Waste Connections, Inc. · TSX:WCN
Waste Connections — Investor Presentation (June 2019)
19 slides from Waste Connections's investor presentation, Jun 4, 2019
Slide 1: Investor Presentation June 2019
Investor Presentation June 2019
Slide 2: Safe Harbor Statement
2 SAFE HARBOR STATEMENT This document contains forward - looking statements within the meaning of the safe harbor provisions of the U . S . Private Securities Litigation Reform Act of 1995 (“PSLRA”), including “forward - looking information” within the meaning of applicable Canadian securities laws
Slide 3: WCN: Investment Highlights
3 WCN: INVESTMENT HIGHLIGHTS Third largest solid waste company in North America ~$28 billion enterprise value; ~$13 billion assets ; over 16,000 employees Differentiated strategy…Differentiated results Only company focused on secondary and exclusive markets Sector - leading EBITDA and free
Slide 4: Keys to Success…What We Believe
4 KEYS TO SUCCESS…WHAT WE BELIEVE Solid waste is a commodity business Lowest price provider wins Basic level of service expectation by customers Private companies in competitive markets often dictate collection margins Success is driven by: Market selection => determines sustainability a
Slide 5: Targeting Attractive Markets
5 TARGETING ATTRACTIVE MARKETS Integrated Operations Non - Integrated Operations Exclusive Markets: #1 EBITDA margin #1 EBIT margin #1 FCF margin #1 ROA #3 EBITDA margin #2(tie) EBIT margin #2 FCF margin #2 ROA Competitive Markets: #2 EBITDA margin #2(tie) EBIT margin #3 FCF margin #3 ROA #4 EBITDA
Slide 6: Our Differentiated Strategy
6 OUR DIFFERENTIATED STRATEGY Exclusive solid waste markets Vertically integrated, or Non - integrated Competitive solid waste markets Secondary markets with High collection market share and Vertically integrated or disposal neutral Niche opportunities E&P waste => disposal - orien
Slide 7: Strategic Implications
7 STRATEGIC IMPLICATIONS Consistent pricing Lower customer churn rates Comparably better core price + volume growth Higher EBITDA and EBIT margins Strong conversion of EBITDA to free cash flow Attractive returns on invested capital Our success: not dependent on behavior or execution of
Slide 8: Revenue Mix: ~85% US & ~15% Canada
8 REVENUE MIX: ~85% US & ~15% CANADA
Slide 9: WCN: Financial Highlights
9 WCN: FINANCIAL HIGHLIGHTS * A Non-GAAP measure; see appendix for reconciliation tables. 2019e based on February 2019 outlook. $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 2016 2017 2018 2019e $ Millions Revenue 44.0% 48.0% 52.0% 56.0% 60.0% $600 $1,000 $1,400 $1,800 2016 2017 2018 2019e $ Millions Ad
Slide 10: WCN: Year Outperformance
10 WCN: 10 - YEAR OUTPERFORMANCE ____________ A s of 4/30/19. 166% 181% 108% 455% 316% 511% 138% 759% 0 100 200 300 400 500 600 700 800 900 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 WCN WM RSG S&P 500 S&P/TSX Composite Index
Slide 11: Financial Discussion
11 FINANCIAL DISCUSSION
Slide 12: 2019 Outlook
12 2019 OUTLOOK (as of February 13 th ) Revenue: $5.310 billion Solid w aste organic price + volume growth Price: 4.5%, in line with 2018; Volume: down 0.5%, with underlying flat Recycling: commodity values assumed in the range of current lev els E&P Waste Activity: assumed in line with 20
Slide 13: Q1 2019 Financial Highlights
13 Q1 2019 FINANCIAL HIGHLIGHTS Revenue: $1.245 billion, or $5 million above upper end of our outlook Solid waste price increases of over 5.2% => above high end of range Volume down 1.2% => intentional shedding and impact of winter weather E&P revenues up 14% YoY Recycled commodity prices
Slide 14: Q2 2019 Outlook
14 Q2 2019 OUTLOOK* Revenue: ~$ 1.360 billion Price growth => 4.5% - 5.0% Volumes => flat to up 0.5% Sequential increase of ~150bps on pick - up in special waste Includes ~50bps impact of purposeful shedding Assumes continued weakness in recycled commodity values Net income attributabl
Slide 15: Current Observations
15 CURRENT OBSERVATIONS* Continued strength in solid waste Price growth => at or above upper end of outlook Volumes => sequential improvement driving positive reported volumes Ongoing reductions in high margin commodity - linked revenues expected to impact Q2 - Q4 results Additional 30% er
Slide 16: Non-GAAP Reconciliation Schedules
16 NON - GAAP RECONCILIATION SCHEDULES
Slide 17: Adjusted EBITDA Reconciliation
Adjusted EBITDA* 2016 2017 2018 Q119 Q219e** 2019e** Net income (loss) attributable to Waste Connections 246,540 576,817 546,871 125,622 162,400 636,000 Plus: Net income attributable to noncontrolling interests 781 603 283 (45) 200 1,000 Plus/less: Income tax provision (benefit) 114,044 (68,910) 159
Slide 18: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow* 2016 2017 2018 2019e** Net cash provided by operating activities 795,312 1,187,260 1,411,235 1,525,000 Plus/less: Change in book overdraft (1,305) 8,241 (839) Plus: Proceeds from disposal of assets 4,604 28,432 5,385 Plus: Excess tax benefit associated with equity-based comp
Slide 19: Principal Administrative Offices / Investor Relations
PRINCIPAL ADMINISTRATIVE OFFICES 3 Waterway Square Place, Suite 110 The Woodlands, TX 77380 (832) 442 - 2200 http://wasteconnections.investorroom.com INVESTOR RELATIONS Mary Anne Whitney, SVP CFO Phone: (832) 442 - 2253 maryannew@wasteconnections.com
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