Slide 1: Fiscal Year 2017 – 4th Quarter Earnings Conference Call
Fiscal Year 2017 – 4th Quarter Earnings Conference Call November 21, 2017 www.jacobs.com | worldwide
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: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with the proposed acquisition of CH2M by Jacobs pursuant to the terms of an Agreement and Plan of Merger by and among CH2M, Jacobs and Merger Sub, Jacobs filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement o
Slide 4: Agenda
Agenda • Business Review – FY17 Year in Review – CH2M Acquisition Update – FY17 Q4 Highlights – Line of Business Review • Financials Review – Q4 & FY17 Results – Balance Sheet and Capital Allocation • Summary & FY18 Outlook 4
Slide 5: Strong FY17 Execution
Strong FY17 Execution Delivering Solutions For A More Connected, Sustainable World • Building A High Performance Culture – Lines of business structure improves accountability and discipline – Incentive compensation aligned to drive shareholder value • Transforming the Core – Improved project executi
Slide 6: CH2M Acquisition Update
CH2M Acquisition Update Jacobs + CH2M – Creating A Premier, Global Solutions Leader • 3Q17 CH2M Results – Strong 3Q17 CH2M EBITDA of ~$99 million – Continued confidence in our outlook for CH2M financials • Integration Planning on Track – Joint Integration Management Office (IMO) focused on deliverin
Slide 7: Jacobs FY17Q4 Highlights
Jacobs FY17Q4 Highlights Continued Positive Revenue & Profit Growth Momentum • Strong Backlog – Record backlog of $19.8 B; up $1.2 B vs Q3 • Excludes $850 M of awards under protest • Revenue Growth – Sequential improvement in revenue with year-over-year growth driven by Professional Services • Profi
Slide 8: Significant Backlog Growth
Significant Backlog Growth Record Backlog Supported by Higher Margin Professional Services Field Services Backlog ($ B) Professional Services Backlog ($ B) 19.8 18.8 18.6 6.2 5.4 5.3 2.8 6.4 5.9 6.7 13.3 12.6 12.0 Aerospace & Technology Buildings & Infrastructure Petroleum Industrial & Chemicals Ind
Slide 9: Aerospace & Technology
Aerospace & Technology Strong Backlog Performance to Drive FY18 Profitable Growth • Large Market Opportunity With Highly Recurring Revenue Model – Funding for key government programs remains stable – Penetrating new opportunities within Federal sector – Acquisition of Blue Canopy strengthens cyber &
Slide 10: Buildings & Infrastructure
Buildings & Infrastructure 8th Straight Quarter of Backlog Growth • Infrastructure – Strong – Public sector budgets indicate sustained infrastructure spend – Transportation remains a vibrant global market with near-term upside – Strong pipeline in rail across all regions – Continued aviation leaders
Slide 11: Industrial
Industrial Strong Backlog Growth Supported By Field Services and Life Sciences • Life Sciences – Strong – Growth in biotech market driven by investment in Gene/Cell Therapy – Continued diversification to small and mid capital projects – Awarded a mid-scale biotech facility conversion to EPCM • Minin
Slide 12: Petroleum & Chemicals
Petroleum & Chemicals Focus On Downstream Drives Continued Stability In Uncertain Market • Upstream – Continuing Uncertainty – Capex spending remains uncertain in the near-term – Recent strengthening of oil prices • Chemicals - Strong – Cheaper feedstocks continue to propel investments in N. America
Slide 13: Q4 Results
Q4 Results Strategic Focus Drives Solid Performance for Q4 & Fiscal 2017 • Sequential Revenue Growth of 5% and Modest YoY Increase – Professional and Field Services both up sequentially – B&I posts 15% y/y growth • Gross Margins Up Over 150 bps YoY • Q4 GAAP Operating Profit Margin Up 90 bps Y/Y to
Slide 14: FY17 Results
FY17 Results • FY17 Revenues of $10.0 B • FY17 Gross Margin Up Over 150 bps YoY • FY17 Operating Profit Margin of 3.9%, Up 80 bps YoY • Fy17 Adj. Operating Profit Margin1 of 5.4%, Up 70 bps YoY • GAAP EPS of $2.42 • Adj. EPS1 of $3.24 • Strong Cash Flow, Operating Working Capital2 Down 30% • Book-to
Slide 15: Revenue and Adjusted Gross Margin %
Revenue and Adjusted Gross Margin % Revenue Adj. GM % $3.5 19% 18% 20% 18% 16% 16% $3.0 2.6 2.6 15% 2.6 2.5 $2.5 2.3 10% $2.0 5% $1.5 $1.0 0% Q4’16 Q1’17 Q2’17 Q3’17 Q4’17 Revenue Growth Trajectory Improving On Stronger Gross Margins 15 Note: Numbers rounded to nearest tenth
Slide 16: FY17 Lines of Business Segment Financials
FY17 Lines of Business Segment Financials Line of Business Operating Profit vs. FY16 OP Margin vs. FY16 Aerospace & Tech. $203 M -0.6% 8.6% (+91 bps) Buildings & Infra. $193 M +10.8% 7.9% (+14 bps) Industrial $115 M +41.8% 4.2% (+129 bps) Petroleum & Chem. $114 M -10.1% 4.6% (+73 bps) Non-allocated
Slide 17: CH2M 3Q Results
CH2M 3Q Results CH2M Third Quarter Results Strong • Revenue of $1.2 B includes CNEA JV deconsolidation & positive impact from the MoPac settlement – CNEA JV deconsolidation negatively impacts revenue by $137 M – Excluding CNEA and MoPac, revenue increased 3% y/y • Operating Margins – GAAP margins 6.
Slide 18: Restructuring, Strategic Investments and Synergies
Restructuring, Strategic Continued Focus on Driving Investments and Synergies Best-in-Class Profitability • 2015 Restructuring Complete – Final program cost of $444 M with estimated recurring annual savings of $289 M – Strategic investments totaling $30 M • CH2M Integration Cost Synergies – Expect $
Slide 19: Balance Sheet and Capital Allocation
Balance Sheet and Capital Allocation • Healthy Balance Sheet Expected Post Close – New $1.5 B 3-year term loans – Expect $900 M of liquidity capacity remaining on revolver – Anticipate net debt position of approximately ~$1.9 B – Expect to de-lever throughout 2018 • Share Buy-Backs Remain a Key Capi
Slide 20: Summary and Outlook
Summary and Outlook On Track to Achieve Our Strategic and Financial Objectives • Delivering Against 3 Year Strategy to Transform Our Business – Operational discipline now engrained in our culture – Strategy execution driving record high backlog – Positioned for sustainable profitable growth • Jacobs
Slide 21: Thank You!
Thank You! © Copyright Jacobs August 8, 2017 www.jacobs.com | worldwide
Slide 22: Non-US GAAP Financial Measures
Non-US GAAP Financial Measures The following tables reconcile the U.S. GAAP values of net earnings, EPS, operating profit, operating profit margin and gross margin to the corresponding "adjusted" amounts. For the comparable periods presented below, such adjustments consist of amounts incurred in con
Slide 23: Non-US GAAP Financial Measures
Non-US GAAP Financial Measures The following tables reconcile the U.S. GAAP values of net earnings, EPS, operating profit, operating profit margin and gross margin to the corresponding "adjusted" amounts. For the comparable periods presented below, such adjustments consist of amounts incurred in con
Slide 24: Non-US GAAP Financial Measures (cont’d)
Non-US GAAP Financial Measures (cont’d) Adjusted net earnings and adjusted EPS are non-GAAP financial measures that are calculated by excluding the after-tax costs related to (i) the 2015 Restructuring activities, which included involuntary terminations, the abandonment of certain leased offices, co