Fiscal Year 2015 – 1st Quarter Earnings Conference...
Transcript of Fiscal Year 2015 – 1st Quarter Earnings Conference...
www.jacobs.com | worldwide
Fiscal Year 2015 – 1st Quarter Earnings Conference Call
January, 2015
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 26, 2014, 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.
January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 2
Outline • Kevin Berryman
– Financial highlights
• Noel Watson – Growth strategy
• George Kunberger – Business Overview and Outlook
January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 3
Financial Highlights for the Quarter • Diluted EPS of $.77, up 8.5% from $.71 a year ago • Net earnings of $100.1 million, up 6.8% from $93.7 million a year ago • Backlog rose to $19.1 billion, up 5.8% from $18.1 billion a year ago • Book-to-bill 1.08 for trailing twelve • Strong balance sheet • Repurchase of 2.5 million shares; total repurchases of 4.0 million shares • Cash of $670.1 million • Cautious stance on guidance
January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 4
Backlog
Professional Services Backlog a Leading Indicator January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 5
Q1-FY11 Q1-FY12 Q1-FY13 Q1-FY14 Q4-FY14 Q1-FY15
5.8
5.1
5.0
12.6
7.9
9.5
18.4
13.0
14.5
5.8
10.4
16.2
5.8
12.3
18.1 Field Services Backlog ($ billions) Technical Professional Services Backlog ($ billions)
5.9
13.2
19.1
Growth Strategy • Differentiate with our relationship-based business model • Leverage market diversity • Expand geographic presence through multi-domestic
strategy • Use cash position to promote growth • Continue to drive down costs
January 2015 | Fiscal Year 2015 – 1st 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
January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 7
Market Diversity
Revenues for twelve months ended
12/26/14: $12.8 billion
Maximizing Opportunities Through Evolving Cycle
37% 46%
17%
PharmaBio
Mining & Minerals
Power, Pulp & Paper, High Tech, Food & Consumer Products
4%
7% 6%
Buildings 7%
Infrastructure 11%
National Government
19% Chemicals
23%
Oil & Gas (Upstream)
7%
Refining (Downstream)
16%
January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 8
Public & Institutional
National Government: Steady Growth
Opportunities worldwide; defense and security in US, UK, AUS and Asia
US midterm elections: greater budget certainty; increasing DoD & federal civilian task orders
Nuclear business overall robust; opportunities increasing in US and UK
Intelligence submarket strong; gaining market share
Infrastructure: Strong
Transport infrastructure market buoyant in US, AUS, ME, UK; steady spending growth
Growing utility and water demand globally
Social development policies in KSA yield opportunities; presence & relationships key
Frameworks w/global commercial clients; infrastructure and building skills + global footprint
Buildings: Steady Growth
Increase in US public sector work; upsurge in DoD federal spending
Strong global healthcare prospects; healthcare facility spending in GCC up 86% since 2009
Education strong globally; US bond elections; conversions
Growing buildings work with non-public sector clients: headquarters, mission critical, retail January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 9
Backlog (Billions)
Q1-‐13 Q1-‐14 Q4-‐14 Q1-‐15
7.2 8.2
9.3 9.7
Industrial
PharmaBio: Strong
Client investments in India, Asia, Europe; historic strength + global footprint differentiators
Standing strong amidst competitive pressures; award-winning industry leader
Exciting opportunities in immunotherapy and vaccine manufacturing facilities
Mining & Minerals: Stable
Sustaining capital work continues to grow
Studies and spending from majors beginning; Q1 stronger than expected
Brownfield projects present ongoing opportunities, yet clients still cautious; mid-tiers; strong relationships
Power, Pulp & Paper, High Tech, Food & Consumer Products: Mixed
Middle East power market gaining momentum; new build capacity in UK and Europe
Greenfield/brownfield global opportunities: facility upgrades >$5b in US; paper machine conversions
Industrial Agriculture sector in Australia/New Zealand growing; long term investment
January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 10
Backlog (Billions)
2.4 2.2 2.1 2.1
Q1-‐13 Q1-‐14 Q4-‐14 Q1-‐15
Process
Refining: Mixed
Continued investment in North America, Europe, ME; certain projects likely delayed
ISA 84 regulations drive new spending
Upgrades, improvements for operating efficiency and output still strong
Oil & Gas: Weak
Brownfield & enhanced recovery work still economical; some greenfield delays/cancellations
Shift to high ROI basins in US; clients seeking new onshore & offshore capacity; footprint key
Sustaining capital work continues to be stable
Chemicals: Strong
Broadly, chemical investment remains strong globally; pure chemical companies benefit
Large energy clients experience ROI hurdles for certain projects
Strong chemical resume plus global delivery are key strengths
January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 11
Backlog (Billions)
6.6 7.7
7.0 7.3
Q1-‐13 Q1-‐14 Q4-‐14 Q1-‐15
Acquisitions
~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
January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 12
• Historic strength • Important to our growth model • Strong cash position enables
action on large and small acquisition opportunities
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 growth
• Cost position – Creates competitive advantage
January 2015 | Fiscal Year 2015 – 1st 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
January 2015 | Fiscal Year 2015 – 1st Quarter Earnings | Slide 14
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