How Cleanaway’s Operational Excellence Fuels Double-Digit EBIT Growth
Cleanaway Waste Management reported strong FY25 results with double-digit earnings growth and a 20% dividend increase, while setting an ambitious EBIT target for FY26 supported by recent acquisitions and operational improvements.
- FY25 underlying EBIT up 14.6% to $411.8 million
- Earnings per share increased by 15.8%
- Declared a fully franked dividend up 20% to 6.0 cents per share
- FY26 underlying EBIT guidance between $470 million and $500 million including acquisitions
- Operational excellence and strategic acquisitions underpin growth
Strong Financial Performance Amid Operational Excellence
Cleanaway Waste Management Limited has reported another year of solid financial progress for FY25, highlighted by a 14.6% increase in underlying EBIT to $411.8 million and a 15.8% rise in earnings per share. The company’s disciplined approach to pricing, cost management, and operational improvements has translated into a record EBIT margin of 12.5%, underscoring the effectiveness of its strategic initiatives.
Despite some non-recurring costs related to a fire incident, IT transformation, and acquisition integration, Cleanaway’s statutory EBIT still rose 3.6% to $353.7 million. The company’s free cash flow was impacted by a catch-up tax payment but showed underlying strength when adjusted for this one-off item.
Growth Driven by Solid Waste Services and Strategic Acquisitions
The Solid Waste Services segment was a key driver of revenue growth, delivering a 6.0% increase in net revenue and a 12.8% rise in underlying EBIT. This performance was supported by disciplined pricing in commercial and industrial collections, volume growth in landfills, and operational excellence initiatives such as the Branch-led Operating Model and Fleet Transformation program.
Cleanaway also expanded its footprint through acquisitions, including Citywide Waste and Contract Resources, which are expected to contribute approximately $30 million in EBIT in FY26. These moves strengthen the company’s post-collection network and enhance its capabilities in decommissioning and remediation services.
Outlook and Strategic Focus for FY26
Looking ahead, Cleanaway is guiding for another year of double-digit EBIT growth, with underlying EBIT expected between $470 million and $500 million, including acquisition contributions. The company remains confident in achieving its mid-term ambition of more than $450 million underlying EBIT excluding acquisitions.
Capital expenditure is forecast at approximately $415 million, reflecting continued investment in growth and operational efficiency. Meanwhile, the company’s digital transformation efforts and operational excellence programs are poised to sustain margin expansion and long-term value creation.
Cleanaway’s CEO Mark Schubert emphasised the company’s commitment to sustainable growth, highlighting recent initiatives such as the commissioning of the Western Sydney Material Recovery Facility and the launch of Tasmania’s container deposit scheme. These efforts align with Cleanaway’s broader Blueprint 2030 strategy to lead Australia’s integrated waste management sector.
Bottom Line?
Cleanaway’s FY25 results and confident FY26 guidance signal a company well-positioned to capitalize on operational excellence and strategic acquisitions for sustained growth.
Questions in the middle?
- How will Cleanaway manage integration risks from recent acquisitions in FY26?
- What impact will rising net finance costs have on future profitability?
- Can operational excellence initiatives continue to drive margin expansion amid market pressures?
