Enviva Inc.

Good morning and welcome to Enviva Inc's fourth quarter and full year 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Kate Walsh, Vice President of Investor Relations. Please go ahead.

Thank you. Good morning, everyone, and welcome to Enviva, Inc.' 's fourth quarter and full year 2021 earnings conference call. We are excited to host our first earnings call at Enviva, Inc. today and appreciate your interest in our company and thank you for your participation. On this morning's call, we have John Kepler, Chairman and CEO, and Shai Evan, Executive Vice President and CFO. Our agenda will be for John and Shai to discuss our financial results and provide an update on our current business outlook and operations. Then, we will open up the call for questions. During the course of our remarks and the subsequent Q&A session, we will be making 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 SEC filings. We assume no obligation to update any forward-looking statements to reflect new or changed events or circumstances. In addition to presenting our financial results in accordance with GAAP, we will also be discussing adjusted EBITDA and certain non-GAAP financial measures pertaining to completed reporting periods as well as our forecast. 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. It is important to note that as a result of the simplification transaction we announced on October 15th, 2021, we were required to recast our historical results in accordance with GAAP. Our historical financial results are presented on a recast basis and non-recast basis in our earnings release and our Form 10-K. We believe the non-recast presentation of historical results provides investors with relevant information to evaluate MVIVA's financial and operating performance. With that, I would now like to turn the call over to John.

Thank you, Kate. Good morning, everyone, and thanks for joining us today. As Kate mentioned, today marks an important milestone for us, our first earnings call as Enviva Inc. 2021 was an incredible year for us, a truly transformational year, and a large part of that was the successful completion of our simplification transaction, which we closed on October 14th, and our subsequent conversion from a master limited partnership to a regular way corporation, which we completed on December 31st. These steps were an essential initial catalyst to how we believe we will continue to unlock shareholder value for a number of reasons. First, the conversion to a C-Corp was structured to be non-taxable to our equity holders, and we expect to pay minimal corporate income tax, if any, through at least 2026. Second, we eliminated our incentive distribution rights. we bought in a tremendous growth profile. Fourth, we significantly lowered our cost of capital. And fifth, we ultimately moved to a structure that makes us investable by the broadest global investor base possible. We accomplished all this while preserving our dividend guidance and growth outlook for 2022 and beyond, maintaining our conservative balance sheet, and as we described when we completed what we anticipate being our last primary equity issue in several weeks ago in this substantially oversubscribed offering, we have put ourselves on a path to having a fully self-funded growth model over time. This is important because when you look at the demand side of our business, you will see that in just the last six months, we have announced six meaningful agreements. An MOU with J-Power that could lead to deliveries of 5 million metric tons per year, a contract with the European refiner of sustainable aviation fuels, which is designed to ramp up to 1.2 million metric tons per year, an MOU to develop a biomass supply chain for a U.S.-based sustainable aviation fuels producer in the Southeast U.S. and in California, an MOU for a 15-year agreement with a European industrial customer for an entirely new use case that has the potential to grow to approximately 600,000 metric tons per year, and several hundred thousand tons of additional annual shipments with two of our existing core utility counterparts, Drax and RWE. As we outlined in January, demand is accelerating, which gives us the opportunity to similarly accelerate our plans to double the size of our company by building six new plants over the next five years, each at a very attractive project investment multiple of approximately five times adjusted EBITDA. As you will recall, this would represent a dramatic reduction in our capacity cost, down from the roughly 7.5 times multiple at which we historically acquired assets from our former sponsor. and given the world's continued focus on the energy transition and deep decarbonization, our growth outlook doesn't plateau from there. With what continues to emerge in our sales pipeline, we see a path to doubling again after that. So now that we have taken our same great business and put it in an even better, simpler corporate structure, we're pretty excited about how 2021 closed and what the opportunity for 2022 and beyond looks like. As you may have seen in our release, We delivered fourth quarter and full year 2021 financial results in line with the non-recast guidance ranges and expectations we outlined when we announced the transaction. Shai will spend a few minutes in a moment walking through the GAAP financial results and the non-GAAP measures that help us talk about our performance in metrics we and our investors use to understand our business. But the headlines are that on a non-recast basis, AGM was up, adjusted EBITDA and DCF were in line with expectations, and Omicron, while challenging given how infectious that variant was, is thankfully beginning to be behind us. Upon this foundation, we are reaffirming full-year 2022 guidance, including net income in the range of $42 to $67 million, adjusted EBITDA in the range of $275 to $300 million, and a full-year dividend of $3.62 per share. a 10% increase over 2021. We expect the shape of our adjusted EBITDA profile during 2022 to look a lot like prior years, with the back half of the year a big step up over the first half and Q2 a step up over Q1, our seasonally softest quarter. Shai will also provide a view on our full-year CapEx and how that investment curve shakes out for the year as well. Based on these results and where we are headed, our growth rate is comparable to the 80th percentile of the S&P 500. With our recently declared dividend of 86 cents per share, our dividend yield is approximately 5% based on our current share price, materially higher than the yield of our high-growth, top quartile peers in the S&P. In fact, at the 98th percentile compared to the S&P 500. So we are very proud of our rare combination of being a top-tier growth company and a top-tier dividend payer, but also one that is virtually unmatched in terms of the fully contracted nature of our business and the highly visible cash flow growth ahead. Because of several critical attributes, especially our fully contracted revenue backlog, our large and growing customer sales pipeline, and our organic capacity expansions, we're given the quick build cycle for plants. We're able to construct a fully contracted plant in a matter of 18 months, and each plant which costs between $200 and $250 million, when fully ramped has the capacity to generate approximately $50 million in incremental annual adjusted EBITDA. Given the very low annual maintenance costs of our facilities, as we continue to execute on our self-funded growth model, we believe the growing cash flow profile of the business will enable us to continue to create and return substantial value to shareholders over time. There truly isn't another company out there like us. Now that we are trading as a regular way, pure play ESG corporation with an unmatched growth in cash flow profile, we look forward to continuing to introduce investors across the globe to the unique opportunity to participate in the step change accretion we have ahead of us, whether that's through investing directly in Aviva Inc. or passively through one of the many indices for which we are becoming eligible. I'll come back in a moment to discuss market developments and our asset and capacity growth plans. But now I'd like to turn it over to Shai to share more details on our financial highlights.