Icf International, Inc. · NASDAQ:ICFI
Icf International — Investor Day (December 2019)
74 slides from Icf International's investor day presentation, Dec 3, 2019
Slide 1: Welcome - Investor Day 2019
Welcome Investor Day-2019
Slide 2: Cautionary Statement
Certain statements made by us in this presentation that are not historical facts or that relate to future plans, events, or performances are forward-looking statements within the meaning of the federal securities laws. Our actual results may differ materially from those Cautionary Statement expresse
Slide 3: Growth
isin Growth <x ]2 (a) 6 =) fo)
Slide 4: ICF at years of impact
ICF at 50 50 years of impact For 50 years we have partnered with hundreds of organizations on transformative projects, all while transforming ourselves EXPERIENCE OUR HISTORY
Slide 5: ICF Strengths
ICF Strengths bs 7yv Revenue and earnings growth across U.S. presidential administrations 80% of business with table long-term ” 4yacklog and contracts Steady margin expansion over time Strong cash flow translating into shareholder value creation
Slide 6: Strong performance across U.S. administrations
Strong performance across U.S. administrations Bush Administration Obeme Administetion Trump Administration Revenue (SMM) Sustained growth + Support for broad array of + Professional * Innovation driven by: government agility missions
Slide 7: Bank Leverage Ratio
Bank Leverage Ratio Effective use 3.00x of leverage 2.50x 2.00x — 1.50x With strong financial market support, ICF ps has effectively levered up for opportunities 0.50x and paid down debt 0.00x 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Debt to Bank EBITDA
Slide 8: Strong value creation since IPO
Strong value 800 cacr creation si _ since IPO ICFL 600 15.8% — 500 ICF has delivered 400 - above average NASDAQ total shareholder 300 10.7% return compared —_ with major indices *” SEP.BO0) as of Nov. 20, 2019 6.7%
Slide 9: ICF: a proven player with significant growth upside
ICF: a proven player with significant growth upside Opportunity to Unique portfolio Demonstrated grow combining deep agility domain expertise with IT + engagement capabilities
Slide 10: Business Overview
Business Overview Presented by: John Wasson, President and Chief Executive Officer . « Investor Day:2019 Kt 4 ; ~” Cc F
Slide 11: ICF's growth strategy
ICF’s growth strategy Sustaining and Increasing scale Building out service growing expertise in in implementation offerings at the core vertical markets _ to win larger intersections of contracts markets and functional expertise Increased emphasis on innovation and expanding strategic client relatio
Slide 12: Synergy in markets and capabilities
Synergy in markets and capabilities Advisory + Strategy Proprietary IP/ loyalty programs Workforce of long-time industry experts Program a Management . * Longstanding Technology, client relationships Analytics + Engagement * Long-term contract. vehicles Revenue percentages are based on Q3 2019 TIM f
Slide 13: ICF culture: a source of competitive advantage
ICF culture: a source of competitive advantage Purpose To build a more prosperous and resilient world for all. Values Interact with Integrity Bring Your Passion Embrace Differences Challenge Assumptions Work Together Be Greater Than
Slide 14: Performance since Investor Day 2016
Performance since Investor Day 2016 * ea Revenue: GAAP EPS: Employees: 2016-2019* 2016-2019* Number of full- CAGR 0 and part-time ° CAGR 16.0% employees 7.9% 13.6%
Slide 15: Opportunity overview
Opportunity overview Large, growing markets Federal services (non- Federal services DoD) (DoD) $90 - 1008 $70 - 80B per year* per year* Commercial energy/ Commercial marketing environmental services and services technology $50B per $7-10B per year** year** Attractive margins Government margins typic
Slide 16: Keys to sustained growth
Keys to sustained growth Demonstrated Roughly 50-50 split Similar split expected to performance in 13 between organic and continue years since IPO. M&A growth
Slide 17: Catalysts for continued organic growth
Catalysts for continued organic growth Federal * Civilian agency spending * Public health * Next gen IT * Citizen engagement Marketing Services * Personalization/loyalty * Digital transformation * Data convergence State + Local * Disaster management: recovery and mitigation * Infrastructure spending
Slide 18: M&A focus areas
M&A focus areas Government Next gen IT / digital transformation Health & Human Services (HHS) Citizen engagement Commercial Energy Advisory services Grid, asset + customer analytics Distributed energy resource management Digital transformation
Slide 19: Investor Day 2019
Investor Day 2019 Take a deeper Gain greater Meet a broader dive into growth understanding of cross-section of ICF catalysts ICF’s unique leaders in key markets positioning
Slide 20: Agenda
Agenda Federal Market Disaster Management ICF Next Commercial Energy Financials Wrap-up Q&A Breakout Sessions
Slide 21: The Federal Market
The Federal ~.Market . Presented by: Mark Lee, Senior Vice Pfesident, Public Sector © Jen Welham, Senior Vice President, “Health and Human Services Investor Day 2019
Slide 22: Market opportunity
Market opportunity $632B 2019 federal civilian budget $77B+ Addressable federal civilian market Mid-single digits Percentage of growth in 2019 budgets +4% 2020 federal civilian topline spending agreement Strong partnerships with nearly every federal agency % of ICF revenues by agency* HHS 16% Other
Slide 23: Market drivers
drivers Increased Aging budgets workforce Need for IT Rising public modernization health challenges and enhanced cyber protection
Slide 24: Differentiators
Differentiators Deep subject- Full-suite of matter expertise capabilities Health, energy, IT, cybersecurity, analytics, environment, communications, education, social engagement, workforce programs, development, program international implementation, training development, transportation Diverse agenc
Slide 25: Record business development pipeline
Record business development pipeline Up ~50% over the last three years $B ICF federal pipeline, 2016 — YTD 2019* 2016 2017 2018 2019
Slide 26: Technology capabilities
__ Technology = Seite: = a @ ff = __. Data IT Cybersecurity Engagement ~ Workforce analytics modernization operations, — ~ “¥ design“. — development R&D 5 je
Slide 27: Health capabilities
Health capabilities ES Deep subject matter expertise Substance abuse (vaping, opioids) Infectious disease (HIV, Malaria) Chronic disease (cancer, diabetes) Mental health (suicide prevention) 8 Full suite of services Disease surveillance Research + evaluation Survey design + data collection Training
Slide 28: Health and Human Services Office of Inspector General
Health and Human Services Office of Inspector General Predictive Analytics to Fight Fraud, Waste and Abuse Potential prevented/recovered fraudulent Medicare funds Leveraging Building tools Incorporating, advanced data __that enable user experience analytics self-serve data design elements queries
Slide 29: A platform for actionable public health insights
A platform for actionable public health insights hospitals and of emergency dept outpatient visits reported daily centers reporting messages processed daily
Slide 30: DADA
DADA DDD AAS
Slide 31: Disaster Management
Disaster Management Presented by: Andrew LaVanway, Senior Vice President, Division Lead Brandy Bones, Senior Director, Recovery Program Expert Investor Day 2019 Mz “ICF
Slide 32: Market opportunity
Market opportunity HUD CDBG-DR market FEMA market Fed-funded mitigation market Numbers in $Millions Total Funding $89.7 billion* (1992-2019) 20000 Active Funding $38.7 billion (Addressable now) 10000 $15.98 Active Grants 137 cBG-MiT ° neti wis aon —=«2017 =o Grantees 58 = Annual m Supplemental 3%-10
Slide 33: Key trends creating a more favorable market
Key trends creating a more favorable market Unprecedented > Extreme weather events need will continue Lower peaks + Consistent FEMA funding fewer valleys (>$7 billion/year) competition recovery Ability to find and/or build talent is critical to success Limited talent Fragmented > More emphasis on wh
Slide 34: Building on Past Success
Building on Past Success a ‘ ° a ° ; * ‘ FEMA Public FEMA Building % Manages billion-dollar Awarded Assistance work FEMA 406 Resilient recoveries for NY.,N.J., 2 FEMA Acquire DMS expanded Mitigation Infrastructure Manages $9.022 _and Conn. following Public with a sizable work & Communities billion L
Slide 35: Supporting communities across the full disaster lifecycle
Supporting communities across the full disaster lifecycle and all funding sources Mitigation | Preparedness Recovery Response
Slide 36: Putting mitigation into practice
Putting mitigation into practice Supporting Columbia, Improving stormwater Building a climate- South Carolina after resilience in the ready Philadelphia historic flooding City of Miami Beach
Slide 37: The ICF advantage
The ICF advantage Our people Working 3 of the largest disaster recovery programs in U.S. history 20+ year Federal, state and local partnerships Training to build internal talent and capacity Work with unwavering passion and integrity ICF has won nearly a half-billion dollars in contract awards acros
Slide 38: DADA
DADA DDD AAS
Slide 39: Slide 39
Slide 40: ICF Next
icF [}@ Presented by: John Armstrong, President, ICF Next Kris Tremaine, Managing Partner, ICF Next
Slide 41: ICF's go-to-market brand for integrated digital + engagement services
ICF’s go-to-market brand for integrated digital + engagement services $350M* ICF Annual revenue across a J 40% balanced portfolio 4) Government x 60% Opportunity -- Commercial pipeline is +3X revenue
Slide 42: Capabilities and differentiators
Capabilities and differentiators Loyalty Technology Combines creativity of an agency with deep domain expertise of a consultancy w 2 & Analytics Engagement Strategy Designs solutions that Built specifically to drive real participation realize the benefits of with customers, an integrated model citiz
Slide 43: Industries served
Consumer Financial Government Health Travel Hospitality Energy Transportation
Slide 44: Awards and recognition
RivericanfAoverrisins FR Sire week AWARDS 10x Gold and 6x PR Agency of Multi-time “Leader” Silver Lions the Year in customer loyalty solutions and in 2018 Cannes Lions PR Week and The digital experience Festival of Creativity Sabre Awards (in one year) (since 2014) The Forrester Wave™ These 12 Agenc
Slide 45: Market opportunities
1 MOX+ Marketing technology * Market $50B+ + Personalization at scale Healthcare + Market $10B+ * Disruption & transformation a3 Customer loyalty * Market $3.5B + Data convergence aps Large federal campaigns * Market $1.98 * Citizen engagement ned NAICS codes: 2WWARC: 2019 and Beyond (US and UX MarT
Slide 46: Real stories of the opioid epidemic
Real stories of the opioid epidemic Supporting CDC in the fight against prescription drug overdose Prescription opioids can be of intended audience Intend to avoid using eddletive and calgercu saw a campaign prescription opioids video because of exposure to the campaign Kl
Slide 47: Transforming the health of the community, one person at a time
Transforming the health of the community, one person at a time Delivering strategy, transformation, experience, marketing and engagement initiatives Enrollees from Increase in leads Continuous client product launch to from paid satisfaction rating from becoming a marketing over 150 projects and cate
Slide 48: Hilton Honors
Hilton Honors “,..to be the most customer centric loyalty program.” — Mark Weinstein SVP & Global Head of Customer Engagement, Loyalty and Partnerships Hilton Honors continuous evolution, ensures the best member experience possible 100” 75" 30” Improvement on Faster checkout Increase in annual membe
Slide 49: DADA
DADA DDD AAS
Slide 50: Commercial Energy
Commercial Energy * Presented by: Sergio Ostria, Executive Vice PréBident, Energy and Infrastructure a Phil Mihimester, Executive Vice President®Energy Division Lead ._Shanthi Muthiah, Senior Vice President, Power Markets Expert ‘Anne Choate, Senior Vice President, Climateand Resiliency =e Investor
Slide 51: Market transformation drives market opportunity
Market transformation drives market opportunity From central station power To distributed power, 2-way grid generation NY
Slide 52: Capabilities and differentiators
Capabilities and differentiators ‘Award-winning Delivery of over customer 160 energy engagement efficiency programs Analytics Leading edge weet 2s Proprietary Deep subject technology & matter expertise analytics
Slide 53: Growth drivers
Growth drivers Energy Distributed energy Utility efficiency resources (DER) resilience
Slide 54: Energy efficiency
Energy efficiency Market expected to grow from $2B to $3.3B by 2030 Numerous states EE increasingly EE program California have increased viewed as a updates fueled has tripled its EE spending grid resource by changes EE outsourcing in climate requirement
Slide 55: Spotlight on California
Spotlight on California 10Us are required to outsource 60% of EE programs by 2022 (20% today) 12 RFAs were issued in 2019 and 18 are expected in 2020 The RFP stage expected to continue into 2020 VV ICF’s estimated addressable market: $250M+/year ICF has responded to most RFAs with excellent success
Slide 56: Distributed Energy Resources
Distributed Energy Resources Estimated addressable market sizes S 1-2B Utilities challenged to EV market by 2030" manage growth of DERs including solar, storage, $6-8 B and electric vehicles Initial utility pilot programs focusing on battery storage and EVs (EVs) NWA market over 10 years for load co
Slide 57: DER technology-based pilots
DER technology-based pilots Implement Pilots Scale and Implement Programs Planning Roadmaps Advise/Plan et Current ICF contracts
Slide 58: Con Edison
SE conEdison Get the Thermostat o That Never Sleeps Helping customers testing smart thermostats, control energy residential solar, battery usage through storage and dynamic rates innovative technologies Evaluating how adoption and use of these technologies impacts Soangs &rctns sheen Get a Free Sola
Slide 59: BGE and PHI
BGE and PHI Incentivizing the EV market peek: oom a BGE and PHI’s EVsmart ICF support includes: Pilots * Program implementation = Residential EV charger rebates * Marketing and advertising = Multifamily EV charger rebates * Web and IT solutions * Public charging stations network _* Events and dealer
Slide 60: Resilience to Climate/Weather Risks
Resilience to Climate/Weather Risks More extreme weather Since 2003, the average $ 2 1 B events in last decade annual # of weather- Resilience spending by than prior 2 decades related power outages has electric and gas utilities in combined doubled 2030 —* i fies have named hee S 100 M Regulatory ac
Slide 61: ICF-led landmark climate vulnerability study
ICF-led landmark climate vulnerability study Regulator-driven study provides risk analysis & recommendations for assets and operations Regulators requiring implementation $5.6B (~$90M/yr) required to address rising temperatures alone
Slide 62: DADA
DADA DDD AAS
Slide 63: Financial Strength
* hee. Financial Strength : Presented by: James Morgan, Chief Financial Officer i Investor Day 2019 » wil ic
Slide 64: Revenue and profit growth
Revenue and profit growth $5.00 > $4.50 7 $4.10-$4.25 eid $4.00 + 2 = $1,400 $1,200, saasz _Sha8S $2229 or | on cos? $3.02 $1,000 $2507) $800 ok $2.00 ~ on Ne $600 62%oN" e750+| — $200 $1.00 4 a $200, $0.50 4 $0 Ls] = it us $0.00 It a + 2015 2016 2017 2018 2019 2015 201s 2017" 2018 2019 Guidance* Gu
Slide 65: Solid margin expansion
Solid margin expansion Adjusted EBITDA to Service Revenue (SR) 14.00% 13.6% 13.50% 3.00% 2018 2014 Catalysts for continued profitability improvement * Growth over last 5 years largely organic Impro i rmargin work) + Catalysts in our markets will drive continued growth
Slide 66: Balance sheet / cash flow metrics
Balance sheet / cash flow metrics * Strong balance sheet * History of strong cash flow Currentratio 151x Debt to total capital 0.26« Leverage ratio (cess e208) 1.86x Bank leverage ratio* (oebtt sankear04) 1.72% FCF as % of net income (1/15 9/30/19) 98% DSO (a/20/:8) 93.9 DSO excl. Puerto Rico (30/19
Slide 67: Capital allocation priorities (2019)
Capital allocation priorities (2019) * Cash use priorities Dividends Support continued growth of ICF’s $10.5M business through M&A and capital CAPEX 1 expenditures 2. Rebuild firepower (debt paydown) Debt Share repayment 3. Maintain dividend repurchase $18.7M $23.4M 4 Maintain stable share count
Slide 68: M&A focus areas
M&A focus areas Government Next gen IT / digital transformation Health & Human Services (HHS) Citizen engagement Commercial Energy Advisory services Grid, asset + customer analytics Distributed energy resource management Digital transformation
Slide 69: Demonstrated track record
Demonstrated track record Bank Leverage Ratio Total Shareholder Return - TSR 2o062018 3.00 soo 10 ier 250 soo 200 soo «0 NASDAQ 150 10.7% 30 sarsoo 1.00 200 er 10 050% 100% eee 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 we —ebt to Bank EBITDA —icrl —sap soo —nasoaa
Slide 70: Summary
Summary ICF has a history of solid financial performance Strong balance sheet, reliable cash flow, and attractive financing enables future growth Our investor-friendly financial policy supports ongoing value creation Significant attention on identifying appropriate acquisition targets to support our
Slide 71: Coffee Break
Slide 72: Key takeaways
Key takeaways Significant runway Continue complementary for organic growth and accretive acquisitions across client set Financial resources to Unique culture that drives support organic and excellent innovation, acquisitive growth execution and collaboration
Slide 73: DADA
DADA DDD AAS
Slide 74: Breakout Sessions
Breakout Sessions