Nrg Energy, Inc. · NYSE:NRG
Nrg Energy — Q3 2021 Earnings Presentation
26 slides from Nrg Energy's earnings presentation, Nov 4, 2021
Slide 1: Third Quarter 2021 Earnings Presentation
NRG Energy Inc. Third Quarter 2021 Earnings Presentation November 4, 2021 1 | NRG 3Q21 Earnings
Slide 2: Safe Harbor
Safe Harbor Forward-Looking Statements In addition to historical information, the information presented in this presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act. These statements involve estimates, ex
Slide 3: Agenda
Agenda Business Review Mauricio Gutierrez President & CEO Financial Review Alberto Fornaro EVP & CFO Growth & Closing Remarks Mauricio Gutierrez President & CEO Q&A Management 3 | NRG 3Q21 Earnings
Slide 4: Key Messages
Key Messages Narrowing 2021 and Initiating 2022 Financial Guidance Consumer Platform Navigating Supply Chain Constraints; Focused on Mitigations Advancing Consumer Services Strategy; Integration and Secondary Products 4 | NRG 3Q21 Earnings Business Review | Financial Review | Growth & Closing Remark
Slide 5: Business Highlights and Results
Business Highlights and Results 2021 Adjusted EBITDA Results Initiating 2022 Financial Guidance (excludes one-time impacts from Uri) 2020 2021 $2,400-$2,500 +19% 2022E Guidance $1,990 Adjusted EBITDA $1,950 – $2,250 $1,674 +2% Free Cash Flow before Growth $1,140 – $1,440 $752 $767 Q3 YTD Narrowed 20
Slide 6: Financial Review
Financial Review 6 | NRG 3Q21 Earnings
Slide 7: 3Q 2021 Results and Guidance Update
3Q 2021 Results and Guidance Update1 ($ millions) 9/30/2021 Narrowing 2021 Three Months Nine Months Guidance Ended Ended Texas $446 $1,004 $1,275-$1,325 Original $1,425-$1,575 East/West/Services/Other2 321 986 $1,125-$1,175 Original $975-$1,025 Adjusted EBITDA $767 $1,990 $2,400-2,500 Free Cash Flow
Slide 8: Introducing 2022 Financial Guidance
Introducing 2022 Financial Guidance ($ millions) 2022 Guidance Texas $1,300-$1,500 East/West/Services/Other1 $650-$750 Adjusted EBITDA $1,950-$2,250 Adj EBITDA to FCFbG Conversion ~61% Free Cash Flow before Growth (“FCFbG”) $1,140-$1,440 Removing Low Multiple Earnings $130 Investor Day Drivers *New*
Slide 9: 2021 Capital Allocation
2021 Capital Allocation ($ millions) No change from Prior Quarter Indicates change from Prior Quarter $2,325 $120 $150 Agua Sale Proceeds1 $493 $1,490 $535 Storm 2021 FCFbG Uri CAFA (mid-point) Impact (mid-point) $516 MM Targeted Debt Reduction and $319 Fees $317 $470 Storm $375 $715 Uri offset $240
Slide 10: Corporate Credit Profile
Corporate Credit Profile ($ millions) 2021 Guidance Corporate Debt1 $8,855 Debt reduction (Capital Allocation) (255) Minimum cash balance (650) Excludes deleveraging Corporate Net Debt $7,950 of $500 MM due to asset sale of 4.8 GW3 Adjusted EBITDA2,3 $2,450 Other Adjustments4 150 Corporate Adj. EBIT
Slide 11: Growth & Closing Remarks
Growth & Closing Remarks 11 | NRG 3Q21 Earnings
Slide 12: Advancing Consumer Services Strategy
Advancing Consumer Services Strategy Executing Investor Day 2021/2022 Initiatives Optimize Core Grow from Core In Focus Direct Energy Integration 2021-22 Initiatives: Setting Stage for Growth • Leverage scale of Home, Business and Services capabilities within our regions • Trialing and executing str
Slide 13: Advancing Consumer Services Strategy: Capital Allocation Principles
Advancing Consumer Services Strategy Adhering to Disciplined Capital Allocation Principles & Roadmap 2022 Capital Available for Allocation Capital Allocation Principles ~$1.67 Bn Maintain top decile safety and operational excellence ‘22 FCFbG Guidance Investment Grade metrics of 2.50-2.75x Net Debt
Slide 14: 2021 Priorities
2021 Priorities Deliver on Financial and Operational Objectives Execute on Direct Energy Objectives $175 MM (from $135 MM) EBITDA-accretive synergies ($300 MM 2023 run-rate) – on track Perfect and Grow Integrated Platform Advance Texas system-wide reliability and customer protection planni
Slide 15: Appendix
Appendix 15 | NRG 3Q21 Earnings
Slide 16: Committed to Sustainability
Committed to Sustainability NRG Sustainability Framework Sustainable Sustainable Sustainable Sustainable Sustainable Business Operations Customers Suppliers Workplace Industry-Leading Disclosure Environmental Leadership1 Diversity & Inclusion Focus U.S. CO2e Emissions (MMtCO2e2) 64% Board Diversity
Slide 17: Direct Energy Integration
Direct Energy Integration Advancing Customer Focused Strategy Integration Plan On Track Direct Energy Integration Scorecard • Cost Savings 2021 2022 2023 / As of 09/30/2021 2021 Reaffirming full plan targets: $300 MM of recurring ($ millions) Target Realized Target Run Rate FCFbG-accretion by 2023
Slide 18: Recourse Debt Maturity Schedule
Recourse Debt Maturity Schedule Balance as of 9/30/2021 ($ millions) $2,141 $1,775 $1,733 $1,030 $821 $600 $500 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 Therafter Recourse Debt Principal Addt’l $500 MM Redeemed Oct ’21 6.625% Senior notes, due 2027 $875 Remaining Balance $375 MM1 5.75%
Slide 19: 3Q21 Business Metrics
3Q21 Business Metrics Home & Business Volumes Texas East / Other Electric Natural Gas 75% 18 25% 38% 28 62% 12 355 TWh TWh MMDth MMDth Home / Residential Business / C&I Home / Residential Business / C&I 46 TWh 367 MMDth Electricity Natural Gas Leading North American Integrated Energy Provider 19 | N
Slide 20: Appendix: Reg. G Schedules
Appendix: Reg. G Schedules 20 | NRG 3Q21 Earnings
Slide 21: Reg. G
Reg. G ($ millions) Appendix Table A-1: 2021 and 2022 NRG Guidance The following table summarizes the calculation of Free Cash Flow before Growth and provides a reconciliation to Adjusted EBITDA and to Net (Loss)/Income: 2021 2022 Guidance Guidance Net (Loss)/Income1 ($370)-($270) $480-$780 Winter S
Slide 22: Reg. G
Reg. G Appendix Table A-2: 3 months ended 09/30/21 and 9/30/20 Adjusted EBITDA Reconciliation by Operating Segment The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss): Three Months ended 09/30/21 Three Months ended 09/30/20 ($ in milli
Slide 23: Reg. G
Reg. G Appendix Table A-3: 9 months ended 09/30/21 and 9/30/20 Adjusted EBITDA Reconciliation by Operating Segment The following table summarizes the calculation of Adjusted EBITDA and provides a reconciliation to Net Income/(Loss): Nine Months ended 09/30/21 Nine Months ended 09/30/20 ($ in million
Slide 24: Reg. G
Reg. G ($ millions) Appendix Table A-4: 3 months and 9 months ended 09/30/21 and 9/30/20 Free Cash Flow before Growth The following table summarizes the calculation of Free Cash Flow before Growth and provides a reconciliation to Cash provided by operating activities: 3 Months Ended 9 Months Ended 9
Slide 25: Reg. G
Reg. G EBITDA and Adjusted EBITDA are non-GAAP financial measures. These measurements are not recognized in accordance with GAAP and should not be viewed as an alternative to GAAP measures of performance. The presentation of Adjusted EBITDA should not be construed as an inference that NRG’s future r
Slide 26: Reg. G
Reg. G Adjusted cash flow from operating activities is a non-GAAP measure NRG provides to show cash from operations with the reclassification of net payments of derivative contracts acquired in business combinations from financing to operating cash flow, as well as the add back of merger, integratio