Babcock & Wilcox Enterprises, Inc. · NYSE:BW
Babcock & Wilcox Enterprises — Investor Presentation (August 2016)
25 slides from Babcock & Wilcox Enterprises's investor presentation, August 2016
Slide 1: Company Overview
Company Overview August 2016 © Babcock & Wilcox Enterprises, Inc. All rights reserved. 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward‐looking statements. Babcock & Wilcox Enterprises, Inc. (“B&W”) cautions that this presentation contains forward‐looking statements, including, without limitation, statements relating to our strategic objectives; management’s expectations regarding the industries in whic
Slide 3: Company Profile
Company Profile • Global leader in energy and environmental Headquarters: Charlotte, NC technologies and services for the power and Incorporation: Delaware industrial markets Ownership: Public (NYSE:BW) • Installed electricity generation capacity of more than 300,000 MW in more than 90 countries Rev
Slide 4: 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 5: Consolidated Revenue Overview
Consolidated Revenue Overview 2015 B&W Revenue Breakdown Other Asia 6% 7% US Coal Industrial, 37% Renewable Europe North & Gas 19% America 50% 68% Non‐US Coal 13% Aftermarket coal in the U.S. will be a solid base for the business while our strategy drives growth and diversification © Babcock & Wilco
Slide 6: Consistent Strategic Focus
Consistent Strategic Focus Optimize Our Business and Improve Efficiency Pursue Core Growth in International Markets Execute a Disciplined Acquisition Program to Drive Growth and Diversification © Babcock & Wilcox Enterprises, Inc. All rights reserved. 6
Slide 7: Global Services Overview
Global Services Overview 2015 Revenue by Segment • Aftermarket products and services for steam generating equipment and associated environmental and auxiliary equipment • Servicing B&W installed electricity generation capacity of 74% Service Construction approximately 300,000 MW in more than 90 coun
Slide 8: Ongoing Rationalization of Operations
Ongoing Rationalization of Operations Cambridge, B&W Foundry Melville, Diamond Power West Point, MS Ontario (Barberton, OH) Saskatchewan Restructuring Relocation to Monterrey Ceased fossil Operations closed in Plant mothballed upon Integration of parts facility to be completed operations in 2014 Jun
Slide 9: Global Power Overview
Global Power Overview 2015 Revenue by Segment • Steam generating systems for fossil fuels and renewable energy conversion for power generation and industrial uses 64% International • Environmental solutions include New Build Environmental emissions control products and 24% related equipment $640.0M
Slide 10: Recent Project Awards Demonstrate Global Expansion is Underway
Recent Project Awards Demonstrate Global Expansion is Underway Supercritical Coal‐Fired Boiler in the Philippines March 2016 – >$80M Carbon Black Emissions Project February 2016 Waste‐to‐Energy Power Plant in England January 2016 – >$90M Biomass Power Plant in England September 2015 – >$190M Emissio
Slide 11: Industrial Environmental Overview
Industrial Environmental Overview 2015 Revenue by Segment • B&W acquired MEGTEC Holdings, Inc. on June 20, 2014 • 40+ year history with ~600 employees across 12 offices globally 64% • Asset‐light flexible manufacturing platform U.S. Aftermarket • Significantly expanded B&W’s industrial environmental
Slide 12: 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 • Broad customer base includes ~3,100 businesses stretching across six continents and over 60 countries [MEGTEC] • Steady stream
Slide 13: B&W SPIG Overview
B&W SPIG Overview • B&W completed its acquisition of SPIG 2016E Revenue by Segment S.p.A. on July 1, 2016 for €155M ($174M), subject to certain adjustments • SPIG provides customized dry and wet 76% Aftermarket International Services cooling solutions and aftermarket services 20% Wet Systems to powe
Slide 14: B&W SPIG: Critical Technology for Multiple End Markets
B&W SPIG: Critical Technology for Multiple End Markets Power Generation • Natural Gas • Cooling systems required for all Traditional • Combined Cycle Power Plants (CCPP) production processes involving steam • Geothermal Critical • Technology impacts operational Renewable / • Solar thermal efficiency
Slide 15: Segment Profitability Characteristics
Segment Profitability Characteristics Segment Revenue $2,000 • Flat revenue $184 $170 $105 • Mix impacts average $1,500 $781 $712 Global margin $640 $616 Services Millions $472 $1,000 • Top priority is sustaining margin $500 $1,005 $1,055 $909 $934 $924 $0 2012 2013 2014 2015 LTM 6/30/16 • Revenue g
Slide 16: Summary Historical Financial Information
Summary Historical Financial Information Second Second $ in millions, YTD YTD Quarter Quarter except per share amounts 2016 2015 2016 2015 Revenues $383.2 $437.5 $787.3 $834.6 GAAP Operating Income (72.6) 4.9 (55.3) 22.2 Adjusted Operating Income(A) (9.1) 21.4 12.1 42.4 GAAP Earnings per Share, Dilu
Slide 17: FY 2016 Guidance
FY 2016 Guidance • Revenue is expected to be $1.8B • Full year adjusted EPS in a range of $0.63 to $0.83(1) • Adjusted EPS estimate excludes any mark‐to‐market adjustment for pension and post‐retirement benefits and restructuring charges • The newly acquired B&W SPIG division will impact revenue in
Slide 18: Business Segment Realignment in Q3 2016
Business Segment Realignment in Q3 2016 Estimated 2016 % Revenue Revenue from Coal Segments through June 30, 2016 New Segments starting July 1, 2016 Global Services Power • Parts and technical services Segment • Parts and technical services • Service projects Realignment • Service projects • Constru
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: Appendix
Appendix © Babcock & Wilcox Enterprises, Inc. All rights reserved. 20
Slide 21: Skilled Management Team
Skilled Management Team Chairman and Chief Executive Officer Finance Jim Ferland Jenny Apker Senior Vice President & Chief Financial Officer Power Renewable B&W MEGTEC Mark Low Paul Scavuzzo Ken Zak Senior Vice President Senior Vice President Senior Vice President B&W SPIG Legal Operations Francesco
Slide 22: 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
Slide 23: Reconciliation of Adjusted, Non-GAAP Results
Reconciliation of Adjusted, Non‐GAAP Results $ in millions, except per share amounts Three Months Ended June 30, 2016 Six Months Ended June 30, 2016 Pension & Pension & OPEB Acquisition OPEB Acquisition MTM and MTM and Restructur‐ (Gain) / Integration Non‐ Restructur‐ (Gain) / Integration Non‐ GAAP
Slide 24: Reconciliation of Adjusted EPS Guidance
Reconciliation of Adjusted EPS Guidance Management has provided full year adjusted earnings per diluted share ("adjusted EPS") guidance of $0.63 to $0.83. It is not possible for management to identify the amount or significance of future adjustments associated with potential mark to market adjustmen
Slide 25: © Babcock & Wilcox Enterprises, Inc. All rights reserved.
© Babcock & Wilcox Enterprises, Inc. All rights reserved. 25
Babcock & Wilcox Enterprises — Investor Presentation (August 2016) on 6ix