Fti Consulting, Inc. · NYSE:FCN
Fti Consulting — Investor Presentation (November 2008)
26 slides from Fti Consulting's investor presentation, November 2008
Slide 1: FTI Consulting Inc. November 2008
FTI Consulting Inc. November 2008
Slide 2: Cautionary Note about Forward-Looking Statements
Cautionary Note about Forward-Looking Statements Certain statements made by us in this presentation that are not historical facts or that relate to future plans, events or performances are forward-looking statements within the meaning of the federal securities laws. Our actual results may differ mat
Slide 3: FTI – Global Leader in a Dynamic Growth Industry
FTI – Global Leader in a Dynamic Growth Industry “Enterprise Value = Reputation X Results” • Strong global demand for solutions to mission-critical, complex problems • Unparalleled intellectual capital to develop and support proprietary and innovative “Gold Standard” services • Global footprint with
Slide 4: What We Do: A Balanced Portfolio of Market-leading Services
What We Do: A Balanced Portfolio of Market-leading Services Broad set of skills to advise organizations on their regulatory, operational, financial and legal issues Corporate Finance/ Restructuring Technology Consulting • Restructuring • Electronic evidence • Transaction advisory 9 mos 2008 Revenue
Slide 5: Where We Do It: Advising Across a Global Economy
Where We Do It: Advising Across a Global Economy United States Annapolis Belgium Brussels • We deploy more than 3,000 professionals globally in every Atlanta Brazil major business and financial center to serve our clients Baltimore Boston São Paulo wherever their challenges arise Brentwood China Cam
Slide 6: How We Do It: The Global Market Opportunity
How We Do It: The Global Market Opportunity FLC Economic Consulting Corporate Finance Tech 5 Strategic Communications
Slide 7: FTI’s Market: Strong Demand Throughout Economic Cycles
FTI’s Market: Strong Demand Throughout Economic Cycles 2007 2008 Drivers in Downturn: Drivers in Expansion: Secular Drivers: •Restructuring •Business improvement •Technology Solutions •Interim management •Financial transaction advisory •Litigation •Strategic transaction •Economic consulting •Regulat
Slide 8: The Global Credit Pandemic: A Major Driver of Growth
The Global Credit Pandemic: A Major Driver of Growth for Some Time to Come Global Default Rate (%) on Speculative-Grade Debt 20 Year Moody’s 7 Average Estimate 6 5 4 3 2 1 0 De Ja Fe Ma Ap Ma Ju J Au Se Oc No De Ja Fe Ma Ap Ma Ju J Au Se Oc No De c- n- b- r- r- y- n- ul- g- p- t- v- c- n- b- r- r- y
Slide 9: Why It Matters: Industry-leading Growth and Profitability
Why It Matters: Industry-leading Growth and Profitability 45% 20% 18% Revenue Growth (YOY % Change) 35% 16% 14% 25% Pre-tax Margin 12% 15% 10% 8% 5% 6% 4% -5% 2% -15% 0% Q1 Q2 Q3 * FCN HURN NCI CRAI XPRT = Pre-tax Margin NOTE: HURN Q3 pre-tax margin excludes restructuring charges NCI Q3 pre-tax marg
Slide 10: How We Grow: Strategies to Meet Market Demand
How We Grow: Strategies to Meet Market Demand Brand and Reputation Global Footprint GROWTH STRATEGIES Strong Market Broadening Service Demand Portfolio Acquisitions Industry Expertise 9
Slide 11: How We Will Grow: One Company/One Mission
How We Will Grow: One Company/One Mission CLIENTS Comprehensive CRM Unifying the brand Integrated Sales & marketing MARKET 10
Slide 12: How We Will Grow: Replicate the Full Platform Globally
How We Will Grow: Replicate the Full Platform Globally GDP GROWTH > 5% FTI Billable Personnel (10) 5-2.5% Source: Department of Physics and Center for the Study of Complex 2.5-2.0% Systems, University of Michigan 11 Economist Intelligence Unit <2.0%
Slide 13: How We Will Grow: Strategic Acquisitions
How We Will Grow: Strategic Acquisitions Financial K Capital Blueprint Dynamics Partners Ashton Partners Strategic and Santé Kinesis Financial Marketing Third Person Communications Occasions Gravitas Ringtail G3 Consulting Strategic Solutions Discovery Technology Attenex Corp Economic Lexecon Helios
Slide 14: How We Will Grow: Disciplined Investment
How We Will Grow: Disciplined Investment In the past 2.5 years we have invested ~ $1 billion to build the global platform and expand breadth of service with stable ROIC. $1,800,000 20.0% $1,600,000 18.0% Invested Capital (in thousands) Return on Invested Capital $1,400,000 16.0% 14.0% $1,200,000 12.
Slide 15: How We Will Grow: Leverage Industry Expertise
How We Will Grow: Leverage Industry Expertise • Multidisciplinary, cross-segment approach to solving industrial problems • Key domain expertise in industries undergoing cyclical stress and structural transformation • Communications, media & entertainment • Energy • Oil & gas • Utilities • Chemicals
Slide 16: Where We’re Going: FTI 2012
Where We’re Going: “FTI 2012” • Having achieved key components of our 2009 Plan in 2007, we recently launched “FTI 2012,” our plan for the next five years • Key elements of FTI 2012: • Annual revenue of $2.5 billion; organic growth + strategic acquisitions • Generate 30-35% of revenue outside the Un
Slide 17: FTI’s Results
FTI’s Results 16
Slide 18: 2007 Results
2007 Results ($ in thousands, except per share data) Year Ended Dec 31, 2007 2006 Revenue + 41.4% $1,001,270 $707,933 Direct cost of revenues 548,407 389,032 Selling, general and administrative expense 255,238 178,572 Special charges - 22,972 Amortization of other intangible assets 10,615 11,175 814
Slide 19: Q3 2008: Strong Momentum in the Year
Q3 2008: Strong Momentum in the Year ($ in thousands, except per share data) Three months ended September 30, 2008 2007 Revenue + 28.5% $325,497 $253,334 Dire ct co st o f re ve nue s 174,514 139,131 Se lling, ge ne ra l a nd a dministra tive e xpe nse 91,508 63,007 Amortiza tion of o the r inta ngi
Slide 20: Q3 2008: Segment Performance
Q3 2008: Segment Performance ($ in thousands, except per share data) Revenue- Generating Revenues EBITDA Margin Headcount (in thousands) Three Months Ended June 30, 2008 % Increase Te chnology 23.6% $ 55,385 $ 15,371 27.8% 498 Corpora te Fina nce /Re structuring 46.0% 91,818 25,463 27.7% 646 Economi
Slide 21: FTI – Global Leader in a Dynamic Growth Industry
FTI – Global Leader in a Dynamic Growth Industry • Strong global demand for solutions to mission-critical, complex problems • Unparalleled intellectual capital supports proprietary and innovative “Gold Standard” services • Global footprint with a platform to grow in all geographical markets • Discip
Slide 22: FTI as Trusted Advisor: Solving the Problems that Keep Directors up at Night
FTI as Trusted Advisor: “Solving the Problems that Keep Directors up at Night” 21
Slide 23: Appendix
APPENDIX 22
Slide 24: Note: We define EBITDA as operating income before depreciation and amortization
Note: We define EBITDA as operating income before depreciation and amortization of intangible assets plus litigation settlements. We use EBITDA in evaluating financial performance. Although EBITDA is not a measure of financial condition or performance determined in accordance with GAAP we believe th
Slide 25: Reconciliation of Operating Income and Net Income to Adjusted EBITDA
24 RECONCILIATION OF OPERATING INCOME AND NET INCOME TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION AND SPECIAL CHARGES Three Months Ended September 30, 2008 (Net income Operating income EBITDA Interest income Interest expense and other Litigation settlement losses Income
Slide 26: Reconciliation of Operating Income and Net Income to Adjusted EBITDA
25 RECONCILIATION OF OPERATING INCOME AND NET INCOME TO ADJUSTED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION AND SPECIAL CHARGES Year Ended December 31, 2007 Total (Net income $ 92,121 Interest income (8,173) Interest expense and other 44,391 Litigation settlement losses 1,002 Inc
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