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Goldman Sachs 2013 Conference Screen.ppt · Kuwait City Dubai Abu Dhabi Dhahran Lagos Luanda...
Transcript of Goldman Sachs 2013 Conference Screen.ppt · Kuwait City Dubai Abu Dhabi Dhahran Lagos Luanda...
Goldman Sachs 2013 Industrials Conference
November 13, 2013Bill Utt – Chairman, President and CEOBrian Ferraioli – Executive Vice President and CFO
Forward Looking StatementsThis 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 others, 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 financial statements reflected in this presentation are as of KBR’s 3Q13 earnings conference call on October 25, 2013
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KBR – A Leading Global E&C Provider
Revenue: Full Year 2012 - $7.9 Billion
Backlog: September 30, 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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KBR’s Global Footprint
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Edmonton
Calgary
WilmingtonArlington
RaleighCharlotte
AtlantaHouston
Birmingham
MMM
Rio De Janeiro
Monterrey
Buenos Aires
GothenburgGreenford
Leatherhead Frankfurt
Algiers
MoscowAtyrau
BakuBaghdad
Kuwait City
DubaiAbu Dhabi
Dhahran
Lagos
Luanda
Johannesburg
New Delhi
Beijing
SingaporeJakarta
PerthAdelaide
MelbourneCanberra
SydneyBrisbane
Ontario
Salt Lake City
DohaDammam Mobile
KBR’s Four Business Segments
LNG FLNG GTL
Gas Monetization Offshore Onshore Pipelines FLNG
Oil & Gas
Refining Petrochemicals Biofuels Fertilizers
Downstream
Refining Petrochemicals Syngas Coal Gasification
Technology
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Infrastructure, Government & Power ServicesN.A. Government & Logistics
Infrastructure Transportation Water / Wastewater Facilities
U.S. Federal Government Department of Defense
International Government, Defence & Support Services 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
HydrocarbonsGas Monetization
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Gas Monetization
Current Gas Mon Projects Progressing Well Gorgon LNG Trains 1-3 Skikda LNG Escravos GTL Ichthys LNG
Strong Pipeline of LNG Projects and Prospects Gorgon Train 4 Pre-FEED with expected FEED
transition, then EPCm Kitimat FEED and EPC Tanzania pre-FEED Petronas LNG FEED and EPC bid Bid preparation for Tangguh Train 3 FEED and EPC bid
Opportunity for GTL in the U.S. Active discussions with a customer and believe a
project could reach FEED in late 2013 or early 2014
FLNG Opportunities Preparing a FEED bid for GDF SUEZ Bonaparte
project Preparing a pre-FEED bid for another project
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HydrocarbonsU.S. Shale Gas Opportunities Awarded ~$600 million Dyno Nobel ammonia EPC and
technology project in Louisiana Awarded EPC contract for an ammonia plant in excess of
$250 million in North America Awarded ~$300 million urea EPC project in North America Awarded ~$100 million for EPC for two new ethylene
furnaces using KBR’s SCORE™ technology Awarded FEED for high-density polyethylene project for
INEOS Working on FEED for fertilizer complex for Ohio Valley
Resources Design, construction and technology for ethylene furnace
for INEOS
Middle East Remains Robust KBR-AMCDE joint venture increasing work volumes Sadara Petrochemical Complex PMC Yanbu Export Refinery Jazan Refinery FEED for Gasifier unit
Growth in Technology Continue to see strong bookings across portfolio of
technologies, including ammonia, VCC, and ethylene Strong suite of technologies:
Advanced Catalytic Olefins (ACO™) Veba Combi-Cracker (VCC) Transport Gasifier (TRIG™) Selective Cracking Optimum Recovery (SCORE™) Ammonia Technology (Purifier™)
Expanding Share of Wallet for Oil & Gas Expansion opportunities at Shah Deniz 2 project in
Caspian for EPCm for both onshore and offshore Increased activity in Gulf of Mexico with pre-FEED and
FEED opportunities in 2014
FLNG Opportunities Preparing a FEED bid for GDF SUEZ Bonaparte project Preparing a pre-FEED bid for another project
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ServicesCanada 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 Steam-assisted gravity drainage (SAGD)
Booked approximately $1 billion in backlog in 2012
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
Materials management contract for major SAGD operation in Fort McMurray, Alberta
Industrial Services Steady and consistent performance Awarded large multi-site DuPont award expanding
from 17 to 26 sites in United States Awarded maintenance services contract by
International Paper in Russia Successful expansion into Saudi Arabia with
SATORP to provide maintenance services at its Jubail refinery over the next seven years
Building Group Challenging but stabilizing business environment Stronger multi-family residential and industrial
manufacturing markets
U.S. Construction 3 Gulf Coast projects’ execution consistent with
project provisions taken in fourth quarter 2012 Bidding only reimbursable work for construction only
projects
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Infrastructure, Government & PowerNorth American Government & Logistics Awarded $134 million contract for land-based missile
defense facilities in Romania Awarded $127 million contract for Djibouti Base
Operations Services Diverse portfolio of pursuits (U.S. Army, Navy, and Air
Force, Army Corps of Engineers, Department of State) Slower award environment due to government budget
uncertainties and sequestration
International Government, Defence & Support Services Diversification strategy from contingency operations
Training (military and non-military) Expeditionary life support services Back office services Equipment facilitation
Awarded contract by the London Mayor’s Office for Policing and Crime to provide facilities management integrator services
Additional opportunities to expand services to other Metro London and U.K. policing departments
Power, Infrastructure and Minerals Markets Air quality & combined cycle power opportunities still
strong Received limited notice to proceed on ~$500 million,
600MW combined cycle power project Awarded EPC for $460 million Ghent Baghouse
project for Kentucky Utilities Expanded opportunities in Middle East infrastructure
market (Qatar, Saudi Arabia, Oman, UAE and Iraq) Minerals challenged relative to new opportunities, but
several early-stage KBR studies in progress Slower spending for government-sponsored
infrastructure projects in Australia and the United States
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Well Positioned for North AmericaLNG and GTL Opportunities British Columbia, Canada
Kitimat FEED and EPC Petronas LNG FEED and EPC bid In discussions on another potential LNG project
United States KBR’s experience on 2 of the 3 world-class GTL
facilities positions KBR well (Pearl GTL and Escravos GTL)
Active discussions on GTL projects; advanced discussion with one customer on a proposed GTL facility that could reach FEED in late 2013 or early 2014
Ongoing discussions on a pending LNG EPC bid Maintaining dialogues with other LNG developers
Technology Awards & Opportunities 3 ammonia Purifier™ awards over the past year Tracking approximately 14 ammonia/urea prospects Tracking approximately 6 ethylene prospects
Ammonia & Petrochemical Awards & Opportunities Awarded EPC for an ammonia plant in excess of $250
million to be constructed in North America Awarded ~$300 million urea EPC project in North America Awarded ~$600 million Dyno Nobel ammonia EPC and
technology project in Louisiana Awarded ~$100 million EPC contract for two new ethylene
furnaces using KBR’s SCORE™ technology FEED for fertilizer project for Ohio Valley Resources Design, construction and technology for ethylene furnace for
INEOS in Texas Five ammonia-related EPC and three ethylene-related EPC
prospects potentially by 2014 Several refining and biofuel prospects in 2013
Power Awards & Opportunities Awarded EPC for $460 million Ghent Baghouse project for
Kentucky Utilities Received limited notice to proceed on ~$500 million,
600MW combined cycle power project
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KBR Financials and Backlog
Revenue at $1.8 billion, down 9% ,year-over-year
Job income of $322 million, up 4%, year-over-year
Operating income of $166 million compared to a loss of $11 million, year-over-year
Corporate G&A of $66 million, includes $14 million of ERP-related costs
Earnings per diluted share of $0.16 compared to a loss of $0.55, year-over-year
Cash and equivalents of $959 million compared to $846 million, year-over-year
Backlog of $14.2 billion compared to $14.8 billion, year-over-year
Backlog book-to-bill of 1.2x in 3Q13
3Q13 Earnings Review - KBR
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Backlog
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Continued focus on job income backlog:
Down 10% from December 31, 2012
Up 88% since December 31, 2006
Revenue Backlog Job Income Backlog
80
90
100
110
120
130
140
150
160
170
180
190
200
210
220
2006 2007 2008 2009 2010 2011 2012 9/30/2013
Perf
orm
ance
Inde
x
Strong Corporate G&A Cost Control
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ERP Spend*Note: For illustrative purposes, 2013 Guidance reflects upper-end of corporate G&A guidance of $230 million to $240 million, which includes approximately $40 million expected ERP spend (per 3Q13 guidance for ERP spend )
$150
$160
$170
$180
$190
$200
$210
$220
$230
$240
$250
2007 2008 2009 2010 2011 2012 2013 Guidance*
Cor
pora
te G
&A
$ in
Mill
ions
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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