Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — FY2016 Earnings Presentation
33 slides from Cleanaway Waste Management's earnings presentation, Aug 19, 2016
Slide 1: FY16 Results Presentation
Cleanaway Waste Management Limited For personal use only Australia’s leading total waste management services company FY16 Results Presentation For the twelve months ended 30 June 2016 19 August 2016 Vik Bansal Brendan Gill CEO and Managing Director Chief Financial Officer Making a sustainable future
Slide 2: Disclaimer
Disclaimer For personal use only • Forward looking statements – This presentation contains certain forward-looking statements, including with respect to the financial condition, results of operations and businesses of Cleanaway Waste Management Limited (“CWY”) and certain plans and objectives of the
Slide 3: 2016 – Building a Solid Foundation
2016 – Building a Solid Foundation For personal use only 3
Slide 4: Agenda
Agenda Page For personal use only Safety and Environmental 5 FY16 Financial Overview 6 Segment Performance and Margins 7 Group Income Statement – Statutory and Underlying Results 16 Cash Flow and Balance Sheet 17 Update on Strategic Initiatives 19 Summary 25 Outlook for FY17 26 Q&A Appendices 28 4
Slide 5: Safety and Environmental – Our objective is Goal Zero
Safety and Environmental – Our objective is Goal Zero For personal use only Total Recordable Injury Frequency Rate 30 26.6 25 20 -11.9% 16.7 15 12.6 10.1 10 8.9 5 0 FY12 FY13 FY14 FY15 FY16 Note – comparative periods have been adjusted to exclude divested businesses Numbers restated from those origi
Slide 6: FY16 Financial Overview
FY16 Financial Overview Underlying Results $ millions For personal use only FY16 FY15 change Financial – • REVENUE 1,455.1 1,384.9 5.1% Underlying • EBITDA 281.3 231.3 21.6% • EBIT 122.6 97.5 25.7% • Profit after income tax attributable to ordinary equity holders 63.3 45.7 38.5% • Basic earnings per
Slide 7: FY16 Underlying Performance Summary by Segment
FY16 Underlying Performance Summary by Segment For personal use only Segments Revenue Underlying EBITDA Underlying EBIT FY16 FY15 % change FY16 FY15 % change FY16 FY15 % change Solids – Collections 778.1 755.8 3.0% 149.8 138.2 8.4% 85.7 81.0 5.8% Solids – Post Collections 252.0 170.7 47.6% 87.9 59.8
Slide 8: FY16 Underlying Performance Summary – Margins
FY16 Underlying Performance Summary – Margins For personal use only Underlying EBITDA Margin Underlying EBIT Margin Segments Revenue % % FY16 FY15 FY16 FY15 FY16 FY15 Total Solids (incl. landfill levies) 1,030.1 926.5 23.1% 21.4% 11.0% 10.7% Total Solids (excl. landfill levies) 895.7 842.7 26.5% 23.
Slide 9: Solids – Collections
Solids – Collections Cleanaway has the largest solid waste services fleet and widest network across Australia For personal use only Largest network of collections Servicing 90+ municipal councils New 75,000 tonnes per annum vehicles operating from more across the country resource recovery centre tha
Slide 10: Solids – Collections Underlying Results
Solids – Collections Underlying Results Key Finance Measures For personal use only 75.7 73.4 74.1 Comparison $ million FY16 FY15 % changes FY16 v 2H16 v 2H16 v 64.8 Total 2H16 1H16 Total 2H15 1H15 FY15 1H16 2H15 Net external 19.1% 18.8% 19.7% 778.1 384.9 393.2 755.8 372.0 383.8 3.0% (2.1)% 3.5% 17.4
Slide 11: Solids – Post Collections
Solids – Post Collections Cleanaway has one of the strongest post collections asset bases in Australia For personal use only Growing network of transfer Landfill assets located in every mainland state of Australia generating over stations across the country 120 million m3 of landfill gas which is co
Slide 12: Solids – Post Collections Underlying Results
Solids – Post Collections Underlying Results Key Finance Measures For personal use only Comparison 44.5 $ million FY16 FY15 43.4 % changes 37.0 FY16 v 2H16 v 2H16 v Total 2H16 1H16 Total 2H15 1H15 FY15 1H16 2H15 Gross external 22.8 252.0 117.1 134.9 170.7 98.2 72.5 47.6% (13.2)% 19.2% revenue 77.1%
Slide 13: Australian Landfill Levies
Australian Landfill Levies $140.0 For personal use only $120.0 $100.0 $ per tonne $80.0 $60.0 $40.0 $20.0 $0.0 FY12 FY13 FY14 FY15 FY16 FY17 Brisbane Sydney Melbourne Adelaide Perth Total Landfill Levies Paid - $ millions $134.4 $86.0 $83.8 $71.1 $55.7 FY12 FY13 FY14 FY15 FY16 Note: Graph represents
Slide 14: Liquids and Industrial Services
Liquids and Industrial Services Cleanaway is the largest hydrocarbons recycling business in Australia and a leader in the overall liquids and For personal use only industrial services market Collecting and processing 130 Collecting and processing over Proving a wide range of million litres of minera
Slide 15: Liquids and Industrial Services Underlying Results
Liquids and Industrial Services Underlying Results Key Finance Measures For personal use only Comparison 31.8 30.7 A$ million FY16 FY15 26.8 % changes 24.0 FY16 v 2H16 v 2H16 v Total 2H16 1H16 Total 2H15 1H15 15.7% FY15 1H16 2H15 13.9% 12.7% Net external 11.1% 407.0 195.6 211.4 445.9 216.8 229.1 (8.
Slide 16: Group Income Statement – Statutory and Underlying Results
Group Income Statement – Statutory and Underlying Results $ million Statutory Results Underlying Adjustments Underlying Results For personal use only FY16 FY15 FY16 FY15 FY16 FY15 change Sales revenue external and other revenue 1,455.1 1,384.9 — — 1,455.1 1,384.9 5.1% Share of profits in continuing
Slide 17: Cash Flow
Cash Flow Key Finance Measures Key Points For personal use only $ million FY16 FY15 • Ratio of cash flow from operating activities Receipts from customers 1,602.2 1,518.6 to underlying EBITDA 95.3% (pcp: Payments to suppliers and employees (1,334.1) (1,284.7) 101.1%)2 Remediation of landfills (45.1)
Slide 18: Balance Sheet
Balance Sheet Key Finance Measures Key Points For personal use only $ million 30 June 16 31 Dec 15 30 June 15 • Deferred settlement liability represents Assets annual fixed payments relating to the Melbourne Regional Landfill discounted Cash and cash equivalents 48.3 35.3 37.0 to present value. Fixe
Slide 19: Update on Strategic Initiatives – Customer for Growth
Update on Strategic Initiatives Customer for Growth For personal use only The rollout of the Growth initiatives is accelerating Target Market Verticals • New National, Mid Market and SMS sales structures operational • Greater alignment between Solids and Liquids & Industrial Services sales 0% 1H16 p
Slide 20: Customer for Growth contd. – Single Brand
Update on Strategic Initiatives Customer for Growth contd. For personal use only Develop a Single Brand • New branding successfully launched on 1 February 2016 and proceeding as – Create Brand Equity planned • Supports simplification of organisational and operating structure and 1H16 realignment of
Slide 21: Continuous Improvement for Cost
Update on Strategic Initiatives Continuous Improvement for Cost For personal use only Net cost reductions achieved in FY16. Confident that by 30 June 2017 a run rate of $30 million pa in permanent cost reductions will be achieved Fit for Purpose Organisation – Decentralised, Empowered • Corporate of
Slide 22: Capital for Cash
Update on Strategic Initiatives Capital for Cash For personal use only Reduce our capital intensity – • FY16 capital expenditure of $153.5 million (including volume payments related to Capex in line with D&A Melbourne Regional Landfill) is below D&A for the year 1H16 • FY17 D&A expense expected to b
Slide 23: Capital for Cash contd.
Update on Strategic Initiatives Capital for Cash contd. For personal use only Landfill Remediation and • Forecast annual spending over the next five years has reduced: Rectification Spending • Actual spend in FY16 - $45.1 million ($59 million previously forecast) • Spend FY17 to FY20 - ~$40-45 milli
Slide 24: Clarity for Alignment
Update on Strategic Initiatives Clarity for Alignment For personal use only • Safety performance and employee engagement improvement to continue Instilling the Cleanaway Way of doing things in the organisation • Simplified and flatter organisation structure – decentralised but standardised to levera
Slide 25: Summary
Summary FY16 – Reset the business for continued growth For personal use only Strategic Plan completed and being implemented Operating Model, Operating Way, Fit for purpose organisation structure in place. Organisation wide metrics aligned through scorecards Name change and new brand launched
Slide 26: Outlook for FY17
Outlook for FY17 For personal use only Market conditions are expected to show little change from those experienced during the past year. However, based on the company wide initiatives we are undertaking, both our Solids and Liquids & Industrial Services segments should report increases in operationa
Slide 27: New Cleanaway Waste App
New Cleanaway Waste App For personal use only • Phase 1 of the new Cleanaway Waste App was launched on 2nd August 2016 • Provides real time information on all matters to do with waste • Available on both Apple and Android platforms 27
Slide 28: Appendices Index
Appendices Index Page For personal use only Statutory Profit Reconciliation to Underlying Profit 29 Group Underlying Income Statement Summary by Halves 30 Capital Structure – Net Finance Costs 31 Capital Structure – Debt 32 Reconciliation of Divisional Results to Statutory Segment Disclosures 33 28
Slide 29: Statutory Profit Reconciliation to Underlying Profit
Statutory Profit Reconciliation to Underlying Profit For personal use only A$ million FY16 Statutory Profit From After Income Tax (Attributable to Ordinary Equity Holders) 44.8 Costs associated with restructuring 21.1 Costs associated with rebranding 3.6 Other costs (0.3) Total Underlying Adjustment
Slide 30: Group Underlying Income Statement Summary by Halves
Group Underlying Income Statement Summary by Halves Comparisons A$ million FY16 FY15 For personal use only % changes FY16 v 2H16 v 2H16 v Total 2H16 1H16 Total 2H15 1H15 FY15 1H16 2H15 Sales revenue and other revenue 1,455.1 708.3 746.8 1,384.9 695.4 689.5 5.1% (5.2)% 1.9% Total EBITDA 281.3 144.1 1
Slide 31: Capital Structure – Net Finance Costs
Capital Structure – Net Finance Costs A$ million Statutory Underlying For personal use only FY16 FY15 FY16 FY15 Cash Interest expense Bank interest 11.2 6.5 11.2 6.5 Commitment fees 1.5 1.6 1.5 1.6 Guarantee/Bond fees 1.1 1.2 1.1 1.2 USPP Notes 6.1 6.0 6.1 6.0 Total interest expense 19.9 15.3 19.9 1
Slide 32: Capital Structure – Debt
Capital Structure – Debt Key Finance Measures – Net Debt Composition Key Points For personal use only A$ million 30 Jun 16 31 Dec 15 30 Jun 15 • Net debt to underlying EBITDA ratio 1.11x Current interest bearing liabilities 0.8 0.7 0.7 (pcp:1.36x) Non-current interest bearing liabilities 358.6 359.7
Slide 33: Reconciliation of Divisional Results to Statutory Segment Disclosures
Reconciliation of Divisional Results to Statutory Segment Disclosures Total Solids Solids Post Eliminations Total Corporate Eliminations A$ million Liquids Associates GROUP For personal use only Collections Collections – Solids Solids & Other – Group & Ind Serv Revenue Sales revenue – external 778.1
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