ICF International : Investor Presentation

ICF Investor Presentation

March 2020

Cautionary Statement

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 materially from those expressed in any forward-looking statements made by us. All statements made by us in this presentation are qualified in all respects by the information disclosed in our filings with the Securities and Exchange Commission and specifically, the risks described therein under the heading "Risk Factors". We are under no duty to update or revise any forward-looking statements pursuant to actual results or events, and do not intend to do so.

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ICF: A professional + technology services firm

Serve a balanced	Leverage	Deliver strong	Benefit from
roster of	deep domain	cross-cutting	visibility of a
government +	expertise to	capabilities in	substantial
commercial	achieve superior	technology +	backlog +
clients	results for clients	engagement	growth profile of
				commercial
				revenues

A growth platform combining organic initiatives + acquisitions

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Synergy in markets + capabilities

Advisory + Strategy

Program

Management

Technology,

Analytics +

Engagement

Energy, Environment + Infrastructure 45%

Consumer + Financial

10%

Health + Social Programs 37%

Safety + Security 8%

Revenue percentages are based on Q4 2019 TTM financial performance released on February 27, 2020

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Drivers of long-standing client relationships

Proprietary IP/	Workforce of
loyalty	long-time
programs	industry experts

ProprietaryLong-term

analyticscontract vehicles

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ICF culture: a source of competitive advantage

Purpose

To build a more prosperous and resilient world for all.

Values

Interact with integrity Bring your passion Embrace differences Challenge assumptions Work together

Be greater than

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Track record of strong revenue + EPS growth

Revenue:	GAAP EPS:
5-year CAGR	5-year CAGR
7.1%	12.4%

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Catalysts for continued organic growth

Federal

• Civilian agency spending
• Public health
• Next gen IT
• Citizen engagement

Marketing Services

• Personalization/loyalty
• Digital transformation
• Data convergence

State + Local

• Disaster management: recovery + mitigation
• Infrastructure spending

Commercial Energy

• Energy efficiency outsourcing in California
• Distributed energy resources
• Resilience planning

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ITG acquisition

Key business statistics

$90M	+$100M
2019 Revenue	revenue run-rate
margin	350
EBITDA
> than ICF's	Digital transformation
	consultants

ITG is a unique IT consulting firm delivering application modernization and business transformation for U.S. federal government clients

Key tech partners

92%

prime contract revenue

65+

CSM & SAFe certifications

Representative systems ITG builds

-	-	-	-	-	-
Case	Purchasing +	Grants	Asset	Contract	Content
Management	Acquisitions	Management	Management	Writing	Management
-	-	-	-	-	-
Financial	Audit	Inspections	Workforce	Healthcare
Emergency Management
Management	Tracking		Management	Compliance

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Compelling strategic rationale

IT modernization and	Sustaining ICF's future	Creates immediate revenue
cloud is estimated to be a	revenue growth requires a	synergies due to the
$21B Federal market1,	broader technology offering	combination of ICF's domain
comprised of large	beyond existing engagement,	expertise and client
projects	cyber, and software	relationships with ITG's IT
	development	modernization capabilities

1 Source: Bloomberg Government, Deltek GovWin Federal Priorities Spotlight

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Meaningful joint growth opportunities

ICF's Domain
Expertise + Client	ICF's Robust Business	ICF's Best-in-Class	Selective	ITG's
Relationships	Development Engine	Contract Vehicles	Insourcing	Qualifications

ITG brings a substantial business development pipeline and a backlog that provides visibility

ICF has a large number of net new opportunities in its pipeline for which ITG enhances our win potential

Combination of ICF's deep domain expertise and broad client base with ITG's IT modernization skills will allow us to identify "new-new" opportunities

Opportunity also exists to bring inhouse the revenues historically subcontracted out by ITG

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We serve a balanced roster of government

+ commercial clients* Commercial

35%

Provides significant opportunities for expansion

*Based on Q4 2019 TTM financial performance released on February 27, 2020

Non-US Government 8%

US State and Local 19%

US Federal 38%

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We work with a broad array of government clients

Government revenues 65% of total revenues*

US federal revenues primarily from civilian agencies

HHS 16%

DOD 6%

DOS 4%

EPA 2%

HUD 1%

DOT 1%

DOJ 1%

Other Fed 7%

Non-US Government 8%

Commercial 35%

US State and Local 19%

*Based on Q4 2019 TTM financial performance released on February 27, 2020

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Our commercial clients are primarily in energy + marketing services*

Commercial Energy Markets + Marketing Services account for majority of commercial revenues

Advisory + Implementation Services mutually reinforcing

Commercial revenues 35% of total revenues*

Commercial - Energy

Markets

15%

Commercial -

Marketing

Services

17%

Commercial - Other 3%

*Based on Q4 2019 TTM financial performance released on February 27, 2020

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Energy markets

Energy efficiency programs for utilities: State-mandated

Utility transformation: distributed energy + grid modernization

Majority long-term contracts

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ICF's go-to-market brand for integrated digital + engagement services

	$400M+
40%	Annual revenue across a
balanced portfolio
Government	Opportunity
60%
pipeline is +3X
Commercial
	revenue

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ICF Next capabilities + differentiators

Loyalty

Technology

Analytics

Engagement

Strategy

Combines creativity of	Designs solutions that	Built specifically to
an agency with deep	drive real participation	realize the benefits of
domain expertise of	with customers,	an integrated model
a consultancy	citizens, colleagues

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Financial Performance

Revenue + EPS, 2020 guidance

Revenue ($ Millions)

EPS

• Mid-pointof 2020 Revenue Guidance ($1.625B) represents 9.9% YoY growth
• Mid-pointof 2020 GAAP EPS Guidance ($3.60) represents 0.3% YoY growth

*Based on 2020 midpoint of management guidance as of February 27, 2020

**Non-GAAP EPS: GAAP EPS plus tax-affected impact of acquisition-related charges, special charges, and amortization of intangibles

***2017 Non-GAAP EPS excludes the one-time benefit of a Deferred Tax Liability (DTL) revaluation for 2017, as a result of the 2017 Tax Reform Act

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Revenue + EPS, Q4 2019

Revenue ($ Millions)*

Q-o-Q Growth: 5.0%

EPS*

Non-GAAP EPS** Q-o-Q Growth: 0.9%

Y-o-Y Growth: 10.5%

Non-GAAP EPS** Y-o-Y Growth: 11.3%

$1,600			$1,478.5	$4.50
$1,400			$1,338.0	$4.00
$1,200				$3.50
$1,000				$3.00
			$2.50
$800
			$2.00
$600
		$396.6	$1.50
$377.9
$400
$1.00

$1.17 $1.18

$4.15

$3.73

$3.18 $3.59

$200					$0.50
$0						$0.00
		Q4 2018	Q4 2019	FY 2018	FY 2019

$0.97	$1.01
Q4 2018		Q4 2019	FY 2018	FY 2019
	GAAP EPS	Non-GAAP EPS

*Based on Q4 2019 financial performance released on February 27, 2020

**Non-GAAP EPS: GAAP EPS plus tax-affected impact of acquisition-related charges, special charges, and amortization of intangibles

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Contract awards + backlog

Contract Awards ($ Millions)*

Book-to-Bill Ratio (TTM)

$2,100		Q4 2018 1.4	Q4 2019 1.0
$1,800			$1,824
		$1,523
$1,500
$1,200
$900
$600			$353
$286
$300

$0

Q4 2018

Q4 2019

FY 2018

FY 2019

Backlog ($ Billions)*

$3.0		Funded	Unfunded
	$2.4	$2.4
$2.5
$2.0		$1.2	$1.1
$1.5
$1.0		$1.2	$1.3
$0.5
$0.0
	Q4 2018		Q4 2019

*Based on Q4 2019 financial performance released on February 27, 2020

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Pipeline ($B)

$7.0						$6.4	$6.3	$6.5	$6.5
$6.0					$5.7	$5.8
						$5.5
$5.0	$4.7	$4.6	$4.3	$4.2	$4.4

$4.0

$3.0

$2.0

$1.0

$0.0

Q1-17

Q2-17

Q3-17

Q4-17

Q1-18

Q2-18

Q3-18

Q4-18

Q1-19

Q2-19

Q3-19

Q4-19

Increasing pipeline of qualified opportunities, the majority of which relate to U.S. federal clients

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Operating cash flow, 2015 - 2019
$M
						Dividends
				$117.2				Debt Repayment & Other
$120.0							Share Repurchase
								CAPEX
$100.0			$80.1			$91.4
$80.0		$76.3	$70.2	$74.7	$10.5
$60.0					$7.9	$31.9
	$36.4	$51.5
		$30.0
$40.0
	$23.9		$27.7	$11.3	$20.5
$20.0		$10.8
		$19.3	$25.5	$28.5
		$16.0	$17.8
$0.0
	2015	2016	2017	2018	2019
Net Debt	$303.8	$253.3	$194.4	$188.7	$159.0
Debt/ EBITDA*	2.64x	2.15x	1.73x	1.57x			1.17x

2020 Operating Cash Flow Guidance**: $120M

*As defined by banking agreement

**Based on Q4 2019 financial performance released on February 27, 2020

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Corporate citizenship - it matters

Investing in	Making a Sustainable
Our People	Commitment
Provided opportunities for all	Made progress on our carbon
employees to develop +	reduction goal + remained carbon
advance.	neutral.

Supporting

Important Causes

Donated to causes important to our employees + communities.

56%	29%
female leaders	female board
	members

Gender Pay Equity

no meaningful disparity across genders in the same roles*

Lower Turnover

16.5% voluntary turnover rate, as compared to 18.6% benchmark

100%

net renewable electricity for global operations-via renewable energy certificates

31%

reduction in greenhouse gas emissions per employee since baseline 2013

Zero

net zero carbon status since 2006 due to investments in high-quality carbon offsets

$473,000

corporate cash donations

$140,000

employee donations through our giving program

1 to 1

ICF-matched employee donations

*Annual audit concluded no statistically significant disparities across genders for comparable incumbents in the same roles.

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In summary - ICF

Distinctive expertise in	Established	Substantial contract backlog
high-growth sectors of	relationships with	- robust business
government +	diversified portfolio of	development pipeline and
commercial markets	domestic + international	track record of high win
	clients	rates

All leading to substantial organic growth opportunities + the potential for accretive acquisitions

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Thank you