Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — H1 FY2016 Earnings Presentation
29 slides from Cleanaway Waste Management's earnings presentation, Feb 19, 2016
Slide 1: FY16 Interim Results
For personal use only Cleanaway Waste Management Limited (ASX: CWY) Vik Bansal FY16 Interim Results Chief Executive Officer For the six months ended 31 December 2015 Brendan Gill 19 February 2016 Chief Financial Officer
Slide 2: Disclaimer
Disclaimer For personal use only • 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
Slide 3: Agenda
Agenda For personal use only Safety and Environmental 4 1H16 Overview 5 Division Performance 6 Group Income Statement – Statutory and Underlying Results 13 Cash Flow and Balance Sheet 14 Update on Strategic Initiatives 16 Summary 22 Outlook for FY16 23 Q&A Appendices 24 3
Slide 4: Safety and Environmental – Our objective is Zero Harm
Safety and Environmental – Our objective is Zero Harm For personal use only Total recordable injury frequency rate 30 26.6 25 20 16.7 -1% 15 12.6 9.6 9.5 10 5 0 FY12 FY13 FY14 FY15 1H16 Note – comparative periods have been adjusted to exclude divested businesses • Safety performance a key • No major
Slide 5: 1H16 Overview
1H16 Overview • Revenue of $746.8 million For personal use only • EBITDA of $128.4 million Financial – • EBIT of $49.7 million Statutory • NPAT attributable to ordinary equity holders of $23.0 million • Earnings per share 1.5 cents • Revenue of $746.8 million, an increase of 8.3% • EBITDA of $137.2
Slide 6: 1H16 Division Performance Summary
1H16 Division Performance Summary For personal use only Sales Revenue External and Other A$ million Underlying EBITDA Underlying EBIT Revenue 1H16 1H15 % change 1H16 1H15 % change 1H16 1H15 % change Solids – Collections 393.2 383.8 2.4% 74.1 73.4 1.0% 43.6 45.5 (4.2)% Solids – Post Collections 134.9
Slide 7: Solids – Collections
Solids – Collections Cleanaway has the largest solid waste services mobile fleet and widest network across Australia For personal use only Largest network of collections vehicles operating Servicing 90+ Municipal councils across the country from more than 100 depots in Australia 7
Slide 8: Solids – Collections Underlying Results
Solids – Collections Underlying Results For personal use only Key Finance Measures Historical Performance 397.1 379.3 383.8 372.0 393.2 A$ million 1H16 1H15 2H15 1H16 v 1H15 1H16 v 2H15 Net external 393.2 383.8 372.0 2.4% 5.7% 19.0% 19.1% 19.1% 18.8% revenue 17.4% EBITDA 74.1 73.4 64.8 1.0% 14.4% 11
Slide 9: Solids – Post Collections
Solids – Post Collections Cleanaway has one of the strongest post collections asset bases in Australia For personal use only Growing network of transfer Landfill assets located in every Generates 76 million m3 of stations across the country. mainland state of Australia landfill gas, resulting in 113
Slide 10: Solids – Post Collections Underlying Results
Solids – Post Collections Underlying Results For personal use only Key Finance Measures Historical Performance A$ million 1H16 1H15 2H15 1H16 v 1H15 1H16 v 2H15 134.9 Gross external 134.9 72.5 98.2 86.1% 37.4% revenue 98.2 Less levies and (77.1) (33.6) (50.2) 129.5% 53.6% carbon tax 70.6 72.5 64.8 N
Slide 11: Liquids and Industrial Services
Liquids and Industrial Services Cleanaway is the largest hydrocarbons business in Australia and a leader in the overall liquids and For personal use only industrial services market Collecting and processing 150 million litres of mineral Providing technical capability to safely manage all oil, offset
Slide 12: Liquids and Industrial Services Underlying Results
Liquids and Industrial Services Underlying Results For personal use only Key Finance Measures Historical Performance 246.9 238.1 229.1 A$ million 1H16 1H15 2H15 1H16 v 1H15 1H16 v 2H15 216.8 211.4 Net external 211.4 229.1 216.8 (7.7)% (2.5)% 19.0% revenue 18.1% 13.9% EBITDA 26.8 31.8 24.0 (15.7)% 11
Slide 13: Group Income Statement – Statutory and Underlying Results
Group Income Statement – Statutory and Underlying Results For personal use only A$ million Statutory Results Underlying Adjustments Underlying Results 1H16 1H15 1H16 1H15 1H16 1H15 change Sales revenue external and other revenue 746.8 689.5 — — 746.8 689.5 8.3% Share of profits in continuing associa
Slide 14: Cash Flow
Cash Flow For personal use only Key Finance Measures Key Points A$ million 1H16 1H15 • Ratio of cash flow from operating Receipts from customers 741.6 690.9 activities to underlying EBITDA Payments to suppliers and employees (632.0) (574.7) 79.9% (pcp: 95.4%)2 Remediation of landfills (14.7) (3.6) U
Slide 15: Balance Sheet
Balance Sheet For personal use only Key Finance Measures Key Points A$ million 31 Dec 15 30 Jun 15 • Deferred settlement liability Assets represents annual fixed payments Cash 35.3 37.0 relating to the Melbourne Regional Trade and other receivables 230.5 227.1 Landfill discounted to present value. I
Slide 16: Our Five Pillars
Our Five Pillars For personal use only Increasing focus A fit for purpose Pursuing effective capital Ensuring transparency and Ensuring our elements of on customers and organisation with management accountability across the competitive advantage are customer service unrelenting focus organisation be
Slide 17: Update on Strategic Initiatives – Customer for Growth
Update on Strategic Initiatives Customer for Growth For personal use only The rollout of Growth initiatives is accelerating Organic Volume Growth • Save desk implementation focused on customer retention • Telesales function now operating 0% 50% 100% • Sales force training and systems implementation
Slide 18: Customer for Growth contd.
Update on Strategic Initiatives Customer for Growth contd. For personal use only Develop a Single Brand – Create Brand Equity • New branding successfully launched on 1 February 2016 • Supports simplification of organisational and operating structure and realignment of cost base • $1 million launch c
Slide 19: Continuous Improvement for Cost
Update on Strategic Initiatives Continuous Improvement for Cost For personal use only By 30 June 2016 – Net impact immaterial as savings reinvested in growth and other initiatives By 30 June 2017 – Initiatives will achieve $30 million in permanent cost reductions Fit for Purpose Organisation – Decen
Slide 20: Capital for Cash
Update on Strategic Initiatives Capital for Cash For personal use only Reduce our capital intensity – • FY16 capital expenditure expected to be $165 million or under including volume Capex in line with D&A payments related to Melbourne Regional Landfill • FY16 depreciation and amortisation expense e
Slide 21: Capital for Cash contd.
Update on Strategic Initiatives Capital for Cash contd. For personal use only • Complete review of spending patterns and timetable undertaken Landfill Remediation and Rectification Spending • Following this review, forecast annual spending over the next five years has reduced: • FY16 - ~$45 million
Slide 22: Summary
Summary For personal use only We are making progress on our multi year “good to a great” company strategies: Three year strategy in place Value operating model in place Fit for purpose organisational structure leading to reducing costs underway Growth initiatives reset and realigned Name c
Slide 23: Outlook for FY16
Outlook for FY16 For personal use only Based on our current estimates, we continue to expect both our Solids and Liquids & Industrial Services segments will report increased EBITDA earnings for FY16. Market conditions are expected to show little change from those experienced during the first half ho
Slide 24: Appendices Index
Appendices Index For personal use only Mission, Vision and Values 25 Statutory Profit Reconciliation to Underlying Profit 26 Capital Structure – Net Finance Costs 27 Capital Structure – Debt 28 Reconciliation of Divisional Results to Statutory Segment Disclosures 29 24
Slide 25: Our Mission, Vision and Values
Appendix: Our Mission, Vision and Values will provide clarity and direction For personal use only for our strategy, operating model, structure and systems To make a sustainable future possible Why we exist Cleanaway is a market leader in Waste Management, Industrial and Environmental Services. We le
Slide 26: Statutory Profit Reconciliation to Underlying Profit
Appendix: Statutory Profit Reconciliation to Underlying Profit For personal use only A$ million 1H16 1H15 Statutory Profit/(Loss) From Continuing and Discontinued Operations After Income Tax 23.0 (41.7) (Attributable to Ordinary Equity Holders) Costs associated with the fleet grounding — 15.5 Impair
Slide 27: Capital Structure – Net Finance Costs
Appendix: Capital Structure – Net Finance Costs For personal use only A$ million Statutory Underlying 1H16 1H15 1H16 1H15 Cash Interest expense Bank interest 5.7 1.5 5.7 1.5 Commitment fees 0.7 0.9 0.7 0.9 Guarantee/Bond fees 0.7 0.7 0.7 0.7 USPP Notes 3.1 3.0 3.1 3.0 Total interest expense 10.2 6.0
Slide 28: Capital Structure – Debt
Appendix: Capital Structure – Debt For personal use only Key Finance Measures – Net Debt Comprises Key Points A$ million 31 Dec 15 30 Jun 15 31 Dec 14 • At 31 December 2015 the Group had $244 million of headroom under the syndicated Current interest bearing liabilities 0.7 0.7 1.8 banking facilities
Slide 29: Reconciliation of Divisional Results to Statutory Segment Disclosures
Appendix: Reconciliation of Divisional Results to Statutory Segment Disclosures For personal use only Total Solids Solids Post Eliminations Total Corporate Eliminations A$ million Liquids Associates GROUP Collections Collections – Solids Solids & Other – Group & Ind Serv Revenue Sales revenue – exte
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