FY17 Results Presentation For the twelve months ended 30 June 2017 23 August 2017
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. Forward- looking statements can generally be identified by the use of words including but not limited to ‘project’, ‘foresee’, ‘plan’, ‘guidance’, ‘expect’, ‘aim’, ‘intend’, ‘anticipate’, ‘believe’, ‘estimate’, ‘may’, ‘should’, ‘will’ or similar expressions. All such forward -looking statements involve known and unknown risks, significant uncertainties, assumptions, contingencies and other factors, many of which are outside the control of CWY, which may cause the actual results or performance of CWY to be materially different from any future results or performance expressed or implied by such forward-looking statements. Such forward-looking statements apply only as of the date of this presentation. • Factors that could cause actual results or performance to differ materially include without limitation the following: risks and uncertainties associated with the Australian and global economic environment and capital market conditions, cyclical nature of various industries, the level of activity in Australian construction, manufacturing, mining, agricultural and automotive industries, commodity price fluctuations, fluctuation in foreign currency exchange and interest rates, competition, CWY’s relationships with, and the financial condition of, its suppliers and customers, legislati ve changes, regulatory changes or other changes in the laws which affect CWY’s business, including environmental and taxation laws, and operational risks. The foregoing list of important factors and risks is not exhaustive. • To the fullest extent permitted by law, no representation or warranty (express or implied) is given or made by any person (including CWY) in relation to the accuracy or completeness of all or any part of this presentation, or any constituent or associated presentation, information or material (collectively, the Information) or the accuracy or completeness or likelihood of achievement or reasonableness of any forward looking statements or the assumptions on which any forward looking statements are based. CWY does not accept responsibility or liability arising in any way for errors in, omissions from, or information contained in this presentation. • The Information may include information derived from public or third party sources that has not been independently verified. • CWY disclaims any obligation or undertaking to release any updates or revisions to the Information to reflect any new information or change in expectations or assumptions, except as required by applicable law. • Investment decisions – Nothing contained in the Information constitutes investment, legal, tax or other advice. The Information does not take into account the investment objectives, financial situation or particular needs of any investor, potential investor or any other person. You should take independent professional advice before making any investment decision. • Results information – This presentation contains summary information that should be read in conjunction with CWY's Consolidated Financial Report for the twelve months ended 30 June 2017. • All amounts are in Australian dollars unless otherwise stated. A number of figures in the tables and charts in the presentation pages have been rounded to one decimal place. Percentages (%) have been calculated on actual whole figures. • Underlying earnings are categorised as non-IFRS financial information and therefore have been presented in compliance with ASIC Regulatory Guide 230 – Disclosing non- IFRS information, issued in December 2011. Refer to CWY’s Directors’ Report for the definition of “Underlying earnings”. The term EBITDA represents earnings before interest, income tax, and depreciation, amortisation and impairments and the term EBIT represents earnings before interest and income tax expense. • This presentation has not been subject to review or audit. 2
Agenda Page 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 28-33 3
Safety and Environmental – Our objective is Goal Zero * 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 7.2 16.7 12.6 10.6 9.2 6.3 FY12 FY13 FY14 FY15 FY16 FY17 Employees Contractors No major environmental breaches Safety performance remains a key were reported during the period. Total recordable injury frequency performance measure in short term rate continues to decline as safety External contractors are now incentive calculations for all initiatives continue to be deployed. added to measurements in our management personnel. objective of Goal Zero. Notes: 4 Comparative periods have been adjusted to exclude divested businesses.
Group – Improving Performance Total Cleanaway Solids Liquids & Industrial Services Liquids & Industrial Services Net revenue Net revenue Net revenue ($m) ($m) ($m) 1,350.7 958.8 475.9 1,320.7 436.6 924.0 424.0 1,301.1 863.4 FY15 FY16 FY17 FY15 FY16 FY17 FY15 FY16 FY17 EBITDA 1 EBITDA 1 EBITDA 1 ($m) ($m) ($m) 301.3 257.0 58.9 57.5 281.3 55.8 237.7 231.3 198.0 FY15 FY16 FY17 FY15 FY16 FY17 FY15 FY16 FY17 Notes: 5 1: Underlying
Group FY17 Performance Overview Underlying Results Statutory Results FY16 FY17 Growth $ million FY16 FY17 Growth _ Gross Revenue 1 _ 1,455.1 1,454.4 1,455.1 1,454.4 Net Revenue 1 1,320.7 1,350.7 2.3% 1,320.7 2.3% 1,350.7 EBITDA 2,3 257.1 314.0 22.1% 281.3 301.3 7.1% 19.5% 23.2% 370bps EBITDA Margin 21.3% 22.3% 100bps 96.1 143.1 48.9% EBIT 122.6 16.6% 142.9 7.3% 10.6% 330bps EBIT Margin 9.3% 10.6% 130bps 44.8 72.5 61.8% NPAT 63.3 77.5 22.4% EPS (basic cents per share) 4.0 4.9 22.5% 2.8 4.6 64.3% Notes: 1: YoY negative impact on Gross and Net Revenue (Gross FY16 FY17 Growth revenue less landfill levies) of $40.3 million and $8.8 million respectively from transition to closure of Erskine Park landfill 2: YoY EBITDA negatively impacted by $3.6 million from Total dividends per share (cents) 1.7 2.1 23.5% transition to closure of Erskine Park landfill 3. Improvement achieved with one less working day in FY17 Cash from operating activities 4 190.7 189.6 (0.6)% compared to FY16 4: Cash from operating activities lower due mainly to tax Free cash flow 5 50.7 62.7 23.7% payments of $8.6 million in FY17 versus a refund of $7.4 million in FY16 5: Free cash flow defined as cash from operating activities excluding interest and tax less capital expenditure 6
Total Solids Performance 1 1 958.8 FY16 FY17 % Change Total Total 2H17 v FY17 v 924.0 $ million 1H16 2H16 1H17 2H17 FY16 FY17 2H16 FY16 Net revenue 2 464.5 459.5 924.0 479.4 479.4 958.8 4.3% 3.8% 863.4 EBITDA 117.5 120.2 237.7 128.7 128.3 257.0 6.7% 8.1% 26.8% 25.7% 25.3% 26.2% 25.7% 26.8% EBITDA Margin 26.8% 26.8% 60bp 110bp 22.9% 14.4% EBIT 55.5 58.1 113.6 64.8 72.8 137.6 25.3% 21.1% 12.3% 11.5% EBIT Margin 11.9% 12.6% 12.3% 13.5% 15.2% 14.4% 260bp 210bp FY15 FY16 FY17 Revenue Revenue and earnings growth across collections and post collections EBITDA Margin Operating leverage leading to both quantity and quality of earnings EBIT Margin Accelerating half on corresponding half revenue improvement Maintaining strong cost disciplines across the business, productivity improvements still work in progress Improvement with one less working day in FY17 vs FY16 Notes: 7 1: Underlying results. Refer to slide 15 for details of underlying adjustments 2: Net revenue excludes landfill levies collected of $103.7 million in FY17 and $134.4 million in FY16
Solids – Collections 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 councils Extensive and growing network of resource recovery facilities in all mainland states of Australia Southern Hemisphere’s most advanced recycling facility opened in Perth in May 2017 8
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