KBR - Earnings call transcript Q4 2024

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Operator

Good afternoon. Thank you for attending today's KBR's Fourth Quarter and Full Year 2024 Earnings Conference Call. My name is Tamia, and I will be your moderator for today's call. [Operator Instructions]

I would now like to pass the conference over to your host, Jamie DuBray, Vice President of Investor Relations.

Jamie DuBray

you. Thank welcome Quarter and Earnings Fiscal KBR's Call. to afternoon and Fourth XXXX Good

Stuart Chief for the Officer. our President Mark me then available the Bradie, Joining are on year full and Today's will highlights Vice at and website earnings and quarter is and Mark the Sopp, President of Executive questions. Chief Investors and Financial call section Stuart open provide kbr.com. from your Executive and Officer; presentation

events reflecting These from statements actual potential KBR's on and forward-looking and includes in website. future outlined X. their differ these on about Slide uncertainties discussion discussed available as matters our our as performance significantly This statements, results to cause impact recent views most XX-K risks forward-looking that on could involve Form

the included includes to earnings end of these presentation. This non-GAAP believes metrics investors. nearest that the at is to measures financial GAAP A company for also measure the non-GAAP reconciliation useful be our discussion of measures

turn now will Stuart. the to I call over

Stuart Bradie

Thanks, Jamie, everyone. up pick will Slide I X. on and good afternoon,

you at earnings of a Zero And program Harm moment. tenth month, call fact, celebrating our every know, this we Zero in anniversary we Harm with are As KBR. start our

preferred and give to be Mura Mura's I would like of partner, And is process in itself. proud update plastics of Hydro-PRT. engineering KBR the and to and an highlight investor is recycling on exclusive Mura's advanced Today, licensing progress. the next-generation an circularity course, Technology a Hydro-PRT pioneer global technology we're partner called global

Mitsubishi's Wilton -- Chems U.K.; built, parallel: commercia-scale being in almost in plant the are Japan. LG X there Now Wilton, in in facilities Korea; and all in Mura's

few come plants runs, commercial to to in incorporate Japan have successful manufacturing. operational Chemicals the sustainability aim with scheduled like facility a by plastics recycled Dow later. Mura had March looking the and and months LG to on is feedstocks their Nestlé stream customers key plants enhance The for and Now operations several in both

you about for KBR, Now positive circular of XXX,XXX U.K. packaging the oil. over Quite for residents recycle plastic and impact, excited barrels a the an annual the feel this what means of the economy equivalent of replacing XXX,XXX give and the roughly approximately year, course will impressive. facility to we're of To course. fossil of waste the

to on quarter, delivered XXXX our messages. top So year quarter delivered XXXX strong billion, revenue performance, full our brought a X total We level. guidance and over of which previous at exceeded and actually Slide with our that some is Starting of We range. key $X.X and expectations. financial billion fourth to the very $X.X performance high in the our fourth which

Organic represents of quarter was growth and for this the the year for growth double-digit for XX% Now the XX% X%. year. full

$XXX at $XXX strong combination strong the also basis million year, top and the adjusted range. margin, full execution generated of EBITDA efficiency, quarter points the operational in We roughly XX EBITDA delivered to up XX.X% our a of we adjusted and guidance year-over-year. million of for Due

execute and Now we our continue growth successfully strategy. methodically to

more continuing are segment topics with our work and our of webinar With early with markets. which customers winning are in and our move updates, globally acquisition to key in a the LinQuest. aligned of we are leadership We were new and and January, upmarket markets our better to now realignment agile

growth secular business minute. resilient our highlight also model alignment trends a more will in and We to strong

our advance outlook, the issuing double-digit all XXXX to are execution as growth XXXX by midpoint financial we metrics equates towards supported our which objectives. disciplined strategic across Finally, guidance we at

HomeSafe. X. and Now start Starting on to our Slide with an recent wins. update contracts I'll on key with

And taking from year. moves markedly January per QX, this in TRANSCOM. in roughly moves in day test successful increased Following ramp XXX now we're the

started just new both HomeSafe progressing suppliers. is early And a has there in earnest, program. in months transformational completely successful significantly, of and are program from remain us and interest increased execution XX-year move we bought the so TRANSCOM With really committed The transformation. the a volume to

our project. Plaquemines Over to venture LNG the joint supporting

first achieving planned in its to know, this one December, announced XX greenfield you which projects months the XXXX Plaquemines from to production just LNG customer over and the well deliver milestone decision, makes is Work of fastest as final Our built. be XXXX. LNG ever investment fully progressing capacity

their lastly, offtakes, LNG proceed year. We anticipated with announce the investment to ban, during final notice Charles to new the were project is with to the order now contract directed emphasized need the new deliver in reversing XXXX advancements systems, a is by strong and and technological energy. in expected executive pleased And mid-XXXX Lake hypersonics, LNG of a the limited decision in and later results here quarter, few The and fourth administration areas has for the wins microelectronics of number the advancing are unmanned highlighted beyond.

test environment in $XX This and And wins test and rapid aligns contract Defense our with design, of these for for Department systems win contract particular, capability $XXX nicely these million priorities. interoperability. win expertise million demonstrate in joint prototyping think program mission I the

And KBR's facilities selected our and X. the position XXX world, number Secondly, projects, and one think supporting Angola of really to our for XXXX in we've market-leading ammonia one across X in this on to produce bringing of in demonstrates base growing critical will, of ammonia the won Kazakhstan, installed was process fertilizer we new projects course, market-leading populations. build which technology

project. was project KBR management Shell's significant Aramco's roles Oman engineering several project the including and LNG project, the in gas Saudi Monty chosen quarter, and LNG for Lastly, Sheba increment

And for global agreement portfolio. in the KBR project greater momentum management extensive presence. their the security. addition, demonstrate very engineering is the gas to this differentiated and market need capabilities global for KBR and In positioned its energy a with market wins These project across and through BP well signed also address

in short, options. achieving more to allowing X.Xx portfolio a is on. bit backlog we multiple in And the different growth ended our trailing is later to strengths into environments. and XX-month macro our with offers $XX of objectives, I'll And of book business over us and KBR this one successfully navigate our paths In billion go year book-to-bill strong, that a

strategy On to what on X, we of do. in Slide said XXXX, doing so delivering we sort would our

strong on was significant performance financial and we area supported made over the the each progress strategy, pillars execution year. by our X across our of Now past

work award Firstly, means stream for the under it Thrive customers using a Charles our security over resilient this won we $X.X for delivery the vehicle, needs and mission-critical a more Lake analysis billion us. a billion-plus revenue of for IDIQ. contract LNG $XX MAC, By centers partner, national Expand, as Technip. of timely with we enabling IAC planned more secured our effectively And project, multiple contract information procurement, and project

infrastructure. State of with won Iraq, the started future new vision, also work of over XX%-plus. bid year a climbed volume MTS, Health develop strategic decisions partnership X-year to value on to billion, delivering including increase government with really lastly, energy outstanding We where by in Agency, bid billion the awaiting the $X-X we Defense and $XX their in over to this customers And and Department our help commitment

demonstration typical We enables Pure gas proprietary U.K. deliver from added that wastewater, by called extraction innovation. this a In announced recently new technology is Weardale Second and with in plant is GeoLith, production. direct produced byproduct selected zero-emission lithium the technology a which which partnership Lithium, for we oil the was from to

we new signs Center, existing With systems, integrating and systems, Information and control information or cyber are and and including Naval Warfare prototype into intelligence, reconnaissance the assistance. components surveillance warfare systems command

Alabama, across labs on-contract as market data. of Navy are We grow our seeing in already and X capabilities, customers. in And to stamp interactive also systems Maryland, a core Virginia This around several simulation Army, now the adds and intel and connection accelerator we're growth launched important digital our of modeling program digital these engineering and enablers Pennsylvania. completed and the and continues

drive Our globally. third pillar is excellence to operational

bps making delivered we expansion earlier, And doing described to so more our really tech in execution to EBITDA adjusted January, tech segments during project special efficiency. As strong with synergy and segments XX cost and mission we benefits realigned and associated discussed and operational both we down webcast year-over-year, sustainable as margin self-sufficient. we the have a of

LinQuest. we million returned fourth on capital focused important. buybacks regular and the in secondly, mission deployment, KBR's model-based engineering Our and over cash. pillar $XXX And through year, deployed particularly domain space during of shareholders systems and military And we the LinQuest expands advanced in in interoperability billion We expertise, dividends. nearly to course, effective arena with very acquired capabilities. digital $X the

contracts Now over of and evidenced X-plus of demand award available over these the $X capabilities going high LinQuest next will be billion ceiling this direct by value years. forward, in is

exciting. very So

included additional some Now the details key with LinQuest. appendix on an in we've slide

to it X. cover our KBR upon with to So differentiated our these strong multiple I'll really to growth. And business pathways and growth actions thanks for business trends, and built on model positioned enables resilience objectives. secular is Slide alignment now model, unique are achieving those which

leadership, on flows cash that's agile the performance. structure, and financial discipline, operations, model capital-light by Our across customer-centric And multiple are a in expertise cost these to positioning. elevated globe, strong and focuses strengths technology leading domain countries resilient really national supported important,

is XXXX and than missile NASA, and as customers, and the sustainable in business EBITDA see roughly believe outside the federal notably, NASA government including Australia Acxiom. most customers our very from non-U.S. Origin work opposite Now space X% less administration notably adjusted critical. can with relates well XX%, chart, priorities. such EBITDA you adjusted comes a in less business X% tech, of operations and those of satellite roles areas of government fed EBITDA mission-critical the sizable of EBITDA and supporting the is from U.K., X-X% missions, and warfighters, agencies allied in with mix, showing than human from positioned direct development our digital so warfare defense, civilian the serving commercial space, our U.S. like support to missions, in little And remaining XX% government to Blue new And civ. Middle East. -- generation We percent concentrated all XX-plus SpaceX, the focused the military The is operationally technology our

on is to touch growth trends strong me on X. aligned KBR to how secular let now And Slide

where align high-end to you with is growing as know, strategy differentiated. Our are siding we markets,

entire I of our can strong is read business but to Now that you, slide growth the well secular book to won't you trends. see aligned

at U.S. defense, picking focus. we mission just in priorities we the administration, of aligned per as a new So to particularly are the operational just discussed, to couple

spending. NATO resilience KBR growth both for positioned in and both the that remind we're U.K. MOD defense, overseas historically defense has from international supported I'll increased And international In missions. you and

infrastructure is discussed KBR our energy times, and And industrial in our market informed Mark alignment an fiscal model will KBR's particularly Middle XXXX. momentum this global economies, business we've has growth which of many well to really market. outlook the differentiation positioned priority, and wins includes trends base As very And real secular this and in shortly. a broadening diversifying for from East. cover strong year is

And that, Mark. turn I'll to in with fact, over

Mark Sopp

Thank covering good you, Stuart, and XX, afternoon, QX performance. I'm Slide on everyone.

over despite This over months. quarter, year-over-year on last tax As by XX.X%. EBITDA we $X.XX billion. within with QX. EPS a last driven interest adjusted XX you versus headwinds repurchases range, the up guided adjustments [ margins rate year. see, ] was XX% growth count in the across LinQuest and in at both EBITDA Adjusted $X.X past That's the segments share year-over-year like XX% QX mostly revenues growth our quarter in the the XX% year acquisition below-the-line and exceeded items up driven also FX late that favorable up favorable were lower by were was made Adjusted

Adjusted Revenues as XX% This acquisition, EBITDA by was a of up case. to X.X Slide program of execution, across was year. total. increasing XX the LinQuest strong up positive X.X% which the that's for segments I year. both that supported about And at with growth always On course, the starts year. full margins of with benefit, last certainly robust to the $X.X with and to contributed for versus additional result, percentage say, XX% XX.X% were points the excellent the type billion,

our XX% versus adjusted Also, been benefiting interest top of higher by mix. XX% terms for the offset of were was tech range. EBITDA EPS the margins end And as year-to-year. ranges generally EPS exceeded clearly largely top XX%-plus were of the whereas has indicated, guidance the at revenue and adjusted the of in with line increase, $X.XX, prior margins the case in adjusted year, year, as is our line cost. Taxes consistent Adjusted end growth the EBITDA Stuart sustainable at all up year, high

taken Kingdom million for action $XXX at by million the cash worthwhile net capital in payment pension forward conversion cash flows outcome million. of OCF term United were deployment we a XXX% in the did relative This going negotiated ultimate conjunction Operating obligation. make utilization did an but year, U.K. enable prefund year, low year to the benefits Later with to The long finishing in income. up a bumping to result end XXXX $XX our the we of greater was with of our seeking the voluntary prepayment capacity $XX for to in guide our certainly, in the intention of deployment collateralized over OCF capacity. of think the with

XX Slide segment performance. and our to On

Government with to XX% off $XXX adjusted revenues billion First Solutions, QX increased EBITDA X.X%. and in in with at million margins $X.X

military organic As increase you various U.K. driven defense on and growth units missile was defense the Australia supported include and programs as of contributed. support space, an Middle International see, strong, and see, technologies, advanced work also by performed business Australia revenue with military Primary LinQuest acquisition in and you in and XX% of all platforms. infrastructure Defense and including Intel X upgrades particularly the here up & drivers well healthy core East. XX% also by digital hypersonics, increases growth.

reminder, as the a part infrastructure of shift early to XXXX in we in area realignment discussed January. As STS the will

normal year was quarter utilization. with to QX X.Xx. in consistent last were lower with the due labor Margins Book-to-bill seasonality

last our that million, And of quarters. will year, we'd favor with XX%, hopefully were unusual the isn't future EBITDA $XXX at XX% for revenues consistent note in a up full adjusted which XX% in up protests, very for While margin, QX, awards significant also billion, $X.X benefit year. with remain

the up that softness were This recall. with XX.X%. in market earlier the in remarkable XX% Within Sustainable is Solutions, adjusted in at On given you revenues to year saw Tech EBITDA tech. and million $XXX quarter margins sustainable might XX, Slide quite in this the we

As the various Stuart and summer, decarbonization increased since suggested demand offerings. energy for has ammonia, security earlier, our

these both projects with program contributed project book-to-bill have consistent LNG after case All consulting Ammonia services U.S. with were same the demand are margins, in technology, long-term management, up main X.Xx. election the XX-plus of projects the New a QX and signals picking And growth on November. and percent. performance year, been drivers strong LNG significantly. factors particularly as has our drove all targets,

Book-to-bill also a with year XX% double-digit billion, consecutive has XX%, the adjusted full This year, up adjusted the EBITDA were For revenues of of $X.X a at the full year third XX.X%. marks up had EBITDA and $XXX margin tech million, X.Xx. growth. for sustainable was strong

sheet XX Slide capital to the Over and and balance matters.

executed XXXX of As course with balanced year. set a Stuart earlier, we LinQuest XX% billion deployment over shareholders on capital in consistent billion in a $X of about plan of X.Xx. primarily XXXX, we to to the deployed said with we the ended at that rest attributed capital returning cash the beginning over leverage the buybacks. $X through the We with deployed, net With acquisition and

grow We ratio leverage we expect this down XXXX. work to as EBITDA in

of Now I'd allocation little clarity to capital bit on forward. going a priorities provide like our

and also in leverage fund soon. probably number two, Number as quite below growth interest should a the Growth we organic one. EBITDA environment. first are actions rate in ratio operating to excellence. That's us Our to X.Xx get there targeting you is priority, current expect, drive

to is in $XXX Our our we of capital returning stock increase we buybacks approved to more. our today. next to Consistent Board to buyback Within with authorization bias plan shareholders. priority continue full an announcing effective do our with are growth, replenishment has this, million

We're also committing attractive maintaining an dividend. to

or XXXX, has the in levels per long-term quarter. Since the Board $X.XXX regular been dividend targets, annual to growth our $X.XX March XX%. dividend dividend approved increasing first tracking XX% our of increase are to has the we in rate our increase average by per this As effective with our regular consistent annum

have cultural Finally, to will financial disciplined take to strong strategic bolt-ons profile. acquisitions, attractive a focused also of approach that on continue a and we fit, fit, course,

XXXX I'll guidance. now turn to Slide XX fiscal and our

For fiscal XXXX, issuing we're following. the

$XXX EBITDA $XXX in representing of revenue at to an range midpoint. increase XX% increase anticipate to billion, midpoint. expect $X.X million at billion the of XX% We adjusted $X.X the [ of an We of the million, ]

for We flows, at million, CapEx year, cash for $X.XX be $XX of the midpoint. XX%. and expect of And to XX% projected at to million effective the $XXX million operating rate XX% to a to between lastly, up increase we representing an is is expect midpoint. XX% approximately and the EPS $XXX $X.XX, adjusted million $XX expected our of range tax

XXXX we Finally, we EPS issued of first Day. to the are well in towards are expecting phasing the half, And the objectives for our adjusted progressing XX% be XXXX XXXX, May in XX% half. those in with targets second certainly Investor

those economic the assumptions, and guidance our political and environment. key highlighting given worth are include I think current Now does

security we customers, operations global we earlier, the support will dependent on First, be U.S. said as the our Stuart national by that believe continue government. and programs demanded to of type space including and

that support update accordingly in certainly we currently assuming programs are as all changes place. we'll an We material remain materially, If provide appropriate.

for of including remains is probability security We mission-critical programs, full national there assume tasking, operations significant on-contract and for intact. continuing believe and year the growth government fiscal but a funding XXXX U.S. resolution modernization

As we ramp for moves domestic HomeSafe year ramp peak a HomeSafe have will at previously summer considerably. volumes be We're in the assuming season. communicated, full which up continues pace but XXXX the not to

growth. is million less to ] XXXX, in the than This range $XX Our a [ for year. million estimated to quite so compares million contributor $XXX to revenue $XXX

We effects tariffs. contemplating of are not some material the from proposed

And Canada from Our remain today. current China business we rates finally, and expecting levels we're are to foreign rates are and static not interest in material. Mexico, exchange where

is our team. strong Investor Day, and consistent global confidence, do momentum a we we and very closing, targets at with so plan set growth with XXXX in dedicated for So long-term the

Stuart. to back it With that, I'll turn

Stuart Bradie

on Mark. I'm key Slide some Thanks, XX takeaways. with

fiscal and to earlier, move book-to-bill of We differentiation. X.Xx. discussed upmarket XXXX XXXX, as quarter growth, on we in and position with year expansion of fourth double-digit results and our delivered in areas strategy strong year fiscal Firstly, margin

of I government adjusted from diversified think resilient we non-U.S. with business more and EBITDA model demonstrated a XX% customers. a than generated and portfolio our

confident at entering are double-digit the with work We outlook in with under metrics percent XX-plus growth our and XXXX midpoint across XXXX all contract.

take and that, Thank to your I'll questions, operator. call With are Hello? happy we to the you. back hand the

Operator

[Operator with Brent first Davidson. Thielman from Instructions] comes D.A. The

Brent Thielman

guess, the terms question the for just billion it, midpoint. great initial for $X.X the a revenue here outlook billion, of to maybe XXXX, call $X.X I on year. in Mark, up finish Congrats at a

to you XXXX? in from million what in maybe heard of integration you little I $XXX LinQuest a you going. from And further just Did $XXX out think specify I call HomeSafe. that anticipated how terms million color is

Mark Sopp

Great, Brent. for first, question. That's tuning in. thanks great a Well,

the that million So X about billion XX% roughly you revenue mentioned Of midpoint. guide, the $X.X $X.X in billion, remarks. at HomeSafe to growth points the number. prepared LinQuest number. talked We is That's our $XXX represents expectations, ballpark, million percentage that, of per the $XXX the the of very about similar running It's consistently year. inorganic addition a 'XX with to growth. numbers, regional

couldn't culture, great. many Really said after better. won bit are go quite performing which The collaborating pipeline. new the The some we and really already interesting to of BD we've which of as times teams a work, still be in before, is

that forth well And set as to as do. so -- all and margins this good is we

contributing of status they integration happier team, be with capabilities. and the set couldn't we are So the of the to KBR how

Brent Thielman

Plaquemines. I then be a here. my It's milestones And critical stuff mean, would lot Terrific. here with -- of I follow-up guess, just some obviously,

discussions, for waiting if of beyond that there. up -- just the approach success that others tempo how Plaquemines FID with you'd here? opening we're maybe with great with and But of Lake curious discussions Charles, is maybe that, had the Just outside

Stuart Bradie

question. Good Yes.

outlook about talked prepared LNG. in I remarks little the think we've a bit the for

-- beyond. couple of us going of to and a of over think XXXX I million through is there's to gap certainly the be LNG telling hundred tons a world

seeing lot some So customers, there's in of entries. the activity. new a We're of market market lot early engagement LNG a multiple from

Some of energy are projects focus that older are on consequence a administration's revised being security. new as the

future. a very part going of buoyant our think I So it's be to

produce are debottlenecking with that to seeing as today LNG operators more facilities expect. We're would expansions looking at operating you and

Rustan certainly before and record up LNG time in time of particularly chains current to in there So position, be in that LNG works, a of supply how certainly market it right it's all think and I good terms from delivering in back and as first very sort et [indiscernible] exciting cetera. currently to in -- a FID very the

in there. good So yes, a we're shape

Operator

with The of Bank next Mariana America. question comes from Perez Mora

Mariana Perez Mora

Could you main are like you discussing think contributing growth think to when you what about drivers and about that? XXXX how like mind the international

Stuart Bradie

of International side, that side big context government Okay. but on technology also for it's a was because us. people think the sustainable the our

and particularly -- rest clear And terms growth LinQuest it it to et I to taken portfolio, of across relates as HomeSafe. think continuing in as balanced of MTS resolutions we've in was a the the Mark very pretty view relates expected, cetera. with

and it's I think balanced I we've So way think prudent, that. approached quite in that's the

government markets, may increased course, the spending defense seen opposite Ukraine in have as you forward. a go Europe, seeing and Europe lot The international governments. of spending, noise from of we're increased happening expected There's as in what's we from

I actually believe this. from call Australia. on But also, taking is we're what said, Mariana depending which this

a pertain enabled And side. market business in year in and it's we've the very here visiting down our the this in is here. Australia. government attractive down and And looking got out the we're here. high-end, infrastructure the business very both And digitally morning and So customers government the

years. So that over forward in we're business going good expecting pretty growth multiple

in In the fact, what's that's pipeline.

we Asia I think, relates activity it seeing bit at but look tech LNG a in but prepared seeing business, of about East, the talked the increased -- also thinking So are we've people not in traditional many on so we think we're of over I over U.S., has the when covered Middle that about sustainable and I as guess, And remarks, are most ago, little companies model is the that take suits fully got think our proven adopting, your ones we But as to which many I risk starting EPC, years. to off well. course, importantly, that years I a and properly. appetite,

good stead. just was stood very at that So a

-- in But there. demand the south, energy is is growth global the

in we're I Middle I increases think East, seeing -- Asia. think

for important those is technical East double business, grown East busy. the Middle example, just executing larger and not that hubs our very, in an Chennai. south, but very terms we've But Singapore a other role, in of projects plays also in the countries presence, in the Middle where Houston our are Our digit across

So the we to which some multiple I'm that sure hit some in U.S., be it's it will have -- not multiple why think outside we're proven downs. is we're past wanted so that's that reinforce our seeing of everything I be pathways bit. those has the activity ups, There'll lots But resilient, and we to perfect. very having about quite pathways a why we growth. talk

So good I going in shape we're think forward.

Mariana Perez Mora

And I you support do about you Europe. may going months? in like then doing that all are up if XX to follow How next that in LOGCAP XX the and forward like on think the

Stuart Bradie

Yes.

another think to margin. very closely. I of We've revenue. internally single-digit It's and a at one it question It's before. good talked $XXX looked about we've $XXX million million

in view terms significant. our EBITDA, a of not it's point from of materiality So

into prudently. -- I sorry, next balanced think looked In across portfolio I the as view the year, budget said, or very as and guidance the we a taken we've

really think it we the Obviously, the basically way in speculate can't we said to goodness about in I Obviously, terms think And was drawn knows of happens. Secretary outcomes. the what know. medium it so that Defense -- term, but I mean, Hexis we the short is,

have for we taken, so in position got we we've so a confidence consequence I balance the think quite got that lot that, the of a a number through ultimately, And And we've Mariana. of the 'XX. think as through guide it's of we how terms in -- appropriate fairly I of terms

Mariana Perez Mora

HomeSafe, And level this we in about last think Mark, margins contribution? probably one, should of to EBITDA as current check how just we

Mark Sopp

and mentioned LOGCAP you broadly? Or the or that Yukon piece just V

Stuart Bradie

HomeSafe. Only

Mariana Perez Mora

For HomeSafe.

Mark Sopp

Okay.

program. I about couldn't with now. Anyway, ramp-up a major we'll with amount you due right Mariana, a very of of today I'm But in in early. hear quite sure that would HomeSafe, expect phase, all we're cautious the profitability or We're that issues others. and bit to we're ramp-up a the far in transformational you from talk distanced Sorry, a year for expecting

the We're And really team so to well. navigating we're of that proud efforts.

And a really the so expected. XXXX, profit as negligible contribution to it's for

carrying contribution of we parts so really And business see the today. all of other

report today. that year, status pretty we'll comes the So and as the during that's it

Operator

The with comes Steven UBS. question Fisher next from

Steven Fisher

up cited sure you there the if you what good over are terms referring So mission to awards business. the technology Or of quarters. what in is of getting stepped pretty business where back the protest. you to I talk in know in of bookings Just Can guys in bids. about wasn't the XX%-plus I that just was bidding I increase past you on the process year decisions know in those? trying terms there? to ramp come you're sort a in that X the still of for like landscape gauge look that things under might next

Stuart Bradie

this our we realigning whole webcast through teams the of And we've our exceeded Steve, say we've 'XX, our reposition upskilling in of the proven. and in had capability target we and development about effort talking business which MTS. volume, course we in been as really that and said as Yes. bid January increasing a and bid

further that XXXX. to expect into grow We

have the close we work. won that's going We actually protest that under through the $X.X typical won to a various lot machinations that protest protest, probably we've under And quite agencies and billion. where within

hopefully, and maybe to So start QX. into through come in will that QX

with course. waiting the the XX billion a we've win ourselves course protest really next $XX through award And of of the months. So as for that up got then sets

waiting valuation and award. submitted a really that's bid So for

that addressing of this but thought, revenue I that, and we they say the would And timing, where the speculate in in with but on concern. procurements and a security of it's year in this XX% utilizing healthy, work is in of to that won't But particularly they that's we terms quicker are into national environment. a indicator business going customers' actually I and we're remarks That's for us contract prepared very unique on we're think great our positioned. for clearly, we under the notes, I So very us, But contract. in healthy we're of to really secondly, -- front of alluded quickly the top number. what of talked that get as vehicles quite book course,

MACs, well We've are 'XX can we being and be 'XX that in $X that done unique able we into cost 'XX. billion in circa on seen and to IAC fill vehicles with we've that contract vehicle utilized the as extremely LinQuest contract product

where areas we have very So attractive actually very performance. strong can

And talked growth. about adding digital and we contract think really piece as the I exciting is on lab

you not we're like, up add all not mention, pathways under technology not in you when an by X% sustainable these the think, [ so that's I levers, international CR terrific. growth, is if way with contract into going additional government constrained a ] those really So any year, in happens what that's to to obviously,

Steven Fisher

of it the great. you Because then not more on at you not move. now a maybe the domestic things give but little sounds just nicely maybe on could beginning this stepped might like that the -- up build And is saying year, has full pretty momentum, color to a it change like year progressed. how Sounds HomeSafe, sounded do little the started maybe or you're

happening it's little perhaps impact at of about of but of the know just talk scenes. the are more what's but of curious a of year, going I back what same puts you learn behind is So said holding yet the a profit the and about what's bit some kind to assumptions? time you takes right what this there, can negligible for sort

Stuart Bradie

Yes.

give they're to release out I the context, we up, Alliance XXX, their a wholesale and XXX own think taking right some press moves day. saying put recently orders circa of just So

in January logged almost X,XXX just in I alone. think we under

quite December. about a XXX% It's that's increase actually in So December. increase from an probably

the is see an now additional of we the XXX over course, providers progressing on with and XXX, that, ramp we nicely. providers on service supply are took So taking you chain. and well got can And in

I But remind performance massive of true a X program. would everyone, XX-year just month our into transformation

We think is I objective which in want we So the improve And like underperformed we're program, terms legacy that the correct think we're against but I our has goes really our hence think make we through sensible that also to that I performance programs, And start the -- sure make -- in many areas, of think to it's start to deliver. -- is will stand all change. and performance how really and against ensuring which legacy that as the forward own sure we very, program that focus we have the very program, step. perfect, really that want of we ramp good operationally, being about but to be. not improved just probably a to

delivery. program. of an it's a on more being So element focused It's XX-year

Steve, As to I win battle lose and you want don't war. in the said,

careful Alliance see has starting to HomeSafe is think I are and being we're actually gone to as XXX% and interested both committed more And supply you new in to very got say, -- I and be how and I that at you've about the coming openly this want clearly, I think quite sure program. talking deliver new can You say TRANSCOM make way of the to ramp TRANSCOM, the would forward. because General the up chain the in

-- that's progress the I you year, quicker, suggest. a other balanced I it's our to if little And better around, bit we'll as start that I in tell tell would we we but way obviously, guide. go we think you sensibly the So than think

Operator

Jerry with from comes question next The Goldman Sachs. Revich

Jerry Revich

So factors Can we in guide you award? laid Government risk the it see about Solutions if a do level be should of about we through relative what the thinking potential 'XX, to guidance out? talk you folks to that slowdown risk

Stuart Bradie

what Jerry. was back Thanks, goes earlier. to I about It talking

looking a think very take for in what ultimately, alone, diligent do I MTS, very low rates that's that the are million a are if is just -- uncertainty the given for I element to actually $XXX -- of with going again, considerable and we see growth for the then you you $XXX these we've balanced digits -- all MTS LinQuest the I expectation you're you do. things business. timing and think and when at HomeSafe. speculate footprint on growth our think single you $XXX to that's got base the And back, math guide. international given And that's -- If But can million can't million that

to just So color. you give

we've we're our overall, pretty going got that bullish line targets, And we're times up and is in about us our pretty that. guide. pathways I of talked these nicely, on having But which then long-term multiple confident really you've of feeling sets STS, call about sort think with and numerous this

We've it been thinking years energy it's -- LinQuest guidance are world, what across probably and -- quite down see that's when And this every year. revenue happening our XX% with got probably I you to start when that very doing could environment, think with what's to been start we've with growth, in hit of people additions in we've markets break HomeSafe all the because of numbers this, you -- when I number. you look that's the at like the achievable But in we've the excitement, the and a high.

Jerry Revich

line contribution then can in talk income that's embedded performance the Plaquemines' Which And equity lower you 'XX, on about terms equity guide of please? the in income in drove quarter? the of the earnings Okay. business

Mark Sopp

to good up. pick Jerry, No. that

full did the the But down jump my significant deliver and view. in for see we despite margins to in that's year, from the did positive, in thing And for QX, equity the so you is earnings consistent a And pretty one equity numbers and year-over-year. contribution were earnings.

exchange from equity fourth were for one by actually quarter. have a then currency similar it $XX $XX Victus. in there a was million. the That in There was or One show a downward did you adjusted million. that X contingent that's VG on and it on That a project. added was but there, was adjustment particular when earnings that that out in things does item. liability Believe happening reduction not, And number accounting-centric the a EPS, the line at foreign still look were back noncash we remeasured very Plaquemines just we

the had scope did that position our accordingly. a good had we of lower we actually so is but And generally as completion percentage a JV increase project, to the on thing, reset which

and a it, took from the but So and income stream to longevity QX. generally, the a project adds good it thing minor step in back

confidence the view not So the the guide are those the of substantive so 'XX. have for outward in really and reasons, we the business to

Operator

from The next Vertical with question Michael comes Research. Dudas

Michael Dudas

go the that name hear for have we'd Australia didn't again. thing. I way the ever think all to you viscous hope didn't I

Mark Sopp

It's Yes. It's too early real. not Mike. accounting,

Michael Dudas

performance call we realignment had some businesses, And Stuart, maybe understand. the or then? January what's you into some since opportunities the guys and for of I wins maybe what's and given have beyond get maybe given or that maybe can the happened the could lift of better you that have? you XX% in giving with of share, the tailwinds even KBR, but what realigned outlook you more drive some to business confidence

Stuart Bradie

Mike. Thanks,

substantially we end to we done. January. So has we was integration haven't -- of in to that of that the And we announce the as as systems across realignment talked I'm is and things the 'XX, as we pleased achieved said, done headed -- when LinQuest

So that's kind of us behind now.

we synergy mission the us next positioned competitive for bottom we The as million I So achieved reimbursable tech across to the just tech but just realigned that. go because international drop cost-out nicely across legacy forward is really our and embarked in seeing to exercise corporate STS. out. U.S., is company realization now these the the moving know -- that the that with costs infrastructure of piece of all and we year. into the we of you'll We line into And the we're think business. it's $XX I sustainable in opportunities. see the what have from into be have really government contracts took cost way And on, the it -- didn't reduction

So up that I all sets think nicely. us

So that's well. all behind us as

the realign I of And down we exciting. we've the that us given our customers. like customers pipe that beyond opposite portfolio, provide think And Air this those labs that got talent the to certainly, make addressed already 'XX book and the aligned LinQuest broader has we reason very space portfolio things portfolio's nicely looking sure fantastic coming opening business particularly Force our was main more was and is positioned wins, But to digital-enabled in to solutions and remarks. across did and the and we're deal the for that, in at with

looking tech that and at But also in East, like and well and down model-wise, the in do portfolio and obviously, sustainable work infrastructure infrastructure a supporting Australia within as where what's there going much got we've really both countries program defense the AUKUS presence. STS in is really, balance we we transport Middle well business in strong of aligned as very are have water the happening infrastructure things very across

that's customer engagement and So really is brand strong, our our helping. and recognition

shift. that did had well in received, think I -- think easy our of we been people. day a by move bad costs team job. So fantastic I has It's taking not an been one The the which terms out,

of I had we've combined capability the no a in And consequence. are as So then the think dislocation the thirdly, seeing appropriate benefit customers the markets.

Michael Dudas

follow-up My is That's for Mark. you encouraging, Stuart. for or

about timing, a how that? there's of the to flows capital your maybe take And to is the go maybe think and in leverage dislocation talk and as to the valuations allocation, given you repurchase, acquisition you Looking dry desire share can back net -- book. and targets powder cash assume about of on maybe advantage the that marketplace, I

Mark Sopp

Michael. Yes,

quite picked clearly. the remarks You up early

said clear in for And I think I outlook, where eye so to and times, the light we as with which in bias substantial of our And with buybacks. M&A, where are while many with more do was the we there's very always Stuart authorize And and Board are resilient, a valuation, our have that healthy is an that, a did increase authorization. we pretty

pay debt and can targets. just to really growth, there's year-end X.X, we need lever no because maybe to cash use EBITDA to down our X.X naturally X.X down achieve from by with

out the sitting we sheet here window opens outlook can, buybacks we XXXX. do year capital and the closed So on a we for to the we have the bit as cash with expect we excess have, balance when cash flow of as the little

use we're certainly that bullish environment. forward of going on capital So this in

Operator

with from The Citigroup. comes Andy question Kaplowitz next

Andrew Kaplowitz

you little Because question Can now. the seem be ammonia color is doesn't projects demand from and coming ag it energy a from? STS. Just right on Maybe where maybe like decarbonization. more a would similar for security for it color

growth? Middle of I other LNG pockets get Where spend. the pickup. potential I Stuart, are know, you East the think we mentioned

environment So it. of the maybe of I'm trying on side. about just lot durability a demand think to that's But STS the

Stuart Bradie

Yes.

do Andy. STS we say. would thanks, piece, in durability Yes, have I So the

their only the lots diversify I gas everyone East, think, happening in on picked and as the the as market, in you seeing Middle understands security also right, a as they U.S. You're but market, But Trinidad across understands there in said, which obviously we're tried the meaningful I what's you security really seen and we've around got to and We've way. of energy U.S. dynamics and happening economies think energy supply-demand broader sort the LNG rightly activity. exploit in in really continued the up

the the energy fuel because becoming transition we I think as gas -- the right as piece transition moves affordability of to challenges.

within individual those. national In We much to tailored focus reinforced we country operational allowed in terms the the has national of what's play. customers that a countries of and the have I right think very for very and us ammonia, sort really to focus the be

prices and ammonia highly attractive continues. the facilities I like it And have Angola think think competitive. be gas the will that very, trains we I global Kazakhstan looking into first many And the like of makes take that there, the provided in places at government that very marketplace. assuming for you're Angola, the places when dynamic

into investment in in fertilizers multiple And for major of first Kazakhstan, decades. sort that's the there probably

So we drive important, footprint sort from And that's it's it's very perspective, that with globe whether they're -- why extremely a these the typical of development projects. and an which it's of business business across dynamics and country strong capability different a in -- execution not the have. a economics global

got technologies. and nature, think about to And portfolio very comments different again a go the think I I these we've pathways So to XX-plus of back growth. dynamics multiple my but -- are I'll

ammonia. just decide not it's their as companies know, up to And do down they'll want various and they resources. go you As what with

Andrew Kaplowitz

in maybe just then like And QX, was quite revenue back Stuart. to helpful, high. Very

any that new I hold? think like before like But administration of the was flush did a you see took something lot LinQuest of or that obviously. sort spending

might you bookings be -- you you think always for expect they a have you quarter be far guys, -- to seen see that do bookings little a obviously, should so about as all or do But And think impact before or can Or is think how any up? we lumpy. any? DOGE X timing about we pick slower for

Stuart Bradie

all, on yes. at seen So impact have not we DOGE,

first terms we of next the timing just resolution awards the under we on in we billion QX, administration, be the those as just and into QX, -- in strong reasonably that what's of could of probably have, that's going continuing half that. And year, would protest. come obviously slower said, the $X.X the protests. depending the on timing which within make through year, won't and of they'll we speculate of think would bookings In probably happening But resolution do the

So of that's on kind where we sit that.

I international year, seen years, think prior we've government through in be progressive and will as STS similarly. the bookings

So...

Mark Sopp

That's area that a and tasking. say, the bit not CR But common tasking about I slowness DOGE little because to in have quarter. been I'd some done have and of in we in did things of pickup in the too I -- place. the the administration rhetoric in quarter might maybe of with get with new Andy, change bit And a so fourth the there push dynamics forth, of little fourth the a upcoming think

as a well. in quarter We the days had of couple extra fourth productive

seen haven't pace. of So that a a said I we further the bit. impact what endorse helped little Stuart will just about direct

haven't far. out government We collections any thus seen of the adverse issues

at time. we'll quo goes, seeing we're this status So how that but see

Operator

comes Sangita Jain with KeyBanc. following The from

Sangita Jain

HomeSafe. So if ask I can one on

move So out as pancake can and they forward? them pushed [indiscernible] you

Mark Sopp

Sangita, the question, apologize you if Could us here. mind? don't repeat for out cut that you but we

Sangita Jain

sorry. Sorry,

if about domestic that little the ramp taking was ask I ramp full is the can this to works. going the see ramps domestic the the to of a on bit still you rate? pancake ramp. But run If Let's top HomeSafe international get longer, as

Mark Sopp

is customer that sequentially. will Our occur view the in talking these with

a a domestic international. so out if have bit, it'll carryover then And to effect pushes

of in light today where see It's in So sequential. change don't in scenario a international domestic. will a accelerate we pace

Sangita Jain

guys additional appreciate plants we How should Okay. about Really impact quick And the P&L these one Mura. operations? as a on then updates think provided. the that start you

Stuart Bradie

one we've our multiple our given think targets to guide. about to it's in way this the that growth achieving is pathways So our of

operations I'll certainly declared development, number when think and But info going and talked on it's give true projects. and Japan, exciting. about -- a more exciting performance. into commercial so I'm more Mitsubishi for of I waiting licenses there. to get And as we it's We've heading I a very and number we'll as the updates times that operational of of number They're facility way. be to the get the

-- example, and the Sangita, of So achieve pathways of it's to pathways have multiple targets, that our the another just it's one we we exciting.

Mark Sopp

front Kinger very Mura, in just to this other in in under the can the add plants construction. And have licensing that licensing case work Mura. known, because at opportunity. with with to leveraging exclusive case also There so is choose are on STS, And that have I'll is Mura offerings of we industrialization There's there's to our rights, not a in clients us well ownership but as that opportunity partial service with like PMC we proprietary offerings similar equipment end. we of technology their exited, plans, that offer the we

which And certainly the they is become the future profitable, participate that we intention, as so respect that well. in in as

case. paths economic multiple there's this in So

Stuart Bradie

Yes.

extending our endeavors. KBR can is facility the but in the in future implied no was means of what part the for probably fabricated on yard, design, LG offering, and what a of took equipment quicker stick-build proprietary matter. more sort that that go stick-build on as Chem going facility what be facility, that a as being controllable give to for in really year whole operationally was and scope it's more than call it's was Just color schedule original the built a we've to We into But which be quicker, cost safer, resell built really of the that. put that and module to so they And which U.K. a

out So I proven we've think that thesis.

a it's part of So future. exciting very our

Operator

over to queued. currently questions no are I for remarks. other will it Stuart final Bradie There pass

Stuart Bradie

Thank much. you very

very in KBR of of XXXX about path we're excited today, closing in course. and the beyond, So

to to in shareholders. leave value We for you that end, takeaways. ability our continue And with a are creating few I'll confident our key

this in dynamic contract that and We and backlog diverse, of we you've XXXX. So under most have billion disciplined expertise, teams a with we resulted and work. and our to aligned of flows options, and Diversification technology capital and over reach. We're quarter-to-quarter. And upmarket have had And a of engineering growth low into long-term challenges. engagements with end XX%-plus solve shareholder margin large-scale becoming allocation excellent plans complex cash provider global recurring intensity operating our capital into and innovative completed science, differentiated and a flight. multiyear focus we predictable technologies leading markets attractive serve partners specialization domain with strong secular late And solutions to leading we on execution trends. be. proprietary where top generated an try We're growth mission-critical talent and $XX going unwavering customers' have seen importantly, in long-term deep stable, work transformation, in complex returns, in and

Thank again Thank interest to you. in we quarter. look you you joining next thank So us. updating your forward and for for you again again KBR,

Operator

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

lines now disconnect may You your

KBR (KBR) 24 Feb 252024 Q4 Earnings call transcript