Slide 1: Delivering Advanced Solutions for a More Connected, Sustainable World
Delivering Advanced Solutions for a More Connected, Sustainable World December 2017 Water Vortex | Australia CH2M
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: Additional Information and Where to Find It
Additional Information and Where to Find It In connection with the proposed acquisition of CH2M by Jacobs pursuant to the terms of an Agreement and Plan of Merger by and among CH2M, Jacobs and Merger Sub, Jacobs filed with the Securities and Exchange Commission (the “SEC”) a Registration Statement o
Slide 4: Jacobs At A Glance
Jacobs At A Glance FY17 Revenue FY17 Op. Profit* $10 B $625 M Employees ~54,700 18% Countries 24% 25% 25+ 31% 18% 24% 27% 32% Petroleum & Chemicals Oil & gas upstream, refining & chemical markets Industrial Mining & minerals, specialty chemicals & manufacturing, life sciences, field services Public
Slide 5: Strong FY17 Execution Supported by 3-yr Strategy
Strong FY17 Execution Supported by 3-yr Strategy • Building A High Performance Culture – Lines of business structure improved accountability and discipline – Incentive compensation aligned to drive shareholder value • Transforming the Core – Improved project execution leading to higher margins – Suc
Slide 6: Jacobs Was Built On Key Acquisitions
Jacobs Was Built On Key Acquisitions… Revenue ($B) 20 FNS 18 Federal Network Systems 16 P&C ZATE 14 Stork 12 Engineering 10 Humphreys & Group Glasgow 8 6 4 2 - 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 Acquired 80+ Companies 6
Slide 7: CH2M is The Right Time, Right Transaction
CH2M is The Right Time, Right Transaction Strong Foundation at Jacobs Together, a Compelling Strategic Fit • Driving accountability through four • Delivers on our strategic blueprint global Lines of Business (LOBs) • Creates world’s premier global • Rightsized overhead and streamlined solutions prov
Slide 8: A Compelling Strategic Fit
A Compelling Strategic Fit Sector Strengths Premier Capabilities Sustained Global Enhanced Value Leadership in Water Operating Platform Differentiated Client Solutions + = Tier 1 Nuclear / Longstanding Client Enviro. Remediation Relationships Industry Leading Talent Advanced Project Delivery Manufac
Slide 9: CH2M at a Glance
CH2M at a Glance Q3FY17 TTM Revenue of $4.6 B6 Founded Employees 1946 >20,000 By Sector Environment & By Service Type O&M Nuclear Water 15% Industry-leading Design Positions Integrated 11% Delivery #1 Wastewater Treatment Manufacturing Semiconductors Transportation 74% Consulting / PM #2 Energy & In
Slide 10: Strengthens Highest Margin, Highest Growth Business Lines
Strengthens Highest Margin, Highest Growth Business Lines Q2FY17 TTM Revenue ($B) Jacobs Margin9 Buildings & 7.7% $2.3 $4.8 Infrastructure Aerospace & $3.7 8.0% $2.6 Technology 3.3% Industrial $2.9 $3.3 Petroleum & 4.7% Chemicals $3.0 $3.3 Jacobs Revenue Combined Revenue 10
Slide 11: Strong Momentum Across CH2M Business
Metrolinx Rapid Transit | Toronto CH2M Strong Momentum Across CH2M Business • Exited power EPC and transportation design-build – MOPAC recently negotiated settlement with Texas DOT – Inpex risk parameters appropriately considered • Attractive business portfolio ~90% reimbursable services • Transform
Slide 12: Advancing Our Profitable Growth Strategy
Advancing Our Profitable Growth Strategy A&T B&I Industrial P&C US Gov’t Services Water Life Sciences Downstream Environmental Transportation Licensed Technologies Upstream & Midstream Nuclear Aviation Cons. Goods/Adv. Mfg Weapons Sustainment Highways & Rail Mining & Minerals Telecom Social Infrastr
Slide 13: Water
Water Industry leading position in Water – deployed across strong, global By the Numbers10 operating platform – creates significant growth opportunity • Scarcity of water driving investments in desalination and water reuse $100 B Total Addressable Market facilities globally – clear areas of combined
Slide 14: Environmental
Environmental Premier environmental expertise specifically addresses global demand By the Numbers10 for sustainable and resilient solutions $160 B Total Addressable Market • A leader with broad and deep environmental capabilities in the industry • Significant cross-sell opportunity through leverage
Slide 15: Nuclear
Nuclear Combined platform achieves Tier 1 global supplier status in Nuclear By the Numbers10 space and positions us for global growth $145 B Total Addressable Market • Strong program and project delivery offering in global nuclear space • Combination of environmental and nuclear skillsets allows us
Slide 16: Jacobs + CH2M Creates Global Design Leader
Jacobs + CH2M Creates Global Design Leader Global Design Revenues11 10 10.0 7.4 $B 5 6.4 5.0 4.8 3.7 3.6 3.3 3.0 2.7 2.6 0 Jacobs + CH2M AECOM Jacobs WSP SNC + Arcadis CH2M Fluor Stantec Worley Wood + Atkins Parsons Amec FW Source: ENR, July 2017 16
Slide 17: Generating Solid EBITDA
Generating Solid EBITDA Delivering a Consistent Adjusted EBITDA Margin of +7% Over the Last Four Quarters $100 $85 $78 $77 $83 $50 $0 -$50 -$100 -$150 Q3 Q4 Q1 Q2 Adjusted EBITDA Restructuring & MOPAC and Inpex Costs GAAP EBITDA ($43) $46 $40 $83 17
Slide 18: Recent Precedent M&A Transactions – EBITDA Multiples
Recent Precedent M&A Transactions – EBITDA Multiples Without Synergies With Synergies 12.0x 10.4x 10.1x 8.6x 7.7x 6.9x Source: Company filings, news releases, Capital IQ Note: Multiples represent Enterprise Value / TTM EBITDA as of June 30th 2017. Precedent E&C transactions include SNC-Lavalin / Atk
Slide 19: Compelling Strategic Combination: Creates Significant Shareholder Value
Compelling Strategic Combination: Creates Significant Shareholder Value 1 Creates a world premier global solutions provider • Delivers enhanced, differentiated value proposition for clients through end-to-end solutions • Bolsters portfolio quality, stability and diversity • Preserves attractive low-
Slide 20: Jacobs Q4 Results
Jacobs Q4 Results National Western Center | Denver CH2M
Slide 21: Significant Backlog Growth
Record Backlog Supported by Significant Backlog Growth Higher Margin Professional Services Field Services Backlog ($ B) Professional Services Backlog ($ B) 19.8 18.8 18.6 6.2 5.4 5.3 2.8 6.4 5.9 6.7 13.3 12.6 12.0 Aerospace & Technology Buildings & Infrastructure Petroleum Industrial & Chemicals Ind
Slide 22: Q4 Results
Strategic Focus Drives Solid Q4 Results Performance for Q4 & Fiscal 2017 • Sequential Revenue Growth of 5% and Modest YoY Increase – Professional and Field Services both up sequentially – B&I posts 15% y/y growth • Gross Margins Up Over 150 bps YoY • Q4 GAAP Operating Profit Margin Up 90 bps Y/Y to
Slide 23: CH2M 3Q Results
CH2M 3Q Results CH2M Third Quarter Results Strong • Revenue of $1.2 B includes CNEA JV deconsolidation & positive impact from the MoPac settlement – CNEA JV deconsolidation negatively impacts revenue by $137 M – Excluding CNEA and MoPac, revenue increased 3% y/y • Operating Margins – GAAP margins 6.
Slide 24: FY17 Results
FY17 Results • FY17 Revenues of $10.0 B • FY17 Gross Margin Up Over 150 bps YoY • FY17 Operating Profit Margin of 3.9%, Up 80 bps YoY • Fy17 Adj. Operating Profit Margin1 of 5.4%, Up 70 bps YoY • GAAP EPS of $2.42 • Adj. EPS1 of $3.24 • Strong Cash Flow, Operating Working Capital2 Down 30% Strong Fi
Slide 25: Revenue and Gross Margin %
Revenue and Gross Margin % Revenue GM % $3.5 19% 18% 20% 18% 16% 16% $3.0 2.6 2.6 15% 2.6 2.5 $2.5 2.3 10% $2.0 5% $1.5 $1.0 0% Q4’16 Q1’17 Q2’17 Q3’17 Q4’17 Revenue Growth Trajectory Improving On Stronger Gross Margins 25 Note: Numbers rounded to nearest tenth
Slide 26: FY17 Lines of Business Segment Financials
FY17 Lines of Business Segment Financials Line of Business Operating Profit vs. FY16 OP Margin vs. FY16 Aerospace & Tech. $203 M -0.6% 8.6% (+91 bps) Buildings & Infra. $193 M +10.8% 7.9% (+14 bps) Industrial $115 M +41.8% 4.2% (+129 bps) Petroleum & Chem. $114 M -10.1% 4.6% (+73 bps) Non-allocated
Slide 27: Aerospace & Technology
Aerospace & Technology Strong Backlog Performance to Drive FY18 Profitable Growth • Large Market Opportunity With Highly Recurring Revenue Model – Funding for key government programs remains stable – Penetrating new opportunities within Federal sector – Acquisition of Blue Canopy strengthens cyber &
Slide 28: Buildings & Infrastructure
Buildings & Infrastructure 8th Straight Quarter of Backlog Growth • Infrastructure – Strong – Public sector budgets indicate sustained infrastructure spend – Transportation remains a vibrant global market with near-term upside – Strong pipeline in rail across all regions – Continued aviation leaders
Slide 29: Industrial
Industrial Strong Backlog Growth Supported By Field Services and Life Sciences • Life Sciences – Strong – Growth in biotech market driven by investment in Gene/Cell Therapy – Continued diversification to small and mid capital projects – Awarded a mid-scale biotech facility conversion to EPCM • Minin
Slide 30: Petroleum & Chemicals
Petroleum & Chemicals Focus On Downstream Drives Continued Stability In Uncertain Market • Upstream – Continuing Uncertainty – Capex spending remains uncertain in the near-term – Recent strengthening of oil prices • Chemicals - Strong – Cheaper feedstocks continue to propel investments in N. America
Slide 31: Restructuring, Investments and Synergies
Restructuring, Investments and Synergies Continued Focus on Driving Best-in-Class Profitability • 2015 Restructuring Complete – Final program cost of $444 M with estimated recurring annual savings of $289 M – Strategic investments totaling $30 M • CH2M Integration Cost Synergies – Expect $225 M of c
Slide 32: Balance Sheet and Capital Allocation
Balance Sheet and Capital Allocation • Healthy Balance Sheet Expected Post Close – New $1.5 B 3-year term loans – Expect $900 M of liquidity capacity remaining on revolver – Anticipate net debt position of approximately ~$1.9 B – Expect to de-lever throughout 2018 • Share Buy-Backs Remain a Key Capi
Slide 33: Summary and Outlook
Summary and Outlook On Track to Achieve Our Strategic and Financial Objectives • Delivering Against 3 Year Strategy to Transform Our Business – Operational discipline now engrained in our culture – Strategy execution driving record high backlog – Positioned for sustainable profitable growth • Jacobs
Slide 34: Thank You!
Thank You! © Copyright Jacobs August 8, 2017 www.jacobs.com | worldwide
Slide 35: Non-US GAAP Financial Measures
Non-US GAAP Financial Measures The following tables reconcile the U.S. GAAP values of net earnings, EPS, operating profit, operating profit margin and gross margin to the corresponding "adjusted" amounts. For the comparable periods presented below, such adjustments consist of amounts incurred in con
Slide 36: Non-US GAAP Financial Measures
Non-US GAAP Financial Measures The following tables reconcile the U.S. GAAP values of net earnings, EPS, operating profit, operating profit margin and gross margin to the corresponding "adjusted" amounts. For the comparable periods presented below, such adjustments consist of amounts incurred in con
Slide 37: Non-US GAAP Financial Measures (cont’d)
Non-US GAAP Financial Measures (cont’d) Adjusted net earnings and adjusted EPS are non-GAAP financial measures that are calculated by excluding the after-tax costs related to (i) the 2015 Restructuring activities, which included involuntary terminations, the abandonment of certain leased offices, co
Slide 38: Consolidated Footnotes
Consolidated Footnotes 1) Equity Value plus CH2M net debt 2) TTM Adj. EBITDA as of June 2017; excludes restructuring charges and Inpex/MOPAC changes in project estimates and includes full run-rate cost savings 3) Excluding the cash-out and rollover of certain CH2M equity awards 4) TTM Adj. EBITDA ex