Environmental Group Limited · ASX:EGL
Environmental — FY2024 Earnings Presentation
45 slides from Environmental's earnings presentation, Aug 22, 2024
Slide 1: The Environmental Group Limited FY24 Financial Results presentation
The Environmental Group Limited FY24 Financial Results presentation August 2024
Slide 2: Disclaimer
Disclaimer The Environmental Group Limited advises that these presentation slides contain forward looking statements which may be subject to significant uncertainties outside of EGL’s control. No representation is made as to the accuracy or reliability of forward-looking statements or the assumption
Slide 3: Agenda
Agenda 01 Overview 02 Financial Results 03 Operating Units 04 Outlook 05 Questions 3
Slide 4: Engineering a Sustainable Future
Engineering a Sustainable Future to enhance the circular economy through strong ESG principles. 4
Slide 5: Group operating units
Baltec IES improves the EGL Energy designs, installs, EGL Clean Air encompasses EGL Water offers advanced EGL Waste specialises in flexibility of gas turbines to and provides preventative the design, manufacturing patented technology innovative recycling solutions support renewable energy maintenanc
Slide 6: Key Highlights FY24
Key Highlights FY24 01 02 03 04 05 Revenue grew Normalised Guidance for Over 50% of our Safety record by 18.8% on the EBITDA up by normalised EBITDA revenue is now 359,000 hours prior 51.7% to to increase recurring, largely worked with zero comparable $10.1M with approximately 25% service & LTI’s. p
Slide 7: Financial Results
02 Financial Results 7
Slide 8: FY24 Financial Results – underlying
FY24 Financial Results – underlying* $98.3M $10.1M $7.6M 18.8% Increase in EBITDA up 51.7% EBIT up 52.8% Revenue on FY23 before significant before significant items on FY23 items on FY23 $4.4M $5.0M $10.1M Net Profit after tax Undrawn working Net cash on hand up 68% capital facility *Underlying prof
Slide 9: FY24 Financial Results Commentary
FY24 Financial Revenue Results Revenue up by 18.8% on the prior comparable period (pcp). Accelerating growth on 1H24 while improving margins across Commentary $98.3M the business. EBITDA before significant items up 51.7% delivering on EBITDA strategy of process improvement and recognising the value
Slide 10: FY24 Financial Results Commentary
FY24 Financial NPAT Results Profit from ordinary activities $4.4M up 68% on the pcp at a Commentary $4.4M tax rate of 35%. Operating Cash Flow Operating cash flow was $4.2M prior to $2.8M in working capital funding for Airtight Solutions post completion of the $4.2M acquisition, the working capital
Slide 11: Growth in Earnings
Growth in Earnings Normalised EBITDA $11 Millions $10.10 Compound Annual $10 Growth 47% for the last 3 years $9 $8 $7 $6.66 $6 $5 $4.39 $4 $3.27 $3 FY21 FY22 FY23 FY24 11 *Underlying profits excludes FX Losses $163K, Performance Rights $158K, Redundancy $41K, Integration costs $88K.
Slide 12: Operating Units
03 Operating Units 12
Slide 13: The Environmental Group Limited
The Environmental Group Limited
Slide 14: Baltec IES
Revenue Baltec Inlet & Exhaust Systems (Baltec IES) FY24 $27.1M provides a range of specialist services to the global gas turbine power industry as it moves FY23 $20.1M to support renewable energy. Up 34.7% • The gas turbine market is changing requiring the EBITDA conversion of base load power plant
Slide 15: FY24 Results Commentary
FY24 RESULTS COMMENTARY • Revenue growth accelerated in the second half of the year driven by the first half record sales. • Management focus on margin and process improvement led to the strong improvement with EBITDA margins increasing from 7.8% pcp to 17.7%. • Noise attenuation is a growing indust
Slide 16: Parts List
Parts List ly tem Part Number 4 1 Access Systems - Inlet FEGL 2m 3 Filter Module Z BALTEC 4 Inet Ducting 16 5 Inlet Silencer 6 Acoustic Enclosure 7 Inlet Expansion Joint 14 8 Gas Turbine 8 Exhaust Ducting 13 "1 10 Diverter Damper 11. Guillotine Damper 12 Exhaust Expansion Joint 12 13° Exhaust Silenc
Slide 17: Key Products
Key Products Diverter Damper Inlet Filter Silencer Bypass & HRSG Guillotine Heating & Cooling Exhaust System Damper Systems 17
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03 18
Slide 19: EGL Energy
Revenue EGL Energy offers an service network across FY24 $37.9M Australia providing 24/7 sales, service, FY23 $36.9M maintenance and repairs of boilers, gas fired equipment and other OEM equipment optimising Up 2.7% energy efficiency. • Our design is the most energy efficient water tube EBITDA boile
Slide 20: FY24 Results Commentary
FY24 RESULTS COMMENTARY • Margin improved significantly with the increased level of service work, while at the same time new boilers sales remained very strong. • Our increased installed capacity grows recurring revenue. • Securing the national distribution for Fulton products in Australia, a worldw
Slide 21: Key Products
Key Products Industrial Steam Industrial Package Large Commercial Hot Boiler Boiler Water Boilers Thermal Oil Heaters Biomass Steam & Hot Vertical Steam Boiler Water Generation 21
Slide 22: EGL Clean Air
G; EGL SOF CLEAN AIR
Slide 23: EGL Clean Air
EGL Clean Air provides engineering, supply, installation, commissioning and ongoing service support for a wide range of Industrial Air Pollution Control Systems. Technologies include: For control of all emissions to air, including: • Wet & Dry Scrubbers • Gaseous pollutants • Bag Filters • Mists and
Slide 24: TAPC
Revenue FY24 $17.4M TAPC designs, manufactures and services flue gas FY23 $17.0M treatment systems which prevent harmful contaminants being discharged into the Up 2.6% atmosphere. EBITDA Key offering FY24 $2.3M • Leaders in off gas scrubbing systems for rare earths and lithium refineries. FY23 $2.9M
Slide 25: FY24 Results Commentary – TAPC
FY24 RESULTS COMMENTARY – TAPC • Margins declined in the second half with several projects going on hold or being postponed. • Growth in critical metals (or rare earths refining) continues with some significant tenders currently in the pipeline. • Servicing of plants and spares organically grew reve
Slide 26: Airtight Solutions
Revenue FY24 $15.5M AIRTIGHT SOLUTIONS – acquired May 23 Airtight’s key offer includes Dust & Fume control by designing, installing, and maintaining air pollution control equipment, Waste-to-Energy via extensive range of waste reduction technologies and after sales servicing. EBITDA • Airtight serve
Slide 27: FY24 Results Commentary – Airtight Solutions
FY24 RESULTS COMMENTARY – Airtight Solutions • Slightly behind expectations largely due to the significant decline in the joinery sector with several major manufactures closing during the period impacting volumes. • The result was impacted by costs associated with transferring Airtight onto our syst
Slide 28: Key Products
Key Products Dry Scrubber Wet Chemical Particulate Dust & Fume Scrubber Scrubber / Cyclones Collectors Fabric Filter Electrostatic Flue-Gas Modular Duct & Hose (Baghouse) Precipitators Desulphurisation Systems 28
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Slide 30: EGL Waste
EGL Waste division brings together our service lines to Revenue provide integrated solutions to the waste industry. FY24 $0.8M The National Waste Policy Action Plan requires an 80% average resource recovery rate from all waste streams following the waste FY23 $4.8M hierarchy by 2030. That is an incr
Slide 31: FY24 Results Commentary
FY24 RESULTS COMMENTARY • Our offering to the industry is continuing to grow through not only the sales of Turmec recycling plants, but also with our provision of servicing, maintenance and spares which was launched this year. • Though we did not sell a new plant during this period the revenue and e
Slide 32: Waste streams
Municipal Solid Commingled or Construction & Waste (MSW) Mixed Dry Recycling Demolition (C&D) Construction & Industrial (C&I) Refuse Derived Fuel Waste to Energy Rubber (RDF) Solid Recovered Fuel (SRF) 32
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Slide 34: EGL Water division
EGL Water division has enhanced patented technology designed to protect our environment by the removal of Per- and polyfluoroalkyl chemical substances (PFAS) from contaminated water. • PFAS was primarily used in aircraft fire fighting as a fire retardant however its use expanded into plastics and cl
Slide 35: PFAS Separation from water, soils & biosolids
PFAS Separation from water, soils & biosolids • Society and industry are aligning in their need to remove PFAS from the environment. • Our technology is effective but importantly can be provided at a low operating and capital cost, with no additional waste streams generated through our process. • EG
Slide 36: FY24 Commentary
FY24 COMMENTARY • EGL Water has continued to progress forward with our first commercial PFAS separation plant, all documentation required is fully submitted to the EPA to obtain license amendments to operate at the liquid waste facility in Melbourne. • While this process has taken longer than expect
Slide 37: PFAS removal process
Effectively removing PFAS from Adaptable Size, Layout water, soil and biosolids, reducing & Configuration companies’ risks & costs. Isolating PFAS from Foam Fraction original input (PFAS Technology output is 1% of its original input) 37
Slide 38: PFAS Separation
PFAS Separation Removing 99% of PFAS Sewer Slug Bore Water Ground Water Leachate Industrial Water Soil 38
Slide 39: Outlook
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Slide 40: Outlook
Outlook 01 02 03 04 Normalised EBITDA Growth will be driven by Continue to develop the Over 50% of our revenue is expected to increase strong market demand and “One EGL” culture to sell now recurring building a approximately 25% this our increasing product multiple services lines to the stronger mor
Slide 41: Outlook
Outlook 05 06 07 08 EGL Energy – The Fulton Baltec is set to have strong TAPC continuing to grow EGL Waste & Water distribution agreement performance supporting the service & maintenance developing products and and high demand is transition to increased revenue to improve the quality markets for the
Slide 42: EGL outlook continued
EGL outlook continued • Extended product offering to drive growth. • Continue to build products and services delivering recurring revenue. • Valuing the IP that the company has created to strengthen customer engagement. • Standardisation to achieve repeated processes. • Systems platform to move to E
Slide 43: Questions
05 Questions 43
Slide 44: Head Office
HEAD OFFICE Suite 2.01 | Level 2 315 Ferntree Gully Road Disclaimer Mount Waverley Victoria 3149 The Environmental Group Limited advises that these presentation slides contain forward looking Phone: 03 9541 8699 statements which may be subject to significant uncertainties outside of EGL’s control. N
Slide 45: Appendix A: Reconciliation of Statutory (4E) to underlying results
Reconciliation of Statutory (4E) to underlying results Appendix A 4E Less Significant Underlying FY24($M) Items Business Revenue 98.3 98.3 Costs of sales (69.0) (69.0) Gross profit 29.3 29.3 Employee expenses (11.7) 0.0 (11.7) Professional fees (1.6) (1.6) Travel expenses (1.6) (1.6) Marketing expen