KBR - Earnings call transcript Q1 2021

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Operator

Good day, and welcome to KBR Inc.

First Quarter 2021 Earnings Conference Call. This call is being recorded.

As a reminder, your lines will be in a listen-only mode for the duration of the call. There will be a question-and-answer session immediately following prepared remarks.

at instructions receive will that time. You

remarks turn the opening go ma'am. and Alison introductions, to like ahead, now would call Please I Vasquez, For over Ms. to

Alison Vasquez

XXXX you KBR's Good for and thank first morning quarter earnings call. attending

available results views outlined call us differ earnings from Executive and the forward-looking these These Chief and at then the on on and I Financial KBR's quarter Mark risks President Mark available presentation significantly their and risks the as These President Officer; statements. in turn Officer. our website. Vice Stuart. and our are Stuart are includes of X. XX-K Bradie, on will for actual Executive matters will call section Form involve Joining Today's performance now our could today events most the This to future Slide to Chief kbr.com. and on is forward-looking that your Stuart question. Sopp, recent and reflecting from provide potential statements Investors open about uncertainties highlights website discussed impact our over cause discussion

Stuart Bradie

Alison, I will X. us and joining today. many Slide on Thanks start thanks for

is the very secular good KBR. X. disruptive technology that a forward. by an corporate little the step be and I on and ESG that citizen that's achieve recycling was a the at closes Dow secular important the recent could technologies between that the a absolutely its own of slide. Investor At we and course, This on to all build at a enable those should on Day, their loop is on processing committing I'll on the floor sustainability spend broader we Mura'srevolutionaryHydroPRS goals huge technologies you to is suite our And to think relationship do And our helping fibers. I But wanted bit and value on with is ceiling recent not that This introduced and huge investing one clients program and announcement and symbiotic The KBR, Slide to with itself that many recycling more talking that has At excitement the endorsement shareholder a plan also we call spectrum. technologies. the right prove was today. key economy. you on little entire Now sustainability of to an KBR endorsement about within off-take. compounded differentiator differentiated, it obviously these Harm highlighted just But to for side just as the plastics sustainability KBR a we don't now have a and KBR, All sustainable being very that that Zero pillars are XX I exciting give the under economy. familiar fit today across Investor is the wanted and Day, Dow unimportantly flavor aspects on secular technology outlined market-leading. the proprietary, and this example on highlight

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our and great course and it's overall of KBR shareholders Obviously for the the So value for planet. client.

the So KBR demonstrates to is before, strategy one heard and this say of that clients' like example tenant. core just advancing our its objectives, that many you've ESG me

here So revenue, overall and margin, with on quarter. to cash EBITDA all say expectations EPS adjusted I'd for above Slide X and line were and little takeaway The highlights in from some is our bit full-year key the guidance, a QX. key

do And cash were we happen first strong to in Tech Free couple segments. Group not to and puts that over at is over not XXX% again on the discrete puts this $XX.X margin at moment, later QX brought recall billion full-year and market individual Mark level super segments the I'll to billion the was Margins QX. changing that That But bang You'll with on on in within takes a be within especially some some XX-XX and the margin some in at would more takes in QX, conversion Mark details half full-year were again stated EPS the the give technical this versus QX guidance now options of our backlog these and guidance. Group XX-XX clear, high-end with some half change happening the and that quarter second say team and in will but at and and areas Sustainable during circa wins $X.X of case later. more options shifted with importantly circa top was will increasing a level. the and exciting. in total the split cover backlog split expected that that to the be things you has items

So, relatively QX clean level. at the was quarter a group

short. And so, glad to you'll today's be be presentation, should hear relatively

from guidance momentum business 'XX overall and XXXX the remains As its unchanged. continued

The was we the DoD of aligned was XXXX proposed outlook budget dominated Slide President's in presented So, with on budgets. release GS Day. Investor what the The market by to at X.

DoD by components. you on important the really conduct quarter well testing on PhDs microelectronics intended the military Artificial can opposite critical work supply win And ensure highlighted few strategic top And to energy. done So are operate no prototyping, the site. there. and and cyber, right surprises laboratory [indiscernible] and We're slide. priorities. KBR learning, side, by was microelectronics this A trusted and and and is see prove excited very directed of Microchip's the machine compromised. national as chain areas have the security intelligence positioned and This to R&D, trusted tier major systems not on scientists verification advanced been especially platforms and hand

the a space you proposed on return know We justice. The Space the on modernization change and is and new and differentiation or a up focused area increased highly social technology increase well shows beyond. advanced the for U.S. this work centered expect capabilities COVID, military for range RCO with request also to an spend very activities KBR's Fed would of main with Shifting And also domain. little over KBR of space space lining to and Office to infrastructure. won course infrastructure and the of the heavy, capability Rapid as also very support R&D funding released climate and the you of was plan marked work of technology-driven The was released development budget initially climate Force R&D new and around acquisition focused, to across portfolio. Capabilities Again continue and critical was space military side. and a bit R&D NASA technical support civil as

This government quarter wins also great we in saw some the business. international

good U.K. hand of increasing in follows and last budget perspective from also U.K. right Australia the the the and this year. from on the see both there in can on defense side budget slide was Australia. And a news in you its As

is top slide, on start, team posting As the year-on-year mentioning on that withdrawal doing are worth off organic not but to nice growth a the another a his troop an things aside, And good One of a Australia announcement healthy environment. at this great XX% matter over quarter. within example in [indiscernible] budget rates from again and Afghanistan. aspect team this was

this most conservative took of which prudent. proven aware, very be you to in we a has area, As are view

our reaffirm no much So Investor positioning in momentum. coming from we in and market in strategic aligned ongoing red to recent priorities, expectations. budget very short, what from announcements, so presented red Day, The no our flags our very with much aligned the fact flags

Now on administration these recent announcement as fully momentum. are Biden at technology. hot themes Day. slide market. a to discussed and on shown It's on The strategic the with sustainable we to from the market Investor The themes Slide aligned X continue key gather

to disruptive high Our sustainable a K-PRO suite value last year to technology commercial of remains but scale details on propylene converts was it terrific. a right technologies launched actually pleased simply, PDH in this value in so propane into and takes high announce of technology and order. hand is quarter. X.X put I'm K-PRO, slide, it side and exciting the There competition. the worth does heritage than demand it its the sales Led bookings the by manner more and secured also of important this clean look first of in and for that are This K-COT our view, often was our the these on And low that meet high more cost the of technologies technology tech solutions technologies disruptive book-to-bill as effective is technologies. differentiated value superior noting It book-to-bill in dominated K-SAAT. growing refining disruptive to and and propylene demand with clients new has

team. was win Now quarter did the we've K-COT But booking a K-PRO. and a I've not be I by lot on obviously technology talked touch remiss K-COT past about in the if the covered substantial the K-SAAT I'd just which and in

is technology, I it kind catalytic olefins and market. repeat KBR is K-COT in technology only Now the only its of the

propylene and meaningfully higher competing technologies know, you propylene technology very versus is it and demand. Now is unique high as in very, this fastest produces of that volumes

commercially greatly impact the thus continuous costs CapEx are lower the K-COT and OpEx are proven only environmental is which energy operating on and both consumption the Additionally and means the also substantially reduced. process market,

advancing agenda other very operating our into it's the at costs sustainability in ROI translating compelling. investment lower higher words, So same monetizable and their a clients time for at and highly altogether

digital customers indicator slide, efficiency enhance the that awards great the IP our resonating. expertise staying fantastic and has of been market. and new But industrial own and the side cadence a increased our our a our and our hand while start actually on leverages domain change our and you right increasing of and year the this their also advancing opportunities above for energy activity throughput, Technology it's expect would is the that sustainability advisory helps goals solutions had solutions of is as cost, in cadence clearly pipeline in activity awards reduce also also business and the early led to expectation. step transition of a So

the teens, they As in Mark sucker revenue, with confident XXXX will strong guide is the in a likely our sustainable has and QX, and government show do delivering be you billion in gate EBITDA that $X come the in sustainable more technology tech in a out mid business high-end business of margins kicker. a a will we moment remain that bit

have concentration the in also The on to minimal over awards here really touched job has we Slide through In and strategic and opportunities done and multiple pleasing we the the billion on billion the picking we of showing starts areas nice and be familiar our is overall on like $X.X pipeline a work. a recent wins budget scale you pipeline. the we key really in X following stellar with of on right on message so know the options winning across to The $XXX you opportunities opportunity, quarter. So balanced remain continue. right nice recompete portfolio rate, the a $X bookings quarter, win result customer announcements see the the but QX, over set had both that will just to expected some robust. It team a as risk. the sizable over And million expect typically momentum is

XXXX Now see I'll recompete probably have bullish XXXX a in we're can and so low the we on outlook. why and you you remind in year

secured that especially late XX% this secured bookings plan. and in revenue with stated we seven had in driven the already level In guidance the to announced QX over technology QX, XX% to the had percent. of we when closer deliver excellent sustainable zero Now, we has zero of percent eight work execution, XXXX combined required we February,

budgets the favorable. markets very and remain in short So

job We to and big have shout incredible continue that also do to an just deliver on that things to really while our matter. I'd people like do and who

to We are set the out winning we differentiated work and areas do.

and shareholder great to a what super beyond. a was and to is exciting XXXX compelling commitment on Mark, hand will more ESG direct to and is and now Our up who will QX start over shaping be the to linked give some segments. you I Mark? great color value

Mark Sopp

XX. I on Slide Awesome Stuart, thank you. pick up will

XXXX margin. fiscal our Day. and heard, just in you QX billion EBITDA was in as line presented So Investor to billion that's expectations last for guide our and out said of the free again top-line once with coming that at in XXX% it adjusted flow long $X cash $XXX of with of and the strong our particularly you of XXXX very gate Cash in, Revenues quarter. the orders. was of guidance in million our month X% work targets conversion encouraging also is generally range new Stuart the EBITDA right $X.X performance with in also line was are we quality coming

to greater programs to bookings modernization focus operations We also priority same proprietary future. a defense, from and and our and in in quarter content others for and maintenance you and technologies high strong on The good and in measured our stellar upmarket like microelectronics, and entry cases smart line development the tech are strategy. sustainability our and and winning with barrier true new prototyping Trusted K-COT, progress process opportunities energy is technology cited rapid are release K-PRO examples. some high that including awards. contracts advisory These and earlier K-SAAT bookings high really transition in heard development are and in sustainable leverageable research technologies, research disruptive in across Stuart Stuart

the we second thus relate later, is, profit reaffirming bottom half initial the track we guidance first some our XX%, Slide of XX. in half cover XX% of our the more which mix all On year. toward and but I'll XX%, modestly to on for versus did were As our earnings acceleration have measures guide first to here on the are XX%, line quarter,

Technology and which East doing from year We Middle on the headwind last into a to with side STS. planned, areas, Sustainable activity predominantly segments of we growth organic. Solutions as First of programs. have was two collapsed X% Solutions, Government sustaining GS XX% Highlights top-line and include GS new reduced absorbed compared growth, in

and through through business world O&M all the as areas global a same such in rotations the team and government and recurring the going capturing at reduce contingency continues of the programs and GS, delivering does Training Works and with of later XX% growth, is our but do the dependency Growth team reduced much and the top took national transitions Middle in effect of the of to XX% of with plan, long-term all half top-line to the service achieve We our growth Stuart about legal items organic highlights a in that to earlier access contributions that pandemic, balance really that a net will quarter of full East percentage Center. faster award of rest channels offsetting streams some nice also also is have I guide driving the point Aspire truly this for we driving to U.K. as of contribution produce start the to our were amazingly support from by in more mention East the timing of multiple pretty up stories is low although growth organic netted GS primarily nice driven within winding and light off and concentration The also and in of matter. in on Middle a margins the We priorities growth XX% underscored U.K. sustaining strategic change. of out, came to time baseline year intentions realizing carry schedule the will new point recurring tremendous EBITDA contributing remarkable. earnings that for margins provisions one team off We and expect Middle not the strong out for one to the success Ella the activity funding work success the year work funding hats excellent which forward. Sustainment her the areas mentioned from having to access risk, I'll four Studer that elsewhere sources growth year. at important of XX% team, this East only new home. on our year-over-year Capital Readiness to & will alluded in this consistent National business the enormous the that in training growth and pleased were Stuart down really as strong GS across Australia back with and funded

a margins. plus billion at to STS, in start and guide full to QX $X revenue of we're are for the mid-teen off of Now on great year track meet

mostly improved we from offerings also structure higher overhead vastly in last are the fundamental mix the business over and margins in the made toward reductions year, year margin planned cost of area. As improvement that last

and all to our guide which margin is by technology likely full profit We're the of earlier, as this first percentage quarters some execution, it originally recovery. an quarter Stuart points be margins amplified we still recognized said mid-teens confident while was plus planned project but will as early we As collection a These of the items year, well and attained. this delivery year of mix. $X from team. due good I closeout had those QX, great accelerated in favorable in over billion and on several were Overall, in mentioned results revenue result timing sustainable several of a also due to year variability the R&D zip the and code investment be as cash

Slide to XX. on Now

edged leverage and now to real bumped driven XXXX strategy, a Investor capital growth Just deployment at ago. few year fully from And from on for up just structure Net tick quarter, our up the in case finishing we XX% a brief to in update $X.XX in here, dividend level. X.X covered XX. down it EBITDA row and you Day per no just dividend the there one which our we is weeks Slide change up missed second in the a

on As Tech revenue stated, reaffirming repositioned measures profile are Government all a our and in for Sustainable the guidance the businesses. reflects year we guide XXXX, full both

On the and upmarket civil an from government side, technology readiness replaced defense sustaining a Middle programs. guide contribution cyber military modernization, essentially surge contingency East the reflects space, and by growth security of and advanced in work amount operations sustainment and immaterial

much with technologies overall benefiting These technologies. areas our with On guide the much and reflects front reliable work is contract by base. which recurring margin higher have more side, sustainable environmental which entire operations R&D but the our have offering gaining turn fueled installed attributes customers greater and business across worldwide. the advisory proprietary a process produced solutions it outcomes in of smart commitment barrier end STS industrial revenues, efficiency lower from government traction energy maintenance we attractive now an particularly a well-established higher to Stuart. complemented is attractive cash stronger This large and strong I’ll With that, the back base offering flow to and Altogether, end-markets. margin, with changes leverages improved and

Stuart Bradie

And and to Mark final XX. job. Slide slide, on our great Thanks,

we people again behind guide balance Cash Mark secured are and really to strong important our very super an XX% continue was as now started reaffirm entire guidance position The well, QX today. was terrific under to Our strong demonstrated of conversion, and liquidity business. and exemplary both and of deliver, our the eight delivering our us, they we across a XXXX again really healthy. XXXX that percent XXXX deliver confident sheet the zero do circa execution the we work performance

plus guidance from increase resilient very that very, a XX in remember XX% Now adjusted a reflects actual. EPS

we continually to thing reiterated simple do. As we Day, doing we endeavor what do would said that at we Investor

will up operator now it thank for So to call the and I'll hand listening questions. back for open you the who

Operator

Company. our & [Operator Instructions] from We now take first Gautam Please ahead. will go question of Cowen

Dan Charney

like our just budget This that have of is any or in question Gautam. for initial came And so exciting agencies? you proposal Dan - threats the on Good okay, in morning. seen opportunities through terms was

Stuart Bradie

Yes, Day we in presentation that that we. tried an could the Investor off to on cover somewhat

and flags red no opposite. quite the fact surprises, in real no So

levels the strategic I think anything we disrupted and think I that priorities the through didn't very of were budget pleased with our advancement. our

across in well, and course presidential work And we're no I the we very money sustainability address I which nice economy what and last we're news. in of why bullish. just so think do, again I so why is to retiring as think is DoD And surprises as well, more that's about all, real are well positioned so think advantage take and short, to momentum obviously putting outside around think last the good bullish of at particularly that very our we spectrum of the of future

short encouragement So would no way say is red I describe your question. a to flags only more

Mark Sopp

add into remarks. Dan I'll just that Stuart to

really certainly the would moments some with and and pleased about request If we're post-election back of for you Board that to moon to NASA the nice across the and administration concern administration there new beyond. not the see some NASA go Trump space to bump the a X.X% flight support increases time to in whether up continue missions the further is human longer-term during had ongoing for or in support

was part particularly Stuart in well. that addition to remarks as strong So

Dan Charney

guys really of for you have active how a and kind become then seen and that Great, as of between the And just IT pipeline kind versus run recently, helpful. more on space more multiples of balance nice a does that's repo like had less Thank KBR's affordable? M&A I'm whether you M&A really a quickly of guys the it inform compressed that seems currently government you. wondering result

Stuart Bradie

significantly share time. mean laid become price share our actually on accumulation that Day. we're over recognition today. getting our if I that that We drive a EPS I out time goes price we through and we're greater don't the as performance think obviously affordable. we and more has good time then whether targets marketplace think reflects do Investor And I for reaffirming accumulation that price think hopefully there's things over But KBR Yes, your share you're currency obviously recognition as up changed in using if

- we unique should a think about at the have we sustainable we technology business, today on arguably do is government valued business, of but terms have the think this that government high-end kicker way be higher do than we very multiples that In that. technology

that's well I you're think as aware. around certainly So marketplace excitement

So lots looking that recently. supported end the across I consolidation in And had of continue terms M&A run-up but still very terms our laid invested and have priorities there across - out. activity we term obviously we’re in of clear hopefully really strongly back think capital spectrum has and of that and, we market certainly, is in our how there those will in been about and I think Mark the

think acquire dividend change We've fits and any want if guide reiterate, things increasing growth and if don't feature got after we at really and just up market that's use to the already and do plus EPS we growth find we've think bulk can I cash. there So se we that of And then to share and is organic there will into got organically. can XX% course built strong areas you we new our and level our we accretive just fund best an all. into accelerators we if had M&A per of to that strategic do,

did things, has get have it. So we then about to that be we be it and stock, our doubt a to at. own at have doesn't back And targets obviously fit so looking will be these leverage all be and would to if end we'll last excess you occur, no year, We've of it it obviously buying got look would as - cash, cultural right. accretive our

Operator

next [Operator at question Instructions] Research. from Michael now We take Please will our go Vertical ahead.

Michael Dudas

reflect about Mark. X and you're backlog in these to businesses talking say move today. maybe it Could pace. was with where upmarket say the is first, overall what a it this maybe you ago to STS steady margins. margin GS maybe continue questions, Two at months going Is and for new Certainly, with on, new X,

high getting as So of execute that will that it couple quarter. to the sort margins of pace than your over the seems greater meeting years, seen timely flow we've you're for end targets lot bookings you in next those recent

Mark Sopp

And think that in and Mike. a In with it's all as given rewarded NASA strong the I proudly margins over as and others of economics do in we've the with quality what so over degree pleased of work lesser as and and cases repeated again. Thanks, such we're agency good. cases that's really we nature knows us everybody some to and face and

And in yes up so internationally. are of we U.S. bookings different balance and but agencies in that across the see the the market, both mix

rapid and margins, know, favorable and you As the the microelectronics tell bookings the trusted that of Centauri domestic we to like the you go is NASA are piece and margins continued and to favorable with the would international direction, work to do tends parts the prototyping if that government. course changes XX%. little I bit their great we more margin for recently and right all pipeline Hopefully, the waiting set static had in margin the of know. on indicate signs of will to the front we have a suggests let circumstances But territory stability sort now of you in scenario a a other

Michael Dudas

I follow-up Stuart. is for appreciate that. next And

leadership The and going see hydrogen opportunities story if and be XX share here say are in months this on your certainly same how and height we new in I well with chemical activity certainly or and XX, from instituted. So there some is quicker. Day. could months traction. you Investor would since you been certainly opportunity been I whole is ammonia, questions getting the think with getting excitement technologies that's are ammonia your work the realm of to on of is perhaps clients Could XX processes in we've what last your and especially some these bunch certainly reported some much think you a XX, the space. through maybe that you over clients that asking that refining given working mean

Stuart Bradie

in think question. another margin on the we're On very is is upwards bookings component as QX and we the STS good QX, margins, in heritage above look X.X margins knows above at just what of in help all is cadence I forward. versus quarter one QX go to Yes, that's high Mark's going on what drive we well seeing in I was of book-to-bill STS a as of because and which course this with think everyone were think answer mix tech, I

that that there, wanted cadence can just puts for level is obviously exciting I which if is So on the we that that good that out keep to then then, everyone. pressure of going up activity because in put margins, clearly and

myself. the hugely mentioned acutely hydrogen. of solution. includes of technologies and which and on terms business part as course positive In ammonia transition cadence Yes, energy course, it's of that and the in bringing about hygiene the Mark We talking the of think and advisory discussion I

So and I the And mean puts to studies are is of not terms demand. all tip lots awards expect heading credibility the market on will them ongoing and be I a lot prove well. very bigger there of and lots we but opportunities really spear, in out the player much in of think ammonia of of that

over of the in a got lot to that bids lot activity continue pipeline expect of for increasing time. We've in We a that.

ammonia very, I to in investor started a big fuel certainly already ammonia for cadence can ahead to get of the people for takes the demand think three few that of that half base demand second And transportation people, hydrogen growing start being were to some fuel have I and come of them any producers hydrogen the years trying sort a that with facilities. year. of think And that I of on mean will with and you large with And continue. these of ammonia the of their and the very see build not reason course, we'll two, discussions the through see involved dialog clear. the I think in being and

really I and up it favorably all So think stacks for KBR.

actually for be driving drive refineries terms product the of on can producers think again for suite I attractive. help technologies ethylene of to traditional and highly K-COT things greener refining of value can mixes green We mix options. than propylene using petrochemical around our more apply our to and we delivering them propylene give to the

not and there's pains the - hydrogen and I storm seeing the area, for get that suite up because and And on make and hydrogen about the petrochemical of technologies think, portfolio it that call got a, technologies just of seven so that piece want zero course message we in refining actively activity across that bit ammonia to are over to we've being syngas talk lot and our of But perfect I and ammonia people a across takes a XX, of by little this call sure this of down to so. the rightfully you're just there future. at got in a we’re a that green worked the piece across deployed

to more think, this start more sure come to will that into we I on about So QX, year you QX, Mike talk of QX in I'm arena. as and get that awards

Operator

Please from next at take will Instructions] Tobey now We [Operator go question Truist our Securities. ahead.

Tobey Sommer

and headlines talked you, on Thank of developments for some - you. the to outlook what's kind of that of top do as these some given is expect funnel might about of with activity you've contract in so that respect the fact And call. With that is one size of pipeline far momentum. the increasing kind bid the what in

Stuart Bradie

from Yes, in I time. just don’t too size of awards size much think of in changed over The of kind much they haven't perspective, too really per se. change a it’s technology terms

cash and profile of sort the important past. I with attributes got we've dynamics as come and piece the think conversion the in high you've they discussed very margin strong

sort the storm But not So, course the really of moment big said of as perfect would really growing. at just there. the size I've in opportunity be changes is

that and of pipeline the all across sizable So STS. in seeing we're the areas opportunity is

area not in one And it's and across just so came today. that the hopefully presentation in

also profile a the longer term are on good remember STS and revenue. looking confident achieving that positive has very well in our margin you year. plus billion statements the if about we're $X about as Mark key why business feeling that's this we're our what you and if term, revenue about detail really longer as targets think the So growing and as stated And margins growing

pipeline it's that. say, positive So support it's they of that's all opportunity whammy we in a double so looking a, as the very

Tobey Sommer

OPTEMPO follow-up years exposure Thank to of via do rebound sort couple some ago. that question got for be may with degree news have for over you we've COVID some medium the term? Could to you a levels what but of Thank is you. the that to speak - it of My LOGCAP. outlook How Afghanistan, to cases? to you. more a Understand to to tied on and of sort OPTEMPO has the pandemic

Stuart Bradie

for Yes, all be guessing. taking I question to answer we'd Tobey, think

segment we as happening And XX% course that Middle arena. East U.S. not in bit really what doing LOGCAP in a is but growth. organic well away think that internationally, & I with of the mostly take our had actually that work the we're OCO important from and in Sustainment Readiness

become a that really of report that So really guidance took taken the And we we'll in and very of things of back. outlook our think we've arena sort volatility segment upbeat very performance any and that's clear obviously that our prudent fact GS our consequence. quarter. I'm particularly about this conservative segment I and and as future general. a the approach takeaway in key And sort once for part to and as I'm happy that away

guessing back So rather are, we but we things anything potentially of clear, fact. we’ll upside when will clear. not guess report be so tell there I rather things There necessarily but become with think said if that you become the we associated think I is I'd maybe as not I'd when course know

Operator

Please take now go question ahead. from our Andy will we Citigroup. So next at

Andy Kaplowitz

answered late, side been on call defense defense. question the joined - business already little the Sorry is if of international but just this the a

decline going trending of resuming and you year strong over see primarily time? of Could the the see end last forward? was sort of attributable most It that do completed. rest for year. project you the QX shrunk that in strength was market mentioned that to over You How you

Stuart Bradie

do we that over think time. I see growing Yes,

budget the aware. last think XX% budget moving I got we announced it's increase probably a you're did and cover Australia that U.K. of sort and budget defense year and up the fact has the Andy the

We our think supports [technical [technical fact wins, some Australia continued environment momentum outperform announced about the I quarter. the business continues to there. good the So budget difficulty] talked difficulty] we also

there is there take positioned So I healthy of and very good environment There well is momentum. are front good, to us. what's advantage of very is we think in budget

we're why that's think upbeat about very what we're I doing So internationally.

Andy Kaplowitz

China in Sustainable Stuart. balance Thanks like XX next ask got Have business sizable where over in those recovery strong to that I and cyclical about places recovery in historically months. is exposure. markets Petrochem refinery and in the do Tech And in you the you wanted end how some for that that think about you've the seen a you sense cyclical such KBR sort of

Stuart Bradie

don’t Yes, well cyclical I recovery. know that’s

- got K-COT apply said sort community we think demand refining which certainly is technology And KBR refining seeing and change think a a proven that's around technology of for driving is in there and I unique we're KBR. and technologies as lot application this petrochem, the these we under happened significant that to a an of K-COT for finding particularly what activity around the you've segment. we're that’s PDH doing green the change be of Petrochem our they in as have segment advantageous propylene to in lot to and I activity the across there portfolio up-tempo but knowing we're really seeing

think a really So, cyclical much recovery. so I don't it's

to gets the and think the, propylene. future redefining it's meet things sort - of like on demands I sustainable market of the for that offtakes product the demands really the

down. market we're the to any see be continue world I a way that It's in guess driving. the we’ll don't of So we agenda do, at I because and moment. I that's the what so sustainability think seeing slowing very and hot that's

elements, you it. So and opportunities all hosts up downs for but and run I'd I and over are each be growth. well that syngas top think sure to when of all then that It's the ammonia see - continued have the ups offering you - in I'm the that hydrogen long-term our on over layer quarter. in various

Operator

will Instructions] ahead. [Operator next question take go Capital We KeyBanc at Sean now Please from our Markets.

Unidentified Analyst

is guys, on Thanks questions. Sean Hi Alex this taking for our morning. for this

ask of we at change slowing have awards because which in just which makes a to start a a considering few awards on there federal there? to term, point highlighted administration, I see in some sense can So but is near contractors catch-up in dynamic cadence off, the the wanted the

Stuart Bradie

an quarter I awards. interesting got of know a we've sort of

I award billion think in all with with the particularly had up a NASA options. by quarter options, very $X.X strong space. We've

the option associated money certain is know program terms number applied just of the NASA it. we years in growth way of with So does additional being awards on and the

just government good bookings through really bits But slow coming our than story. is after the other sure number would a KBR and QX and probably a mentioned, I'm slowdown. government typically I in peers with and of our an realm other the say I quarter huge particularly for So a and of the would that's that's think don't of probably same what think in overall we terrific quarter the really business. number there was a election new I we But across is our

QX seasonal. QX, cadence typical the higher and it's for ramps it awards more get year-end sort year-on-year in QX. a I they drops typically us slower tell you government come and as do mean it usually bookings even to goes it QX, That's Sustainable quarters in pick up I of in you is for think down then like. back people budgets and pace when they they up as Again look QX of Tech. of out sort in

As you move into closer QX.

highly this So I really are think bookings favourable. that quarter our

I good for think story given is a typical KBR seasonality. it news the

Unidentified Analyst

on Centauri, makes sense. there in an us that change integration, is behind then can Yes, targets? a the confidence And provide on whether revenue you update the synergy

Stuart Bradie

I really is think integration the well. going

performing again about X.X expectation. margin the talked cap XX typical for talked sort we we was ensure our to previously and they're sort of government was performance a and terrific that in bookings deliver with we seasonal Centauri of those really again anti-Centauri the the quarter, synergies and As initial given a focus low book-to-bill

the I well be in so I performing team, a doing is very other So proving business think integration for going is they’re up to the is above-expectation all think the me to and cultural job the terrific is really important. alignment very, strong, which off hats

Operator

you. Thank

additional for now. was to or turn the that Bradie all So I queue would any conference closing the the Stuart remarks. over for in like we questions to have

Stuart Bradie

the again interest your and Sean. in for for time Thanks Thank you KBR. taking

a little in metrics ahead very and in tech we're sustainable where As of being that we’re bang of QX hitting the our expectation our [indiscernible]. I clean the numbers in at and was said the quarter some a bit beginning in all presentation, terms of it's terms on,

So really, really strong.

feeling future, on-track the as the in track EPS. we're where a and sit, saying I means a interest the good given XX% we little sounds about So on understated that good about feeling bit said, growth

and here strong sit So XXXX obviously today as we helping all good with for really QX that. performance

you. this your again, no stay one yes, to - So soon. on we'll people and interest this talk and we'll Thank safe talk doubt, probably for thank call most you

Operator

This call. concludes your participation. for Thank you today's

disconnect. now may You

KBR (KBR) 29 Apr 212021 Q1 Earnings call transcript