Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — H1 FY2017 Earnings Presentation
29 slides from Cleanaway Waste Management's earnings presentation, Feb 23, 2017
Slide 1: FY17 Half Year Results
SS _ Cleanaway Waste Management Limited FY17 Half Year Results For the six months ended 31 December 2016 Vik Bansal —- CEO and Managing Director Brendan Gill - CFO ASX: CWY 23 February 2017
Slide 2: Australia's leading total waste management services company
With a nation-wide footprint in solid, liquid, hydrocarbon and industrial services, Cleanaway is Australia’s leading total waste management services company For personal use only Approximately 200 solid, liquid, hydrocarbon and industrial services depots and processing facilities across the country
Slide 3: 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 4: Agenda
Agenda For personal use only Page Group Performance Overview 5 Safety and Environmental 6 Divisional Performance 7-13 Statutory Profit Reconciliation to Underlying 14 Cash Flow and Balance Sheet 15-16 Strategic Initiatives 17-22 Priorities and FY17 Outlook 23 Q&A Appendices 24-29 4
Slide 5: Group Performance Overview
Group Performance Overview For personal use only Underlying Results Statutory Results $million 1H17 1H16 Growth 1H17 1H16 Growth Gross Revenue1 724.5 746.8 (3.0)% 724.5 746.8 (3.0)% Net Revenue2 672.4 669.7 0.4% 672.4 669.7 0.4% EBITDA 150.4 137.2 9.6% 150.0 128.4 16.8% EBITDA Margin 22.4% 20.5% 190
Slide 6: 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 26.6 -24.2% 16.7 12.6 10.1 9.5 7.2 FY12 FY13 FY14 FY15 FY16 1H17 Total recordable injury frequency Safety performance is a key rate continues to decline as a performance measure in shor
Slide 7: Total Solids Performance
Total Solids Performance For personal use only $million 1H171 1H161 Growth 479.4 464.5 459.5 431.9 431.5 Net revenue2 479.4 464.5 3.2% EBITDA 128.7 117.5 9.5% EBITDA Margin 26.8% 25.3% 150bps 26.2% 26.8% 25.3% 22.3% 23.6% EBIT 64.8 55.5 16.8% 13.5% 11.7% 11.2% 11.9% 12.6% EBIT Margin 13.5% 11.9% 160
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 in Australia Servicing 90+ municipal councils across the country Extensive network of resour
Slide 9: Solids – Collections Performance
Solids – Collections Performance For personal use only $million 1H171 1H161 Growth 404.0 384.0 393.3 385.7 369.1 Net revenue 404.0 393.3 2.7% EBITDA 81.0 74.1 9.3% EBITDA Margin 20.0% 18.8% 120bps 19.1% 19.6% 20.0% 18.8% 17.6% EBIT 49.8 43.6 14.2% 11.8% 11.1% 10.9% 12.3% 9.6% EBIT Margin 12.3% 11.1%
Slide 10: 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 120 million m3 of landfill gas some of which is converted into
Slide 11: Solids – Post Collections Performance
Solids – Post Collections Performance For personal use only $million 1H171 1H161 Growth 93.6 89.3 87.7 Gross revenue 145.7 166.4 (12.4)% 72.8 Net revenue (Ex. Landfill levies) 93.6 89.3 4.8% EBITDA 47.7 43.4 9.9% 57.4 50.8% 48.6% 50.7% 51.0% 39.7% EBITDA Margin 51.0% 48.6% 240bps 17.9% 18.2% EBIT 15
Slide 12: Liquids & Industrial Services
Liquids & 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 million litres of mineral oil, offsetting Australia’s annual requirements for oil
Slide 13: Liquids & Industrial Services Performance
Liquids & Industrial Services Performance For personal use only $million 1H171 1H161 Growth 245.3 230.6 224.5 Net revenue 208.0 224.5 (7.3)% 212.1 208.0 EBITDA 28.8 26.8 7.5% 14.5% 13.8% 13.0% 11.9% EBITDA Margin 13.8% 11.9% 190bps 10.4% 8.6% 6.9% 7.3% EBIT 15.1 14.7 2.7% 6.5% 5.2% EBIT Margin 7.3%
Slide 14: Statutory Profit Reconciliation to Underlying Profit
Statutory Profit Reconciliation to Underlying Profit For personal use only $ million 1H17 Statutory Profit After Income Tax (Attributable to Ordinary Equity Holders) 28.0 After tax adjustments: Costs associated with restructuring 2.0 Costs associated with rebranding 1.0 Acquisition costs 3.4 Remedia
Slide 15: Cash Flow
Cash Flow $million 1H17 1H16 For personal use only Receipts from customers 772.8 741.6 Cash from operating activities up 28.3% Payments to suppliers and employees (638.2) (632.0) Ratio of cash flow from operating Remediation of landfills (20.3) (14.7) activities to underlying EBITDA 90% Underlyi
Slide 16: Balance Sheet
Balance Sheet For personal use only $million 31 Dec 2016 30 June 2016 31 Dec 2015 ASSETS Cash and cash equivalents 44.5 48.3 35.3 Landfill remediation provision Trade and other receivables 246.2 224.3 230.5 reduction primarily reflects the Inventories 15.7 16.7 16.2 transfer to liabilities held fo
Slide 17: Strategy is underpinned by five key pillars
Strategy is underpinned by five key pillars For personal use only Unrelenting focus on A fit for purpose Pursuing effective and Ensuring transparency Ensuring our identified customers and organisation with pragmatic capital and accountability across elements of competitive customer service to unrele
Slide 18: Customers for Growth
Customers for Growth For personal use only Initiatives producing results Target market verticals Sales structures by market verticals fully operational We are maturing in our Go to Market to a more segmented approach especially in the solids business 0% 1H16 50% 1H17 100% Increasing sales prod
Slide 19: Continuous Improvement for Cost
Continuous Improvement for Cost For personal use only By 30 June 2017, $30 million pa in permanent cost reductions will be achieved Implementation of 1ERP platform completed Fit for purpose organisation Corporate office streamlined and operational decision making decentralised in line with opera
Slide 20: Capital for Cash – Capital Expenditure
Capital for Cash – Capital Expenditure For personal use only Maintaining spending below underlying depreciation & amortisation Reducing our capital intensity Average age of fleet relatively low with improved spending controls FY17 underlying D&A expense expected to be ~ $160 - $165 million 0%
Slide 21: Capital for Cash – Landfill Remediation
Capital for Cash – Landfill Remediation For personal use only Sale of closed landfills Announced 31 January 2017 and forecast to generate a pre-tax profit of approximately $20-$22 million in 2H17 Brooklyn, Melbourne Profit comprises release of rectification and remediation provisions partially o
Slide 22: Cleanaway Footprint 2025
Cleanaway Footprint 2025 For personal use only To achieve our 2025 strategic vision, we will extract maximum value through the value chain Landfill/alternative Collections Resource recovery waste disposal Operational efficiency Access to strategic resource Well located prized assets recovery f
Slide 23: Priorities and FY17 Outlook
Priorities and FY17 Outlook For personal use only Priorities Improve Liquids & Industrial Services revenue performance Foster a culture of premium customer service and continuous improvement Focus on pricing performance – both core price and yield Improve operational effectiveness, productiv
Slide 24: Appendices
Appendices For personal use only Page Segment Performance Summary 25 Group Income Statement – Statutory and Underlying Results 26 Capital Structure – Net Finance Costs 27 Capital Structure – Debt 28 Reconciliation of Divisional Results to Statutory Segment Disclosures 29 24
Slide 25: Segment Performance Summary
Segment Performance Summary For personal use only $million Net Revenue1 Underlying EBITDA Underlying EBIT Segments 1H17 1H16 Growth 1H17 1H16 Growth 1H17 1H16 Growth Solids – Collections 404.0 393.3 2.7% 81.0 74.1 9.3% 49.8 43.6 14.2% Solids – Post Collections 93.6 89.3 4.8% 47.7 43.4 9.9% 15.0 11.9
Slide 26: 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 1H17 1H16 Growth 1H17 1H16 1H17 1H16 Growth Sales revenue external and other revenue (Gross Revenue) 724.5 746.8 (3.0)% — — 724.5 746.8 (3.0)% Share of
Slide 27: Capital Structure – Net Finance Costs
Capital Structure – Net Finance Costs For personal use only Statutory Underlying $ million 1H17 1H16 1H17 1H16 Cash interest expense Bank interest 5.1 5.7 5.1 5.7 Commitment and Guarantee fees 1.4 1.4 1.4 1.4 USPP Notes 3.1 3.1 3.1 3.1 Interest received (0.2) (0.3) (0.2) (0.3) Net cash interest expe
Slide 28: Capital Structure – Debt
Capital Structure – Debt For personal use only Net debt to underlying EBITDA $ million 31 Dec 16 30 Jun 16 31 Dec 15 ratio 1.11x (30 June 2016: 1.11x) Current interest bearing liabilities 66.6 0.8 0.7 At 31 December 2016 the Group Non-current interest bearing liabilities 304.0 358.6 359.7 had $2
Slide 29: 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
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