Where ADS Waste Holdings, Inc.
Disclaimer This presentation contains “forward - looking statements” within the meaning of the federal securities laws. Such forward-looking statements are subject to risks and uncertainties, including, in particular, statements about ADS Waste Holdings, Inc. (“ADS” or the “Company”) plans, strategies, prospects and industry estimates. These statements identify prospective information and include words such as “believes,” “expects,” “may,” “will,” “should,” “seeks,” “approximately,” “intends,” “plans,” “estimates,” or “anticipates” or similar expressions. Examples of forward-looking statements include, but are not limited to, statements regarding: expected cost savings, sales increases, margins growth, cash flows, capital expenditures, market and industry growth rates and trends, including trends towards outsourcing, product line and market expansion, market share, operational and expense improvements (including headcount, technological, customer service and business improvement initiatives), retention rates, demand for the Company’s products and financial results. The foregoing is not an exclusive list of all forward-looking statements. Forward-looking statements are based on the Company’s current expectations and assumptions regarding its business, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. The Company’s actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees or assurances of future performance. The matters referred to herein may not in fact occur. You are cautioned, therefore, against relying on any of these forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made. Factors or events that could cause the Company’s actual results to differ may emerge from time to time, and it is not possible to predict all of them. The Company undertakes no obligation to publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law. 2
Advanced Disposal snapshot Largest privately owned solid waste management company in the U.S. Market leader Geographically diversified footprint Focused on secondary and franchise markets Operate in 17 states and the Commonwealth of the Bahamas Significant scale 91 collection operations, 73 transfer stations, 23 recycling facilities and 42 active landfills Over 5,400 employees Long lived landfill network Best in class asset Modern fleet quality base Investing in CNG / Automation Increases in housing starts and commercial construction lead to organic volume growth Municipal growth and privatization opportunities Attractive opportunities for growth Successful acquisition tuck-in strategy Disciplined organic growth strategy in core secondary markets Revenue growth Focus on key value Margin expansion drivers Free cash flow maximization while reinvesting in the business 3
Vertically integrated asset base supports our market strategy Collection Services Transfer Stations Recycling Facilities Landfill Services LTM 6/30/14 revenue by line of business National Landfill Gas Accounts 1% 2% Commodity Sales Other 2% 3% Temporary Rolloff Transfer 5% / Landfill 91 Collection Operations 73 Transfer Stations 23 Recycling Facilities 42 Landfills 30% Permanent 2.5M residential customers 3,200 vehicle fleet collecting 530K tons of recyclables 15M annual tons disposed Rolloff serviced; 732 exclusive 7M tons of waste annually collected annually and 164K in our 42 landfills with 64% 10% municipal contracts; 302K tons processed in 23 being internalized waste commercial, industrial & facilities Commercial construction customers Residential 23% 24% Revenue: $1,359 million Vertically integrated geographic hubs EBITDA: $367 million Leading collection Strategically located operations primarily in landfills throughout the secondary markets network 4
Strategic position in attractive markets LTM 6/30/14 revenue by segment Over 2.5 million customers across 17 states and the Bahamas South Midwest 36% 39% East 25% LTM 6/30/14 revenue by market type Urban market revenue 25% Secondary market revenue Corporate Headquarters 47% Regional Headquarters Hauling/Collection Landfill Franchise Recycling More than 70% of revenue Transfer Stations Not Listed 27% revenue from franchise and secondary markets 5
History of Advanced Disposal Best-in-class eastern U.S. footprint formed by combining 3 regional market leaders Today * – – – Combination of 2 market-leading regional players Acquired in 2012 Largest privately owned solid waste management acquired in 2006 company in the U.S. and the fourth largest overall – Focus on attractive secondary Midwestern – – Focus on high density Northeastern markets and markets Best-in-class eastern U.S. footprint focused on high growth Southeastern markets attractive secondary and franchise markets – Synergistic overlap in certain Southeastern and Northeastern markets Note: Continuing operations only. * Solid waste division purchased - name & trademark not purchased 6
2014 focus and accomplishments – Institutionalize the Advanced Disposal culture / management philosophy – Incentivize managers to act like owners/entrepreneurs – Significant executive management field involvement – Focus on operations – Achieve operational efficiencies – Disposal and route optimization – CNG conversion: At 7% CNG as of June 2014, target 11% CNG by December 2014 – Residential fleet automation: At 46% as of June 2014, target 50% by end of Q2 2015 – SG&A: Focus on purchasing driven savings – Achieve organizational efficiencies – Focus on local execution without inflating management structure – Implement comprehensive safety training programs – Implement price / volume increases – Increase customer retention – Complete the integration of the companies and achieve estimated synergies – Original estimate of $29.5mm updated to $45mm – Corporate and back office integration – Effective purchasing program established – Rebranding complete 7
ADS investment highlights
Investment highlights Leading vertically integrated solid waste services platform Diversified business with Multiple opportunities for multi-year contracts and balanced growth long lived assets Essential service with recession-resistant Highly experienced management team demand and stable cash flows Favorable industry dynamics and significant barriers to entry 9
Leading vertically integrated solid waste services platform Largest privately owned solid waste company in the U.S. (a) $5 $16 High degree of vertical integration (b) 80% 68% 67% 64% 64% $13.1 Internalization rate 70% 54% 60% $13 $4 50% 40% 30% 20% Revenue ($ billions) $8.1 10% $3 0% $8 Republic Waste ADS Casella Waste Services Management Connections $2.0 $2 $1.7 $1.3 $1 $0.7 $0.5 $0.5 $0.5 $0.5 $0.3 $0 Republic Progressive Management Services Connections ADS(a) Recology Rumpke Casella Industries Waste Pro WCA Waste Waste Waste Waste Public Private Non-US operations (a) Fourth largest in the US and fifth largest in North America as measured by 2013 calendar year revenue (b) Data as of last Fiscal Year End Note: Waste Management excludes Wheelabrator; Waste Connections excludes E&P segment Source: Public filings, Waste Business Journal 10
Diversified business with multi-year contracts and long lived assets Contract summary LTM 6/30/14 revenue by segment – Approximately 68% of revenue has annuity-like profile South – Revenue distributed across multiple regional markets and Midwest 36% lines of business 39% – Strong residential business provides insulation from fluctuations in the C&D market – Relatively small amount of temporary roll-off business (approximately 5% of total revenue) East 25% – No individual customer accounts for more than 2% of revenue Average expected life – active landfills LTM 6/30/14 revenue by line of business 50 National Landfill Gas 39 38 Accounts 40 1% 34 Expected years 2% Commodity Sales Other 2% 3% 30 Temporary Rolloff Transfer 20 5% / Landfill 30% Permanent 10 Rolloff 10% 0 MSW C&D All Commercial Residential 23% # landfills 31 11 42 24% 11
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