Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — FY2021 Earnings Presentation
34 slides from Cleanaway Waste Management's earnings presentation, Aug 20, 2021
Slide 1: FY21 Full Year Results
FY21 Full Year Results For the twelve months ended 30 June 2021 Brendan Gill – Chief Operating Officer Paul Binfield – Chief Financial Officer 20 August 2021
Slide 2: Disclaimer
Disclaimer • Forward looking statements – This presentation contains certain forward-looking statements, including with respect to the financial condition, results of operations and businesses of Cleanaway Waste Management Limited (“CWY”) and certain plans and objectives of the management of CWY. Fo
Slide 3: Agenda
Agenda FY21 Results Update Page ❖ FY21 Highlights 4 ❖ People, Circular Economy, Climate Change 5-7 ❖ Group Performance Overview 8-9 ❖ Segment Performance and Margin Targets 10-13 ❖ Statutory NPAT Reconciliation to Underlying NPAT 14 ❖ Capital Expenditure, Cash Flow and Funding 15-17 Enterprise Updat
Slide 4: FY21 Highlights
FY21 Highlights FINANCIAL: +4.7% +3.8% +2.1% +5.7% +12.2% 2198.9 2100.1 535.1 515.7 153.2 150.0 424.4 401.5 4.60 4.10 Net Revenue ($m) Underlying EBITDA ($m) Underlying NPAT ($m) Operating Cash Flow ($m) Total Dividend (cps) FY21 FY20 ❖ Group net revenue up 4.7% reflecting new customer contracts and
Slide 5: People and Culture
People and Culture Total Recordable Injury Frequency Rate (TRIFR)1 Employee Engagement Survey2 78% 6,015 6,380 700 0 TRIFR includes 73% 600 0 Employees employees and 68% 4,453 500 0 contractors 63% Participation rate 5.7 400 0 64% 66% 59% 58% 4.5 300 0 3.6 53% 200 0 Engagement rate 48% 43% 92% 86% 8
Slide 6: Circular Economy
Circular Economy Material and Energy Recovery Resource Recovery (kT) ❖ Cleanaway’s mission is to make a sustainable future possible, 500 474 467 which is supported by its goal of maximising value from every 400 tonne of waste. 300 ❖ Cleanaway is a key enabler of the circular economy investing in 182
Slide 7: Climate Change
Climate Change GHG Emissions and Climate Change Action ❖ Cleanaway recognises the need to reduce its carbon emissions (906 ktCO2-e in FY211) to contribute to mitigating global warming and climate change. ❖ Cleanaway’s ambition is to align reduction in its carbon emissions to the 2015 Paris Agreement
Slide 8: Group Performance Overview
Group Performance Overview Underlying Results Statutory Results $ million FY21 FY20 Change FY21 FY20 Change Gross Revenue 2,406.4 2,332.1 3.2% 2,406.4 2,332.1 3.2% Net Revenue 2,198.9 2,100.1 4.7% 2,198.9 2,100.1 4.7% EBITDA 535.1 515.7 3.8% 528.8 487.1 8.6% EBITDA Margin 24.3% 24.6% (30 bps) 24.0%
Slide 9: Ongoing COVID-19 effects
Ongoing COVID-19 effects FY21 Headwinds and Tailwinds NSW FY22 Air travel Cruise line CBD Construction Surgery Tourism Education Tourism Construction Hospitality Events CBD Hotel COVID-19 CDS CDS Quarantine Testing ❖ FY22 headwinds and tailwinds expected to be like FY21, but new challenges have emer
Slide 10: Solid Waste Services Performance
Solid Waste Services Performance Net Revenue ($m) and margins (%)3 $million FY212 FY202 change 1,476.3 1 Net revenue 1,476.3 1,372.8 7.5% 1,362.3 1,372.8 EBITDA 405.5 388.3 4.4% 28.3% EBITDA Margin 27.5% 28.3% (80 bps) 25.9% 27.5% EBIT 213.0 212.7 0.1% 15.0% 15.5% 14.4% EBIT Margin 14.4% 15.5% (110
Slide 11: Industrial & Waste Services Performance
Industrial & Waste Services Performance Net Revenue ($m) and margins (%)2 $million FY211 FY201 change 341.9 Net revenue 305.6 313.4 (2.5%) 313.4 305.6 EBITDA 48.0 45.9 4.6% 15.7% 14.6% EBITDA Margin 15.7% 14.6% 110 bps 13.6% EBIT 22.6 21.4 5.6% 7.4% 6.6% 6.8% EBIT Margin 7.4% 6.8% 60 bps FY19 FY20 F
Slide 12: Liquid Waste & Health Services Performance
Liquid Waste & Health Services Performance $million FY211 FY201 change Net Revenue ($m) and margins (%)2 Net revenue 512.7 513.6 (0.2%) 513.6 512.7 495.0 EBITDA 110.0 106.3 3.5% EBITDA Margin 21.5% 20.7% 80 bps 21.5% 20.7% 17.6% EBIT 67.6 64.3 5.1% 12.5% 13.2% 10.9% FY19 FY20 FY21 EBIT Margin 13.2%
Slide 13: Medium Term Segment Margin Targets
Medium Term Segment Margin Targets ❖ Progressing well towards medium term margin targets (provided at FY20 Results) despite COVID-19 headwinds. ❖ IWS and LW&HS benefiting from a well managed integration of the Toxfree business and renewed focus on core business lines. ❖ Successful tenders for new la
Slide 14: Statutory NPAT Reconciliation to Underlying NPAT
Statutory NPAT Reconciliation to Underlying NPAT $ million FY21 Statutory Profit After Income Tax Attributable to Ordinary Equity Holders 145.3 Pre-tax adjustments: Impact of Perth MRF fire 7.0 Acquisition and integration costs 7.9 CEO transition costs 4.3 Employee entitlements adjustment (7.0) Chan
Slide 15: Capital Expenditure
Capital Expenditure Total capital expenditure ($m) Total capital expenditure ($m) 339.8 14.7 267.5 240.4 93.6 0.8 57.7 139.5 47.9 97.8 209.8 246.2 192.5 168.9 185.6 FY19 FY20 FY21 FY20 FY21 1 Cash capex Leased Plant & Equipment 2 Stay in business Growth Perth MRF ❖ Continuing to apply a disciplined
Slide 16: Strong Cash Flow and Balance Sheet to Fund Growth
Strong Cash Flow and Balance Sheet to Fund Growth Operating Cash Flow ($m) Comments 424.4 ❖ FY21 operating cash flow increased $22.9m to 401.5 $424.4m due to higher EBITDA and lower 350.8 25.0 remediation costs offset by the reversal of Tax Refund(1) favourable prior period working capital movements
Slide 17: Capital Structure – Debt
Capital Structure – Debt $ million 30 June 2021 30 June 2020 Capital structure 30 June 2021: Leases 499.4 437.3 ❖ At 30 June 2021, the Group had $930.3m of USPP Notes 366.7 426.9 headroom under existing banking facilities. Other interest-bearing liabilities 207.2 201.2 Gross Debt 1,073.3 1,065.4 ❖ T
Slide 18: Rising Landfill Levies Drive Diversion
Rising Landfill Levies Drive Diversion Waste levies by State Waste Export Ban - Key dates Metropolitan areas, $ per tonne 1 January 2021 + CPI ❖ Unprocessed glass in a whole or broken state that is not in a furnace ready state. Both formed packaging and flat sheet 147.10 146.00 glass. 146.00 1 July
Slide 19: Market value growth to come from new inflows and levy avoidance
Market value growth to come from new inflows and levy avoidance Collections Resource Rec. & Value-add Energy from Waste Treatment and Disposal • Greater source • Onshoring recycling • Multi billion-dollar • Landfills face volume separation – more bins (export bans) industry emerging pressure from (e
Slide 20: Value chain extension - Plastics
Value chain extension - Plastics Australian Plastics Consumption by Polymer Cross value chain collaboration to develop the Albury PET and Laverton Total of 3.4 million tonnes HDPE and PP pelletising facilities $45 million facility to process 30kt per annum of PET, providing a bottle-to- 1 bottle rec
Slide 21: Energy from Waste
Energy from Waste Western Sydney Project Update Policy and Project Developments Activity Date ❖ New South Wales EIS public Exhibition Oct/Nov 2020 • EfW has been identified specifically in the NSW Prepare responses to submissions Dec 2020- June 2021 Government’s waste strategy and is part of the sol
Slide 22: Agreement to acquire Sydney landfills and transfer stations from Suez
Agreement to acquire Sydney landfills and transfer stations from Suez1 Strong strategic fit and financial returns 5 transfer stations ✓ $501 million acquisition price ❖ Located in Auburn, Artarmon, Belrose2, Rockdale2 and Ryde ✓ Delivers >10 years of airspace in the Legend Cleanaway Energy from Wast
Slide 23: Digitisation, Data & Analytics
Digitisation, Data & Analytics Digitisation is a critical enabler to drive improvement in customer experience and employee satisfaction; realise Establish & maintain data Infrastructure; Data significant efficiency gains; and support Infrastructure ingest, standardise, clean & enrich data. organic g
Slide 24: Priorities and FY22 Outlook
Priorities and FY22 Outlook Priorities ❖ Continue to improve our ESG performance across a range of measures including safety, diversity and employee engagement, and establish carbon emissions reduction targets. ❖ Integrate NSW landfills and transfer stations, following completion of Suez transaction
Slide 25: Questions
Questions Confidential | 25 25
Slide 26: Appendices
Appendices Page ❖ Group Income Statement – Statutory and Underlying Results 27 ❖ Underlying Segment Disclosures 28 ❖ Net Finance Costs 29 ❖ Cash Flow 30 ❖ Balance Sheet 31 ❖ Performance Summary 32-33 26
Slide 27: Group Income Statement – Statutory and Underlying Results
Group Income Statement – Statutory and Underlying Results Statutory Results Underlying Adjustments Underlying Results $ million FY21 FY20 FY21 FY20 FY21 FY20 Sales revenue external and other revenue (Gross Revenue) 2,406.4 2,332.1 — — 2,406.4 2,332.1 Share of profits/(losses) in equity accounted inv
Slide 28: Underlying Segment Disclosures
Underlying Segment Disclosures Solid Waste Industrial & Liquid Waste Equity Corporate & Eliminations – GROUP $ million Services Waste & Health Accounted Other Group Services Services Investments Revenue Sales of goods and services 1,615.9 298.9 456.3 — — — 2,371.1 Other revenue 12.0 0.1 23.2 — — — 3
Slide 29: Net Finance Costs
Net Finance Costs Underlying Statutory $ million FY20 FY21 FY20 FY21 Cash interest expense Bank interest and leases 29.1 20.2 29.5 20.2 Commitment and Guarantee fees 2.5 3.8 2.5 3.9 USPP Notes 3.4 6.6 3.4 6.6 Interest received (1.4) (0.3) (1.4) (0.3) Net cash interest expense 33.6 30.3 34.0 30.4 Non
Slide 30: Cash Flow
Cash Flow $ million FY21 FY20 Underlying EBITDA 535.1 515.7 Cash flow of underlying adjustments (26.1) (26.1) Less: Other non-cash items (2.1) (2.0) Payments for rectification and remediation of landfills (21.0) (46.5) Other changes in working capital 12.8 43.1 Net interest paid (32.2) (33.2) Tax pa
Slide 31: Balance Sheet
Balance Sheet $ million 30 June 2021 30 June 2020 Cash and cash equivalents 69.4 79.8 Inventories & Trade and other receivables 394.3 367.5 Property, plant and equipment 1,241.5 1,174.0 Right-of-use assets 479.2 416.7 Intangible assets & Other assets 2,467.1 2,484.6 Total Assets 4,651.5 4,522.6 Trad
Slide 32: Solid Waste Services Performance (additional information)
Solid Waste Services Performance (additional information) ❖ EBITDA margins declined 80bps across the year reflecting several factors including: • lower post collections margins due to: • lower volumes at Erskine Park landfill with the landfill airspace now exhausted until the MSE wall is complete •
Slide 33: Sustained Earnings Growth Continues
Sustained Earnings Growth Continues Net Revenue ($million) EBITDA ($million) and EBITDA margin (%)1 EBIT ($million) and EBIT margin (%)1 535.1 256.6 2,198.9 515.7 258.7 2,109.1 2,100.1 240.8 461.6 11.4% 12.2% 24.6% 24.3% 11.8% 21.9% FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 NPAT ($million) and NP
Slide 34: Cash Flows and Shareholder Returns
Cash Flows and Shareholder Returns Operating Cash Flow ($m)2 Total Capex ($m) Free Cash Flow ($m)2 424.4 339.8 274.4 401.5 252.5 350.8 310.0 267.5 25.0 206.4 240.4 260.0 Tax Refund(1) 210.0 160.0 110.0 60.0 10.0 FY19 FY20 FY21 FY19 FY20 FY21 FY19 FY20 FY21 Net Debt ($million) and Net debt / EBITDA (
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