Gfl Environmental Inc · TSX:GFL
Gfl Environmental — Q4 2020 Earnings Presentation
23 slides from Gfl Environmental's earnings presentation, Feb 23, 2021
Slide 1: Q4 2020 Investor Review, 2021 Guidance & Outlook Through 2023
Q4 2020 Investor Review, 2021 Guidance & Outlook Through 2023 February 23, 2021
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 Statements This presentation contains “forward-looking statements” within
Slide 3: 2020 Results: Delivering on our 2020 Commitments
2020 Results Expand Adjusted (2) (3) (4) (1) Strategic Acquisitions Cost of Debt Delevering EBITDA Margins Solid Waste 25.7% 72% 6.4% 7.7X $3,970M 4.5% 4.6X 24.7% $730M FY19 FY20 FY19 FY20 FY19 FY20 FY19 FY20 • 100 bps expansion • 22 acquisitions • Opportunistic refinancings • IPO proceeds used to d
Slide 4: Q4 Revenue Growth
Q4 Revenue Growth Solid Waste Three months ended December 31, 2020 Contribution Total • 4.0% positive organic growth (150 bps sequential Organic Foreign from Growth Exchange Revenue increase) Acquisitions Growth Solid waste: o 3.6% net price and surcharges partially offset by Canada 3.6% 6.3% 0.0%
Slide 5: Operating Segment Breakdown
Operating Segment Breakdown (C$ millions unless otherwise noted) Solid Waste Three months ended December 31, 2020 2019 • 240 bps margin expansion Adjusted Adjusted Adjusted Adjusted o Margin improvement in both geographies Revenue (1) EBITDA Revenue (1) EBITDA EBITDA EBITDA (2) Margin(2) Margin o
Slide 6: Cash Flow Highlights
Cash Flow Highlights (C$ millions unless otherwise noted) Adjusted Free Cash Flow Three months ended December 31, Change • 101% increase in Adjusted Free Cash Flow as compared 2020 2019 $ % to fourth quarter of 2019 Net cash from operating activities 163.5 133.0 30.5 22.9% • Results inclusive of n
Slide 7: Net Leverage and Liquidity
Net Leverage and Liquidity (C$ millions unless otherwise noted) Delevered balanced sheet Q4-20 at • IPO proceeds used to pay down debt Q4-20 (1) Q4-19 Q4-19 F/X • Historically H1 is a use of cash driven by seasonality and Revolver 148.8 151.0 - front end loading of capital expenditures Term loan f
Slide 8: 2021 Guidance
2021 Guidance
Slide 9: Committed Management Team
Committed Management Team Patrick Dovigi Solid Waste Incentive 72% • Founder, CEO Structures • One of the single largest shareholders Aligned with • Long term focus Shareholders Other NEOs • Diversified skill sets with 26 years average relevant experience • Variable performance based compensation re
Slide 10: Creating Long Term Shareholder Value
Creating 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 to lead in sustainable alternat
Slide 11: 2021 Guidance – Revenue Bridge
2021 Guidance – Revenue Bridge M&A Roll Over F/X 21.0% - 22.0% (4.0%) (1) Liquid & Infrastructure $5,210 – Solid Price Solid Volume 1.0% - 3.0% 5,310 $5,040 – 3.5% - 4.0% 0.5% - 1.0% 5,140 $4,196 2020 2021 @ 2021 2021 Actual Price Volume Liquid & M&A Roll Over 2021 @ F/X 2021 Outlook Actuals Constan
Slide 12: 2021 Guidance
2021 Guidance FY20 FY21 YoY (C$ millions unless otherwise noted) Actuals Guidance Growth Revenue • Solid waste 3.5% - 4.0% price, 0.5% - 1.0% volume $5,040 – • Liquid and Infrastructure 1.0% - 3.0% $4,196 20% – 22% • M&A Roll over 21.0% - 22.0% 5,140 • F/X (4.0%)(1) Adjusted EBITDA(2) • Adjusted EBI
Slide 13: Potential M&A Landscape
Potential M&A Landscape Integration of Recent Acquisitions Solid Waste Robust M&A 72% • Integration well underway Pipeline • WM/ADS integration substantially completed, WCA scheduled for early Q2-21 Provides • Operating results to date at or above expectations Potential • Cost savings realization on
Slide 14: 2021 – Upside Opportunities
2021 – Upside Opportunities Adjusted Adjusted (C$ millions unless otherwise noted) Revenue EBITDA(1) FCF(1) Potential Incremental Acquisitions • Robust pipeline • Potential to deploy $350M to $500M • 7.0x – 7.5X valuations, 25% EBITDA margin $200 – 280 $50 – 70 $35 – 40 • Substantially self financed
Slide 15: 2021 Adjusted FCF – Potential Run Rate
2021 Adjusted FCF – Potential Run Rate Adjusted FCF Bridge Potential 2021 Run Potential Redeployment of Rates Inclusive of Potential Incremental Potential Refinancing Capital Acquisitions $10 - 15 Upside $35 - 40 $20 - 30 Opportunities(1) Revenue $5,450M $530 - 580 $465 - 495 Adj. EBITDA(2) $1,455M
Slide 16: 2022 & 2023 Potential Growth Opportunities
2022 & 2023 Potential Growth Opportunities Adjusted Adjusted (C$ millions unless otherwise noted) Revenue EBITDA(1) FCF(1) Organic Revenue Growth • ~4.5% top line growth • 3.5% - 4.0% price, 0.5% - 1.0% volume • Continued EBITDA margin expansion $450 – 475 $145 – 155 $100 – 110 • 35 – 45 bps solid,
Slide 17: 2023 Adjusted FCF – Potential Run Rate
2023 Adjusted FCF – Potential Run Rate Adjusted FCF Bridge Potential 2023 Run Potential Potential Rates Inclusive of Incremental Acquisitions Refinancing $20 - 30 Organic Revenue Upside Growth $55 - 80 $100 - 110 Opportunities(1) Revenue $6,405M $705 - 800 Adj. EBITDA(2) $1,730M $530 - 580 Adj. FCF
Slide 18: Summary
Summary Continue to prioritize the health and well-being of GFL’s workforce and communities amidst COVID-19 Solid Waste 72% Delivered on 2020 expectations and GFL well positioned for continued growth GFL’s strength and resilience underpinned by focus on innovation and dynamic waste management
Slide 19: Appendix
Appendix
Slide 20: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (C$ millions unless otherwise noted) 1. Gain on foreign exchange: Consists of (i) non-cash gains and losses on foreign exchange and interest rate swaps entered into in connection with our debt instruments, Three months ended Year ended and (ii) gains and losses attribu
Slide 21: 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 associated with the extinguishment of the PIK Notes, the 2022 Notes and the 2023 Notes, the Three months ended Year ended termination of the swap arrang
Slide 22: Adjusted Net Income (Loss) Reconciliation
Adjusted Net Income (Loss) Reconciliation (C$ and shares in millions unless otherwise noted) 1. Amortization of intangibles: This is a non-cash item and consists of the amortization of intangible assets such as customer lists, municipal contracts, non-complete agreements, Three months ended Year end
Slide 23: Definitions
Definitions Adjusted EBITDA: Is calculated by adding and deducting, as applicable, 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 performance