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Biffa seeks to drive organic growth across all of its businesses by gaining new customers and by upselling services to existing customers. In its I&C business, Biffa has a clear focus to grow by acquisition, as a natural consolidator within a fragmented market.
Biffa looks to leverage the control of waste feedstock from its collections operations to invest in sustainable waste processing infrastructure. The expanded capacity and service offerings that this brings will help deliver the sustainability ambitions of both Biffa and its customers whilst providing the Group with long term sources of earnings.
Biffa aims to maximise margins by operating its business as efficiently as possible. Optimising Biffa’s systems and processes includes activities such as integrating acquisitions on to Biffa systems, delivering strong levels of customer service to minimise customer churn, leveraging e-commerce opportunities and ensuring that projects meet investment criteria and help deliver our Sustainability Strategy.
Focused on three specific investment areas:
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Collections growth ■ Scale and capabilities position us well for organic growth ■ Proven track record of M&A ■ Platform gives unique synergy opportunities |
Leading in UK plastic recycling ■ Operational and development track record ■ Control of materials ■ Trusted offtake partnerships |
Developing energy from waste infrastructure ■ Proven market need ■ Control of waste and consented sites ■ Underpins I&C business |
Underpinned by an extremely powerful sustainability story:
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Building a circular economy ■ Quadrupling our plastic recycling capability ■ Investing in energy from waste
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Tackling climate change ■ Efficient low carbon collections ■ Transitioning to EV/alternative fuels ■ Solar development |
Caring for our people, supporting our communities ■ Reduce Lost Time Injuries ■ Top quartile business for employee engagement ■ Manage 30% of estate for biodiversity |
Grow our market share
What we achieved
Biffa has continued its strong track record of delivering both organic and inorganic growth, delivering good levels of new contract wins in all areas of the business and by acquiring and successfully integrating acquisitions in our I&C business.
During the year, we achieved some flagship Collections division customer wins including Transport for London and Center Parcs in our I&C business, Winchester and Cornwall Council in our Municipal business, and North London Waste Authority and Müller in our Resources & Energy division.
We acquired the trade and assets of five small businesses for a combined consideration of £5.1m, which takes our total number of successfully integrated businesses up to 22 since 2016, with £102m invested and £132.6m in revenue acquired.
We made good progress in integrating acquired businesses from the prior year with all integrations on track. In particular, the integration of Weir Waste has seen strong operational synergies by reducing the size of the combined trade waste fleet by 24% and in SWR, where we have benefited significantly from additional revenues into our collection network.
June 2019 - Thamesdown Recycling
July 2019 - IWMS Waste Collection.com
September 2019 - Ribbex
November 2019 - Kier Somerset trade waste
January 2020 - Winchester City Council Trade Waste Business
Priorities
We have a strong track record in delivering on our M&A programme. The market remains fragmented and once we emerge from the COVID-19 crisis we will be well placed to continue with our strategy.
As at March 2020, we had several potential acquisitions that were significantly progressed, but those processes were put on hold due to the impact of COVID-19. We are confident that as the year progresses, we will be able to further progress our strategic growth plans in this area.
Develop services & infrastructure
What we achieved
A particular area of focus for the Group is in plastics recycling, where we have the operational track record, control of feedstock materials and the deep trusted partnerships with our customers that position us for success in this critical and growing sector. Similarly our focus is in EfW, where our control of feedstock and consented sites give us the potential to unlock the development of this much needed infrastructure.
In January 2020, we opened and commissioned the first phase of our new £27.5m PET plastics recycling facility in Seaham, County Durham. In the next year, Biffa intends to progress the second phase of this facility in addition to building a £7m facility in Washington, which will expand our recycling capabilities for plastic pots, tubs and trays. These combined investments will increase Biffa’s total recycled plastic processing capability to 140,000 tonnes per annum.
We also made good headway in growing our EfW assets, reaching financial close for our facility in Newhurst, Leicestershire in February 2020, a commitment by Biffa of c.£45m. The plant is now in construction and is expected to be operational in 2023. Our second project, the Protos EfW in Cheshire, is at an advanced stage of evaluation.
In response to the COVID-19 crisis, we deferred all non-essential and uncommitted capital expenditure. We anticipate that this will have only a modest impact on the timing of our plastics expansion plans and EfW programme.
Priorities
Our strategic priorities continue to remain as outlined in our Capital Markets Day in September 2019, the presentation for which is included on our website. We intend to proceed at pace with these plans once the COVID-19 crisis passes.
Optimise systems & processes
What we achieved
At the beginning of the financial year we restructured our business into two operating divisions – Collections and Resources & Energy. The restructure has delivered real benefits and synergies in particular with closer working between the I&C and Municipal businesses and between our Landfill and Landfill Gas operations.
Increasing efficiency was a key focus throughout the year which we accomplished in many areas, including our finance back office by deploying a Robotic Process Automation (RPA) using UI Path. The tool automates repetitive tasks and increases the speed of completing certain finance processes.
From a customer perspective, we experienced low levels of churn, in our I&C business, with key renewals including John Lewis Partnership, Baxter Healthcare, Greene King and Mitchells & Butlers. We also deployed customer facing Power BI reporting across 64 corporate customers which enables them to report on their overall spend, volumes, carbon consumption and other detailed activity. It is proving to be a real differentiator for new business versus competitors, adding to Biffa’s unique and quality service offering.
We successfully integrated prior year acquisitions, together with five additional businesses bought in year, overseen by our experienced management team. Our excellent M&A track record and integration capabilities have been key success factors in ensuring we can quickly benefit from the synergies that these acquisitions deliver.
We have also been progressing ‘Project Fusion’, the Group’s system replacement programme.
Priorities
Our investment focus remains on improving efficiency of Collections, processing and back office function operations. We also seek to reduce the level of manual intervention in operational day-to-day tasks so that our resource can provide more added value elsewhere. We will implement RPA in other areas of the business in the coming year to drive increased efficiency and will explore potential efficiency opportunities using our internal BrightSparks innovation process which generates new ideas.
