CLEAN HARBORS, INC. Third-Quarter 2024 Investor Review
October 30, 2024
Summary of Q3 Results
- Revenue of $1.53B, up 12% YoY reflecting growth in both segments and acquisitions
- Net income increased 26% to $115.2 million or EPS of $2.12
- Adjusted EBITDA* increased 18% to $301.8M; Adjusted EBITDA* margin of 19.7%
- Adjusted free cash flow* was $144.5 million
- Environmental Services segment experienced healthy demand across disposal/recycling network. Services businesses continued to grow, particularly Field Services. Industrial Services had a challenging quarter due to maintenance deferrals
- Safety-KleenSustainability Solutions up from a year ago but below expectations as a muted demand environment weakened base oil and lubricant pricing
- Corporate segment expenses were up YoY due to acquisitions, insurance and healthcare costs, partly offset by cost savings
- For a reconciliation of non-GAAP measures to its nearest GAAP equivalent, please refer to the appendix in this presentation.
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Environmental Services
$1,297.2
$1,146.4
Revenue | +13% |
(in millions) | |
Q3 2023 | Q3 2024 | ||
$332.5 | |||
$289.0 | |||
Adjusted | +15% | ||
25.2% | 25.6% | ||
EBITDA* | |||
(in millions)
Q3 2023 | Q3 2024 | ||||
Q3 Performance
- Revenue increased due to HEPACO acquisition combined with steady organic growth driven by higher pricing and incineration volumes
- Adjusted EBITDA increased due to revenue growth and higher margin; Margin up YoY as pricing offset inflation, supported by cost reduction and productivity initiatives
- Margins in this segment increased YoY for the 10th consecutive quarter
- Incinerator utilization was 89% vs. 86% in Q3'23 given strong demand; Average price was up 6% from Q3'23
- Performed 250K parts washer services vs. 243K a year ago; SK branch core offerings, particularly containerized waste services, continued to grow with SK Environmental Services revenue up 8%
- Industrial Services experienced challenges in fall turnaround season, particularly in the refinery space
- For a reconciliation of Adjusted EBITDA to net income, please refer to the appendix in this presentation.
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Kimball Incinerator - Commercial Launch in November
- 70,000-tonfacility expected to begin accepting hazardous waste shortly
- Project completed on time, including feature enhancements
- Will help address logjam in the network as it ramps up over next 12-18 months
- Market dynamics support new capacity; customer interest remains strong
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Safety-Kleen Sustainability Solutions
$219.2$232.1
Revenue+6%
(in millions)
Q3 2023 | Q3 2024 |
$41.2
$31.1
+32% 17.8%
Adjusted
EBITDA* 14.2%
(in millions)
Q3 2023 | Q3 2024 |
Adjusted EBITDA Margin
Q3 Performance
- Revenue up YoY, entirely due to addition of Noble Oil. Pricing for base oil slightly higher than prior year but below expectations and YoY volumes were slightly lower
- Adjusted EBITDA reflects increased revenue and higher profitability than a year ago when we suffered plant disruptions/costs. Margins up YoY but down from Q2 due to market conditions
- Gathered 69 million gallons of waste oil compared with 59 million gallons in Q3'23. Average collection costs were a pay for oil (PFO) vs. CFO a year ago
- Blended products sales volume accounted for 21% of total volumes sold, up from 19% in Q2, and consistent with the year ago period
- Castrol continuing the sales rollout of MoreCircular offering
- For a reconciliation of Adjusted EBITDA to net income, please refer to the appendix in this presentation.
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Disciplined Capital Allocation Strategy - Driven by ROIC
Organic Growth | Share | |||||||||
Investments | Repurchases | |||||||||
Acquisitions | Debt |
& Divestitures | Repayment |
- Invest in capex to drive organic growth
- Evaluate acquisition and divestiture opportunities
- Execute authorized buyback plan
- Assess current debt structure and leverage
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FINANCIAL OVERVIEW
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Q3 Income Statement
(in millions, except per share data) | Q3 2024 | Q3 2023 |
Revenues | $1,529.4 | $1,365.7 |
Cost of revenues | $1,055.6 | $944.0 |
Gross profit | $473.8 | $421.7 |
Gross margin % | 31.0% | 30.9% |
Selling, general and administrative expenses | $177.8 | $171.0 |
SG&A % | 11.6% | 12.5% |
Depreciation and amortization | $100.1 | $93.0 |
Income from operations | $192.3 | $154.4 |
Adjusted EBITDA* | $301.8 | $255.0 |
Adjusted EBITDA* margin % | 19.7% | 18.7% |
Net income | $115.2 | $91.3 |
Diluted earnings per share | $2.12 | $1.68 |
* Please refer to the appendix in this presentation for a reconciliation to the nearest GAAP equivalent.
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Balance Sheet Highlights
(in millions)
Cash and short-term marketable securities Billed and unbilled receivables
Accounts payable
Current and long-term debt
Environmental liabilities
9/30/24 6/30/24 12/31/23
$594.7 | $493.3 | $550.8 |
$1,305.0 | $1,277.0 | $1,091.0 |
$504.2 | $447.9 | $451.8 |
$2,788.8 | $2,790.9 | $2,301.7 |
$230.2 | $230.7 | $229.8 |
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Cash Flow Highlights
(in millions) | Q3 2024 | Q3 2023 |
Cash from operations | $239.2 | $220.1 |
Capital expenditures, net of disposals | ($94.7) | ($105.4) |
Adjusted free cash flow* | $144.5 | |
$114.7 | ||
Share repurchases | $20.0 | $10.0 |
- Please refer to the appendix in this presentation for a reconciliation to the nearest GAAP equivalent.
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Disclaimer
Clean Harbors Inc. published this content on October 30, 2024, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on October 30, 2024 at 12:41:37.550.
