Covanta — Q4 2020 Earnings Presentation
22 slides from Covanta's earnings presentation, Feb 18, 2021
Slide 1: Fourth Quarter 2020 Earnings Conference Call
NYSE: CVA February 18, 2021 Fourth Quarter 2020 Earnings Conference Call
Slide 2: Cautionary Statements
February 18, 2021 2 Cautionary Statements All information included in this earnings presentation is based on continuing operations, unless otherwise noted. Forward-Looking Statements Certain statements in this press release may constitute “forward-looking” statements as defined in Section 27A of the
Slide 3: CEO Update
February 18, 2021 3 CEO Update
Slide 4: Business and Operations Update
February 18, 2021 4 Business and Operations Update
Slide 5: Commitment to Sustainability
February 18, 2021 5 Commitment to Sustainability
Slide 6: Revenue: 2020 vs. 2019
February 18, 2021 6 Revenue: 2020 vs. 2019 1. Includes waste and service revenue, energy and metals volume, metals processing, wholesale energy load serving, and plant operating costs. 2. Energy price includes capacity payments and bundled RECs. (Unaudited)
Slide 7: Adjusted EBITDA: 2020 vs. 2019
February 18, 2021 7 Adjusted EBITDA: 2020 vs. 2019 (Unaudited) 1. Includes waste and service revenue, energy and metals volume, metals processing, wholesale energy load serving, and plant operating costs. 2. Energy price includes capacity payments and all RECs.
Slide 8: Free Cash Flow: 2020 vs. 2019
February 18, 2021 8 Free Cash Flow: 2020 vs. 2019 1. Includes capital type expenditures at client owned facilities. (Unaudited)
Slide 9: Adjusted EBITDA: 2021E vs. 2020
February 18, 2021 9 Adjusted EBITDA: 2021E vs. 2020 1. Includes waste and service revenue, energy and metals volume, metals processing, wholesale energy load serving, plant operating costs and overhead. 2. Energy price includes capacity payments and all RECs. (Unaudited)
Slide 10: Free Cash Flow: 2021E vs. 2020
February 18, 2021 10 (Unaudited) Free Cash Flow: 2021E vs. 2020 1. Includes capital type expenditures at client owned facilities.
Slide 11: Capital Allocation
February 18, 2021 11 Capital Allocation (Unaudited, in millions) FY 2020 FY 2019 FY 2021 Estimate Free Cash Flow $95 $140 $100 - $140 Domestic growth investments (14) (39) (5) International growth investments (20) (17) (15) Total growth investments (33) (56) (20) Proceeds from asset sales (1) 15 28
Slide 12: Capitalization Summary
February 18, 2021 12 (Face value; unaudited, in millions) December 31, 2020 December 31, 2019 December 31, 2018 Cash and cash equivalents $55 $37 $58 Corporate debt: Secured $691 $659 $671 Unsecured 1,744 1,744 1,694 Total corporate debt $2,435 $2,403 $2,365 Project debt 123 131 150 Total debt $2,55
Slide 13: UK / Ireland Project Update
February 18, 2021 13 UK / Ireland Project Update Notes: Investments and financial outlook are based on forward curve for foreign exchange of USD/GBP of ~$1.37 and USD/EUR of ~$1.22. Proportional, unconsolidated, non-recourse project debt to total ~$650 million representing debt balance at Dublin of
Slide 14: Appendix
February 18, 2021 14 Appendix
Slide 15: Waste Update
February 18, 2021 15 • FY 2020 revenue drivers vs. FY 2019: ▪ Same store WtE tip fee revenue: ◦ Price up $16 million (3%) ◦ Volume down $1 million ◦ WtE profiled waste revenue increased by 3% ▪ Service fee revenue flat year-over-year ▪ Environmental services revenue lower by 3% with improved profita
Slide 16: Energy Update
February 18, 2021 16 Energy Update (in millions, except price) 2020A 2019A 2021E Energy Revenue: Energy sales $266 $273 $250 - $270 Capacity 41 44 40 Load serving & other (1) 51 12 60 Total $357 $329 $350 - $370 MWh Sold: Contracted 2.0 2.1 2.0 - 2.1 Hedged (2) 3.8 3.0 2.9 Market 0.6 1.3 1.4 - 1.5 T
Slide 17: Long-term Outlook: Energy Detail
February 18, 2021 17 Long-term Outlook: Energy Detail (Unaudited, in millions, except price) 2019A 2020A 2021E 2022E 2023E 2024E 2025E MWh Sold – CVA Share: Contracted 2.1 2.0 2.0 2.1 2.1 2.1 1.9 Hedged (1) 3.0 3.8 2.9 0.8 0.2 - - Market 1.3 0.6 1.5 3.6 4.3 4.5 4.6 Total MWh Sold 6.4 6.5 6.4 6.6 6.6
Slide 18: Recycled Metals Update
February 18, 2021 18 • FY 2020 revenue drivers vs. FY 2019: ▪ Ferrous: ◦ Realized pricing down $2 million (5%) ◦ Same store volume up $4 million by 8% ▪ Non-ferrous: ◦ Realized pricing down $5 million (12%) ◦ Same store volume down $1 million (3%) • Trends and outlook: ▪ Metal prices showing improve
Slide 19: Maintenance and Operating Expenses
February 18, 2021 19 • FY 2020 drivers vs. FY 2019: ▪ 2020 maintenance higher than prior year as expected due to planned outage schedule and COVID impacts ▪ COVID-19 cost impacts: ◦ $7 million higher costs for plant safety ◦ $24 million savings from cost reduction efforts including impact to G&A ◦ R
Slide 20: Non-GAAP Reconciliation: Adjusted EBITDA
February 18, 2021 20 Non-GAAP Reconciliation: Adjusted EBITDA Q4 Full Year (Unaudited, in millions) 2020 2019 2020 2019 2018 Net income (loss) $12 $12 $(28) $10 $152 Depreciation and amortization expense 56 56 224 221 218 Interest expense 33 35 133 143 145 Income tax benefit (12) (1) (18) (7) (29) I
Slide 21: Non-GAAP Reconciliation: Adjusted EBITDA and Free Cash Flow
February 18, 2021 21 Non-GAAP Reconciliation: Adjusted EBITDA and Free Cash Flow Q4 Full Year Full Year (Unaudited, in millions) 2020 2019 2020 2019 2018 Estimated 2021 Adjusted EBITDA $103 $125 $424 $428 $457 $435 - $465 Cash paid for interest, net of capitalized interest (8) (29) (112) (152) (136)
Slide 22: Non-GAAP Financial Measures
February 18, 2021 22 Non-GAAP Financial Measures Free Cash Flow Free Cash Flow is defined as cash flow provided by operating activities, plus changes in restricted funds - operating, less maintenance capital expenditures, which are capital expenditures primarily to maintain our existing facilities.