Slide 1: Fiscal Year 2016 – 4th Quarter Earnings Conference Call
Fiscal Year 2016 – 4th Quarter Earnings Conference Call November 22, 2016 www.jacobs.com | worldwide
Slide 2: Forward-Looking Statement Disclaimer; Non-GAAP Financial Measures
Forward-Looking Statement Disclaimer Statements included in this presentation that are not based on historical fact are forward‐looking statements. Although such statements are based on management’s current estimates and expectations, and currently available competitive, financial and economic data,
Slide 3: Agenda
Agenda • Business Review • Financials Review • Summary & FY17 Outlook 3
Slide 4: FY16 Business Highlights: Structural Changes Creating Greater Focus and Efficiencies
FY16 Business Highlights Structural Changes Creating Greater Focus and Efficiencies • Restructured to Right-Size Jacobs • Realigned into a Focused Global Structure • Completed Strategic Review • Driving Greater Leadership Accountability & Financial Discipline • Simplifying & Enhancing Systems and Ca
Slide 5: FY16 Business Highlights: More Stringent Discipline Improving Margin & Cash Flow
FY16 Business Highlights More Stringent Discipline Improving Margin & Cash Flow • Stable adjusted EPS, delivered against FY16 expectations • Backlog of $18.8B; sequentially up $438M • Improvements to Gross Margin Percentages in 2H vs. FY15 • Significant Reduction in SG&A • Improvements to A/R & Othe
Slide 6: Backlog Improvement Over FY16
Backlog Backlog Improvement Over FY16 Professional Engineering Services Backlog ($ Billion) Field Services Backlog ($ Billion) 5.1 5.0 18.4 18.8 18.2 18.2 18.3 18.8 17.2 15.9 5.8 3.1 6.1 7.1 6.8 6.9 6.4 6.7 5.5 5.6 12.6 11.7 11.4 11.4 11.9 12.0 11.1 10.3 Aerospace & Technology Buildings & Infrastruc
Slide 7: Aerospace & Technology: Continued Focus on Execution
Aerospace & Technology Continued Focus on Execution Delivering Positive Results • Steady Growth Markets – $140M of protested govt contracts awarded, not yet in backlog – Strong new-business pipeline – Improving unit margins facilitated by lean cost structure – US govt spend stable; significant oppor
Slide 8: Buildings & Infrastructure: Strong Growth Opportunities Continue to Develop
Buildings & Infrastructure Strong Growth Opportunities Continue to Develop • Buildings – Steady – Increased opportunities in the healthcare market – US federal market strong – Emerging opportunities in large scale smart cities • Infrastructure – Steady – Continued rail and transit spend; targeting h
Slide 9: Industrial: Positive Sales Momentum Across Several Industrial Markets
Industrial Positive Sales Momentum Across Several Industrial Markets • Mining & Minerals – Weak – Improving capital expenditure in select markets – Several positive wins during quarter • Life Sciences – Strong – Biologics expansion continues – Supporting clients in emerging technologies • Specialty
Slide 10: Petroleum & Chemicals: Growth in Chemical Awards Drives Sequential Backlog Increase
Petroleum & Chemicals Growth in Chemical Awards Drives a Sequential Increase in Backlog • Oil & Gas – Weak – Oil trading in the $45-$50/bbl range – Main focus is on maintenance, turnaround, sustaining capital – Tracking several midstream opportunities in US & Middle East • Refining – Steady – North
Slide 11: FY16 & Q4 Financial Metrics
FY16 & Q4 Financial Metrics Greater Discipline Driving G&A Reductions & Strong FCF • FY16 Revenue of $11B; GAAP EPS of $1.73 (Adj. $3.081) – Q4 Revenue of $2.6B; GAAP EPS of $0.24 (Adj. $0.77 1) • Book-to-Bill for TTM of 1.00, Highest in FY16 • Q4 Gross Margin up 120 bps vs. Year Ago, Continuing 2H
Slide 12: FY16 & Q4 Segment Financials
FY16 & Q4 Segment Financials Operating Profit vs. FY15 OP Margin vs. FY15 Line of Business FY16Q4 FY16 FY16Q4 FY16 Aerospace & Tech. $47M -16% $204M -1% 7.2% 7.7% (+10 bps) (+70 bps) Buildings & Infra. $42M +79% $175M +20% 7.5% 7.8% (+380 bps) (+190 bps) Industrial $13M -54% $81M -36% 1.7% 2.9% (-25
Slide 13: FY16 Lines of Business Summary
FY16 Lines of Business Summary Revenues1 Segment Operating Profit1,2 Aerospace & Technology 30% 24% 22% Buildings & 35% Infrastructure 14% 21% Industrial 25% 30% (Incl. Field Services) Petroleum & Chemicals 13 (1) Numbers rounded to nearest percent (2) Excludes non-allocated corporate expenses
Slide 14: Restructuring Update
Restructuring Update Select Reinvestments in People, Systems & Services • Announced Formal Restructuring in July 2015 Focused on Business Simplification & Enhancing Cost Effectiveness • Significant Additional Opportunities Identified Over FY16 – Revised final savings estimate of $260-$270M – Revised
Slide 15: Capital Allocation: Share Buy-Back Over FY16
Capital Allocation Jacobs Continued to Execute Share Buy-Back Over FY16 • $500M Share Buy-Back – Balanced approach over three year term – Repurchased 1M shares in FY16Q4 ($50M) – Repurchased 3.4M shares in FY16 ($153M) – 3.7% reduction in shares outstanding vs. FY15 • Update to be Provided at 2016 I
Slide 16: Summary & FY17 Outlook: Pivoting to Profitable Growth
Summary & FY17 Outlook Pivoting to Profitable Growth • Market Uncertainty & Tepid Global Growth to Continue in FY17 • Backlog Improvement Against Tough Market Conditions • Operational Discipline Driving Margins & Cash Flow • Stable FY17 Outlook – Stronger underlying operational performance – Initial
Slide 17: Thank You!
Thank You! © Copyright Jacobs November 22, 2016 www.jacobs.com | worldwide
Slide 18: Non-US GAAP Financial Measures
Non-US GAAP Financial Measures The following table reconciles, for Q4FY16 and FY16, the non-GAAP financial measures of adjusted net earnings, adjusted EPS, adjusted selling general & administrative (“G&A”) expenses and adjusted operating profit to the most directly comparable U.S. GAAP financial mea
Slide 19: Non-US GAAP Financial Measures (cont'd)
Non-US GAAP Financial Measures (cont’d) Adjusted earnings and adjusted EPS are non-GAAP financial measures that are calculated by excluding the after-tax costs related to certain restructuring activities that began in fiscal year 2015 (the “2015 Restructuring”), the loss on sale of our French subsid