 28: Growing Markets
Growing Markets Approximate % of Markets P&PS CMS Jacobs Portfolio Water Telecom Infrastructure 31% Transport Government Services Defense National Security Intelligence 17% Cyber Electronics and Data Centers Automotive Advanced Manufacturing 4% Specialized Manufacturing Health Health & Life Sciences
Slide 29: Our market growth is aligned with strong secular trends
Our market growth is aligned with strong secular trends Markets Definitions Addresses global national governments’ focus on modernizing aging infrastructure and post-pandemic economic stimulus. As an example, over 80% of the $550B US Infrastructure Investment and Jobs Act is aligned with our Infrast
Slide 30: Track record of strong financial growth through volatile economic cycles
Track record of strong financial growth through volatile economic cycles Net Revenue1 and GAAP Revenue ($B) Return on Invested Capital ROIC $12.7 $13.6 $14.1 $11.0 $11.7 $9.1 $10.6 $10.2 10.2% 11.1% 11.5% 9.2% 2018 2019 2020 2021 2022E 2018 2019 2020 2021 2022E GAAP EPS and Adj. EPS Adjusted EBITDA1
Slide 31: Selected financial data
Selected financial data Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 $’s in millions 2020 2020 2020 2020 2020 2021 2021 2021 2021 2021 2022 Backlog 22,671 23,291 23,674 23,818 23,818 25,105 25,571 25,436 26,631 26,631 28,006 Revenue 3,360 3,427 3,260 3,520 13,567 3,382 3,548 3,576 3,586 14,093 3,381 Net Revenue
Slide 32: Selected financial data
Selected financial data Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 $’s in millions 2020 2020 2020 2020 2020 2021 20211 2021 2021 2021 2022 Critical Mission Solutions Backlog 8,473 9,135 9,066 9,104 9,104 9,683 9,779 9,565 10,589 10,589 10,798 Revenue 1,182 1,243 1,211 1,329 4,966 1,295 1,310 1,218 1,264 5,087
Slide 33: Other operational metrics from continuing operations
Other operational metrics from continuing operations Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 $’s in thousands 2020 2020 2020 2020 FY 2020 2021 2021 2021 2021 FY 2021 2022 Depreciation 22,152 22,566 22,276 24,076 91,070 22,989 25,090 26,405 26,540 101,024 26,237 (pre-tax) Amortization of Intangibles 21,845 22,094
Slide 34: PA Modeling 101
PA Modeling 101 Income Statement Adjusted EBITDA Calculation Adjusted EBITDA reflects GAAP requires PA NCI including minority Adj. Net Earnings From Continuing Revenue Consulting to be fully Operations interest reduction for PA consolidated on P&L Consulting Gross Profit Adj. Income Tax Expense from
Slide 35: Capital Deployment Supplemental
Capital Deployment Supplemental Close Date Investment Strategic Rationale Status of Forecast vs Business Case 12/17 CH2M Water, Environmental & Infrastructure Consultancy & Design Exceeding original expectation driven by accelerating $3.3B demand for ESG & Technology solutions 4/19 Divested -Oil/Gas
Slide 36: 2018 to 2022E Financial Slide Footnotes
2018 to 2022E Financial Slide Footnotes ▪ The difference between net revenue and GAAP revenue is the impact of pass-through revenue. ▪ Fiscal 2022E represents the mid-point of the company’s guidance or implied based off such guidance ▪ Adjusted EPS = GAAP EPS without Amortization of Intangibles Rest
Slide 37: Non-GAAP Financial Measures and Pro Forma Figures
Non-GAAP Financial Measures and Pro Forma Figures Non-GAAP Financial Measures To supplement the financial results presented in accordance with generally accepted accounting principles in the United States (“GAAP”), we present certain non-GAAP financial measures within the meaning of Regulation G und
Slide 38: Reconciliation of net earnings to adjusted EBITDA
Reconciliation of net earnings from continuing operations attributable to Jacobs to adjusted EBITDA 38 ©Jacobs 2022
Slide 39: Non GAAP financial measures
Non GAAP financial measures (1) Includes charges associated with various restructuring, transaction and other related activity costs associated with Company transformation and acquisition related programs, impairment charges relating to our investment in AWE, along with pre-tax $297.8 million in PA
Slide 40: Non GAAP financial measures
Non GAAP financial measures (1) Includes after-tax charges for the Company's fourth quarter fiscal 2020 transformation initiatives relating to real estate of $123.1 million, and other staffing programs of $23.5 million, and $101.6 million of other restructuring, transaction and other charges. (2) In
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Jacobs Solutions — BofA Securities 2022 Global Industrials Conference on 6ix