Clean Harbors, Inc. · NYSE:CLH
Clean Harbors — Q2 2021 Earnings Presentation
21 slides from Clean Harbors's earnings presentation, Aug 4, 2021
Slide 1: Second Quarter 2021 Investor Review
Second Quarter 2021 Investor Review August 4, 2021 1
Slide 2: Forward Looking Statements and GAAP Disclaimer
Forward Looking Statements and GAAP Disclaimer These slides contain (and the accompanying oral discussion will contain) forward-looking statements, which are generally identifiable by use of the words "believes," "expects," "intends," "anticipates," "plans to," "seeks," "should," "estimates," "proje
Slide 3: Summary of Q2 Results
Summary of Q2 Results ▪ Revenue of $926.5M, a 30% increase YoY; up 15% sequentially from Q1 ▪ Net income of $67.1 million or EPS of $1.22 and Adjusted EPS of $1.19 ▪ Adjusted EBITDA* increased 36% to $187.8M, including $5.2M from government pandemic relief programs; Adjusted EBITDA margin climbed 80
Slide 4: Environmental Services
Environmental Services $724.1 Q2 Performance $612.6 ▪ Revenue up YoY primarily due to growth in disposal volumes and strong Industrial Services activity. Favorable comparison to Q2’20 Revenue when pandemic lockdowns impacted overall economy + 18% (in millions) ▪ Adjusted EBITDA was flat based on hig
Slide 5: Safety-Kleen Sustainability Solutions
Safety-Kleen Sustainability Solutions $202.3 Q2 Performance ▪ Revenue increased YoY due substantially higher pricing, more Revenue $97.4 volumes and normal production levels vs prior year where we + 108% (in millions) experienced pandemic-related slowdowns and shutdowns; revenue up 32% from Q1 due t
Slide 6: Transaction Overview
– Transaction Overview ▪ Valued at $1.25 billion in all-cash transaction ▪ Plan to fund through combination of existing cash and newly issued debt ▪ HPC forecasting $744M of revenue and $115M of Adjusted EBITDA in 2021 ▪ Expect to achieve $40M+ of synergies after first full year of operation ▪ Payin
Slide 7: Key Strategic Benefits
– Key Strategic Benefits ▪ Gain significant size, scale and capabilities in IS and FS businesses ▪ Increase focus on higher margin Industrial Services (IS) offerings ▪ Expand Field Services (FS) business with strength in utility vertical ▪ Leverage material synergy and efficiency opportunities acros
Slide 8: Incineration Network Expansion – Kimball, NE
Incineration Network Expansion – Kimball, NE ▪ Plan to add 70,000-ton state-of-the-art incinerator to Kimball facility ▪ Kiln modeled after our El Dorado plant and will meet/exceed all state and federal emissions control standards ▪ Permitting process has begun on $180 million project ▪ Excellent re
Slide 9: Incineration Network Expansion – Kimball, NE
Incineration Network Expansion – Kimball, NE 9
Slide 10: Capital Allocation Strategy – Driven by ROIC
Capital Allocation Strategy – Driven by ROIC 1 2 ▪ Invest capex to drive growth Organic Growth Acquisitions Investments & Divestitures ▪ Evaluate acquisition and divestiture opportunities ▪ Execute authorized buyback plan 3 4 ▪ Assess current debt structure Share Debt Repurchases Repayment 10
Slide 11: Financial Overview
eT” Ee a ab FINANCIAL OVERVIEW 40 YEARS OF SUSTAINABILITY IN ACTION
Slide 12: Q2 Income Statement
Q2 Income Statement (in millions, except percentages and per share data) Q2 2021 Q2 2020 Revenues $926.5 $710.0 Cost of revenues $617.9 $470.7 Gross profit $308.6 $239.3 Gross margin % 33.3% 33.7% Selling, general and administrative expenses $124.1 $103.8 SG&A % 13.4% 14.6% Depreciation and amortiza
Slide 13: Balance Sheet Highlights
Balance Sheet Highlights (in millions) 6/30/21 3/31/21 12/31/20 Cash and short-term marketable securities $666.3 $570.7 $571.0 Accounts payable $249.2 $213.4 $195.9 Billed and unbilled receivables $718.8 $675.4 $667.2 Current and long-term debt $1,555 $1,556 $1,557 Environmental liabilities $205.9 $
Slide 14: Cash Flow Highlights
Cash Flow Highlights (in millions) Q2 2020 Q2 2021 Cash from operations $162.4 $139.8 Capital expenditures, net of disposals ($47.8) ($41.7) Adjusted free cash flow* $114.6 $98.1 Share repurchases $18.9 $0.0 * Please refer to the appendix in this presentation for a reconciliation to the nearest GAAP
Slide 15: Guidance (as of August 4, 2021)
Guidance (as of August 4, 2021) Full-Year 2021 (in millions) Range Net Income $159 to $193 Adjusted EBITDA* $620 to $650 Net Cash from Operating Activities $475 to $525 Adjusted Free Cash Flow* $285 to $315 * Please refer to the appendix in this presentation for a reconciliation of Adjusted EBITDA a
Slide 16: Appendix
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Slide 17: Non-GAAP Results Reconciliation
Non-GAAP Results Reconciliation (in thousands, except percentages) For the Three Months Ended For the Six Months Ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Net income $ 67,075 $ 29,023 $ 88,811 $ 40,595 Accretion of environmental liabilities 2,873 2,766 5,826 5,327 Stock-based com
Slide 18: Non-GAAP Results Reconciliation
Non-GAAP Results Reconciliation (in thousands, except per share amounts) For the Three Months Ended For the Six Months Ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Adjusted net income Net income $ 67,075 $ 29,023 $ 88,811 $ 40,595 Loss on sale of businesses — 184 — 3,258 Tax-related
Slide 19: Non-GAAP Results Reconciliation
Non-GAAP Results Reconciliation (in thousands) For the Three Months Ended For the Six Months Ended June 30, 2021 June 30, 2020 June 30, 2021 June 30, 2020 Adjusted free cash flow Net cash from operating activities $ 162,432 $ 139,805 $ 265,432 $ 173,486 Additions to property, plant and equipment (50
Slide 20: Non-GAAP Guidance Reconciliation
Non-GAAP Guidance Reconciliation For the Year Ending (in millions) December 31, 2021 Projected GAAP net income $159 to $193 Adjustments: Accretion of environmental liabilities 12 to 11 Stock-based compensation 16 to 18 Depreciation and amortization 290 to 280 Other expense, net 3 to 3 Interest expen
Slide 21: Questions?
QUESTIONS? 40 YEARS OF SUSTAINABILITY IN ACTION