South Jersey Industries — Q2 2021 Earnings Presentation
31 slides from South Jersey Industries's earnings presentation, Aug 4, 2021
Slide 1: Second Quarter 2021 Earnings Presentation
Second Quarter 2021 Earnings Presentation August 5, 2021
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation, including information incorporated by reference, contains forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding
Slide 3: Second Quarter 2021 Financial Review
Second Quarter 2021 Financial Review
Slide 4: Second Quarter 2021 Financial Review Highlights
4 Second Quarter 2021 Financial Review Highlights PERFORMANCE ▪ GAAP earnings $(0.87) per diluted share compared to $(0.03) per diluted share in 2020 ▪ Economic Earnings $0.02 per diluted share compared to $(0.01) per diluted share in 2020 ▪ Capital expenditures $269M YTD; 80%+ allocated for growth,
Slide 5: Second Quarter 2021 Consolidated Earnings
Second Quarter 2021 Consolidated Earnings Economic Earnings Improvement Across Core Segments 5 Note: Earnings and average shares outstanding are in millions. Amounts and/or EPS may not add due to rounding. GAAP GAAP Economic Economic GAAP GAAP Economic Economic Earnings EPS Earnings EPS Earnings EPS
Slide 6: Consolidated Earnings Bridge – Q2 2020 to Q2 2021
Second Quarter 2021 Economic Earnings Consolidated Earnings Bridge – Q2 2020 to Q2 2021 6 • UTILITY: SJG $2.7M; ETG $(2.2M); ELK $(0.2M) • NON-UTILITY: Energy Production $2.1M; Energy Management $0.7M; Midstream $0.3 • OTHER: Interest on Debt $(0.5)M
Slide 7: Utility Earnings Bridge – Q2 2020 to Q2 2021
Second Quarter 2021 Economic Earnings Utility Earnings Bridge – Q2 2020 to Q2 2021 7 • MARGIN: SJG rate relief, customer growth and infrastructure modernization investment • OPERATION EXPENSES: O&M, bad debt, regulatory riders, and energy and other taxes • DEPRECIATION: Utility investment in propert
Slide 8: Non-Utility Earnings Bridge – Q2 2020 to Q2 2021
Second Quarter 2021 Economic Earnings Non-Utility Earnings Bridge – Q2 2020 to Q2 2021 8 • RENEWABLES: Fuel Cell and Solar earnings and ITCs from projects placed in service last twelve months • WHOLESALE SERVICES: Improved asset optimization opportunities, and fuel supply management contracts • MIDS
Slide 9: Six Months 2021 Financial Review
Six Months 2021 Financial Review
Slide 10: Six Months 2021 Consolidated Earnings
Six Months 2021 Consolidated Earnings Solid Economic Earnings Performance YTD 10 Note: Earnings and average shares outstanding are in millions. Amounts and/or EPS may not add due to rounding. GAAP GAAP Economic Economic GAAP GAAP Economic Economic Earnings EPS Earnings EPS Earnings EPS Earnings EPS
Slide 11: Consolidated Earnings Bridge – 2020 YTD to 2021 YTD
Six Months 2021 Economic Earnings Consolidated Earnings Bridge – 2020 YTD to 2021 YTD 11 • UTILITY: SJG $14.5M; ETG $(0.9M); ELK $(0.6M) • NON-UTILITY: Energy Management $8.7M; Energy Production $3.9M; Midstream $0.2 • OTHER: Interest on Debt $(0.9M)
Slide 12: Utility Earnings Bridge – 2020 YTD to 2021 YTD
Six Months 2021 Economic Earnings Utility Earnings Bridge – 2020 YTD to 2021 YTD 12 • MARGIN: SJG rate relief, customer growth and infrastructure modernization investment • OPERATION EXPENSES: O&M, bad debt, regulatory riders, and energy and other taxes • DEPRECIATION: Utility investment in property
Slide 13: Non-Utility Earnings Bridge – 2020 YTD to 2021 YTD
Six Months 2021 Economic Earnings Non-Utility Earnings Bridge – 2020 YTD to 2021 YTD 13 • WHOLESALE SERVICES: Improved asset optimization opportunities, and fuel supply management contracts • RENEWABLES: Fuel Cell and Solar earnings and ITCs from projects placed in service last twelve months • RETAI
Slide 14: Financial Metrics
9SJI Financial Metrics
Slide 15: Capital Expenditures (Six Month Period Ended June 30, 2021)
Financial Metrics Capital Expenditures (Six Month Period Ended June 30, 2021) 15 82% 13% 5% UTILITY CLEAN ENERGY OTHER UTILITY $221 $490-510 System Growth & Maintenance $112 --- Projects to enhance the safety and reliability of SJG/ETG systems Infrastructure Modernization $51 --- Replacement of agin
Slide 16: Capital Sources and Uses
Financial Metrics Capital Sources and Uses (Six Month Period Ended June 30, 2021) Capital Sources ~1.0B Capital Uses ~1.0B 16 CASH FLOW FROM INVESTING $269 CASH FLOW FROM OPERATIONS $242 DEBT ISSUANCE $447 DEBT REPAYMENT $672 DIVIDENDS, $30 EQUITY ISSUANCE $329 CASH, $46 M ill io n s
Slide 17: Equity Capitalization / Credit Ratings
Financial Metrics Equity Capitalization / Credit Ratings Equity-to-Total Cap Credit Ratings 17 Note: Non-GAAP includes mandatory convertible equity units and equity credit from rating agencies for long-duration debt. Results are rounded. S&P SJI SJG ETG BBB BBB BBB Stable Stable Stable Moody's SJI S
Slide 18: Liquidity (June 30, 2021)
Financial Metrics Liquidity (June 30, 2021) 18 $500 $210 $200 $220 $46 $1,176 LIQUIDITY SOURCES SJI CREDIT FACILITY SJG CREDIT FACILITY ETG CREDIT FACILITY EQUITY FORWARD CASH $10 $26 $1 $1,139 $1,176 LIQUIDITY USES SJI CREDIT FACILITY SJG CREDIT FACILITY ETG CREDIT FACILITY AVAILABILE LIQUIDITY M i
Slide 19: Guidance and Outlook
9SJI Guidance and Outlook
Slide 20: 2021 Economic Earnings Guidance Reaffirmed
2021 Economic Earnings Guidance Reaffirmed Midpoint Guidance By Segment – 2020 to 2021 20 • NON-RECURRING ITEMS: 2020 results included ~$13M in nonrecurring gains — adjustments for certain tax benefits (~$7M), adjustments to SJG's rate design (~$3M) and pipeline supplier refunds (~$3M) • UTILITY: SJ
Slide 21: Strong Growth Through 2025 and Beyond
Strong Growth Through 2025 and Beyond Driving Significant Shareholder Value 21 SECTOR FUNDAMENTALS STRATEGIC PLAN FINANCIAL TARGETS $3B+ existing infrastructure are valuable assets, performing essential role supplying reliable energy to homes and businesses and supporting economic growth Utilities w
Slide 22: Appendix
9SJI Appendix
Slide 23: Complementary Infrastructure Businesses Across The Energy Value Chain
Complementary Infrastructure Businesses Across The Energy Value Chain 2 3
Slide 24: Our Mission: 21st Century Clean Energy Infrastructure Company
2 4 Our Mission 21st Century Clean Energy Infrastructure Company ▪ $3B+ infrastructure company supplying safe, reliable and affordable energy and supporting economic growth ▪ U.S. and New Jersey accelerating transition to low carbon and renewable energy future ▪ Launched utility-centered $3.5B, 5-ye
Slide 25: Decarbonization Goals
Decarbonization Goals Our Pathway To A Clean Energy Future ▪ 70% Reduction in Carbon Emissions and Consumption by 2030 ▪ 100% Reduction in Carbon Emissions and Consumption by 2040 ▪ At least 25% of Annual Capex on Sustainability Investments 25
Slide 26: Regulated Earnings
Regulated Earnings Utilities Remain Our Core Growth Engine in 2021-2025 and Beyond 26 70-80% 20-30% REGULATED NON-REGULATED
Slide 27: Capital Expenditures: ~$3.5 Billion Capital Plan 2021-2025
Capital Expenditures ~$3.5 Billion Capital Plan 2021-2025 ~80% for Utilities (SJG/ETG) ~60% for Safety & Reliability ~60% for Sustainability 27 ~ $2,100 60% ~ $1,400 40% Sustainability Traditional ~ $2,000 57% ~ $500 14% ~ $1,000 29% Safety & Reliability New Business Clean Energy ~$2,700 78% ~$800 2
Slide 28: Economic EPS Guidance
Economic EPS Guidance Attractive 2021-2025 and Long-Term Economic EPS CAGR 5-8% 5-8% LONG-TERM ANNUAL GROWTH 28 $1.55 - $1.65 $2.00 - $2.10 2021E 2022E 2023E 2024E 2025E
Slide 29: Capital Allocation
Capital Allocation Disciplined Approach Balances Financial Strength With Strong Growth 29 Capital Allocation Priority 2021-2025 Plan Allocate capital first at utility operating companies to ensure system safety and reliability ~60% of 5-year capital plan dedicated to safety and reliability investmen
Slide 30: Future Growth Opportunities
Future Growth Opportunities Focused on Both Utility and Non-Utility Investments 30 HISTORIC TRACK RECORD PRESENT FUTURE OPPORTUNITIES REDUCING ENERGY CONSUMPTION/EMISSIONS Conservation Incentive Program (SJG) Replacement of Aging Infrastructure (SJG) Conservation Incentive Programs (SJG and ETG) Rep
Slide 31: Q&A
9SJI Q&A
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