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.

• The 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 net loss of $686 million, negative adjusted EBITDA of $119 million, major contract terminations, and asset impairments.

• 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.

• Cost of goods sold rose 31% to $1.22 billion, including a $123 million charge related to terminated contracts and unrecoverable inventory.

• Gross margin for 2023 was negative $189 million, with adjusted gross margin at -$34 million, down from +$217 million in 2022.

• Net loss for 2023 was $686 million, compared to a net loss of $168 million in 2022.

• Adjusted EBITDA was -$119 million, a $274 million decline from the prior year, due to lower gross margin and higher legal and advisory expenses.

Outlook and guidance

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

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

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