Cleanaway Waste Management Ltd. · ASX:CWY
Cleanaway Waste Management — H1 FY2025 Earnings Presentation
47 slides from Cleanaway Waste Management's earnings presentation, Feb 19, 2025
Slide 1: FY25 Half Year Financial Results cover letter
19 February 2025 Company Announcements Office ASX Limited Exchange Office Level 4, 20 Bridge Street Sydney NSW 2000 For personal use only Dear Sir/Madam, FY25 HALF YEAR FINANCIAL RESULTS MEDIA RELEASE AND INVESTOR PRESENTATION Please find attached the following documents in relation to the Company’s
Slide 2: 1H FY25 Financial Results media release
ASX & Media Release 19 February 2025 1H FY25 FINANCIAL RESULTS Cleanaway continues to deliver double-digit EBIT growth, sustained margin expansion and increased returns Remains on-track to deliver FY25 guidance and FY26 mid-term ambition Cleanaway Waste Management Limited (Cleanaway or the Company)
Slide 3: CEO comments and outlook
ASX & Media Release 19 February 2025 Cleanaway CEO & Managing Director, Mark Schubert, said: “Delivering double-digit earnings growth and improved returns is further evidence of our strong track record of delivering shareholder value. Disciplined execu on of our Blueprint 2030 strategy is realising
Slide 4: Group financial performance commentary
ASX & Media Release 19 February 2025 Underlying EBIT margin was 11.8%, an increase of 80 basis points on the prior corresponding period (pcp: 11.0%). The increase in underlying EBIT reflects the revenue growth men oned above, supported by opera onal efficiency ini a ves, the restora on of Health Servi
Slide 5: Segment performance commentary
ASX & Media Release 19 February 2025 Solids underlying EBIT was $177.2 million, an 11.4% increase on the prior corresponding period (pcp: $159.0 million). This growth was driven by strong performance in the CDS, commodi es and carbon, and Metropolitan municipal opera ons, along with the realisa on o
Slide 6: FY25 guidance and investor enquiries
ASX & Media Release 19 February 2025 Net finance costs are expected to be between $120 and $125 million, below previous guidance of $130 million. Capital expenditure guidance for the year remains unchanged at approximately $400 million, almost $50 million lower than FY24, reflec ng management’s comm
Slide 7: 1H FY25 Financial Results
For personal use only 1H FY25 Financial Results 19 February 2025 CLEANAWAY 1H FY25 Financial Results 1
Slide 8: Disclaimer
Disclaimer For personal use only 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 as
Slide 9: Acknowledgement of country
Acknowledgement of country For personal use only 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 t
Slide 10: Agenda
For personal use only 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 11: Highlights and Overview
For personal use only 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 12: Demonstrating a 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 • Expanded EBIT margin by 80bps to 11.8% vs pcp For personal use only $1,659.4m 4.
Slide 13: Health, Safety, Environment
Health, Safety, Environment 2 years into our 5-year HSE strategy and roadmap to drive improvements in our performance and culture For personal use only Safety & Environment Update on the St Marys fire • Investigation underway Serious injury frequency rate (SIFR1) 1.0 – Initial insights indicate rece
Slide 14: Living our purpose through our new sustainability framework
Living our purpose through our new sustainability framework Branch-led Operating Model being rolled out across the Group; Increased resource recovery capacity; Commissioned PFAS capacity; Monetising methane capture at Lucas Heights For personal use only • Rolling out Branch-led Operating Model acros
Slide 15: Financial Performance
For personal use only FINANCIAL PERFORMANCE Pictured: FOGO process with Biomax at Organics Eastern Creek, NSW CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 9
Slide 16: Financial performance summary
Financial performance summary Strong financial results delivering shareholders sustained underlying EBIT margin expansion, increased underlying ROIC, and underlying EPS and DPS growth For personal use only UNDERLYING STATUTORY 1H FY25 ($m) 1H FY24 ($m) Variance (%) 1H FY25 ($m) 1H FY24 ($m) Variance
Slide 17: Net operating cash flow
Net operating cash flow Underlying business improvement continues to drive strong cash generation; net operating cash flow lower due to recommencement of tax payments For personal use only Net operating cash flow ($m) Operating cash flow ($m) 375.0 313.2 279.3 325.0 • Net operating cash flow1 decrea
Slide 18: Capital expenditure
Capital expenditure FY25 capex guidance unchanged at ~$400m, on-track to be a reduction of almost $50m vs FY24 For personal use only 1H FY25 expenditure projects to deliver earnings growth and efficiency: • Western Sydney MRF • Eastern Creek Organics FOGO transition • CustomerConnect • Fleet replace
Slide 19: Net finance costs
Net finance costs Overall net finance costs are stabilising, FY25 expected to be $120-$125m1 due to timing of capex and working capital management For personal use only Net finance costs ($m) 58.8 58.9 56.9 Unwind of discount on provisions and other liabilities (non-cash) 2 50.7 • Non-current provis
Slide 20: Segment Updates
For personal use only SEGMENT UPDATES Pictured: City of Logan branch. QLD CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 14 14
Slide 21: Solid Waste Services
Solid Waste Services Delivered net revenue growth and sustainable EBIT margin expansion • 7.0% revenue growth (up from 5.2% in pcp) driven by price increases and volume growth For personal use only $m NET REVENUE 1 EBIT 2 EBIT MARGIN Solid Waste Services $ 1,168.8 $177.2 15.2% • 11.4% EBIT growth vs
Slide 22: 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 For personal use only • EBIT up 1.1% as overall lower volumes were offset by price increases, Organics density improvements and tight cost
Slide 23: Solid Waste Services (continued): branch optimisation
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) For personal use only Addressing underperformance through targete
Slide 24: Liquid Waste & Health Services
Liquid Waste & Health Services Integration of Liquid & Technical Services (LTS) and Hydrocarbons to deliver savings in FY26 For personal use only $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% d
Slide 25: 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 For personal use only • Health Services’ transformation showcases the TRANSFORMATION JUNE 2023 DEC 2024 value creation embedded in our Bra
Slide 26: Industrial & Waste Services
Industrial & Waste Services Restructure complete and on-track to return to its 1H FY24 earnings run-rate in Q4 FY25 For personal use only $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%
Slide 27: Strategic Progress and Outlook
For personal use only STRATEGIC PROGRESS AND OUTLOOK Pictured: Burpengary depot in Moreton Bay, QLD CLEANAWAY 21 CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 21
Slide 28: 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 For personal use only Sustainable Customer Solutions Strategic + Greater Market Share Infrastructure Growth Operational + Accretive Investments Excellen
Slide 29: Operational efficiency supported margin expansion in 1H FY25
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 use only Initiatives potential Continued growth • 78% of all Solids branches have the ‘Drumbeat’ in plac
Slide 30: 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 For personal use only Underlying EBIT • Tracking towards the midpoint of the $395m to $425m guidance rang
Slide 31: 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 For personal use only (not included in FY26 financial ambition) • Driving operational efficiency across SBU’s
Slide 32: Q&A
For personal use only Q&A CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 26 26
Slide 33: Case Studies
For personal use only CASE STUDIES CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 27 27
Slide 34: 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 For personal use only • Applied ownership model to each SBU, identifying • Complete 3PL tender in Solids
Slide 35: 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 For personal use only Objective centre in VIC • Uplift EBIT margin % to assessed potential
Slide 36: 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 $100m) with majority of increase relating to change management risk mitigation For personal use only Delivered: upgrading IT found
Slide 37: Operational efficiency: Business Teams at MRFs
Operational efficiency: Branch Optimisation Business Teams: Driving yield improvement across our Materials Recovery Facilities Objective Example: Laverton Materials Recovery Facilities equipment For personal use only • Improve the sorting efficiency of the Materials Recovery Facilities upgrades (MRF
Slide 38: Decommissioning, decontamination and remediation services
Decommissioning, decontamination and remediation services Leveraging our expertise and strengths across Cleanaway to deliver growth in FY26 and beyond Decommissioning, decontamination and remediation value chain For personal use only Oil & Gas Decommissioning Upcoming decommissioning projects have a
Slide 39: Appendices
For personal use only APPENDICES CLEANAWAY CLEANAWAY 1H 1H FY25 FY25 Financial Financial Results Results 33 33
Slide 40: Statutory NPAT to underlying NPAT reconciliation
Statutory NPAT to underlying NPAT reconciliation For personal use only 1H FY25 ($m) Commentary Statutory NPAT attributable to ordinary equity holders 73.3 ‒ Net insurance recoveries of $6.2 million were recognised during the Pre-tax adjustments: period in relation to property damage and business int
Slide 41: Group income statement – statutory and underlying results
Group income statement – statutory and underlying results For personal use only Statutory Result Adjustments Underlying Result ($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
Slide 42: Balance sheet
Balance sheet For personal use only ($m) 31-Dec-24 30-Jun-24 31-Dec-23 ASSETS Cash and cash equivalents 116.4 120.6 60.6 Trade and other receivables 566.7 557.3 589.1 Inventories 63.6 58.2 53.3 Property, plant and equipment 1,775.2 1,777.1 1,724.1 Right-of-use assets 601.1 611.1 616.3 Intangible ass
Slide 43: Cash flow
Cash flow ($m) 1H FY25 1H FY24 For personal use only 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 (
Slide 44: Net finance costs
Net finance costs For personal use only ($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 borrow
Slide 45: Balance sheet, liquidity and covenants
Balance sheet, liquidity and covenants Strong balance sheet positioned for growth For personal use only Overview Key finance facilities maturity profile, $ million • At 31 December 2024, the Group had $2481 million headroom under committed debt facilities • Leverage ratio2 of 1.95x Available debt fa
Slide 46: Underlying segment disclosure
Underlying segment disclosure For personal use only Liquid Waste Industrial & Equity Solid Waste Corporate & Eliminations – Group ($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
Slide 47: Contacts
CONTACTS For personal use only 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 Ro
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