Recycle and Resource Operations Pty Ltd.

Overview Key strengths Key risks Vertically integrated waste service provider. Exposed to cyclical demand via infrastructure, residential, and non-residential construction markets. Landfill and recycling assets provide advantages over competitors. Small scale and limited geographic diversity in a fragmented market. Strong market presence in Sydney and growing presence in Melbourne and southeast Queensland. Likely benefits from structural shift to recycling. Operates in a highly regulated industry, with significant environmental risks. High leverage over the next 12-24 months. Weaker construction activity over the next two years could hamper the company's growth prospects and deleveraging efforts. Large infrastructure projects may offset this to some degree amid our expectation of a fall in residential and other construction. With a muted volume outlook, the company

...A challenging construction sector will weigh on collections volume for Recycle and Resources Operations Pty Ltd. (Bingo). Weaker construction activity over the next two years could hamper the company's growth prospects and deleveraging efforts. Large infrastructure projects may offset this to some degree amid our expectation of a fall in residential and other construction. With a muted volume outlook, the company will be more dependent on pricing increases and margin expansion to improve its credit metrics. Bingo's vertically-integrated business model and capital assets enhance its market position. The company participates across the value chain in collecting, recycling, and disposing of waste from the construction and infrastructure industries in Sydney, Melbourne, and more recently, southeast Queensland. The group generates over 90% of its EBITDA from the post-collections segment. This segment enjoys higher margins and higher capital barriers to entry than collections and should continue...

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