Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — FY2022 Earnings Presentation
27 slides from Cleanaway Waste Management's earnings presentation, Aug 19, 2022
Slide 1: Cleanaway FY22 results presentation
Cleanaway Waste Management Limited Australia’s leading total waste FY22 results presentation management services provider for the year ended 30 June 2022 Presenters Mark Schubert, Managing Director & CEO Paul Binfield, Chief Financial Officer
Slide 2: Forward looking statements
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. Forward‐looking
Slide 3: Agenda
1. Highlights 2. People & Environment 3. Financial Performance 4. Operating Cash Flow 5. Capital Expenditure 6. Balance Sheet & Liquidity 7. Segment Review 8. Delivering BluePrint 2030 9. Greenhouse Gas Emissions 10. Outlook 11. Appendices
Slide 4: Financial highlights
Financial • Strong revenue growth across all segments NET • Strong net operating cash flow generation REVENUE EBITDA EBIT • Sydney Resource Network (SRN) acquisition completed with contribution ahead of expectations $2,604M $581.6M $257.1M UP 18.4% UP 8.7% DOWN 0.6% • Recovering cost increases throu
Slide 5: Total Recordable Injury Frequency Rate
Total Recordable Injury Frequency Rate (TRIFR)1 Female Representation • Three female Executive 4.5 4.2 20.8% Team members recruited 3.6 • Three tragic fatalities (not at fault) 19.1% 19.1% • Executive and senior • 83 injuries management increased to • Intense safety focus 23% from 15% in FY21 • 3 fe
Slide 6: Strong revenue growth partially offset by unexpected operational challenges
Strong revenue growth partially offset by unexpected operational challenges and natural disasters… Underlying Key EBITDA variance drivers $ (million) FY22 FY21 Variance Revenue growth Operational challenges Gross Revenue 3,006.2 2,406.4 24.9% • Base business Net Revenue1 2,603.8 2,198.9 18.4% • Sydn
Slide 7: Strong pricing and contractual mechanisms available
Strong pricing and contractual mechanisms available to manage inflation…. Operating costs (%) Labour Disposal and Levies • Exposed to Enterprise Agreements & • Represents 32% of cost base individual contracts • Flexible cost passthrough mechanism • Contractual/pricing passthrough • Flexible for SME
Slide 8: New Chum rectification costs
$ (million) H1FY22 H2FY22 FY22 Statutory NPAT Attributable to Ordinary Equity Holders 51.5 27.4 78.9 Pre‐tax adjustments: • New Chum rectification costs associated New Chum rectification costs ‐ 38.8 38.8 with the flood damage Other flood impacts ‐ 4.7 4.7 • Flood rectification costs plus write‐off
Slide 9: Operating Cash Flow
• Net cash from operating activities increased by Operating Cash Flow ($ million) $41.9 million 466.3 ₊ Underlying EBITDA and lower tax payments 401.5 424.4 ─ Interest payments and cash outflows attributable to underlying adjustments • Good working capital management • Cash conversion1 at 99.9% (pcp
Slide 10: Total Capital Expenditure
Total Capital Expenditure ($ million) • Strong capital discipline • FY22 Growth capex included — Land at Wollert for EfW — New municipal contracts — SEMTS upgrade to support new post‐collections contract • Approximately $200 million of capex in FY22 is eligible under FY20 FY21 FY22 Leased Plant & Eq
Slide 11: Commitment to maintaining a strong balance sheet
KEY DEBT FACILITIES AT 30 JUNE 2022 • At 30 June 2022, the Group had $454 million of headroom under committed debt facilities $ million 30 Jun 2022 30 Jun 2021 Leases 640.9 499.4 • $500 million 3‐year committed debt facility USPP Notes 351.9 366.7 utilised for purchase of SRN Other interest‐bearing
Slide 12: Segment Review
Segment Review 1. Solid Waste Services • Victoria Cleanaway comprises three segments, • New South Wales/ACT encompassing ten strategic business units, • Queensland designed to create value through customer • Western Australia/Northern Territory proximity while leveraging centralised • South Australi
Slide 13: Solid Waste Services
Solid Waste Services Financial performance NET ₊ Initial SRN contribution REVENUE EBIT EBITDA ₊ Higher post‐collections and new municipal customer contributions $1,818.6M $469.4M $227.8M UP 23.2% UP 15.8% UP 6.9% ─ Fuel price, labour availability, pandemic and floods (PCP $1,476.3M) (PCP $405.5M) (P
Slide 14: Transaction completed, assets seamlessly integrated and immediately accretive
Transaction completed, assets seamlessly integrated and immediately accretive Generated $127.5 million net revenue, $57.7 million EBITDA and $21.1 million PBT for the first 28 weeks of operations. Enhanced operating leverage through expanded footprint and route optimisation. Leveraging network
Slide 15: Liquid Waste & Health Services
Liquid Waste & Health Services Financial performance REVENUE EBITDA EBIT ₊ LTS benefited from substantial project work, flood related activity and economic recovery $550.5M $96.2M $53.0M UP 7.4% DOWN 12.5% DOWN 21.6% ─ COVID‐related volumes and equipment failure led to (PCP $512.7M) (PCP $67.6M) sig
Slide 16: Industrial & Waste Services
Industrial & Waste Services REVENUE EBITDA EBIT Financial performance ₊ Strong performance in WA, SA and NT markets, which $328.6M $47.2M $19.9M UP 7.5% DOWN 1.7% DOWN 11.9% were less affected by COVID (PCP $305.6M) (PCP $48.0M) (PCP $22.6M) ─ QLD and VIC incurred higher unit labour costs and costs
Slide 17: Our growing pipeline of opportunities
Our growing pipeline of opportunities sit firmly within our value creation growth framework… • Developed refreshed Sustainable Customer Rolled out Data & Analytics programs CustomerConnect business case approved Strategy‐ BluePrint 2030 Solutions • Route optimisation • Completed RFP for pre‐executio
Slide 18: Greenhouse gas reduction targets
We have set targets that align to COP22 and are supported by the IPCC’s 2022 Sixth Assessment Report Vision: To achieve emissions reductions across the business that support a pathway to limiting global warming to 1.5C above pre‐industrial levels Target details versus FY22 Target details versus FY22
Slide 19: FY23 earnings outlook
• FY23 earnings are expected to be higher than FY22 due to a full year contribution from SRN, underlying growth and Blueprint 2030 initiatives • Underlying EBITDA expected to be in the range of $630 ‐ $670 million — based on current operating conditions and a balanced assessment of the opportunities
Slide 20: Appendices
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Slide 21: Commitment to maintaining a strong balance sheet
Optimise operational Effective working Improve capital efficiency capital management efficiency Strong Operating Cash Flow • Commitment to maintaining a strong balance sheet Strong Operating Health, Safety and Environment Capital Cash Flow • Applying a disciplined approach to capital Stay in Busines
Slide 22: FY22 Underlying and Statutory results
Underlying Statutory $ (million) FY22 FY21 Variance FY22 FY21 Variance Gross Revenue 3,006.2 2,406.4 24.9% 3,006.2 2,406.4 24.9% Net Revenue 2,603.8 2,198.9 18.4% 2,603.8 2,198.9 18.4% EBITDA 581.6 535.1 8.7% 510.8 528.8 (3.4%) EBITDA Margin 22.3% 24.3% (200 bps) 19.6% 24.0% (440 bps) EBIT 257.1 258
Slide 23: Statutory Result Adjustments
Statutory Result Adjustments Underlying Result $ (million) FY22 FY21 FY22 FY21 FY22 FY21 Sales revenue external and other revenue (Gross Revenue) 3,006.2 2,406.4 ‐ ‐ 3,006.2 2,406.4 Share of losses in equity accounted investments (1.1) (2.0) ‐ ‐ (1.1) (2.0) Expenses (net of other income) (2,494.3) (
Slide 24: Segment results table
Solid Waste Industrial & Liquid Waste Equity Corporate & Eliminations Group $ (million) Services Waste & Health Accounted Other – Group Result Services Services Investments Revenue Sales of goods and services 2,161.6 318.9 488.8 ‐ ‐ ‐ 2,969.3 Other revenue 14.8 ‐ 22.1 ‐ ‐ ‐ 36.9 Internal sales 44.6
Slide 25: Net finance costs
Underlying Statutory $ (million) FY22 FY21 FY22 FY21 Cash interest expense Bank interest and leases 27.2 20.2 27.2 20.2 • Net finance costs were $9.5 million Commitment and Guarantee fees 4.5 3.8 4.5 3.9 higher reflecting the increased USPP Notes 7.1 6.6 7.1 6.6 borrowings to fund the acquisition of
Slide 26: Underlying EBITDA and cash flow of adjustments
$ (million) FY22 FY21 Underlying EBITDA 581.6 535.1 Cash flow of underlying adjustments (49.5) (26.1) Other non‐cash items (0.9) (2.1) Payments for rectification and remediation of landfills (19.3) (21.0) Other changes in working capital (0.6) 12.8 Net interest paid (38.5) (32.2) Tax paid (6.5) (42.
Slide 27: 30 Jun 22 Balance Sheet
$ (million) 30 Jun 22 30 Jun 21 ASSETS Cash and cash equivalents 66.5 69.4 Trade and other receivables 532.5 372.2 Inventories 26.7 22.1 Property, plant and equipment 1,434.5 1,241.5 Right‐of‐use assets 614.7 479.2 Intangible assets 3,074.3 2,320.4 Other assets 113.5 146.7 Total Assets 5,862.7 4,651
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