It all connects. BFI Canada Income Fund. CIBC Income Trust Conference September 2006

Transcription

1 It all connects. BFI Canada Income Fund CIBC Income Trust Conference September

2 Forward-Looking Statements This presentation may contain forward-looking statements relating to the Fund s operations or to the environment in which it operates. These statements are based on the Fund s estimates, forecasts, and projections. These statements are not guarantees of future performance and involve risks and uncertainties that are difficult to predict, or are beyond the Fund s control. A number of important factors could cause actual outcomes and results to differ materially from those expressed in these forward-looking statements. These factors include those set forth in the Fund s Annual Information Form for the year ended December 31, Consequently, you should not rely on such forward-looking statements. In addition, these forward-looking statements relate to the date on which they are made. Although the forward-looking statements contained in this presentation are based upon what management believes to be reasonable assumptions, the Fund cannot assure unitholders that actual results will be consistent with these forward-looking statements, and the Fund disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2

3 Business Strengths One of North America s largest non-hazardous, solid waste management companies Strong positions in 56 markets, long-term customer contracts, diversified account base Solid track record of organic growth Outstanding opportunities for improvement: From market-focused strategies From accretive acquisitions From stable markets Effective management processes 3

4 An Outstanding Record of Distributions Paid $1.64 $1.23 $1.33 $0.82 Annualized distributions now $

5 Strong Annual Revenue & EBITDA Revenue ($) EBITDA ($) (millions) (millions)

6 Total Return to Unitholders 293% to July 30,

7 Strong Platforms for Growth One of North America s largest solid waste management companies Solid waste collection 60 Transfer stations 27 Recycling facilities 13 Landfills 22 77

8 Serving More Than 1 Million Customers 6 th largest player by revenue Strong portfolio of vertically-integrated assets Collection Transfer Landfills Recycling facilities 8

9 Strength from Market-Focused Strategies assets price efficiency productivity volume margins customers 9

10 Strategies That Work Locally Increase route density Maximize container capacity Increase percentage of internalized waste Secure new customers/contracts Use price as a strategic tool Renew customer accounts 10

11 Benefits of Market-Focused Strategies Strong Organic Revenue Growth 12.8% 13.2% 2006 YTD Canadian Organic Revenue Growth Rate 2006 YTD US Organic Revenue Growth Rate (constant dollar basis) 11

12 Sustainability: A Key Strength Ongoing societal need Industry is recession resistant We enjoy long-term contracts: Typically 2-5 years Allow price increases, fuel surcharges High renewal rates 12

13 Systematic Growth Through Acquisitions 2000 Allied Assets 2001 Selected collection assets in London, ON 2002 Enterprise Sanitaire F.A., Laval, QC 2003 Selected collection assets in various markets including: - Vancouver, Montreal and Calgary 2004 Twin Oaks in Hamilton CDS in Toronto 2005 Ridge Landfill, Chatham IESI Corporation of Fort Worth 7 tuck-in acquisitions tuck-in acquisitions through 6/30/06 13

14 The Purpose of Acquisitions Acquisitions support our market-focused strategies Two strategies, two purposes: Tuck-in acquisitions: drive performance of existing platforms Savings from: improved route density, internalization of disposal, and partial elimination of SG&A Platforms: enter a new market with enough strength to realize immediate value 14

15 IESI Case Study Demonstrates quality of research and ability to choose winning platforms Transaction designed to be immediately accretive Company chosen on strength of: Management Strategies Market position Assets 15

16 30,000 New Opportunities to Grow Highly fragmented industry Increasing complexity favours companies that are: Large Well-capitalized Well resourced BFI Canada has the financial strength to execute our acquisition strategy We will remain an aggressive, smart purchaser 16

17 Investments to Support Ongoing Growth Growth Capital & Landfill Expenditures $62.4 (millions) $ $6.6 $5.4 $ months to June 30 17

18 Predictable Maintenance Expenditures Maintenance Capital & Landfill Expenditures $45.5 (millions) $11.5 $11.6 $11.9 $ months to June 30 18

19 Reasons for Confidence 1. Quality of assets 2. Strong market positions 3. Proven market-focused strategies 4. Predictability of maintenance capital 5. Strong management processes 6. Favourable economic environment 19

20 Steady Distribution Increases Payout ratio maintained below 90% since IPO target to maintain below 90% even un-hedged $1.200 $1.275 $1.403 $1.571 $1.698 $ At IPO Apr 02 Sept 03 Aug 04 Sept 04 Jan 05 Feb 05 Aug 05 Sept 05 Aug 06 Sept 06 20

21 It all connects. BFI Canada Income Fund Financial Review 21

22 Revenue Growth Continues 400 $ (millions) $ First Half 2005 First Half

23 EBITDA Growth Continues $99.6 $111.2 (millions) First Half 2005 First Half

24 Free Cash Flow Available For Distribution $57.4 $63.9 (millions) First Half 2005 First Half

25 Strong Distributions, Low Payout Ratio Free Cash Flow Available for Distribution Aggregate Distributions Declared $1.56 $1.33 $1.91 $ $0.98 $ Six months to June 30 25

26 Limited Impact of F/X F/x impact on income statement largely non-cash Natural cash flow hedge US operating, investing and financing activities are paid in US dollars from US cash flows To provide some protection on distributions, entered into 3, three year f/x hedges through Feb Allow for monthly purchases of Cdn. $4.5 million at $

27 Liquidity Conservatively leveraged 2.3x debt to LTM EBITDA Plan to keep overall leverage in 2x range 27

28 Credit Capacity Entered into new Canadian amended credit facility in Feb. 06, increased total capacity to $120 million, including $40 million accordion feature current credit facility has $22 million available Amended US credit facility in March 06, increased total capacity to $550 million, including $165 million accordion feature current credit facility has $31 million available Changes to both facilities included reduction in interest rates Flexibility to support growth strategies 28

29 2006 Operating Agenda Increase route density Maximize container capacity Secure new accounts Manage price Increase internalization Renew customer contracts 29

30 Looking Forward Our goal is continuous improvement Setting new performance standards Growing organically Identifying the right acquisitions 30

31 It all connects. BFI Canada Income Fund 31