Slide 1: Fiscal Second Quarter Earnings Conference Call
Fiscal Second Quarter Earnings Conference Call May 6, 2020
Slide 2: Disclaimer
Disclaimer Forward-Looking Statement Disclaimer Non-GAAP Financial Measures Certain statements contained in this presentation constitute forward-looking statements as such To supplement the financial results presented in accordance with generally accepted accounting term is defined in Section 27A of
Slide 3: Today's agenda
Today’s agenda Jacobs employees and their families celebrate Earth Day. Business Review ▪ Climate Action Plan ▪ COVID-19 Response ▪ Financial Summary ▪ Lines of Business Review Financial Review ▪ Q2 Results ▪ Segment Results ▪ Acquisition and Divestiture Update ▪ Balance Sheet and Cash Flow Outlook
Slide 4: Taking action to create a sustainable world
Taking action to create a sustainable world 1. 100% renewable energy for our operations in 2020. 2. Net zero carbon for our operations and business travel in 2020. 3. Carbon negative for our operations and business travel by 2030. Jacobs' Climate Action Plan 4
Slide 5: Jacobs: Challenging today. Reinventing tomorrow.
Jacobs: Challenging today. Reinventing tomorrow. Keeping our people safe ▪ Mobilized global COVID-19 Critical Response Team ▪ Immediate, decisive action on travel and remote working ▪ Accelerated investment in digital technology ▪ Proactive communications with employees; weekly live town halls ▪ Ong
Slide 6: A Resilient Business Model
A Resilient Business Model Diversified Portfolio Aligned to Multiple Growth Opportunities ▪ Aligned to resilient sectors; benefit from additional stimulus and global economic recovery ▪ Strategy combines global scale, deep expertise and enhanced brand awareness ▪ Digital transformation and cyber exp
Slide 7: Critical Mission Solutions
Critical Mission Solutions Critical Mission Solutions Snapshot (TTM including KeyW excludes Wood Nuclear) Maintaining Resilient Base while Expanding into Higher Value Solutions U.S. / International 90% / 10% ▪ Backlog provides strong visibility into base business Government ~89% ▪ Fiscal 2020-2021 n
Slide 8: People & Places Solutions
People & Places Solutions People & Places Solutions Snapshot (Net Revenue Q2 2020) Unique Competitive Advantage to Sustain Long-Term Growth U.S./International 64% / 36% Public / Private Sector 59% / 41% ▪ Maintaining talent capacity for post-COVID-19 new normal Reimbursable and Lower RIsk Fixed ~90%
Slide 9: Fiscal 2020 Q2 results
Fiscal 2020 Q2 results Revenue increased 10.9% y/y and Pro Forma Net Revenue increased 7.5% y/y GAAP Operating Profit (OP) of $168M (+63%) and OP Margin of 4.9% (+160 bps) Adj. OP of $237M (+7%) and Net Revenue Adj. OP Margin of 8.5% (-50 bps) GAAP Net Earnings of $(122) million and EPS from Continu
Slide 10: Segment financials
Segment financials $’s in millions Q2 Q2 Y/Y 2019 2020 Critical Mission Solutions Operating Profit 74 84 14% as a % of revenue 7.0% 6.8% -20 bps People & Places Solutions Operating Profit 173 189 9% as a % of net revenue 12.3% 12.3% 0 bps Adjusted Unallocated Corporate Costs1 (25) (37) (12) Adjusted
Slide 11: M&A and divestiture update
M&A and divestiture update ECR Update ▪ Incurred >$220M of ~$230M transaction, separation and restructuring costs ▪ Final stages of separation and restructuring to be reached by end of year KeyW Integration Effectively Complete ▪ Incurred $25M in costs to achieve synergies ▪ Incurred $13M of transac
Slide 12: Balance sheet and cash flow
Balance sheet and cash flow Positive Free Cash Flow (FCF) Generation for Remainder of 2020 Q2 Leverage Metrics $ billions FY20 Q2 ▪ Q2 positive FCF1 of $113M; includes $36M headwind from non-run rate items ▪ $85M of $150M in one-time items recognized in 1H 2020 Q2 Net Debt Position $1.4B ▪ Q2 DSOs f
Slide 13: Outlook & Summary
Outlook & Summary Underlying Fiscal 2020 and 2021 COVID-19 Related Assumptions ▪ Mid-point of FY20 outlook assumes physical distancing limitations assimilated into the workplace by Q4 ▪ Adapting to a new normal in fiscal 2021 Updating Fiscal Year 2020 Outlook ▪ Revising adjusted EBITDA to $950M to $
Slide 14: Strong culture and diversified portfolio aligned to multiple growth opportunities
Strong culture and diversified portfolio aligned to multiple growth opportunities ▪ Prioritizes employee health and safety during COVID-19 crisis ▪ Aligned to resilient sectors that will benefit from stimulus and global economic recovery ▪ Strategy combines global scale, deep expertise and enhanced
Slide 15: Environmental, Social and Governance (ESG) Summary
Environmental, Social and Governance (ESG) Summary Jacobs ESG Investor Page 2019 ESG Data Disclosure for Analysts Water Business Overview Environmental and PFAS Overview 15
Slide 16: Jacobs: Delivering innovative solutions & disciplined execution
Jacobs: Delivering innovative solutions & disciplined execution Q2 Fiscal 2020 ($ in billions) Reimbursable and Net Revenue TTM Gross Backlog Lower Risk Fixed Public/Private As Reported As Reported U.S./Int’l Mix Talent Base Price Services Sector 76%/24% ~55,000 93% 73%/27% ▪ Increasing portfolio mi
Slide 17: Recast consolidated financials
Recast consolidated financials $’s in millions PF Q1 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 20181 Critical Mission Solutions Backlog 6,641 7,174 7,148 7,130 7,130 7,158 7,285 8,393 8,460 8,460 8,473 9,135 Revenue 842 924 1,021 1,069 3,856 1,035 1,060
Slide 18: Recast consolidated financials
Recast consolidated financials $’s in millions Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 1 Backlog 18,910 19,262 19,840 19,955 19,955 20,335 20,713 22,404 22,569 22,569 22,671 23,291 Revenue 2,746 2,870 2,934 2,992 11,541 3,084 3,092 3,170 3,393
Slide 19: Other operational metrics from continuing operations
Other operational metrics from continuing operations $’s in thousands Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 FY 2019 Q1 2020 Q2 2020 Depreciation (pre-tax) 25,607 1 26,764 24,423 21,567 98,361 1 18,211 23,491 25,851 20,508 88,061 22,152 22,566 Amortization of Intangi
Slide 20: Non GAAP financial measures
Non GAAP financial measures Three Months Ended The following tables reconcile the U.S. GAAP values of March 27, 2020 net revenue, net earnings, EPS, operating profit and Effects of operating profit margin to the corresponding Restructuring, "adjusted" amounts. For the comparable periods Transaction
Slide 21: Non GAAP financial measures
Non GAAP financial measures The following tables reconcile the U.S. GAAP values of net revenue, net earnings, EPS, operating profit and operating profit margin to the corresponding "adjusted" amounts. For Three Months Ended the comparable periods presented below, such adjustments March 29, 2019 cons
Slide 22: Reconciliation of net earnings to adjusted EBITDA
Reconciliation of net earnings from continuing operations attributable to Jacobs to adjusted EBITDA Reconciliation of Net Earnings from Continuing Operations Attributable to Jacobs to Adjusted EBITDA Three Months Ended Three Months Ended 3/29/2019 3/27/2020 Adj Net earnings from Continuing Operation
Slide 23: Non-GAAP financial measures (cont'd)
Non-GAAP financial measures (cont’d) Net revenue is calculated excluding pass-through revenue of the Company’s People & Places Solutions segment from the Company’s revenue from continuing operations. Adjusted net earnings from continuing operations, adjusted EPS from continuing operations, adjusted