Enviva (EVA) investor relations material

Executive summary

• Enviva Inc. filed for Chapter 11 bankruptcy on March 12, 2024, and continues to operate as debtor-in-possession while pursuing a court-supervised restructuring process.

• The company is the world’s largest producer of utility-grade wood pellets, operating ten plants in the U.S. Southeast and exporting primarily to Europe and Japan under long-term, take-or-pay contracts.

• A proposed reorganization plan includes a $250 million equity rights offering, a $1 billion exit facility, and significant changes to capital structure, with existing equity holders expected to receive minimal or no recovery.

• 2023 was marked by severe financial distress, including a $685.8 million net loss, major contract terminations, asset impairments, and a negative adjusted EBITDA of $119.1 million.

• The company’s future is highly uncertain, with substantial doubt about its ability to continue as a going concern pending successful emergence from bankruptcy.

Financial highlights

• Net revenue for 2023 was $1.18 billion, up 8% from 2022, driven by a 14% increase in product sales volumes, but offset by lower average sales prices and contract terminations.

• Net loss for 2023 was $685.8 million, compared to a net loss of $168.4 million in 2022, reflecting significant impairments, contract losses, and restructuring costs.

• Adjusted EBITDA was negative $119.1 million in 2023, down from positive $155.2 million in 2022, due to a $251.6 million decrease in adjusted gross margin and higher legal and advisory expenses.

• Goodwill impairment charge of $103.9 million and asset impairments of $66.2 million were recorded in 2023, including the cessation of development at the Bond plant and shutdown of a dryer line at the Southampton plant.

• Cash used in operating activities was $65.8 million, with $301.3 million invested in capital expenditures, and $420.2 million provided by financing activities, mainly from new debt.

Outlook and guidance

• The company’s ability to continue as a going concern depends on successful completion of the Chapter 11 process, approval and implementation of the restructuring plan, and access to sufficient liquidity.

• The proposed plan contemplates a $250 million equity rights offering, a $1 billion exit facility, and a backstopped rights offering, with minimal recovery for existing equity holders.

• Management expects continued volatility in financial results during bankruptcy, with future performance dependent on contract renegotiations, cost reductions, and market conditions.