Kbr, Inc. · NYSE:KBR
Kbr — D.A. Davidson 14th Annual E&C Conference 2015
23 slides from Kbr's conference presentation, Sep 10, 2015
Slide 1: D.A. Davidson E&C Conference
D.A. Davidson E&C Conference September 2015 Brian Ferraioli – EVP and Chief Financial Officer Zac Nagle – VP, Finance - Investor Relations
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements include statements regarding our plans, objectives, goals, strat
Slide 3: KBR's Zero Harm 24/7
KBR’s Zero Harm 24/7 5-Year TRIR Performance 0.45 0.4 0.39 0.39 0.37 0.35 0.34 0.35 0.35 0.31 0.32 0.3 0.30 0.25 0.26 0.23 0.22 0.2 0.21 0.19 0.18 0.15 0.1 0.05 KBR TRIR IOGP Top Q IOGP Average 0 2010 2011 2012 2013 2014 2015 3
Slide 4: Agenda
Agenda • Introduction • Overview & Strategy • Market Outlook • Financial Results • Q&A 4
Slide 5: KBR Overview
KBR Overview • KBR, Inc. is a global technology, engineering, procurement and construction company serving the hydrocarbons and government services industries. • More than 100 year proud history. • #424 in Fortune 500 rankings. • 25,000 employees in more than 45 countries. • Customers in more than 7
Slide 6: Structure – Streamlined / Focused
Structure – Streamlined / Focused Old KBR operating segment structure (16 business units) KBR Infrastructure, Gas Hydrocarbons Government & Services Operations Monetization Power New streamlined operating segment structure (5 business units) KBR Technology & Engineering & Government Consulting Const
Slide 7: KBR's Business Groups
KBR’s Business Groups Technology & Consulting Engineering & Construction Government Services Proprietary Technologies Offshore EMEA Upstream Fixed Platforms Home Base Operational • Semi-submersible hull Floating Facilities Support design Hulls, Moorings & Risers Overseas Operational Supp
Slide 8: KBR Global Operations
KBR Global Operations Moscow Gothenburg Atyrau Edmonton London Beijing Seoul Baku Kabul Wilmington Tokyo Baghdad Delhi Houston Arlington Birmingham Bahrain Shanghai Monterrey Kuala Lumpur Caracas Saudi Arabia Mexico City Dubai Singapore Freetown Pune Chennai Luanda Jakarta Rio de Janeiro Perth Sydne
Slide 9: Leadership Team
Leadership Team Stuart Bradie President and CEO E&C Group President 27 Years of Industry Experience Brian Ferraioli John Derbyshire Engineering & Construction Andrew Pringle Engineering & Construction CFO Technology & Consulting Government Services 37 Years of Industry 37 Years of Industry 14 Years
Slide 10: Strategic Priorities
Strategic Priorities Early project involvement Priority Markets via differentiated technology Global Hydrocarbons (Gas) & (gas monetization) & International Government specialized consultancy Services services 1 2 Re-focus Growth Strategy 3 Pursue Fixed Price EPC 4 when differentiated by: - KBR Tech
Slide 11: Framework to Support Core Focus
Framework to Support Core Focus Exit non-strategic businesses: One KBR: - Stand-alone Fixed Price EPC Power Consistent use & application of - Fixed Price U.S. Infrastructure & standard policies, processes, systems, U.S. Minerals tools & procedures to deliver - Building Group consistency and efficien
Slide 12: Progress Report on Strategic Objectives
Progress Report on Strategic Objectives Strategic Objective Progress to date Exit non-strategic businesses Stand-Alone EPC Power The first of three power plants is now operational. The second will be completed in 1Q 2016. The third is targeted for 1Q 2017 completion. U.S. Minerals & U.S. Infrastru
Slide 13: Market Outlook: Technology & Consulting
Market Outlook: Technology & Consulting Technology market opportunities led by ammonia, refining and olefins, particularly revamps. Opportunities in China and elsewhere for VCC (Veba Combi-Cracker) technology and converting heavy Hydrocarbons into lighter fuels, esp. diesel. Consulting opportu
Slide 14: Market Outlook: Engineering & Construction
Market Outlook: Engineering & Construction Q2 developments supporting strategic focus areas: Statoil award for topsides for phase 1 of multi-staged development of Johan Sverdrup oil & gas field with long- term follow on opportunities. Moving to grow industrial services / maintenance business wit
Slide 15: Market Outlook: E&C (Continued)
Market Outlook: E&C (Continued) Good pipeline of near-term and long-term prospects: Increased focus on Middle East opportunities (refining and petrochemicals). • Key hire – President, Middle East – J. Ibrahim. Onshore upstream opportunities in Middle East & Caspian remain positive due to low cos
Slide 16: Market Outlook: Government Services
Market Outlook: Government Services Confirmed preferred bidder for U.K. MoD Fixed Wing Training (MFTS) contract – another long-term annuity type project. Award expected this year. U.K. Army re-basing – discussions continue on a sole source basis with decisions expected by year-end. Strong oper
Slide 17: Q2 Financial Summary
Q2 Financial Summary Significantly improved earnings versus 2014 driven by strong operating performance. Two mega LNG projects continue to perform well. Won strategically important Johan Sverdrup contract from Statoil – topsides for stage 1 of multi-staged development with longer-term opportun
Slide 18: Consolidated Results: Q2 2015 vs Q2 2014
Consolidated Results: Q2 2015 vs Q2 2014 Commentary Quarter Ending Backlog increase reflects GS long-term contract adjustment. ($ in millions, except EPS) Jun 30, 2015 Jun 30, 2014 Revenues declined from completion or near completion of Bookings $ 1,087 $ 1,186 Canadian pipe fabrication and N.A.
Slide 19: Segment Reporting: Q2 2015 vs Q2 2014
Segment Reporting: Q2 2015 vs Q2 2014 Revenue T&C reflects mix shift to technology services and less proprietary equipment and reduced upstream oil & gas consulting activity; Quarter Ending E&C reflects completion or near completion of Canadian pipe ($ in millions) Jun 30, 2015 Jun 30, 2014 fabric
Slide 20: Cash / Capital Allocation
Cash / Capital Allocation $ in millions KBR Cash Balance Return of Cash to Shareholders Q2 2015 Q1 2015 YTD 2015 Since Jan-07 Domestic 289 181 Share Repurchases 17 748 International 381 499 Dividends 35 273 JV 61 78 Total 731 758 Total Returned to SHs 52 1,021 Key Impacts to Cash in 2Q15 Settlement
Slide 21: Financial Summary
Financial Summary Significantly improved earnings vs 2014 driven by strong operational performance. KBR’s restructuring remains on track to deliver $200 million in annual cost savings by 2016 and gross profit and equity in earnings margin percentages: • T&C – low 20s. • E&C – upper single digits
Slide 22: Appendix
Technology & Consulting Engineering & Construction Government Services
Slide 23: Consolidated EBITDA Reconciliation 2Q 2015
Consolidated EBITDA Reconciliation 2Q 2015 Quarter Ending ($ in millions) Jun 30, 2015 Jun 30, 2014 Net Income Attributable to KBR $62 ($8) Add Back: Interest Income (Expense) ($2) ($2) Provision for Income Taxes ($23) ($10) Depreciation & Amortization ($8) ($18) Consolidated EBITDA $95 $22 Note: EB