Kbr, Inc. · NYSE:KBR
Kbr — Q1 2021 Earnings Presentation
21 slides from Kbr's earnings presentation, Apr 29, 2021
Slide 1: Delivering Solutions, Changing the World
Stuart Bradie, President and CEO DELIVERING SOLUTIONS, CHANGING THE WORLD. Mark Sopp, Executive VP and CFO Alison Vasquez, VP of Investor Relations
Slide 2: Forward-Looking Statement
FORWARD-LOOKING STATEMENT This presentation contains forward-looking statements regarding our plans, objectives, goals, strategies, future events, future financial performance and backlog information and other information that is not historical. When used in this presentation, the words “estimates,”
Slide 3: Stuart Bradie, President and CEO
// Stuart Bradie President and Chief Executive Officer D E L I V E R I N G S OL U T I O N S , C H A N G I N G T H E W O R L D . D E L I V E R I N G S O L U T I O N S , C H A N G I N G T H E WO R LD. 3
Slide 4: ESG focus areas
RECYCLE/ HEALTH SAFETY REUSE & SECURITY EFFICIENT GOVERNANCE ENERGY SUSTAINABLE INCLUSION & TRAVEL DIVERSITY SUPPLY COMMUNITY PARTNERS ENGAGEMENT CLIMATE RISK CHANGE MANAGEMENT D E L I V E R I N G S OL U T I O N S , C H A N G I N G T H E W O R L D . 4
Slide 5: KBR's Proprietary Technologies Enable a Circular Economy
KBR’S PROPRIETARY TECHNOLOGIES ENABLE A CIRCULAR ECONOMY KBR’s state-of-the-art recycling process technologies enable… ▪ The recovery and reuse of valuable materials, chemicals and water in circular processing and in the broader circular economy ▪ Sustainable fibers ▪ Plastics, including single use
Slide 6: 1st Quarter Highlights
1 ST QUARTER HIGHLIGHTS ▪ Strong execution across the business to deliver results in line with the 2021 plan ▪ $1.5 billion KBR revenue and 9% Adj. EBITDA margins ▪ Strong free cash generation; 109% net income conversion ▪ Reaffirming full-year guidance ▪ Attractive bookings that underscore momentum
Slide 7: Market Outlook: Government Solutions
MARKET OUTLOOK GOVERNMENT SOLUTIONS MARKET DRIVERS AND OUTLOOK RECENT TRENDS AND WINS The U.S. fiscal 2022 defense budget proposal prioritizes near-peer ▪ Won a new $195 million ceiling, five-year IDIQ threats and investment in advanced, next-gen and emerging tech, such contract to provide trusted m
Slide 8: Market Outlook: Sustainable Technology Solutions
MARKET OUTLOOK SUSTAINABLE TECHNOLOGY SOLUTIONS MARKET DRIVERS AND OUTLOOK RECENT TRENDS AND WINS ▪ Won a contract to provide KBR’s proprietary K-COT™ catalytic Growing number of countries and companies targeting olefins technology. K-COT produces larger volumes of high demand reduction in carbon fo
Slide 9: Robust Pipeline Underpins Growth Momentum
ROBUST PIPELINE UNDERPINS GROWTH MOMENTUM KBR Pursuit Pipeline $1.6B Q1 2021 AWARDS AND OPTIONS $43B Lead 95%+ GS RECOMPETE WIN RATE $47B Positioning & Pursuit $18B 150+ Proposal and Negotiation PURSUITS > $100 MILLION $108B 10+ TOTAL PURSUITS > $1 BILLION D E L I V E R I N G S OL U T I O N S , C H
Slide 10: Mark Sopp, Executive VP and CFO
// Mark Sopp Executive Vice President & Chief Financial Officer D E L I V E R I N G S O L U T I O N S , C H A N G I N G T H E WO R LD. 10
Slide 11: Q1 Financial Snapshot
Q1 21 FINANCIAL SNAPSHOT Revenues Adj. EBITDA1 Adj. EBITDA1 Margin $135 9% $1,537 $1,461 $112 7% 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 Adj. EPS1 Adj. Op. Cash Flow1 Backlog $65 $4B Options $57 $3B $0.48 Capex $0.39 $51M $14B $15B $63M Free Cash Flow Backlog 1Q20 1Q21 1Q20 1Q21 1Q20 1Q21 1See Appendix for re
Slide 12: Q1 2021 Segment Results
Q1 2021 SEGMENT RESULTS GOVERNMENT SOLUTIONS SUSTAINABLE TECHNOLOGY SOLUTIONS Revenue Adj. EBITDA1 Adj. EBITDA1 Revenue 11% 16% 9% $1,164 Revenue by GS Business Unit $107 $104 $555 $49 $982 1Q20 1Q21 5% Defense & Intel 205 351 Science & Space 237 247 $28 Readiness & Sust. 286 329 $297 International
Slide 13: Capital Deployment & Liquidity
CAPITAL DEPLOYMENT & LIQUIDITY HEALTHY LIQUIDITY PROFILE Net Leverage Target CAPITAL NET ▪ Target net leverage of 2.5x to 3.0x DEPLOYMENT LEVERAGE ▪ Reflects cash-generative characteristics of the company’s sustaining, PRIORITIES 2.3X differentiated portfolio AS OF MARCH 31, 2021 Near-Term ` Deploya
Slide 14: Reaffirming FY 2021 Guidance
REAFFIRMING FY 2021 GUIDANCE FY 2021 Guidance Consolidated Revenue $5.8 billion to 4% growth from 2020 at the midpoint $6.2 billion Adjusted EBITDA Margin ~9% ~70 bps expansion from 2020 Adjusted EPS1 $2.00 to $2.20 >20% growth from 2020 at the midpoint Expect 45%/55% phasing 1H/2H (updated) Effecti
Slide 15: In Summary
IN SUMMARY D O I N G W H AT W E S A I D W E WO U L D D O ▪ Executing on growth strategy aligned with accelerating market dynamics and spending outlook ▪ Winning attractive new work ▪ Delivering strong financial results ▪ Maintaining healthy liquidity profile ▪ Reaffirming full-year guidance D E L I
Slide 16: Roadmap to 2025 Q&A
ROADMAP TO 2025 Q&A D E L I V E R I N G S OL U T I O N S , C H A N G I N G T H E W O R L D . Assumes 3x net leverage
Slide 17: Appendices
APPENDICES D E L I V E R I N G S O L U T I O N S , C H A N G I N G T H E WO R LD.
Slide 18: Non-GAAP Reconciliations: Adj EPS and Adj OCF
Non-GAAP Reconciliations: Adj EPS and Adj OCF Adjusted EPS 1Q20 Actual 1Q21 Actual 2021 Guidance EPS (Diluted) $(0.73) $0.33 $1.39 $1.59 Add Back: Amortization related to acquisitions 0.02 0.07 0.25 Ichthys interest and commercial dispute cost 0.05 0.04 0.17 Acquisition, integration and restructurin
Slide 19: Non-GAAP Reconciliation: Adj EBITDA
Non – GAAP Reconciliation: Adj EBITDA Adjusted EBITDA 1Q20 2Q20 3Q20 4Q20 1Q21 TTM Net income (loss) attributable to KBR ($104) ($39) $52 $19 $47 $79 Add Back: Interest Expense 23 19 18 23 22 82 Provision (benefit) for income taxes (1) 6 19 2 16 43 Other non-operating (income) expense (7) 2 4 0 3 9
Slide 20: Non-GAAP Reconciliations: Segment Adj EBITDA
Non – GAAP Reconciliations: Segment Adj EBITDA Government Solutions Adjusted EBITDA 1Q20 2Q20 3Q20 4Q20 1Q21 Net income (loss) attributable to GS $90 $93 $97 $71 $74 Add Back: Interest Expense 0 0 0 1 1 Other non-operating (income) expense 0 1 0 1 0 Depreciation & amortization 12 12 10 26 25 EBITDA
Slide 21: Selected Recast 2020 Income Statement Information
Selected Recast 2020 Income Statement Information Unaudited 1Q20 2Q20 3Q20 4Q20 FY20 Revenues: The following 2020 quarterly and Government Solutions $ 982 $ 953 $ 1,013 $ 1,107 $ 4,055 annual unaudited, condensed Sustainable Technology Solutions 555 432 366 359 1,712 income statement information Tot