A Global Leader in Aerospace and Defense Systems Presentation to Investors and Analysts November 2017 OA Investor - Nov2017 1
Caution Regarding Forward-Looking Statements This communication, and any documents to which Orbital ATK refers you in this communication, contains not only historical information, but also forward-looking statements made pursuant to the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements often include the words “forecast,” “expect,” “believe,” “will,” “intend,” “plan,” and words of similar substance. Such forward-looking statements are subject to risks and uncertainties that could cause actual results or performance to differ materially from those expressed in or contemplated by the forward-looking statements, including the risk that the proposed acquisition of Orbital ATK by Northrop Grumman may not be completed in a timely manner or at all, which may adversely affect Orbital ATK’s business and the price of Orbital ATK’s common stock; potential increased costs, liability, or reputational harm associated with the recent restatement of the company’s financial statements; the company’s ability to maintain and grow its relationship with its customers; reductions or changes in U.S. Government spending; changes in cost and revenue estimates and/or timing of programs and payments; the potential termination of U.S. Government contracts; failure to win or retain key contracts; supply, availability, and cost of raw materials and components; performance of subcontractors and other third parties; development of key technologies; the costs and ultimate outcome of contingencies, including litigation, government investigations and other legal proceedings; and other risks described in Orbital ATK’s filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date hereof. 2 OA Investor - Nov2017
Orbital ATK Overview Aerospace Systems Defense Systems The Partner You Can Count On Innovation… Delivered Global Aerospace and Defense Systems Company Established by Merger of Orbital and Alliant Techsystems in 2015 Leading Developer and Manufacturer of Innovative, Reliable and Affordable Products for Government and Commercial Customers Launch Vehicles, Rocket Propulsion Systems and Aerospace Structures Tactical Missile Products, Armament Systems and Ammunition Satellites, Space Components and Technical Services Approximately 13,000 Employees, Including About 4,200 Engineers and Scientists Targeting About $4.6 Billion in Revenue and Over $6.00 in EPS in 2017 Total Contract Backlog of $15.7 Billion Providing High Revenue Visibility 3 OA Investor - Nov2017
Top Customers and Revenue Composition Military & Commercial Aircraft Programs 11% Civil & Commercial Space Systems 12% 25% Space Systems 27% Strategic Missiles Flight Systems 35% & Missile Defense 13% National Security Tactical Missiles & 37% 40% Space Systems Armament Systems Defense Systems 2017 Revenue by Market Area 2017 Revenue by Business Segment OA Investor - Nov2017 4
Operating Groups and Product Divisions Flight Systems Group Defense Systems Group Space Systems Group Annual Revenue ~$1.6 Billion Annual Revenue ~$1.9 Billion Annual Revenue ~$1.2 Billion Segment EBIT Margin ~12.5% Segment EBIT Margin ~9.5% Segment EBIT Margin ~10.5% Workforce ~5,250 People Workforce ~4,700 People Workforce ~2,750 People 3 P&L Divisions 4 P&L Divisions 4 P&L Divisions Launch Vehicles Missile Products Satellite Systems Propulsion Systems Armament Systems Advanced Programs Aerospace Structures Defense Electronics Space Components Ammunition Technical Services 5 OA Investor - Nov2017
Major Flight Systems Programs Launch Vehicles GMD Launch Vehicle (MDA/ Boeing) Missile Defense Target Vehicles (MDA) Antares Launch Vehicle (NASA) Pegasus/Taurus/Minotaur Launch Vehicles (Various) Propulsion Systems Space Launch Boosters (NASA) Trident II D5 SLBM Motors (Navy/ Lockheed) GEM Solid Boosters (ULA) Aerospace Structures F-35 Fighter (Various/Lockheed) A-350 Aircraft (Airbus) Restricted Programs 6 OA Investor - Nov2017
Major Defense Systems Programs Missile Products GMLRS/Hellfire Missiles (Army/Lockheed) Sidewinder/AMRAAM/SM-3 Missiles (Air Force and MDA/Raytheon) Advanced Warheads and Munition Fuzes (Air Force and Navy) Armament Systems Precision Guidance Kits (Army) Advanced Gun Systems (Various) Large-Cal Ammo (Army) Medium-Cal Ammo (Army) Defense Electronics AARGM Missiles and Derivatives (Navy and International) Small Caliber Systems Small-Cal Ammo (Army) Small-Cal Ammo (Commercial) 7 OA Investor - Nov2017
Major Space Systems Programs Satellite Systems GSSAP Satellites (Air Force) Restricted Space Systems Commercial Satellites (Various) Medium Science Satellites (NASA) Small Science Satellites (NASA) Advanced Programs ISS Cargo Supply Vehicles (NASA) Mission Extension Vehicles (Various) Space Components Spacecraft Structures, Propulsion Tanks, Deployable Arrays, Thermal Systems (Various) Technical Services Scientific Balloon Program (NASA) Sounding Rocket Program (NASA) Space Technical Services (Various) 8 OA Investor - Nov2017
Major Growth Areas in 2017-2019 Commercial and Military Tactical Missiles Advanced Med/Large Caliber Aerostructures and Subsystems Ammunition Medium/Large Space Small Precision Defense and Science Launch Vehicles Weapons Satellites Defense Systems Space Systems Flight Systems OA Investor - Nov2017 9
Large Contract Backlog… High Revenue Visibility 17% 19% Flight Systems Group 51% 53% Defense Systems Group 30% 30% Space Systems Group Firm Backlog ∼ $9.6 Billion Total Backlog ∼ $15.7 Billion Total Contract Backlog Worth ∼ $15.7 Billion as of Third Quarter 2017 Firm Backlog ∼ $9.6 Billion Option Backlog ∼ $6.1 Billion Current Backlog Provides Excellent Visibility to Near-Term Revenue Growth ~99% of Targeted 2017 Revenue ~85% of Targeted 2018 Revenue ~60% of Targeted 2019 Revenue OA Investor - Nov2017 10
Balance Sheet and Capital Deployment Plans Summary Balance Sheet as of October 1, 2017 ($ Millions) Cash and Equivalents $119 Short-Term Debt $40 Accounts Receivable 1,939 Accounts Payable 141 Other Current Assets 357 Other Current Liabilities 1,112 Property, Plant and Equipment 858 Long-Term Debt 1,370 Goodwill 1,832 Pension and Other 811 Other Assets 432 Shareholders’ Equity 2,063 Total Assets $5,537 Total Liabilities and Equity $5,537 Capital Deployment and Investment Plans for 2017 Stock Repurchases ~$25 Million R&D Investments ~$135 Million* Dividend Payments ~$75 Million Capital Expenditures ~$225 Million* Debt Repayments ~$40 Million Pension Funding ~$25 Million _____________ *Includes ~$60 Million of R&D and ~$75 Million of Capex for New Growth Investments OA Investor - Nov2017 11
Key Investment Highlights Highly Innovative, Agile and Competitive Space, Defense and Aviation Systems Manufacturer With a Sharp Focus on Affordability Long-Standing Customer Relationships, Many Franchise Programs and High- Visibility Backlog in Both Prime Contractor and Merchant Supplier Businesses Exceptional Operational Performance on Over 100 Major R&D and Production Programs, Including Over 20 Product Development Projects Strong Prospects for Sustainable Growth, Robust Free Cash Flow and Substantial Capital Deployment to Benefit Shareholders Commitment to Shareholder Value Increases in 2017 and Beyond OA Investor - Nov2017 12
Current Equity Research Analysts Analyst Firm E-mail Phone # George Godfrey CL King & Associates ggodfrey@clking.com 617-357-4028 Gautam Khanna Cowen and Co gautam.khanna@cowen.com 617-946-3978 Robert Spingarn Credit Suisse robert.spingarn@credit-suisse.com 212-538-1895 Myles Walton Deutsche Bank myles.walton@db.com 617-217-6259 Noah Poponak Goldman Sachs noah.poponak@gs.com 212-357-0954 Sheila Kahyaoglu Jefferies & Co sheila.kahyaoglu@jefferies.com 212.336.7216 Joseph DeNardi Stifel Nicolaus denardij@stifel.com 443-224-1358 Michael Ciarmoli SunTrust Robinson Humphrey michael.ciarmoli@suntrust.com 212-303-0136 Sam Pearlstein Wells Fargo Securities sam.pearlstein@wellsfargo.com 212-214-5054 OA Investor - Nov2017 13
Recommend
More recommend
