Quanta Services, Inc. · NYSE:PWR
Quanta Services — Q1 2022 Earnings Presentation
31 slides from Quanta Services's earnings presentation, May 5, 2022
Slide 1: First Quarter 2022 Earnings Call Presentation
First Quarter 2022 Earnings Call Presentation May 5, 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 • 1Q22 Results, Operational and Strategic Derrick Jensen Commentary Chief Financial Officer • Financial Review and Discussion Kip Rupp • Outlook Vice President, Inv
Slide 4: First Quarter 2022 Overview
First Quarter 2022 Overview • Great start to the year that included record first *Adj. quarter results EBITDA(1) Operating *Adj. EPS(1) • Continued solid execution and profitable growth Income $345.5MM ◦ Strong revenue growth in each segment $117.5MM $1.37 • Record backlog(1) of +$20 billion ◦ Refle
Slide 5: Electric Power Infrastructure Solutions
Electric Power Infrastructure Solutions MEGATRENDS DRIVING DEMAND FOR QUANTA'S ELECTRIC POWER INFRASTRUCTURE SOLUTIONS 5
Slide 6: Renewable Energy Infrastructure Solutions
Renewable Energy Infrastructure Solutions CARBON-NEUTRALITY REQUIRES SIGNIFICANT RENEWABLE GENERATION & HIGH-VOLTAGE TRANSMISSION 6
Slide 7: Underground Utility & Infrastructure Solutions
Underground Utility & Infrastructure Solutions GAS UTILITIES AND THE TRADITIONAL ENERGY INDUSTRY IN EARLY STAGE OF ENERGY TRANSITION 7
Slide 8: We Have Delivered on Our Strategic Initiatives
We Have Delivered on Our Strategic Initiatives OPERATIONAL EXCELLENCE * TOTAL COST SOLUTIONS * PROFITABLE GROWTH * RISK MITIGATION 8 (1) Refer to appendix for a reconciliation of this non-GAAP financial measure to its most directly comparable GAAP financial measure
Slide 9: Construction-Led Infrastructure Solutions Leveraging the Portfolio
Construction-Led Infrastructure Solutions Leveraging the Portfolio 9 (1) Based on the midpoint of Quanta’s 2022 financial outlook provided on May 5, 2022
Slide 10: Visible Megatrends Provide Visible Long-Term Growth Opportunities
Visible Megatrends Provide Visible Long-Term Growth Opportunities ARGUABLY THE MOST EXCITING TIME IN QUANTA'S HISTORY 10
Slide 11: Across Our Portfolio, Megatrends Provide Multiple Paths for Growth
Across Our Portfolio, Megatrends Provide Multiple Paths for Growth SOUND STRATEGY * STRENGTH AND SUSTAINABILITY * FAVORABLE LONG-TERM TRENDS * STRONG FINANCIAL PROFILE 11
Slide 12: 1Q22 Segment Results versus 1Q21
1Q22 Segment Results versus 1Q21 ($M) Revenues Op Inc %(1) Commentary Change (bps) + Revenue increase primarily due to growth in spending by our utility customers on grid modernization and hardening, Electric resulting in increased demand for our electric power services, as well as approximately $75
Slide 13: Backlog
Backlog (1) ($B) Backlog • Total backlog of $20.5B and 12-month backlog of $11.5B as of March 31, 2022 represent record levels +2% over • Backlog additions during 1Q22 include 4Q21 several larger awards; however, growth continues to be driven primarily by multi- year MSA programs with North American
Slide 14: Free Cash Flow & DSO
Free Cash Flow & DSO Free Cash Flow (1) ($M) Days Sales Outstanding (2) (DSO) 1st Quarter Recap 1Q21 1Q22 Free Cash Flow decrease driven by: • Increased working capital requirements due to higher revenues as well as progress on two larger transmission projects in Canada and the timing of the associa
Slide 15: Balance Sheet & Liquidity
Balance Sheet & Liquidity December 31, March 31, ($M) 2019 2020 2021 2022 Liquidity Highlights Cash and Cash Equivalents 165 185 229 238 • Remain focused on de-levering with Debt strong EBITDA growth and robust cash Credit Facility 105 149 450 523 generation Term Loans 1,241 — 750 750 • Significant
Slide 16: Electric Power Solutions Segment Guidance
Electric Power Solutions Segment Guidance Full-Year 2022 Estimated Range Initial 2021 △ △ 1Q Guidance Guidance + Base business growth Revenues + Communications growth + Strong first quarter results $7.6B - Reduced emergency $8.2B - $8.3B + Continued confidence $8.3B - $8.4B restoration services in g
Slide 17: Underground Utility & Infrastructure Solutions Segment Guidance
Underground Utility & Infrastructure Solutions Segment Guidance Full-Year 2022 Estimated Range Initial 2021(2) △ △ 1Q Guidance Guidance + Industrial services + Strong first quarter Revenues recovery results + Increased Canadian + Continued confidence $3.5B operations revenues $4.0B - $4.2B in growth
Slide 18: Renewable Solutions Segment Guidance
Renewable Solutions Segment Guidance Full-Year 2022 Estimated Range Initial 2021 △ △ 1Q Guidance Guidance Revenues + Full year revenue contribution from = In line with initial $1.8B Blattner with continued $3.8B - $4.0B $3.8B - $4.0B expectations demand for renewable infrastructure Op Inc % (1) - Ex
Slide 19: 2022 Guidance Summary
2022 Guidance Summary GUIDANCE ($M except per share data) Low Mid High Revenues $16,200 $16,450 $16,700 Adj. EBITDA (1) $1,597 $1,651 $1,705 Free Cash Flow (2) $650 $750 $850 Net Income (Loss) $515 $552 $590 Diluted EPS (GAAP) $3.47 $3.72 $3.97 Adjusted Diluted EPS (3) $6.00 $6.25 $6.50 REITERATING
Slide 20: Closing Remarks
Closing Remarks • Solid first quarter results and reiteration of full-year 2022 consolidated expectations led by continued performance from our base business activities • Continued backlog growth and increasing visibility into the duration of this infrastructure cycle strengthens conviction in our a
Slide 21: Appendix
Appendix • Definitions • Reconciliation Tables • Cautionary Statement About Forward-Looking Statements and Information 21
Slide 22: 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 23: Definitions
Definitions • Adjusted Earnings Per Share is defined as diluted earnings per share adjusted for the after-tax impact of certain other items as described below: ◦ Non-cash stock-based compensation expense may vary period do period due to acquisition activity, changes in the estimated fair value of pe
Slide 24: 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) 2022 FY 2022 GUIDANCE RANGE 1Q Low Mid High Reconciliation of adjusted net income (loss) attributable to common stock: Net income (loss) attributable to common stock (GAAP as reported)
Slide 25: Reconciliation of EBITDA and Adjusted EBITDA
Reconciliation of EBITDA and Adjusted EBITDA ($000s) 2022 FY 2022 GUIDANCE RANGE 2016 2021 1Q Low Mid High Net income (loss) attributable to common stock (GAAP as reported) $ 198,725 $ 485,956 $ 84,641 $ 515,000 $ 552,400 $ 589,800 Interest expense, net 12,464 65,705 24,659 113,000 115,000 117,000 P
Slide 26: Reconciliation of Free (Negative) Free Cash Flow
Reconciliation of Free (Negative) Free Cash Flow ($000s) 2021 2022 FY 2022 GUIDANCE RANGE 1Q 1Q Low Mid High Net cash provided by operating activities (GAAP as reported) $ 125,613 $ 85,090 $ 1,050,000 $ 1,150,000 $ 1,250,000 Less: Net capital expenditures: (76,256) (100,936) (400,000) (400,000) (400
Slide 27: Reconciliation of Backlog
Reconciliation of Backlog (In thousands) March 31, 2021 December 31, 2021 March 31, 2022 12 Month Total 12 Month Total 12 Month Total Electric Power Infrastructure Solutions Remaining performance obligations $ 1,749,824 $ 2,290,410 $ 2,002,862 $ 2,769,106 $ 2,071,266 $ 2,731,572 Estimated orders und
Slide 28: 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 29: Cautionary Statement About Forward-Looking Statements and Information
Cautionary Statement About Forward-Looking Statements and Information • Quarterly variations in operating and financial results, liquidity, financial condition, cash flows, capital requirements and reinvestment opportunities, including the ongoing and potential impact to Quanta's business, operation
Slide 30: 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 31: 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 31