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Is KBR on a Path to Transformation?

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Strategic focus and restructuring

In December 2014, KBR (KBR) revamped its operations to strengthen its global presence. From 16 business lines servicing many end markets, it narrowed its focus to only two end markets (hydrocarbon and government services) through three segments.

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Winding down

In response to the reorganization plan, KBR sold off its building group unit to Pernix Group (PRXG) for $22 million in June 2015, and its US infrastructure unit to Stantec Consulting Services (STN) for $19 million in December 2015. KBR closed two fixed-price energy ventures in 2015 and a third one in April 2017.

Reimbursable government services

KBR enters into cost-reimbursable contracts with the US, UK, and Australian governments. The deals are usually long term.

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Hydrocarbons

According to KBR’s latest annual report, the company offers four primary services to the hydrocarbons (XLE) sector:

  • proprietary technology
  • specialized consulting
  • project delivery solutions
  • maintenance and asset services

Digitalization

KBR has shifted to offering training simulators and remote monitoring operations. The company recently signed a partnership with IBM to create digital solutions.

All of these restructuring efforts are part of KBR’s strategy to pivot the company to compete with Fluor (FLR), Jacobs Engineering (JEC), and Chicago Bridge & Iron (CBI). In the next part, we’ll take a look at KBR’s strategic acquisitions.

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