Kbr, Inc. · NYSE:KBR
Kbr — Investor Day (May 2019)
59 slides from Kbr's investor day presentation, May 3, 2019
Slide 1: Investor Conference
nvestor Conference The future, designed and delivered.
Slide 2: Today's Agenda
Today’s Agenda Introduction Alison Vasquez, Vice President Investor Relations Welcome & Opening Remarks Stuart Bradie, President & CEO Market Dynamics & KBR Strategy Greg Conlon, Executive Vice President & CDDO - Break A Roundtable with Our Business Leaders Andrew Barrie, President Government Soluti
Slide 3: Forward looking statements
Forward looking statements This presentation contains forward-li strategies, future nts, future fi nformation that is not historical n used in this presentation, the words “estir cts,” “anticipates,” “projects,” “plans,” “intends,” “believes,” “forecasts” or future or conditional verbs such as “will
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Slide 5: Investor Conference
nvestor Conference The future, designed and delivered.
Slide 6: Welcome & Opening Remarks
Welcome & Opening Remarks Stuart Bradie, President and CEO
Slide 7: ocean. Using our
ocean. Using our engineers will mentor — on, networking with local ’s global footprint. will encourage, enerations through mic world changing repr 80% of the tal marine debris in our seas 46,000 pieces of plastic are floating every square mile of ocean marine species are in danger of extinction thro
Slide 8: Vision
Vision A leading global provider of full life-cycle professional services, project delivery and technologies supporting the Government Services and Energy markets, creating exceptional value for customers, employees and shareholders. inset, ceed Scunor Maree aren? Nangerent SOCIAL NETWORK auch
Slide 9: A Brief Look Back | We deliver...outpacing 2017 investor day targets
A Brief Look Back | We deliver...outpacing 2017 investor day targets Adjusted EPS People sm sm fre so00 s120 200 @ * 160 s120 m smo 100 x $0 s so 7 . Ky n ° s s s < fs & 2017 LT Targets] Actual 9 consecutive quarters meeting or exceeding expectations
Slide 10: Advantaged portfolio and healthy backlog
t} Advantaged portfolio and healthy backlog ‘@) Executing our strategy, delivering disciplined growth hes, Collaborative, experienced management team $ A true growth and value story
Slide 11: Oo idk
(ry Oo idk Installed Markets Capabilities customer base
Slide 12: Momentum in KBR's strategic markets; Capabilities and strengths
Momentum in KBR's strategic markets Capabilities and strengths aligned to market needs Defense modernization Renewal of space priorities Human performance ustainable technologies : gital deployment 50 +| Human science and 70 +| Leading edge, high 70 +| Complex project delivery YEARS performance serv
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Slide 14: We win together
We win together Team Culture Service oriented aA Customer Focused 2 Extremely smart, they’re experts in their field and they really care Authentic, helpful and make you feel like you are part of the team No li to personal achievement
Slide 15: A growth story
a oo Od Installed Markets Capabilities customer base A growth story
Slide 16: Compelling Adjusted EPS Growth Story
Compelling Adjusted EPS Growth Story $3.50 $2.80 $210 $1.40 - $ - 2017 2018 2019 2020 2021 2022
Slide 17: Investor Conference
nvestor Conference The future, designed and delivered.
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Slide 19: Executing our strategy, delivering disciplined growth
ae Executing our strategy, delivering disciplined growth <> Vision for the future, deliberately harvesting synergy a) Digitalization, helping customers unlock the future ©) Strong market outlook, fundamentals & pipeline
Slide 20: Strategy: Position, Leverage, Combine, Develop
POSITION LEVERAGE our culture of teamwork and global platform to earn high KBR in growth markets where our domain expertise, technologies and values are essential for customer confidence and customer success and have i respect for the value we enduring demand. eS \ deliver. our XS || Strategy COMBIN
Slide 21: Focused and disciplined
Focused and disciplined Horizon 3 Positioning for the future Prioritized, deliberate growth Capturing synergies Horizon 2 Differentiated solutions capturing synergies Yn ct eo © ct i) gO, < = > QO ap e) =)
Slide 22: Focused and disciplined
Focused and disciplined Prioritized, deliberate growth Capturing synergies oP) ap me i) ct 0) gO, =< = > Q en fe) 3} NextEdge, ammonia, K-SAAT, K-PRO = ° =] © ts N I ct, ° =)
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Slide 24: NextEdge Digital Twin
NextEdge Digital Twin
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Slide 27: Smart Maintenance
@) Smart Maintenance
Slide 28: Executing our strategy | Momentum in the market
Executing our strategy | Momentum in the market US. DoD U.K. MoD . “ue 2m ASS ef Ff # HF eK KH EH 5 i Global Energy CAPEX/OPEX Outlook i sureseal sesessussl ef £ # # # PS HK
Slide 29: Executing our strategy | Leveraging momentum
Executing our strategy | Leveraging momentum Total* Lead Positioning & Pursuit Approval Proposal & Negotiation Government Solutions Technology & Energy Solutions 125+ Pursuits > $100M Pursuits > $100M $41B Near-term Pipeline *Pursuit pipeline includes opportunities through 2022 only
Slide 30: Break
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Slide 31: Investor Conference
nvestor Conference The future, designed and delivered.
Slide 32: A Conversation with our Business Leaders
A Conversation with our Business Leaders Andrew Barrie, ’ Byron Bright, Ghee 7 Jay Ibrahim, Farhan Muj oF nt E ident Presiden’
Slide 33: Government, Technology and Energy Solutions | Who we are
Government Solutions | ho we are Technology Solutions | who we ave Energy Solutions | who we are
Slide 34: Government Solutions | Who we are
Government Solutions | Who we are @ na $3.48 115+ 98% 2018 Revenue Global Locations 2018 U.S. prime recompete win rate arts 2g = 18,000+ $148 35+ Employees Backlog & Options* U.S. Locations 1 = bos! ‘Actual EBITDA Target EBITDA —— Actual Revenue ——= Target Revenue Who We Are INTERNATIONAL > Upper Si
Slide 35: Technology Solutions | Who we are
Technology Solutions | Who we are is w a) $0.38 25% $0.68 2018 Revenue 2018 EBITDA Backlog Margin 4 sts 2to3 20% 0.5m New Technologies 2018 Revenue from Revenue per Per Year New Technologies Employee Who We Are AMMONIA/ FERTILIZERS REFINING Revenue CAGR 2019 Revenue Profile 2 fe s q g o Ss Financial
Slide 36: Energy Solutions | Who we are
Energy Solutions | Who we are il & att a} of $1.28 9% $1.98 2018 Revenue 2018 EBITDA Backlog Margin Who We Are B cS) Rix 100 120+ 40+ Years of Years of Project Execution Global Locations LNG Experience DELIVERY 2019 Revenue Profile ms es 2017 208 Business Breakdown - S = 3 « ra 2019 - 2022 Targets S
Slide 37: Investor Conference
nvestor Conference The future, designed and delivered.
Slide 38: Financial Outlook
Financial Outlook Mark Sopp, Executive Vice President, Chief Financial Officer
Slide 39: Delivering on our financial commitments
&) Delivering on our financial commitments Y | Advantaged portfolio delivers predictable growth outlook «atl Raising long-term targets oe} Resulting cash flow delivers compelling value creation
Slide 40: 2019-2022 | Our financial strategy
2019-2022 | Our financial strategy Maximizing Earnings and Cash Maximizing Shareholder Value Promote disciplined, profitable growth and scale Achieve and maintain gross leverage of 2.75x Maintain commercial selectivity Return capital to shareholders Continue ‘Cash is King’ mindset a
Slide 41: Favorable markets with predictable growth catalysts
Favorable markets with predictable growth catalysts Market Dynamics KBR strengths in favorable markets 10-14% KBR Revenue CAGR High LNG and Global technology agnostic 2019-2022 Energy downstream demand LNG leader Solutions Relationships/Innovation/ Value Technology Growing global GDP and Proprietary
Slide 42: 2019-2022 Revenue Profile | Our book of business underpins growth
2019-2022 Revenue Profile | Our book of business underpins growth Profile for a single LNG project }—*" Conservative new business conversion rate * Book of Business - 60% coverage * Backlog, options, recompetes and renewals * Strong recompete win rates (Gs 90%; Es, Services 80%) + Long-term, funded
Slide 43: 2019-2022 | Adjusted EBITDA Margin Targets
2019-2022 | Adjusted EBITDA Margin Targets 2017 Investor Day Target 2019 Investor Day Target Government Solutions | Upper single % Upper single % Technology Solutions Upper teens % Mid-20s % Energy Solutions Mid- to upper-single % Mid-single % KBR, consolidated n/a Upper single % Note: Target Segmen
Slide 44: 2019-2022 | Operating Cash Flow Targets
2019-2022 | Operating Cash Flow Targets ™ 90% - 110% operating cash conversion’ *. $800 million to $1.0 billion cumulative operating cash flow' * $50M to $75M cumlative capex 2019 2020 2021 2022 Defined as operating cash flow divided by net income attributable to KBR. Operating cash flow for this pu
Slide 45: 2019-2022 | Capital structure and deployment
: a X Vw NS 2019-2022 | Capital structure-and deployment : [> Guiding Principles Capital Deployment Priorities Maintain low capital intensity Fund organic growth Continued improvements to Targeted 2.75 leverage ratio maximize cash flow Return capital to shareholders Balanced liquidity profile Select
Slide 46: 2019-2022 | Targeted Adjusted EPS CAGR
2019-2022 | Targeted Adjusted EPS CAGR Breakout potential Add scale benefits 12-16%
Slide 47: 2019-2022 Targets
2019-2022 Targets Revenue (organic) EBITDA margin Adjusted EPS Operating cash conversion ROIC 10-14% Upper single % 14-18% 90-110% 12%+ CAGR CAGR By 2022
Slide 48: Growth...Raising long-term targets; Value...Returning cash to shareholders
WB Growth...Raising long-term targets ss 7 WH Value...Returning cash to shareholders
Slide 49: Investor Conference
nvestor Conference The future, designed and delivered.
Slide 50: What do we do at KBR?
What do we do at KBR?
Slide 51: Investor Conference
nvestor Conference The future, designed and delivered.
Slide 52: Closing Remarks
Closing Remarks Stuart Bradie, President and CEO
Slide 53: 2019 priorities
2019 priorities Meeting or exceeding 2019 targets Strong 1Q results Finish Ichthys BIS Grow backlog Win LOGCAP V Win LNG Internal efficiency Costpoint ERP Workday HRIS Transformation agenda New brand New website GICS code change Delever FF S88 FN PS
Slide 54: Today's Summary
|_| Today's Summary Strategic market positioning Backlog security at 60% through 2022 $41B in near-term pipeline Outperforming 2017 targets Proven strategic and commercial discipline Proven team to deliver growth and value KBR
Slide 55: Closing Remarks
Closing Remarks Stuart Bradie, President and CEO It’s a great time to bea part of KBR
Slide 56: Investor Conference
nvestor Conference The future, designed and delivered.
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Slide 58: Investor Conference
nvestor Conference The future, designed and delivered.
Slide 59: Appendix: Reconciliation of EPS to Adjusted EPS
Appendix: Reconciliation of EPS to Adjusted EPS EPS (diluted) $3.06 $1.99 Add Back: Legacy legal fees $0.10 $ 0.06 Acquisition & integration related expenses $0.00 $0.04 Amortization related to Aspire acquisition $0.00 $0.06 Non-cash imputed interest on conversion option $0.00 $0.01 Aspire (gain) lo