Enviva Inc.

Good day and welcome to the Enviva Partners LP fourth quarter and full year 2020 earnings conference call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Please note this event is being recorded. I would now like to turn the conference over to Wishma, Vice President and Treasurer. Please go ahead.

Thank you. Good morning and welcome to the InViva Partners IOP fourth quarter and full year 2020 financial results conference call. We appreciate your interest in InViva Partners and thank you for participating today. On this morning's call, we have John Kepler, Chairman and CEO and Shai Evans, Chief Financial Officer. Our agenda will be for John and Shai to discuss our financial results and provide an update on our current business outlook. Then we will open up the phone lines for questions. During the course of our remarks and the subsequent Q&A session, we will be making some forward-looking statements which are subject to a variety of risks. Information concerning the risks and uncertainties that could cause our actual results to differ materially from those in our forward-looking statements can be found in our earnings release as well as in our other filings with the ICC. We assume no obligation to update any forward-looking statements to reflect new or change the events or circumstances. In addition to presenting our financial results in accordance with GAAP, we will also be discussing adjusted EBITDA and certain other non-GAAP measures pertaining to completed fiscal periods, as well as our forecasts. Information concerning the reconciliations of these non-GAAP measures to their most directly comparable GAAP measures and other relevant disclosures are included in our earnings release. I would like to now turn it over to John.

Thank you, Woosh. Good morning, everyone, and thanks for joining us today. A hallmark of NViva's culture is keeping promises. At this time last year, we committed to achieving a certain set of operational and financial targets for the partnership. When we completed two transformative acquisitions in the middle of the year, We made additional promises and increased our guidance. As I hope you saw in our earnings release, we kept the promises we made. Against the very challenging COVID-19 backdrop that continues to persist, we are very proud to report that we had our safest year ever. We did not miss a single customer delivery. We increased the fully contracted production capacity of the partnership by more than 30%. We increased our year-over-year adjusted EBITDA by more than 30%, and we kept our promise to our unit holders, distributing $3 per unit for full year 2020, extending our track record of 22 consecutive quarterly distribution increases at a compound annual growth rate of 13% since our IPO, and delivered a total unit holder return of 30% in 2020. We were able to achieve this in the face of broad economic and market volatility in large part because of the fully contracted nature of our business and its durable, sustainable operating profile that together generates stable, growing cash flows. Turning to 2021, we're making new promises about what we expect to achieve, not just in terms of operating and financial performance, but also to align ourselves with the global community's escalating commitments to limit global warming in order to avoid the most devastating impacts of climate change. As a result, we are proud to join with other leaders in committing ourselves to net zero emissions in our operations by 2030, by following a measured, achievable, and efficient plan. At the same time, we are undertaking to deliver meaningful growth in our adjusted EBITDA in 2021, as we realize the anticipated benefits of the growth initiatives we undertook over the last few years. Specifically, our guidance for 2021 is an increase of 25% over 2020, at the midpoint of our range of $230 to $250 million in adjusted EBITDA, before accounting for additional dropdowns or other acquisitions you have come to consistently expect from us. We believe the resulting cash flow profile will enable us to distribute at least $3.17 per unit for full year 2021, again, before considering the benefit of additional dropdowns or other acquisitions. Moreover, I'm very excited about the new expansion projects we have commenced within the partnership. Now that we have completed construction at the Northampton and Southampton expansion projects, we are turning our attention to targeted opportunities at our Sampson, Hamlet, and Cottondale facilities, where through innovative projects that are intended to optimize our manufacturing processes, eliminate certain costs, and expand our production capacity, we expect to deliver substantial incremental margins. On the basis of approximately $50 million of investment, we believe we will generate an additional $20 million in annual run rate adjusted EBITDA as these projects are completed and fully ramped by the end of 2022. Looking ahead, despite the global pandemic, the tailwinds for our industry are remarkable. In the macro context, each member nation of the EU, the United Kingdom, Japan, South Korea, and other potential markets across the globe have pledged to become net zero. The US itself has recommitted to the Paris Agreement. And one of the most cost-effective and immediate ways to decarbonize continues to be the conversion of existing coal and other fossil fuel-fired plants to biomass. The progress to date has been remarkable, and not just in traditional applications. While customers around the world are recycling existing energy infrastructure, and building new, bespoke, biomass-fired assets. We are also increasingly seeing innovations like biomass energy generation coupled with carbon capture and sequestration, one of the few ways in the near term to achieve carbon-negative energy at scale, as well as projects that use biomass energy in combined heat and power applications, which are key to decarbonizing the industrial energy sector. We are also seeing major manufacturers around the world looking to substitute renewable bio-based carbon for fossil fuel-based carbon as direct material inputs for the production of core commodity products like chemicals, cement, and steel. This is exciting and has the potential to open up new markets and new customer segments. I will take some time later in the call to provide an update on how these long-term market drivers are influencing our contracting activities as well as to bring you up to speed on the development and expansion projects taking place at the partnership and our sponsor. I will also elaborate on our net zero commitment and its related action plans. Hopefully, as we wrap up today, we can tie all the pieces we have underway together in a way that can make you as excited as we are about 2021 and beyond. But first, I would like to turn it over to Shai to discuss our financial results for the fourth quarter and for full year 2020, and to provide more details on our guidance.