Environmental Group Limited · ASX:EGL
Environmental — H1 2024 Earnings Presentation
38 slides from Environmental's earnings presentation, Feb 22, 2024
Slide 1: The Environmental Group Limited – 1H FY24 Financial Results
The Environmental Group Limited ENGINEERING A SUSTAINABLE FUTURE Investor Presentation 1H FY24 Financial Results February 2024 Presentation should be read in conjunction with the Interim Report, 31 December 2023.
Slide 2: Disclaimer
Disclaimer EGL 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 assumptions on which they are based.
Slide 3: Key Highlights 1H FY24
Key Highlights 1H FY24 01 02 03 04 05 Revenue grew Normalised Upgrading Over 50% of our Airtight fully by 14.6% on the EBITDA up by guidance for revenue is now integrated onto prior 47.8% to $4.5M normalised EBITDA recurring largely EGL systems and comparable with EBITDA to increase service & proces
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Slide 5: 1H FY24 Financial Results – underlying
1H FY24 Financial Results – underlying* $46.7M $4.5M $3.4M 14.6% Increase in EBITDA up 47.8% EBIT up 51.8% Revenue on 1H23 before significant before significant items on 1H23 items on 1H23 $2.1M $5.0M $7.2M Net Profit after tax Undrawn working Net cash on hand up 47.2% capital facility *Underlying p
Slide 6: 1H FY24 Financial Results commentary
1H FY24 Revenue Financial Results Revenue up by 14.6% on the prior comparable period (pcp). Consolidating our growth while improving margins across the commentary $46.7M business. EBITDA before significant items up 47.8% due to a focus on EBITDA margin improvement, via consistent processes throughou
Slide 7: 1H FY24 Financial Results commentary
1H FY24 NPAT Financial Results Profit from ordinary activities $2.1M up 47.2% on the pcp at a tax rate of 32%. commentary $2.1M Operating Cash Flow *Operating cash flow was $2.9M prior to $2.8M in working capital funding for Airtight Solutions post completion of the $2.9M* acquisition, the working c
Slide 8: Operating Units
02 Operating Units Ae The Envirenmeta Group Line
Slide 9: Operating units overview
EGL Waste encapsulates our service offering to the waste industry; world class recycling Total Air Pollution Control (TAPC) & plants, dust extraction systems, odor control, Airtight Solutions provides highly efficient boilers & autoclaves, Combustion state-of-the-art industrial air pollution control
Slide 10: Baltec Inlet and Exhaust Systems
01 Baltec Inlet and Exhaust Systems 10
Slide 11: Baltec 1H24 Results
Revenue Baltec IES supports the gas turbine industry in 1H24 $10.7M its role in the transition from coal-powered energy generation by providing engineered 1H23 $10.5M products and custom designs specifically to Up 4.4% meet clients' renewables applications. Key offering EBIT • Baltec leads the marke
Slide 12: Baltec 1H24 Results Commentary
1H24 RESULTS COMMENTARY • Strong first half to the year with EBIT margin expansion of 9% as our focus on process improvement and procurement has lifted returns. • Record sales have been achieved. Current year to date of approximately $21.9M will lead to an excellent FY24. • Noise attenuation is a gr
Slide 13: Key Products
PARTS LIST DESCRIPTION [Access Systems - Exhaust [Access Systems - Inlet [Acoustic Enclosure. Diverter Damper Exhaust Ducting Exhaust Expansion Joint [Exhaust Silencer Exhaust Stack ¢ Filter Module \ (Gas Turbine [Guillotine Damper [Inlet Ducting IInlet Expansion Joint C Inlet Silencer \ [Support st
Slide 14: EGL Energy
44EGL EGL Energy
Slide 15: EGL Energy 1H24 Results
Revenue EGL Energy offers a network of service offices across 1H24 $18.2M Australia providing 24/7 sales, service, maintenance and repairs of boilers, gas fired equipment and other 1H23 $18.5M OEM equipment optimising energy efficiency. Down 1.7% Key Offering EBITDA • Our design is the most energy e
Slide 16: EGL Energy 1H24 Results Commentary
1H24 RESULTS COMMENTARY • Tomlinson margin improved strongly in the first half with costs stabilising after shipping and steel prices returned to pre Covid levels. • Service work remained high with the increased installed capacity growing recurring revenue. • New boilers sales have been strong provi
Slide 17: Key Products
Key Products Industrial Industrial Large Commercial Steam Boilers Package Burners Hot Water Boilers Thermal Oil Biomass Steam and Medical Waste Heaters Hot Water Generation Autoclaves 17
Slide 18: EGL Clean Air
03 EGL Clean Air 18
Slide 19: EGL Clean Air 1H24 Results
Revenue 1H24$8.8M TAPC designs, manufactures 1H23 $9.6M and services flue gas treatment systems which prevent harmful contaminants being Down 8% discharged into the atmosphere. EBIT Key offering 1H24 $1.4M • Leaders in off gas scrubbing systems for rare earths and lithium refineries. 1H23 $1.5M • Sc
Slide 20: 1H24 Results Commentary – TAPC
1H24 RESULTS COMMENTARY – TAPC • Completed one of our two major lithium and rare earth projects during the period on time and on budget. • A commendable result in the current inflationary environment with margins largely stable on pcp. • The capital spend on new lithium plants globally, has softened
Slide 21: Airtight Solutions – acquired May
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. • Airtight serves several key client indust
Slide 22: 1H24 Results Commentary – Airtight Solutions
1H24 RESULTS COMMENTARY – Airtight Solutions • In the first full reporting period Airtight was largely in line with expectations. • The result was impacted by costs associated with transferring Airtight onto our systems and platforms and a contract executed prior to our ownership at lower margin. •
Slide 23: Key Products
Key Products Dry Wet Electrostatic Scrubber Scrubber Precipitators Fabric Filters Aeromixes Dust extraction Dust Extraction (Baghouse) & Cyclones System system 23
Slide 24: EGL Waste
04 EGL Waste 24
Slide 25: EGL Waste Revenue
Revenue 1H24 $0.5M EGL Waste division brings together our service lines to provide integrated solutions to the waste industry. 1H23 $2.2M The National Waste Policy Action Plan requires an 80% average resource recovery rate from all waste streams following the waste hierarchy by 2030. That is an incr
Slide 26: EGL Waste 1H24 Commentary
1H24 COMMENTARY • Our pipeline for recycling plant tenders remains very strong at $129M. • Very good near-term prospects after recently being engaged to do a detailed engineering design on a large-scale construction and demolition recycling facility. • The Rino Resources plant was successfully commi
Slide 27: EGL Water
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Slide 28: EGL Water PFAS removal technology
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. • Society and industry are aligning in their need to remove PFAS from the environment. • Our technology is effective,
Slide 29: EGL Water FY24 Commentary
FY24 COMMENTARY • EGL Water has continued to progress forward with our first commercial PFAS separation plant. • All documentation required is now 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
Slide 30: Outlook
03 Outlook 30
Slide 31: Outlook
Outlook 01 02 03 04 Normalised EBITDA to Margin and process Continue to develop the “One Over 50% of our revenue is increase approximately 45% improvement will remain a EGL” culture to sell multiple now recurring building a this financial year. focus of the business. services lines to the one strong
Slide 32: Outlook
Outlook 05 06 07 08 EGL Energy -Tomlinson Baltec is set to have strong TAPC continuing to grow EGL Waste & Water to improve margin to drive performance delivering both service & maintenance continue organic growth by EBITDA growth year on revenue and margin growth. revenue to improve the quality ent
Slide 33: EGL outlook continued
EGL outlook continued • At this stage we expect EBITDA to increase approximately 45% year on year before significant items. • Continue to build products and services delivering recurring revenue. • Drive margin expansion through improving our business practices and importantly valuing the IP that th
Slide 34: Questions?
Questions? 34
Slide 35: Head Office
HEAD OFFICE Level 2 315 Ferntree Gully Rd Disclaimer Mt Waverly EGL advises that these presentation slides contain forward looking statements which may be Victoria 3149 subject to significant uncertainties outside of EGL’s control. No representation is made as to the Phone: 03 9763 6711 accuracy or
Slide 36: Appendix A – Reconciliation of Statutory to underlying results
Appendix A Reconciliation of Statutory (4D) to underlying results Less 4D Significant Underlying FY24(SM) Items Business Revenue 46.7 46.7 Costs of sales (33.3) (33.3) Gross profit 13.4 13.4 Employee expenses (5.5) 0.0 (5.5) Professional fees (0.9) (0.9) Travel expenses (0.8) (0.8) Marketing expense
Slide 37: Executive Management
Appendix B Executive Management CEO – Jason Dixon CFO – Andrew Bush CCM - Paul Gaskett COO – Brenda Borghouts 10 years executive 25 years experience in 17 years Business 20 years Defence and experience for a listed Industrial services and Development and sales in heavy engineering, ASX 300 company C
Slide 38: Senior Management
Senior Management Peter Rankin Aldo Giachero Charles Borg Stirling Kiril Nikitin Stig Brixen 32 years 17 years 30 years Schunemann 19 years 17 years experience in the experience in experience in the 16 years engineering experience in boiler and emissions Gas Turbine experience with experience in dus