Kbr, Inc. · NYSE:KBR
Kbr — Investor Day (June 2020)
46 slides from Kbr's investor day presentation, Jun 16, 2020
Slide 1: Key Takeaways: Platform for Growth Opportunity
Key Platform for Investment Takeaways Growth Opportunity
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: Sustainability themes
RECYCLE/ HEALTH SAFETY REUSE & SECURITY EFFICIENT HUMAN RIGHTS ENERGY SUSTAINABLE INCLUSION TRAVEL DIVERSITY SUPPLY COMMUNITY PARTNERS ENGAGEMENT CLIMATE RISK CHANGE MANAGEMENT
Slide 4: Advancing climate change research globally
Slide 5: Key Takeaways: predominantly a government solutions company
KBR is predominantly a government solutions company and the announcement today pertaining to E&C risk coming off the table reinforces this fact! Key Myth buster – KBR is a high-end solutions provider with access Takeaways to multiple customers and balanced funding sources. Multiple funding sources –
Slide 6: Key Takeaways: predominantly a government solutions company
KBR is predominantly a government solutions company and the announcement today pertaining to E&C risk coming off the table reinforces this fact! Key Myth buster – KBR is a high-end solutions provider with access Takeaways to multiple customers and balanced funding sources. Multiple funding sources –
Slide 7: KBR Government Solutions: A Day in the Life
Slide 8: Overview of GS - Who We Are
Overview of GS - Who We Are Byron Bright President, Government Solutions — U.S.
Slide 9: 200+ global locations, 18,000 employees
200+ global locations 18,000 Overview of GS - employees Who We Are
Slide 10: Our Customers
w International Governments U.S. National Security Agencies Other U.S. Federal Civilian Agencies U.S. Department of Defense & Our Customers
Slide 11: Our Customers: 2019 Revenue Profile
Other International 6% U.K. MoD U.S. Army 16% 29% 2019 Revenue Profile 23% 12% NASA and Fed Civ U.S. Navy 6% 8% U.S. Air Force Other U.S. DoD Our Customers
Slide 12: KBR — A Compelling Investment Opportunity
KBR — A Compelling Investment Opportunity
Slide 13: Broad range of contracts and significant book of business
Broad Range of contracts and significant Suite of IDIQ task order vehicles gives us agility to respond to customers Diverse revenue base highlighted by Global Franchise positions with marquee customers Solid Book of Business provides stability to pursue large strategic opportunities Experienced Mana
Slide 14: Diverse set of capabilities aligned to customers' priorities
KBR maintains a diverse ex) set of capabilities aligned [RN =) 7 i iti US Dept of International Civilian to customers’ priorities Defense | Governments Agencies Systems Engineering & Integrations Hardware & Software Development Test & Evaluation Lifecycle Engineering & Sustainment Digital Engineerin
Slide 15: Customer Markets
U.S. National Security Agencies Other U.S. Federal Civilian Agencies International Governments U.S. Department of Defense Customer Markets &
Slide 16: Stable, growing budgetary environments
Stable, growing budgetary environments
Slide 17: External national priorities ensure strong market spending
Cyber: Threats q Health & Human.” Performance -— : st al + Sp ry , LOK? External National Priorities Ensure strong market spending Gar
Slide 18: Platform for Growth
Alignment of current customers and capabilities built on strong book of business Adds new customers, new PLATFORM Increase programs, and new capabilities FOR GROWTH market share • Stellar Current Performance / Trust • Progressive Engagement • Commercially-Focused Sales Team • Task Order Center of Ex
Slide 19: Alignment of current customers and capabilities
CORE CAPABILITIES MAJOR CUSTOMERS Engineering Scientific Operational Services Research Support International Other U.S. Federal U.S. National Governments Civilian Agencies Security Agencies Program Information Management Operations Alignment of NASA U.S. Department current customers Of Defense and c
Slide 20: Increase market share: $1+ Billion program takeaways
• Takeaways • Contractor-initiated proposals • On-contract growth • Sole source extensions • Advantaged recompetes Increase market share $1+ Billion Program takeaways in 2019
Slide 21: Suite of IDIQ vehicles targeting specific customers
24 different IDIQ contracts, such as: • DTIC IAC-MAC Suite of IDIQ • GSA OASIS vehicles targeting • Army RS3 specific customers, • Army AMCOM Express • National Institute technologies and of Health CIO-SP3 capabilities • UK DIO NTSP Framework
Slide 22: Leverages synergies, shared past performance, and industry expertise
Leverages synergies, shared past performance, and industry expertise into larger strategic pursuits
Slide 23: Adds new customers, new programs, and new capabilities
NEW CUSTOMERS • Missile Defense Agency • Intelligence Agencies • Army Human Performance • U.S. National Cyber Range Complex • European Space Agency • Saudi Defence and Critical Infrastructure NEW CAPABILITIES • Space Systems and Structures • Deep Space Advanced Radars 65%+ Adds new • Cloud Computing
Slide 24: Platform for Growth
Alignment of current customers and capabilities built on strong book of business Adds new customers, new PLATFORM Increase programs, and new capabilities FOR GROWTH market share • Stellar Current Performance / Trust • Progressive Engagement • Commercially-Focused Sales Team • Task Order Center of Ex
Slide 25: KBR — A Compelling Investment Opportunity
KBR — A Compelling Investment Opportunity
Slide 26: Business Leaders Roundtable
Business Leaders Roundtable Leveraging Technology Enabled Solutions for Customer Success
Slide 27: KBR Government Solutions
KBR Government Solutions Business Description a KBR Government Solutions ensures mission success for customers globally with capabilities supporting defense, space, aviation, and other government programs and missions. KBR if} Q >90% Government Solutions creates value and drives innovation by combin
Slide 28: KBR Government Solutions: Engineering
KBR GOVERNMENT SOLUTIONS Engineering Business Description The Engineering Business Unit (EBU) provides full spectrum engineering and technical solutions across the life cycle of DoD military systems on land, at sea, in the air and in space. Areas of expertise include acquisition, systems engineering
Slide 29: KBR Government Solutions: Asia-Pacific Region
KBR GOVERNMENT SOLUTIONS Asia-Pacific Region (APac) Key Factors Business Description An international business delivering program and technical solutions to ii 5 government, military and defense organizations across the full program life cycle of 76% defense equipment, systems and capabilities. APAC
Slide 30: KBR Government Solutions: EMEA
KBR GOVERNMENT SOLUTIONS Europe, Middle East and Africa (EMEA) Key Factors Business Description Operating primarily in the United Kingdom (U.K.) and the Middle East, EMEA provides si technology-enabled solutions across the defense, nuclear, space and critical national (i 90% infrastructure spectrum.
Slide 31: KBR Government Solutions: Logistics
KBR GOVERNMENT SOLUTIONS. Logistics Business Description The Logistics Business Unit (LBU) delivers technical, professional solutions across multiple customers within the Department of Defense and commercial entities throughout the life cycle of critical facilities and equipment with diverse and rec
Slide 32: KBR Government Solutions: Space & Mission Solutions
KBR GOVERNMENT SOLUTIONS. Space & Mission Solutions Key Factors Business Description The Space & Mission Solutions (SMS) business unit has worked with every U.S. astronaut if} 9 98% since 1968, providing solutions for astronaut training and health, mission ond satelite operations, human spaceflight
Slide 33: KBR — A Compelling Investment Opportunity
KBR — A Compelling Investment Opportunity
Slide 34: KBR — A Compelling Investment Opportunity
KBR — A Compelling Investment Opportunity
Slide 35: Building a $4B+ Diversified & Sustainable Platform
Building a $4B+ Diversified & Sustainable Platform 4,500 3,500 13% 2,500 AVERAGE ORGANIC REVENUE GROWTH IN 2018 AND 2019; 1,500 OR $740 MILLION 500 2015 2016 2017 2018 2019 Space & Mission Solutions Engineering International Sustainment Logistics Contingency Logistics
Slide 36: Building a $4B+ Diversified & Sustainable Platform
Building a $4B+ Diversified & Sustainable Platform 4,500 600 3,500 ~10% 500 ~$400 2019 GS ADJUSTED ~$400 Million million 2019 13% 2,500 EBITDA MARGIN EBITDA AVERAGE ORGANIC 300 Adjusted EBITDA ($MM) REVENUE GROWTH IN 2018 AND 2019; 1,500 OR $740 MILLION 200 Revenue ($MM) 500 100 2015 2016 2017 2018
Slide 37: Extended Runway and Contract Tenor
E x t e n d e d R u n w a y a n d C o n t r a c t Te n o r LOGCAP V 2030 1 Djibouti Base Ops Aspire Defense Service 2041 ~50%+ 2020 EBITDA Affinity Flying Training Services 2034 FROM TOP 10 PROGRAMS Aspire Capital Works IAC-MAC, DSTAT, CSTAT Special Ops Health & Human Perf 10 Years WEIGHTED AVERAGE
Slide 38: Strong Visibility in our Book of Business
S t r o n g Vi s i b i l i t y i n o u r B o o k o f B u s i n e s s 6-10% Revenue CAGR FY18-FY22 LT Target ~80%+ WORK IN BACKLOG, OPTIONS AND RECOMPETES 23% 28% THROUGH 2024 19% 9% 14% 3% 11% 19% 21% 21% 95%+ 88% RECOMPETE 75% 62% 56% 51% WIN RATE IN 2018 AND 2019 2020 2021 2022 2023 2024 Backlog &
Slide 39: Favorable Portfolio Mix Delivers Healthy Margins
Favorable Portfolio Mix Delivers Healthy Margins In Control Adjusted EBITDA Margins 12% Prime 94% 10% Subcontractor Upper Single % 8% Long-Term Target Truly Global 6% 22% International 4% Domestic 2% Balanced 0% 2018 2019 2020 2021 2022 Performance 39% Mix Domestic International Non-recurring Items
Slide 40: Cash Flow Machine
Cash Flow Machine 450 120% 400 350 167% 122% 104% $1.3B 300 GS FREE CASH 250 CONTRIBUTION 2017-2020E 200 150 100 50 - 1 2 2017 2018 2019 2020E GS Segment Income GS Segment Op Cash Flow GS CapEx Notes: 1) 2018 Segment Income excludes Aspire Gain on Consolidation 2) 2020E Segment OCF excludes the impa
Slide 41: KBR Delivers Top Tier Financial Performance
K B R D e l i v e r s To p Ti e r F i n a n c i a l P e r f o r m a n c e 12% Leidos Booz | Allen | Hamilton 10% CACI ManTech Parsons SAIC KBR Gov’t Fed IT Svc Adj EBITDA Margin (%) 8% Solutions Peers FY 2019 Revenue Growth 14% 13% PAE Organic Growth 9% 6% 6% Adj EBITDA % 10% 8% Adj EBITDA less CAPE
Slide 42: Compelling Investment Opportunity
Compelling Investment Opportunity EV/2020E EBITDA 16.2x 15.4x 15.4x 14.5x 13.6x 13.0x Peer Average 11.2x 9.9x 8.7x 7.5x KBR BAH LDOS MANT CACI PSN SAIC VEC PAE Source: FactSet as of May 31, 2020 and KBR analysis
Slide 43: KBR — A Compelling Investment Opportunity
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Slide 44: Q&A
Slide 45: Key Takeaways: predominantly a government solutions company
KBR is predominantly a government solutions company and the announcement today pertaining to E&C risk coming off the table reinforces this fact! Key Myth buster – KBR is a high-end solutions provider with access Takeaways to multiple customers and balanced funding sources. Multiple funding sources –
Slide 46: Non-GAAP Recon: FY 2015-2019 GS Adjusted EBITDA
Non-GAAP Recon: FY 2015-2019 GS Adjusted EBITDA FY15 FY16 FY17 FY18 FY19 Net Income Attributable To Government Solutions $ 31 $ 148 $ 168 $ 379 $ 335 Add Back: Interest expense 5 4 4 3 2 Provision for income taxes 0 0 0 0 0 Other non-operating income (2) (2) 0 (2) (5) Depreciation & amortization 6 1