Broom Holdings BidCo Ltd.

Overview Key strengths Key risks Strong market position in Ireland, with more than 2.6x and 3.6x the market share of the nearest competitors in waste collection and processing, respectively. Small absolute size compared with larger waste management peers in other countries, and limited geographical diversification with close to half of revenue generated in Ireland in 2023. Long-term contracts and low customer churn support revenue visibility and allow for beneficial offtake prices due to steady waste intake volumes. EBITDA margin pressure from the pass through of cost inflation and delays in executing on growth initiatives. High barriers to entry due to significant capital expenditure (capex), regulatory requirements, and multi-year contracts with existing market incumbents. High capex requirements limiting free operating cash

...Beauparc's 2023 operating performance was broadly as we expected, supporting an improvement in credit metrics and restoring rating headroom. At year end, leverage was 5.6x and funds from operations (FFO) to debt was 9.8% (5.7x and 8.8%, respectively, in our previous forecast). At the end of 2022, we had estimated leverage at 6.6x with FFO to debt of about 8.4%. The deleveraging was supported by like-for-like company-reported revenue growth of 9% (excluding the impact of the exit of the electricity and gas supply market through Panda Power). The S&P Global Ratings-adjusted EBITDA margin expanded to 16.6% at end-2023 from 13.7% (estimated) at end-2022. Revenue growth was supported by full-year contributions from acquired companies, price increases to catch up with inflation, and some volume growth. Margin expansion reflected a positive product mix (mitigating the lower-margin Panda Power business), additional capacity from the licensed Knockharley site, and better operating leverage thanks...

Full Report