Booz Allen Hamilton Holding Corporation · NYSE:BAH
Booz Allen Hamilton — Investor Day (October 2021)
49 slides from Booz Allen Hamilton's investor day presentation, Oct 5, 2021
Slide 1: Booz Allen Investor Day 2021
Slide 2: Rubun Dey
RUBUN DEY Director of Investor Relations
Slide 3: Agenda
AGENDA The Future of Booz Allen Horacio Rozanski, President and Chief Executive Officer Business Leader Perspectives Break Multi-Year Financial Outlook Karen Dahut, Executive Vice President, Defense Group Lead Judi Dotson, Executive Vice President, Intelligence Group Lead Kristine Martin Anderson, E
Slide 4: Disclaimer
DISCLAIMER Centain statements contained in this presentation and in related comments by our management include *fonvard-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of fonvard-looking statements include information concerning Booz Allen's p
Slide 5: Horacio Rozanski
HORACIO ROZANSKI President & Chief Executive Officer
Slide 6: Investment Thesis
INVESTMENT THESIS EXCEPTIONAL SHAREHOLDER VALUE CREATION FY2023-F¥2025 GOALS SUMS ADJUSTED EBITDA oie Mission- GROWTH 10 |. )-|. aR Capital Innovation — Deployment eae Strategic StrongMid10% $0,0-4,5B Intersection aoe © Acquisitions& © Adjusted EBITDA : 5-8% Investments Margin :
Slide 7: Leadership
LEADERSHIP TECHNOLOGY
Slide 8: VoLT Strategy: Ignite the Future
Slide 9: Technology
ai TECHNOLOGY. +e eins bl mes potions s closer to needs of clients Identify client needs ripe for hyper-growt Scale businesses at nexus of mission @ technology Use mission insight to build solutions Next generation tech to transform mission
Slide 10: Karen Dahut
KAREN DAHUT Executive Vice President & Defense Group Lead
Slide 11: Defense Market Overview
DEFENSE MARKET OVERVIEW! KEY STATS 13,000+ $3.9B Employees* FYa21 Sales $13.8B rt) ~11% Total Backlog? FY18-21 CAGRS CONTRACT MIX! Cost Plus Time & Materials Fixed Firm Price * Includes Core Defense only and does not include Global Commercial 2 Backlog as of OxFY22 + Calculated based on FY21 Sales 4
Slide 12: VoLT: Positioned Ahead of Change
VoLT: POSITIONED AHEAD OF CHANGE Awareness & urgency around modernization agenda Recognition that warfighting must be joint & their introduction of JADC2 Technology revolution that enables a new way of fighting
Slide 13: Judi Dotson
JUDI DOTSON Executive Vice President & Intelligence Group Lead
Slide 14: Digital Modernization
• • • • Digital Modernization •
Slide 15: VoLT: Outpacing Cyber Threats
VoLT: OUTPACING CYBER THREATS Urgency around morphing threats and growing attack surface Critical infrastructure and weapons systems at risk Advise and prepare our clients to understand how our adversaries operate
Slide 16: Kristine Martin Anderson
KRISTINE MARTIN ANDERSON Executive Vice President & Civil Group Lead
Slide 17: Civil Market Overview
CIVIL MARKET OVERVIEW! KEY STATS 7,000+ $2.2B Employees* FYa21 Sales $6.3B rt) ~10% Total Backlog? FY18-21 CAGRS CONTRACT MIX! 22% a 25% ew WY XS Cost Plus Time & Materials Fixed Firm Price * Civilian Services Market only, all metrics shown exclude Liberty 2 Backlog as of O1FY22 5 Caleulated based o
Slide 18: VoLT: Powering Digital Missions
VoLT: POWERING DIGITAL MISSIONS Accomplishing in the future what is impossible today Using technology to become more predictive, responsive and faster Giving citizens a better experience with the functions of government
Slide 19: Karen Dahut
KAREN DAHUT Executive Vice President & Global Commercial Lead
Slide 20: Commercial Overview
COMMERCIAL OVERVIEW! SUBACCOUNTS KEY STATS 400+ $137M Employees* FYa21 Sales $95.6M rt) ~11% Total Backlog? FY18-21 CAGRS CONTRACT MIX! Q© Time & Materials Fixed Firm Price "Commercial Market (metrics presented exclude the company's operations in MENA) » Backlog as of OrFY22 2 Calculated based on FY
Slide 21: Susan Penfield
SUSAN PENFIELD Executive Vice President & Chief Innovation Officer
Slide 22: Becoming More Innovative
BECOMING MORE INNOVATIVE
Slide 23: 2018: Option Value Thesis
2018: OPTION VALUE THESIS We will create option value by using innovation and intellectual capital created by the firm to: Ci) Create the right solutions (2) Create value for our clients (3) Monetize our solutions 2021: OPTION VALUE EXECUTION We are pairing our mission and technical knowledge with d
Slide 24: Innovation Enablers
INNOVATION ENABLERS Experimentation in Emerging Tech Solution Engineering Partnership Development | +4 ROWTH EMERGING TECH Focus Artificial Intelligence & Quantum 5G Next Gen Digital (Edge Cloud, XR, loT) Trends on the Horizon
Slide 25: Betty Thompson
BETTY THOMPSON Executive Vice President & Chief People Officer
Slide 26: Empower People to Change the World
Slide 27: VoLT: Talent Drives Growth
VoLT: TALENT DRIVES GROWTH People-centered culture that attracts talent and keeps them with us Strong talent systems that support individuals and our business needs
Slide 28: Booz Allen Has Heart
BOOZ ALLEN HAS HEART
Slide 29: World's Most Ethical / Best Employers
r=i/WORLD’S MOST Forbes 2 THE BEST — EMPLOYERS D=! ror WOMEN t DISABILITY EQUALITY INDEX BY STATISTA,
Slide 30: Lloyd Howell
LLOYD HOWELL Chief Financial Officer & Treasurer
Slide 31: Delivery Since Prior Investment Thesis
DELIVERY SINCE PRIOR INVESTMENT THESIS Nearly doubled original ADEPS growth goal of 50% Organic Revenue Growth — = Adjusted EBITDA Margin = Pa Capital FYIB FY2i Original three-year Investment Thesis reflects performance in FY19, FY20 and FY21 Deployment* “Total amount of capital deployed for FY21 do
Slide 32: FY22 Guidance
FY22 GUIDANCE Operating Performance Revenue Adjusted Net Cash Growth EBITDA Diluted Provided by Margin on EPS Operating Revenue Activities’
Slide 33: Investment Thesis
INVESTMENT THESIS EXCEPTIONAL SHAREHOLDER VALUE CREATION FY2023-F¥2025 GOALS Competitive A D | l \ | E l E B | | D i. | ~ Disciplined Geom SROVTETO SL. 2-138 om ~ Deployment Innovation a Strategic -—-StrongMidr0% ~~: 9$0.9-4.5B Intersection ea @ Acquisitions& © Adjusted EBITDA 5-8% Investments Margi
Slide 34: Adjusted EBITDA Growth
RIVE | = — FY21 to FY25 $1.2-$1.38 CAGR 10%+ Fy22 Fy23 © Fy24 © Fy25° m Adjusted EBITDA
Slide 35: History of Above Market Delivery
History of above market delivery 5-8% Organic Revenue CAGR (FY23-FY25) Supported by Alignment to Government Client intimacy Budget priorities Backlog & pipeline Investment for multi-year growth
Slide 36: Outpacing the Market
OUTPACING THE MARKET 500% 450% 20 Year CAGR = 10% 400% 350% 300% 250% 200% 150% to0% 50% 0% 2001 2002 2003 2004 2005 2008 2007 2008 2009' zo010' 20I1 2012 2013 2014 2015 2016 2017 2018? 2019 2020° mmm Discretionary Budget mmm Booz Allen Addressable Market * emmmBooz Allen Revenue Source: Federal Pro
Slide 37: Large and Growing Addressable Market
LARGE AND GROWING ADDRESSABLE MARKET U.S. Government 2020 Discretionary Budget " Total Contracted + Intel Addressable Contracted + INTEL, COMMERCIAL & INTERNATIONAL “U.S. Office of Management and Budget, Budget ofthe U.S. Government, Federal Procurement Data System * Congressional Budget Office GFY2
Slide 38: "Land and Expand" Strategy
"LAND AND EXPAND" STRATEGY Key Aerospace Customer Key Health Customer FY2I FYI7 FYI3
Slide 39: Ample Backlog Pipeline
AMPLE BACKLOG PIPELINE TO SUPPORT GROWTH EXPECTATIONS Solid Backlog Growth Provides $44B' Qualified Pipeline Through FY23 Strong Revenue Visibility ($B) (66% New Work) $34B in Opportunities in Pre-Proposal Fyl2 FYI3 FYl4 FYIS FYIG FYI7 FYI8 FYI9 FY2O FY2! FY227 Funded m Unfunded 1 Priced Options Str
Slide 40: Growth-Oriented Investment Spend
GROWTH-ORIENTED INVESTMENT SPEND EXPECTED TO DRIVE FY23-25 ADJUSTED EBITDA MARGINS INTO THE MID-10S FYI8-FY22 Adjusted EBITDA Margin Drivers Better underlying contract and cost management Improved margins on all contract types and in all markets FY23-FY25 Adjusted EBITDA Margin Drivers Growth-orient
Slide 41: Margin Bridge
MARGIN BRIDGE Positive mix shift and cost containment will support incremental investment in the business at sustained mid 10s margins 1.4% ha = 11.0% 10.8% 10.6% 10.4% 10.2% _ : 10.0% FY21 Margin Mix Shift towards Higher Margin Cost containment Investment in Growth FY25E Margin Businesses / Solutio
Slide 42: Free Cash Flow Conversion
FREE CASH FLOW CONVERSION Goal of Free Cash Flow Conversion of >100% of Adjusted Net Income Adjusted Net Income to Free Cash Flow Conversion History
Slide 43: Track Record of Deploying Capital
TRACK RECORD OF DEPLOYING CAPITAL TO DELIVER SHAREHOLDER VALUE! Capital Deployment and TSR Performance Since IPO Sat $1,331.3 1200% 180% $1,200 iaae Special Dividends ~$1.7B $1,000 geaa.o 800% Share Repurchases ~$1,3B $00 600% Mae. iad $600 $565.5 Quarterly Dividends ~$o40M - 400% $400 $389.47 $393.
Slide 44: Sufficient Balance Sheet Capacity
SUFFICIENT BALANCE SHEET CAPACITY AND FLEXIBILITY TO EXECUTE CAPITAL DEPLOYMENT STRATEGY + Accelerating revenue growth to drive EBITDA + Ample room relative to net operating leverage target of ~3.0x-3.5x * No near-term maturities or financing requirements’ * Current capital structure mix as of Q1FY2
Slide 45: Capital Deployment Priorities
CAPITAL DEPLOYMENT PRIORITIES M@A Free Cash Flow Generation Ability to deploy Repurchases $3.5-4.5B in capital Balance Sheet by FY2025 Dividends Capacity Other Continue to maintain flexible posture but prioritizing strategic M&A to drive growth
Slide 46: M&A Strategy and Recent Activity
M@A Strategy and Recent Activity November 2016, $250M AQUILENT Digital Services October 2017, undisclosed | morphick Managed Detection / Response May 2021, $725M May 2021, Minority Investment G5 LatentAl Adaptve’al September 2021, undisclosed Incident Response (IR) | * Strategic Channels + Leading C
Slide 47: Investment Thesis
INVESTMENT THESIS EXCEPTIONAL SHAREHOLDER VALUE CREATION FY2023-F¥2025 GOALS Competitive A D | l \ | E l E B | | D i. | ~ Disciplined Geom SROVTETO SL. 2-138 om ~ Deployment Innovation a Strategic -—-StrongMidr0% ~~: 9$0.9-4.5B Intersection ea @ Acquisitions& © Adjusted EBITDA 5-8% Investments Margi
Slide 48: Non-GAAP Financial Information
N O N - G A A P F I N A N C I A L I N F O R M A T I O N
Slide 49: Non-GAAP Financial Information
N O N - G A A P F I N A N C I A L I N F O R M A T I O N $ in thousands, except for shares and per share data FY2018 FY2019 FY2020 FY2021 Revenue, Excluding Billable Expenses Revenue $ 6,167,600 $ 6,704,037 $ 7,463,841 $ 7,858,938 Less: Billable Expenses 1,861,312 2,004,664 2,298,413 2,325,888 Revenu
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