Gfl Environmental Inc · TSX:GFL
Gfl Environmental — Q4 2021 Earnings Presentation
29 slides from Gfl Environmental's earnings presentation, Feb 10, 2022
Slide 1: Q4 2021 Investor Review & 2022 Guidance
Q4 2021 Investor Review & 2022 Guidance February 10, 2022
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 statement
Slide 3: Q4 2021 & Fiscal 2021 Highlights
Q4 2021 & Fiscal 2021 Highlights Delivered on Growth Strategies 2019 Footprint • Exceeded our increased full year 2021 guidance despite ongoing delay in Canadian reopening activities (~40% of revenue derived in Canada) • Continued margin expansion highlighting effectiveness of strategies o Solid w
Slide 4: Fiscal 2021 Financial Highlights Exceeded Our 2021 Commitments
Fiscal 2021 Financial Highlights Expanded Adjusted Increased Adjusted Free Continued Strategic Reduced Cost of Debt(3) EBITDA Margins(1) Cash Flow(1) Generation Acquisitions(2) (C$ millions) (C$ millions) 540 6.4% 26.5% 3,941 360 25.7% 4.5% 4.2% 2,300 24.7% 721 (82) FY2019 FY2020 FY2021 FY2019 FY202
Slide 5: Q4 Revenue Growth
Q4 Revenue Growth Solid Waste Three months ended December 31, 2021 Contribution Organic Foreign Total • 9.9% positive organic growth from Revenue Acquisitions Growth Exchange Growth o 5.1% net price vs 3.6% in Q4-20 Solid waste: o 3.4% positive volume vs (0.3%) in Q4-20 Canada 9.9% 9.3% - 19.2% US
Slide 6: Operating Segment Breakdown
Operating Segment Breakdown (C$ millions, unless otherwise noted) Solid Waste Three months ended December 31, 2021 2020 • First year to have all 4 quarters > 30% margin Adjusted Adjusted Adjusted EBITDA Adjusted EBITDA o 15 bps net drag from commodities and fuel Revenue (1) Revenue EBITDA (2) EBIT
Slide 7: Cash Flow Highlights
Cash Flow Highlights (C$ millions, unless otherwise noted) Adjusted Free Cash Flow Three months ended December 31, Change • ~33% increase in Adjusted Cash Flows from Operating 2021 2020 $ % Activities(3) as compared to Q4-20 Cash flows from operating activities 283.8 163.5 120.3 73.6% • Year end c
Slide 8: Net Leverage and Liquidity
Net Leverage and Liquidity (C$ millions, unless otherwise noted) Other Cash Flow and Liquidity Items December December 31, 2021 30, 2020 • Deployed ~$2,300M for 46 acquisitions Total long-term debt 7,979.0 6,166.1 • ~$190M cash position and fully undrawn revolving credit Deferred finance costs and
Slide 9: Portfolio Rationalization
Portfolio Rationalization p 98 faruaae TUE RUTTTT,
Slide 10: Portfolio Rationalization – GFL Infrastructure
Portfolio Rationalization – GFL Infrastructure Fiscal 2021 Financial Information (C$ millions, unless otherwise noted) Infrastructure Division Has Different Investment Profile Relative to Core Solid Waste Operations Infrastructure & Soil Remediation Segment Revenue: $520 Adjusted EBITDA(1) Adjusted
Slide 11: Transaction Overview
Transaction Overview Sale of GFL Infrastructure Fiscal 2021 Financial Information • GFL Infrastructure to be sold for cash plus equity interest in (C$ millions, unless otherwise noted) new entity Green o Retained soil remediation division will be combined with Infrastructure the liquid waste segme
Slide 12: GFL – Pro Forma Financial Information
GFL – Pro Forma Financial Information 86% Solid waste division will account for over 80% of our business mix 80% Business Mix – Solid Waste Reinforces focus on core solid waste operations Contribution Increases comparability with publicly traded peers FY2021 FY2021 PF 27.5% Adjusted 26.5% De
Slide 13: Rationale for Separation
Rationale for Separation Infrastructure Division is Unique and Viewed as Non-Core by Investors and Research Analysts GFL’s Core Operations Intensify Focus on Core Solid Waste Operations and Increase Comparability of Our Business Mix with Publicly Traded Peers Deconsolidating the Infrastructure Divis
Slide 14: 2022 Guidance
2022 Guidance PP THUAN yp 8 Catena RULLELL shy val
Slide 15: Multi-Pronged Growth Strategy to Create Long-Term Shareholder Value
Multi-Pronged Growth Strategy to Create Long-Term Shareholder Value 1 Drive Organic Growth EBITDA Margin Expansion 2 Optimize base business price/volume mix Leverage investment in infrastructure Drive volume to underutilized asset base Utilize purchasing power from enhanced scale Continue
Slide 16: 2022 Guidance – Revenue Bridge
2022 Guidance – Revenue Bridge Net M&A GFL Roll Over FX Infrastructure 8.0% - 8.5% 0.5%(1) ($440) Solid Liquid & Volume MRF Impact Infrastructure Solid Price 5.0% - 6.0% 4.5% - 5.0% 1.0% - 1.5% (0.2%) – (0.6%) Inclusive of impact of asset divestitures Increase in market prices for recycling commodit
Slide 17: Fiscal 2022 Full Year Guidance
Fiscal 2022 Full Year Guidance Excl. GFL Infrastructure FY 2021 FY 2022 FY 2022 YoY (C$ millions, unless otherwise noted) Actuals Guidance As Adj. Growth Revenue Organic growth 5.0% – 6.0% $6,265 – $5,825 – Net M&A roll over 8.0% – 8.5% $5,525 14% – 16% F/X 0.5%(1) $6,365 $5,925 Adjusted EBITD
Slide 18: Capital Expenditure Breakdown
Capital Expenditure Breakdown Proceeds from Normalization for Growth Capex Asset Divestitures Excess Proceeds $110 ($260) from Asset Divestitures Excess Proceeds of $150 2021 Portfolio Rationalization to be $540 $540 Deployed in 2022 2021 2021 Base Capex Net Capex Normalization for Excess Proceeds f
Slide 19: Potential M&A Landscape
Potential M&A Landscape Integration of Recent Acquisitions Integration of recent M&A well underway Operating results to date at or above expectations Robust M&A • Terrapure meaningfully over contributed in Q4 Pipeline Provides Cost savings realization on track Potential Upside to 2022 Guidance
Slide 20: 2022 Adjusted Free Cash Flow – Potential Run-Rate
2022 Adjusted Free Cash Flow – Potential Run-Rate Excluding GFL Infrastructure, Potential 2022 Run- Potential Potential Incremental GFL Rate Inclusive of Near-Term M&A Acquisitions $30 - $35 Infrastructure ($40) M&A Opportunities(1) $30 - $40 Revenue $6,435M $725 - $685 - Adj. EBITDA(2) $1,800M $665
Slide 21: GFL Renewables – RNG Projects
GFL Renewables – RNG Projects GFL Renewables Formed in 2021 Significant Focused on converting methane gas from collection systems at MSW landfills into commercial-grade, pipeline-quality RNG that can be used in commercial (i.e. fuel for Incremental Annual natural gas-powered vehicles) and indust
Slide 22: 2023 Potential Growth Opportunities
2023 Potential Growth Opportunities Adjusted Adjusted (C$ millions, unless otherwise noted) Revenue EBITDA(1) FCF(1) Organic Revenue Growth ~5.0% top line growth Continued EBITDA margin expansion $305 – $335 $85 – $95 $55 – $60 • Adjusted EBITDA Margin of 28.2% to 28.4% (40 bps + increase) Poten
Slide 23: 2023 Adjusted Free Cash Flow – Potential Run-Rate
2023 Adjusted Free Cash Flow – Potential Run-Rate Potential 2023 Run- Rate Inclusive of Potential RNG Potential Growth Organic Potential Incremental Projects $105 - $125 Opportunities(1) Revenue Growth Acquisitions $45 - $55 $55 - $60 Revenue(2) $7,020M Adj. EBITDA(2)(3) $1,995M $890 - $970 $685 - $
Slide 24: Appendix
Appendix vit TRI PRULLELE
Slide 25: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (C$ millions, unless otherwise noted) 1. (Gain) loss on foreign exchange: Consists of (i) non-cash gains and losses on Three months ended Year ended foreign exchange and interest rate swaps entered into in connection with our debt instruments and (ii) gains and losses
Slide 26: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation (C$ millions, unless otherwise noted) 1. Costs associated with IPO related debt repayments: Consists of costs, including related fees, premiums, accrued interest and the termination of swap arrangements, Three months ended Year ended associated with the extingu
Slide 27: Adjusted Net Income Reconciliation
Adjusted Net Income 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 Year ended amortization of intangible assets such as customer lists, municipal contracts, non- compete agreement
Slide 28: Pro Forma Operating Segments
Pro Forma Operating Segments (C$ millions, unless otherwise noted) Three months ended Three months ended Three months ended Three months ended Year ended March 31, 2021 June 30, 2021 September 30, 2021 December 31, 2021 December 31, 2021 Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted Adjusted
Slide 29: Definitions
Definitions “Adjusted EBITDA” is calculated by adding and deducting, as applicable from EBITDA, certain expenses, costs, charges or benefits incurred in such period which in management's view are either not indicative of underlying business performance or impact the ability to assess the operating p