Slide 1: Fiscal 2nd Quarter Earnings Conference Call
Fiscal 2nd Quarter Earnings Conference Call May 7, 2019 1
Slide 2: Forward-Looking Statement Disclaimer
Forward-Looking Statement Disclaimer Certain statements contained in this presentation constitute forward-looking statements as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and such statements are i
Slide 3: Today's Agenda
Today’s Agenda Business Review ▪ ATN Leadership Transition ▪ Progressing our Culture ▪ Q2 FY19 Highlights ▪ Line of Business Review Financials Review ▪ Q2 FY19 Results ▪ M&A Cost and Synergy Update ▪ Balance Sheet Outlook and Summary 3 NASA, Lunar Gateway Early Design Concept
Slide 4: ATN Leadership Transition
ATN Leadership Transition Terry Hagen transitioning to retirement in 2020 ▪ Over 30 years of exceptional leadership at Jacobs ▪ Developed strong bench of ATN leaders ▪ Terry to lead KeyW Integration process Dawne Hickton to lead ATN effective June 3rd ▪ Former Vice Chair and CEO of RTI International
Slide 5: Executing against our Strategy
Executing against our Strategy Continued Strong Fiscal Year 2019 Momentum life science space frontier ▪ Revenue growth of 8% year-over-year; net revenue up 9% ▪ Double-digit adj. operating profit growth; adj. EPS of $1.191 up 37% Transforming Portfolio For Profitable Growth ▪ Aligning portfolio to s
Slide 6: Be the Employer of Choice
Be the Employer of Choice Attract, retain and develop the world’s best talent • Inspirational leadership and clarity of strategy • Employee empowerment through inclusion and diversity INNOVATION • Innovative and entrepreneurial opportunities Our Connective • PlanBeyond℠ sustainability strategy Found
Slide 7: Investing in Solutions for Critical Global Challenges and Opportunities
Investing in Solutions for Critical Global Challenges and Opportunities Solutions enabled by digital capability, informed by domain expertise Applied Automated Internet Predictive Cybersecurity Geospatial Science Design of Things Analytics Reduce Extend life cycle of Less Enhance Data Privacy operat
Slide 8: KeyW Recap: A Compelling Strategic Fit
KeyW Recap: A Compelling Strategic Fit Enhanced Value Next-Gen ISR Financial Strength, Leadership in High-Growth, Quick Reaction Capabilities and Technology + Resources and Client Access High-Margin Multi-Billion $ Space-Intelligence Sector Mission IT and Enterprise IT and Highly Full Spectrum IT Ca
Slide 9: Aerospace, Technology and Nuclear (ATN)
Aerospace, Technology and Nuclear (ATN) ATN Snapshot TTM Revenue by Customer Focus on High-Priority Federal Programs ▪ Long-term, mission critical, enterprise contracts U.S./International 87% / 13% ▪ Robust pipeline of over $30B through 2021 Government ~85% Civil Defense Reimbursable and Lower Intel
Slide 10: Buildings, Infrastructure and Advanced Facilities (BIAF)
Buildings, Infrastructure and Advanced Facilities (BIAF) BIAF Snapshot TTM Gross Revenue by Sector Aligned To Secular Growth Trends U.S./International 61% / 39% 20% 27% ▪ Sustainability and resiliency – multi-decade opportunity Public / Private Sector 53% / 47% ▪ Favorable Electronics and Life Scien
Slide 11: Fiscal Q2 2019 Results
Fiscal Q2 2019 Results Double-Digit Year-Over-Year Operating Profit Growth Revenue increased 8% y/y and Net Revenue increased 9% y/y Adj. Gross Margin (to Net Revenue) 24.9% vs 26.0% in Q2 2018 GAAP Operating Profit of $103M and Operating Profit Margin of 3.3% Net Adj. Operating Profit Margin 9.0% v
Slide 12: Segment Financials
Segment Financials Continued Strong Operating Margin Expansion $’s in millions Comparable Basis Q2 20182 Q2 2019 ATN Operating Profit 58, 74 as a % of revenue 6.2% 7.0% BIAF Operating Profit 159 173 as a % of net revenue 11.9% 12.3% Adjusted Unallocated Corporate Costs1 (42) (25) Adjusted Operating
Slide 13: M&A Cost Update
M&A Cost Update M&A Cost Synergies On Track CH2M Cost Synergies Continue to Surpass Original Estimates ▪ Achieved over 90% of targeted $175M run-rate savings at end of Q2 ▪ Excluding ECR, expect to reach $175M in run rate synergies exiting FY19 ▪ Total cost to achieve synergies remains $265M after s
Slide 14: Balance Sheet
Balance Sheet ECR Sale Improves Pro Forma Financial Flexibility Maintained Healthy Balance Sheet ▪ Q2 cash and equivalents of $0.9B and gross debt of $2.8B Reported Net Cash Net Cash ▪ Ending Q2 with $1.4B of liquidity capacity remaining on revolver FY19 Q2 FY19 Q21 $1.0 ▪ ASR delivered 2.8M shares
Slide 15: Delivering Superior Shareholder Value
Delivering Superior Shareholder Value ▪ Inspiring employees through a high- performance culture reflecting FY19 Financial Outlook accountability, inclusion and diversity Increasing FY19 adj. EPS1 ▪ Aggressively capturing growth opportunities to $4.45 - $4.85 from $4.40 - $4.80, through innovation in
Slide 16: Thank you!
Thank you! © Copyright Jacobs www.jacobs.com | worldwide
Slide 17: Jacobs: Industry leader poised for growth
Jacobs: Industry leader poised for growth New Jacobs (post ECR sale) Q2 FY19 ($ in billions) Net Revenue Gross Backlog U.S./Int’l Mix Talent Base Reimbursable Public/Private 70%/30% ~50,000 and Low Risk Sector ATN ATN Fixed Price 64%/36% $7.3 Services $1.1 ~95% $1.4 BIAF $13.4 BIAF Increasing portfo
Slide 18: Recast Segment Financials
Recast Segment Financials $’s in millions PF Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 ATN Backlog 6,641 7,174 7,148 7,130 7,130 7,158 7,285 Revenue 842 924 1,021 1,069 3,856 1,035 1,060 Operating Profit 57 581 72 77 2641 72 74 as a % of revenue 6.8% 6.2% 7.1% 7.2% 6.9% 7.0% 7.0% BIAF
Slide 19: Recast Consolidated Financials
Recast Consolidated Financials $’s in millions PF Q1 2018 Q2 2018 Q3 2018 Q4 2018 FY 2018 Q1 2019 Q2 2019 Backlog 18,910 19,262 19,840 19,955 19,955 20,335 20,713 Revenue 2,746 2,870 2,934 2,992 11,541 3,084 3,092 Net Revenue 2,059 2,262 2,335 2,334 8,989 2,410 2,459 Adjusted Gross Profit 547 588 58
Slide 20: Other Operational Metrics from Continuing Operations
Other Operational Metrics from Continuing Operations $’s in millions Q1 2018 Q2 2018 Q1 2019 Q2 2019 Depreciation (pre-tax) 18,476 26,764 18,211 23,491 Amortization of Intangibles (pre-tax) 11,444 18,101 18,671 18,678 Pass-Through Costs Included in Revenue 411,787 608,720 674,278 632,359 Capital Exp
Slide 21: Non-US GAAP Financial Measures
Non-US GAAP Financial Measures Three Months Ended March 29, 2019 Effects of Restructuring Effects of Other The following tables reconcile the U.S. GAAP values of net earnings, EPS, and Other Transaction Adjustments U.S. GAAP Charges Costs (1) (2) Adjusted operating profit and operating profit margin
Slide 22: Non-US GAAP Financial Measures
Non-US GAAP Financial Measures Three Months Ended March 30, 2018 The following tables reconcile the U.S. GAAP values of net earnings, Effects of Effects of EPS, operating profit and operating profit margin to the corresponding Restructuring CH2M Other and Other Transaction Adjustments "adjusted" amo
Slide 23: Reconciliation of Net Earnings from Continuing Operations to Adjusted EBITDA
Reconciliation of Net Earnings from Continuing Operations Attributable to Jacobs to Adjusted EBITDA Three months end ed March 29, 2019 Adj. Net earnings from Continuing Operations attributable to Jacobs (1) $ 165,526 Adj. Income Tax Expense for Continuing Operations 52,099 Adj. Net earnings from Con
Slide 24: Non-GAAP Financial Measures (cont'd)
Non-GAAP Financial Measures (cont’d) Adjusted net earnings from continuing operations, adjusted EPS from continuing operations, adjusted operating profit and adjusted operating profit margin are non- GAAP financial measures that are calculated by (i) excluding the costs related to the 2015 restructu