Babcock & Wilcox Enterprises, Inc. · NYSE:BW
Babcock & Wilcox Enterprises — Q4 2017 Earnings Presentation
25 slides from Babcock & Wilcox Enterprises's earnings presentation, March 2018
Slide 1: Babcock & Wilcox Enterprises, Inc. Company Overview
Babcock & Wilcox Enterprises, Inc. Company Overview March 2018
Slide 2: Safe Harbor Statement
Safe Harbor Statement B&W cautions that this presentation contains forward-looking statements, including, without limitation, statements relating to our strategic objectives; our business execution model; management’s expectations regarding the industries in which we operate; our guidance and foreca
Slide 3: Company Profile
Company Profile B&W is a global leader in providing custom technologies, engineered solutions, and aftermarket services to a broad range of industrial and power generation markets Headquarters: Charlotte, NC Business model delivers shareholder Founded: 1867 value by driving maximum value for Ownersh
Slide 4: Markets We Serve
Markets We Serve • Traditional Power Generation • Natural Gas Power Generation • Renewable Power Generation • Oil and Petrochemical • Natural Gas Midstream • Pulp and Paper, Wood Products • Mining and Metals • Iron and Steel • Food Processing and Agriculture • Coatings and Flexible Packaging • Lithi
Slide 5: Business Segment & Strategic Overview
Business Segment & Strategic Overview % Revenue from Strategic Estimated Aftermarket Key End Product and Focus 2018 Revenue Parts and Markets Service Offering Services* Utility steam Optimize Our Legacy generation equipment, 81% Utility industrial boilers, Power ~$800M (includes Retrofit) Business a
Slide 6: Power Segment
Power Segment Other Industrial 30% US Majority of revenue generated by aftermarket parts and services for steam Coal Non-US 51% generating, environmental and auxiliary equipment for power generation Coal 19% and other large industrial applications Services B&W-installed electricity generation ca
Slide 7: Product & Service Offerings and Key Market Drivers
Product & Service Offerings and Key Market Drivers Over 80% of segment revenue tied to existing installed base Global Parts and Field New Build Utility Industrial Steam Retrofits Engineering Services and Environmental Generation Natural-gas fired package boilers, industrial boilers DESCRIPTION DESCR
Slide 8: Renewable Segment
Renewable Segment Supplies steam-generating systems, environmental and auxiliary equipment O&M 19% WtE and provides operations and maintenance support for waste-to-energy and 51% biomass power generation applications Biomass Product offering meets renewable power standards and allows customers t
Slide 9: Renewable New-Build Execution Model
Renewable New-Build Execution Model Illustrative Renewable New-Build Project: Breakdown of Major Work Packages New Model focuses Focus on Core B&W Scope primarily on Core EPC Partner executes Balance of B&W Scope Plant and Civil Scope improves overall risk and margin profile Reduces revenue Core
Slide 10: Dynagrate Pivoting Combustion Grate
Dynagrate® Pivoting Combustion Grate A Market Leader with Differentiating Technology in Waste-to-Energy Solutions Large installed base with diverse set of customers Grate design allows for high availability and long operational time, leading to reduced O&M cost High thermal efficiency and low emissi
Slide 11: Renewable Projects Update
Renewable Projects Update Target Construction Turnover of Project 1 and Project 3 Percent Complete at End of Q4 2017 expected in first half 2018 Completion Date Construction Project 1 Complete Project 2 and Project 4 in start-up commissioning phases Project 2 Mid-2018 Construction on all U.K.
Slide 12: Industrial Segment
Industrial Segment After- market Cooling Services 27% Systems 32% Custom-engineered environmental and cooling equipment, other Environmental engineered equipment (i.e. drying and coating), and related aftermarket and Engineered Equipment services 41% Focused on organic growth, cross selling oppo
Slide 13: Industrial Segment Business Lines & Key Market Drivers
Industrial Segment Business Lines & Key Market Drivers DESCRIPTION DRIVERS KEY MARKETS Designs, engineers, and manufactures General Industrial environmental Industrial capacity (3,100 customers in MEGTEC equipment and coating & expansion, environmental 60+ countries), drying equipment and regulation
Slide 14: Financial Information
Financial Information © 2018 Babcock & Wilcox Enterprises, Inc. All rights reserved. Proprietary and Confidential 14
Slide 15: Q4 Segment Financial Results Summary
Q4 Segment Financial Results Summary Segment Revenue and Gross Profit $ in Millions Power Renewable Industrial $219.6 Revenue $208.8 $85.0 $106.3 $116.1 $55.6 Q4 2016 Q4 2017 Q4 2016 Q4 2017 Q4 2016 Q4 2017 Gross Profit $62.6 $59.3 ($28.1) $17.2 $7.1 ($82.6) Q4 2016 Q4 2017 Q4 2016 Q4 2017 Q4 2016 Q
Slide 16: Bookings & Backlog
Bookings & Backlog Bookings Backlog $2.2B $317M $310M $2.1B $2.0B $2.0B $1.9B $266M $262M $255M $257M $1.7B Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q3 2016 Q4 2016 Q1 2017 Q2 2017 Q3 2017 Q4 2017 Power Renewable Industrial Power Renewable Industrial Solid bookings in power driven by retrof
Slide 17: FY 2018 Guidance
FY 2018 Guidance Consolidated: • Revenue: $1.5 billion – $1.7 billion • EBITDA (1): $75 million – $95 million Segments: Power: full year revenue down 5% to flat compared to 2017; gross margin (2) approximately 20% Renewable: full year revenue up 5% to 10% compared to 2017; gross margin(2) greate
Slide 18: Reconciliation of Adjusted EBITDA Guidance
Reconciliation of Adjusted EBITDA Guidance Management has provided full year adjusted EBITDA guidance of $75 million to $95 million. It is not possible for management to identify the amount or significance of future adjustments associated with potential mark to market adjustments to our pension and
Slide 19: Investment Highlights
Investment Highlights Strong Foundation Significant Earnings Upside Great Brand Associated with Quality, Reliable Delivery and Innovation Long-term Growth Strategy Aligned with Businesses Customer and Strategic Partner Relationships Established Platform in Industrial Environmental and Cooling System
Slide 20: Appendix
Appendix © 2018 Babcock & Wilcox Enterprises, Inc. All rights reserved. Proprietary and Confidential 20
Slide 21: Skilled Management Team
Skilled Management Team President and Chief Executive Officer Leslie Kass Finance Jenny Apker Senior Vice President & Chief Financial Officer Power Renewable Industrial Mark Carano Mark Low Jimmy Morgan Senior Vice President Senior Vice President Senior Vice President Industrial and Corporate Develo
Slide 22: Pension Accounting Change
Pension Accounting Change In 2018, we will adopt FASB ASU 2017-07, Pension & other postretirement benefit costs (benefits), Consolidated under which the non-service cost Year ended December 31, Current Future components of net periodic benefit cost will (in thousands) 2015 2016 2017 Classification
Slide 23: Reconciliation of Adjusted EBITDA
Reconciliation of Adjusted EBITDA* $ in millions Three Months Ended Twelve Months Ended December 31, December 31, 2017 2016 2017 2016 Net Income - GAAP ($107.5) ($71.6) ($379.8) ($115.7) Income tax expense (benefit) 72.5 7.7 64.9 6.9 Interest expense, net 10.6 2.5 25.7 3.0 Depreciation and amortizat
Slide 24: Reconciliation of Adjusted, Non-GAAP Results
Reconciliation of Adjusted, Non-GAAP Results $ in millions, except per share amounts Three Months Ended December 31, 2017 Restructuring Revaluation of Non-GAAP and spin-off Acquisition and Pension & Financial deferred tax excluding transaction integration OPEB MTM advisory assets and Intangible inta
Slide 25: Reconciliation of Adjusted, Non-GAAP Results
Reconciliation of Adjusted, Non-GAAP Results $ in millions, except per share amounts Year Ended December 31, 2017 Restructuring Revaluation of Non-GAAP Impairment of and spin-off Acquisition and Pension & Financial deferred tax excluding equity method transaction integration OPEB MTM advisory Goodwi
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