Babcock & Wilcox Enterprises, Inc. · NYSE:BW
Babcock & Wilcox Enterprises — Investor Presentation (July 2015)
25 slides from Babcock & Wilcox Enterprises's investor presentation, July 2015
Slide 1: Company Overview
Company Overview July 2015 © Babcock & Wilcox Enterprises, Inc. All rights reserved. 1
Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-looking statements. Babcock & Wilcox Enterprises, Inc. (“B&W”) cautions that this presentation contains forward-looking statements, including, without limitation, statements relating to backlog, to the extent it may be viewed as an indicator of future revenues; manageme
Slide 3: Company Profile
Company Profile • Global leader in energy and environmental technologies and services for the power and industrial markets Headquarters: Charlotte, NC • Installed electricity generation capacity of more than 300,000 MW Incorporation: Delaware in more than 90 countries Ownership: Public (NYSE:BW) • A
Slide 4: Business Model Delivers Maximum Customer Value
Business Model Delivers Maximum Customer Value B&W engineers custom solutions that are difficult to replicate and are fundamental to reliable operations and regulatory compliance Manufacturing Complex Strategic Project Customer Custom Engineering Management Sourcing Technology Relationship and Desig
Slide 5: Consolidated Revenue Overview
Consolidated Revenue Overview 2015E B&W Revenue Breakdown Other Asia 7% Other 9% 21% Coal Europe North Renewables 55% 19% America 18% 65% Gas 6% Aftermarket coal will be a solid base for the business while our strategy drives growth and diversification © Babcock & Wilcox Enterprises, Inc. All rights
Slide 6: Business Segments Align with Growth Strategy
Business Segments Align with Growth Strategy Global Services Optimize Traditional • Parts and technical services Business to Align • Service projects with Changing • Construction services • Operations and maintenance Markets Global Power Pursue Growth • Utility steam generation Opportunities in • Re
Slide 7: Global Services Overview
Global Services Overview 2014 Revenue by Segment • Aftermarket products and services for steam generating equipment and associated 69% environmental and auxiliary equipment Service Construction U.S. Projects Services • Servicing B&W installed electricity generation 31% 27% capacity of approximately
Slide 8: Market Opportunity
Market Opportunity 2014 Total Revenue Breakdown 2014 Non-Coal Revenue Breakdown Renewable 53% Natural • Biomass International Gas • Waste to Energy Non-Coal 15% U.S. General Industry 30% General Coal Renewable • Petrochemical, 55% Industry Refinery 27% Intl. Coal 58% • Pulp & Paper 47% • Manufacturi
Slide 9: Ongoing Rationalization of Operations
Ongoing Rationalization of Operations Cambridge, B&W Foundry Melville, Diamond Power Ongoing Pipeline Ontario (Barberton, OH) Saskatchewan Restructuring of Initiatives Ceased fossil Operations closed in Plant mothballed upon Integration of parts B&W continues to work operations in 2014 June 2015 com
Slide 10: Global Power Overview
Global Power Overview 2014 Revenue by Segment • Steam generating systems for fossil fuels and renewable energy conversion for power generation and industrial uses 57% U.S. • Environmental solutions include New Build Environmental emissions control products and 36% related equipment $471.9M • Complex
Slide 11: Market Opportunity
Market Opportunity Select Fuels Generating Capacity (GWe) by Region 3,000 Coal Natural Gas Renewables 2,000 1,000 0 2014 2025 2014 2025 2014 2025 2014 2025 NorthNorth America EMEA CtlCentral & So America / South Asia Pacific EMEA Asia Pacific America America Source: IHS Energy Scenarios (Rivalry), J
Slide 12: Recent Project Awards Demonstrate Global Expansion is Underway
Recent Project Awards Demonstrate Global Expansion is Underway Emissions Control Project in Colorado March 2015 – $40.3M Biomass Power Plant in England March 2015 – >$220M Biomass Power Plant in Wales January 2015 – >$200M Supercritical Coal-Fire Boiler and SCR System in Vietnam January 2015 Waste-t
Slide 13: Industrial Environmental Overview
Industrial Environmental Overview 2014 Revenue by Segment(1) • B&W acquired MEGTEC Holdings, Inc. on June 20, 2014 • 40+ year history with ~600 employees across 13 offices globally 53% • Asset-light flexible manufacturing platform U.S. Aftermarket • Significantly expanded B&W’s industrial environmen
Slide 14: Market Opportunity
Market Opportunity • Industrial environmental business provides engineered solutions to a wide range of problems and processes in diverse and naturally growing end markets 5% projected annual market growth • Broad customer base includes ~3,100 businesses stretching across six continents and over 60
Slide 15: Strategy to Perform Operationally and Grow via Acquisition
Strategy to Perform Operationally and Grow via Acquisition • MEGTEC acquisition is highly Key Acquisition Criteria complementary to B&W’s core • Alignment with core competencies competencies • Synergistic value • Long-term growth platform • History of acquisitions and • Diversification or internatio
Slide 16: Segment Profitability Characteristics
Segment Profitability Characteristics Segment Revenue $3,000 $2,500 • Flat revenue $2,000 Global • Mix impacts average margin $186 Services Millions $105 $1,500 $603 $781 $712 $508 • Top priority is driving margin $603 $472 $1,000 $500 $822 $939 $1,005 $1,055 $909 $987 $0 2010 2011 2012 2013 2014 LT
Slide 17: Summary Historical Financial Information
Summary Historical Financial Information Second Second Year-to- Year-to- $ in millions, Quarter Quarter Date Date except per share amounts 2015 2014 6/30/15 6/30/14 Revenues $437.5 $327.4 $834.6 $639.5 GAAP Operating Income 4.9 3.2 22.2 7.7 Adjusted Operating Income(1) 21.4 12.5 42.4 19.8 GAAP Earni
Slide 18: FY 2015 Guidance
FY 2015 Guidance Revenues of • Represents 15% year-over-year growth approximately • Combination of core growth and the full-year impact $1.7B of MEGTEC acquisition • Excludes any mark-to-market adjustment for pension and post-retirement benefits, spin-related transaction costs and Adjusted restructu
Slide 19: Investment Highlights
Investment Highlights Strong Foundation Significant Earnings Upside Great Brand Associated with Quality, Three-Pronged Growth Strategy Reliable Delivery and Innovation Aligned with Businesses Customer and Strategic Technology Leader in Partner Relationships Global Power Generation Established Platfo
Slide 20: Appendix
Appendix © Babcock & Wilcox Enterprises, Inc. All rights reserved. 20
Slide 21: Skilled Management Team
Skilled Management Team Chairman and Chief Executive Officer Finance Jim Ferland Jenny Apker Senior Vice President & Chief Financial Officer Global Services Global Power Industrial Division Division Environmental Division Mark Low Paul Scavuzzo Ken Zak Senior Vice President Senior Vice President Sen
Slide 22: Experienced Board of Directors
Experienced Board of Directors Thomas A. Christopher Former Vice Chairman of AREVA, Mr. Christopher also served as its President and CEO from 2000 to 2009. Before that, he held a number of positions at Westinghouse, including Vice President and General Manager, Westinghouse Power Services. Cynthia S
Slide 23: Reconciliation of Adjusted, Non-GAAP Items
Reconciliation of Adjusted, Non-GAAP Items $ in millions, except per share amounts Three Months Ended June 30, 2015 NE Sgmt GAAP Impairments Restructuring Allocation Spin Costs Non-GAAP Operating Income (Loss) $ 4.9 $ 9.0 $ 5.3 $ 1.3 $ 0.9 $ 21.4 Other Income / (Expense) 0.2 - - - - 0.2 Income Tax (
Slide 24: Reconciliation of Adjusted, Non-GAAP Items
Reconciliation of Adjusted, Non-GAAP Items $ in millions, except per share amounts Six Months Ended June 30, 2015 NE Sgmt GAAP Impairments Restructuring Allocation Spin Costs Non-GAAP Operating Income (Loss) $ 22.2 $ 9.0 $ 7.7 $ 2.7 $ 0.9 $ 42.4 Other Income / (Expense) (0.1) - - - - (0.1) Income Ta
Slide 25: © Babcock & Wilcox Enterprises, Inc. All rights reserved.
© Babcock & Wilcox Enterprises, Inc. All rights reserved. 25
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