Jacobs
Challenging today. Reinventing tomorrow.
Certain statements contained in this presentation constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to a historical or current fact. When used herein, words such as "expects," "anticipates," "believes," "seeks," "estimates," "plans," "intends," "future," "will," "would," "could," "can," "may," "target," "goal" and similar words are intended to identify forward-looking statements. Examples of forward-looking statements include, but are not limited to, statements regarding our expectations as to our future growth, prospects, financial outlook, and business strategy for fiscal year 2023 or future fiscal years, including our expectations for our fiscal year 2023 adjusted EPS and adjusted EBITDA (including our outlook assumptions), revenue growth, free cash flow, pipeline growth, and fiscal 2023 cash conversion to adjusted net income, and our expectations regarding our ability to maintain an investment grade credit profile, our plans to separate the CMS business through a spin-off that is intended to be tax-free to stockholders for U.S. federal income taxes purposes, the description of the CMS business following the separation, the timing of completion for the separation, and the perceived benefits for both Jacobs and CMS to be derived from the separation. Although such statements are based on management's current estimates and expectations, and/or 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. Such factors include uncertainties as to the final structure and timing of the separation of the CMS business, the possibility that closing conditions for a separation transaction may not be satisfied or waived, the impact of the separation on the Company's and CMS' businesses, and a possible decrease in the trading price of their shares, if the separation is completed, the possibility that the separation may not qualify for the expected tax treatment, the risk that any consents or approvals required in connection with the separation may not be received, the risk that the separation may be more difficult, time-consuming or costly than expected, and the possibility that we may not retain key employees while the separation is pending or after it is completed, as well as factors related to our business, such as our ability to execute on our three-year corporate strategy, including our ability to invest in the tools needed to fully implement our strategy, competition from existing and future competitors in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve the cost-savings and synergies contemplated by our recent acquisitions within the expected time frames or to achieve them fully and to successfully integrate acquired businesses while retaining key personnel, the impact of and future opportunities in our target markets, our ability to achieve
Challenging today. Reinventing tomorrow.
By Sector¹
- Advanced Facilities 13%
- Infrastructure 45%
- National Security 25%
- Energy & Environment 17%
By Region
- APAC & other 9%
- UK & Europe 23%
- North America 68%
By Contract Mix
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Fixed-price limited risk 21%
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Fixed-price at risk 5%
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Cost-reimbursable 74%
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Science based consulting for critical infrastructure, energy transition and national security sectors
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Climate Response, Data Solutions and Consulting & Advisory key accelerators
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Solid execution and operational discipline result in robust cash flow
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Prudent deployment of shareholders’ capital
Net Revenue² ($B)
- 2018: $9.1
- 2019: $10.2
- 2020: $11.0
- 2021: $11.7
- 2022: $12.6
Adjusted EBITDA Margin²
- 2018: 9.4%
- 2019: 9.6%
- 2020: 9.6%
- 2021: 10.6%
- 2022: 10.8%
1 Excludes PA Consulting 2 Fiscal year 2018 net revenue and adjusted EBITDA includes CH2M as if it closed at beginning of the fiscal year 10/1/2017 vs 12/7/2017
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© Jacobs 2023
Premier Technology-Enabled Solutions Provider Focused on Critical Infrastructure and Sustainability
- ~$10.5B FY22 Revenue
- ~12% FY22 Adj. Op. Margin(1)
- Water and Environment
- Energy Transition
- Transportation
- Advanced Manufacturing
- Climate Response
- Data Solutions
- Consulting & Advisory
Revenue Breakdown:
- P&PS 81%
- PA Consulting 11%
- Divergent Solutions 8%
Leading Pure-Play Government Services Provider
- ~$4.4B FY22 Revenue
- ~8% FY22 Op. Margin
- Space
- National Security
- Nuclear Remediation
- 5G Technology
- Long-term contracts
- Performance track record
- Serve civilian, defense, intelligence and international customers
Revenue Breakdown:
- U.S. 78%
- International 22%
Note: Jacobs pie chart reflects FY22 segment gross revenue excluding Critical Mission Solutions (1) FY22 Non-GAAP adjusted operating profit margin based on net revenue for Jacobs excluding CMS LOB. Not to be considered indicative of performance post-separation. Calculation does not include any potential elimination of stranded costs upon separation.
© Jacobs 2023
| Perimeter | - Critical Mission Solutions segment |
| Transaction Structure | - Spin-Off of Critical Mission Solutions to Jacobs shareholders |
| - Intended to be tax-free to Jacobs shareholders for U.S. federal income tax purposes | |
| Capital Structure | - Committed to maintaining an investment grade profile for Jacobs |
| - Critical Mission Solutions capital structure, governance, and other matters to be communicated at a later date | |
| Timing | - Targeting a completed transaction in the second half of fiscal 2024, subject to customary closing conditions |
5 | © Jacobs 2023
Challenging today. Reinventing tomorrow.
- Culture of inclusion, innovation and inspiration creates competitive advantage
- Diverse sector exposure with recurring revenue provides substantial visibility
- Climate Response, Data Solutions and Consulting & Advisory key accelerators
- Solid execution and discipline result in strong cash flow and shareholder value
- Q2 net revenue increased 5% y/y and up 8% y/y in constant currency (cc)
- Q2 adjusted EBITDA up 5% y/y with adjusted EBITDA margin 10% of net revenue
- Q2 revenue backlog $29B, up 4% y/y with gross margin in backlog up 50 bps y/y
- P&PS net revenue up 7% y/y and up 10% y/y in cc with OP growth up 21% y/y and up 25% y/y in cc
- Q2 2022: $3.3
- Q2 2023: $3.4
- Q2 2022: $27.8
- Q2 2023: $29.0
- People & Places Solutions, 50%
- Critical Mission Solutions, 35%
- Divergent Solutions, 7%
- PA Consulting, 9%
- People & Places Solutions, 56%
- Critical Mission Solutions, 22%
- Divergent Solutions, 6%
- PA Consulting, 16%
6 See "Selected Financial Data" and Non-GAAP reconciliation and operating metrics at the end of presentation for applicable reconciliations
© Jacobs 2023
- Capturing unprecedented multi-year super-cycle in semiconductors in response to global supply chain disruption
- Trusted advisor to many Electronics and Specialized Manufacturing clients
- Data centers, driving decarbonization and cloud condo strategies
- Electric Vehicle Manufacturing
- Largest professional services provider to the biopharmaceutical industry
- Health System Governance, Health Infrastructure and Health Operations Advisory
- Digital Health: data solutions and cyber expertise, telehealth
- #1 ENR ranking in Healthcare facilities design and Pharmaceuticals
- Responding to challenges driven by climate change, urbanization, resource scarcity, energy security & digital proliferation
- Supporting global energy diversification and transition efforts across all sectors
- Renewables and hydrogen
- Environmental planning, remediation, regeneration, operational excellence and PFAS solutions
- ENR ranked top global Environmental Consultant
- Integrating data, technology, mobility and connectivity to improve economic and social equity and the resiliency of cities & communities
- Architecture, Structures, Building Systems, Interiors & Strategies
- Market leaders in Defense and Government buildings
- Industry leading PMCM capabilities
- Sustainable and intelligent buildings
- Market leading position in Mass Transit & Rail, Marine & Port Facilities, Highways & Bridges, and Airports
- PMCM capabilities delivering world’s largest Transportation megaprojects
- Transportation Advisory & Planning
- Decarbonization
- Data & Cyber solutions
- EV charging
- Unique OneWater end-to-end approach providing social value across the complete water cycle
- Drinking water and reuse, wastewater, conveyancing and storage and water resources
- Water-Energy nexus
- Digital Water including OT Cyber
- Nature based solutions
Note: The percentage reflects TTM P&PS revenue
Empowered by digitally enabled solutions across all end sectors
- Advanced Facilities
- Semiconductors
- Life Sciences
- Electric Vehicles
- Energy Transition
- Water & Environment
- Transportation
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© Jacobs 2023
Revenue up 6% y/y, Net Revenue up 5% y/y and up 8% in constant currency
GAAP Operating Profit (OP) of $290 and OP Margin of 7%
Adj. OP of $356M up 7% and up 11% in constant currency; Net Revenue Adj. OP Margin of 10.4%
GAAP Net Earnings from Continuing Operations of $217M
GAAP EPS from Continuing Operations of $1.70 includes:
- $(0.26) of expense net of NCI related to the amortization of acquired intangibles
- $(0.06) of a non-cash charge related to reduction in real estate footprint
- $(0.03) of transaction, restructuring and other related costs
- $0.25 tax adjustment to align to effective tax rate
Adj. EPS of $1.81, up 5% y/y
Adjusted EBITDA of $358M, up 5% y/y with adjusted EBITDA margin 10.4% of Net Revenue
Q2 revenue book-to-bill 1.2x and gross margin percentage in backlog up y/y
“We have delivered a robust second quarter focused on disciplined and rigorous execution.”
Bob Pragada Chief Executive Officer
See 'Selected Financial Data' and Non-GAAP reconciliation and operating metrics at the end of presentation for applicable reconciliations
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© Jacobs 2023
| $'s in millions | Q2 2022 | Q2 2023 | Y/Y | Y/Y CC² |
|---|---|---|---|---|
| People & Places Solutions Operating Profit | 193 | 232 | 20.5% | 25.4% |
| as a % of net revenue | 12.0% | 13.5% | 148 bps | |
| Critical Mission Solutions Operating Profit | 95 | 94 | -0.7% | 2.8% |
| as a % of revenue | 8.3% | 7.9% | (45) bps | |
| PA Consulting Operating Profit | 68 | 66 | -4.0% | 5.6% |
| as a % of revenue | 23.0% | 21.8% | (117) bps | |
| Divergent Solutions Operating Profit | 17 | 25 | 45.8% | 46.1% |
| as a % of net revenue | 7.4% | 11.1% | 370 bps | |
| Adjusted Unallocated Corporate Costs¹ | (41) | (60) | (20) | N/A |
| Adjusted Operating Profit from Continuing Operations¹ | 332 | 356 | 7.4% | 11.1% |
| as a % of net revenue | 10.2% | 10.4% | 21 bps | |
| Adjusted EBITDA from Continuing Operations¹ | 340 | 358 | 5.2% | |
| as a % of net revenue | 10.4% | 10.4% |
Strong People & Places Performance Driving Year-Over-Year Growth
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¹See Non-GAAP reconciliation and operating metrics at the end of presentation ²Year over year constant currency represent growth and margin using FX rates from the year ago period applied to current results
© Jacobs 2023
- Q2 cash flow from operations (CFFO) $132M and FCF¹ of $97M, resulting in YTD 104% FCF conversion of Net Income
- Expect ~100% underlying FY23 cash flow conversion to adjusted net income
- Balance sheet strength affords prudent capital deployment
- Expect to maintain an investment grade credit profile
- Q2 dividend of $0.26/share an increase of 13% y/y, to be paid June 23, 2023
| Leverage Metrics ($ billions) | FY23 Q2 |
|---|---|
| Cash/debt | $1.2B/$3.5B |
| Net Debt Position | $2.2B |
| Net debt to adjusted FY23E EBITDA mid-point² of $1,445 | 1.4x |
| Fixed/Floating debt | ~40%/60% |
| Ending Q2 weighted interest rate | 4.8% |
¹ Free cash flow (FCF) calculated as reported cash flow from operations minus CAPEX. See Non-GAAP reconciliation and operating metrics at the end of presentation. Adjusted cash conversion is an operating metric calculated as the ratio of adjusted free cash flow to adjusted net earnings from continuing operations.
² See Non-GAAP reconciliation and operating metrics at the end of presentation.
We have delivered solid second quarter results with strong revenue growth, with improving business mix and cost discipline allowing for continued margin expansion.
Kevin Berryman Chief Financial Officer
11 | © Jacobs 2023
- Diverse portfolio of recurring revenue provides opportunity to grow under multiple economic scenarios with upside from Climate Response, Data Solutions and Consulting & Advisory accelerators.
- The company has revised its outlook for fiscal 2023 adj. EBITDA to a range of $1,420M to $1,470M and adjusted EPS to $7.25 to $7.45.
| Outlook Assumptions |
|---|
| FY23 net interest expense & other income¹ (~$160M) |
| FY23 effective tax rate ~21% |
| FY23 adj. non-controlling interest (~$80M) |
| Q3 2023 fully diluted average share count ~128M |
| Annual CAPEX ~$125M |
¹ other income includes certain pension costs and other items
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© Jacobs 2023
Jacobs
Challenging today. Reinventing tomorrow.
Purpose
To create a more connected, sustainable world.
Values
We do things right.
We challenge the accepted.
We aim higher.
We live inclusion.
Employee Value Statement
Jacobs. A world where you can.
Where you can be you.
Where you can do.
Where you can grow.
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© Jacobs 2023
As of March 31st, 2023
- Fixed Debt ($B's)
- Floating Debt ($B's)
- Net Interest Expense ($M's)
| Q2'21 | Q3'21 | Q4'21 | Q1'22 | Q2'22 | Q3'22 | Q4'22 | Q1'23 | Q2'23 | |
|---|---|---|---|---|---|---|---|---|---|
| Fixed | $1.4 | $1.4 | $1.4 | $1.4 | $1.4 | $1.4 | $1.4 | $0.9 | $1.4 |
| Float | $2.1 | $1.7 | $1.5 | $1.7 | $1.8 | $2.2 | $2.0 | $2.6 | $2.1 |
| Total | $14.9 | $19.0 | $19.2 | $17.9 | $21.6 | $25.1 | $31.1 | $37.1 | $33.0 |
| Tranche | 3/31 Debt | Q1 '23 Rate | Q2 '23 Rate |
|---|---|---|---|
| Revolver ($2.25B) | $950M | 5.7% | 6.3% |
| USD Term Loans | $296M | 5.7% | 6.3% |
| GBP Term Loans | $808M | 4.8% | 5.6% |
| Total Floating | $2,054M | 5.4% | 6.0% |
| Treasury Lock/Bond | $500M | 5.5% | 5.0% |
| Swaps | $900M | 2.3% | 2.1% |
| Total Fixed | $1,400M | 3.4% | 3.1% |
| Total Debt | $3,454M | 4.7% | 4.8% |
| Hedge | Notional (USD) | Fair Value | Fixed Rate | Maturity |
|---|---|---|---|---|
| 10 YR USD Floating | $200M | $29M | 1.116% + Spread | APR '30 |
| 5 YR USD Floating | $325M | $21M | 0.704% + Spread | FEB '25 |
| 10 YR GBP Floating | $247M | $29M | 0.82% + Spread | APR '30 |
| EUR cross-currency | $128M | $2M | 0.811% + Spread | FEB '28 |
| Total | $900M | $81M |
- Fixed Rates and spread includes new amendments
- Re-Financing $2.25B Revolver, 865M GBP, $200M US Term Loan
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© Jacobs 2023
$'s in millions (unaudited)
| Q1 2022 | Q2 2022 | Q3 2022 | Q4 2022 | FY 2022 | Q1 2023 | Q2 2023 | |
|---|---|---|---|---|---|---|---|
| People and Places Solutions | |||||||
| Backlog | 16,930 | 16,950 | 17,527 | 17,014 | 17,014 | 17,243 | 17,563 |
| Revenue | 1,921 | 2,163 | 2,223 | 2,228 | 8,535 | 2,227 | 2,345 |
| Pass-Through Revenue | (472) | (564) | (636) | (647) | (2,319) | (660) | (629) |
| Net Revenue | 1,449 | 1,599 | 1,587 | 1,581 | 6,216 | 1,567 | 1,716 |
| Operating Profit | 189 | 193 | 214 | 229 | 825 | 227 | 232 |
| Operating Profit as a % of Net Rev. | 13.0% | 12.0% | 13.5% | 14.5% | 13.3% | 14.5% | 13.5% |
| Critical Mission Solutions | |||||||
| Backlog | 7,524 | 7,509 | 7,219 | 7,622 | 7,622 | 7,632 | 8,136 |
| Revenue | 977 | 1,134 | 1,109 | 1,156 | 4,377 | 1,075 | 1,191 |
| Operating Profit | 91 | 95 | 88 | 81 | 356 | 82 | 94 |
| Operating Profit as a % of Revenue | 9.3% | 8.3% | 8.0% | 7.0% | 8.1% | 7.6% | 7.9% |
| Divergent Solutions | |||||||
| Backlog | 3,291 | 3,063 | 3,019 | 2,957 | 2,957 | 3,077 | 2,956 |
| Revenue | 193 | 239 | 218 | 242 | 892 | 214 | 241 |
| Pass-Through Revenue | (6) | (9) | (6) | (9) | (30) | (13) | (17) |
| Net Revenue | 187 | 230 | 212 | 233 | 862 | 201 | 224 |
| Operating Profit | 23 | 17 | 12 | 15 | 68 | 12 | 25 |
| Operating Profit as a % of Net Rev. | 12.3% | 7.4% | 5.7% | 6.6% | 7.8% | 6.0% | 11.1% |
| PA Consulting | |||||||
| Backlog | 276 | 269 | 326 | 269 | 269 | 306 | 319 |
| Revenue | 290 | 297 | 278 | 254 | 1,119 | 282 | 301 |
| Operating Profit | 63 | 68 | 51 | 49 | 232 | 51 | 66 |
| Operating Profit as a % of Revenue | 21.8% | 23.0% | 18.5% | 19.4% | 20.7% | 18.1% | 21.8% |
15 | © Jacobs 2023
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Fully integrates purpose with profit and operationalizes sustainability across all aspects of our business.
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Drives how we can have the largest positive impact for society as a business.
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Leverages Jacobs’ full suite of solutions to play a key role in advancing a net-zero economy.
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Achieved industry leading ISS Prime Status for our ESG corporate rating and made the CDP Climate A-List and Dow Jones Sustainability World Index.
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Jacobs supports governmental clients in the delivery of critical missions which helps to keep their citizens safe from nuclear attack, prevent large-scale war, and defend their global allies and partners. Jacobs does this by assisting governmental organizations to safely deliver their mission-critical infrastructure and tailored solutions in complex environments around the world.
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Jacobs does not manufacture nuclear warheads or nuclear weapons components.
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Climate Action Plan 2022
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FY22 ESG Disclosures
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PlanBeyond 2.0
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Climate Risk Assessment FY22
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Approved Science-Based Targets
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2022 CDP Submission
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FY22 ESG Verification Statement
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Jacobs Carbon Neutrality Commitment
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Sustainability on Jacobs.com
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Human Rights Policy
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Modern Slavery Act Statement 2023
Corporate ESG Performance
RATED BY ISS ESG
Prime
Member of Dow Jones Sustainability Indices
Powered by the S&P Global CSA
CDP A LIST 2022 CLIMATE
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Los Angeles Bureau of Sanitation, Los Angeles, U.S.: Jacobs has been selected as the progressive design-build contractor responsible for design, permitting, construction, start-up and commissioning for the Donald C Tillman Advanced Water Purification Facility. This is one of the largest potable reuse projects in the U.S.
Read more here.
EDF Energy, U.K.: Jacobs is supporting EDF with wide-ranging professional technical and project management services. Our UKAS-accredited Inspection Validation Center is the project’s sole supplier for independent verification of ultrasound inspections on safety critical components.
Read more here.
TenneT and TransnetBW: Jacobs is providing an integrated delivery partner approach to program and contract management, integrating renewable sources into Germany’s electricity grid to support 2050 target of 80% of power provided by clean energy.
Read more here.
RTI International, Philippines: Jacobs is supporting RTI International in an offshore wind capacity building program in the Philippines for the USAID’s Energy Secure Philippines project. Jacobs will be delivering capacity-building workshops and development support to establish competency standards required to deploy more offshore wind systems in the country.
Read more here.
“Together with our clients, we continue to conceptualize and implement renewable energy, decarbonized transit, EV ecosystems, water optimization, lifesaving vaccines and therapies and technology-advanced electronics, bringing social value to underserved communities.”
Bob Pragada Jacobs Chief Executive Officer
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© Jacobs 2023
![Image of water droplets on a purple surface]
Gold Medal for International Corporate Achievement in Sustainable Development
awarded by The World Environment Center
![PlanBeyond Logo]
PlanBeyond
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© Jacobs 2023
Agile Learning Culture
Innovation
Inclusion & Diversity
Empowerment & Accountability
When we learn and grow together, we activate Empowerment & Accountability, Inclusion & Diversity, and Innovation.
We lead, embrace, and anticipate change.
© Jacobs 2023
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In this presentation, the Company has included certain non-GAAP financial measures as defined in Regulation G promulgated under the Securities Exchange Act of 1934, as amended. These non-GAAP measures are described below.
Net revenue is calculated excluding pass through revenue of the Company’s People & Places Solutions and Divergent Solutions segments from the Company’s revenue from continuing operations. Adjusted operating profit, adjusted income before income taxes from continuing operations, adjusted income taxes from continuing operations, adjusted noncontrolling interests, adjusted net earnings from continuing operations and adjusted EPS from continuing operations are calculated by:
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Excluding items collectively referred to as Restructuring, Transaction and Other Charges, which include: a) costs and other charges associated with our Focus 2023 transformation initiatives, including activities associated with the re-scaling and repurposing of physical office space, employee separations, contractual termination fees and related expenses, referred to as "Focus 2023 Transformation"; b) transaction costs and other charges incurred in connection with the acquisitions of Buffalo Group, BlackLynx and StreetLight and the strategic investment in PA Consulting, including advisor fees, change in control payments, and the impact of the quarterly adjustment to the estimated performance based payout of contingent consideration to the sellers in connection with certain acquisitions; and similar transaction costs and expenses (collectively referred to as "Transaction Costs"); c) recoveries, costs and other charges associated with restructuring activities implemented in connection with the acquisitions of CH2M, John Wood Group nuclear business, Buffalo Group, BlackLynx, StreetLight, the strategic investment in PA Consulting, the sale of the ECR business and other related cost reduction initiatives, which included involuntary terminations, costs associated with co-locating offices of acquired companies, separating physical locations of continuing operations, professional services and personnel costs, amounts relating to certain commitments and contingencies relating to discontinued operations of the CH2M business, including the final settlement charges relating to the Legacy CH2M Matter, net of previously recorded reserves and charges associated with the impairment and final closing activities of our AWE ML joint venture (collectively referred to as “Restructuring and Integration costs").
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Excluding items collectively referred to as Other adjustments, which include: a) adding back amortization of intangible assets; b) impact of certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our PA Consulting investment; c) certain non-routine income tax adjustments for the purposes of calculating the Company’s annual non-GAAP effective tax rate to facilitate a more meaningful evaluation of the Company’s current operating performance and comparisons to the Company’s operating performance in other periods.
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© Jacobs 2023
Adjusted EBITDA, and the resulting calculation of adjusted EBITDA margin, is calculated by adding income tax expense, depreciation expense and adjusted interest expense, and deducting interest income from adjusted net earnings from continuing operations. Adjusted interest expense excludes one-time fees related on our debt facilities that are included in our interest expense under GAAP. Adjusted unallocated corporate costs are calculated by taking other corporate expenses and subtracting amortization of intangibles and other.
Free cash flow is calculated using the reported statement of cash flows, provided from operations less additions to property and equipment. Adjusted free cash flow is calculated by taking free cash flow (calculated as previously described) adjusted for the cash payments/receipts related to the adjustments made to GAAP net earnings to arrive at adjusted net earnings from continuing operations. In addition, in fiscal 2022, adjusted free cash flow excluded the repayment of $55M of payroll tax deferral which was permitted by the CARES Act.
Certain percentage changes are quantified on a constant currency basis, which provides information assuming that foreign currency exchange rates have not changed between the prior and current periods. For purposes of constant currency calculations, we use the prior period average exchange rates as applied to the current period adjusted amounts.
Net debt-to-Adjusted FY23E EBITDA midpoint is a Non-GAAP financial metric which provides an indication of the Company’s leverage. It is calculated as our interest-bearing liabilities minus cash, divided by the midpoint of our FY23 Adjusted EBITDA expectations. Reconciliation of Adjusted FY23E EBITDA to the most directly comparable GAAP measure is not available without unreasonable efforts because the Company cannot predict with sufficient certainty all the components required to provide such reconciliation, including with respect to the costs and charges and timing of costs and charges relating to expenses, restructuring and integration costs to be incurred in fiscal 2023.
We believe that the measures listed above are useful to management, investors and other users of our financial information in evaluating the Company’s operating results and understanding the Company’s operating trends by excluding or adding back the effects of the items described above and below, the inclusion or exclusion of which can obscure underlying trends. Additionally, management uses such measures in its own evaluation of the Company’s performance, particularly when comparing performance to past periods, and believes these measures are useful for investors because they facilitate a comparison of our financial results from period to period.
This presentation also contains certain operating metrics which management believes are useful in evaluating the Company’s performance. We regularly monitor these operating metrics to evaluate our business, identify trends affecting our business, and make strategic decisions. Backlog represents revenue we expect to realize for work to be completed by our consolidated subsidiaries and our proportionate share of work to be performed by unconsolidated joint ventures. For more information on how we determine our revenue backlog, see our Backlog Information in our most recently filed quarterly or annual report with the Securities and Exchange Commission Book-to-bill ratio is an operational measure representing the ratio of change in backlog revenue, or backlog gross margin, since the prior reporting period plus reported revenue or reported gross margin for the reporting period to the reported revenues or gross margin for the same period. Cash conversion is the ratio of cash flow from operations to GAAP net earnings from continuing operations. Adjusted cash conversion is the ratio of adjusted free cash flow to adjusted net earnings from continuing operations (calculated as previously described). We regularly monitor these operating metrics to evaluate our business, identify trends affecting our business, and make strategic decisions.
The following tables reconcile the GAAP financial measures to the corresponding “adjusted” amount used in this presentation.
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| Three Months Ended | Six Months Ended | |||
|---|---|---|---|---|
| March 31, 2023 | April 1, 2022 | March 31, 2023 | April 1, 2022 | |
| Operating Profit | 289,863 | 166,215 | 527,668 | 343,548 |
| Restructuring, Transaction and Other Charges (1) | ||||
| Focus 2023 Transformation, mainly real estate rescaling efforts | 11,028 | 8,599 | 38,828 | 81,810 |
| Transaction costs | 6,282 | 7,099 | 11,552 | 12,761 |
| Restructuring and integration charges | 1,845 | 101,572 | 9,117 | 106,265 |
| Other Adjustments (2) | ||||
| Amortization of intangibles | 50,475 | 48,431 | 100,247 | 95,338 |
| Other | (3,164) | — | 1,126 | — |
| Adjusted Operating Profit | $ 356,329 | $ 331,916 | $ 688,538 | $ 639,722 |
(1) Includes estimated operating profit impacts from real estate impairments associated with the Company's Focus 2023 transformation program and related to the final pre-tax settlement of the Legacy CH2M Matter, net of previously recorded reserves for the three- and six-months ended March 31, 2023 and April 1, 2022, as well as operating profit impacts from charges associated with various transaction costs incurred with our acquisition and restructuring related activity associated with Company restructuring and integration programs.
(2) Includes estimated operating profit impacts from amortization of intangible assets for the three- and six- months ended March 31, 2023 and April 1, 2022 and estimated operating profit impacts on certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our PA Consulting investment for the three- and six-months ended March 31, 2023.
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Reconciliation of Earnings from Continuing Operations Before Taxes to Adjusted Earnings from Continuing Operations Before Taxes (in thousands)
| Three Months Ended | Six Months Ended | |
|---|---|---|
| March 31, 2023 | April 1, 2022 | |
| Earnings from Continuing Operations Before Taxes | $252,313 | $155,282 |
| Restructuring, Transaction and Other Charges (1): | ||
| Focus 2023 Transformation, mainly real estate rescaling efforts | 10,995 | 8,365 |
| Transaction costs | 6,282 | 7,098 |
| Restructuring and integration charges | 1,845 | 99,800 |
| Other Adjustments (2): | ||
| Amortization of intangibles | 50,475 | 48,431 |
| Other | (3,164) | — |
| Adjusted Earnings from Continuing Operations Before Taxes | $318,746 | $318,976 |
(1) Includes pre-tax non-cash real estate impairments charges associated with the Company's Focus 2023 transformation program of $10.1 million and $2.3 million for the three-months ended March 31, 2023 and April 1, 2022, respectively, and $37.2 million and $74.6 million for the six-months ended March 31, 2023 and April 1, 2022, respectively. The three- and six- months ended April 1, 2022 includes $91.3 million related to the pre-tax settlement of the Legacy CH2M Matter, net of previously recorded reserves. Also includes charges associated with various transaction costs incurred with our acquisition and restructuring related activity associated with Company restructuring and integration programs.
(2) Includes pre-tax charges for the removal of amortization of intangible assets for the three- and six- months ended March 31, 2023 and April 1, 2022, respectively, and the impact of certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our PA Consulting investment of $(3.2) million and $1.1 million for the three- and six- months ended March 31, 2023.
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Reconciliation of Income Tax Expense from Continuing Operations to Adjusted Income Tax Expense from Continuing Operations
| Three Months Ended | Six Months Ended | |
|---|---|---|
| March 31, 2023 | April 1, 2022 | |
| Income Tax Expense from Continuing Operations | $(19,060) | $(46,166) |
| Tax Effects of Restructuring, Transaction and Other Charges (1) | ||
| Focus 2023 Transformation, mainly real estate rescaling efforts | (2,907) | (2,089) |
| Transaction costs | (1,486) | (1,746) |
| Restructuring and integration charges | (408) | (17,589) |
| Tax Effects of Other Adjustments (2) | ||
| Amortization of intangibles | (12,031) | (10,808) |
| Other income tax adjustments | (31,741) | 9,180 |
| Other | 696 | — |
| Adjusted Income Tax Expense from Continuing Operations | $(66,937) | $(69,218) |
(1) Includes estimated income tax impacts on real estate impairments associated with the Company's Focus 2023 transformation program and related to the final pre-tax settlement of the Legacy CH2M Matter, net of previously recorded reserves for the three- and six-months ended March 31, 2023 and April 1, 2022, as well as tax impacts on charges associated with various transaction costs incurred with our acquisition and restructuring related activity associated with Company restructuring and integration programs.
(2) Includes estimated income tax impacts on amortization of intangible assets for the three- and six-months ended March 31, 2023 and April 1, 2022, certain income tax adjustments for the purposes of presenting the Company's expected annual non-GAAP effective tax rate to facilitate a more meaningful evaluation of the Company's current operating performance and comparisons to the Company's operating performance in other periods and estimated tax impacts on certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our PA Consulting investment for the three- and six-months ended March 31, 2023.
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Reconciliation of Net Earnings Attributable to Jacobs from Continuing Operations to Adjusted Net Earnings Attributable to Jacobs from Continuing Operations (in thousands)
| Three Months Ended | Six Months Ended | |
|---|---|---|
| March 31, 2023 | April 1, 2022 | |
| Net Earnings Attributable to Jacobs from Continuing Operations | $216,587 | $88,817 |
| After-tax effects of Restructuring, Transaction and Other Charges (1): | ||
| Focus 2023 Transformation, mainly real estate rescaling efforts | 8,088 | 6,277 |
| Transaction costs | 4,240 | 5,353 |
| Restructuring and integration charges | 1,437 | 81,939 |
| After-tax effects of Other Adjustments (2): | ||
| Amortization of intangibles | 33,575 | 31,997 |
| Other income tax adjustments | (31,713) | 8,846 |
| Other | (1,690) | — |
| Adjusted Net Earnings Attributable to Jacobs from Continuing Operations | $230,524 | $223,229 |
(1) Includes estimated after-tax and related noncontrolling interest impacts from non-cash real estate impairment charges associated the Company's Focus 2023 program for the three- and six-months ended March 31, 2023 and April 1, 2022, and for the three- and six-months ended April 1, 2022, the final pre-tax settlement of the Legacy CH2M Matter, net of previously recorded reserves. Also includes charges associated with various transaction costs incurred with our acquisition and restructuring related activity associated with Company restructuring and integration programs.
(2) Includes estimated after-tax and noncontrolling interest impacts from amortization of intangible assets for the three- and six-months ended March 31, 2023 and April 1, 2022, certain income tax adjustments for the purposes of presenting the Company's expected annual non-GAAP effective tax rate to facilitate a more meaningful evaluation of the Company's current operating performance and comparisons to the Company's operating performance in other periods and estimated tax impacts on certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our PA Consulting investment for the three- and six-months ended March 31, 2023.
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Reconciliation of Noncontrolling Interests from Continuing Operations to Adjusted Noncontrolling Interests from Continuing Operations (in thousands)
| Three Months Ended | |
|---|---|
| March 31, 2023 | |
| Noncontrolling Interests from Continuing Operations | $(16,666) |
| Restructuring, Transaction and Other Charges (1) | |
| Transaction costs | (555) |
| Restructuring and integration charges | — |
| Other Adjustments (2) | |
| Amortization of intangibles | (4,869) |
| Other income tax adjustments | 27 |
| Other | 778 |
| Adjusted Noncontrolling Interests from Continuing Operations | $(21,285) |
-
Includes noncontrolling interests amounts associated with the costs incurred with Company acquisition related activity costs.
-
Includes noncontrolling interests amounts relating to amortization of intangible assets for the three-months ended March 31, 2023 and April 1, 2022, certain income tax adjustments for the purposes of presenting the Company’s expected annual non-GAAP effective tax rate to facilitate a more meaningful evaluation of the Company’s current operating performance and comparisons to the Company’s operating performance in other periods and estimated tax impacts on certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our PA Consulting investment for the three-months ended March 31, 2023.
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Reconciliation of Diluted Net Earnings from Continuing Operations Per Share to Adjusted Diluted Net Earnings from Continuing Operations Per Share (in thousands)
| Three Months Ended | Six Months Ended | |
|---|---|---|
| March 31, 2023 | April 1, 2022 | |
| Diluted Net Earnings from Continuing Operations Per Share | $1.70 | $0.68 |
| After-tax effects of Restructuring, Transaction and Other Charges (1): | ||
| Focus 2023 Transformation, mainly real estate rescaling efforts | 0.06 | 0.05 |
| Transaction costs | 0.03 | 0.04 |
| Restructuring and integration charges | 0.01 | 0.63 |
| After-tax effects of Other Adjustments (2): | ||
| Amortization of intangibles | 0.26 | 0.24 |
| Other income tax adjustments | (0.25) | 0.07 |
| Other | (0.01) | — |
| Adjusted Diluted Net Earnings from Continuing Operations Per Share | $1.81 | $1.72 |
(1) Includes estimated per-share impacts from real estate impairments associated with the Company's Focus 2023 transformation program for the three- and six-months ended March 31, 2023 and April 1, 2022, and for the three- and six-months ended April 1, 2022, the final pre-tax settlement of the Legacy CH2M Matter, net of previously recorded reserves. Also includes related impacts associated with various transaction costs incurred with our acquisition and restructuring related activity costs associated with Company restructuring and integration programs.
(2) Includes estimated per-share impacts from amortization of intangible assets for the three- and six-months ended March 31, 2FQ23 and April 1, 2022, certain income tax adjustments for the purposes of presenting the Company's expected annual non-GAAP effective tax rate to facilitate a more meaningful evaluation of the Company's current operating performance and comparisons to the Company's operating performance in other periods and certain subsidiary level contingent equity-based agreements in connection with the transaction structure of our PA Consulting investment for the three- and six-months ended March 31, 2023.
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Reconciliation of net earnings from continuing operations attributable to Jacobs to adjusted EBITDA and free cash flow
| Three Months Ended | |
|---|---|
| March 31, 2023 | |
| Adj. Net earnings from Continuing Operations | $230,524 |
| Adj. Income Tax Expense for Continuing Operations | $(66,937) |
| Adj. Net earnings from Continuing Operations attributable to Jacobs before income taxes | 297,461 |
| Depreciation expense | 27,707 |
| Interest income | (7,630) |
| Interest expense | 40,613 |
| Adjusted EBITDA | $358,151 |
| Three Months Ended | |
|---|---|
| March 31, 2023 | |
| Net cash provided by operating activities | $132,041 |
| Additions to property and equipment | $(35,202) |
| Free cash flow | $96,839 |
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| (in millions) | Three Months Ended |
|---|---|
| March 31, 2023 | |
| Other Corporate Expenses | $ (108) |
| Amortization of intangibles | 50 |
| Other | (3) |
| Adjusted Unallocated Corporate Costs | $ (60) |
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| Net Revenue impact of CC | ($M) |
|---|---|
| Q2'23 Actual Revenue | $3,432 |
| Currency Impact | 101 |
| Net Revenue in CC | $3,532 |
| Q2'22 Revenue | $3,261 |
| Growth | 8.3% |
| Net Revenue impact of CC | ($M) |
|---|---|
| Q2'23 Actual Revenue | $301 |
| Currency Impact | 31 |
| Net Revenue in CC | $332 |
| Q2'22 Revenue | $297 |
| Growth | 11.5% |
| Net Revenue impact of CC | ($M) |
|---|---|
| Q2'23 Actual Revenue | $1,716 |
| Currency Impact | 44 |
| Net Revenue in CC | $1,759 |
| Q2'22 Revenue | $1,599 |
| Growth | 10.0% |
| Net Revenue impact of CC | ($M) |
|---|---|
| Q2'23 Actual Revenue | $224 |
| Currency Impact | 1 |
| Net Revenue in CC | $224 |
| Q2'22 Revenue | $230 |
| Growth | -2.6% |
| Net Revenue impact of CC | ($M) |
|---|---|
| Q2'23 Actual Revenue | $1,191 |
| Currency Impact | 25 |
| Net Revenue in CC | $1,217 |
| Q2'22 Revenue | $1,134 |
| Growth | 7.2% |
30 | © Jacobs 2023