Slide 1: Fiscal Year 2018 – 1st Quarter Earnings Conference Call
Fiscal Year 2018 – 1st Quarter Earnings Conference Call February 7, 2018 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: Agenda
Agenda • Business Review – Jacobs Q1 Highlights – Line of Business Review – CH2M Integration Update • Financials Review – Jacobs & CH2M Q1 Results – Balance Sheet – Capital Allocation • Summary & FY18 Outlook 3
Slide 4: Solid Start to Fiscal 2018
Solid Start to Fiscal 2018 Positioned Well To Capitalize On Acceleration in End Markets • Fiscal 2018 Priorities – Maintain a winning culture of safety, integrity and client centricity – Continue to strengthen our industry leading quality and delivery – Grow profitably by diversifying into higher gr
Slide 5: Backlog Remains Strong
Backlog Remains Strong Continued Solid Backlog Performance In Higher Margin Businesses Jacobs Field Services Backlog ($ B) Jacobs Professional Services Backlog ($ B) Jacobs Only Backlog CH2M Backlog ($ B) 26.2 6.6 CH2M Backlog Addition 6.3 19.8 19.6 5.4 18.1 6.4 6.4 5.3 2.6 5.9 13.3 13.2 12.2 5 FY17
Slide 6: Aerospace & Technology
Aerospace & Technology Continuing to Deliver Strong Backlog Growth • Large Market Opportunity With Highly Recurring Revenue Model – Portfolio centers around national priority programs – Positioned to expand services to commercial sector client base – Ongoing integration of Blue Canopy strengthens cy
Slide 7: Buildings & Infrastructure
Buildings & Infrastructure Water, Transportation & Resilience Investments Driving Opportunities • Global Modernization of Infrastructure Unfolding – ‘Big 3’ priorities – Water, Transportation and Resilience – Continued success driving Jacobs Connected Enterprise (JCE) digital solutions • Infrastruct
Slide 8: Industrial
Industrial Stable Life Sciences Performance with Expected Recovery in Mining/Minerals • Life Sciences – Steady – Growth expected to be driven by Gene and Cell Therapy – Jacobs + CH2M expands advanced facility leadership position • Mining, Minerals, and Specialty Chemicals – Improving – Currently see
Slide 9: Petroleum & Chemicals
Petroleum & Chemicals Positioned Well for Improving End-Market Demand • Upstream and Midstream – Improving – CAPEX spend expected to improve on oil prices stabilizing at 3-year highs • Chemicals - Steady – Next cycle of petrochemicals facilities on the horizon • Refining - Steady – U.S. refining CAP
Slide 10: CH2M Integration Update
CH2M Integration Update On Track For A Successful Integration • Integration Management Office (IMO) – Dedicated cross-functional team aligned to drive value capture program • Focused on Employee Culture – Conducted global executive roadshow to communicate the strategy – Voluntary attrition below pre
Slide 11: FY18Q1 Results
FY18Q1 Results Professional Services Growth Drives 3% Y/Y Jacobs Only Revenue Growth • Revenue (Jacobs only) increases 3% year over year – Higher value professional services revenue increase 10% y/y • Q1 GAAP Operating Profit Margin 1.7%, Adjusted Op Margin 4.9%1 $2,654 $2,619 $2,551 • GAAP EPS $0.0
Slide 12: CY17 CH2M Performance
CY17 CH2M Performance Full Year CH2M Results Demonstrates Improved Performance • Strong Backlog Performance Year over Year – Backlog up over 18% Y/Y excluding Chalk River, MoPac and Inpex • Increase due to multi-year Federal, program management & O&M awards – Gross margin in backlog up 14% y/y, ex C
Slide 13: Revenue and Gross Margin %
Revenue and Gross Margin % Revenue GM % 3.0 20% 18% 18% 18% 18% 16% 2.8 15% 2.7 2.5 2.5 10% 2.6 2.3 2.0 5% Q1’17 Q2’17 Q3’17 Q4’17 Q1’181 Delivering Revenue Growth, While Maintaining Gross Margins 13 FY18Q1 revenue includes impact from CH2M stub period 12/15-12/29 of $131 M in total revenue and gros
Slide 14: FY18Q1 Jacobs Only LOB Segment Financials
FY18Q1 Jacobs Only LOB Segment Financials1 Line of Business Operating Profit vs. FY17Q1 OP Margin vs. FY17Q1 8.4% Aerospace & Technology $53 M +5% -46 bps 8.2% Buildings & Infrastructure $51 M +33% +150 bps 5.1% Industrial $38 M +52% +174bps 4.9% Petroleum & Chemicals $29 M +24% +119 bps 1Segment fi
Slide 15: CH2M Acquisition Costs and Synergies
CH2M Acquisition Costs and Synergies CH2M Cost Synergies On Track • On Track to Achieve Estimated CH2M Cost Synergies – Over 25% of $150 M estimated run-rate savings achieved at end of Q1; expect to achieve 50% of $150 M of synergies on run-rate basis by end of year – Expect $50 M of synergies to be
Slide 16: Balance Sheet and Capital Allocation
Balance Sheet and Capital Allocation Near Term Focus to De-Lever • Healthy Balance Sheet Post Close – Ending Q1 cash and equivalents of $1.1 B – Ending Q1 gross debt of $2.6 B – $500 M of liquidity capacity remaining on revolver – Expect to de-lever throughout 2018 • Strong Financial Flexibility Rem
Slide 17: Summary and FY18 Outlook
Summary and FY18 Outlook Executing Well Against 3-Year Strategy • On Track to Execute Against 3 Year Strategy – Maintain Culture Of Safety, Integrity and Innovation – Financial Discipline to Drive Profitable Growth – Solid Start to FY18 with Improving Macro Backdrop • Updated FY18 Outlook – Raising
Slide 18: Thank You!
Thank You! © Copyright Jacobs February 2018 www.jacobs.com | worldwide
Slide 19: 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 and operating profit margin to the corresponding "adjusted" amounts. For the comparable periods presented below, such adjustments consist of amounts incurred in connection with t
Slide 20: 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 (i) the after-tax costs related to the 2015 restructuring activities, which included involuntary terminations, the abandonment of certain leased offices, co