Covanta — Q1 2021 Earnings Presentation
19 slides from Covanta's earnings presentation, Apr 29, 2021
Slide 1: First Quarter 2021 Earnings Conference Call
NYSE: CVA April 29, 2021 First Quarter 2021 Earnings Conference Call
Slide 2: Cautionary Statements
April 29, 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 Se
Slide 3: CEO Update
April 29, 2021 3 CEO Update 1. Financial outlook assumptions include: • Energy prices and FX rates at current market forward curves (April 2021); • Metal prices at $300 / ton for #1 HMS index and $0.60 / lb for Old Cast Aluminum Scrap (in real terms); and • No material changes to asset portfolio oth
Slide 4: Operations and Markets Update
April 29, 2021 4 Operations and Markets Update
Slide 5: Revenue: Q1 2021 vs. Q1 2020
April 29, 2021 5 Revenue: Q1 2021 vs. Q1 2020 1. Tip fee waste tons received and energy and metals sold. (Unaudited) (1)
Slide 6: Adjusted EBITDA: Q1 2021 vs. Q1 2020
April 29, 2021 6 Adjusted EBITDA: Q1 2021 vs. Q1 2020 (Unaudited) (1) 1. Tip fee waste tons received and energy and metals sold.
Slide 7: Free Cash Flow: Q1 2021 vs. Q1 2020
April 29, 2021 7 Free Cash Flow: Q1 2021 vs. Q1 2020 1. Includes capital type expenditures at client owned facilities. (Unaudited) (1)
Slide 8: Capital Allocation
April 29, 2021 8 Capital Allocation (Unaudited, in millions) Q1 2021 FY 2020 FY 2021 Estimate Free Cash Flow $19 $93 $125 - $155 Domestic growth investments (1) (14) (5) International growth investments (1) (20) (15) Total growth investments (2) (33) (20) Proceeds from asset sales (1) — 15 — Dividen
Slide 9: Capitalization Summary
April 29, 2021 9 (Face value; unaudited, in millions) March 31, 2021 December 31, 2020 December 31, 2019 Cash and cash equivalents $56 $55 $37 Corporate debt: Secured $715 $691 $659 Unsecured 1,744 1,744 1,744 Total corporate debt $2,459 $2,435 $2,403 Project debt 121 123 131 Total debt $2,580 $2,55
Slide 10: Appendix
Appendix 10 April 29, 2021 COVANTA Powering Today. Protecting Tomorrow.
Slide 11: UK / Ireland Project Update
April 29, 2021 11 UK / Ireland Project Update Notes: Investment schedule and financial outlook based on current forward curve for foreign exchange rates. Proportional, unconsolidated, non-recourse project debt to total ~$650 million representing debt balance at Dublin of $213 million at 3/31/21 plus
Slide 12: Waste Update
April 29, 2021 12 • Q1 2021 revenue drivers vs. Q1 2020: ▪ Same store WtE tip fee revenue: ◦ Price up $6 million (4%) ◦ Volume down $8 million (5%) due to planned maintenance activity ◦ WtE profiled waste revenue down by 8% vs. strong Q1 2020, but set record in March ▪ Service fee revenue up $4 mill
Slide 13: Energy Update
April 29, 2021 13 Energy Update (Unaudited; in millions, except price) Q1 2021 Q1 2020 2021E Energy revenue: Energy sales $76 $77 $255 - $275 Capacity 10 10 40 Wholesale load serving (1) 11 4 55 RECs and other 7 2 25 Total $104 $93 $375 - $395 MWh Sold: Contracted 0.5 0.5 2.0 - 2.1 Hedged (2) 0.8 0.
Slide 14: Long-term Outlook: Energy Detail
April 29, 2021 14 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 1.5 0.3 - - Market 1.3 0.6 1.5 2.9 4.1 4.5 4.6 Total MWh Sold 6.4 6.5 6.4 6.6 6.6 6.
Slide 15: Materials Sales Update
April 29, 2021 15 • Q1 2021 revenue drivers vs. Q1 2020: ▪ Ferrous: ◦ Realized pricing up $9 million (85%) on higher HMS and better sales mix ◦ Same store volume up $3 million (28%) on better recovery and sales timing ▪ Non-ferrous: ◦ Realized pricing up $6 million (86%) on higher Old Cast and coppe
Slide 16: Maintenance and Operating Costs
April 29, 2021 16 • Q1 2021 drivers vs. Q1 2020: ▪ Completed over 30% of full year estimated maintenance expense ▪ Other operating costs increased primarily due to new wholesale load serving activity • Trends and outlook: ▪ 2021 maintenance capex to moderate vs. 2020 with reduced schedule of large c
Slide 17: Non-GAAP Reconciliation: Adjusted EBITDA
April 29, 2021 17 Non-GAAP Reconciliation: Adjusted EBITDA Q1 Full Year LTM (Unaudited, in millions) 2021 2020 2020 2019 March 31, 2021 Net income (loss) $2 $(32) $(28) $10 $6 Depreciation and amortization expense 57 58 224 221 223 Interest expense 31 34 133 143 130 Income tax benefit (18) (5) (18)
Slide 18: Non-GAAP Reconciliation: Adjusted EBITDA and Free Cash Flow
April 29, 2021 18 Non-GAAP Reconciliation: Adjusted EBITDA and Free Cash Flow Q1 Full Year Full Year (Unaudited, in millions) 2021 2020 2020 2019 2021E Adjusted EBITDA $106 $97 $424 $428 $460 - $480 Cash paid for interest (52) (39) (112) (152) (125) Cash (paid) refunded for taxes (1) (1) 4 (5) (5) C
Slide 19: Non-GAAP Financial Measures
April 29, 2021 19 Non-GAAP Financial Measures Free Cash Flow Free Cash Flow is defined as cash flow provided by operating activities, plus changes in operating restricted funds, less expenditures for software implementation and maintenance capital expenditures, which are capital expenditures primari