Babcock & Wilcox Enterprises : Company Overview (16 MB)

COMPANY OVERVIEW

M A R C H 1 5 , 2 0 2 4

© 2024 Babcock & Wilcox Enterprises, Inc. All rights reserved.

S A F E H A R B O R S TAT E M E N T

B&W Enterprises cautions that this presentation contains forward-looking statements within the meaning of federal securities laws. All statements other than statements of historical or current fact included in this presentation are forward-looking statements, including, without limitation, statements relating to the company's business outlook and expected financial performance, including adjusted EBITDA and sales targets, expectations regarding future growth, expansion and profitability, outlook and expectations regarding B&W's BrightLoop™ technologies, as well as statements about B&W's future pipeline of new projects and business within its Renewable, Environmental and Thermal operating segments and their impact on future shareholder value. These forward-looking statements are based on management's current expectations and involve a number of risks and uncertainties, including, among other things, our ability to continue as a going concern, our ability to maintain effective internal control over financial reporting; the impact of global macroeconomic conditions, including inflation and volatility in the capital markets; the impact of our divestiture of Babcock & Wilcox Solar Energy, Inc. ("Babcock & Wilcox Solar" or "B&W Solar"); the refinancing of our senior debt; our ability to integrate acquired businesses and the impact of those acquired businesses on our cash flows, results of operations and financial condition, including our acquisitions of Babcock & Wilcox Renewable Service A/S, formerly known as VODA A/S ("VODA"), Fossil Power Systems, Inc. ("FPS"), Babcock & Wilcox Chanute, LLC, formerly known as Optimus Industries, LLC. and certain assets of Hamon Holdings Corporation ("Hamon"); our recognition of any asset impairments as a result of any decline in the value of our assets or our efforts to dispose of any assets in the future; our ability to obtain and maintain sufficient financing to provide liquidity to meet our business objectives, surety bonds, letters of credit and similar financing; our ability to comply with the requirements of, and to service the indebtedness under, our debt facility agreements; our ability to pay dividends on our 7.75% Series A Cumulative Perpetual Preferred Stock; our ability to make interest payments on our 8.125% senior notes due 2026 and our 6.50% notes due 2026; the highly competitive nature of our businesses and our ability to win work, including identified project opportunities in our pipeline; general economic and business conditions, including changes in interest rates and currency exchange rates; cancellations of and adjustments to backlog and the resulting impact from using backlog as an indicator of future earnings; our ability to perform contracts on time and on budget, in accordance with the schedules and terms established by the applicable contracts with customers; failure by third-party subcontractors, partners or suppliers to perform their obligations on time and as specified; delays initiated by our customers; our ability to successfully resolve claims by vendors for goods and services provided and claims by customers for items under warranty; our ability to realize anticipated savings and operational benefits from our restructuring plans, and other cost-savings initiatives; our ability to successfully address productivity and schedule issues in our B&W Renewable, B&W Environmental and B&W Thermal segments; our ability to successfully partner with third parties to win and execute contracts within our B&W Environmental, B&W Renewable and B&W Thermal segments; changes in our effective tax rate and tax positions, including any limitation on our ability to use our net operating loss carryforwards and other tax assets; our ability to successfully manage research and development projects and costs, including our efforts to successfully develop and commercialize new technologies and products; the operating risks normally incident to our lines of business, including professional liability, product liability, warranty and other claims against us; difficulties we may encounter in obtaining regulatory or other necessary permits or approvals; changes in actuarial assumptions and market fluctuations that affect our net pension liabilities and income; our ability to successfully compete with current and future competitors; our ability to negotiate and maintain good relationships with labor unions; changes in pension and medical expenses associated with our retirement benefit programs; social, political, competitive and economic situations in foreign countries where we do business or seek new business; the impact of the ongoing conflicts in Ukraine and the Middle East, the impact of pandemics or other global health crises, and the other factors specified and set forth under "Risk Factors" in our periodic reports filed with the Securities and Exchange Commission, including, without limitation, the risks described in the Company's Annual Report on Form 10-K for the year ended December 31, 2022 under the caption "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" (as applicable). These factors should be considered carefully, and B&W Enterprises cautions you not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation, and undertakes no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.

Non-GAAP Financial Measures

Adjusted EBITDA on a consolidated basis is a non-GAAP metric defined as the sum of the adjusted EBITDA for each of the segments, further adjusted for corporate allocations and research and development costs. At a segment level, adjusted EBITDA presented is consistent with the way our chief operating decision maker reviews the results of operations and makes strategic decisions about the business and is calculated as earnings before interest expense, tax, depreciation and amortization adjusted for items such as gains or losses arising from the sale of non-income producing assets, net pension benefits, restructuring costs, impairments, gains and losses on debt extinguishment, costs related to financial consulting, research and development costs and other costs that may not be directly controllable by segment management and are not allocated to the segment. We present consolidated Adjusted EBITDA because we believe it is useful to investors to help facilitate comparisons of our ongoing, operating performance before corporate overhead and other expenses not attributable to the operating performance of our revenue generating segments. In this presentation, we also present certain targets for our adjusted EBITDA in the future; these targets are not intended as guidance regarding how we believe the business will perform. We are unable to reconcile these targets to their GAAP counterparts without unreasonable effort and expense due to the aspirational nature of these targets.

© 2024 Babcock & Wilcox Enterprises, Inc. All rights reserved.

B A B C O C K & W I L C O X E N T E R P R I S E S , I N C .

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W E ' R E A G LO B A L E N E R G Y L E A D E R C R E AT I N G A B R I G H T E R F U T U R E

Providing high quality and innovative technologies since 1867

• From our first patent for a more efficient boiler to more than 17,000 patents since, we continue to drive innovation and change
• Today, we are a globally recognized technology leader and innovator at the forefront of the energy transition

Ensuring energy security for customers and the world

• Helping utility and industrial customers with the technical challenges of moving from current to future energy sources
• Delivering systems, parts and field services to help utility and industrial plants operate more effectively and efficiently

Making net zero ambitions a reality today

• Our hydrogen production, carbon capture, waste- and biomass-to-energy, and environmental technologies support the reduction of greenhouse gases, including CO2 and methane, in an environmentally friendly way

WE PROVIDE

PROVEN, BEST-IN-

CLASS POWER

PRODUCTION

TECHNOLOGIES AND

ARE LEADING THE

WAY TO A

NET-ZEROFUTURE.

© 2024 Babcock & Wilcox Enterprises, Inc. All rights reserved.

B A B C O C K & W I L C O X E N T E R P R I S E S , I N C .

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W E ' R E H E L P I N G C U S TO M E R S C R E AT E C L E A N A N D R E L I A B L E E N E R G Y

SUPPORTING A CIRCULAR ECONOMY

ENERGY SOLUTIONS	Ecologically sound ways of using and recycling resources like biomass and
municipal waste to create clean, renewable baseload power while reducing
greenhouse gas emissions.
REDUCING THE IMPACT OF GREENHOUSE GAS EMISSIONS
CLEAN
Hydrogen production, carbon capture, ash handling, cooling systems, energy
recovery and storage, and advanced emissions control solutions to help
	preserve the world's natural resources.
TRADITIONAL	CREATING RELIABLE AND EFFICIENT STEAM GENERATION
Providing boilers and related equipment, aftermarket parts, service and

upgrades to help utilities and industries generate reliable thermal energy from a wide range of fuels and bridge the gap during the global transition to new energy sources.

DELIVERING VALUE

THROUGH

TECHNOLOGY-DRIVEN

PRODUCTS AND

SERVICES,

WITH CONTINUAL

PRODUCT

IMPROVEMENT AND ROBUST R&D EFFORTS TO SUPPORT FUTURE ENERGY NEEDS

© 2024 Babcock & Wilcox Enterprises, Inc. All rights reserved.

B A B C O C K & W I L C O X E N T E R P R I S E S , I N C .

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T H E F O U N D AT I O N O F O U R C O M PA N Y

Our Vision:

Advancing energy and environmental solutions that bring power and progress to our world.

Our Mission:

B&W delivers environmentally conscious, technology-driven solutions and services to energy and industrial customers worldwide - safely, ethically and as promised.

Our Core Values:

Safety • Integrity • Quality • Respect • Agility

© 2024 Babcock & Wilcox Enterprises, Inc. All rights reserved.

B A B C O C K & W I L C O X E N T E R P R I S E S , I N C .

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W E ' R E ST R E N GT H E N I N G O U R B U S I N ES S TO

AC H I E V E P RO F I TA B L E G ROW T H A S W E CO N T I N U E TO P ROV I D E E N E RGY T EC H N O LO G I ES

• Continue to expand geographical presence in Thermal and Renewable aftermarket parts and services
• Leverage our advanced thermal technologies to support gas conversion projects
• Increase focus on higher-margin aftermarket parts and services across all three business segments
• Implementing up to $30 million in cost reductions associated with strategic realignment
• Entered into new $150 million senior secured credit facility to reduce interest expense associated with letters of credit and revolving lines of debt
• Strengthen balance sheet and evaluate strategic alternatives for non-strategic assets
• Utilize state and federal project-level financing to accelerate deployment of BrightLoop™
• Utilize FEED studies to drive ClimateBright™ technology bookings
• Achieve full-year 2024 adjusted EBITDA of $100M to $110M, excluding BrightLoop™ and ClimateBright™ expenses

© 2024 Babcock & Wilcox Enterprises, Inc. All rights reserved.

B A B C O C K & W I L C O X E N T E R P R I S E S , I N C .

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W E ' R E L E V E R A G I N G A VA S T I N S TA L L E D B A S E A N D P R O V E N T E C H N O LO G I E S

• More than 500 waste-to-energy and biomass-to-energy units at 300+ facilities globally (consuming over 61 million tonnes of waste per year) and a leader in plant availability
• Serving utility, waste management, municipality and investment firm customers
• Large worldwide installed base of wet and dry scrubbers for SOX reduction, particulate control equipment, NOX reduction technologies, and mercury control systems to meet environmental regulations
• Flue gas pre-treatment technologies for use with CO2 capture
• Nearly 2,000 wet, dry and hybrid cooling system units (10,000+ cells) installed globally
• More than 300 operating utility and industrial boiler units in the U.S. and nearly 200 operating utility and industrial boiler units across 40 countries around the world
• More than 5,000 industrial water-tube package boilers and other waste heat recovery products installed in a variety of facilities
• Average approximately 500,000 Boilermakers' construction manhours per year over last five years

A VAST GLOBAL INSTALLATION OF B&W'S CORE TECHNOLOGIES AT UTILITY AND INDUSTRIAL PLANTS CREATE LARGE GROWTH OPPORTUNITIES FOR PARTS, SERVICES AND RETROFITS

© 2024 Babcock & Wilcox Enterprises, Inc. All rights reserved.

B A B C O C K & W I L C O X E N T E R P R I S E S , I N C .

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B A B C O C K & W I L C OX P R O F I L E

CORPORATE SNAPSHOT

Headquarters:		Akron OH, USA
Founded:		1867
Ownership:		Public (NYSE:BW)
Employees:		~2,250
LTM Revenue		~$999.4M
December 2023:
LTM Adjusted EBITDA:	$79.1M
2024 EBITDA Target:	$100M to $110M2
B&W RENEWABLE
Industrial	Parts & Services		Asia & Other
31%	62%	Europe	13%
		68%
Power	Aftermarket		North
Generation	& Upgrades		America
69%	11%		19%

New Build

27%

CONSOLIDATED

Industrial	Parts & Services	Europe	Asia & Other
27%	17%
34%
45%
Power	Aftermarket		North
Generation	& Upgrades		America
66%	33%		56%
		New Build
		22%
B&W ENVIRONMENTAL
Industrial	Parts & Services	Asia & Other
36%	37%
28%
Power	Aftermarket		North
Generation	& Upgrades		America
64%	30%		33%

New Build	Europe
31%
42%

		Backlog1 as of
LTM Revenue	December 31, 2023
20%	50%	34%
39%
	30%	27%

B&W Renewable B&W Environmental B&W Thermal

B&W THERMAL

Industrial	Parts &	New Build	Europe	Asia & Other
35%	Services	12%	2%	11%
	41%
Power		Aftermarket		North
Generation		& Upgrades		America
65%		47%		87%

Notes: All charts based on LTM December 31, 2023 revenues, unless otherwise noted. 1. Backlog does not include shorter lead-time parts and services. 2. The most comparable GAAP target is not available without unreasonable effort. Target is based on continuing operations excluding BrightLoop™ and ClimateBright™ expenses.

Disclaimer: B&W Enterprises cautions not to place undue reliance on any forward-looking statements, which speak only as of the date of this presentation and may be impacted by the risks described in our SEC reports. We undertake no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.

© 2024 Babcock & Wilcox Enterprises, Inc. All rights reserved.

B A B C O C K & W I L C O X E N T E R P R I S E S , I N C .

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A S O L I D P I P E L I N E O F G LO B A L O P P O R T U N I T I E S

2024-2026		PIPELINE REVENUE
Addressable Market
Europe	2024-2026	SPLIT 2024-2026
More than $8.5B
	Addressable Market
	Asia-Pacific
	More than $9B

2024-2026

Addressable Market Middle East & Africa More than $4B

2024-2026

Addressable Market

Americas

Other: More than $10B

Manufacturing

Service Facilities

Future Service Facilities

Construction

Sales/Support

Sales Reps

B&W RENEWABLE

B&W ENVIRONMENTAL

B&W THERMAL

-YEARPIPELINE

$2,130

Total

$1,015

Total

$932

Total

$1,835

$5.8B

$2.1B

$ MILLIONS

$1.5B

$ MILLIONS

$ MILLIONS

$693

$1,096

$749

$206

$249

$286

$157

$24

3

Americas

APAC

Europe

ME/A

Americas

APAC

Europe

ME/A

Americas

APAC

Europe

ME/A

15-20%

20-25%

60-65%

Total pipeline more

than $9 billion

over the next three years including over $1.5 billion in BrightLoop and ClimateBright opportunities

A WIDE FOOTPRINT AND ONGOING EXPANSION POSITIONS B&W TO LEVERAGE MARKET TRENDS AROUND THE WORLD

Disclaimer: B&W Enterprises cautions not to place undue reliance on any forward-looking statements, which speak only as of the date of this presentation and may be impacted by the risks described in our SEC reports. We undertake no obligation to update or revise any forward-looking statement, except to the extent required by applicable law.

© 2024 Babcock & Wilcox Enterprises, Inc. All rights reserved.

B A B C O C K & W I L C O X E N T E R P R I S E S , I N C .

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G LO B A L A N N UA L C A P I TA L I N V E S T M E N T I N

C A R B O N C A P T U R E A N D H Y D R O G E N I S G R O W I N G

Trillions USD (2019)

5

4

3

2

1

0

By technology area

$224B

$158B

$240B

$150B	$390B
	$428B

2016-20

2030

2040

2050

ANNUAL AVERAGE CAPITAL INVESTMENT IN THE NET-ZERO EMISSIONS (NZE) SCENARIO

Source: IEA

Technology area

Other

Fossil fuels

CCUS

Hydrogen

Electricity system Electrification

Efficiency Other renewables

Bioenergy

© 2024 Babcock & Wilcox Enterprises, Inc. All rights reserved.

B A B C O C K & W I L C O X E N T E R P R I S E S , I N C .

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