Year ended 31 December 2019

Preliminary Results

February 2020

Presented by:

Jim Meredith, Executive Chairman

Mark Fryer, Group Finance Director

1

69%

31%

88%

12%

Augean at a glance

Business overview

Revenue and EBITDA contribution (2019A)

⚫ Augean is the UK’s leading hazardous waste management

business with a strong and diverse customer base across

a range of sectors and throughout the UK

⚫ Reliable and diverse revenue stream against which to

operate key assets which are strategically located in respect

of customers served

⚫ Augean offers a comprehensive range of hazardous waste

services, from disposal via hazardous landfills to treatment,

recovery or re-use of waste

⚫ Industry leading critical analysis of best waste treatment /

disposal routes for customers

⚫ With c. 40% of the UK hazardous waste landfill and three

associated dedicated treatment plants, the business is

underpinned by secure long term disposal facilities

⚫ Hazardous waste types treated originate from UK EfW plants,

waste from construction projects, industrial processes,

decommissioning of the UK nuclear estate and the Oil & Gas

industry

⚫ Strengthened and lean business built over the last two

years with a focus on growing in key markets which are

highly profitable with high EBITDA margin, cash generative

and high ROCE

⚫ Investment opportunities to extend the scope and

diversity of the business still remain and provide a platform

to sustain good growth into the future

Geographical footprint

£107m £29m

Revenue (£m) EBITDA (£m)

The UK’s leading provider of hazardous waste management solutions

Treatment and Disposal North Sea Services

Avonmouth

Paisley

Port Clarence

PC Waste

Recovery Park

East

Northants RMF

Thornhaugh

Great

Yarmouth

Dundee

Aberdeen

Lerwick

2

£1.5-2bn

Group divisional overviewD

ivis

ion

s

Mark

et

siz

e

Mark

et

po

sit

ion

Co

mp

eti

tive

ad

van

tag

es

Treatment & Disposal

EfW residueConstruction &

Industrial waste

Radioactive waste

services

Treatment &

Recovery

North Sea Services

Drilling and Well

AbandonmentIndustrial

ServicesWaste Services

Treatment and disposal

of by-products

generated from EfW and

biomass plants (e.g.

APCR ash)

Treatment and disposal

of contaminated waste

from construction /

demolition activities and

specialist manufacturers

Disposal of low level

activity radioactive

waste mainly generated

from decommissioning

of UK nuclear plants

Hazardous and difficult

waste management

service supported by

specialist treatment

plants, vehicles,

equipment and expert

personnel

Waste management

of waste generated

from the drilling and

abandonment of

wells

Cleaning and

decontamination

services, including

vessels, tanks and

tube bundles

cleaning

General waste

management

services to active

O&G rigs and

platforms

Market leader for North Sea P&A

projects

Preferred

provider for specialised

decommissioning

services

✓ Most competitive

pricing

✓ Unique know-how

✓ Multiple sites with

national coverage

✓ Industry leading

customer and

technical support

team

✓ Soil washing

capabilities

✓ Only disposal site

capable of accepting

radioactive

hazardous waste

✓ Preparation &

cleaning pre disposal

✓ On-site Technical

Resource capability

✓ Comprehensive

treatment for all

waste types

✓ Multiple sites with

national coverage

✓ Multi skilled

capabilities –

allowing for a

wide range of

in house

services

✓ Strategic

access to

decommission-

ning hub and

know-how

✓ One-stop-shop

waste

management

solutions for

the offshore

O&G industry

Established

presence as waste

management

provider of choice

Established player

within local geographies

Active across multiple niche and attractive hazardous waste markets, with leading positions and strong

barriers to entry

c. £1bn

c. 40%

of remaining UK haz

void

Only player with

radioactive

hazardous permit

Number one

player in APCR

Arr

ow

s =

gro

wth

3

Long-term drivers of growth

Main market drivers

8mt of EfW capacity expected to be added in

the next 5-6 years - resulting in c. 410ktpa of

additional EfW ash/residue needed to be

treated

Strategy

⚫ Win significant share of new EfW APCr

treatment/disposal contracts by maintaining most

competitive pricing

⚫ Continue with track record of 90% win rate

HMRC taxing of soil on site, resulting in

greater landfilling. Greater EA enforcement

Brownfield site redevelopment

⚫ Continue to capitalise on revamped sales and

commercial team

⚫ Increase market share in London by establishing a

river-sea-river route to transport London’s construction

soils to Port Clarence

⚫ Expand site capability

➔ Decommission of UK nuclear estate

expected to steadily continue over the next

40 years

⚫ Broaden service offering / technical capabilities to

become a provider of full lifecycle of radioactive waste

management

⚫ Port Clarence licence extension – NORM and sort and

segregation increased offering

➔ Regulatory drive to dispose of waste through

recycling and recovery vs. landfill

⚫ Increase capacity utilisation at current treatment facilities

⚫ Re-focus and increase HiPods operations

Waste value streams

Growth driven by favourable market trends and well-defined business strategy

EfW residue

Construction &

industrial waste

Radioactive waste

services

Treatment & recovery

North Sea Services

Growth

Rapidly increasing decommissioning market

– £15-20bn spend estimated over the next 10

years of which up to c. £1bn (5% of total) is

addressable by Augean

⚫ Establish Dundee as main port for decommissioning

projects

⚫ Win majority of Plug & Abandonment projects by

leveraging current market leading position in on-site

waste support services

4

Strategy

Overall Group strategic focus

➔ Maintain focus on margin and ROCE optimisation

➔ Eliminate debt

➔ Resolve HMRC

Drive further growth in specialist

defensible areas and support the

current asset base with targeted

forward investment

➔ North Sea, particularly decommissioning

➔ Support for Nuclear decommissioning

➔ Contaminated construction and demolition soils

➔ EfW residue growth — support

➔ Invest in waste stream specific treatments to develop and enhance existing key

assets

5

Operational highlights

Strong revenue growth

across all divisions

Established Market

leading positions and a

successful diversification

strategy in the North Sea

Continued

Business optimisation

✓ Sales growth overall of 33%, Landfill up 28%, Radioactive 5%, Treatment (5%) and North Sea 61%. All sites

showed profit growth year on year with some standout performances, notably Port Clarence WRP up 88%,

PC Landfill 65%, Paisley 65%, Kings Cliffe Landfill 62%, and North Sea 25%

✓ 12% growth from residues from Energy from Waste (plants despite no new municipal EfW opening in 2019)

✓ Significant increase for soils of 46% reflecting a successful investment in the team resulting in a more

effective and focused approach

✓ Continued diversification in North Sea into industrial services, decommissioning and waste management

more than offsetting reduced drilling volumes resulting in profit increase of 25%

✓ Excellent progress on business optimisation program with cost savings exceeding target and no cost creep

✓ Contracts won in 2019 representing one third of 2019 municipal ash volume with EfW plants expected to in

2020 with full impact by 2021

✓ Increasing margins contributing £3.1m in additional profit

6

Group financials

Strong track record of revenue growth Industry leading margins

Treatment and Disposal North Sea Services

Revenue (£m) FCF (£m)2

Margin (%)

4% 19%Growth (%)

Adjusted EBITDA (£m)

22% 24%20% 39% 82%34%

Significant improvement in cash

generation

Cash conversion (%)

1

Notes

1 Revenue for 2016A excludes revenue generated from AIS (£5.5m), Colt (£3.5m) and East Kent (£2.7m) which are excluded from the financials reported on the continuing basis for 2017A and 2018A

2 Free Cash Flow (FCF) defined as EBITDA less capex; cash conversion defined as FCF over EBITDA

34% 27% 80%

6467

80

107

2016A 2017A 2018A 2019A

13

15

19

29

2016A 2017A 2018A 2019A

23

4

6

15

2016A 2017A 2018A 2019A

68.8

91.5

FY 2018 FY 2019

7

FY 2019 Financial highlights1

Note

1 From continuing operations excluding landfill tax, other non-underlying items and share based payments

2 Denotes statutory results

Adjusted revenue

(excluding landfill tax)

Adjusted PBT

Adjusted EBITDA

Adjusted EPS

Net (debt)/cash position

of £(13.2)m – after LFT

cash payment of £40.4m and

LTIP payment of £4.0m

ROCE

1

2

3

4

5

6

+33% increase FY 2019

vs FY 2018

37.8%FY 2019

+68% increase FY 2019

vs FY 2018

+52% increase FY 2019

vs FY 2018

+80% increase FY 2019

vs FY 2018

+72% Adj. operating CF

increase –

£29.6m vs

£17.2m in FY18

18.9

28.8

FY 2018 FY 2019

8.2

(13.2)

FY 2018 FY 2019

21.6%FY 2018

FY 2018 FY 2019

FY 2018 FY 2019

11.4

10.6

19.2

(15.3)

8.5

9.6

15.3

(12.3)

8

Adjusted income statement

Note

1 From continuing operations excluding landfill tax, exceptional items and share based payments

⚫ Exceptional items in 2019 of £34.5m including:

– £0.7m exceptional expense related to continuing operations, being £0.5m of net landfill tax legal costs and £0.2m of other costs and

– LTIP expense of £7.6m

– LFT expense of £26.2m

£m, Dec y/e1 FY 2019 FY 2018 Change (%)

Excluding exceptional items

Revenue 91.5 68.8 33%

Operating expenses (71.6) (56.6) (27)%

Operating profit 19.9 12.2 63%

Finance charges (0.7) (0.7)

Profit before tax 19.2 11.5 68%

Discontinued / Exceptional Items (34.5) 1.1

PBT including exceptional items (15.3) 12.6

9

Balance sheet

£m, Dec y/e FY 2019 FY 2018 Change (£m)

Goodwill and intangible assets 19.8 19.8 -

PPE and other non-current assets 47.2 42.2 5.0

Total non-current assets 67.0 62.0 5.0

Net current assets (excluding cash and debt) 2.6 (1.2) 3.8

Restoration and capping provisions (8.7) (8.7) -

Capital employed 60.8 52.1 8.8

Net (debt) / cash (13.2) 8.2 (21.4)

Net assets 47.6 60.3 (12.7)

Gearing n/a n/a

ROCE % on average capital employed 37.8% 21.6% 16.2%

10

Total cash flows and net debt

£m, Dec y/e FY 2019 FY 2018 Change (£m)

EBITDA (continuing and before exceptional items) 28.8 18.9 9.9

Net working capital (0.5) (0.3) (0.2)

Interest, taxation and other (1.3) (1.4) 0.1

Net operating cash flows 27.0 17.2 9.8

Maintenance capital expenditure (4.3) (2.0) (2.3)

Post maintenance free cash flow 22.7 15.2 7.5

Development capital expenditure (1.5) (1.4) (0.1)

Free cash flow 21.2 13.8 7.4

Dividends paid - - -

Net cash flow from continuing operations 21.2 13.8 7.4

Sale of business and assets 3.3 6.2 (2.9)

Net cash generation 24.5 20.0 4.5

Exceptional items (44.5) (0.3) (44.2)

Net cashflow (20.0) 19.7 (39.7)

11

Bank facilities

Note

1 Excluding exceptional items

£m, Dec y/e1 FY 2019 FY 2018

Closing net cash / (debt) (13.2) 8.2

Closing headroom (not including £10m M&A accordion) 26.6 25.2

Gearing (net debt/equity) 27.9% n/a

Net debt/EBITDA (covenant < 2.5x) 0.5x n/a

12

Outlook

Eliminate bank debt1

Continue to challenge the HMRC LFT claims2

Maximise opportunity in the key growth markets of Energy from Waste, Treatment, and Decommissioning projects

both nuclear and North Sea3

The Board is confident in the Group’s prospects for the full year

13

Summary

Leader

UK wide network of

locations

Successful

turnaround strategy

Highly attractive

investment

opportunity

Strong

performance

Favourable

market trends

✓ In attractive niche and highly regulated hazardous waste markets

✓ Two hazardous landfill locations accounting for c. 40% of current void and optionally to increase void

✓ Strategy successfully executed resulting in strong financial performance

✓ Strong revenue momentum, which analysts are expecting to continue going forward

✓ Growth supported by strong market trends and a targeted business strategy

✓ Multiple levers for value creation

14

Key investment highlights

Attractive financial profile…

… with analysts expecting strong

revenue and profit growth to

continue over the forecast period

+19%Revenue CAGR

2016-19

27%EBITDA margin

2019

37%ROCE

FY 2019

80%Cash conversion

2019

Revenue (£m)EBITDA (£m)

64 6780

107

2016A 2017A 2018A 2019A

⚫ Comprehensive range of hazardous waste treatment and disposal solutions

⚫ Leading provider of EfW ash treatment and disposal with exceptional 86% win

rates

⚫ Leader in hazardous construction and demolition wastes

⚫ Leading provider of waste management solutions to the North Sea O&G sector

⚫ Only company to operate with a haz and non-haz low-level radioactive waste

permit and a second low level radioactive waste licence in planning for Port

Clarence, creating the only disposal facility combined with on site treatment

optionality

UK’s market leading provider of

hazardous waste management

solutions

UK-wide network of strategically

located treatment and disposal

facilities

⚫ 2 hazardous landfills representing c. 40% of remaining void in the UK, with life

through to 2050 and beyond

⚫ Share of void should further increase over the next 30 years – e.g. a further

1.9m m3 of void located in ENRMF

⚫ 100% success rate on planning permissions for new planning and development

⚫ 3 well-invested treatment and recovery facilities

⚫ 4 North Sea sites strategically located for the decommissioning market

1315

1929

2016A 2017A 2018A 2019A

Appendix

Appendix

Appendix

16

4.8

2.01.8

1.81.5

1.11.0

0.9

0.40.1

Hazardous landfills

UK hazardous landfill capacity by site Commentary

⚫ Unlike non-hazardous landfills, demand for

hazardous landfills is expected to stay constant

as it is the only possible disposal option for a

majority of hazardous waste types, post

treatment and recovery

⚫ Levels of recycling, re-use and treatment of

industrial wastes means that residual materials

currently received to hazardous landfills should

persist

⚫ The National Policy Statement for Hazardous

Waste establishes a need for further hazardous

waste landfill capacity with general planning

policy supporting the extension of existing above

new sites

⚫ Augean currently holds c. 40% of hazardous

landfill void in the UK, through its Port Clarence

and ENRMF facilities establishing it as a key

player in the hazardous waste disposal market

⚫ Furthermore, Port Clarence and ENRMF have

the potential to increase their void

Augean holds c. 40% of the remaining hazardous landfill void in the UK, with life through 2050 and

beyond

Operator

Planning

expiry

NamePort

Clarence

ICI No 3

Teesport

White

moss

Bradley

Park

Wins-

ford

Wing-

moor Farm

ENRMF Winterton

South

Parkgate Polmont

n/a 2035 2028 n/a 2030 2025+ 2026 2023 20222050

Comments

c. 4 / 5

years

expected

life

Salt mine

/ Veolia

lease

expires in

3 years

m m3 hazardous landfill void

Augean currently holds c. 40% of

hazardous landfill void in the UK

+1.9m m3 from

additional

adjacent land

optioned

Limited

waste

types

accepted

Source: Tolvik

A. Appendix

17

211 ktpa

60 ktpa

38 ktpa

103 ktpa

-

50kt

100kt

150kt

200kt

250kt

Planning Commissioning On Hold In Build

Large pipeline on potential new contracts… … supporting significant growth in volumes treated by Augean

410 ktpa of APCr, IBA and Fly Ash

from

37 EfW / biomass

plants in planning/commissioning

or construction

Large pipeline supporting topline growth >35 EfW / biomass plants in construction or planning, which are expected to add c. 410ktpa of EfW residue in

the market, of which Augean is expected to win a significant share, in line with historical win rates

⚫ Large pipeline of contracts for treatment and disposal of APCr and

bottom ash, as result of 37 EfW / biomass facilities either in

planning/commissioning or already under construction

EfW residue treated and disposed by Augean - historical and forecast (ktpa)

~150

~190

~210

-

100kt

200kt

300kt

2017 2018 2019

APCr Bottom ash

⚫ Volumes of APCr and bottom ash treated and disposed by Augean

Source: Tolvik

A. Appendix