Gfl Environmental Inc · TSX:GFL
Gfl Environmental — Q3 2023 Earnings Presentation
16 slides from Gfl Environmental's earnings presentation, Nov 2, 2023
Slide 1: Q3 2023 Investor Review
Q3 2023 Investor Review November 2, 2023
Slide 2: Disclaimer
Disclaimer Unless otherwise indicated, all references in this presentation to “GFL”, “we”, “our”, “us”, the “Company” or similar terms refer to GFL Environmental Inc. and its consolidated subsidiaries. Forward-Looking Information This presentation includes certain “forward-looking statements” and “f
Slide 3: Q3 2023 Solid Waste Adjusted EBITDA Margin Bridge – Year-Over-Year
Q3 2023 Solid Waste Adjusted EBITDA Margin(1) Bridge – Year-Over-Year Underlying Margin Expansion 335 bps Commodities (65 bps) Net Fuel M&A (10 bps) (10 bps) Acceleration of underlying margin expansion 335 bps 31.4% 315 bps 28.9% 190 bps 125 bps Q4 2022 Q1 2023 Q2 2023 Q3 2023 Q32022 Q3 2022A Commod
Slide 4: Environmental Services – Well-Positioned for Incremental Growth
Environmental Services – Well-Positioned for Incremental Growth Environmental Services – Organic Growth (%) Environmental Services – Adjusted EBITDA Margin(1) Profile Double-Digit Organic Growth Profile Driven by Focus on Quality (80 bps) +100 bps +440 bps of Revenue (e.g., pricing quality) & Asset
Slide 5: Fiscal 2023 Guidance Update – Revenue & Adjusted EBITDA Bridges
Fiscal 2023 Guidance Update – Revenue & Adjusted EBITDA(1) Bridges Revenue Bridge New M&A FX Impact Soil Remediation RNG ~$60 – ~$70 ~$53 ~($40) – ~($30) ~($3) ~$7,400 ~$7,480 Fiscal 2023 2023 G (Q2 2023) M&A FX Soil RNG Updated 2023 Fiscal G (Q3 2023) Guidance(2) 2023 Guidance Adjusted EBITDA(1) Br
Slide 6: Underlying Net Leverage Bridge – Q3 2023 vs Q2 2023
Underlying Net Leverage(1) Bridge – Q3 2023 vs Q2 2023 Organic FX Deleveraging 0.08x 4.39x (0.20x) U.S. Solid Waste Divestitures Incremental Cash Taxes Held M&A 0.13x 0.11x 4.30x 4.18x Realized organic deleveraging ~2x the impact of incremental M&A completed post-Q2 2023 Q2-23 Q2 2023 Divestiture Ca
Slide 7: Net Leverage – Accelerated Deleveraging in Fiscal 2023
Net Leverage(1) – Accelerated Deleveraging in Fiscal 2023 5.02x Low 4s(2) FX & M&A Impact Adjusted EBITDA(1) growth and free cash flow generation Mid 3s (2) Net Leverage(1)(2) <4.0x, excluding the impact of FX and incremental M&A completed post-Q2 2023 Q4-22A Q4 2022 Q4-23E Q4 2023G 2024 Organic Del
Slide 8: Large Weighting of Fixed Rate Obligations in Rising Rate Environment
Large Weighting of Fixed Rate Obligations in Rising Rate Environment Variable vs Fixed Interest(1) Current Debt Maturity Profile(1) Revolver ~7% TLA 2,028 ~9% Unsecured Notes ~32% 1,758 1,690 (2) TLB 1,451 1,014 ~12% 744 ~$8.5B (As at Q3 2023) 1,014 676 986 986 1,014 1,014 775 ~4.1 Years(1) ~5.2%(1)
Slide 9: Effective Borrowing Rate – Credit Spread Declines with Credit Enhancement
Effective Borrowing Rate – Credit Spread Declines with Credit Enhancement 7.43% ~7.1% – ~7.8% 6.15% ~5.9% – ~6.4% ~175 bps – 250 bps(1) Potential credit spread compression between ~60 bps – ~110 bps 5.20%(2) 115 bps – 190 bps ~5.2% ~310 bps Conservatively assumes ~530 bps(3) benchmark rate remains ~
Slide 10: Change in Annualized Cash Interest – Scenario Analysis
Change in Annualized Cash Interest – Scenario Analysis Capital Structure (As At September 30, 2023) (C$ millions, unless otherwise noted) $2,073 $2,028 $1,758 $1,690 622 1,014 744 1,014 676 $986 986 1,014 1,014 676 775 2023E 2023E 2024E 2024E 2025E 2025E 2026E 2026E 2027E 2027E 2028E 2028E 2029E 202
Slide 11: Illustrative Impact of Potential Refinancings
Illustrative Impact of Potential Refinancings Illustrative Incremental Cash Interest Scenarios Illustrative Adjusted EBITDA(1) Growth Profile (C$ millions, unless otherwise noted) Current Variable Rate Potential Refinancing Scenarios ~$3,950 @ @ @ @ @ (C$ millions) 7.8% 7.5% 6.5% 5.5% 4.5% Variable
Slide 12: Appendix
Appendix
Slide 13: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (C$ millions, unless otherwise noted) 1. Loss (gain) on foreign exchange: Consists of (i) non-cash gains and losses on foreign exchange and interest rate swaps entered into in connection with our debt Three months ended Nine months ended instruments and (ii) gains and
Slide 14: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation (C$ millions, unless otherwise noted) 1. Operating cash flows from discontinued operations: Consists of operating cash flows from discontinued operations. As at September 30, 2022, GFL Infrastructure Three months ended Nine months ended was presented as discont
Slide 15: Adjusted Net Income from Continuing Operations Reconciliation
Adjusted Net Income from Continuing Operations Reconciliation (C$ and shares in millions, unless otherwise noted) 1. Amortization of intangible assets: This is a non-cash item and consists of the Three months ended Nine months ended amortization of intangible assets such as customer lists, municipal
Slide 16: Definitions
Definitions “EBITDA” represents, for the applicable period, net income (loss) from continuing operations plus (a) interest and other finance costs, plus (b) depreciation and amortization of property and equipment, landfill assets and intangible assets, plus (less) (c) the provision (recovery) for in