Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — H1 2022 Earnings Presentation
39 slides from Cleanaway Waste Management's earnings presentation, Feb 17, 2022
Slide 1: FY22 Half-Year Results: Strong Financial Performance and Blueprint for future growth
ASX & Media Release 17 February 2022 FY22 HALF-YEAR RESULTS Strong Financial Performance and Blueprint for future growth Cleanaway Waste Management Limited (“Cleanaway”) ASX:CWY today announced a Statutory Net Profit of $52.5m for the six months ended 31 December 2021 (“1H22”), down 33.9% on the pri
Slide 2: Net revenue, EBITDA and management commentary
ASX & Media Release 17 February 2022 Net Revenue of $1,230m was 14.9% higher than the pcp with higher revenue across all segments primarily driven by a general recovery in economic conditions, new customer contracts, recent acquisitions, pandemic related clinical waste and higher commodity revenue.
Slide 3: Management commentary on Blueprint 2030 and acquisitions
ASX & Media Release 17 February 2022 With sustainability here to stay in the form of lower carbon and higher circularity driven by customers and communities, our landscape review showed a long and exciting runway of domestic opportunities in our core markets, which we are well positioned to capture.
Slide 4: Dividend Reinvestment Plan and FY22 Outlook
ASX & Media Release 17 February 2022 The Dividend Reinvestment Plan (DRP) will be in operation for this dividend. Shareholders residing in Australia or New Zealand may elect to participate in the DRP. The DRP election date is 2 March 2022. Under the DRP, Cleanaway shares will be issued at the averag
Slide 5: Cleanaway FY22 half-year results presentation
Cleanaway Waste Management Limited Australia’s leading total waste FY22 half-year results presentation for the six months ended 31 December 2021 management services provider Presenters Mark Schubert, Managing Director & CEO Paul Binfield, Chief Financial Officer
Slide 6: 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 7: Australia's leading total waste management services provider
Cleanaway is Australia’s leading total waste management, industrial, environmental and health services company. c. 550 Sales, 6,650+ Marketing & Cleanaway is vertically integrated through the waste value chain from Customer Employees waste collection, to resource and energy recovery, to waste treatm
Slide 8: Net Revenue, Underlying EBITDA, NOCF and agenda
Net Revenue $1,229.9M UP 14.9% 1. H1FY22 Performance Review - Highlights - Foundations - Financial Performance - Operating Cash Flow - Capital Expenditure Underlying - Balance Sheet and Liquidity EBITDA $273.7M 2. Blueprint 2030 Strategy Overview UP 3.8% 3. Outlook 4. Appendices NOCF $223.6M UP 10.5
Slide 9: Foundations: safety, resources recovered and environment
Total Recordable Injury Frequency Rate (TRIFR)1 Personal Employeeand Process Safety Engagement Survey2 ✓ Steadily improving TRIFR performance 4.5 3.6 ✓ Developing core processes to manage risk 3.2 consistently ✓ Improving preventative maintenance systems for fixed assets FY20 FY21 H1FY22 Resources R
Slide 10: Financial Performance
Financial Performance • Strong top line growth with opportunity to drive further NET earnings once temporary headwinds subside REVENUE EBITDA EBIT • Increased dividend underpinned by resilient business performance, higher operating cash flow and strong $1,230M $273.7M $129.9M balance sheet UP 14.9%
Slide 11: Group Financial Overview
Group Financial Overview CLEANAWAY)
Slide 12: Underlying group financial results
Underlying • Net Revenue growth $ (million) H1FY22 H1FY21 Variance Gross Revenue 1,364.6 1,170.3 16.6% ₊ Economic recovery and health volumes Net Revenue1 1,229.9 1,070.2 14.9% ₊ New municipal contracts EBITDA 273.7 263.8 3.8% ₊ Acquisitions and Perth MRF EBITDA Margin 22.3% 24.6% (230 bps) ₊ Commod
Slide 13: Statutory to underlying profit reconciliation
$ (million) H1FY22 Statutory Profit After Income Tax Attributable to Ordinary Equity Holders 51.5 Pre-tax adjustments: Acquisition and integration costs 25.0 CEO transition & restructuring projects 7.9 Write down loan Sydney EfW 6.0 Gain on sale and leaseback of property (8.2) Change in remediation
Slide 14: Diversified revenue streams moderating pandemic impacts
Diversified revenue streams moderating the operational impacts from the pandemic • Q1 NSW lockdowns resulted in • Omicron labour impacts businesses shutting down and − Accelerated from Dec-21 into 2022 deferred project work resulting in labour shortages and staff • Rapidly reduced our variable cost
Slide 15: Operating cash flow and dividend
Operating Cash Flow ($m) 223.6 • Net cash from operating activities increased by $21.2m 202.4 compared to the prior corresponding period reflecting 157.1 increased underlying EBITDA and lower tax payments H1FY20 H1FY21 H1FY22 Dividend (cents) & Payout Ratio (%) 2.45 • Directors declared an interim d
Slide 16: Total Capital Expenditure
Total Capital Expenditure ($ million) • Continuing to apply a disciplined approach to capital expenditure while pursuing value accretive opportunities 184.7 160.0 155.1 • Greater visibility over our pipeline of potential projects – capital 34.2 59.4 29.3 will be allocated to maximise returns 125.3 1
Slide 17: Balance sheet and liquidity: key debt facilities
KEY DEBT FACILITIES AT 31 DECEMBER 2021 (A$M) • At 31 Dec 2021, the Group had $4921 million of $ million 31 Dec 2021 30 Jun 2021 headroom under committed banking facilities Leases 625.6 499.4 • $500 million 3 year committed debt facility utilised USPP Notes 374.2 366.7 for purchase of Sydney Resourc
Slide 18: Segment Review
Segment Review 1. Solid Waste Services • Victoria Cleanaway comprises three segments, • New South Wales/ACT encompassing nine strategic business units, • Queensland designed to create value through customer • Western Australia/Northern Territory proximity while leveraging centralised • South Austral
Slide 19: Solid Waste Services
Solid Waste Services Financial performance ₊ Robust economic rebound supported revenue growth NET ₊ Significant new post-collection and municipal contract REVENUE EBITDA EBIT contributions $834.4M $209.1M $107.0M ₊ Reopening of Perth MRF UP 17.0% UP 5.4% DOWN 1.2% ± Commodity price rises offset by r
Slide 20: Liquid Waste & Health Services
Liquid Waste & Health Services Financial performance REVENUE EBITDA EBIT ₊ Substantial LTS project work and economic recovery partially offset by NSW ‘delta’ lockdown $278.1M $53.4M $31.5M UP 10.1% DOWN 3.1% DOWN 7.9% ₊ Strong activity in Health Services as a result of (PCP $252.6M) (PCP $34.2M) inc
Slide 21: Industrial & Waste Services
Industrial & Waste Services REVENUE EBITDA EBIT Financial performance ₊ Substantial new project work in WA, SA and NT $163.3M $23.6M $10.6M UP 7.6% DOWN 0.8% DOWN 10.9% ─ Lower contribution from project work due to (PCP $151.7M) (PCP $23.8M) (PCP $11.9M) postponements in NSW and VIC ─ Competitive me
Slide 22: Strategy Overview
Strategy Overview
Slide 23: Customers, Climate, Communities and Circularity
• The waste industry plays a key role in the transition to low- Customers Climate carbon and high-circularity Seeking cost-effective Energy transition creating new world sustainable services with waste streams lower carbon footprint & New technologies to reduce improved circularity • These trends pr
Slide 24: BluePrint 2030 strategy
BluePrint 2030 is our customer led evolution of the Footprint 2025 strategy. In BluePrint 2030 we will create superior shareholder value by integrating and extending our leading network of infrastructure assets to provide high circularity, low- carbon solutions, seamless customer service and value f
Slide 25: CLEANAWAY WASTE MANAGEMENT LIMITED – PAGE 21
CLEANAWAY WASTE MANAGEMENT LIMITED – PAGE 21
Slide 26: Creating our East Coast Energy from Waste platform
Creating our East Coast Energy from Waste platform… ✓ NSW options under review (51% equity, Macquarie 49%) ✓ Melbourne site purchased (100% equity) ✓ Queensland site agreement in place (100% equity) ✓ Dedicated Energy from Waste team and strong partnership with Macquarie Capital across platform ✓ En
Slide 27: Expanding our resource recovery and plastics reprocessing platform
Expanding our resource recovery platform… Material Recovery Facilities ✓ Six Material Recovery Facilities for advanced sorting Plastics ✓ Developing the leading plastics reprocessing platform ✓ Feasibility study with Qenos for advanced recycling of mixed plastics Example Organics Our leading Plastic
Slide 28: Creating our future customer platform
Creating our future customer platform…. Creating a scalable, seamless & digitised service experience across the customer journey through Service CustomerConnect • Business led multi-year program to enable customer service and engagement Delivering value-for-money solutions by providing customers tai
Slide 29: Creating best-in-class productivity and culture
Creating best-in-class productivity and culture… 150,000+ 6,650+ 130+ ✓ Aligning our strategy and our culture Business Employees Municipal customers councils ✓ Harnessing the potential of our frontline teams • Piloting ‘Lighthouse Branches’ – including continuous improvement of branch level value dr
Slide 30: Series of investor deep dives across three strategic pillars
Over the coming year, a series of deep dives is being planned for investors across our three strategic pillars 1. Strategic Infrastructure Growth 2. Sustainable Customer Solutions 3. Productivity & Culture Next: Strategic Infrastructure Growth – Q2 2022 BluePrint 2030: creating superior shareholder
Slide 31: Outlook
Foundations • Deliver continued improvements in our foundations (safety & environment) Strategy • Make material progress on BluePrint 2030 strategic pillars in the near term Financial performance • Deliver continued growth in earnings and profitability OUTLOOK • Second half EBITDA expected to be sim
Slide 32: CLEANAWAY WASTE MANAGEMENT LIMITED – PAGE 28
CLEANAWAY WASTE MANAGEMENT LIMITED – PAGE 28
Slide 33: Appendices
Appendices Sinn CLEANAWAY)
Slide 34: Underlying and statutory financial results
Underlying Statutory $ (million) H1FY22 H1FY21 Variance H1FY22 H1FY21 Variance Gross Revenue 1,364.6 1,170.3 16.6% 1,364.6 1,170.3 16.6% Net Revenue 1,229.9 1,070.2 14.9% 1,229.9 1,070.2 14.9% EBITDA 273.7 263.8 3.8% 253.2 256.9 (1.4%) EBITDA Margin 22.3% 24.6% (230 bps) 20.6% 24.0% (340 bps) EBIT 1
Slide 35: Statutory result, adjustments and underlying result
Statutory Result Adjustments Underlying Result $ (million) H1FY22 H1FY21 H1FY22 H1FY21 H1FY22 H1FY21 Sales revenue external and other revenue (Gross Revenue) 1,364.6 1,170.3 - - 1,364.6 1,170.3 Share of profits/(losses) in equity accounted investments (0.1) (1.3) - - (0.1) (1.3) Expenses (net of oth
Slide 36: Segment revenue, EBITDA and EBIT
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 940.5 158.9 248.6 - - - 1,348.0 Other revenue 5.7 - 10.9 - - - 16.6 Internal sales 22.9 4.4 18.6 -
Slide 37: Net finance costs breakdown
Underlying Statutory $ (million) H1FY22 H1FY21 H1FY22 H1FY21 Cash interest expense Bank interest and leases 10.6 10.2 10.6 10.2 Commitment and Guarantee fees 2.4 1.8 2.4 1.8 USPP Notes 3.3 3.4 3.3 3.4 Transaction costs expensed - - 2.5 - Interest received (0.1) (0.2) (0.1) (0.2) Net cash interest ex
Slide 38: Cash flow
$ (million) 31 Dec 20 30 Jun 21 31 Dec 21 Underlying EBITDA 263.8 535.1 273.7 • Net cash from operating activities Cash flow of underlying adjustments (14.8) (26.1) (11.6) Other non-cash items 3.4 (2.1) 0.2 increased by $21.2m compared to the Payments for rectification and remediation of landfills (
Slide 39: Balance sheet
$ (million) 31 Dec 20 30 Jun 21 31 Dec 21 ASSETS Cash and cash equivalents 31.8 69.4 48.7 Trade and other receivables 359.4 372.2 436.2 Inventories 18.7 22.1 24.3 Property, plant and equipment 1,209.9 1,241.5 1,316.6 Right-of-use assets 432.2 479.2 601.7 Intangible assets 2,333.9 2,320.4 2,758.0 Oth
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