Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — FY2023 Earnings Presentation
30 slides from Cleanaway Waste Management's earnings presentation, Aug 24, 2023
Slide 1: FY23 results presentation
Cleanaway Waste Management FY23 results presentation Limited for the year ended 30 June 2023 Australia’s leading total waste management services provider 24 August 2023 Presenters Mark Schubert, Managing Director & CEO Paul Binfield, Chief Financial Officer
Slide 2: Disclaimer
Disclaimer This presentation contains summary information about the current activities of Cleanaway Waste Management Limited (“CWY”) and its subsidiaries that should be read in conjunction with CWY's Consolidated Financial Report for the financial year ended 30 June 2023 and associated results annou
Slide 3: Agenda
Agenda 1. Highlights 2. Progress on key challenges 3. Financial Performance Summary Sustainable 4. New Chum Customer 5. Capital Expenditure Solutions 6. Segment Review 7. Greenhouse Gas Emissions 8. Outlook C u c ti v i t y 9. Mid-term financial ambition re 10. Appendices ltu u d P ro & Ze r o H a r
Slide 4: Highlights
Highlights Financial • Strong revenue growth across all segments reflecting ― organic growth, contract price increases and fuel NET surcharges EBIT NPAT ― contribution from recent acquisitions REVENUE $302.2M $148.6M • Revenue growth, easing cost inflation and emerging $2,966M UP 17.5% UP 2.5% effic
Slide 5: Progress on key challenges
Progress on key challenges Performance improvement plans in place to support business units … Labour Availability and Productivity Health Services ✓ Labour efficiency & productivity and female representation ✓ Victorian Autoclaves installed and operational improving with voluntary turnover slowing ✓
Slide 6: Financial Performance Summary
Financial Performance Summary Strong financial performance with operating efficiency beginning to emerge Underlying Statutory $ (million) FY23 FY22 Variance FY23 FY22 Variance Gross Revenue 3,558.8 3,006.2 18.4% 3,558.8 3,006.2 18.4% Net Revenue 2,965.8 2,603.8 13.9% 2,965.8 2,603.8 13.9% EBITDA 668
Slide 7: Underlying EBIT (FY22 vs FY23)
Underlying EBIT (FY22 vs FY23) Delivered on guidance despite headwinds … SWS LW&HS IWS Commentary • GRL initial 10-month contribution • Lower Commodities prices through FY23 with higher rebates to customers in the first half compressing margins • Residual post flooding impacts in QLD Network, includ
Slide 8: Underlying EBIT (H1 FY23 vs H2 FY23)
Underlying EBIT (H1 FY23 vs H2 FY23) Momentum has continued into the second half … SWS LW&HS IWS Commentary • GRL six months contribution compared to four months in H1 • Lower Commodities prices through FY23 with H2 rebate decrease restoring margin compression experienced in H1 • Performance restora
Slide 9: Statutory NPAT to Underlying NPAT Reconciliation
Statutory NPAT to Underlying NPAT Reconciliation $ (million) FY23 Commentary Statutory NPAT attributable to ordinary equity holders 21.6 • Alternate disposal costs in Health Services Pre-tax adjustments: following loss of the hammer mill (clinical waste Additional alternative medical waste processin
Slide 10: New Chum
New Chum Preparing for residual airspace cell construction and end-of-life remediation Existing Airspace Proposed Height Extension • Awaiting approval from Ipswich City Council to • Court appeal ultimately unsuccessful and further appeal not complete construction of Cell 3B being pursued ― c.250k cu
Slide 11: Capital Expenditure
Capital Expenditure Total Capital Expenditure ($ million) Commentary 431.0 339.8 45.1 • FY23 maintenance capex of $275 million reflects a larger and 321.6 growing business and at c.75% of D&A represents a more 93.6 58.6 sustainable run rate (c.65% of D&A historically) 385.9 • FY23 HS&E capex increas
Slide 12: Segment Review
Segment Review Cleanaway comprises three segments, encompassing ten strategic business units, designed to create value through customer proximity while leveraging centralised enterprise services Solid Waste Services Liquid Waste & Health Services Industrial & Waste Services 6 3 1 Business Business B
Slide 13: Solid Waste Services
Solid Waste Services Financial performance NET ₊ Full year SRN contribution and initial 10-month GRL EBITDA EBIT REVENUE contribution $2,091.7M $562.7M $278.1M UP 19.9% UP 22.1% ₊ Landfill gas capture and environmental benefits UP 15.0% (PCP $469.4M) (PCP $227.8M) ₊ Contracted price increases (labou
Slide 14: Liquid Waste & Health Services
Liquid Waste & Health Services Financial performance ₊ Increased project work in Liquids, partially offset by REVENUE EBITDA EBIT freight and labour costs ─ Strain on Health Services network due to hammer $610.6M $92.4M $48.8M UP 10.9% DOWN 4.0% DOWN 7.9% mill outage/autoclave installation and assoc
Slide 15: Industrial & Waste Services
Industrial & Waste Services Financial performance ₊ Strong revenue performance across most regions driven REVENUE EBITDA EBIT by increased activity with existing customers and new contract wins $375.8M $52.7M $26.5M UP 14.4% UP 11.7% UP 33.2% ₊ Earnings improvement from strong contract (PCP $328.6M)
Slide 16: Landfill Gas Capture and Greenhouse Gas Emissions
Landfill Gas Capture and Greenhouse Gas Emissions Set 1.5°C aligned GHG reduction targets and linked methane emissions to Executive remuneration... FY23 Progress Maximising benefits Combined (CO2, CH4, N2O) NGERs emissions vs. combined net-emissions target (CO2e) • Reduced CO2-e emission by 117k ton
Slide 17: FY24 Outlook
FY24 Outlook • Strong momentum and stability in the business into FY24 • Expecting the impacts of inflation and higher interest rates to taper over the year • With good progress made on key headwinds and operational excellence embedded across the business, operational efficiency is emerging • Future
Slide 18: Mid-term Financial Ambition
Mid-term Financial Ambition
Slide 19: Financial Ambition and Scorecard
Financial Ambition and Scorecard Blueprint2030 aligned priorities Capex • Driving operational efficiency across SBU’s including: ─ Growth in productivity of Queensland Network Low ─ Restoration of Health performance and business transformation Low ─ Deliver group-wide labour efficiency and productiv
Slide 20: Financial Ambition – Capital Expenditure Envelope
Financial Ambition – Capital Expenditure Envelope FY24-26 growth capex of c.$150m p.a. together with sustainable maintenance capex will deliver… Allocating Growth Capex to maximise shareholder returns • Good visibility over pipeline of Blueprint 2030 opportunities • Applying a disciplined approach t
Slide 21: Questions
Questions For further information contact: Richie Farrell, Head of Investor Relations +61 409 829 014 Richie.Farrell@cleanaway.com.au
Slide 22: Appendices
Appendices Sinn CLEANAWAY)
Slide 23: Disciplined Capital Allocation Framework to Drive Improved Returns
Disciplined Capital Allocation Framework to Drive Improved Returns Commentary • Commitment to maintaining a strong balance Optimise operational Effective working Improve capital efficiency capital management efficiency sheet • Applying a disciplined approach to capital Strong Operating Cash Flow exp
Slide 24: Group Income Statement – Statutory and Underlying Results
Group Income Statement – Statutory and Underlying Results Statutory Result Adjustments Underlying Result $ (million) FY23 FY22 FY23 FY22 FY23 FY22 Sales revenue external and other revenue (Gross Revenue) 3,558.8 3,006.2 - - 3,558.8 3,006.2 Share of losses from equity accounted investments (0.7) (1.1
Slide 25: FY23 Underlying Segment Disclosures
FY23 Underlying Segment Disclosures Solid Waste Industrial & Liquid Waste Equity Corporate & Eliminations Group $ (million) Services Waste & Health Accounted Other – Group Result Services Services Investments Revenue Revenue from customers 2,601.7 364.8 540.6 - - - 3,507.1 Other revenue 30.6 - 21.1
Slide 26: Strong Net Operating Cash Flow
Strong Net Operating Cash Flow Operating Cash Flow ($ million) Commentary 466.3 481.8 • Strong net operating cash flow, increasing by $15.5 424.4 million ₊ Underlying EBITDA ─ Interest payments and cash outflows attributable to underlying adjustments • Credit quality of the receivables ledger remain
Slide 27: Cash Flow
Cash Flow $ (million) FY23 FY22 Underlying EBITDA 668.1 581.6 Cash flow of underlying adjustments (79.6) (49.5) Other non-cash items (0.5) (0.9) Payments for rectification and remediation of landfills (21.9) (19.3) Other changes in working capital (10.2) (0.6) Net interest paid (64.7) (38.5) Tax pai
Slide 28: Net Finance Costs
Net Finance Costs Net finance costs Commentary $ (million) FY23 FY22 • Unwind of discount on provisions and other liabilities (non-cash Cash interest expense Bank interest and leases 47.5 27.2 interest expense) represents the difference in their present Commitment and Guarantee fees 4.8 4.5 value at
Slide 29: Balance Sheet and Liquidity
Balance Sheet and Liquidity Overview Key Debt Facilities • At 30 June 2023, the Group had $504.5 million of headroom 30 June under committed debt facilities $ million 2023 2022 Leases 638.7 640.9 • Completed strongly supported $400 million equity raise in USPP Notes 348.3 351.9 August/September 2022
Slide 30: Balance Sheet
Balance Sheet $ (million) 30 Jun 23 30 Jun 22 ASSETS Cash and cash equivalents 102.1 66.5 Trade and other receivables 551.7 532.5 Inventories 31.2 26.7 Property, plant and equipment 1,577.9 1,434.5 Right-of-use assets 609.4 614.7 Intangible assets 3,072.5 3,060.3 Other assets 128.5 113.5 Total Asset
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