Leidos Holdings, Inc. · NYSE:LDOS
Leidos — Cowen 35th Annual Aerospace / Defense & Transportation Conference (February 2014)
29 slides from Leidos's conference presentation, Feb 6, 2014
Slide 1: Cowen 35th Annual Aerospace / Defense & Transportation Conference
Cowen 35th Annual Aerospace / Defense & Transportation Conference February 6, 2014
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this presentation contain or are based on "forward-looking" information within the meaning of the Private Litigation Reform Act of 1995. In some cases, you can identify forward-looking statements by words such as "expects," "intends," "plans," "antici
Slide 3: Investment Rationale
Investment Rationale Numerous exciting opportunities to drive shareholder value: Separation of a $1.7B equity market cap business. Removed organizational conflicts of interest & increased our addressable market by $37B Leidos operates in three multi-billion dollar markets that are critical to ma
Slide 4: Who we are
Who we are: National Security Sector $4.2B TTM revenue 13,500 employees with >10,500 possessing DoD, TS/SCI, SAP/SAR and DoE security clearances National Security 99% government, <1% commercial 68% Health 14% Health & Engineering Sector $1.9B TTM revenue 9,500 employees Engineering 18% 6
Slide 5: National Security at a Glance
National Security at a Glance OUR CORE RESOURCES… CONTRIBUTE TO OUR CUSTOMER AND GENERATE MISSIONS… RESULTS 14,000 $7.5B PROFESSIONALS BACKLOG** 80% 10,000 INTELLIGENCE $4.2B WITH SECURITY CLEARANCES 15% TTM REVENUE DEFENSE Broad technology, 5% DHS & COMMERCIAL development and integration capabiliti
Slide 6: National Security
Intelligence Intelligence Analysis Systems & Production Airborne Systems National Security Cybersecurity Space Systems Maritime Systems Readiness & Ground Sustainment Systems Critical Mission Support In All Operational Regimes: Air, Land, Sea, Space, and Cyberspace 6 ©2013 LEIDOS. ALL RIGHTS RESERVE
Slide 7: National Security Addressable Market
National Security Addressable Market REVENUE ADDRESSABLE BUSINESS SEGMENT PERCENTAGE MARKET Technology 25% $47B Intelligence 60% $23B Cybersecurity 15% $24B $94B Increase of $37 Billion in addressable market 7 ©2013 LEIDOS. ALL RIGHTS RESERVED.
Slide 8: Technology Business
Technology Business Technology-driven end-to-end integrated solutions operating in the air, land, sea & space CAPABILITIES CUSTOMERS PROGRAMS R&D in air, sea, ground & space Saturn Arch Autonomous and Distributed Solutions Buckeye Modeling, Simulation & Training Desert Owl Wide range of technica
Slide 9: Intelligence Business
Intelligence Business Building wide range of information processing systems solving toughest challenges today CAPABILITIES PRIMARY CUSTOMERS System Engineering & Integration Classified Advanced analytics Intel Communications Software development Intelligence analysis & operations Army Military
Slide 10: Cybersecurity Business
Cybersecurity Business Delivering over $700M of Cybersecurity to the Intelligence Community to constantly defend critical infrastructure against the most sophisticated adversaries CAPABILITIES PRIMARY CUSTOMERS Leading Cyber provider in Intel Community Federal Government Computer Defense, Exploita
Slide 11: Health & Engineering Sector
Health & Engineering Sector $1.9B Revenues (TTM) 56% 66% 44% 33% Healthcare Commercial Engineering Federal 11 ©2013 LEIDOS. ALL RIGHTS RESERVED.
Slide 12: Healthcare Market
Healthcare Market International Health IT market is > $90B Total addressable market is much bigger than just Health IT The U.S. Healthcare IT Market is >$35B and Growing Source: Gartner Enterprise IT spending by verticals forecast, 2013Q1 ©2013 LEIDOS. ALL RIGHTS RESERVED. 12
Slide 13: Health Solutions
Electronic Health Record System Implementation Health IT & Optimization Framework & Information Behavioral Exchange Health Research & Outreach Health Information Security Health Solutions Advanced Data Analytics & Visualization Biomedical Data Integration & Warehousing Biomedical Public Health Resea
Slide 14: Leidos Health: What We Do
Leidos Health: What We Do % of Business Capabilities EHR Implementation EHR Consulting 45% Optimization (Digitization) Information integration IT Services Systems Integration Application Development & Maint (Integration and Interoperability) 30% Ongoing System Support Legacy System Sup
Slide 15: Leidos Engineering: Five Core Businesses
Leidos Engineering: Five Core Businesses BUSINESS CAPABILITIES CUSTOMERS Process-intensive Architecture and design Mid Tier Refiners 1 Industries Detailed engineering design HollyFrontier Magellen Engineering Controls and information technologies Process industries/manufacturing Construc
Slide 16: Leidos Engineering - $1.1B TTM Revenues
Leidos Engineering - $1.1B TTM Revenues Other Process Security Industries Products Engineering Federal Environmental & Engineering Power/Grid Engineering Asset Transactions 16
Slide 17: Process Industries Engineering
Process Industries Engineering (30% of Engineering Revenues) Markets Served: • Mid Tier Refiners • Process Industries/ Manufacturing (3M, InBev, LSB) Capabilities: • Architecture/ Design/ Build & Construction Program Management • Specialized Engineering Design & Controls Key Competencies: Market Sta
Slide 18: Process Industries Engineering - Projects
Process Industries Engineering - Projects › Active contracts with 4 of the top 6 super majors in oil › Service delivery at more than 500 shale energy sites › $125 million in process industry EPC projects in 2012 › Winner of 3 Design-Build Institute of America (DBIA) awards › Named 2013 System Integr
Slide 19: Security Products
Security Products (23% of Engineering Revenues) Markets Served: • Customs and Border Protection • Department of Defense • Transportation Security Administration • International Customs, Military, and Security Agencies Capabilities: • Non-intrusive Inspection (Vehicles and Cargo) • Explosives Detecti
Slide 20: Security Products – Latest Solutions
Security Products – Latest Solutions › Market Diversification: more than 75% of FY14 VACIS sales made to international customers › Product Diversification: more than 90% of FY14 VACIS sales were of models created within past year › Revenue Diversification: more than 2,000 security systems currently
Slide 21: Power/Grid Engineering
Power/Grid Engineering (18% of Engineering Revenues) Markets Served: • Large Utilities, including National Grid, Hawaii Electric & Energy & Northeast Utilities • Muni & Coop Clients Capabilities: • Engineering Design & Consulting • Energy Efficiency Consulting & Program Management • Smart Grid as a
Slide 22: Power/Grid Engineering - Projects
Power/Grid Engineering - Projects › Almost 600 utility clients › More than 30 smart grid projects underway › Helped save more than 700,000 net megawatt hours annually through energy efficiency services TRANSMISSION AND DISTRIBUTION SYSTEM ENERGY EFFICIENCY PROGRAM MANAGEMENT CAPITAL MANAGEMENT PROGR
Slide 23: Federal Environmental / Engineering
Federal Environmental / Engineering (18% of Engineering Revenues) Markets Served: • DoD - Army Corps of Engineers, Air Force & Navy • Fed Civ – NASA & DOE Capabilities: • Environmental Sciences & Technology • Permitting, NEPA • Remediation Market Stats • Engineering Design & Design/Build U.S. Market
Slide 24: Federal Environmental and Engineering - Projects
Federal Environmental and Engineering - Projects › 2,150 prime environmental and engineering projects in the last five years valued at $2.4 billion › 125 active engineering contracts with civilian and defense agencies › Winner of 4 DBIA awards ONE-OF-A-KIND VIBRO-ACOUSTIC TEST CAPABILITY NUCLEAR TAN
Slide 25: Transaction & Valuation Consulting
Transaction & Valuation Consulting (5% of Engineering Revenues) Markets Served: Major Lending Institutions to the Power Market • Citibank • Credit Suisse • Prudential Capabilities: Market Stats • Gold Standard Process U.S. Market $150M/yr • Deep Technology Understanding Market Growth 3-5% Key Compet
Slide 26: Leidos Value Creation Roadmap
Leidos Value Creation Roadmap Profit-Focused Revenues Year-over-year Operating Income Growth Strong Cash Generation Capital Allocation Effectiveness Proven Business Model – On a new path to drive Shareholder Value 26 ©2013 LEIDOS. ALL RIGHTS RESERVED.
Slide 27: Profitability Actions
Profitability Actions Focus on Profit growth-focused revenues Profitable Capitalize on OCI and commercial opportunities Growth Increase Leidos content in programs Deliver Complete transition year costs/charges Expanded Ongoing cost reductions; full-year benefit FY15 Margins Underperformi
Slide 28: Strong Cash Flow
Strong Cash Flow No Factories Human Strong Insignificant Capital Based Cash Pensions Flow Variable Cost Structure Low Capital-Intensity Business Model 28 ©2013 LEIDOS. ALL RIGHTS RESERVED.
Slide 29: Summary
Summary Exciting opportunity to drive shareholder value Our goal is to drive strong cash flows to invest in the business and drive strong returns for shareholders Post spin off from old SAIC our addressable market is significantly larger Focused on continuous improvement to drive down costs