Cleanaway Co., Ltd. · TWSE:8422
Cleanaway — Investor Presentation (June 2002)
86 slides from Cleanaway's investor presentation, Jun 24, 2002
Slide 1: Cleanaway Business Overview
Cleanaway Business Overview 24 June 2002 Gerben Westra, CEO
Slide 2: Presentation Outline
Presentation Outline 1. Cleanaway Business Overview Gerben Westra Cleanaway Profile Market Profile Cleanaway’s Strategy for Growth 2. Country Presentations Australia & New Zealand Peter Spencer UK Dry Waste Steve Huxley UK Technical Waste Phil Morton Asia Lai Chong Meng Germany Max K
Slide 3: Business Structure
Business Structure CLEANAWAY International Revenue Gerben Westra Market Position CEO £ 853 m CLEANAWAY CLEANAWAY CLEANAWAY UK UK Germany Dry Waste Technical Waste Steve Huxley Phil Morton Max Köttgen Managing Director Managing Director Managing Director £ 297 m 2 £ 49 m 1 £ 358 m 4 CLEANAWAY CLEANAW
Slide 4: Our Customer Base
Our Customer Base Segmental Split (% Revenue) 38% Local Authorities - City Councils 54% - District/County Councils Commercial & Industrial - Large Industrial & Retail - Small–Medium-Sized Commercial 8% DSD – Germany (Packaging Recycling Scheme) Servicing around 0.25 million commercial & industrial c
Slide 5: Waste Streams
Our Business Scope Waste Management Value Chain Final Final Collection Collection Recycling Disposal Disposal Municipal Municipal Solid Solid Waste Waste (MSW) (MSW) Integrated package of outsourcing services Waste Streams Commercial Commercial across the waste management value chain & & Industria
Slide 6: Range of Services & Activities
Range of Services & Activities Collection of municipal, industrial, commercial & technical waste Complementary Services Street Cleansing Grounds & Parks Maintenance Total Waste Management Recycling, reprocessing & trading of recyclables Materials Recovery Facilities (MRFs) “Bottle-to
Slide 7: Our Track Record
Our Track Record Revenue EBITA £m 900 100 £m 800 90 700 80 70 600 60 500 50 400 40 300 30 200 20 100 10 0 0 95 / 96 96 / 97 97 / 98 98 / 99 99 / 00 00 / 01 Revenue 240 298 397 563 646 853 EBITA 30 41 53 72 82 91 95–01 Revenue CAGR 28% (organic growth 9%) 95–01 EBITA CAGR 25% (organic growth 8%) 1. C
Slide 8: Cleanaway's Growth Engine
Cleanaway’s Growth Engine Organic market growth Increase of value in particular elements of the value chain through legislation Outsourcing and public sector privatisation Acquisitions 7
Slide 9: Proven Ability to Integrate Acquisitions
Proven Ability to Integrate Acquisitions 900 800 700 600 500 revenue 400 £m 300 200 100 0 95/96 96/97 97/98 98/99 99/00 00/01 MABEG SKP WMD Service- Major acquisitions team Total No. of Acquisitions: 60 Base Acquisition growth 8
Slide 10: Market Size & Future Growth
Market Size & Future Growth Local Authorities Segment Commercial & Industrial Segment £ bn £ bn 12 16 14 10 12 8 10 6 8 6 4 4 Taiwan 2 ANZ 2 UK 0 0 Germany 2002 2012 2002 2012 Strong legislation driven growth Outsourcing/privatisation of LA segment from 50% today to 75% by 2012 9
Slide 11: Key Drivers for Change
Key Drivers for Change 1. Legislation driving pre-treatment, recycling and recovery EU Landfill Directive TASi (Germany) Packaging Ordinance (Germany) Waste Strategy 2000 (UK) Landfill taxes and licence costs (Australia) National Covenant for Packaging Recycling (Australia) 2. More Produ
Slide 12: Shifts in the Waste Management Value Chain
Shifts in the Waste Management Value Chain Source Segregation Emerging (quite mature in Germany) Collection/Transfer Current/growing Declining Sorting Recycling / Composting Mechanical /Biological Waste-to-Energy / treatment Alternative Disposal Landfill 11
Slide 13: Market Position
Market Position Barriers to Entry Local market share Increasing entry barriers Service complexity Top 5 Players in Main Countries of Operation Others Others Others Shanks Sita Richards Onyx Cleanaway Visy Sita Altvater Sita Cleanaway Rethmann Onyx Biffa RWE Cleanaway UK Germany ANZ 12
Slide 14: Cleanaway's Growth Strategy
Cleanaway’s Growth Strategy To extract value from the waste management value chain where there is clear economic logic for outsourcing and where existing markets and future market growth are underpinned by legislation. Key success factors in achieving this are: Geographic focus Value chain focus
Slide 15: Growth Strategy: Geographic Focus
Cleanaway’s Growth Strategy Geographic Focus Grow market share in core regions in existing countries of operation Selectively enter attractive new markets where Legislation underpins outsourcing and growth Cleanaway’s expertise is needed There are geographic and cultural links to our exist
Slide 16: Growth Strategy: Value Chain Focus
Cleanaway’s Growth Strategy Value Chain Focus Final Final Collection Collection Recycling Disposal Disposal grow fast increase activity not pursue growth in landfill but secure increase local share sorting, processing access and trading internationally evaluate, adopt, develop alternativ
Slide 17: Ingredients Driving Growth
Ingredients Driving Growth Common Themes Legislation Recycling Technology Outsourcing and Privatisation Acquisitions Timing of investments Management 16
Slide 18: Cleanaway Australia Business Overview
Cleanaway Australia Business Overview Sydney 24 June 2002 Peter Spencer
Slide 19: Australia Business Overview
Australia Business Overview Cleanaway is the Australian market leader - 14% share of <£1 billion market Active in all Australian markets, recent entrant in NZ Predominant regional positioning in collection markets Complementary interests in landfilling, treatment and recycling 18
Slide 20: Australia Growth History
Australia Growth History Five year compounding sales growth of 5.5% Growth has been essentially organic Market growth rate has been 3% over this period Growth relativities comparable to Cleanaway overall 19
Slide 21: Australia Forecast Value Chain Migration
Australia Forecast Value Chain Migration Waste Management Value Chain Sorting Sorting Reprocessing Reprocessing Final Final Collection Collection && & & Disposal Disposal Recycling Recycling Trading Trading Municipal Municipal Solid Solid Waste Waste (MSW) (MSW) Over 5 year horizon, landfilling wi
Slide 22: Australia Business Model
Australia Business Model Cleanaway’s business is strongly cash generative Indicatively free cash has been comparable to operating profit Price multiples on medium to large acquisition targets are seen in recent Australian market experience as value prohibitive Cleanaway will pursue organic g
Slide 23: Australia Growth Strategy
Australia Growth Strategy Capitalise on entrenched position in industrial collections Lever scale, coverage, and technology to secure large “one stop” government and corporate accounts Improve customer interfaces for organic growth (CRM facilitation) Advance technology leadership: VICTOR in-
Slide 24: Australia VICTOR In Cab System
Australia VICTOR In Cab System 23
Slide 25: Australia Growth Strategy
Australia Growth Strategy Target the municipal sector for growth Focus and improve municipal contract tender success rate Seek outsourcing of select non-traditional services, e.g. street cleansing, grounds maintenance Market Cleanaway innovations, example: Bio Insert 24
Slide 26: Introducing the Bio-insert
Australia Bio Insert Introducing the Bio-insert… A breakthrough in kerbside green waste collection technology, exclusive to Cleanaway. 25
Slide 27: Australia Growth Strategy
Australia Growth Strategy Increase recycling and re use penetration Expand activities in packaging recycling in response to government measures. Lever Cleanaway international associations for improved recyclables price net-backs Focus on “problem” industrial recyclates for government sanctione
Slide 28: Australia Summary
Australia Summary Cleanaway is number one in Australia Growth strategy focuses on: Organic initiatives Legislative drivers Outsource opportunities Leverage of global associations Growth objective: at least double market rate Strong cashflow business with selective investment opportun
Slide 29: Cleanaway UK Dry Waste Market Business Overview
Cleanaway UK Dry Waste Market Business Overview 24 June 2002 Steve Huxley
Slide 30: UK Business Activities
UK Market UK Business Activities Technical Dry Specialist TWM Commercial Municipal Landscapes Recycling Disposal waste services “Street scene” Headcount - FTE Turnover 2000/1 6,500 £350 M 29
Slide 31: UK Dry Waste Scale of Activity
UK Dry Waste Market Scale of Activity Commercial & Industrial Commercial & Industrial > 70,000 customers Broad portfolio National business Regional focus 30
Slide 32: UK Dry Waste Scale of Activity
UK Dry Waste Market Scale of Activity Commercial & Industrial Municipal Municipal 83 customers Commercial & Industrial 108 contracts > 70,000 customers Current order book Broad portfolio > £450 M National business Regional focus Density is important Cross fertilisation between ma
Slide 33: UK Market Business Scope
UK Market Business Scope No. 2 player in the market Strong across broad customer base Well placed to exploit changing market dynamics Final Final Collection Collection Recycling Recycling Disposal Disposal Very strong Emerging strengths Regional positions (customer (leveraging Group (London
Slide 34: UK Market Historical Growth
UK Market Historical Growth Revenue (£M) 400 300 200 100 0 1996 1997 1998 1999 2000 2001 Business has grown by 135% over the past 5 years 33
Slide 35: UK Market Size
UK Market Market Size Million tonnes Municipal 30 Agriculture 95 55 Commercial & Industrial Dry Waste 25 Other Industrial 75 Construction & Demolition Quarry / Mining 119 35 Sewage 51 Dredged Spoils 485 M tonnes of waste in the UK Cleanaway is focused on Municipal, C&I & Other Industrial Legis
Slide 36: UK Value Across the Chain
UK Market Value Across the Chain Final Final Collection Collection Recycling Recycling Disposal Disposal Tonnages (million) 90 60 70 Market Value (£ billion) 3.3 1.7 1.8 Est. Annual Growth 6–10% 15% (5)% Rate Sectors Current Market Value £ billion Municipal 2.0 C&I 4.4 Tech Waste 0.4 35
Slide 37: UK Industry Structure
UK Dry Waste Market Industry Structure Final Final Collection Collection Recycling Recycling Disposal Disposal “Consolidating” “Fragmented” “Mature” Few large players in the market, including Cleanaway Some regional players, many local operators 36
Slide 38: The Four Key Drivers of Change: Legislative Framework
UK Dry Waste Market The Four Key Drivers of Change 1. Legislative framework WS2K UK waste strategy 2000 sets recovery and recycling targets for MSW aimed at meeting EU directive Landfill directive Sets targets to reduce biodegradable MSW to landfill based on 1998 tonnages Requires C&I wast
Slide 39: Implications on Value Chain (MSW)
UK Dry Waste Market Implications on Value Chain (MSW) Final Final Collection Collection Recycling Recycling Disposal Disposal More Complex Fast growth Gradual decrease Tonnage growth circa 50% by 2015 Significant increase in private sector involvement 75% increase in market value 38
Slide 40: Drivers of Change: Environmental Pressure
UK Dry Waste Market The Four Key Drivers of Change 2. Environmental pressure Political pressure Infrastructure not in place UK lags far behind most of western Europe 39
Slide 41: The Alternatives to Landfill: Europe vs UK
The Alternatives to Landfill: Europe vs UK - UK Dry Waste Market MSW Waste Management by Option Landfill Incineration Denmark Sweden Germany Spain Recycling Composting Netherlands Austria France UK Alternatives to Landfill are much more developed in Europe than in the UK * Source data based on 199
Slide 42: Drivers of Change: Increasing Complexity
UK Dry Waste Market The Four Key Drivers of Change 3. Increasing Complexity Outsourcing / Best Value (Municipal) Waste becoming a “problem” for customers 41
Slide 43: Drivers of Change: Expanding Market
UK Dry Waste Market The Four Key Drivers of Change 4. Expanding Market New products / services Infrastructure (resources / expertise) C. 300 MRFs Market requirement C. 200 composters Importance of market share with strong regional focus 42
Slide 44: Competitive Advantage: Municipal
UK Dry Waste Market Competitive Advantage: Municipal Track record / credibility / critical mass “Street scene” capability in-house Ability to pre-qualify Business development - trade up Extensive TUPE/People mgt experience Recycling experience / focus Strong tendering skills / capacity
Slide 45: London and South East Municipal Market
UK Dry Waste Market London and South East Municipal Market Current Cleanaway Contracts Contracts due for tender over next 30 months Estimated Value of Tenders £500 million 44
Slide 46: Competitive Advantage: Commercial
UK Dry Waste Market Competitive Advantage: Commercial Broad spread of current customer base Market leader in general waste Business development capability Track record of new business generation (> £30m) Good business retention Application of systems & technology to improve service quali
Slide 47: Strategic Intent
UK Dry Waste Market Strategic Intent Final Final Collection Collection Recycling Recycling Disposal Disposal Grow fast Grow fast Hold and Track Organic and Organic and Manage existing acquisition acquisition assets Integrated Build footprint / Utilise to win services asset base integrate
Slide 48: UK Dry Waste Summary
UK Dry Waste Market Summary 1. Become the provider of collection services with the lowest cost base in the market 2. Focus on key regional positions 3. Develop recycling products supported by recycling parks 4. Respond to customer needs for integrated waste solutions (and street scene in municipal)
Slide 49: Cleanaway UK Technical Waste Business Overview
Cleanaway UK Technical Waste Business Overview June 24 2002 Phil Morton
Slide 50: UK Technical Waste Business Scope
UK Technical Waste Business Scope Hazardous and non hazardous liquids, hazardous solids Advice/consultation/compliance Collection, recovery, recycling Disposal – incineration, co-disposal, Physico chemical treatment Ecoservice including waste electrical and electronic (WEEE) Total waste
Slide 51: Total Waste Management (TWM)
UK Technical Waste Total Waste Management (TWM) On site waste management for large single or multi site customers Normally long term contracts Currently 26 sites across the UK Typically Waste segregation Minimisation Recycling/recovery Disposal Ancillary services and plant operatio
Slide 52: National Business/Regional Focus
UK Technical Waste National Business/Regional Focus Incineration Transfer Treatment WEEE Landfill 51
Slide 53: UK Technical Waste Market Share
UK Technical Waste Market Share Approx. £400 million 6.1 million tons Revenue 14% 47% Cleanaway Next 4 Remainder 39% 52
Slide 54: UK Technical Waste Revenue Growth
UK Technical Waste Revenue Growth £000’s 60000 50000 40000 30000 20000 10000 0 1997 1998 1999 2000 2001 4000 Industrial Customers Including Major Chemical, Pharmaceutical, Agrochemical, Aerospace and Engineering 53
Slide 55: Technical Waste Market Growth
UK Technical Waste Technical Waste Market Growth Overall hazardous waste is growing, traditional hazardous wastes are declining, new streams constantly emerging Growth driven principally by legislation Landfill directive WEEE (waste electrical, electronic equipment) ELV (end of life vehicl
Slide 56: UK Technical Waste Summary
UK Technical Waste Summary Cleanaway technical waste is currently No.1 in the UK with excellent assets Well positioned to benefit from legislative changes and environmental trends through Ecoservice Also well positioned in growing outsourcing market and source segregation with TWM 55
Slide 57: Cleanaway Asia Business Overview
Cleanaway Asia Business Overview 24 June 2002 LAI Chong Meng
Slide 58: Asia Agenda
Asia Agenda Overview Main business operations in Taiwan Recent start-up in China Revenue and Growth Potential Summary 57
Slide 59: Asia: Taiwan
Asia Taiwan Market leader in hazardous waste collection, treatment and final disposal Hazardous waste stabilization plant Landfill for hazardous waste Market leader in industrial waste disposal Largest non-government industrial landfill 58
Slide 60: Taiwan – cont'd
Asia Taiwan – cont’d LFGTE plants Sole operator in Taiwan 4 locations Installed capacity of 22MW Recurring profitable revenue for next 10 years Skilled HR base Taiwan growth China growth 59
Slide 61: Integrated Stabilisation Plant & Hazardous Landfill
Asia Integrated Stabilisation Plant & Hazardous Landfill 60
Slide 62: Typical LFGTE Installation
Asia Typical LFGTE Installation 61
Slide 63: Landfill Gas to Energy Sites in Taiwan
Asia Taipei Sanjuku Landfill, Taipei City Taichung City Landfill Futekeng Landfill, Taichung Taipei City Kaohsiung Xichingpu Landfill, Kaohsiung City LANDFILL GAS TO ENERGY SITES IN TAIWAN 62
Slide 64: Asia Revenue
Asia Revenue High growth potential Organic growth New businesses in existing locations, e.g. Recyclables Duplicating successful business models Profitable – good ROS% Forecast June 02: ~ £13m Projected CAGR 02-07: >30% 63
Slide 65: Cleanaway Nanjing
Asia Cleanaway Nanjing NANJING 64
Slide 66: Asia China
Asia China Entry Long term growth plan Strategy On the ground with speed Initial focus – LFGTE Success in Taiwan Low-risk strategy Available HR base in Taiwan Profitable revenue stream with speed Duplication of business – multiple sites High organic growth potential Foundation fo
Slide 67: Asia Summary
Asia Summary Good foundation in Taiwan High revenue and profit growth projected Strategic entry into China Overall, some exciting prospects for a young team 66
Slide 68: Cleanaway Germany Business Overview
Cleanaway Germany Business Overview 24 June 2002 Mark Köttgen
Slide 69: Germany Presentation Outline
Germany Presentation Outline CLEANAWAY GERMANY PROFILE Business Structure & Regional Focus Customer Base and Business Scope Revenue Growth & Acquisition History MARKET PROFILE Market Position Key Market Trends Cleanaway Germany’s Growth Strategy Summary 68
Slide 70: Business Structure & Regional Focus
Germany Business Structure & Regional Focus CLEANAWAY Deutschland AG & Co KG Max Köttgen Revenue £ 358 m Managing Director Market Position 4 North West North East South East West / Middle Region Region Region Region Over 70 materials recovery, processing & composting facilities Strong regional f
Slide 71: Customer Base & Business Scope
Germany Customer Base & Business Scope Customer Segments 19% Local Authorities (% Revenue) Commercial & Industrial 56% 25% DSD Collection and recycling of municipal, packaging, commercial and industrial waste Broad range of recycling capabilities – waste paper, plastics, glass, wood, organics, e
Slide 72: Proven Ability to Integrate Acquisitions
Germany Proven Ability to Integrate Acquisitions Track Record Sales* 1996/7 1997/8 1998/9 1999/0 2000/1 € 73,9 € 377,3 € 386,5 € 500,5 € 508,4 600 500 400 € 300 200 100 0 acquisition acquisition acquisition acquisition Mabeg WMD SKP OTR Good track record of integrating acquisitions Acquisition growt
Slide 73: Key Market Trends: Overview
Germany Key Market Trends: Overview 11 22 33 Regulatory Privatisation Industry Drivers of of Municipal Consolidation Change Services DSD ‘Bottle Deposit Scheme’ TASi 72
Slide 74: Regulatory Drivers of Change: DSD
Germany Regulatory Drivers of Change: DSD Established in 1990 in PACKAGING CYCLE anticipation of the German Packaging Ordinance 1991. Packaging Manufacturer DSD contracts are Secondary feedstock Æ expected to be re- Filler / Bottler other products tendered with new Duales contracts starting in S
Slide 75: Regulatory Drivers of Change: Deposit Scheme
Germany Regulatory Drivers of Change: Deposit Scheme 'Single-Use Drinks Packaging Deposit Scheme' PACKAGING CYCLE Mandated by the Packaging Ordinance Packaging Recycling collection at Manufacturer retail point-of-sale Secondary Filler / Bottler feedstock Æ other products Types of single-use co
Slide 76: Regulatory Drivers of Change: TASi
Germany Regulatory Drivers of Change: TASi TASi Technical Instructions on Municipal Solid Waste: No untreated waste to landfill Waste must be inert ( max. 5% organic content) prior to landfill Range of Alternative Treatments will be required: Mechanical-Biological Treatment (MBA) Waste-t
Slide 77: Privatisation of Municipal Services
Germany Privatisation of Municipal Services 2002 2007 Public Sector 20% Public Private Sector Sector 45% Private 55% Sector 80% Value of municipal solid waste sector in Germany today: € 5 bn A part of the public sector market will be privatised through tendering and public-private-partnerships
Slide 78: Potential for Further Industry Consolidation
Germany Potential for Further Industry Consolidation € 2500 million 2000 1500 1000 500 11% 4% 3% 3% 3% 0 RWE Rethmann A ltvater Cleanaway Sita There are more than 500 waste management companies in Germany. The top 5 players account for less than 25% of the market 77
Slide 79: Cleanaway Germany's Growth Strategy
Germany Cleanaway Germany’s Growth Strategy 11 Developing industry positions to benefit from Regulatory Change DSD re-tendering Preparing for DSD re-tendering: cost effectiveness and efficiencies Bottle Deposit Scheme Developing solutions and industry position for ‘Bottle Deposit Scheme’ TASi
Slide 80: Cleanaway Germany's Growth Strategy
Germany Cleanaway Germany’s Growth Strategy 22 Pursuing key growth projects in the recycling and re-processing segments of the value chain PET Recycling Capitalising on Cleanaway’s unique proprietary technology for recycling to produce food-grade PET Other Recycling Building on leading European
Slide 81: Cleanaway Germany's Growth Strategy
Germany Cleanaway Germany’s Growth Strategy 33 Continuing the acquisition programme to capitalise on industry consolidation Opportunities to acquire medium-size family companies with revenues € 50 – 200 m Privatisation of municipal services 80
Slide 82: Cleanaway Germany's Growth Strategy
Germany Cleanaway Germany’s Growth Strategy 44 Expanding selectively in Eastern Europe Cleanaway is market leader in Estonia Seedcorn businesses in Lithuania, Poland & Hungary Growth model is primarily organic and via PPPs 81
Slide 83: Germany Summary
Germany Summary Front-runner in sorting, recycling & reprocessing Valuable know-how for other Cleanaway markets as legislation converges Strong regional market shares Strong position in collection, sorting and recycling elements of value chain Good start towards Eastern European growth 82
Slide 84: Summary
Summary Good track record including integration of acquisitions Significant market growth with serious barriers to entry Focus on sustainable above-average organic growth and acquisitive growth The different services in our portfolio fit well together Skills transfer between our countries
Slide 85: Waste Management Glossary
Waste Management Glossary C&I Commercial & Industrial CRM Customer Relationship Management DSD Duales System Deutschland (Packaging Recycling Scheme) ELV End of Life Vehicles LFGTE Landfill Gas to Energy MBA Mechanical Biological Treatment MBWT Mechanical-Biological Waste Treatment MRFs Material Rec
Slide 86: Forward-looking statements
This presentation may contain certain “forward-looking statements” with respect to certain of Brambles’ plans and its current goals and expectations relating to its future financial condition, performance and results. By their nature, all forward-looking statements involve risk and uncertainty becau