Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — FY2017 Earnings Presentation
33 slides from Cleanaway Waste Management's earnings presentation, Aug 23, 2017
Slide 1: FY17 Results Presentation
For personal use only FY17 Results Presentation For the twelve months ended 30 June 2017 23 August 2017
Slide 2: Disclaimer
Disclaimer • 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 management of CWY. Fo
Slide 3: Agenda
Agenda Page For personal use only Safety and Environmental 4 Group Performance 5 Divisional Performance 7 Statutory EBITDA Reconciliation to Underlying EBITDA 15 Cash Flow and Balance Sheet 16 5C’s Strategic Initiatives Update 18 Footprint 2025 Update 25 Priorities and FY18 Outlook 27 Q&A Appendices
Slide 4: 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* *From FY12 to FY15 Total Recordable Injury Frequency Rate was for employees only. From FY16 onwards statistics include both employees and contractors. -33% 26.6 10.8 16.7 7.2 12.6 10.6
Slide 5: Group – Improving Performance
Group – Improving Performance Total Cleanaway Solids Liquids && Liquids Industrial Services Industrial Services For personal use only Net revenue Net revenue Net revenue ($m) ($m) ($m) 1,350.7 958.8 475.9 1,320.7 924.0 436.6 424.0 1,301.1 863.4 FY15 FY16 FY17 FY15 FY16 FY17 FY15 FY16 FY17 EBITDA1 EB
Slide 6: Group FY17 Performance Overview
Group FY17 Performance Overview Underlying Results For personal use only Statutory Results $ million FY16 FY17 Growth FY16 FY17 Growth Gross Revenue1 1,455.1 1,454.4 _ 1,455.1 1,454.4 _ Net Revenue1 1,320.7 1,350.7 2.3% 1,320.7 1,350.7 2.3% EBITDA2,3 281.3 301.3 7.1% 257.1 314.0 22.1% EBITDA Margin
Slide 7: Total Solids Performance
Total Solids Performance For personal use only 1 1 FY16 FY17 % Change 958.8 Total Total 2H17 v FY17 v 924.0 $ million 1H16 2H16 1H17 2H17 FY16 FY17 2H16 FY16 Net revenue2 464.5 459.5 924.0 479.4 479.4 958.8 4.3% 3.8% 863.4 EBITDA 117.5 120.2 237.7 128.7 128.3 257.0 6.7% 8.1% 25.7% 26.8% EBITDA Margi
Slide 8: Solids – Collections
Solids – Collections For personal use only Cleanaway has the largest solid waste services fleet and widest network across Australia Largest network of collections vehicles operating from more than 100 depots across Australia Largest collector of municipal waste in Australia servicing 90+ municipal c
Slide 9: Solids – Collections Performance
Solids – Collections Performance For personal use only 1 1 FY16 FY17 % Change 810.5 Total Total 2H17 v FY17 v $ million 1H16 2H16 1H17 2H17 779.0 FY16 FY17 2H16 FY16 Net revenue 393.3 385.7 779.0 404.0 406.5 810.5 5.4% 4.0% 753.1 EBITDA 74.1 75.7 149.8 81.0 79.9 160.9 5.5% 7.4% 19.2% 19.9% 18.4% EBI
Slide 10: Container Deposit Scheme, New South Wales
Container Deposit Scheme, New South Wales Cleanaway in joint venture with TOMRA has been awarded the role of network operator for the NSW For personal use only Container Deposit Scheme Joint venture partner is TOMRA Systems ASA (listed on the Oslo Stock Exchange), world leader in reverse vending m
Slide 11: Solids – Post Collections
Solids – Post Collections For personal use only Cleanaway has one of the strongest post collections asset bases in Australia Growing network of transfer stations across the Landfill assets located across Australia generating over country – New South East Melbourne Transfer Station 120 million m3 of
Slide 12: Solids – Post Collections Performance
Solids – Post Collections Performance 1 1 185.0 FY16 FY17 % Change For personal use only 177.0 Total Total 2H17 v FY17 v $ million 1H16 2H16 1H17 2H17 FY16 FY17 2H16 FY16 Gross revenue 166.4 145.0 311.4 145.7 143.0 288.7 (1.4)% (7.3)% 130.2 Net revenue2 89.3 87.7 177.0 93.6 91.4 185.0 4.2% 4.5% 51.9
Slide 13: Liquids & Industrial Services
Liquids & Industrial Services Cleanaway is the largest hydrocarbons recycling business in Australia and a leader in the overall liquids For personal use only and industrial services market Collecting and processing ~130 million litres of mineral oil, offsetting Australia’s annual requirements for oi
Slide 14: Liquids & Industrial Services Performance
Liquids & Industrial Services Performance 1 1 For personal use only FY16 FY17 % Change 475.9 436.6 424.0 Total Total 2H17 v FY17 v $ million 1H16 2H16 1H17 2H17 FY16 FY17 2H16 FY16 Net revenue 224.5 212.1 436.6 208.0 216.0 424.0 1.8% (2.9)% EBITDA 26.8 30.7 57.5 28.8 30.1 58.9 (2.0)% 2.4% 13.9% 13.2
Slide 15: Statutory EBITDA Reconciliation to Underlying EBITDA
Statutory EBITDA Reconciliation to Underlying EBITDA For personal use only $ million FY17 Statutory EBITDA 314.0 Pre-tax adjustments: Restructuring costs 6.6 Rebranding costs 3.8 Acquisition costs 2.4 Remediation and rectification (3.5) Gain on sale of properties (22.0) Total Underlying Adjustments
Slide 16: Cash Flow
Cash Flow $ million FY16 FY17 For personal use only Underlying EBITDA 281.3 301.3 Ratio of cash flow from operating activities Cash flow of underlying adjustments (18.8) (12.5) to underlying EBITDA 91% (pcp: 96%)2 Less: Non-cash share of profits from associates (1.3) (1.2) Less: Other non-cash ite
Slide 17: Balance Sheet
Balance Sheet $ million 30 June 2016 31 Dec 2016 30 June 2017 For personal use only ASSETS Cash and cash equivalents 48.3 44.5 43.2 Trade and other receivables 224.3 246.2 247.9 Inventories 16.7 15.7 11.1 Landfill remediation provision Property, plant and equipment 897.1 898.9 936.5 reduction from
Slide 18: Strategy is underpinned by five key pillars
Strategy is underpinned by five key pillars For personal use only 18
Slide 19: Customer for Growth
Customer for Growth Initiatives producing results For personal use only Sales structures by market verticals fully operational Target market verticals Go to Market approach improved in Solids, further improvement needed in Liquids & Industrial Services. Further investment in sales force in L&IS
Slide 20: Coles waste management contract
Coles waste management contract The Coles total waste management contract will deliver scale and efficiency (route density) from For personal use only servicing over 2,500 sites across Coles’ network of businesses 800 Supermarkets 712 Coles Express 896 Liquor outlets 89 Hotels 12 Distribut
Slide 21: Continuous Improvement for Cost
Continuous Improvement for Cost For personal use only $30 million pa in permanent cost reductions have been achieved 1ERP platform completed Fit for purpose organisation Corporate office and operational decision making in line with operating model Collaborative way of working between areas imp
Slide 22: Capital for Cash – Capital Expenditure and Landfill Remediation
Capital for Cash – Capital Expenditure and Landfill Remediation Capital Expenditure Landfill Remediation For personal use only Ongoing disciplined approach to cash and capital Expenditure in FY17 of $42.5 million in line with expenditure management expectations Capital expenditure spending bel
Slide 23: Capital for Cash – Funding Framework aligned with Capital Outlay
Capital for Cash – Funding Framework aligned with Capital Outlay Syndicate Banks Finance Leases For personal use only Working Capital & Term Loan Facilities Green Term Loan Facility Finance Lease Facilities Core banking facilities $90m term loan for clean energy Provides diversity of capital s
Slide 24: Capital for Cash – Capital Allocation
Capital for Cash – Capital Allocation Utilisation of our strong balance sheet and funding framework to finance growth will provide a better For personal use only outcome for shareholders through improved free cash flow Disciplined approach to capital allocation and expenditure will continue – spen
Slide 25: Cleanaway Footprint 2025
Cleanaway Footprint 2025 Prized infrastructure assets completed in FY17 or in construction stage For personal use only New paper recycling Engineering upgrade facility and transfer to oil recycling facility station acquired improving product quality New material recycling Brisbane facility construct
Slide 26: Cleanaway Footprint 2025 – Brisbane City Council Post Collection Contract
Cleanaway Footprint 2025 Brisbane City Council Post Collection Contract Access to strategic assets in South East Queensland For personal use only Resource Recovery Innovation Alliance agreement with BCC for 10 years with options that extend to 16 years in total Operation of BCC’s four Resource
Slide 27: Priorities and FY18 Outlook
Priorities and FY18 Outlook For personal use only Priorities Continue progress in Solids and improve Liquids & Industrial Services revenue and earnings performance Foster a culture of premium customer service and continuous improvement Focus on pricing performance – both core price and yield
Slide 28: Appendices
Appendices For personal use only Page Segment Performance Summary 29 Group Income Statement – Statutory and Underlying Results 30 Capital Structure – Net Finance Costs 31 Capital Structure – Debt 32 Reconciliation of Divisional Results to Statutory Segment Disclosures 33 28
Slide 29: Segment Performance Summary
Segment Performance Summary For personal use only $ million Net Revenue1 Underlying EBITDA Underlying EBIT Segments FY16 FY17 Growth FY16 FY17 Growth FY16 FY17 Growth Solids – Collections 779.0 810.5 4.0% 149.8 160.9 7.4% 85.7 98.8 15.3% Solids – Post Collections 177.0 185.0 4.5% 87.9 96.1 9.3% 27.9
Slide 30: Group Income Statement – Statutory and Underlying Results
Group Income Statement – Statutory and Underlying Results Underlying Statutory Results Underlying Results Adjustments For personal use only $ million FY16 FY17 Growth FY16 FY17 FY16 FY17 Growth Sales revenue external and other revenue (Gross Revenue) 1,455.1 1,454.4 No change — — 1,455.1 1,454.4 No
Slide 31: Capital Structure – Net Finance Costs
Capital Structure – Net Finance Costs Statutory Underlying For personal use only $ million FY16 FY17 FY16 FY17 Cash interest expense Bank interest 11.2 10.0 11.2 10.0 Commitment and Guarantee fees 2.6 2.7 2.6 2.7 USPP Notes 6.1 6.1 6.1 6.1 Interest received (0.7) (0.4) (0.7) (0.4) Net cash interest
Slide 32: Capital Structure – Debt
Capital Structure – Debt For personal use only $ million 30 Jun 16 31 Dec 16 30 Jun 17 Net debt to underlying EBITDA ratio Current interest bearing liabilities 0.8 66.6 62.4 1.09x (30 June 2016: 1.11x) Non-current interest bearing liabilities 358.6 304.0 307.8 At 30 June 2017 the Group had Gross
Slide 33: Reconciliation of Divisional Results to Statutory Segment Disclosures
Reconciliation of Divisional Results to Statutory Segment Disclosures For personal use only Total Equity Solids Solids Post Eliminations Total Liquids Accounted Corporate Eliminations $ million Collections Collections – Solids Solids & Ind Serv Investments & Other – Group GROUP Revenue Sales of good
Cleanaway Waste Management — FY2017 Earnings Presentation on 6ix