Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — H1 FY24 Earnings Presentation
33 slides from Cleanaway Waste Management's earnings presentation, Feb 16, 2024
Slide 1: FY24 half-year results presentation
Cleanaway Waste Management FY24 half-year results presentation Limited for the six months ended 31 December 2023 Australia’s leading total waste management services provider 16 February 2024 Presenters Mark Schubert, CEO and Managing Director Paul Binfield, CFO
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 6 months ended 31 December 2023 and associated results announc
Slide 3: Agenda
Agenda 1. 1H FY24 Overview 2. Financial Performance 3. Segment Review 4. Strategy Progress & FY24 Outlook 5. Q&A
Slide 4: Highlights
Highlights Continued strong EBIT growth and strategic momentum • Delivered strong financial performance driven by new business, organic growth, the recovery of QLD Solids and emerging turnaround in Health Services, and operational discipline • Expanded EBIT margin through embedding a branch-led cult
Slide 5: Financial Highlights
Financial Highlights Strong financial result driven by underlying business improvement, strategy execution and headwinds resolving Net Revenue Underlying EBITDA Underlying EBIT $ 1,587.1m $ 356.5m $ 173.9m 7.9% 10.6% 25.7% on 1H23 on 1H23 on 1H23 Net revenue growth $116.0m EBITDA margin 22.5%,
Slide 6: Foundations: Safety and Environment
Foundations: Safety and Environment Progressing our 5-year HS&E strategy and execution of transformation plan 1H FY24 achievements • Culture: Introduced robust HSE performance Personal safety metric – Total Recordable Injury Frequency Rate (TRIFR) improvements and cultural change framework % • Leade
Slide 7: Foundations: People
Foundations: People Evolving our culture to deliver Blueprint 2030 as focus shifts to improving retention and productivity Stabilised workforce will increase productivity • Vacancies slightly above historical run rate of 300 - 400 12-month rolling voluntary turnover • Focus on onboarding and support
Slide 8: Financial Performance
Financial Performance CLEANAWAY)
Slide 9: Financial Performance Summary
Financial Performance Summary Strong financial result driven by underlying business improvement, strategy execution and headwinds resolving Underlying Statutory $ (million) 1H24 1H23 Variance 1H24 1H23 Variance Gross Revenue 1,871.6 1,777.9 5.3% 1,871.6 1,777.9 5.3% Net Revenue 1,587.1 1,471.1 7.9%
Slide 10: Net Operating Cash Flow
Net Operating Cash Flow Strength of underlying business evident in steady cashflow during a period of higher interest rate payments Net Operating Cash Flow ($ million) Commentary 257.9 256.8 275.0 • Net cash from operating activities increased by $26.2 235.2 27.2 million 11.6 54.5 225.0 + Underlying
Slide 11: Capital Expenditure
Capital Expenditure FY24 total capital expenditure guidance remains $430-$450m, with D&A expected to be $370-$390m Investing in a growing business Total capital expenditure1 ($m) • FY24 growth capex guidance remains $150 million 231.6 199.7 • Continually enhancing our capital allocation processes 83
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 Strong growth in NSW/ACT and QLD Solids, lower volumes in C&D and landfills Financial performance Net Revenue EBITDA EBIT ₊ NSW/ACT Solids driven volume growth and actioned $1,092.4m $299.6m UP 11.8% $159.0m UP 27.7% initiatives UP 5.2% ₊ QLD Solids recovery exceeding expectatio
Slide 14: Solid Waste Services (cont'd)
Solid Waste Services (cont’d) Branch-led initiatives delivering earnings growth and enables frontline managers to focus on returns QLD Solids turned around earlier than expected 1H24 landfill EBIT up on pcp, despite lower volumes New management team and fleet1 post 2022 floods • Revenue and EBITDA
Slide 15: Liquid Waste & Health Services
Liquid Waste & Health Services Continued growth in LTS; Health Services returned to profitability Financial performance Net revenue EBITDA EBIT ₊ LTS growth underpinned by large scale mining $348.2m $52.0M $28.9m rehabilitation projects, and recycling of expired hand UP 13.8% UP 7.7% UP 8.6% sanitis
Slide 16: Industrial & Waste Services
Industrial & Waste Services Doubled proportion of earnings from Tier 1 Oil & Gas and Resources companies Financial performance Net revenue EBITDA EBIT ₊ Strong revenue and EBIT growth driven by increased $210.5m UP 15.3% $28.6m UP 12.6% $15.6m UP 25.8% activity with existing customers and recently a
Slide 17: Strategy Progress and FY24 Outlook
Strategy Progress and FY24 Outlook
Slide 18: Blueprint 2030 Growth Strategy
Blueprint 2030 Growth Strategy Building a safe and resilient platform to deliver sustainable customer solutions and growth Sustainable Customer Solutions + Greater Market Share Strategic Infrastructure Growth Operational Excellence + Accretive Investments + Improved Profitability Footprint GDP+ Grow
Slide 19: Operational Excellence: Restoration of Performance
Operational Excellence: Restoration of Performance Foundations in place to restore performance in QLD Solids, Health Services and labour QLD Solids Health Services Labour • FY22: SE QLD floods closed New Chum • FY20 - FY22: COVID • FY22 - FY23: Tight market conditions led to landfill and a portion o
Slide 20: Operational Excellence: Operational Efficiency
Operational Excellence: Operational Efficiency Data & Analytics: enabling branch and sales leaders to drive efficiencies and financial returns in real time Customer Labour Route Subcontracted Profitability Management Optimisation Services Provides transparency on Provides daily labour Provides key m
Slide 21: Delivering Low Carbon, High Circularity Solutions
Delivering Low Carbon, High Circularity Solutions Pursuing emissions reduction for the benefit of Cleanaway and our customers Strategic Infrastructure Landfill gas HVO100 Energy-from Circular Plastics VIC CDS capture -waste Australia (PET)1 • Well positioned to • Opened Altona facility • Launched Vi
Slide 22: FY26 Financial Ambition and Scorecard
FY26 Financial Ambition and Scorecard Blueprint 2030 aligned priorities Capex Dec-23 • Driving operational efficiency across SBU’s including: ─ Growth in productivity of Queensland Network (slide 14 and 19) Low ─ Restoration of Health performance and business transformation (slide 15 and 19) Low ─ D
Slide 23: FY24 Outlook And Priorities
FY24 Outlook And Priorities FY24 outlook • Continue to expect FY24 EBIT of approximately $350m and depreciation and amortisation expenses of ~$370m - $390m. 2H FY24 priorities • HS&E: Continue to deliver the 5-year transformation plan • Labour: Focus on first-year retention and productivity improvem
Slide 24: Questions
Questions
Slide 25: Appendices
Appendices [Sinn ; CLEANAWAY)
Slide 26: Statutory NPAT to underlying NPAT reconciliation
Statutory NPAT to underlying NPAT reconciliation $ (million) H1 FY24 Commentary Statutory NPAT attributable to ordinary equity holders 73.2 • Costs of $1.3 million associated with the integration of Global Renewables Holdings Pty Ltd Pre-tax adjustments: were incurred during the period Integration c
Slide 27: Group Income Statement – Statutory and underlying results
Group Income Statement – Statutory and underlying results Statutory Result Adjustments Underlying Result $ (million) H1 FY24 H1 FY23 H1 FY24 H1 FY23 H1 FY24 H1 FY23 Sales revenue external and other revenue (Gross Revenue) 1,871.6 1,777.9 - - 1,871.6 1,777.9 Share of losses from equity accounted inve
Slide 28: Balance Sheet
Balance Sheet $ (million) 31-Dec-23 30-Jun-23 31-Dec-22 ASSETS Cash and cash equivalents 60.6 102.1 124.9 Trade and other receivables 589.1 551.7 588.4 Inventories 53.3 31.2 34.3 Property, plant and equipment 1,724.1 1,577.9 1,505.5 Right-of-use assets 616.3 609.4 597.4 Intangible assets 3,085.2 3,0
Slide 29: Cash Flow
Cash Flow $ (million) H1 FY24 H1 FY23 Underlying EBITDA 356.5 322.2 Cash flow of underlying adjustments (23.5) (45.6) Other non-cash items (2.5) (0.6) Payments for rectification and remediation of landfills (19.1) (11.1) Other changes in working capital (37.1) (24.3) Net interest paid (40.6) (28.7)
Slide 30: Net Finance Costs
Net Finance Costs Net finance costs $ (million) H1 FY24 H1 FY23 Cash interest expense Bank interest and leases 29.6 22.2 Commitment and Guarantee fees 2.0 2.7 USPP Notes 11.6 7.6 Interest received (1.6) (1.4) Net cash interest expense 41.6 31.1 Non-cash finance costs Amortisation of capitalised borr
Slide 31: Balance Sheet, Liquidity and Covenants
Balance Sheet, Liquidity and Covenants Overview Key ratios • Strong balance sheet positioned for growth $ million H1 FY24 H1 FY23 • At 31 December 2023, the Group had $320.4 million headroom under committed debt facilities Net Debt1 1,668.4 1,490.7 • Leverage ratio2 of 1.98x Gearing ratio 36.0% 33.0
Slide 32: 1H24 Underlying Segment Disclosures
1H 24 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 1,329.3 203.5 311.6 - - - 1,844.4 Other revenue 16.5 - 10.7
Slide 33: Questions
Questions For further information contact: Josie Ashton, Head of Investor Relations +61 416 205 234 josie.ashton@cleanaway.com.au
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