Kbr, Inc. · NYSE:KBR
Kbr — Q3 2018 Earnings Presentation
17 slides from Kbr's earnings presentation, Oct 30, 2018
Slide 1: 3Q 2018 Financial Results
3Q 2018 Financial Results October 30, 2018 Stuart Bradie – President and Chief Executive Officer Mark Sopp – Executive Vice President and Chief Financial Officer Alison Vasquez – Vice President, Investor Relations
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements regarding our plans, objectives, goals, strategies, future events, future financial performance and backlog information and other information that is not historical. When used in this presentation, the words “estimates,
Slide 3: Stuart Bradie, Chief Executive Officer
Stuart Bradie Chief Executive Officer
Slide 4: Zero Harm | Good Safety is Good Business
Zero Harm | Good Safety is Good Business Total Recordable Incident Rate (TRIR) Performance: 2012 – Q3 20181 0.50 0.43 0.42 0.40 0.36 0.30 0.35 0.28 0.32 0.31 0.24 0.24 0.22 0.18 0.20 0.21 0.21 0.19 0.19 0.18 0.16 0.16 0.10 0.14 0.00 2012 2013 2014 2015 2016 2017 Q3 2018 KBR is focused on an industry
Slide 5: Highlights | 3rd Quarter 2018
Highlights | 3rd Quarter 2018 $ in millions, except EPS Revenues Adjusted EBITDA1 Adjusted EBITDA1 Margin § Revenue, Adjusted EBITDA and $124 $1,278 Adjusted EPS growth fueled by 9.7% $1,034 8.3% industry leading organic growth and $86 strategic acquisitions - 59% growth in GS, 12% organic - 35% gro
Slide 6: Market Outlook
Market Outlook Proposals Submitted ($26 B)1 Tech, $1 § Healthy government spending budgets, both domestic and international GS, $13 Government § Increasing opportunities with best value selections Services § Bundling of procurements favor scale and broad capability § Growing demand for petrochemical
Slide 7: Ichthys LNG Project Status
Ichthys LNG Project Status Operations Temporary Complex Power Plant Combined Cycle Power Plant § All of the components of the LNG facility, except for Butane GTG GTG GTG GTG GTG Tank CCPP, are complete and turned over to the client 1 2 3 4 5 Offsites & Utilities Propane § First LNG produced in Octob
Slide 8: Mark Sopp, Chief Financial Officer
Mark Sopp Chief Financial Officer
Slide 9: Consolidated Results
Consolidated Results Quarter Ending ($ in millions, except EPS) Sep 30, 2017 Sep 30, 2018 § Strong Revenues and Adjusted EBITDA Revenues $ 1,034 $ 1,278 - Excellent GS and Technology organic growth Gross Profit $ 87 $ 122 - Full quarter of activity from SGT Equity in Earnings $ 23 $ 21 GP + EE* $ 11
Slide 10: KBR Segment Results | GS, Technology and HS
KBR Segment Results | GS, Technology and HS $100 $1,000 § Revenues of $928 million, up $346 million and 59% from Q32017 $50 $500 § Excellent organic and strategic acquisitive growth GS § Continued focus on and improvement of cash collections and DSO $0 $0 1Q17 2Q17 3Q17 4Q17 1Q18 2Q18 3Q18 $100 $100
Slide 11: Capital Allocation and Liquidity
Capital Allocation and Liquidity Quarter Ending Jun 30, 2018 Sep 30, 2018 Ending Cash Balance $ 519 $ 581 § Improved leverage ratios due to growing Gross Debt $ 1,078 $ 1,169 Adjusted EBITDA Net Debt $ 559 $ 588 § As planned, increase in debt attributable to 1 $ 319 $ 357 TTM Adjusted EBITDA investm
Slide 12: 2018 Full Year Guidance
2018 Full Year Guidance Previous Revised 2018 Guidance Guidance Diluted Earnings Per Share $1.88 - $1.98 $1.93 - $2.03 Adjustments: § Legacy Legal Fees ($0.06) § Acquisition & Integration Expenses ($0.05) § Amortization related to Aspire Acquisition ($0.07) § Aspire Gain on Consolidation (-$0.66) Ad
Slide 13: Final Thoughts
Final Thoughts § Excellent quarter – strong growth, execution and bookings § Strong earnings and cash flow momentum § Favorable tailwinds across Government Services, Technology and Hydrocarbons Services § Growing confidence in the restoration of LNG and downstream capital investment cycles § Healthy
Slide 14: Appendix
Appendix
Slide 15: Appendix: Backlog Trend
Appendix: Backlog Trend $ in millions $13,157 $13,495 $13,481 § Majority of KBR backlog is currently $1,601 $2,144 $1,898 Hydrocarbons Services associated with long-term, reimbursable, PFI $10,595 $10,324 $10,342 $10,570 $423 $509 $544 Technology and/or service contracts with a lower risk profile an
Slide 16: Non-GAAP Reconciliation: Adjusted EPS
Non-GAAP Reconciliation: Adjusted EPS Quarter Ending Sep 30, 2017 Sep 30, 2018 EPS (diluted) $ 0.32 $ 0.41 Add Back: Legacy legal fees $ 0.03 $ 0.01 Acquisition & integration related expenses $ 0.00 $ 0.01 Amortization related to aspire acquisition $ 0.00 $ 0.02 Aspire (gain) loss on consolidation $
Slide 17: Non-GAAP Reconciliation: Consolidated, Adjusted and TTM Adjusted EBITDA
Non-GAAP Reconciliation: Consolidated, Adjusted and TTM Adjusted EBITDA EBITDA is defined as earnings before interest income / expense, income taxes, other non-operating income / expense (including FX, excluding settlement), depreciation and amortization Quarter Ending Sept 30, 2018 TTM Adjusted EBI