Quanta Services, Inc. · NYSE:PWR
Quanta Services — Q3 2021 Earnings Presentation
28 slides from Quanta Services's earnings presentation, Nov 4, 2021
Slide 1: Third Quarter 2021 Earnings Call Presentation
Third Quarter 2021 Earnings Call Presentation November 4, 2021
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 • 3Q21 Results, Operational and Strategic Derrick Jensen Commentary Chief Financial Officer • Financial Review and Discussion Kip Rupp • Outlook Vice President, Inv
Slide 4: Third Quarter 2021 Overview
Third Quarter 2021 Overview *Adj. • Continued solid execution and profitable growth EBITDA(1) *Operating *Adj. • Record backlog(1) of $17 billion Income EPS(1) ◦ Reflects collaboration with customers, favorable end $366.9MM market dynamics and advancement of long-term $1.48 $248.1MM strategies Cash
Slide 5: Blattner Is A Premier Utility-Scale Renewable Energy Infrastructure Solutions Provider
Blattner Is A Premier Utility-Scale Renewable Energy Infrastructure Solutions Provider • Transaction puts Quanta in a unique position to enable the energy infrastructure for North America's energy transition Wind and Solar Generation Capacity Additions(4) (4) Source: BNEF 1H 2021 U.S. Renewable Ener
Slide 6: Electric Power Infrastructure Solutions
Electric Power Infrastructure Solutions • Another strong quarter 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
Slide 7: Communications Infrastructure Solutions
Communications Infrastructure Solutions • Continue to scale our communications services operations and progress our strategy • Developed our wireless capabilities and are expanding those services in select markets • Revenues increased in 3Q, though we incurred higher costs on certain jobs, which imp
Slide 8: Underground Utility & Infrastructure Solutions
Underground Utility & Infrastructure Solutions • Performed well considering challenges from work disruptions along the Gulf Coast from Hurricane Ida and work inefficiencies associated with the surge of the COVID-19 Delta variant in certain areas • Continued solid demand for gas utility and pipeline
Slide 9: Encouraged By Progress on Infrastructure Proposals
Encouraged By Progress on Infrastructure Proposals • Quanta's multi-year growth opportunities are driven by significant multi-year programs already in place to modernize the existing power grid, build renewable generation, integrate increasing renewable generation capacity into the power grid and en
Slide 10: Solid Year-to-Date 2021 Performance and Positive Multi-Year Outlook
Solid Year-to-Date 2021 Performance and Positive Multi-Year Outlook • Quanta has profitably grown the company and executed well in 2021 and expects to continue to do so • Year-to-date 2021 performance and full-year expectations demonstrate the strength and sustainability of our business and long-ter
Slide 11: 3Q21 Segment Results versus 3Q20
3Q21 Segment Results versus 3Q20 ($MMs) Revenues Op Inc %(1) Commentary Change (bps) + Revenue increase was driven by continued favorable dynamics across our core utility and communications markets and associated demand for our services and a $55 million increase in revenues from acquired businesses
Slide 12: Backlog
Backlog (1) ($B) Total Backlog +13% over • Total backlog of $17.0B and 12-month 4Q20 backlog of $9.8B represent record levels as of September 30th $17.0 $17.0 • Total backlog at the end of the third quarter $15.1 $15.1 is 13% higher than both backlog at year-end and at the end of the third quarter o
Slide 13: Free Cash Flow & DSO
Free Cash Flow & DSO Free Cash Flow (1) ($MMs) Days Sales Outstanding (2) (DSO) 3rd Quarter Recap Free Cash Flow decrease driven by: 3Q20 3Q21 • 3Q21 decrease due to higher revenues and corresponding increases in working capital $70 demands compared to prior year, which benefited from lower revenues
Slide 14: Balance Sheet & Liquidity
Balance Sheet & Liquidity December 31, September 30, ($MMs) 2018 2019 2020 2021 Liquidity Highlights • Cash and debt at September 30, Cash and Cash Equivalents 79 165 185 1,696 2021 include the proceeds from our Debt $1.5B senior notes offering in Credit Facility 479 105 149 416 September 2021, whic
Slide 15: Debt Maturities and Capital Allocation
Debt Maturities and Capital Allocation Total Estimated Debt at 12/31/2021E using midpoint of free cash flow guidance (1) Amounts shown in millions 2.900% Senior Notes • During periods of moderate, mid-single digit growth, we $1,000 would expect to convert our adjusted EBITDA into free cash Term Loan
Slide 16: 2021 Guidance Summary
2021 Guidance Summary Contribution from 3Q21 LEGACY GUIDANCE GUIDANCE (5) and 4Q21 M&A (4) ($MMs except per share data) Low Mid High Low Mid High Low Mid High Revenues $12,150 $12,250 $12,350 $400 $450 $500 $12,550 $12,700 $12,850 Adj. EBITDA (1) $1,172 $1,186 $1,201 $40 $50 $60 $1,212 $1,236 $1,261
Slide 17: Closing Remarks
Closing Remarks • Utility-based operations continue to execute at a high level and are well positioned to deliver solutions to meet the expanding capital and maintenance programs of our North American utility partners • Continued backlog growth and increasing visibility into the duration of this inf
Slide 18: Appendix
Appendix • Definitions • Reconciliation Tables • Cautionary Statement About Forward-Looking Statements and Information 18
Slide 19: 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 20: 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 21: 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) 2021 FY 2021 GUIDANCE RANGE 3Q Low Mid High Reconciliation of adjusted net income (loss) attributable to common stock: Net income (loss) attributable to common stock (GAAP as reported)
Slide 22: Reconciliation of EBITDA and Adjusted EBITDA
Reconciliation of EBITDA and Adjusted EBITDA ($000s) 2021 FY 2021 GUIDANCE RANGE 3Q Low Mid High Net income (loss) attributable to common stock (GAAP as reported) $ 174,365 $ 464,200 $ 478,650 $ 493,100 Interest expense, net 17,187 64,000 64,000 64,000 Provision for income taxes 61,581 149,000 153,5
Slide 23: Reconciliation of (Negative) Free Cash Flow
Reconciliation of (Negative) Free Cash Flow ($000s) 2020 2021 FY 2021 GUIDANCE RANGE 3Q 3Q Low Mid High Net cash provided by operating activities (GAAP as reported) $ 114,859 $ 17,876 $ 675,000 $ 750,000 $ 825,000 Less: Net capital expenditures: Capital expenditures (50,780) (74,612) (325,000) (325,
Slide 24: Reconciliation of Backlog
Reconciliation of Backlog ($MMs) September 30, 2020 December 31, 2020 September 30, 2021 12 Month Total 12 Month Total 12 Month Total Electric Power Infrastructure Solutions Remaining performance obligations $ 2,639.1 $ 3,747.7 $ 2,511.2 $ 3,547.8 $ 2,819.6 $ 3,706.9 Estimated orders under MSAs and
Slide 25: 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 26: Cautionary Statement About Forward-Looking Statements and Information
Cautionary Statement About Forward-Looking Statements and Information • Quarterly variations in operating results, liquidity, financial condition, cash flows, capital requirements and reinvestment opportunities, including the ongoing and potential impact to Quanta's business, operations, workforce a
Slide 27: Cautionary Statement About Forward-Looking Statements and Information
Cautionary Statement About Forward-Looking Statements and Information • Fluctuations of prices of certain materials and equipment used in Quanta’s or its customers' businesses, including as a result of inflation, supply chain disruptions, governmental regulations affecting the sourcing of certain ma
Slide 28: 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 28