Quanta Services, Inc. · NYSE:PWR
Quanta Services — Q2 2022 Earnings Presentation
29 slides from Quanta Services's earnings presentation, Aug 4, 2022
Slide 1: Second Quarter 2022 Earnings Call Presentation
Second Quarter 2022 Earnings Call Presentation August 4, 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 • 2Q22 Results, Operational and Strategic Derrick Jensen Commentary Executive Vice President - Business Operations • Financial Review and Discussion Kip Rupp • Outl
Slide 4: Second Quarter 2022 Overview
Second Quarter 2022 Overview • Great start to the year that included many record second quarter and first half results *Adj. EBITDA(1) • Continued solid execution and profitable growth *Operating *Adj. Income EPS(1) ◦ Strong revenue growth in each segment $422.1MM • Momentum building for profitable
Slide 5: Electric Power Infrastructure Solutions
Electric Power Infrastructure Solutions • Another solid quarter of profitable growth. Reflects solid and safe execution and robust demand for our services • Successfully managing through supply chain challenges causing limited delays and resource utilization inefficiencies ◦ Expect short-term delays
Slide 6: Renewable Energy Infrastructure Solutions
Renewable Energy Infrastructure Solutions • Renewable developers and utilities are leading the effort to reduce carbon emissions, many with significant carbon-reduction commitments, through aggressive efforts to expand their renewable generation portfolios. • Segment performed well despite supply ch
Slide 7: Underground Utility & Infrastructure Solutions
Underground Utility & Infrastructure Solutions • Continued strong segment revenue and margin +2.2MM Miles Of pipeline in the U.S. natural gas distribution performance in the second quarter system(1) • Particular strength from Industrial Services operations $22B ◦ Solid execution Est. investment by I
Slide 8: Across Our Portfolio, Megatrends Provide Multiple Paths for Growth
Across Our Portfolio, Megatrends Provide Multiple Paths for Growth SOUND STRATEGY * STRENGTH AND SUSTAINABILITY * FAVORABLE LONG-TERM TRENDS * STRONG FINANCIAL PROFILE 8
Slide 9: Solid Year-to-Date 2022 Performance and Positive Multi-Year Outlook
Solid Year-to-Date 2022 Performance and Positive Multi-Year Outlook • Year-to-date 2022 performance and full-year expectations demonstrate our confidence in the strength and sustainability of our business and long-term strategy, favorable end-market trends, our ability to safely execute and our stro
Slide 10: 2Q22 Segment Results versus 2Q21
2Q22 Segment Results versus 2Q21 ($M) Revenues Op Inc %(1) Commentary Change (bps) + The increase in revenue was primarily due to growth in spending by our utility customers on grid modernization and hardening, resulting in increased demand for our electric power services, as well as approximately $
Slide 11: Backlog
Backlog (1) ($B) Backlog • Total backlog of $19.9B as of June 30, 2022 is higher than 2Q21 levels but down sequentially compared to 1Q22 0.6% • The reduction is primarily attributable to over backlog under our multi-year MSAs, 1Q22 which saw a reduction in estimated value due to one quarter's worth
Slide 12: Free Cash Flow & DSO
Free Cash Flow & DSO 2nd Quarter Recap Free Cash Flow (1) ($M) Days Sales Outstanding (2) (DSO) Free Cash Flow decrease mainly driven by: 2Q21 2Q22 • The timing of certain renewable contract awards, which typically have favorable cash terms, and continued elevated working capital requirements associ
Slide 13: Balance Sheet & Liquidity
Balance Sheet & Liquidity December 31, June 30, ($M) 2019 2020 2021 2022 Liquidity Highlights Cash and Cash Equivalents 165 185 229 151 • Slight increase in overall leverage due Debt to flat year-to-date free cash flow Credit Facility 105 149 450 583 coupled with strategic capital Term Loans 1,241 —
Slide 14: Electric Power Solutions Segment Guidance
Electric Power Solutions Segment Guidance Full-Year 2022 Estimated Range 2021 △ 1Q Guidance △ 2Q Guidance + Base business growth + Robust demand for Revenues + Communications growth electric and communications $7.6B - Reduced emergency $8.3B - $8.4B services $8.5B - $8.6B restoration services + Cont
Slide 15: Renewable Solutions Segment Guidance
Renewable Solutions Segment Guidance Full-Year 2022 Estimated Range 2021 △ 1Q Guidance △ 2Q Guidance Revenues + Full year revenue contribution from + Improved visibility into $1.8B Blattner with continued $3.8B - $4.0B second half $4.0B - $4.2B demand for renewable opportunities infrastructure Op In
Slide 16: Underground Utility & Infrastructure Solutions Segment Guidance
Underground Utility & Infrastructure Solutions Segment Guidance Full-Year 2022 Estimated Range 2021(2) △ 1Q Guidance △ 2Q Guidance + Industrial services Revenues recovery = Tightening range + Increased Canadian $3.5B operations revenues $4.1B - $4.3B around previous $4.1B - $4.2B expectations + Incr
Slide 17: 2022 Guidance Summary
2022 Guidance Summary GUIDANCE ($M except per share data) Low Mid High Revenues $16,600 $16,800 $17,000 Adj. EBITDA (1) $1,638 $1,675 $1,713 Free Cash Flow (2) $550 $650 $750 Net Income (Loss) $491 $516 $541 Diluted EPS (GAAP) $3.32 $3.49 $3.65 Adjusted Diluted EPS (3) $6.10 $6.27 $6.44 REITERATING
Slide 18: Closing Remarks
Closing Remarks • Solid first half results and improved visibility positions us to raise revenue expectations and reiterate full-year 2022 earnings expectations • Remain focused on successful execution of our five key objectives ◦ Grow our base business ◦ Improve margins ◦ Create growth platforms th
Slide 19: Appendix
Appendix • Definitions • Reconciliation Tables • Cautionary Statement About Forward-Looking Statements and Information 19
Slide 20: 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 21: 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 22: 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 2Q Low Mid High Reconciliation of adjusted net income (loss) attributable to common stock: Net income (loss) attributable to common stock (GAAP as reported)
Slide 23: Reconciliation of EBITDA and Adjusted EBITDA
Reconciliation of EBITDA and Adjusted EBITDA ($000s) 2022 FY 2022 GUIDANCE RANGE 2Q Low Mid High Net income (loss) attributable to common stock (GAAP as reported) $ 88,020 $ 491,200 $ 516,050 $ 540,900 Interest expense, net 28,417 120,000 121,500 123,000 Provision for income taxes 41,252 177,200 188
Slide 24: Reconciliation of Free Cash Flow
Reconciliation of Free Cash Flow ($000s) 2021 2022 FY 2022 GUIDANCE RANGE 2Q 2Q Low Mid High Net cash provided by operating activities (GAAP as reported) $ 188,948 $ 118,731 $ 950,000 $ 1,050,000 $ 1,150,000 Less: Net capital expenditures: (63,178) (105,189) (400,000) (400,000) (400,000) Free Cash F
Slide 25: Reconciliation of Backlog
Reconciliation of Backlog (In thousands) June 30, 2021 March 31, 2022 June 30, 2022 12 Month Total 12 Month Total 12 Month Total Electric Power Infrastructure Solutions Remaining performance obligations $ 1,821,011 $ 2,457,067 $ 2,071,266 $ 2,731,572 $ 2,149,469 $ 2,779,227 Estimated orders under MS
Slide 26: 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 27: 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 28: Cautionary Statement About Forward-Looking Statements and Information
Cautionary Statement About Forward-Looking Statements and Information • The future development of natural resources; • 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
Slide 29: 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 29