Booz Allen Hamilton Holding Corporation · NYSE:BAH
Booz Allen Hamilton — Q2 FY2019 Earnings Presentation
27 slides from Booz Allen Hamilton's earnings presentation, Nov 7, 2018
Slide 1: Investor Presentation November 2018 Fiscal Year 2019 Second Quarter
Investor Presentation November 2018 Fiscal Year 2019 second Quarter Exhibit 99.1
Slide 2: Disclaimer: Forward Looking Safe Harbor Statement
DISCLAIMER Forward Looking Safe Harbor Statement Certain statements contained in this presentation and in related comments by our management include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Examples of forward-looking statements include
Slide 3: Booz Allen continues its 100+ year history as an industry leader
Booz Allen continues its 100+ year history as an industry leader Data as of 3/31/18 We bring bold thinking and a desire to be the best in our work in consulting, analytics, digital solutions, engineering, and cyber, focused on agencies ranging from defense to health, energy, and international develo
Slide 4: Booz Allen continues to execute on Vision 2020
Booz Allen continues to execute on Vision 2020, driving modern solutions in an ever changing mission environment 1914 1940 1949 1987 1992 1996 2001 2008 2010 2012 2013 2014 2015 2016 Founded by Edwin Booz in Chicago Received NASA space station contract (first contract over $100M) Supported GSA in ov
Slide 5: Capabilities: analytics, digital, engineering, cyber and other solutions
Focuses on delivering transformational solutions in the areas of decision analytics, automation, and data science, as well as new or emerging areas. Combines the power of modern systems development techniques and cloud platforms with machine learning to transform customer and mission experiences. De
Slide 6: Strategy: Vision 2020 reflects our ability to reinvent ourselves
Strategy Successful execution of Vision 2020 reflects our ability to reinvent ourselves Ability to Integrate We merge our consulting expertise with advanced technical capabilities and mission knowledge to create integrated capabilities We attribute our business and financial success to five key area
Slide 7: Diversified revenue base and contract portfolio minimizes volatility
Booz Allen’s diversified revenue base, resulting from a high-quality and diversified contract portfolio, minimizes volatility Delivered on 4,997 U.S. government contracts and task orders (1) Largest definite contract accounted for 2.2% of revenue 75% of revenue was derived from over 3,900 active tas
Slide 8: Broad customer base spanning U.S. Government, international and commercial
Booz Allen provides services to a broad customer base spanning the U.S. Government, international and commercial clients Commercial: Financial Services, Health and Life Sciences, Energy, Transportation International: Middle East, North Africa Region, and Select Asian Markets GLOBAL / COMMERCIAL (3.2
Slide 9: Large and growing addressable market provides ample opportunity
Booz Allen’s large and growing addressable market provides ample opportunity for continued growth… U.S. Office of Management and Budget. 2017 Budget U.S. Government Total Contracted Addressable Contracted + INTEL, COMMERCIAL & INTERNATIONAL U.S. GOVERNMENT 2018 DISCRETIONARY BUDGET (1) + INTEL CAGR
Slide 10: History of growing faster than the government budget and addressable market
…while our firm boasts a history of growing faster than the government budget and our overall addressable market Source: Federal Procurement Data Systems (FPDS) FY09 and FY10 discretionary government budget growth rates impacted by the American Reinvestment and Recovery Act (ARRA) Based on governmen
Slide 11: Sixth year of Vision 2020 growth strategy: the payoff period
Currently in its sixth year of implementation, we’re in the “payoff period” of our Vision 2020 growth strategy Key Elements Moving closer to the center of our clients’ core mission Increasing the technical content of our work Attracting and retaining superior talent in diverse areas of expertise Lev
Slide 12: Vision 2020 supports continued strong financial performance
As a result of Vision 2020, Booz Allen anticipates our strong financial performance will continue ACCELERATING ADJUSTED EBITDA, ADEPS GROWTH ORGANIC REVENUE GROWTH CONSISTENTLY ABOVE MARKET (1), (2), (3) Gov Services Industry includes Leidos, SAIC, ManTech, CACI, Engility, and CSRA (through Q3 FY18)
Slide 13: $17B in opportunities in pre-proposal; strong backlog growth
$17B in Opportunities in Pre-Proposal Strong backlog growth is also a direct result of superior planning, preparation and execution of the firms strategic initiatives FY13 backlog excludes backlog gained in the BES acquisition Pipeline data as of 3/31/2018 SOLID BACKLOG GROWTH PROVIDES STRONG REVENU
Slide 14: Track record of deploying capital to deliver shareholder value
Post-recession, Booz Allen has established a track record of deploying capital to deliver shareholder value TSR as of 10/30/2018 and assumes dividend reinvested – Capital Deployed as of FY’18 Capital deployed since IPO(1): ~$2.9B ($B) Capital deployed and TSR Performance SINCE IPO TSR Since IPO : 54
Slide 15: Investment Thesis
UNIQUE MARKET POSITION Investment Thesis 50% ADEPS Growth (+~2% Dividend Yield) OPTION VALUE STRONG FINANCIAL RETURNS = + ~$2 3-year goals: ADEPS ADEPS 6–9% 10–30 bps ~$1.4B Annual Revenue Growth Margin Expansion Capital Deployment, Incl Dividends ~$3 FY18 FY21
Slide 16: Quarterly performance: Q2 FY19
Quarterly performance: Q2 FY19
Slide 17: Q2 FY19 Performance: Aligned with Investment Thesis
Q2 FY19 Performance: Aligned with Investment Thesis Investments in innovation, talent, and capabilities position us to help clients adopt current and new technologies First mover advantage enhanced by our ability to combine mission knowledge, consulting heritage and technical depth Creating value fo
Slide 18: Key Financial Results: Second Quarter Fiscal Year 2019
Key Financial Results SECOND QUARTER FISCAL YEAR 2019 PRELIMINARY RESULTS Comparisons are to prior fiscal period SECOND QUARTER (1) FIRST HALF (1) Revenue $1.6 billion 4.6% Increase $3.3 billion 6.4% Increase Revenue, Excluding Billable Expenses $1.1 billion 7.2% Increase $2.3 billion 8.2% Increase
Slide 19: Capital Allocation
Capital Allocation DELIVERING STRONG CAPITAL RETURNS THROUGH EFFICIENT CAPITAL DEPLOYMENT STRATEGY Our FY19 and multi-year capital deployment plans remain on track Aim to deploy $350 million this year, subject to market conditions Aim to deploy $1.4 billion over the next three years Returned $68 mil
Slide 20: Goal of 10-30 bps adjusted EBITDA margin improvement
Goal of 10-30 bps adjusted EBITDA margin improvement over 3 years Margin levers Mix shift—commercial, international Fixed-price technology work Emerging businesses Operating scale Potential Limits on Margin expansion Growth in defense and intelligence work – typically higher proportion of cost-plus
Slide 21: Appendix
appendix
Slide 22: Non-GAAP Financial Information
Non-GAAP Financial Information "Revenue, Excluding Billable Expenses" represents revenue less billable expenses. We use Revenue, Excluding Billable Expenses because it provides management useful information about the Company's operating performance by excluding the impact of costs that are not indic
Slide 23: Non-GAAP reconciliation footnotes
(a) Reflects debt refinancing costs incurred in connection with the refinancing transaction consummated on July 23, 2018. (b) Reflects the combination of Interest expense and Other income (expense), net from the condensed consolidated statement of operations. (c) Reflects the adjustment made to the
Slide 24: Non-GAAP Financial Information
Non-GAAP Financial Information (a) a The use and definition of Non-GAAP financial measurements can be found in the company's public filings b Reflects stock-based compensation expense for options for Class A Common Stock and restricted shares, in each case, issued in connection with the acquisition
Slide 25: Financial Results – Key Drivers
Financial Results – Key Drivers Second Quarter Fiscal 2019 – Below is a summary of the key factors driving results for the fiscal 2019 second quarter ended September 30, 2018 as compared to the prior year: Revenue increased by 4.6% to $1.6 billion driven primarily by continued strength in client dem
Slide 26: Shareholder and Stock Information
Shareholder and Stock Information Transfer Agent & Registrar Computershare www.computershare.com/investor/ P.O. Box 30170 College Station, TX 77842-3170 Phone: 866-390-3908 Computershare maintains records for registered stockholders and provides stockholder services at no charge, including: Independ
Slide 27: Shareholder and Stock Information: Contact Information
Shareholder and Stock Information Website: investors.boozallen.com Contact Information Investor Relations Nicholas Veasey Director of Investor Relations 703/377-5332 Veasey_Nicholas@bah.com Media James Fisher Principal, Media Relations 703/377-7595 Fisher_James_W@bah.com Corporate Governance Nancy L
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