www.jacobs.com | worldwide
Fiscal Year 2014 – 3rd Quarter Earnings Conference Call
July 29, 2014
Forward-Looking Statement Disclaimer
Statements included in this presentation that are not based on historical facts are forward-looking statements. Although such statements are based on management’s current estimates and expectations, and currently available competitive, financial and economic data, forward-looking statements are inherently uncertain and you should not place undue reliance on such statements as actual results may differ materially. We caution the reader that there are a variety of risks, uncertainties and other factors that could cause actual results to differ materially from what is contained, projected or implied by our forward-looking statements. For a description of some of the risks, uncertainties and other factors that may occur that could cause actual results to differ from our forward-looking statements see our Annual Report on Form 10-K for the period ended September 27, 2013, and in particular the discussions contained in Item 1 – Business, Item 1A - Risk Factors, Item 3 – Legal Proceedings, and Item 7 – Management’s Discussion and Analysis of Financial Condition and Results of Operations, as well as the Company’s other filings with the Securities and Exchange Commission. We also caution the readers of this presentation that we do not undertake to update any forward-looking statements made herein.
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 2
Outline • John Prosser
– Financial highlights
• Craig Martin – Growth strategy – Business overview
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 3
Financial Highlights • Diluted EPS of $0.49 for the quarter
– Includes the impact of restructuring in the amount of $0.35 per share
• Backlog of $18.5 billion • Book-to-bill 1.10 for trailing twelve • Strong balance sheet • Cash of $772.6 million • FY14 EPS near the midpoint of Q2 guidance
– Excludes the impact of first half adjustments and second half restructuring expenses
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 4
Backlog
Field Services Backlog ($ billions)
Technical Professional Services Backlog ($ billions)
7.4 5.7
5.3
5.4 6.1
6.2
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
20.0
Q3-FY09 Q3-FY10 Q3-FY11 Q3-FY12 Q3-FY13 Q3-FY14
15.8
13.5 14.0
15.6
17.2
Professional Services Backlog a Leading Indicator
18.5
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 5
Growth Strategy • Differentiate with our relationship-based business model • Leverage market diversity • Expand geographic presence through multi-domestic
strategy • Use cash position for strategic acquisitions • Continue to drive down costs
15% Average Earnings Growth Goal July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 6
Our Relationship Model Fuels Growth
Building a Strong Reputation in Each Market We Serve
Long-Term Relationships
Trust/Client Knowledge
Continuous Improvement
Superior Value
Reinvest
Steady Earnings Growth
Growth Fueled by
Clients
Lower Cost of Doing Business
Manageable Risk
Repurchase Loyalty
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 7
Market Diversity
Revenues for twelve months ended 6/27/14:
$12.6 billion
Maximizing Opportunities Through Evolving Cycle
34% 48%
18%
PharmaBio
Mining & Minerals
Power, Pulp & Paper, High Tech, Food & Consumer Products
4%
8%
6%
Buildings 6%
Infrastructure 10%
National Government
18% Chemicals
22%
Oil & Gas (Upstream)
7%
Refining (Downstream)
19%
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 8
Public & Institutional
National Government: Improving
Steady opportunities in US; new national security opportunities with FNS acquisition
UK and Australia defense remain stable; major opportunities in Asia-Pacific
Nuclear cleanup in UK robust; >$1b environmental remediation projects in North America
Infrastructure: Strong
US telecom business growing: Total 5 yr global investment >$2 trillion
Uptick in water projects globally; notable sales activity in UK, Asia Pacific, Middle East
Major opportunities in airports, roads, rail; gaining market share
Buildings: Improving
Growing buildings business globally; Increase in new awards year-over-year
Aviation, scientific, high-tech, healthcare, and commercial wins worldwide
Increase in US public sector work anticipated
End-market diversification a competitive differentiator
Backlog (Billions)
Q3-‐12 Q3-‐13 Q2-‐14 Q3-‐14
6.9 7.9 8.4 8.5
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 9
Industrial
Backlog (Billions)
2.4 2.2 2.2 2.2
Q3-‐12 Q3-‐13 Q2-‐14 Q3-‐14
PharmaBio: Improving Strong skill set in both Western and Eastern hemispheres; integrated EPCM capabilities; innovative leader in lean project delivery
Product pipeline driving capital investments; significant uptick in opportunities
Client investments in India and Asia; India domestic market to grow from $16b to $50b by 2020
Opportunities in adjacent businesses such as animal health and consumer products
Mining & Minerals: Growing
Sustaining capital work continues, particularly with mid-tiers; strong relationships
Asset optimization, integrated service delivery and end-market diversification key strengths
Spending trends toward emerging markets; a few major project prospects
Power, Pulp & Paper, High Tech, Food & Consumer Products: Mixed
Middle East power market gaining momentum; new build capacity in UK and Europe
Alliances with international players; greenfield/brownfield global opportunities
Focus on continuous improvement of safety record having positive impact
US industrial facility upgrades; >$5b estimated CapEx
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 10
Process
Backlog (Billions)
Q3-‐12 Q3-‐13 Q2-‐14 Q3-‐14
6.3 7.2
7.8 7.8
Refining: Strong
Increasing investment in the US, Middle East, Asia, South America
Compliance- and safety-driven projects business (Tier 3 & ISA 84) in US
Geographic footprint advanced through acquisition; key to competing in global opportunities
Oil & Gas: Very Strong
Continued strong investment in North America; CapEx still at historic highs
Pipeline services a growth opportunity
Surge in domestic crude oil production; midstream infrastructure investment in North America
Gas monetization projects strong globally
Chemicals: Strong
Pre-FEED and FEED pipeline robust
Methanol and derivatives are key strengths
Prospects robust; owners taking a measured approach to releasing next phases
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 11
Acquisition Focus Areas of Focus
Geographies North America
Markets Upstream and Telecommunications
~1/3 of our Growth Historically Comes from Acquisitions
Pulp & Paper, Buildings US 1994
Infrastructure, Aerospace & Defense US, Australia
Chemicals, Pharmaceuticals, Buildings France, India, Italy, Mexico, Spain, UK
Upstream Oil & Gas, Chemicals Belgium, Canada, Germany, Netherlands
Infrastructure, Upstream Oil & Gas Hong Kong, US, Scandinavia
Field Construction, Infrastructure, Buildings, Process Canada, UK, Saudi Arabia
Buildings, Telecommunications, National Government, Information Technology UK, US
2014
Buildings, Water/Wastewater, Mining & Minerals, Infrastructure Australia, China, India, UK, South America, US
Buildings, Infrastructure, Water, Mining & Minerals, Power, Process, Telecommunications, National Government(intelligence/IT), Upstream (pipelines) Australia, China, South Africa, South America, UK, US
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 12
Why Jacobs: A History of Solid Growth • Relationship-based business model
– Drives client loyalty, opportunities and results
• Diversified markets/geographies/services – Fuels growth and manages exposures
• Strong balance sheet and cash position – Enables organic expansion and strategic acquisitions
• Cost position – Creates competitive advantage – Restructuring actions create a foundation for FY15 growth
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 13
National Government Chemicals PharmaBio Food & Consumer Products
Buildings Oil & Gas Upstream Mining & Minerals High Tech
Infrastructure Refining Downstream Power Pulp & Paper
July 2014 | Fiscal Year 2014 – 3rd Quarter Earnings | Slide 14
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