FY18 Full Year Results For the twelve months ended 30 June 2018 22 August 2018
Cleanaway – Making a sustainable future possible ✓ Diversified exposure to Australia’s growing waste market ✓ Leading player in each of our operating segments of Solids, Liquid Waste & Health and Industrial Services ✓ Owner of an irreplaceable and largest network of prized infrastructure assets across the country ✓ Acquired a leading position in the attractive hazardous and medical waste sector with recent acquisition of Toxfree ✓ Creating significant value for shareholders through the synergies of combining the Cleanaway and Toxfree business. ✓ Strong cash conversion and increasing free cashflow ✓ Delivering organic growth and focused margin improvement across our operating segments ✓ Systematic implementation of our Footprint 2025 strategy 2
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, health and automotive industries, commodity price fluctuations, fluctuation in foreign currency exchange a nd interest rates, competition, CWY’s relationships with, and the financial condition of, its suppliers and customers, legislative changes, regulatory changes or othe r 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 year ended 30 June 2018. • 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. 3
Agenda FY18 Results Update Page • Safety and Environmental 5 • Group Financial Performance 6-9 • Divisional Performance 10-15 • Statutory NPAT Reconciliation to Underlying NPAT 16 • Debt, Balance Sheet and Cash Flow 17-19 Other Key Updates: • Toxfree Acquisition and Integration 20-25 • 5C’s Strategic Initiatives 26-29 • Footprint 2025 30-31 Priorities and FY19 Outlook 32 Q&A Appendices 34-38 4
Safety and Environmental – Our objective is Goal Zero Total Recordable Injury Frequency Rate 1 From FY12 to FY15 Total Recordable Injury Frequency Rate was for employees only. From FY16 onwards statistics include both employees and contractors. -18.4% 26.6 10.8 7.6 16.7 6.2 12.6 10.6 9.2 6.6 5.7 FY12 FY13 FY14 FY15 FY16 FY17 FY18 Employees Contractors Safety performance remains a key Total recordable injury frequency performance measure for all No major environmental incidents rate continues to decline as safety management’s short term incentive were reported during FY18 initiatives are further deployed. starting from CEO down to site management Note 1: Comparative periods have been adjusted to exclude divested businesses. 5
FY18 Group Financial Performance Overview Group Underlying Results Group Statutory Results FY17 FY18 Growth $ million FY17 FY18 Growth 1,454.4 1,714.3 17.9% Gross Revenue 1,454.4 1,714.3 17.9% 1,350.7 1,564.9 15.9% Net Revenue 1,350.7 15.9% 1,564.9 314.0 323.1 2.9% EBITDA 301.3 339.7 12.7% 23.2% 20.6% (260)bps EBITDA Margin 22.3% 21.7% (60)bps 143.1 149.3 4.3% EBIT 142.9 16.4% 166.4 _ 10.6% 9.5% (110)bps EBIT Margin 10.6% 10.6% 72.5 103.3 42.5% NPAT 77.5 97.8 26.2% EPS (basic cents per share) 1 4.4 5.6 27.3% 4.7 5.3 12.8% ❖ Continuously improving result FY17 FY18 Growth across majority of metrics Final dividend per share (cents) 1.1 1.4 27.3% ❖ Margin contraction due to: o Once off $2.8 million bad debt write- Cash from operating activities ($m) 189.6 221.2 16.7% offs o Impact of China National Sword Cash conversion ratio 91.0% 94.8% 380bps o Once off ramp-up costs associated Free cash flow ($m) 62.7 117.0 86.6% with major new contracts Note 1: EPS reflects equity raising in December 2017/January 2018 for the acquisition of Toxfree. Toxfree contribution to the FY18 result was 6 for a 7 week period only. Refer to slide 35 for adjusted EPS calculations
FY18 Group Financial Performance Overview (continued….) Underlying results – CWY & TOX ($ million) FY17 FY18 TOX Total CWY CWY CWY (7 weeks in Total Growth Growth FY18) (incl. Tox) Gross Revenue 1,714.3 1 1,454.4 1,646.7 13.2% 17.9% 70.7 1,564.9 1 Net Revenue 1,350.7 1,497.3 10.9% 70.7 15.9% EBITDA 301.3 327.0 8.5% 12.7 339.7 12.7% EBITDA Margin 22.3% 21.8% (50)bps 18.0% 21.7% (60)bps EBIT 142.9 160.3 12.2% 16.4% 6.1 166.4 _ EBIT Margin 10.6% 10.7% 10bps 8.6% 10.6% NPAT 77.5 94.0 21.3% 26.2% 3.8 97.8 EPS (basic cents per share) 2 4.7 n/a n/a n/a 5.3 12.8% 7 Notes 1: Excludes inter-segment sales. 2: EPS adjusted for the bonus element of the equity raising in December 2017/January 2018 for the 7 acquisition of Toxfree. Toxfree contribution to the FY18 result was for a 7 week period only. Refer to slide 35 for adjusted EPS calculations
Sustained earnings growth EBITDA 1 ($m) EBIT 1 ($m) Net Revenue ($m) CAGR +6.3% CAGR +13.7% CAGR +19.5% 1,564.9 339.7 166.4 301.3 142.9 281.3 1,350.7 122.6 231.3 1,320.7 1,301.1 97.5 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 NPAT 1 ($m) Earnings Per Share 1,2 (cents) CAGR +23.7% CAGR +28.9% 5.3 98.0 4.7 77.5 63.3 3.9 45.7 2.8 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Notes 1: Underlying results. 2: Adjusted for the bonus element of the entitlement offer. Excluding the equity raising, EPS in FY18 is 5.9 8 cents
Driving increased cash flows and shareholders returns Return on Invested Capital 1 (%) Operating Cash Flow ($m) Cash Capex ($m) and % of D&A CAGR +7.9% CAGR +12.0% ~85% of D&A 221.2 5.2% 175.9 155.3 4.8% 153.5 143.5 4.2% 190.7 189.6 3.7% 131.5% 176.2 98.0% 96.7% 82.8% FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Free Cash flow ($m) Dividends Per Share (cents) CAGR +83.7% CAGR +18.6% 117.0 2.5 2.1 1.7 62.7 1.5 50.7 18.9 FY15 FY16 FY17 FY18 FY15 FY16 FY17 FY18 Note 1: Return on Invested Capital calculated as tax effected EBIT divided by average net assets plus net debt (excluding Toxfree). 9
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