Quanta Services, Inc. · NYSE:PWR
Quanta Services — FY2021 Earnings Presentation
34 slides from Quanta Services's earnings presentation, Feb 24, 2022
Slide 1: 4Q and Full-Year 2021 Earnings Call Presentation
4Q and Full-Year 2021 Earnings Call Presentation February 24, 2022
Slide 2: Notice to Investors
Notice to Investors This presentation (and oral statements regarding the subject matter of this presentation) includes forward-looking statements intended to qualify under the “safe harbor” from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking stat
Slide 3: Call Participants and Agenda
Call Participants and Agenda Duke Austin • Introduction and Forward-Looking President and Chief Executive Officer Statements Disclaimer • 2021 Results, Operational and Strategic Derrick Jensen Commentary Chief Financial Officer • Financial Review and Discussion Kip Rupp • Outlook Vice President, Inv
Slide 4: 2021: Another Year of Solid, Safe Execution and Profitable Growth
2021: Another Year of Solid, Safe Execution and Profitable Growth • Full-year 2021 results include record: *Adj. EBITDA(1) ◦ Revenues *Operating *Adj. ◦ GAAP and Adjusted EPS Income EPS(1) $1,259M ◦ Adjusted EBITDA ◦ Total Backlog $663.5M $4.92 • Results built off a strong operational and financial
Slide 5: Select Full-Year 2021 Accomplishments
Select Full-Year 2021 Accomplishments • Advanced our front-end solutions strategy, both organically and through acquisitions • Expanded emergency response capabilities and generated record emergency response revenues • Transition of the operation and maintenance of the Puerto Rico transmission and d
Slide 6: Levered to Favorable Long-Term Trends
Levered to Favorable Long-Term Trends Quanta's Solutions for Modern Infrastructure Facilitate Movement Towards A Carbon-Neutral Economy and New Technologies Utility Grid Modernization Electrification Outsourcing Renewable Renewable Generation Generation Expansion Integration Utility Grid Communicati
Slide 7: Electric Power Infrastructure Solutions
Electric Power Infrastructure Solutions • Another strong year of profitable growth. Reflects solid and safe execution, robust demand for our services, high utilization of resources and operational excellence ◦ Grid modernization, system hardening, renewable interconnections and emergency response wo
Slide 8: Electric Power Infrastructure Solutions
Electric Power Infrastructure Solutions • Believe North America is at an inflection point for significant investment in electric vehicle (EV) charging infrastructure and associated power grid system upgrade • Quanta is collaborating with multiple EV charging companies and utilities in states across
Slide 9: Communications Infrastructure Solutions
Communications Infrastructure Solutions (within Electric Power Segment) Multi-Year Drivers / Opportunities • Continue to scale our communications services operations and progress our strategy ◦ ~25% revenue growth in 2021 • Ongoing core fiber network ◦ Record total backlog of ~$1.3 billion at Dec. 3
Slide 10: Renewable Energy Infrastructure Solutions
Renewable Energy Infrastructure Solutions • New segment consists of services and solutions for infrastructure supporting the delivery of renewable energy, including renewable energy generation, associated electric transmission and substations and battery storage • Renewable developers and utilities
Slide 11: Underground Utility & Infrastructure Solutions
Underground Utility & Infrastructure Solutions • Performed well considering challenges from the global pandemic, work disruptions along the Gulf Coast from Hurricane Ida and bankruptcy of a customer • Continued solid demand for gas utility and pipeline integrity services • Industrial services, as we
Slide 12: Strong 2021 Performance and Positive Multi-Year Outlook
Strong 2021 Performance and Positive Multi-Year Outlook • Our end markets and multi-year visibility are solid and growth opportunities are gaining momentum • 2022 financial outlook calls for meaningful growth with record revenues, adjusted EBITDA, EPS and improved margins ◦ Reflects expected strengt
Slide 13: 4Q21 Segment Results versus 4Q20
4Q21 Segment Results versus 4Q20 Op Inc %(1) ($M) Revenues Commentary Change (bps) + Revenues increased primarily due to double-digit growth in our base business and $50M in revenues from acquired Electric businesses. Power $2,136 11.8% + Increased margins due to overall strong execution across elec
Slide 14: Backlog
Backlog (1) +27.4% ($B) over Total Backlog 4Q20 • Total backlog of $19.3B and 12-month backlog of $11.3B represent record levels as of December 31, 2021 • $1.6B of total backlog as of December 31, +36.8% 2021 is attributable to fourth quarter over acquisitions, the majority of which was from 4Q20 Bl
Slide 15: Free Cash Flow & DSO
Free Cash Flow & DSO 4th Quarter Recap Free Cash Flow (1) ($M) Days Sales Outstanding (2) (DSO) Free Cash Flow decrease driven by: 4Q20 4Q21 • $72M of change of control related disbursements associated with acquired liabilities during the quarter related to the Blattner transaction, which were requi
Slide 16: Balance Sheet & Liquidity
Balance Sheet & Liquidity December 31, ($M) 2018 2019 2020 2021 Liquidity Highlights Cash and Cash Equivalents 79 165 185 229 • Elevated leverage ratio at year end due Debt primarily to the funding of the Blattner Credit Facility 479 105 149 450 acquisition; we expect to efficiently de- Term Loans 5
Slide 17: Electric Power Solutions Segment Guidance
Electric Power Solutions Segment Guidance Guidance 2021 △ 2022 + Base business growth Revenues + Communications growth - Reduced emergency $7.6B restoration services $8.2B - $8.3B - Reduced Canadian operations revenues - Reduced emergency Op Inc % (1) restoration services + Continued base business 1
Slide 18: Renewable Solutions Segment Guidance
Renewable Solutions Segment Guidance Guidance 2021 △ 2022 2022 Blattner Expectations Revenues + Full year revenue contribution from Blattner Revenues: $2.5B - $2.7B $1.8B with continued demand for $3.8B - $4.0B renewable infrastructure Adj. EBITDA: $250M - $290M Consistent with initial guidance from
Slide 19: Underground Utility & Infrastructure Solutions Segment Guidance
Underground Utility & Infrastructure Solutions Segment Guidance Guidance (2) 2021 △ 2022 + Industrial services recovery Revenues + Increased Canadian operations revenues $3.5B $4.0B - $4.2B + Increased Australian operations revenues Op Inc % (1) + Industrial services margins approach pre-pandemic pe
Slide 20: Corporate & Non-Allocated Costs Segment Guidance
Corporate & Non-Allocated Costs Segment Guidance Guidance ($M) 2021 2022 Actual Low High Total $ (534) $ (680) $ (701) % of Consolidated Revenues (4.1)% (4.25)% (4.25)% (-) Amortization $ (165) $ (347) $ (347) (-) Deal Costs (47) (44) (44) (-) Change in FMV of Earnout Liabilities (7) — — Total Items
Slide 21: 2022 Guidance Summary
2022 Guidance Summary GUIDANCE ($M except per share data) Low Mid High Revenues $16,000 $16,250 $16,500 Adj. EBITDA (1) $1,591 $1,646 $1,700 Free Cash Flow (2) $650 $750 $850 Net Income (Loss) $530 $567 $604 Diluted EPS (GAAP) $3.56 $3.81 $4.06 Adjusted Diluted EPS (3) $6.00 $6.25 $6.50 ENABLING THE
Slide 22: Influence of Revenue Growth on Cash Flow Generation
Influence of Revenue Growth on Cash Flow Generation Change in Revenue vs Free Cash Flow / Adjusted EBITDA (1)(2) Free Cash Flow Drivers • Quanta’s cash flow generation is generally counter to revenue growth primarily due to working capital demands and, to a lesser extent, capex investment • This dyn
Slide 23: Closing Remarks
Closing Remarks • We continue to believe we are in the early stages of a significant infrastructure investment cycle, and that we are uniquely positioned in the markets we serve to deliver and shape comprehensive, end-to-end solutions to support North America's transition to carbon-neutral energy in
Slide 24: Appendix
Appendix • Definitions • Reconciliation Tables • Cautionary Statement About Forward-Looking Statements and Information 24
Slide 25: Definitions
Definitions • Backlog is defined as performance obligations, plus estimated orders under master service agreements, including estimated renewals, and non-fixed price contracts expected to be completed within one year. Quanta’s methodology for determining backlog may not be comparable to the methodol
Slide 26: Definitions
Definitions • Adjusted Earnings per Share is defined as diluted earnings per share adjusted for the after-tax impact of certain other items, in the current year, as described below: ◦ Non-cash stock-based compensation expense may vary period do period due to acquisition activity, changes in the esti
Slide 27: Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings per Share
Reconciliation of Adjusted Net Income and Adjusted Diluted Earnings per Share ($000s, except per share information) 2016 2021 FY 2022 GUIDANCE RANGE FY FY Low Mid High Reconciliation of adjusted net income attributable to common stock: Net income attributable to common stock (GAAP as reported) $ 198
Slide 28: Reconciliation of EBITDA and Adjusted EBITDA
Reconciliation of EBITDA and Adjusted EBITDA ($000s) 2014 2015 2016 2017 2018 2019 2020 2021 FY 2022 GUIDANCE RANGE FY FY FY FY FY FY FY FY Low Mid High Net income attributable to common stock (GAAP as reported) $ 269,224 $ 120,286 $ 198,725 $ 314,978 $ 293,346 $ 402,044 $ 445,596 $ 485,956 $ 529,60
Slide 29: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow ($000s) 2014 2015 2016 2017 2018 2019 2020 2021 FY 2022 GUIDANCE RANGE FY FY FY FY FY FY 4Q FY 4Q FY Low Mid High Net cash provided by operating $1,115,977 activities (GAAP as reported) $ 247,742 $ 628,649 $ 390,749 $ 371,891 $ 358,789 $ 526,551 $ 276,090 $ 249,953 $
Slide 30: Reconciliation of Backlog
Reconciliation of Backlog ($M) December 31, 2020 September 30, 2021 December 31, 2021 12 Month Total 12 Month Total 12 Month Total Electric Power Infrastructure Solutions Remaining performance obligations $ 1,791.0 $ 2,356.3 $ 1,884.6 $ 2,537.9 $ 2,002.9 $ 2,769.1 Estimated orders under MSAs and sho
Slide 31: Cautionary Statement About Forward-Looking Statements and Information
Cautionary Statement About Forward-Looking Statements and Information This presentation (and oral statements regarding the subject matter of this presentation) contains forward-looking statements intended to qualify for the “safe harbor” from liability established by the Private Securities Litigatio
Slide 32: Cautionary Statement About Forward-Looking Statements and Information
Cautionary Statement About Forward-Looking Statements and Information • Market, industry, economic, financial or political conditions that are outside of the control of Quanta, including as a result of, among other things, inflation and geopolitical conflicts and unrest; • Quarterly variations in op
Slide 33: Cautionary Statement About Forward-Looking Statements and Information
Cautionary Statement About Forward-Looking Statements and Information • Unavailability of, or increased prices for, materials, equipment and fuel used in Quanta’s or its customers' businesses, including as a result of inflation, supply chain disruptions, governmental regulations affecting the sourci
Slide 34: Connect With Quanta Services Investor Relations
Connect With Quanta Services Investor Relations @QuantaIR QuantaServicesIR Investor Contact Corporate Office Kip Rupp, CFA, IRC 2800 Post Oak Blvd., Suite 2600 Vice President – Investor Relations Houston, TX 77056 713-341-7260 713-629-7600 investors@quantaservices.com www.quantaservices.com 34