Jacobs Solutions Inc. · NYSE:J
Jacobs Solutions — Jacobs Engineering Group — Jefferies 2017 Industrials Conference
34 slides from Jacobs Solutions's conference presentation, Aug 9, 2017
Slide 1: Delivering Advanced Solutions for a More Connected, Sustainable World
Delivering Advanced Solutions for a More Connected, Sustainable World Water Vortex | Australia CH2M
Slide 2: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with the proposed acquisition of CH2M Hill Companies, Ltd. (“CH2M”) by Jacobs Engineering Group Inc. (the “Company”) pursuant to the terms of an Agreement and Plan of Merger by and among CH2M, the Company and Basketball Merger Sub Inc., a who
Slide 3: Participants in Solicitation
Participants in Solicitation The Company, CH2M and their respective officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of CH2M in connection with the proposed Merger of Merger Sub with and into CH2M. Information about the Company’s executive
Slide 4: Forward-Looking Statement Disclaimer
Forward-Looking Statement Disclaimer Certain statements contained in this document 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 inten
Slide 5: Agenda
Agenda Strategy Update Steve Demetriou, Chairman & CEO Financial Overview Kevin Berryman, EVP & CFO 5
Slide 6: Jacobs At A Glance
Jacobs At A Glance 2016 Revenue $11B Listed JEC (NYSE) Countries 25+ 21% 30% Employees ~54,000 Locations 230+ 24% 25% Petroleum & Chemicals Oil & gas upstream, refining & chemical markets 2016 Op. Profit* $586M Mining & minerals, specialty chemicals & manufacturing, Industrial life sciences, field s
Slide 7: Jacobs Was Built On Key Acquisitions
Jacobs Was Built On Key Acquisitions… Revenue ($B) 20 18 FNS Federal Network Systems 16 P&C ZATE 14 Stork 12 Engineering 10 Humphreys & Group Glasgow 8 6 4 2 - 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Acquired 80+ Companies 7
Slide 8: CH2M is The Right Time, Right Transaction
CH2M is The Right Time, Right Transaction Strong Foundation at Jacobs Together, a Compelling Strategic Fit • Driving accountability through four • Delivers on our strategic blueprint global Lines of Business (LOBs) • Creates world’s premier global • Rightsized overhead and streamlined solutions prov
Slide 9: CH2M at a Glance
CH2M at a Glance Revenue of $4.4 B6 Founded Employees 1946 20,000 By Sector Environment & By Service Type O&M Nuclear Water 15% 26% 35% Industry-leading Design Positions Integrated 12% Delivery #1 Wastewater Treatment Manufacturing 22% 73% Semiconductors Transportation 17% Consulting / PM #2 Energy
Slide 10: Strong Momentum Across CH2M Business
Metrolinx Rapid Transit | Toronto CH2M Strong Momentum Across CH2M Business • Exited power EPC and transportation design-build – MOPAC nearing completion; risk mitigation in place – Inpex risk parameters appropriately considered • Attractive business portfolio - 90% reimbursable services • Transform
Slide 11: Creates A Premier Global Industry Leader
Creates A Premier Global Industry Leader Jacobs Revenue8 Combined Revenue8 $2.3B $3.7 B $4.8 B $2.6B (21%) (24%) (32%) (24%) $10.7 B $15.1 B $3.0B $2.9B (28%) $3.3 B (27%) (22%) $3.3 B (22%) Aerospace & Technology Buildings & Infrastructure Industrial Petroleum & Chemicals 11
Slide 12: Strengthens Highest Margin, Highest Growth Business Lines
Strengthens Highest Margin, Highest Growth Business Lines Jacobs Margin9 Revenue ($B)8 Buildings & 7.7% $2.3 $4.8 Infrastructure Aerospace & $3.7 8.0% $2.6 Technology 3.3% Industrial $2.9 $3.3 Petroleum & 4.7% Chemicals $3.0 $3.3 Jacobs Revenue Combined Revenue 12
Slide 13: Common Cultures – Shared Values
Common Cultures – Shared Values Safety Ethics People Growth Client Centric Quality Embedded in Culture Greater Opportunities for Employees – Greater Value for Clients 13
Slide 14: A Compelling Strategic Fit
A Compelling Strategic Fit Sector Strengths Premier Capabilities Sustained Global Enhanced Value Leadership in Water Operating Platform Differentiated Client Solutions + = Tier 1 Nuclear / Longstanding Client Enviro. Remediation Relationships Industry Leading Talent Advanced Project Delivery Manufac
Slide 15: Advancing Our Profitable Growth Strategy
Advancing Our Profitable Growth Strategy Water Canal Pedestrian Bridge | Dubai CH2M
Slide 16: Advancing Our Profitable Growth Strategy
Advancing Our Profitable Growth Strategy A&T B&I Industrial P&C US Gov’t Services Water Life Sciences Downstream Environmental Transportation Licensed Technologies Upstream & Midstream Nuclear Aviation Cons. Goods/Adv. Mfg Weapons Sustainment Highways & Rail Mining & Minerals Telecom Social Infrastr
Slide 17: Water
Water Industry leading position in Water – deployed across strong, global By the Numbers10 operating platform – creates significant growth opportunity • Scarcity of water driving investments in desalination and water reuse $100 B Total Addressable Market facilities globally – clear areas of combined
Slide 18: Environmental
Environmental Premier environmental expertise specifically addresses global demand By the Numbers10 for sustainable and resilient solutions $160 B Total Addressable Market • A leader with broad and deep environmental capabilities in the industry • Significant cross-sell opportunity through leverage
Slide 19: Nuclear
Nuclear Combined platform achieves Tier 1 global supplier status in Nuclear By the Numbers10 space and positions us for global growth $145 B Total Addressable Market • Strong program and project delivery offering in global nuclear space • Combination of environmental and nuclear skillsets allows us
Slide 20: Jacobs + CH2M Creates Global Design Leader
Jacobs + CH2M Creates Global Design Leader Global Design Revenues11 10 10.0 7.4 $B 5 6.4 5.0 4.8 3.7 3.6 3.3 3.0 2.7 2.6 0 Jacobs + CH2M AECOM Jacobs WSP SNC + Arcadis CH2M Fluor Stantec Worley Wood + Atkins Parsons Amec FW Source: ENR, July 2017 20
Slide 21: Financial Overview
Financial Overview Panama Canal Expansion | Panama CH2M
Slide 22: Transaction Overview
Transaction Overview $2.85 B Equity Value Purchase Price Enterprise Value1 / Adj. EBITDA2 – 6.9x 60% Cash / 40% Equity Consideration Mix3 Pro-forma Net Debt to Adj. EBITDA4 of 1.9x Expected Annual Cost Savings of $150 M Synergies Significant Upside Revenue Potential Accretion 5 Adj. Cash EPS accreti
Slide 23: Delivers on our Profitable Growth Strategy and M&A Framework
Delivers on our Profitable Growth Strategy and M&A Framework Focus Areas High Growth Sectors Water, Transportation, Environmental, Nuclear Superior Technical Expertise Track record of innovation, advanced technical skillset and leader in iconic projects Leading Positions Water, Transportation, Envir
Slide 24: Rigorous Integration Approach Drives Significant Synergy Realization
Rigorous Integration Approach Drives Significant Synergy Realization $150 M Annual Cost Synergies Identified Additional Cost & Cash Opportunities Real Estate: Significant co-location and consolidation opportunities • Project delivery excellence • Utilization of high value service centers Corporate:
Slide 25: Industry Leading Low-Risk Profile Remains Intact
Industry Leading Low-Risk Profile Remains Intact • Exited Power EPC and Transportation Jacobs Risk Profile Combined Risk Profile Design-Build 18% 15% – Focus area of due diligence – Confirmed exit of past problem businesses – Economics fully considered in transaction value 82% • Remaining portfolio
Slide 26: Generating Solid EBITDA
Generating Solid EBITDA Delivering a Consistent Adjusted EBITDA Margin of +7% Over the Last Four Quarters $100 $85 $78 $77 $83 $50 $0 -$50 -$100 -$150 Q3 Q4 Q1 Q2 Adjusted EBITDA Restructuring & MOPAC and Inpex Costs GAAP EBITDA ($43) $46 $40 $83 26
Slide 27: Recent Precedent M&A Transactions – EBITDA Multiples
Recent Precedent M&A Transactions – EBITDA Multiples Without Synergies With Synergies 12.0x 10.4x 10.1x 8.6x 7.7x 6.9x Source: Company filings, news releases, Capital IQ Note: Multiples represent Enterprise Value / TTM EBITDA. Precedent E&C transactions include SNC-Lavalin / Atkins, Wood Group / Ame
Slide 28: Transaction Financing / Balance Sheet Remains Strong Post-Close
Thames Tideway - Lee Tunnel | London CH2M Transaction Financing • Consideration mix of 60% Cash / 40% Equity3 • Total funding requirement of $2.4 B (including payoff of CH2M debt) – Combination of existing cash and revolver capacity – New, committed $1.2 B three-year term loan • Post-close liquidity
Slide 29: Integration & Wrap-up
Integration & Wrap-up National Western Center | Denver CH2M
Slide 30: Committed to Successful Integration
Two Medicine River Bridge | Montana, ??? | ??? US Jacobs Committed to Successful Integration • Leveraging integration lessons learned – Evaluated transactions over past 10 years – Capturing opportunities / mitigating challenges • Proven discipline in delivering cost savings – Strong accountability,
Slide 31: Comprehensive, Focused and Disciplined Approach
Comprehensive, Focused and Disciplined Approach • Joint Integration Management Office (IMO) – Full-time integration leaders and teams – Experienced hands-on leadership across all business lines – External advisors with proven transformational integration expertise Gary Mandel Lisa Glatch Executive V
Slide 32: Compelling Strategic Combination: Creates Significant Shareholder Value
Compelling Strategic Combination: Creates Significant Shareholder Value 1 Creates a world premier global solutions provider • Delivers enhanced, differentiated value proposition for clients through end-to-end solutions • Bolsters portfolio quality, stability and diversity • Preserves attractive low-
Slide 33: Jacobs & CH2M
Jacobs & CH2M: Delivering Advanced Solutions for a More Connected, Sustainable World London Olympics | UK CH2M
Slide 34: Consolidated Footnotes
Consolidated Footnotes 1) Equity Value plus CH2M net debt 2) TTM Adj. EBITDA as of June 2017; excludes restructuring charges and Inpex/MOPAC changes in project estimates and includes full run-rate cost savings 3) Excluding the cash-out and rollover of certain CH2M equity awards 4) TTM Adj. EBITDA ex
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