2013 Credit Suisse Engineering & Construction Conference Bill - - PowerPoint PPT Presentation

2013 credit suisse engineering construction conference
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2013 Credit Suisse Engineering & Construction Conference Bill - - PowerPoint PPT Presentation

2013 Credit Suisse Engineering & Construction Conference Bill Utt Chairman, President and CEO Sue Carter Executive Vice President and CFO June 6, 2013 Zac Nagle Vice President, Investor Relations & Communications Forward


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SLIDE 1

2013 Credit Suisse Engineering & Construction Conference

June 6, 2013

Bill Utt – Chairman, President and CEO Sue Carter – Executive Vice President and CFO Zac Nagle – Vice President, Investor Relations & Communications

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SLIDE 2

Forward Looking Statements

This presentation contains “forward-looking statements.” All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements include statements about the benefits of the split-off, the discussions of KBR’s business strategies and KBR’s expectations concerning future operations, profitability, liquidity and capital resources. You can generally identify forward- looking statements by terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “goal,” “intend,” “may,” “objective,” “plan,” “potential,” “predict,” “projection,” “should” or other similar

  • words. These statements relate to future events or future financial performance and involve known and

unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to differ materially from those in the future that are implied by these forward-looking statements. Many of these factors cannot be controlled or predicted. These risks and other factors include those described under “Risk Factors” in KBR’s Annual Report on Form 10-K dated February 20, 2013, Forms 10-Q, recent Current Reports on Forms 8-K, and other Securities and Exchange Commission filings. Those factors, among

  • thers, could cause KBR’s actual results and performance to differ materially from the results and performance

projected in, or implied by, the forward-looking statements. As you read and consider this presentation, you should carefully understand that the forward-looking statements are not guarantees of performance or results. KBR cautions you that assumptions, beliefs, expectations, intentions and projections about future events may and often do vary materially from actual results. Therefore, KBR cannot assure you that actual results will not differ materially from those expressed or implied by forward-looking statements. The forward-looking statements included in this presentation are made only as of the date of this document. New risks and uncertainties arise from time to time, and KBR cannot predict those events or their impact. KBR assumes no obligation to update any forward-looking statements after the date of this presentation as a result of new information, future events or developments, except as required by the federal securities laws. Note: All statements reflected on this presentation are as of KBR’s 1Q13 earnings conference call on April 26, 2013

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SLIDE 3

KBR – A Leading Global E&C Provider

  • Revenue: Full Year 2012 - $7.9 Billion
  • Backlog: March 31, 2013 - $14.2 Billion
  • Headquarters in Houston, Texas
  • ~27,000 employees; 70+ countries
  • KBR is a global engineering, construction,

and services company supporting the energy, hydrocarbons, power, industrial, civil infrastructure, minerals, government services and commercial markets.

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SLIDE 4

KBR’s Global Footprint

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Edmonton Calgary Wilmington Arlington Raleigh Charlotte Atlanta Houston Birmingham MMM Rio De Janeiro Monterrey Buenos Aires Gothenburg Greenford Leatherhead Frankfurt Algiers Moscow Atyrau Baku Baghdad Kuwait City Dubai Abu Dhabi Dhahran Lagos Luanda Johannesburg New Delhi Beijing Singapore Jakarta Perth Adelaide Melbourne Canberra Sydney Brisbane Ontario Chicago Salt Lake City Doha Dammam Mobile

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SLIDE 5

KBR’s Three Business Groups

  • LNG
  • FLNG
  • GTL

Gas Monetization

  • Offshore
  • Onshore
  • Pipelines

Oil & Gas

  • Refining
  • Petrochemicals
  • Biofuels
  • Fertilizers

Downstream

  • Refining
  • Petrochemicals
  • Syngas
  • Coal Gasification

Technology

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Infrastructure, Government & Power Services

Infrastructure

  • Transportation
  • Water
  • Facilities

N.A. Government & Logistics (NAGL)

  • U.S. Federal Government
  • Department of Defense

International Government, Defence & Support Services (IGDSS)

  • U.K. Ministry of Defence
  • Middle East
  • Asia Pacific (APAC)

Power & Industrial

  • Power
  • Pulp & Paper
  • Industrial Manufacturing

Minerals

  • Coal, Iron Ore
  • Base Metals
  • Material Handling

Construction

  • Refining
  • Chemicals
  • Oil & Gas
  • Power

Industrial Services

  • Refining & Chemicals
  • Oil & Gas
  • Power
  • Pulp and Paper

Canada Operations

  • Oil Sands
  • Mining
  • Gas Treating

Building Group

  • Life Sciences and Education
  • Government Buildings
  • Healthcare
  • General Industrial & Aerospace
  • Food & Beverage

Hydrocarbons

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SLIDE 6
  • Revenue at $1.9 billion, down 7% year-over-year
  • Operating Income of $133 million, up 19% year-over-year
  • Earnings per diluted share of $0.59 compared to $0.61 year-over-year
  • Backlog of $14.2 billion compared to $15.8 billion year-over-year

1Q13 Review - KBR

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Note: All statements reflected on this slide are as of KBR’s 1Q13 earnings conference call on April 26, 2013

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SLIDE 7

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Hydrocarbons – Gas Monetization and Oil & Gas

Current Gas Mon Projects Progressing

  • Gorgon LNG Trains 1-3
  • Skikda LNG
  • Escravos GTL
  • Ichthys LNG EPC

Good Investment of LNG pre-FEEDs and FEEDs

  • Gorgon Train 4 Pre-FEED with expected FEED

transition

  • Kitimat FEED
  • Tanzania pre-FEED
  • Recently awarded Petronas LNG FEED

Opportunities in GTL in the U.S. Expanding Share of Wallet for Oil & Gas

  • Expansion opportunities at Shah Deniz 2 project in

Caspian for EPCm for both onshore and offshore

FLNG Opportunities

  • FLNG Study for Hoegh LNG
  • GDF SUEZ Bonaparte

Oil & Gas Geographically

  • FEED for FPSO topsides and hull in Angola
  • Recently awarded topsides design for Chevron

Lianzi development

  • Activity recovering in U.S. Gulf of Mexico
  • Caspian Region
  • North Sea
  • Australia
  • Brazil (GVA)
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SLIDE 8

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Hydrocarbons – Downstream and Technology

U.S. Shale Gas Opportunities

  • KBR last week signed an EPC contract for an

ammonia plant in excess of $250 million to be constructed in North America

  • Recently awarded ~$600 million Dyno Nobel

ammonia EPC and technology project in Louisiana

  • Recently awarded ~$100 million for EPC for two

new ethylene furnaces using KBR’s SCORE™ technology

  • Working on FEED for fertilizer complex for Ohio

Valley Resources

  • Design, construction and technology for ethylene

furnace for INEOS

Middle East Remains Robust for Downstream

  • KBR-AMCDE joint venture increasing work volumes
  • Sadara Petrochemical Complex PMC
  • Yanbu Export Refinery
  • Jazan Refinery FEED for Gasifier unit

Ethylene Project in Uzbekistan

  • ~ $120 million technology and EPC support contract
  • Utilizes KBR’s SCORE™ technology

Growth in Technology

  • Continue to see strong bookings across portfolio of

technologies, including ammonia, VCC, and ethylene

  • 20% job income growth year-over-year

Technology Inroads in China & India

  • Doubled headcounts in offices during 2011 in

Beijing, China and Delhi, India

  • Strong suite of technologies
  • Advanced Catalytic Olefins (ACO™)
  • Veba Combi-Cracker (VCC)
  • Transport Gasifier (TRIG™)
  • Selective Cracking Optimum Recovery

(SCORE™)

  • Ammonia Technology (Purifier™)
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SLIDE 9

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Services

Canada Operations

  • Strong across variety of markets:
  • Turnarounds / maintenance
  • Module fabrication
  • Construction projects in Alberta Oil Sands
  • Gas processing projects in Western Canada
  • Client camp support
  • Booked approximately $1 billion in backlog in 2012

from:

  • Module fabrication work
  • Turnaround work
  • Gas processing work
  • Recently awarded:
  • 3-year turnaround services contract for Suncor

Energy’s refinery in Edmonton, AB, Canada

  • Off-site modularization and pipe fabrication for

Shell Canada’s Quest Carbon Capture and Storage project

Industrial Services

  • Steady and consistent performance
  • Successful expansion into Saudi Arabia with

SATORP to provide maintenance services at its Jubail refinery over the next seven years

Building Group

  • Challenging by stabilizing business environment
  • Project awards grew 50% in 2012 compared to 2011
  • Stronger multi-family residential and industrial

manufacturing markets

  • Healthcare spending remains slow

U.S. Construction

  • 3 Gulf Coast projects execution consistent with

project provisions in fourth quarter 2012

  • Bidding only reimbursable work for construction only

projects

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SLIDE 10

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Infrastructure, Government & Power

North American Government & Logistics

  • Slower award environment due to government budget

uncertainties and sequestration

  • Awarded $127 million contract for Djibouti Base

Operations Services

  • Awarded $54 million LogCAP IV task order for

services to U.S. forces in Kingdom of Bahrain

  • EAGLE program by U.S. Army Material Command
  • Diverse portfolio of pursuits (U.S. Army, Navy, and Air

Force, Army Corps of Engineers, Department of State)

International Government, Defence & Support Services

  • Recently awarded contract by the London Mayor’s

Office for Policing and Crime to provide facilities management integrator services

  • Diversification strategy from contingency operations
  • Training (military and non-military)
  • Expeditionary life support services
  • Back office services
  • Equipment facilitation

Power & Industrial

  • Air quality & combined cycle opportunities still strong
  • Recently awarded EPC for $460 million Ghent

Baghouse project for Kentucky Utilities

  • Currently have 2 multi-$100-million projects out for

bid

  • Anticipate bidding two additional multi-$100-million

later in 2013

Infrastructure

  • Expanded opportunities in Middle East market

(Qatar, Saudi Arabia, Oman, UAE and Iraq)

  • Slower spending for government-sponsored projects

in Australia and the United States

Minerals

  • Challenged environment relative to new
  • pportunities
  • Several early-stage studies in progress for large

capital projects

  • Currently working on several projects for Rio Tinto
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SLIDE 11

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Well Positioned for North America

LNG and GTL Opportunities

  • British Columbia, Canada
  • Kitimat FEED
  • Recently awarded Petronas LNG FEED
  • In discussions on another potential LNG project
  • United States
  • Selectively evaluating 5-6 LNG export terminals
  • Potentially 2 GTL projects in the Gulf Coast

area

  • KBR’s experience on 2 of the 3 world-class GTL

facilities positions KBR well (Pearl GTL and Escravos GTL)

Technology Awards & Opportunities

  • 3 ammonia Purifier™ technology awards over the past

year

  • Tracking approximately 12 ammonia/urea prospects
  • Tracking approximately 8 ethylene prospects

Downstream Awards & Opportunities

  • KBR last week signed an EPC contract for an

ammonia plant in excess of $250 million to be constructed in North America

  • Recently awarded ~$600 million Dyno Nobel ammonia

EPC and technology project in Louisiana

  • Working on FEED for fertilizer complex for Ohio Valley

Resources

  • Recently awarded ~$100 million EPC contract for two

new ethylene furnaces using KBR’s SCORE™ technology

  • Design, construction and technology for ethylene

furnace for INEOS in Texas

  • Four ammonia-related EPC and three ethylene-related

EPC prospects potentially in 2013

  • Several refining and biofuel prospects in 2013

Power Awards & Opportunities

  • Recently awarded EPC for $460 million Ghent

Baghouse project for Kentucky Utilities

  • Currently have 2 multi-$100-million projects out for bid
  • Anticipate bidding two additional multi-$100-million

later in 2013

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SLIDE 12

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KBR Financials and Backlog

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SLIDE 13
  • Revenue at $1.9 billion, down 7% year-over-year
  • Job income margins of 15.3% compared to 12.5% year-over-year
  • Operating income of $133 million, up 19% year-over-year
  • Corporate G&A of $52 million compared to $55 million year-over-year
  • Earnings per diluted share of $0.59 compared to $0.61 year-over-year
  • Cash and equivalents of $904 million compared to $837 million year-over-year
  • Backlog of $14.2 billion compared to $15.8 billion year-over-year
  • FY13 earnings per diluted share guidance unchanged at $2.45 to $2.90

1Q13 Review - KBR

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Note: All statements reflected on this slide are as of KBR’s 1Q13 earnings conference call on April 26, 2013

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SLIDE 14

Backlog

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Continued focus on job income backlog:

  • Down 4% from December 31, 2012
  • Up 100% since December 31, 2006

80 90 100 110 120 130 140 150 160 170 180 190 200 210 220 2006 2007 2008 2009 2010 2011 2012 3/31/2013

Performance Index

Revenue Backlog Job Income Backlog

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SLIDE 15

Job Income Margins Improving

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First Quarter 2011 First Quarter 2012 First Quarter 2013

15.3% 12.0% 12.5%

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SLIDE 16

Strong Corporate G&A Cost Control

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ERP Spend

*Note: 2013 Guidance reflects mid-point of corporate G&A guidance of $230 million to $250 million, which includes between $30 million to $40 million expected ERP spending (midpoint of $35 million used for graph)

$150 $160 $170 $180 $190 $200 $210 $220 $230 $240 $250 2007 2008 2009 2010 2011 2012 2013 Guidance* Corporate G&A $ in Millions

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SLIDE 17

Investment Thesis

  • Fundamentally strong, global growth company with diverse portfolio of businesses
  • Well positioned for growing opportunities in North America
  • Multiple platforms for acceleration of new orders across global end markets;

strategically placing bets on a number of large opportunities through 15 active pre-FEEDs and FEEDs

  • Driving higher job income and job income margins in the P&L and backlog
  • Strong focus on corporate G&A cost control and tax planning
  • Patience, prudence and discipline in managing KBR’s businesses

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SLIDE 18

Proud History