Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — H1 2025 Earnings Presentation
41 slides from Cleanaway Waste Management's earnings presentation, Feb 19, 2025
Slide 1: 1H FY25 Financial Results
1H FY25 Financial Results 19 February 2025 CLEANAWAY 1H FY25 Financial Results 1
Slide 2: Disclaimer
Disclaimer This presentation contains summary information about the current activities of Cleanaway Waste Management Limited (“CWY”) and its subsidiaries that should be read in conjunction with CWY's Consolidated Financial Report for the six-months ended 31 December 2024 and associated results annou
Slide 3: Acknowledgement of country
Acknowledgement of country Cleanaway acknowledges the Traditional Owners of the lands on which we operate and in the communities in which we exist. We pay our respect to all Aboriginal and Torres Strait Islander peoples. Artwork by Marcus Lee, a proud Aboriginal descendant of the Karajarri people fr
Slide 4: Agenda
1. Highlights and overview 2. Financial performance 3. Segment updates AGENDA 4. Strategic progress and outlook Presenters: Mark Schubert, CEO & MD Paul Binfield, CFO CLEANAWAY 1H FY25 Financial Results 4
Slide 5: Highlights and Overview
HIGHLIGHTS AND OVERVIEW Pictured: Cleanaway’s Welland team delivering C&D skip bins, Adelaide, South Australia CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 5 5
Slide 6: Reliable track record of double-digit EBIT growth
Demonstrating a reliable track record of double-digit EBIT growth Delivering shareholders sustainable margin expansion; underlying EPS and DPS growth alongside improved underlying ROIC Net Revenue1,2 Underlying EBIT $1,659.4m 4.6% on 1H FY24 $195.2m 12.2% on 1H FY24 • Expanded EBIT margin by 80b
Slide 7: Health, Safety, Environment
Health, Safety, Environment 2 years into our 5-year HSE strategy and roadmap to drive improvements in our performance and culture Safety & Environment Update on the St Marys fire • Investigation underway Serious injury frequency rate (SIFR1) 1.0 – Initial insights indicate recently installed fire co
Slide 8: Living our purpose through our new sustainability framework
Living our purpose through our new sustainability framework Branch-led Operating Model being rolled out across the Group; Increased resource recovery capacity; Commissioned PFAS capacity; Monetising methane capture at Lucas Heights • Rolling out Branch-led Operating Model across the Group Working •
Slide 9: Financial Performance
FINANCIAL PERFORMANCE Pictured: FOGO process with Biomax at Organics Eastern Creek, NSW CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 9
Slide 10: Financial performance summary
Financial performance summary Strong financial results delivering shareholders sustained underlying EBIT margin expansion, increased underlying ROIC, and underlying EPS and DPS growth UNDERLYING STATUTORY 1H FY25 ($m) 1H FY24 ($m) Variance (%) 1H FY25 ($m) 1H FY24 ($m) Variance (%) Gross Revenue 1,9
Slide 11: Net operating cash flow
Net operating cash flow Underlying business improvement continues to drive strong cash generation; net operating cash flow lower due to recommencement of tax payments Net operating cash flow ($m) Operating cash flow ($m) 375.0 313.2 279.3 325.0 • Net operating cash flow1 decreased by $65.1m on pcp,
Slide 12: Capital expenditure
Capital expenditure FY25 capex guidance unchanged at ~$400m, on-track to be a reduction of almost $50m vs FY24 1H FY25 expenditure projects to deliver earnings growth and efficiency: • Western Sydney MRF • Eastern Creek Organics FOGO transition • CustomerConnect • Fleet replacement FY25 capex guidan
Slide 13: Net finance costs
Net finance costs Overall net finance costs are stabilising, FY25 expected to be $120-$125m1 due to timing of capex and working capital management Net finance costs ($m) 58.8 58.9 56.9 Unwind of discount on provisions and other liabilities (non-cash) 2 50.7 • Non-current provisions, principally the
Slide 14: Segment Updates
SEGMENT UPDATES Pictured: City of Logan branch. QLD CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 14 14
Slide 15: Solid Waste Services
Solid Waste Services Delivered net revenue growth and sustainable EBIT margin expansion $m NET REVENUE 1 EBIT 2 EBIT MARGIN • 7.0% revenue growth (up from 5.2% in pcp) driven by price increases and volume growth Solid Waste Services $ 1,168.8 $177.2 15.2% • 11.4% EBIT growth vs pcp reflects + CDS, C
Slide 16: Solid Waste Services (continued)
Solid Waste Services (continued) Growth in CDS, landfills, resource recovery, commodities and carbon; C&D market remains challenging Landfills Resource recovery • EBIT up 1.1% as overall lower volumes were offset by price increases, Organics density improvements and tight cost control • FOGO transit
Slide 17: Solid Waste Services (continued)
Solid Waste Services (continued) Driving sustainable margin improvement and reduced operating risk through branch optimisation Branch Optimisation Initiative: SWOT Teams Branch Optimisation Initiative: Branch-led Operating Model (BOM) Addressing underperformance through targeted programs of work Pro
Slide 18: Liquid Waste & Health Services
Liquid Waste & Health Services Integration of Liquid & Technical Services (LTS) and Hydrocarbons to deliver savings in FY26 $m NET REVENUE EBIT 1 EBIT MARGIN Liquid & Technical Services (LTS) Liquid Waste & Health Services $360.5 $41.2 11.4% • Revenue up 4.9% and EBIT up 4.4% driven by strong growth
Slide 19: Liquid Waste & Health Services (continued)
Liquid Waste & Health Services (continued) Health Services expected to deliver more than $15m EBIT in FY25 HEALTH SERVICES PRE-TRANSFORMATION POST-TRANSFORMATION • Health Services’ transformation showcases the TRANSFORMATION JUNE 2023 DEC 2024 value creation embedded in our Branch-led Operating Mode
Slide 20: Industrial & Waste Services
Industrial & Waste Services Restructure complete and on-track to return to its 1H FY24 earnings run-rate in Q4 FY25 $m NET REVENUE EBIT 1 EBIT MARGIN • As expected market conditions were challenging, continuing 2H FY24 trend Industrial & Waste Services (I&WS) $194.5 $10.9 5.6% • Restructure complete
Slide 21: Strategic Progress and Outlook
STRATEGIC PROGRESS AND OUTLOOK Pictured: Burpengary depot in Moreton Bay, QLD CLEANAWAY 21 CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 21
Slide 22: Blueprint 2030 growth strategy
Blueprint 2030 growth strategy Building a safe and resilient platform, delivering sustainable growth and improving returns in FY25, FY26 and beyond Sustainable Customer Solutions Strategic + Greater Market Share Infrastructure Growth Operational + Accretive Investments Excellence Footprint + Improve
Slide 23: Operational efficiency powered by data & analytics
Operational efficiency supported 80 bps margin expansion in 1H FY25 Program on track to deliver more than $50m in FY26 and ongoing, sustained benefits in FY27 and beyond Initiatives 1H25 progress Initiatives potential Continued growth • 78% of all Solids branches have the ‘Drumbeat’ in place FY25 FY
Slide 24: FY25 underlying EBIT tracking towards midpoint of guidance
FY25 underlying EBIT tracking towards midpoint of guidance Step up in 2H underlying EBIT vs 1H driven by accelerating realisation of operational excellence benefits FY25 underlying EBIT guidance Underlying EBIT • Tracking towards the midpoint of the $395m to $425m guidance range • 2H FY25 to be supp
Slide 25: FY26 Financial Ambition and Scorecard
FY26 Financial Ambition and Scorecard Confident in ability to deliver mid-term ambition of more than $450m underlying EBIT in FY26 Other initiatives Blueprint 2030 aligned priorities 1H FY25 (not included in FY26 financial ambition) • Driving operational efficiency across SBU’s including: • Material
Slide 26: Q&A
Q&A CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 26 26
Slide 27: Case Studies
CASE STUDIES CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 27 27
Slide 28: Operational efficiency: Fleet transformation
Operational efficiency: Fleet transformation A holistic, centralised approach to reducing fleet operating costs and capital expenditure Programs Strategic goal 1H FY25 progress 2H FY25 activities • Applied ownership model to each SBU, identifying • Complete 3PL tender in Solids VIC/Tas excess assets
Slide 29: Operational efficiency: Branch optimisation
Operational efficiency: Branch optimisation SWOT program: Dedicated support for branches to unlock their potential 1H FY25 SWOT deployments Example: SWOT deployment to a large C&I branch located at a regional Objective centre in VIC • Uplift EBIT margin % to assessed potential From the Branch Manage
Slide 30: Operational efficiency: CustomerConnect
Operational efficiency: CustomerConnect Digitising our call to cash cycle: Project delivery delayed six-months, total project costs now expected to be ~$130m (previously $100m) with majority of increase relating to change management risk mitigation Delivered: upgrading IT foundations and simplifying
Slide 31: Operational efficiency: Branch Optimisation
Operational efficiency: Branch Optimisation Business Teams: Driving yield improvement across our Materials Recovery Facilities Objective Example: Laverton Materials Recovery Facilities equipment • Improve the sorting efficiency of the Materials Recovery Facilities upgrades (MRFs) to maximise the com
Slide 32: Decommissioning, decontamination and remediation services
Decommissioning, decontamination and remediation services Leveraging our expertise and strengths across Cleanaway to deliver growth in FY26 and beyond Oil & Gas Decommissioning Decommissioning, decontamination and remediation value chain Upcoming decommissioning projects have an indicative addressab
Slide 33: Appendices
APPENDICES CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 33 33
Slide 34: Statutory NPAT to underlying NPAT reconciliation
Statutory NPAT to underlying NPAT reconciliation 1H FY25 ($m) Commentary Statutory NPAT attributable to ordinary equity holders 73.3 ‒ Net insurance recoveries of $6.2 million were recognised during the Pre-tax adjustments: period in relation to property damage and business interruption claims agree
Slide 35: Group income statement – statutory and underlying results
Group income statement – statutory and underlying results Statutory Result Adjustments Underlying Result ($m) 1H FY25 1H FY24 1H FY25 1H FY24 1H FY25 1H FY24 Sales revenue external and other revenue (Gross 1,940.2 1,871.6 - - 1,940.2 1,871.6 Revenue Share of losses from equity accounted investments
Slide 36: Balance sheet
Balance sheet ($m) 31-Dec-24 30-Jun-24 31-Dec-23 ASSETS Cash and cash equivalents 116.4 120.6 60.6 Trade and other receivables 566.7 557.3 589.1 Inventories 63.6 58.2 53.3 Property, plant and equipment 1,775.2 1,777.1 1,724.1 Right-of-use assets 601.1 611.1 616.3 Intangible assets 3,053.3 3,067.9 3,
Slide 37: Cash flow
Cash flow ($m) 1H FY25 1H FY24 Underlying EBITDA 383.2 356.5 Cash flow of underlying adjustments (19.4) (23.5) Other non-cash items 3.9 (2.5) Payments for rectification and remediation of landfills (17.6) (19.1) Other changes in working capital (46.7) (37.1) Net interest paid (44.7) (40.6) Tax paid
Slide 38: Net finance costs
Net finance costs ($m) 1H FY25 1H FY24 Cash interest expense Bank interest and leases 31.8 29.6 Commitment and Guarantee fees 1.6 2.0 USPP Notes 12.0 11.6 Interest received (2.1) (1.6) Net cash interest expense 43.3 41.6 Non-cash finance costs Amortisation of capitalised borrowing costs 0.6 0.7 Unwi
Slide 39: Balance sheet, liquidity and covenants
Balance sheet, liquidity and covenants Strong balance sheet positioned for growth Overview Key finance facilities maturity profile, $ million • At 31 December 2024, the Group had $2481 million headroom under committed debt facilities • Leverage ratio2 of 1.95x Available debt facility 88 4 • The Grou
Slide 40: Underlying segment disclosure
Underlying segment disclosure Liquid Waste Industrial & Equity Solid Waste Corporate & Eliminations – Group ($m) & Health Waste Accounted Services Other Group Results Services Services Investments Revenue Revenue from customers 1,399.9 321.4 187.0 – – – 1,908.3 Other revenue 21.5 10.4 – – – – 31.9 I
Slide 41: Contacts
CONTACTS Investor contact: Media contact: Josie Ashton Mark Biddulph Head of Investor Relations Head of Corporate Affairs + 61 416 205 234 +61 499 322 601 josie.ashton@cleanaway.com.au mark.biddulph@cleanaway.com.au Registered office: P +61 03 8397 5100 Level 4, 441 St Kilda Road, Melbourne F +61 03
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