VAUGHAN,
ON, May 24, 2022 /CNW/ - GFL Environmental
Inc. (NYSE: GFL) (TSX: GFL) ("GFL", "we", "our" or the "Company"),
a leading North American diversified environmental services
company, will hold its first Investor Day today in New York City beginning at 8:00 am Eastern Time. The live webcast of
the event and a copy of today's presentation will be available on
the Company's website at investors.gflenv.com or by clicking
here.
At today's meeting, GFL will review its key strategic
initiatives achieved since its initial public offering in
March 2020 and discuss its growth
strategies, capital allocation plan, sustainability initiatives and
financial objectives.
2022 to 2025 Potential Growth
Opportunities(1)
In addition to reaffirming its 2022 full year guidance
previously provided on February 10,
2022, as updated on May 4,
2022, at its Investor Day, GFL will present three potential
growth scenarios for the 2022 to 2025 period:
- Utilization of Adjusted Free Cash Flow(2) generated
by the business to reduce net long-term debt;
- Deployment of $500 million
annually on acquisitions, financed from Adjusted Free Cash
Flow(2); and
- Deployment of $1.0 billion
annually on acquisitions, financed from Adjusted Free Cash
Flow(2) and available liquidity.
All three scenarios assume the following:
- Organic revenue growth of approximately 5.0% per year and
Adjusted EBITDA margin(2) expansion of 40 basis points
per year, before considering the impact of GFL's investment in
renewable natural gas projects, over the 2022 to 2025 period.
- Contribution of $150 million in
incremental Adjusted EBITDA(2) and Adjusted Free Cash
Flow(2) from GFL's share of renewable projects by the
end of 2025.
Based on these scenarios, GFL's launch off point for 2026 could
be Adjusted Free Cash Flow(2) between $1,050 million and $1,350
million and Net Leverage(2) between approximately
2.50x and 3.20x.
___________________
|
(1)
|
Information
contained in the section titled "2022 to 2025 Potential Growth
Opportunities" includes Adjusted EBITDA, Adjusted Free Cash Flow
and Net Leverage which are non-IFRS measure or supplemental
measures. Due to the uncertainty of the likelihood, amount and
timing of effects of events or circumstances to be excluded from
these measures, GFL does not have information available to provide
a quantitative reconciliation of such projections to comparable
IFRS measures. See "Non-IFRS Measures" below.
|
(2)
|
A non-IFRS measure;
see "Non-IFRS Measures" for an explanation of the composition of
non-IFRS measures.
|
Implicit in forward-looking information in respect of these
growth scenarios are certain current assumptions, including, among
others, that the Company will continue to execute on its strategy
of organically growing its business, leveraging its scalable
network to attract and retain customers across multiple service
lines, realize operational efficiencies, and extract procurement
and cost synergies. Additional assumptions include no changes
to the current economic environment, no material changes in
interest rates and foreign exchange rates, access to debt markets
for refinancing opportunities on comparable terms and conditions to
recent financings, potential for credit rating upgrades in the
near-term, continued margin expansion and sufficient free cash flow
to fund acquisitions. The M&A assumptions are based on the
fragmented nature of the industry, historical experience with
acquisitions and the current robust pipeline. The renewable energy
assumptions are based on the expectations that construction of the
required facilities will proceed as scheduled, markets for
renewable energy credits and access to end markets. See
"Forward-Looking Information".
About GFL
GFL, headquartered in Vaughan,
Ontario, is the fourth largest diversified environmental
services company in North America,
providing a comprehensive line of solid waste management, liquid
waste management and soil remediation services through its platform
of facilities across Canada and in
more than half of the U.S. states. Across its organization, GFL has
a workforce of more than 18,000 employees. For more information,
visit our web site at gflenv.com. To subscribe for investor email
alerts please visit investors.gflenv.com or by clicking here.
Forward-Looking Information
This release includes certain "forward-looking statements" and
"forward-looking information" (collectively, "forward-looking
information") within the meaning of applicable U.S. and Canadian
securities laws, respectively. Forward-looking information includes
all statements that do not relate solely to historical or current
facts and may relate to our future outlook, financial guidance and
anticipated events or results and may include statements regarding
our financial performance, financial condition or results, business
strategy, growth strategies, budgets, operations and services.
Particularly, statements regarding our expectations of future
results, performance, achievements, prospects or opportunities or
the markets in which we operate is forward-looking information. In
some cases, forward-looking information can be identified by the
use of forward-looking terminology such as "plans", "targets",
"expects" or "does not expect", "is expected", "an opportunity
exists", "budget", "scheduled", "estimates", "outlook",
"forecasts", "projection", "prospects", "strategy", "intends",
"anticipates", "does not anticipate", "believes", or "potential" or
variations of such words and phrases or statements that certain
actions, events or results "may", "could", "would", "might",
"will", "will be taken", "occur" or "be achieved", although not all
forward-looking information includes those words or phrases. In
addition, any statements that refer to expectations, intentions,
projections, guidance, potential or other characterizations of
future events or circumstances contain forward-looking information.
Statements containing forward-looking information are not
historical facts nor assurances of future performance but instead
represent management's expectations, estimates and projections
regarding future events or circumstances.
Forward-looking information is based on our opinions, estimates
and assumptions that we considered appropriate and reasonable as of
the date such information is stated, is subject to known and
unknown risks, uncertainties, assumptions and other important
factors that may cause the actual results, level of activity,
performance or achievements to be materially different from those
expressed or implied by such forward-looking information, including
but not limited to certain assumptions set out herein; our ability
to obtain and maintain existing financing on acceptable terms; our
ability to source and execute on acquisitions on terms acceptable
to us; our ability to find purchasers for non-core assets on terms
acceptable to us; currency exchange and interest rates; the impact
of competition; the changes and trends in our industry or the
global economy; changes in laws, rules, regulations, and global
standards; and the duration and severity of the COVID-19 pandemic,
including variants, and its impact on the economy, the North
American financial markets, our operations, our M&A pipeline
and our financial results. Other important factors that could
materially affect our forward-looking information can be found in
the "Risk Factors" section of GFL's annual information form for the
year ended December 31, 2021 and
GFL's other periodic filings with the U.S. Securities and Exchange
Commission and the securities commissions or similar regulatory
authorities in Canada.
Shareholders, potential investors and other readers are urged to
consider these risks carefully in evaluating our forward-looking
information and are cautioned not to place undue reliance on such
information. There can be no assurance that the underlying
opinions, estimates and assumptions will prove to be correct.
Although we have attempted to identify important risk factors that
could cause actual results to differ materially from those
contained in forward-looking information, there may be other
factors not currently known to us or that we currently believe are
not material that could also cause actual results or future events
to differ materially from those expressed in such forward-looking
information. There can be no assurance that such information will
prove to be accurate, as actual results and future events could
differ materially from those anticipated in such information. The
forward-looking information contained in this release represents
our expectations as of the date of this release (or as the date it
is otherwise stated to be made), and is subject to change after
such date. However, we disclaim any intention or obligation or
undertaking to update or revise any forward-looking information
whether as a result of new information, future events or otherwise,
except as required under applicable U.S. or Canadian securities
laws. The purpose of disclosing our financial outlook set out in
this release is to provide investors with more information
concerning the financial impact of our business initiatives and
growth strategies.
Non-IFRS Measures
This release makes reference to certain non-IFRS measures. These
measures are not recognized measures under IFRS and do not have a
standardized meaning prescribed by IFRS and are therefore unlikely
to be comparable to similar measures presented by other companies.
Accordingly, these measures should not be considered in isolation
or as a substitute for analysis of our financial information
reported under IFRS. Rather, these non-IFRS measures are used to
provide investors with supplemental measures of our operating
performance and thus highlight trends in our core business that may
not otherwise be apparent when relying solely on IFRS measures. We
also believe that securities analysts, investors and other
interested parties frequently use non-IFRS measures in the
evaluation of issuers. Our management also uses non-IFRS measures
in order to facilitate operating performance comparisons from
period to period, to prepare annual operating budgets and forecasts
and to determine components of management compensation.
EBITDA represents, for the applicable period, net income (loss)
from continuing operations plus (a) interest and other finance
costs, plus (b) depreciation and amortization of property and
equipment, landfill assets and intangible assets, less (c) the
provision for income taxes, in each case to the extent deducted or
added to/from net income (loss) from continuing operations. We
present EBITDA to assist readers in understanding the mathematical
development of Adjusted EBITDA. Management does not use EBITDA as a
financial performance metric.
Adjusted EBITDA is a supplemental measure used by management and
other users of our financial statements including our lenders and
investors, to assess the financial performance of our business
without regard to financing methods or capital structure. Adjusted
EBITDA is also a key metric that management uses prior to execution
of any strategic investing or financing opportunity. For example,
management uses Adjusted EBITDA as a measure in determining the
value of acquisitions, expansion opportunities and dispositions. In
addition, Adjusted EBITDA is utilized by financial institutions to
measure borrowing capacity. Adjusted EBITDA is calculated by adding
and deducting, as applicable from EBITDA, certain expenses, costs,
charges or benefits incurred in such period which in management's
view are either not indicative of underlying business performance
or impact the ability to assess the operating performance of our
business, including: (a) (gain) loss on foreign exchange, (b)
(gain) loss on sale of property and equipment, (c) mark-to-market
(gain) loss on fuel hedges, (d) mark-to-market (gain) loss on
Purchase Contracts, (e) share-based payments, (f) impairment and
other charges, (g) gain on divestiture, (h) transaction costs, (i)
IPO transaction costs, (j) acquisition, rebranding and other
integration costs (included in cost of sales related to acquisition
activity), (k) unbilled revenue reversal, and (l) deferred purchase
consideration. We use Adjusted EBITDA to facilitate a comparison of
our operating performance on a consistent basis reflecting factors
and trends affecting our business. As we continue to grow our
business, we may be faced with new events or circumstances that are
not indicative of our underlying business performance or that
impact the ability to assess our operating performance.
Adjusted Cash Flows from Operating Activities represents cash
flows from operating activities adjusted for (a) costs associated
with IPO related debt repayments, (b) prepayment penalties for
early note redemption, (c) IPO transaction costs, (d) transaction
costs, (e) acquisition, rebranding and other integration costs, (f)
M&A related net working capital investment, (g) tax refund from
CARES Act, (h) cash interest paid on TEUs, and (i) deferred
purchase consideration. Adjusted Cash Flows from Operating
Activities is a supplemental measure used by investors as a
valuation and liquidity measure in our industry. Management uses
Adjusted Cash Flows from Operating Activities to evaluate and
monitor the ongoing financial performance of GFL.
Adjusted Free Cash Flow represents Adjusted Cash Flows from
Operating Activities adjusted for (a) proceeds from asset
divestitures, (b) normalization for excess proceeds from asset
divestitures, (c) proceeds on disposal of assets, and (d) purchase
of property and equipment and intangible assets. Adjusted Free Cash
Flow is a supplemental measure used by investors as a valuation and
liquidity measure in our industry. Management uses Adjusted Free
Cash Flow to evaluate and monitor the ongoing financial performance
of GFL.
Acquisition EBITDA represents, for the applicable period,
management's estimates of the annual Adjusted EBITDA of an acquired
business, based on its most recently available historical financial
information at the time of acquisition, as adjusted to give effect
to (a) the elimination of expenses related to the prior owners and
certain other costs and expenses that are not indicative of the
underlying business performance, if any, as if such business had
been acquired on the first day of such period ("Acquisition EBITDA
Adjustments"), and (b) contract and acquisition annualization for
contracts entered into and acquisitions completed by such acquired
business prior to our acquisition. Further adjustments are made to
such annual Adjusted EBITDA to reflect estimated operating cost
savings and synergies, if any, anticipated to be realized upon
acquisition and integration of the business into our operations. We
use Acquisition EBITDA for the acquired businesses to adjust our
Adjusted EBITDA to include a proportional amount of the Acquisition
EBITDA of the acquired businesses based upon the respective number
of months of operation for such period prior to the date of our
acquisition of each such business.
Net Leverage is a supplemental measure used by management to
evaluate borrowing capacity and capital allocation strategies. Net
Leverage is equal to our total long-term debt, as adjusted for fair
value, deferred financings and other adjustments and reduced by our
cash, divided by Run-Rate EBITDA.
Run-Rate EBITDA represents Adjusted EBITDA for the applicable
period as adjusted to give effect to management's estimates of (a)
Acquisition EBITDA Adjustments (as defined above) and (b) the
impact of annualization of certain new municipal and disposal
contracts and cost savings initiatives, entered into, commenced or
implemented, as applicable, in such period, as if such contracts or
costs savings initiatives had been entered into, commenced or
implemented, as applicable, on the first day of such period.
Run-Rate EBITDA has not been adjusted to take into account the
impact of the cancellation of contracts and cost increases
associated with these contracts. These adjustments reflect monthly
allocations of Acquisition EBITDA for the acquired businesses based
on straight line proration. As a result, these estimates do not
take into account the seasonality of a particular acquired
business. While we do not believe the seasonality of any one
acquired business is material when aggregated with other acquired
businesses, the estimates may result in a higher or lower
adjustment to our Run-Rate EBITDA than would have resulted had we
adjusted for the actual results of each of the acquired businesses
for the period prior to our acquisition. We primarily use Run-Rate
EBITDA to show how GFL would have performed if each of the interim
acquisitions had been consummated at the start of the period as
well as to show the impact of the annualization of certain new
municipal and disposal contracts and cost savings initiatives. We
also believe that Run-Rate EBITDA is useful to investors and
creditors to monitor and evaluate our borrowing capacity and
compliance with certain of our debt covenants. Run-Rate EBITDA as
presented herein is calculated in accordance with the terms of our
revolving credit agreement.
All references to "$" in this press release are to Canadian
dollars, unless otherwise noted.
For further information:
Patrick Dovigi, Founder and Chief
Executive Officer,
+1 905-326-0101
pdovigi@gflenv.com
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SOURCE GFL Environmental Inc.