First Half FY13 Results Presentation March 2013
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Agenda Contents 1 Capital Structure 2 Corporate Strategy 3 1H FY13 Results 4 1H FY13 Key Highlights 6 Operations 7 Outlook 3
Capital Structure 4 ASX CODE TOX Shares on issue 115,999,858 Unlisted employee options No. of shareholders 2,287,500 3,500 (approx) Market Capitalisation Substantial shareholders $350 m (approx) Australian Foundation Investment Co 8.2% Fisher Funds Management Ltd 7.3% National Australia Bank 6.8% 4
Company Profile One of the largest industrial service and waste management businesses in Australia Strategically located facilities Unique licenses and specialist technologies Provide diverse number of industrial and waste services to all market sectors Resource sector and hazardous waste focus Focus on competitive advantage through safety, service delivery, sustainable waste management practices, treatment licenses and technologies Growth - combination of acquisition, green field development, organic and contract growth 5
Corporate Strategy 1. Leader in Hazardous Waste Management Nationally Best Technologies Best Licences Best People High barriers to entry Servicing all industry sectors 2. Provide a broad range of Industrial Services to Blue Chip clients under long term contract Mining Oil and Gas Infrastructure Heavy manufacturing Government 3. Provide all waste services in all regional resource hubs of Australia Resource focus - WA, QLD and NT Total waste management services Municipal Commercial Industrial / Construction 6 6
Service locations 7
FY13 First Half Financial Highlights Revenue up 43% to $131.6M (FY12: $92.2M) EBITDA up 39% to $28.0M* (FY12: $20.1M) EBIT up 38% to $17.9M* (FY12: $12.9M) Underlying NPAT up 38% to $10.8M* (FY12: $7.9M) Statutory NPAT up 33% to $10.5M (FY12: $7.9M) EPS up 16% to 9.34* cents (FY12: 8.06 cents) Solid cash flow from operations = $25.7M, 93% of EBITDA Net debt to equity = 33% (FY12: 30%) *excludes SSAA write off ($1.59M) and MMS add back ($1.27M) 8
FY13 First Half - Key Highlights Strong operational performance from divisions and contracts linked to the resource sector including the Pilbara, South West WA and Surat Basin Expansion of services in central Queensland with acquisition of Absolute Liquid Waste in Toowoomba and Racelog in Roma Award of a contract with Rio Tinto (Pacific Aluminum) for the Boyne Smelter in Gladstone Integration of recent acquisitions continues as planned plan Commenced services to the offshore oil and gas sector in WA Investment in Business Development team with tender pipeline in excess of $150 M tendered and pending 9
FY13 First Half Results Group Results 1H FY13 ($ 000) 1H FY12 ($ 000) % Change Revenue 131,623 92,188 43% EBITDA* 28,006 20,136 39% Depreciation (10,124) (7,190) 41% EBIT* 17,882 12,946 38% Gross Interest (2,675) (1,470) 82% Profit before tax* 15,207 11,476 33% Income tax expense (4,426) (3,612) 23% Underlying net profit after tax* 10,781 7,864 37% Statutory net profit after tax 10,463 7,864 33% EPS (cents)* 9.34 8.06 16% Number of shares on issue at balance date (million) * exclude SSAA write off ($1.59M) and MMS add back ($1.27M) 116.0 111.1 4% 10
Group Cash Flow 1H FY13 ($ 000) 1H FY12 ($ 000) % Change Gross operating cash flow 25,655 14,946 72% Net interest paid (2,462) (1,234) 100% Income taxes paid (8,801) (2,718) 224% Net operating cash flows 14,392 10,994 31% Net purchases of PP&E (12,862) (5,487) 134% Payments for acquisitions (4,892) (15,106) (67%) Net investing cash flows (17,754) (21,399) (17%) Net proceeds from borrowings/(repayment of borrowings) Dividends paid Proceeds from the issue of share capital (net of capital raising costs) 7,074 8,314 (15%) (4,613) (2,895) 59% 36 28,375 (100%) Net financing cash flows 2,497 33,794 (93%) Net increase/(decrease) in cash (865) 23,389 (104%) Cash at the beginning of the half year 18,924 14,513 30% Cash at the end of the half year 18,059 37,902 (52%) 11
Balance Sheet 31 December 2012 ($ 000) 30 June 2012 ($ 000) % Change Cash 18,059 18,924 (5%) Trade and other receivables 61,497 52,731 17% Inventories 269 314 (14%) Prepayments 2,284 2,265 1% Tax assets 9,149 8,076 13% Property, plant and equipment 102,445 96,673 6% Intangibles 93,350 93,826 (1%) Total assets 287,053 272,809 5% Trade and other payables 29,979 28,714 4% Loans and borrowings 73,679 66,605 11% Provisions 4,889 5,221 (6%) Employee benefits 5,803 4,158 40% Tax liabilities 4,314 7,447 (42%) Total liabilities 118,664 112,145 6% Total equity 168,389 160,664 5% NET DEBT TO EQUITY 33% 30% 10% 12
Cash flow and balance sheet Solid cash flow conversion: 93% of EBITDA Comfortable gearing of 33% net debt to equity Excellent banking relationship and headroom funding available Debtor days at 77 days good quality but some late payments occurred 13
FY13 First Half Results - Industrial services $ 000 1H13 1H12 Variance Revenue 35,440 34,168 4% EBIT 4,831 5,773 (16%) EBIT margin 1H13 2H12 1H12 14% 12% 17% Western Australian (Pilbara and South West) and Central Queensland (Surat basin, Mackay and Gladstone) operations and contracts performed strongly Acquired Absolute Liquid Waste Toowoomba (exposure to Surat basin) Focus on expansion of services to offshore oil and gas gaining momentum Victoria met expectation services a diverse range of market sectors Manufacturing and infrastructure sectors were weak Closed Sydney metro branch amalgamated services with St Marys Opened new branch in Hunter Valley in line with strategy Targeted business development strategy in place approx. $40 M of tenders pending 14
FY13 First Half Results - Waste services $ 000 1H13 1H12 Variance Revenue 65,381 42,262 55% EBIT 14,788 10,255 44% EBIT margin 1H13 2H12 1H12 23% 23% 24% Pilbara, Kimberley and South West regions all met expectations Toll Energy (Gorgon) contract has continued to perform well Toxfree achieving over 1,200 days without LTI Awarded extension of the existing total waste management contract with Rio Tinto Iron Ore Fortescue Metals Group (FMG) contract performing well Awarded a waste services contract with Rio Tinto (Pacific Aluminum) for the Boyne Smelter in Gladstone Gladstone performing well however APLNG contract still not meeting expectations Targeted business development strategy in place approx. $110 M of tenders pending 15
FY13 First Half Results Hazardous waste $ 000 1H13 1H12 Variance Revenue 30,802 15,758 95% EBIT 8,753 5,204 68% EBIT margin 1H13 2H12 1H12 28% 28% 33% Integration of DMX assets and consolidation of services to improve efficiencies continues Streamlining of waste treatment and investigation into new technologies to improve productivity Growth in volumes of hazardous waste from the resource sector during the period Melbourne, Kwinana and Pilbara operations as well as destruction of scheduled wastes performed well Manufacturing sector was weak - reduced volumes of waste in Brisbane and Sydney SSAA production in Brisbane has ceased ($1.59M write off) Commenced operations in Tasmania 16
FY13 First Half Results Corporate $ 000 1H13 1H12 Variance Revenue - - - EBIT (10,490) (8,286) 27% Health and Safety a reduction in All Injury Frequency Rate of 8% Appointment of Mr Reg Yarran, as Indigenous Engagement Coordinator and endorsement of Toxfree s Reconciliation Action Plan Corporate overhead includes $2.7M regional overheads and health, safety and environmental resources Increased by 27% in line with a larger company revenue growth of 44% Includes due diligence, integration, systems development, improved and greater insurance cover and legal costs of $1M Corporate costs 8% of revenue down from 9% on pcp 17
Outlook Expecting similar market conditions to continue in the second half Major contracts and regional resource hubs expected to perform well Contribution from recent acquisitions of Absolute Waste and Racelog in the second half Continued growth from central Queensland operations expected Newly established Hunter Valley operations Approximately $600 M pa identified market for waste and industrial service contracts - $150 M tendered and pending Systems integration of recently acquired businesses continues Hazardous Waste focus on revenue diversification, operational efficiencies and new technologies 18
Questions Steve Gostlow Managing Director Email: s.gostlow@toxfree.com.au Tel: +61 8 6216 7000 Mob: +61 (0) 419 197 155 Jason Dixon Executive General Manager - Corporate and Risk Email: j.dixon@toxfree.com.au Tel: +61 3 9541 4700 Mob: + 61 (0) 419 310 792 Michael Constable Chief Financial Officer Email: m.constable@toxfree.com.au Tel: +61 3 9541 4700 Mob: + 61 (0) 419 504 003 19
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