FLUOR CORP Q1 FY2025 earnings call

• Thanked for joining the strategy update in Indianapolis and webcast, outlining shift from fix and build to grow and execute under reinforced financial discipline.
• Operating review: Revenue $4 billion, consolidated new awards $5.8 billion, book to burn ratio 1.5, total backlog $28.7 billion (79% reimbursable).
• Detailed segment performances: Urban Solutions profit, ATLS new award and biotech progress, Mining and Metals award, Infrastructure project, Energy Solutions profit changes, Mission Solutions profit and reserve details.

Urban Solutions: Reported profit of $70 million in Q1. New awards for the quarter were $5.3 billion. Ending backlog at $20.2 billion represents 70% of Fluor's total backlog. ATLS: Had a very strong quarter with a new award from a leading pharmaceutical maker for EPCM services, advancements in biotech project in Denmark (successfully doubled bioreactor capacity), and opportunities in pharmaceuticals, advanced manufacturing, semiconductor, and data center. Mining and Metals: Received a services award for the Reko Diq copper gold project in Pakistan, with interest in green steel production, aluminum, and copper projects. Infrastructure: New awards include $682 million for a TxDOT construction contract, and the Gordie Howe project is 96% complete. Energy Solutions: Segment profit was $47 million compared to $68 million a year ago. New awards totaled $315 million. Dow project had slowdown in construction activities but ongoing engineering and procurement. LNG Canada field progress advancing. Mission Solutions: Segment profit was $5 million compared to $22 million a year ago. Results reflect a $28 million reserve, lost recompete for strategic petroleum reserve, new awards $164 million, ending backlog $2.4 billion.

• Held 2025 adjusted EBITDA guidance of $575 million to $675 million and adjusted EPS guidance of $2.25 to $2.75.
• Operating cash flow expected between $450 million and $500 million.
• Key assumptions include book to burn ratio above 1, revenue growth ~15%, and segment margins: urban ~4%-5%, energy ~3.5%-4.5%, mission ~5%-6%.

• Market uncertainty affecting client decision-making on project timing and scope.
• Client sensitivity to cost and GDP growth requiring further market clarity before FIDs.
• FX impacts and reserves related to past projects (e.g., $28 million reserve in Mission Solutions).

Q: Relative to client sentiment change, which clients are more time to market vs price sensitive?

A: Most urban space projects (ATLS) are time to market, while energy, copper projects are more price sensitive and need market certainty. 90% of underlying award revenue is already engaged.

Q: How conservative is EBITDA guidance given first quarter EBITDA?

A: Share price impact distorts the curve; normalized, it's midpoint of guidance. Confidence in outlook remains as most backlog projects are being worked on.

Q: Concerns about second half underutilization given Dow project delay and recompete loss?

A: Dow's decision is specific and not a trend; backlog quality and ability to convert are strong, with early procurement buyout supporting execution. Confidence in book to bill over one from close client collaboration and ongoing projects in various end markets.