Annual Report 2024
Overview
About Cleanaway
2
2024 Snapshot
4
Chairman’s message
6
CEO’s message
8
Strategic update
12
Operating and
financial review
Solid Waste Services
16
Liquid Waste and Health Services
18
Industrial and Waste Services
20
Sustainability
Our approach to sustainability
22
Sustainability highlights
24
Corporate information
Board of Directors
35
Senior Executive Team
38
Contents
Important information
The Company’s 2024 Annual General Meeting will be held at 11am (Brisbane time) on Friday 25 October 2024 at Customs
House, 399 Queen Street, Brisbane QLD 4000. The 2024 Corporate Governance Statement and Appendix 4G Disclosures
are available on our website at www.cleanaway.com.au/about-us/for-investor/corporate-governance.
FY24 REPORTING SUITE
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.
We are proud to pay our respect to Elders past,
present and future for they hold the traditions
and the culture, and together we hold the hopes
of a truly reconciled Australia.
Financial report
Directors’ Report
42
Financial Statements
77
Other information
Other information
152
Corporate directory
153
Our Annual Report forms part of our broader
2024 reporting suite, available online at
www.cleanaway.com.au
Sustainability Report
Modern Slavery Statement
Corporate Governance Statement
B
Through our Blueprint 2030 strategy, we are
strengthening our foundations and building
a strong platform for future growth.
As the nation’s leading waste solutions
provider, this positions Cleanaway to
continue leading the way in sustainable
waste management for years to come
and deliver on our purpose of making
a sustainable future possible
Cleanaway is playing
a vital role in supporting
Australia’s transition
to a sustainable future.
Melbourne, Victoria, home of Cleanaway’s Corporate Head Office.
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
1
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.
We are proud to pay our respect to Elders past,
present and future for they hold the traditions
and the culture, and together we hold the hopes
of a truly reconciled Australia.
This is an interactive PDF designed to
enhance your experience. The best
way to view this report is with Adobe
Reader. Click the links on the pages or
use the home button
in the header
to navigate the report.
ABOUT CLEANAWAY
Our reach
Australia’s largest, integrated network
of prized, waste infrastructure assets.
Our national network
7,900+
employees
~330
active sites
6,350+ 1
vehicles in the fleet
~140
council relationships
1
Includes heavy and light road vehicles, site-based industrial vehicles and trailers.
Solid Waste Services
Liquid Waste and Health Services
Industrial and Waste Services
Corporate
2
Creating value
through our 3 segments
Solid Waste
Services
Australia’s largest solid waste and
recycling services fleet supported by
a leading resource recovery and post
collection facilities network.
See more on page 16
Liquid Waste and
Health Services
Each recognised for their technical
expertise, our Liquid and Technical
Services, Health Services and
Hydrocarbons businesses are leaders
in their respective fields.
See more on page 18
Industrial and
Waste Services
A leader in plant and asset management
solutions that minimise downtime,
enhance efficiency, and support
compliance.
See more on page 20
Return to the value chain
Through the recovery of valuable resources from waste
streams, we are diverting waste from landfill and conserving
natural resources.
104ML
recycled oil
FY23 108ML
430kt
paper and cardboard
FY23 431kt
208kt
containers
processed via CDS 1
FY23 185kt
23kt
plastic
FY23 20kt
245kt
composted organics
FY23 289kt
31kt
steel and aluminium
FY23 32kt
Our strategy
See more on page 12
1
Collected through Container Deposit Schemes in NSW, QLD, WA, VIC and SA.
Cleanaway has a long and proud history of delivering at-scale waste solutions that
provide environmental and public health benefits to our customers and communities.
Our national network of 135 licensed facilities, including transfer stations, engineered
landfills, liquid treatment plants and refineries, and around 330 branches, allows us
to collect, process, treat, recycle, or safely dispose of various waste types for over
170,000 customers each year.
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
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5
FINANCIAL
REPORT
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CORPORATE
INFORMATION
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OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Financial highlights 1
Net revenue 2
$3,194.5m
7.7% from FY23
EBIT
$359.2m
18.9% from FY23
Earnings per share
7.6¢
15.2% from FY23
Operating cash
flow conversion
97.6%
98.3% in FY23
Cleanaway delivered
another year of
double-digit EBIT
growth and improving
returns through the
ongoing execution
of our Blueprint
2030 strategy.
Total revenue
$3,758.2m
5.6% from FY23
EBITDA
$728.7m
9.1% from FY23
EBIT Margin
11.2%
10.2% in FY23
NPAT 3
$170.6m
14.8% from FY23
1
Represents underlying results.
2
Net revenue is a non-IFRS measure that excludes landfill levies.
3
Attributable to ordinary equity holders.
2024
SNAPSHOT
4
Creating stakeholder value
People
Shareholders 1
Community
Environment
1
Represents underlying results.
2
TRIFR is measured per million hours worked and includes both employee incidents and hours worked, and contractor incidents and hours provided to Cleanaway.
Customers
TRIFR 2
4.6
vs 3.7 in FY23
ROIC
5.5%
Up from 4.9% in FY23
Community and
education sessions
1,555
Sessions held nationally
Landfill gas captured
~247Mm3
Increase of 12.5% on FY23
SIFOT
99.7%
Solid Waste Services
Female participation
24.3%
Up from 22.8%
in FY23
Dividend per share
5.0¢
Up 2.0% on FY23
Spend with First
Nations businesses
45.3%
Up on FY23
Emissions
1,122kt C02-e
Gross scope 1 and 2
greenhouse gas emissions
Invoice accuracy
97.9%
Up from 97.3% in FY23
Launched
Guiding
Principles
For how we work
On track to deliver
>$450m
EBIT in FY26
Spend with small and
medium-sized enterprises
10.0%
Up on FY23
Environment
Zero
Major or significant
environmental incidents
Canstar 2024 ‘Most
Satisfied Customers’
small business waste
services provider
Voluntary turnover
17.6%
Improved from
21.5% in FY23
EBIT margin
+100BPS
Up from 10.2% in FY23
Community donations
and sponsorships
~$390K
Contributed in FY24
Renewable energy
225GWh
Generated
Customer
Connect
Tracking on time
and on budget
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
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SUSTAINABILITY
FY24 was a year of execution
and progress where we delivered
another year of double-digit EBIT
growth and improved returns to
shareholders. It exemplified the
opportunities in our business
being unlocked by our Blueprint
2030 strategy.
Dear fellow shareholders,
I’m pleased to report that the challenges of FY22 and FY23 have
been addressed. The execution of our plans to address them,
alongside the continued roll-out of our Blueprint 2030 strategy,
has strengthened Cleanaway and is building a solid foundation
for the delivery of sustainable growth in the years ahead.
A stronger FY24 financial
performance
We reported net revenue of $3,194.5 million, up 7.7% on FY23
and an underlying net profit after tax of $170.6 million, 14.8%
higher than the prior year. Underlying EBIT grew at a record
rate of 18.9% to $359.2 million which was ahead of FY24 EBIT
guidance. Cleanaway’s EBIT margin rose by 100 basis points to
11.2%, up from 10.2% the previous year, reflecting the delivery
by management on plans to address the challenges of the past
few years and the benefits flowing from Blueprint 2030 initiatives.
This led to underlying EPS growth of 15.2% and a stronger ROIC
of 5.5%, which was up 60bps on FY23.
CHAIRMAN’S MESSAGE
Our performance and
progress provides confidence
in our ability to execute on
our strategy to grow and
achieve our FY26 ambition.
6
Our business remains in strong financial health. We have
$276.4 million of undrawn debt facilities and an average debt
maturity of 4.0 years as at 30 June 2024, with our next refinancing
not due until August 2025. Our net debt to EBITDA ratio of 1.89x as
at 30 June 2024 was in line with 30 June 2023 and we continue to
remain comfortably within our debt covenants.
In August 2024, the Board declared a final fully franked dividend
of 2.55 cents per share taking the total partially franked dividends
for the year to 5.0 cents per share, payable on 7 October 2024.
This was 2.0% higher than the previous year and represents a
payout ratio of 65.9%, in line with our stated policy of paying out
50-75% of underlying profits. The Commonwealth Government’s
Instant Asset Write off program has concluded, and we will
resume paying income tax in FY25.
Strengthening our safety focus
We made significant progress on our process safety journey
through introduction of a computerised maintenance
management system for managing preventative and
corrective maintenance for fixed assets across Cleanaway.
Our personal safety performance, as measured by the Total
Recordable Injury Frequency Rate (TRIFR), deteriorated to 4.6
from 3.7 in FY23. Delving into our performance over the year,
we could see that our recordable injuries were largely the result
of slips, trips and falls. We have several programs in place to seek
to reduce these as part of our extensive, five-year safety strategy.
Cleanaway’s TRIFR performance over the last decade has
decreased significantly from 12.6 in 2014 but has plateaued
over the past five years. Although we will never be satisfied with
any injury level, industry benchmarking shows that Cleanaway’s
safety performance (as measured by TRIFR) continues to be highly
competitive across multiple industries including waste, fleet
and logistics.
We have now added Serious Injury Frequency Rate (SIFR) to
our short-term incentive measures. Adding this metric aligns
with evolving industrial best practice and helps us measure
our progress in addressing Critical Risks and Controls whilst
still maintaining the focus on all recordable injuries.
Building a purpose-led Company
The achievements and progress shared throughout this report
are a testament to the Cleanaway team of over 7,900 people
across Australia, serving more than 170,000 customers across
approximately 330 branches. Their talent, hard work and
dedication brings to life our purpose of making a sustainable
future possible together every day.
Our purpose encapsulates Cleanaway’s reason for being, that is to
enable better outcomes for the environment through the provision
of waste collection, sorting, recovery, treatment and disposal
services to households, businesses and communities. We strive to
live our purpose in a way that continually delivers better outcomes
for our people and the communities in which we operate as well
as profitable growth and attractive returns to Cleanaway’s owners
– you, our shareholders.
During the year, we evolved our Sustainability Framework to
capture how we are delivering on our purpose through recovering
resources, protecting the environment, reducing emissions and
working together. We hold ourselves accountable for our impact
and in FY25 we will add targets to our Sustainability pillars,
to better measure our progress and achievements over time.
As Australia’s leading waste solutions company, we have an
important role to play in supporting Australia’s transition to a
future where meeting today’s needs doesn’t compromise the
ability of future generations to meet theirs. In delivering on our
purpose, through the execution of our Blueprint 2030 strategy,
our efforts will support environmentally sustainable communities,
foster social equity and ensure our long-term economic viability.
Board renewal
We continued our program of orderly Board renewal with
the appointment of Robert Cole as a Non-Executive Director
in March 2024, aligning with the retirement of Terry Sinclair.
Robert brings considerable relevant director and executive
experience to Cleanaway, having more than 35 years’ experience
in energy, resources, infrastructure and legal industries. Robert
is a member of the Audit and Risk, and Human Resources
Committees. Already in his first six months, Robert’s experience
and drive have been beneficial to Cleanaway.
On behalf of the Board, I extend my sincere thanks to Terry for
his invaluable contribution and wish him all the best in his future
endeavours. Terry was an active and engaged Non-Executive
Director and he made a significant contribution to the Cleanaway
Board over many years. His efforts helped position Cleanaway
strongly for future growth opportunities.
Final remarks
As we look to the future, I am confident that we are
well positioned to deliver our FY26 EBIT ambition of more
than $450 million alongside improving returns.
On behalf of the Board I would like to thank Cleanaway’s
CEO and Managing Director, Mark Schubert and the Executive
Management Team for their leadership. Our achievements
are thanks to our 7,900 strong Cleanaway team servicing
our customers and communities every day.
I would also like to extend my appreciation to my fellow
Board members for their hard work and support.
Finally, thank you to our shareholders. Your support allows us
to deliver the initiatives Mark and I put before you today. I look
forward to speaking to you again at our Annual General Meeting
in October 2024.
Philippe Etienne
Chairman
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
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SUSTAINABILITY
CEO’S MESSAGE
By working with our employees,
customers, suppliers, regulators
and communities, we are making
a sustainable future possible
together, for the benefit of all.
Our FY24 results demonstrate
the increasing strength of our
foundations and the value
being created through the
year on year execution of
our Blueprint 2030 strategy.
8
Strengthening our foundations of
people, safety and the environment
The safety of our people and the environment in which we
work, as well as the protection of the natural environment, are
the foundations on which we operate. At the beginning of FY24,
we set out a five-year roadmap to drive improvements in our
Health, Safety and Environment (HSE) performance and culture.
The roadmap outlines how everyone at Cleanaway will work
to keep each other, the environment, and our communities safe.
In FY24 we had no significant environmental incidents and we
reduced the risk and severity of major fires though our efforts
and investment in fire detection and suppression.
We made significant progress in embedding our ‘Stronger
Together’ safety culture, through 170 face-to-face sessions,
delivered to 350 leaders. In FY25, this training will be extended
to include all frontline supervisors across Cleanaway.
Another area of progress was in relation to how we manage
our Critical Risks and Controls. Six Critical Risks modules
were released including Mobile Plant and People Interaction,
Driving (including Chain of Responsibility), Waste Acceptance,
Fire Management, High Pressure Water Jetting and Falls from
Height. This program will continue into FY25.
In the first half of FY24, we rolled out mandatory
Respect@Cleanaway training for all employees. We followed
this in the second half with the roll-out of our five Guiding
Principles. These principles which build on each other serve as
a roadmap for creating a workplace where everyone feels safe,
respected, and empowered to contribute their best every day
and deliver outstanding results.
Female representation increased to 24.3% from 22.8% in
FY23 and female voluntary turnover also improved during
the year, driven by direct initiatives to attract and retain female
employees, as well as building a culture of respect, ownership,
and connection.
Dear shareholder,
I am extremely proud of what the Cleanaway team has achieved
this year. FY24 was a year characterised by execution, progress
and delivering record underlying EBIT growth and improving
returns to shareholders. Equally important, it was about doing
what we said we would do.
By taking a disciplined and methodical approach to overcoming
recent challenges and executing our Blueprint 2030 strategic
initiatives, we finished FY24 as a materially stronger Company.
A record financial result
Underlying EBIT grew by 18.9% to $359.2 million compared
with FY23. This was driven by the completed restoration of
QLD Solids, transformation of Health Services, and strong
growth in the NSW Solids and the Liquid and Technical
Services (LTS) business.
Through the execution of our Blueprint 2030 Operational
Excellence initiatives and disciplined price management,
we increased our EBIT margin by 100 basis points to 11.2%,
up from 10.2% in the previous year.
Pleasingly, all three of our operating segments reported revenue
growth compared to the previous corresponding period.
Solid Waste Services (Solids) reported increases in net revenue
and EBIT of 6.3% and 18.3% respectively. Earnings were driven
by the restoration of QLD, a strong performance in NSW and a
positive contribution from commodities.
Liquid Waste and Health Services reported increases in revenue
and EBIT of 13.3% and 38.7% respectively, as a result of
strong growth in each of the segment’s three businesses –
LTS, Hydrocarbons and Health Services.
Industrial & Waste Services (IWS) reported increases in net
revenue of 7.7% with EBIT broadly in line with FY23 following
the slowdown in economic growth in the second half which
offset the growth in the first half.
A more detailed analysis of our operating segments
can be found on pages 16 to 21 of this Annual Report.
“ Through the execution of our Operational Excellence initiatives
and disciplined price management, we increased our EBIT margin
by 100 basis points to 11.2%, up from 10.2% in the previous year.”
Mark Schubert CEO and Managing Director
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
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SUSTAINABILITY
In FY24 we introduced a deeper leadership incentive plan aligned
to the Executive FY26 ‘stretch’ LTI to help foster an owner’s
mentality for more than 500 leaders (who don’t already receive
an LTI), including many at a branch level.
Our branch-led culture and Guiding Principles are revitalising
the way we work on the front line, and collectively as a business.
We have a clearly defined strategy to uplift our branches’ access
to information and data through CustomerConnect, improve our
fleet performance, and strategically invest in infrastructure.
Producing operational uplift while strengthening our foundations
isn’t easy, but I am proud of what we have achieved and it
gives me confidence in just how far we can go.
Building a foundation of
Operational Excellence
Our focus on operational excellence continues.
We are on track to deliver the expected $50 million in EBIT
realised through our ‘restoration’ program in FY25. In doing so,
we will close out the program of work we undertook to restore
the performance of those areas of Cleanaway impacted by
external challenges in FY22 and FY23. Specifically, the profitability
of our QLD Solids business has been restored and is ready to
grow. The Health Services business has been reset in terms of
its cost base and capacity, and our workforce numbers have
stabilised as indicated by our voluntary turnover now below
pre-COVID levels.
Our FY24 financial results are the first of what I believe will be
many to reflect the benefits of our efforts to work smarter, as
one team, by leveraging our national, integrated network of
waste solutions assets. These ‘Operational Efficiency’ programs
are on track to deliver more than $50 million in EBIT by FY26,
with continued contributions well into the future.
FY24 is our first full year of leveraging Data & Analytics
capabilities. Since beginning our data journey in 2022, the value
of these efforts has become increasingly evident. Enhanced
capabilities have been crucial in driving our disciplined focus
on returns, as they have enabled us to develop tools for our
Branch Managers to identify and deliver efficiencies and identify
opportunities to optimise costs and capital spend through our
Fleet Transformation program, as just two examples.
Our Branch Optimisation program to lift the performance of all
our branches, is a key part of our improvement journey. At its
core, it is an operating rhythm, that provides a standardised
framework and tool kit that supports our branches to embrace
what is common across the network, creating time and capacity
to focus on how each and every branch can be its best because
they know the value they’re responsible for delivering, how to
track it, and feel a real sense of ownership in the business.
Another is our CustomerConnect program, which remains
on schedule and on budget. We are looking forward to the
opportunities CustomerConnect will create from an operational
and customer service perspective, as it delivers a forecast annual
EBIT contribution in FY27 of more than $13 million.
For more insights and updates on our Operational
Excellence initiatives, please see page 13 of this report.
Expanding our leading national
network of prized assets
Our capital expenditure of $445.8 million was in line with
the top end of our $430 to $450 million guidance range,
with approximately one third of the total or $161 million being
growth capex. Key investments across the period included the
construction of the Western Sydney Materials Recovery Facility,
Victorian Container Deposit Scheme, CustomerConnect, Santos
national maintenance contract, Energy from Waste (EfW) and
the acceleration of the transition of Eastern Creek Organics (ECO)
from red-bin to food organics, garden organics (FOGO) waste.
There is a more detailed update on these projects
on pages 14 and 15 of this report.
We also continued to strengthen our capital allocation process
to take an EBIT (rather than EBITDA) focus, lifted our hurdle rates,
explored the allocation of capital over multiple time horizons and
looked to Data & Analytics to help optimise our spend, particularly
in relation to fleet.
CEO’S MESSAGE
Driver Academy for Women graduation in Brisbane August 2024.
10
10
Positioning for growth beyond FY26
Looking towards the future, we’re continuing to invest today
for tomorrow with a number of projects including the Western
Sydney MRF, CustomerConnect and the Eastern Creek FOGO
transition expected to generate a positive EBIT contribution
in FY26.
Additionally, we have a number of strategic infrastructure growth
projects that while not contributing to our FY26 mid-term goals,
are expected to deliver significant value creation for shareholders
in the years beyond FY26.
Our Lucas Heights landfill extension plans are underway with a
view to address the projected early 2030s shortfall in putrescible
airspace within the Sydney basin through an extension of the
current landfill footprint. This would increase the operational
life of Lucas Heights by around 8-10 years.
On 24 June 2024, we announced an agreement to acquire
Citywide Service Solutions’ waste and recycling business for a
total consideration of $110 million. This is a highly complementary
acquisition that expands our collections and our Solid Waste
Services infrastructure in Melbourne. As part of the acquisition
Cleanaway has agreed to undertake a $35 million redevelopment
of the Dynon Road transfer station, with the City of Melbourne
contributing an additional $10 million. The redevelopment will
nearly double the existing site capacity enabling future earnings
growth and supporting volume expansion in our post-collection
infrastructure. The acquisition is subject to a range of conditions
precedent including Australian Competition and Consumer
Commission (ACCC) regulatory approval.
On EfW, we continue to progress our role as an ‘originator’
leveraging our ability to de-risk EfW plants through mitigating
feedstock, customer and project schedule, commercialisation
and regulatory risks. We continue to take a capital-lite approach
to the EfW projects and remain disciplined in our approach to
capital allocation.
“ We have started FY25 focused on delivering our EBIT guidance
of between $395 and $425 million. From there, we see a clear
runway to our mid-term ambition of more than $450 million
in EBIT in FY26.”
Mark Schubert CEO and Managing Director
Heading confidently into FY25
As we head into FY25, I would like to thank and acknowledge
the entire Cleanaway team. The progress we’ve made together
is a direct reflection of their commitment and hard work.
We have started FY25 focused on delivering our EBIT guidance of
between $395 and $425 million. Our progress over the past 12
months, coupled with the momentum we’ve gained in executing
our Blueprint 2030 strategy, gives us confidence in our ability to
continue delivering results.
From there, we see a clear runway to our mid-term ambition of
more than $450 million in EBIT in FY26. Importantly, we are not
only creating value but also building a more sustainable Company,
with the full commitment of over 7,900 employees.
Stay safe out there.
Mark Schubert
Chief Executive Officer
and Managing Director
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SUSTAINABILITY
STRATEGIC UPDATE
Over the past 12 months, Cleanaway continued with the
execution of its customer-led Blueprint 2030 strategy.
Introduced in FY22, Blueprint 2030 is designed to create superior
shareholder value by integrating and extending our leading network
of infrastructure assets to provide high-circularity, low-carbon solutions,
seamless service and value for money for our customers. Our goal is to
be recognised by our customers as the most innovative and sustainable
waste management company, with industry-leading health, safety and
environmental (HSE) performance. In FY24, we continued to focus
on strengthening our operational foundations of HSE. FY24 was
the second year of our five-year HSE strategy through which we
are driving progressive and sustainable change in this area. Key
achievements for the period included the commencement of our
Critical Risk program, the implementation of our new HSE culture
framework to further embed behaviours, and the roll-out across the
Group of our HSE leadership training, ‘Stronger Together.’ We are
enabling the delivery of Blueprint 2030 through fostering a culture
that creates growth, innovation and inclusivity.
1
All figures are EBIT $m. Diagram not to scale, illustrative only.
2
Citywide acquisition subject to final approvals including ACCC, and excluded from FY26 EBIT ambition.
Strategic
Infrastructure
Growth
~$50m
VIC CDS
Scanline/Australian Eco Oils
Santos national maintenance contract
Western Sydney MRF
ECO FOGO transition
FY23
FY24
FY25
EBIT 1
Guidance
$395 – $425m
Mid-term ambition
> $450m
$302m
$359m
Labour
Productivity uplift
Stabilisation
QLD Solids
Restoration
~$50m
Health Services
FY26
Decommissioning Services
Advanced Analytics
Landfill Gas Monetisation
Landfill Gas Capture
Fleet Transformation
CustomerConnect
Branch Optimisation
+ Citywide collection and recycling assets 2
Data & Analytics
Operational
Efficiency
more than
$50m
Sustainable Customer Solutions
+ Greater Market Share
Strategic Infrastructure Growth
+ Accretive Investments
Operational Excellence
+ Improved Profitability
Footprint
GDP + Growth
At the end of FY24, Cleanaway remains on track to deliver on its mid-term ambition through the delivery
of our Operational Excellence and Strategic Infrastructure initiatives.
On track to deliver our mid-term ambition
Our Blueprint 2030 strategy leverages our leading national network through three strategic pillars coming together to
create value for shareholders, being Operational Excellence, Strategic Infrastructure Growth and Sustainable Customer
Solutions. In August 2023, Cleanaway set a mid-term financial ambition of FY26 EBIT greater than $450 million,
alongside improving returns.
12
12
Step 4
Layering specific programs of work
Introducing key strategic programs, such as CustomerConnect and Fleet
Transformation. These initiatives are centrally managed and designed to
deliver improved performance across the entire Group.
CustomerConnect
An example of a centralised program is our CustomerConnect
project. The total forecast cost of the program remains approximately
$100.0 million and is divided 60:40 between upgrading our IT systems
and additional IT growth functionality. In the second half of FY24,
the first release of the two-part project was delivered on time and on
budget. The second release is scheduled for the third quarter of FY26.
This project is forecast to deliver more than $5.0 million in EBIT in FY26,
and more than $13.0 million in FY27.
Fleet Transformation strategy
During the year we introduced our Fleet Transformation strategy.
With over 3,600 heavy vehicles we have one of the largest owned
heavy vehicle fleets in Australia. In practical terms, this means we are
expanding our fleet focus beyond our commitment to ensuring a safe
and compliant fleet to now include optimising its running and capital
costs. This focus will lead to lower costs and a more efficient use of
capital, resulting in improved EBIT and increasing returns. We are doing
this through a holistic and comprehensive, multi-year strategy that
will transform the fleet, and how we manage it on a day-to-day basis,
as well as the life of each vehicle.
Operational excellence
Under our Operational Excellence pillar, we are aligning our
culture with our strategy and extending our performance
culture to the frontline to both deliver for today and improve
for tomorrow. We will better connect our frontline teams to
our business and work together for continuous improvement.
Our Restoration ‘bucket’ is one of the two groups of initiatives
under our Operational Excellence pillar. These initiatives
refer to those implemented to restore the profitability of our
Queensland Solids operations following the 2022 South East
Queensland floods; transform our Health Services business
following the challenges of COVID; and address the impact
of Australia’s tight labour market in FY22 and FY23.
Our FY24 financial performance benefited from the
execution of these initiatives, with the profitability of the
Queensland Solids business restored, Health Services on track
to deliver $15.0 million of EBIT in FY25, and our workforce
turnover reduced and vacancies filled. In line with previous
guidance, collectively these initiatives are on track to deliver
$50.0 million of EBIT in FY25.
The Operational Efficiency ‘bucket’ is the other group of
initiatives under the Operational Excellence pillar. Anchored
in their objective of improving the profitability of our business,
these initiatives focus on enabling our branches and customer
facing teams through our Branch Optimisation initiative;
improving decision making at all levels through our Data &
Analytics capability; improving our fleet performance via its
transformation; delivering new EBIT by monetising landfill gas;
and seeding our growth vectors of tomorrow that combine
our current capabilities in a new offering of Decommissioning
and Remediation Services. It is these efficiency initiatives that
we see as driving our EBIT above $450.0 million in FY26 as in
aggregate they are on track to deliver more than $50.0 million
of EBIT in FY26, in line with previous guidance.
In FY24, the power of our Data & Analytics (D&A) capability
became clear as the deployed D&A tools delivered efficiency
benefits. These tools enable our frontline leaders to manage
and improve operational performance in real time. Whether
it’s driving conversations to enhance customer profitability,
managing overtime across our ~330 branches, providing leads
to the sales team, or better managing our owner-drivers,
these tools leverage our D&A capability to improve margins
by giving leaders at all levels easy access to the real-time value
drivers essential to their business.
Step 1
Benchmarking of branches
Identifying underperforming branches
that deliver below-average results.
Step 2
Applying performance
improvement plans, SWOT
teams and LEAN programs
Providing focused support to these
branches through one of three approaches:
a structured Profit Improvement Plan,
intervention by our SWOT team, or the
application of LEAN principles to enhance
operational efficiency.
Step 3
Implementing branch
operating model
Uplifting the overall performance of the entire
business through leveraging best practices
across the network and a consistency in
operating cadence and processes.
Branch Optimisation program
Our Branch Optimisation program utilises our D&A capability to uplift the average
EBIT margin of our branch network in four phases – outlined below.
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SUSTAINABILITY
Strategic infrastructure growth
Under our Strategic Infrastructure Growth
pillar, we will continue to invest to extend
our recycling and landfill diversion
infrastructure and services platforms.
We will be more innovative and ensure we
are well positioned to capture opportunities
from emerging at-scale waste streams to
meet the country’s future recycling needs.
We continued to grow our leading solid
waste infrastructure network across various
verticals. During the year, our Container
Deposit Scheme (CDS) vertical took another
step towards our goal for this business
to be national with the start-up of our
Victorian CDS operations in November
2023, having successfully tendered for the
western metro and regional zones.
In June 2024, we announced an
agreement to acquire Citywide Service
Solutions’ waste and recycling business for
$110.0 million. Concurrently we agreed to
enter into a 35-year lease for the waste
transfer station located at 391-395 Dynon
Road in West Melbourne (Dynon Road),
strategically located five kilometres from
Melbourne’s CBD. Aligning with our
approach of using mergers and acquisitions
to accelerate the delivery of our Blueprint
2030 strategy, this acquisition is an
attractive opportunity to expand our Solid
Waste Services business in metropolitan
Melbourne and deliver network efficiencies.
Cleanaway has agreed to acquire
Citywide’s Municipal and Commercial &
Industrial collections business, as well as
the Dynon Road transfer station, which
currently sends 90% of its volume to
Cleanaway’s Melbourne Regional Landfill
(MRL). As part of the acquisition, which
is still subject to approvals, including
from the ACCC, Cleanaway has agreed
to nearly double the site’s capacity
through a redevelopment expected
to cost approximately $35.0 million,
unlocking attractive earnings growth for
shareholders. It will also support future
volume growth into our post collections
infrastructure assets.
Our approach to EfW captures both our
focus on strategic infrastructure growth
and disciplined capital allocation.
STRATEGIC UPDATE
Biomax® Technology being installed at Eastern Creek.
Progress on our NSW
organics footprint
Organics is the fastest-growing segment
of the waste industry as more councils
adopt source-separated organics collections
and we progressed our plans to increase
our New South Wales organics capacity
during the period.
Having acquired Global Renewables
Holdings (GRL) in August 2022 for
$96.6 million, integration was completed
during FY24 and renamed Eastern Creek
Organics (ECO). In the first half of FY24,
ECO initiated its planned transition from
a red bin inert treatment facility (which
converts red bin waste from putrescible to
inert waste for disposal in an inert landfill)
to a Food Organics and Garden Organics
(FOGO) treatment facility. This decision
brought forward the necessary investment
and allows us to meet the growing customer
demand for FOGO and will increase the
site’s capacity from 220 ktpa to 300 ktpa
delivering attractive earnings growth.
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14
Sustainable customer solutions
Our mission is making a sustainable future possible together.
And when we talk to our customers about sustainability it boils
down to circularity and carbon.
Innovation is fundamental to finding at-scale circular solutions,
and in FY24, in partnership with Viva Energy, we began
investigating the potential for a soft plastics and hard-to-recycle
plastics facility. While there is still a considerable pathway to be
determined, we are encouraged by the potential for the proposed
facility because the process produces an oil, which is then
converted into a plastic resin with properties identical to virgin
products and can be used in food-grade recycled packaging.
Our involvement in Circular Plastics Australia (PET) (CPA (PET))
is another way we’re building the local circular economy. CPA
(PET) is a joint venture between ourselves and Pact Group,
Asahi Beverages and Coca-Cola Europacific Partners.
Having already opened a facility in Albury, New South Wales
in FY22, in FY24, the joint venture opened a second CPA (PET)
facility in Altona North, Victoria, doubling the capacity of the
joint venture to 56,000 tonnes of PET. Also, during the year,
we opened a third facility at Laverton North, Victoria, in a 50/50
joint venture with Pact Group. This state-of-the-art facility can
process over 20,000 tonnes of HDPE and PP every year.
Capital allocation
Delivering profitable growth to shareholders through disciplined capital management has been the driver
behind Cleanaway’s transition from using EBITDA as our primary profit measure to EBIT. Our enhanced
focus on capital discipline is leading to our strategic business unit management teams sharpening their
focus on asset performance, which includes exploring capital-lite alternatives where appropriate. In
addition, our returns focus led to the development and adoption of our centralised capital allocation
framework which is reducing project risks and enhancing project management. We are also seeing the
benefit of our D&A capabilities driving better analysis and delivering greater insights which have been
central in unlocking opportunities to asset pool, improved capex allocation, and considering capital-lite
initiatives – such as in our Fleet Transformation strategy.
Aerial view of Western Sydney Materials Recovery Facility to be commissioned in 1H FY25.
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SOLID WASTE
SERVICES
2024
2023
2022
2021
2020
EBITDA margin (%)
EBIT margin (%)
EBIT ($m)
212.7
213.0
227.8
278.1
329.0
28.3
27.5
25.8
26.9
27.6
15.5
14.4
12.5
13.3
14.8
$329.0m
$612.8m
18.3% from FY23
8.9% from FY23
EBIT
EBITDA
FY24
FY23
CHANGE
Revenue
($ million)
2,787.9
2,684.7
3.8%
Net Revenue
($ million)
2,224.2
2,091.7
6.3%
EBITDA
($ million)
612.8
562.7
8.9%
EBITDA
(margin %)
27.6%
26.9%
70bps
EBIT
($ million)
329.0
278.1
18.3%
EBIT
(margin %)
14.8%
13.3%
150bps
The Solid Waste Services results for the year ended 30 June 2024 includes the first
full-year contribution from Global Renewables Holdings (GRL) (compared to 10 months
in the prior financial year), which was renamed Eastern Creek Organics (ECO) following
its integration. Net revenue growth of 6.3% was predominantly driven by price increases
in the Collections business with support from volume growth primarily in the Container
Deposit Scheme (CDS) business and Organics operations. Price increases and contractual
price mechanisms offset higher operating costs resulting from higher fleet repair and
maintenance costs and the general inflationary environment. Compared to the prior
period, the stabilisation of the workforce led to an improvement in overtime and the
reduction in the use of subcontractors, resulting in an improvement in the labour costs per
hour worked. Underlying EBIT growth was driven by the turnaround of the Queensland
The Solid Waste Services segment comprises
the collection, recovery and disposal of solid
waste, including putrescible waste, inert waste,
household waste and recovered waste. Waste
streams are generally processed through
the resource recovery and recycling facilities,
transfer stations and landfills.
All figures are underlying unless stated otherwise.
16
16
business and a strong performance in New South Wales, although
it was moderated by the Victorian results as the prevailing
competitive environment led to lower landfill volumes. In addition,
the contribution from commodities was up year on year as Old
Corrugated Cardboard (OCC) price trended steadily higher over
the period.
Commercial and Industrial (C&I) Collections revenue grew by
7.1%, of which 6.0% of the variance was driven by price increases.
EBIT growth was driven by the restoration of the Queensland
business following the execution of Operational Excellence
initiatives implemented to address the impacts of the 2022
South East Queensland floods and the earlier-than-expected
closure of New Chum. Across the balance of C&I Collections,
volume growth and price increases were secured, underpinned
by increased service levels. Branch-led, data driven operational
efficiency initiatives have enabled increased productivity, which
has been complemented with tight cost control.
Cleanaway’s municipal collections business continues to deliver
strong contractual growth whilst tightly managing cost.
The CDS business continues to grow both in absolute terms and
as a proportion of the total Solids segment, benefiting from its
management as a national vertical since FY23. In FY24, strong
volume growth was driven by the commencement of the Victorian
CDS contract and the expansion of the Queensland program. In
November 2023, the Victorian CDS operations were successfully
launched with initial volumes tracking in line with expectations.
CDS EBIT was up year on year, notwithstanding it included the
ramp-up costs of the Victorian CDS contract.
Construction & Demolition (C&D) EBIT was lower year on year as
the sector experienced lower levels of activity. Management was
able to maintain pricing discipline despite the intense competitive
environment. Landfills EBIT declined by 2.4% year-on-year.
In managing these hard-to-replicate assets for long-term
returns, the management teams at each landfill continued to
utilise the performance drivers of price, mix, compaction and
operational efficiency. This largely offset volumes being down
8.7% for the period. Lucas Heights and Kemps Creek, the business’
two landfills within the Sydney basin, were able to balance price
and volume resulting in profitability per cubic metre improving
year on year. In Melbourne, Melbourne Regional Landfill (MRL)
continues to operate in a particularly competitive market, and
the team remains focused on extending waste codes to capture
higher margin waste streams, and operational improvements to
maximise returns. The cost of soil for cover purposes is tempering
these operational improvements and the business is applying a
performance improvement focus on MRL similar to what the Group
used to reset the Health business and Queensland Solids last year.
Transfer Stations earnings were higher year on year driven by the
performance of Sydney Resource Network (SRN) due to higher
volumes and higher pricing.
In June 2024, Cleanaway announced an agreement to acquire
the waste and recycling business and assets of Citywide Service
Solutions Pty Ltd (Citywide Waste) for $110.0 million. Acquiring
Citywide’s collections business and the inner-city Melbourne
transfer station (Dynon Road) presents an attractive opportunity
to expand the Victorian Solids business in metropolitan Melbourne.
If the transaction receives the necessary approvals, Cleanaway
plans to redevelop Dynon Road, nearly doubling its capacity and
unlocking significant earnings growth for shareholders from FY26.
Dynon Road already directs a large portion of its waste streams
to Cleanaway’s post-collection assets, and its integration would
support future volume growth into Cleanaway’s network.
Organics EBIT was up year on year driven by New South Wales
through improved management of the network. While Victoria’s
FOGO market is relatively mature, the future of Queensland’s FOGO
market remains uncertain due to pending changes in regulations.
New South Wales’ FOGO market is expected to continue to grow,
reflecting the State Government policy to drive landfill diversion.
Cleanaway is meeting this growth with the transition of the business’
ECO facility to FOGO processing while increasing the site’s capacity.
“ Solids delivered strong earnings growth
in FY24. This was driven by our focus on
profitability restoration, service delivery
and operational efficiency which is being
achieved through the implementation of
our branch-led operating model.”
Tracey Boyes Executive General Manager,
Solid Waste Services
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LIQUID WASTE AND
HEALTH SERVICES
2024
2023
2022
2021
2020
EBITDA margin (%)
EBIT margin (%)
EBIT ($m)
64.3
67.6
53.0
48.8
67.7
20.7
21.5
17.5
15.1
16.7
12.5
13.2
9.6
8.0
9.8
$67.7m
$115.2m
38.7% from FY23
24.7% from FY23
EBIT
EBITDA
Liquid and Technical Services (LTS) revenue was up 16.0% on the prior corresponding
period (pcp) and EBIT increased by 35.4% on pcp driven by increased activity and
operational efficiencies.
During the year, major projects delivered included remediation projects for major mining
companies, the management of hazardous waste streams for major listed Oil and Gas
companies, undertaking hazardous soil remediation for a number of major infrastructure
projects, and the recycling of hand sanitiser for various government agencies. The closure
of Qenos in Australia adversely affected revenue in the current financial year.
During the year, LTS integrated the business and assets of Australian Eco Oils (AEO),
acquired on 21 August 2023 for $39 million. Trading under the Scanline brand, AEO
collects and processes used cooking oils to improve the quality and then sells the product
into the stockfeed and renewable fuel sectors. The acquisition aligns with Cleanaway’s
focus on growing its low carbon, high circularity solutions to customers. Its initial earnings
contribution in FY24 was offset by integration costs.
Cleanaway’s Liquid Waste and Health
Services comprises three national strategic
business units: Liquid and Technical
Services, Hydrocarbons and Health Services.
FY24
FY23
CHANGE
Revenue
($ million)
691.7
610.6
13.3%
EBITDA
($ million)
115.2
92.4
24.7%
EBITDA
(margin %)
16.7%
15.1%
160bps
EBIT
($ million)
67.7
48.8
38.7%
EBIT
(margin %)
9.8%
8.0%
180bps
All figures are underlying unless stated otherwise.
18
18
LTS continues to build on its market-leading capabilities and
growing reputation of being able to collect, manage, treat, reuse
and dispose of complex, hard-to-treat waste streams. During the
period, LTS re-signed two key state-wide household recycling
community contracts and was awarded a three-year national
stewardship program.
Cleanaway’s Health Services revenue grew by 14.1% in FY24.
EBIT was significantly ahead of pcp as the transformation
program undertaken has turned this business around from
being loss-making in FY23, to achieving its targeted annualised
run-rate of $15.0 million EBIT in the final quarter of FY24. The
transformation program has driven improved service levels and
EBIT margin expansion through the realisation of efficiencies in
labour and transportation. Productivity efficiencies have also been
realised following the business’ treatment and disposal network
coming fully operational with the commissioning of two new
autoclaves at the business’ main processing facility in Victoria
in the second half of the previous financial year. The business
remains on track to complete its profitability restoration program
and is expected to deliver approximately $15.0 million in EBIT
in FY25.
Hydrocarbons revenue grew 2.9% compared to pcp, with EBIT
up 8.6% on pcp reflecting increased machine sales in Cleanaway’s
Equipment Services business, particularly in New South Wales and
Queensland; as well as growth in the Fuel Oil business, driven by
demand in Western Australia. A strategic review was conducted
in the first half of the period, as this business continues to assess
its customer value proposition against a backdrop of customers
increasing interest in low carbon, high-circularity products.
“ Our strategy to optimise our core business, maximise
the sustainability features of our offering and ensure
we deliver outstanding technical solutions for complex
waste streams continues to underpin our highly
regarded customer value propositions.”
Scott Nicholls Executive General Manager, Liquid Waste
and Health Services, Industrial and Waste Services
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INDUSTRIAL AND
WASTE SERVICES
2024
2023
2022
2021
2020
EBITDA margin (%)
EBIT margin (%)
EBIT ($m)
21.4
22.6
19.9
26.5
26.5
14.6
15.7
14.4
14.0
13.1
6.8
7.4
6.1
7.1
6.5
$26.5m
$53.1m
0.0% from FY23
0.8% from FY23
EBIT
EBITDA
Revenue growth in the first half was strong, supported by price increases, volume growth,
and the start of the multi-year national Santos service contract. In the second half, softer
market conditions led to customers deferring or cancelling projects, which impacted IWS
financial performance due to its operating leverage, where profitability is optimised when
there is a high utilisation of assets and staff. The second half was also impacted by the
announcement of the upcoming closure of the Alcoa Kwinana site.
Higher input prices were recovered through contract escalation clauses and rate card
price increases. To support the optimisation of project delivery performance and financial
outcomes, a Project Management Office (PMO) was established to optimise systems,
processes, fleet and labour.
Cleanaway’s Industrial and Waste Services
provides a wide variety of services to
the resources, oil and gas, infrastructure
and industrial markets. These services
include vacuum loading, higher pressure
cleaning, pipeline maintenance and
non-destructive digging.
FY24
FY23
CHANGE
Revenue
($ million)
404.6
375.8
7.7%
EBITDA
($ million)
53.1
52.7
0.8%
EBITDA
(margin %)
13.1%
14.0%
90bps
EBIT
($ million)
26.5
26.5
0.0%
EBIT
(margin %)
6.5%
7.1%
60bps
All figures are underlying unless stated otherwise.
20
20
Over the last few years, the IWS business has successfully delivered on its strategy to
increase the proportion of its earnings from oil and gas, and resources companies.
In doing so, IWS has positioned itself to benefit from the attractive medium-term outlook
as customers continue to outsource maintenance contracts. IWS continues to focus
on growing the share of wallet with key contracts that it has successfully re-signed.
However, in response to the near-term challenges within their non-contracted customers,
in July 2024 IWS undertook a restructuring of its resources with a consolidation of its
East Coast operations, while realigning its WA operations to enable further customer
segmentation given its growth over the past few years and potential for further growth.
“ We have strong technical capabilities, licensed infrastructure and
relationships as a platform to develop integrated decommissioning,
decontamination and remediation solutions for multiple
sectors, including oil and gas, mining, utilities, manufacturing,
and government. It is early days, but we are excited by the
opportunity and are developing what we think will be a unique
and attractive offering for our customers.”
Frank Lintvelt Executive General Manager,
Strategy, Mergers & Acquisitions and Innovation
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SUSTAINABILITY
As a waste management solutions provider, we are in a privileged
position to support and partner with businesses, governments and
communities in reducing their environmental impact and mitigating
the effects of their actions on the future. We do this by enabling reuse,
recycling and recovery of resources, and the responsible and safe disposal
of waste that can’t be recovered.
Together, our hard-working team plays a vital role in our ability to
contribute to Australia’s sustainable future. Which is why we are committed
to building a respectful, gender diverse and empowering workplace that
enhances the wellbeing of our employees and the broader community.
We refreshed our Sustainability Framework in FY24. Our objective was to
focus on where we could effect the greatest material and positive outcomes
for the environment, our people and the communities we serve.
Our four pillars capture the outcomes of our actions and are aligned with
our material focus areas. They bring accountability to our efforts as they
focus on our impact, progress and achievements.
For more information visit our Sustainability Report
cleanaway.com.au/sustainability-report
Our Sustainability Framework articulates how we
are ‘Making a sustainable future possible together’ by
recovering resources, protecting the environment,
reducing emissions, and working together with
our people, customers, partners and communities.
OUR APPROACH
TO SUSTAINABILITY
22
22
Our four pillars capture the outcomes of our actions
and are aligned with our material focus areas.
Recovering resources
We play a vital role in
enabling Australia’s circular
economy, working with our
partners to ensure valuable
resources are recovered
from waste streams and
returned to the value chain.
Reducing emissions
The goal of net zero
puts pressure on all of
us to reduce greenhouse
gas emissions. We are
committed to reducing our
emissions and helping our
customers do the same.
Working together
To deliver on our mission
requires the co-ordinated
effort and hard work of
our people, suppliers, and
communities. Together,
we fulfil our purpose
of making a sustainable
future possible together.
Our Sustainability Framework
As a total waste solutions
provider, we prioritise
resource reuse, recycling and
recovery wherever possible.
When these options are not
feasible, we offer safe and
responsible, at-scale treatment
and disposal solutions.
Protecting the
environment
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Recovering resources
Partnering to deliver sustainable
solutions for soft plastics
An analysis of Cleanaway’s ‘bag-in-bin’ kerbside collection
trial with Australian councils showed that 85% 1 of collected
household soft plastics are suitable for chemical recycling into
food-grade plastics. However, Australia does not currently have
an at-scale solution to enable this to happen.
Cleanaway, in partnership with Viva Energy, wants to address
this issue. In FY24, together, we initiated a pre-feasibility
study of a possible facility in Victoria. The proposed facility is
particularly exciting because the process would produce an oil,
which could be converted into a food-grade resin with identical
chemical properties to virgin products using Viva Energy’s
refinery and polypropylene plant in Geelong, Victoria.
This is a game changer for producing food-grade recycled
packaging. It will reduce the amount of soft plastic going
to landfills and create a circular path for new products.
The pre-feasibility assessment will identify a pathway to
commissioning the new facility in 2028. Once the technological
solution is in place, the feasibility of operations will depend
on a sure supply of feedstock (being the soft and other
hard-to-recycle plastics) and market demand for the generated
recycled plastics. The Commonwealth Government’s packaging
regulation reform and product stewardship framework,
anticipated to be in effect by the end of 2025, will be critical.
Cleanaway’s resource recovery operations have an
important role to play in enabling Australia’s transition
to a circular economy. Our ability to drive that transition
is strengthened through our partnerships and focus
on innovation as we continue to identify and develop
additional resource recovery solutions at scale.
SUSTAINABILITY HIGHLIGHTS
1
NPRS Trials Review. A Report to the Australian Food and Grocery
Council (AFGC), Page 24.
Circular economy
Cleanaway is helping to close the loop with
innovative solutions for recovering resources from
waste streams and returning them to the supply
chain. Our customer and industry partnerships,
strategic assets, and resource recovery expertise,
enable us to deliver these solutions at scale.
Launch of kerbside soft plastics ‘bag-to-bin’
recycling trial at Albury, New South Wales.
24
24
Cleanaway operates over 3,600 heavy vehicles
delivering essential waste and recycling
collections, transport and industrial solutions
around the country. Our vehicles make up the
second biggest component of greenhouse gas
emissions from our operations and they are
the largest contributor of carbon dioxide. With
one of Australia’s largest fleets, we’re pursuing
a range of solutions to incrementally decarbonise,
working with local and international partners.
Cleanaway is pioneering the use of HVO100
renewable diesel in two of its waste
management vehicles out of the Perry Road
depot in Dandenong South, Victoria. HVO100
is a 100% renewable diesel made from
renewable sources such as used cooking oil.
It is near chemically identical to fossil diesel
which means it’s a ‘drop-in’ replacement
requiring no new infrastructure, fleet, or
additional capital. As it is made from renewable
resources, all carbon in the fuel has been
captured from the atmosphere that is released
again upon combustion, resulting in net zero
carbon combustion emissions.
“We’re committed to leading our industry with
innovative and fit for purpose solutions that align
with our customers‘ goals while working towards
federal emissions targets,” said Mark Schubert,
Cleanaway CEO and Managing Director.
The Neste MY Renewable Diesel™ used in our
demonstration is exclusively attributed to used
cooking oil feedstock and reduces greenhouse
gas emissions by approximately 91% compared
to landed fossil fuel across the lifecycle
including extraction, transport, conversion
and combustion.
Customers of Cleanaway’s used cooking oil
collection business, Scanline, have taken
notice and are pleased to see their material
is contributing to powering trucks. Scanline
General Manager Mark Smith said, “Customers
are seeing the sustainable reuse of their used
cooking oil right here on the road, which
creates added value and is an important
differentiator for our business.”
Find out more about HVO100 at
cleanaway.com.au/renewable-fuel
Driving towards net zero with HVO100
Cleanaway/City of Casey side lift truck powered by HVO100.
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SUSTAINABILITY HIGHLIGHTS
Protecting the
environment
We have the expertise and experience to safely
and responsibly collect, treat and dispose of waste
streams that otherwise risk harming our people,
the environment and our communities.
Protecting the environment is foundational to
how we operate. For example, our landfills are
constructed and managed to the highest standard
to protect the environment during construction,
use and long after they are closed.
Remediation of Clayton
landfill completed
In 2024 Cleanaway proudly handed over its fully remediated
30 hectare landfill site at Victory Road in Clayton, Victoria,
for the City of Kingston community to enjoy.
Around 450,000 square metres of engineered geosynthetics and
180,000 cubic metres of soil were used to safely cover the landfill.
The site was topped with 300,000 square metres of grass and
the team planted 230,000 shrubs and trees, using seeds native
to the area.
Three kilometres of paths, a fitness circuit, fenced dog park and
viewing platform were all constructed for the community. The
site connects to the City of Kingston’s broader ‘Chain of Parks’.
This five-year transformation revitalised the site into a parkland
that is functional and sustainable to best practice engineering,
design and environmental standards. Part of one of the largest
Environmental impacts
As a total waste solutions provider, Cleanaway
prioritises resource reuse, recycling, and
recovery wherever possible. When these
options are not feasible, we offer safe
and responsible treatment and disposal
solutions, often for large-scale, complex waste
challenges, that adhere to strict compliance
and safety standards. In doing so we neutralise
the negative impact untreated waste would
have on the environment, ensuring pollution
is avoided and ecological and public health
is maintained.
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landfill remediations of its kind in Australia, conducted across several Clayton locations,
it owes its success to careful selection of supplier partners, high-grade materials and strict
regulatory compliance.
In line with Cleanaway’s carbon reduction targets, the site safely captures methane gas and
uses it to generate electricity for the community.
Cleanaway worked closely with the City of Kingston, the Environmental Protection Authority
Victoria, and the south east urban community nature program, Living Links. The result is
a green space that creates and protects value for heritage and landscape conservation,
biodiversity, waterway health, recreation, agriculture and horticulture.
The work doesn’t stop there. Cleanaway will carefully monitor the site for the
next three decades to ensure environmental safety and ongoing best-practice
on landfill transformation.
Aerial view over remediated Victory Road Landfill site in Clayton, Victoria.
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SUSTAINABILITY
Reducing emissions
We are focused on reducing our greenhouse gas
emissions and helping our customers do the same.
In FY24 we reduced our methane emissions by
7.6% and our overall greenhouse gas emissions
by 5.4% compared with FY23. We remain on track
to achieve our 2030 targets.
SUSTAINABILITY HIGHLIGHTS
Greenhouse gas emissions
Cleanaway’s greenhouse gas emission (GHG) reduction targets of a
43% reduction in carbon dioxide and a 34% reduction in methane
by 2030 are established by reference to the FY22 base year.
These targets are aligned with the most conservative 1.5°C scenarios
in the Sixth Assessment Report of the International Panel on Climate
Change and are consistent with limiting global warming to 1.5°C
above pre-industrial levels by 2100. The methane targets are also
aligned with the Global Methane Pledge. We track our performance
against these targets on a net emissions basis.
In FY24, Cleanaway’s net combined greenhouse gas emissions
met the 1.5ºC aligned targets after considering carbon credits
movements. Reportable emissions to the National Greenhouse and
Energy Reporting (NGER) Scheme prior to net movements of carbon
credits were 1,122 ktCO2-e, comprised of 808kt CH4 (72%), 308kt
CO2 (27%) and 6.7kt 5N2O (0.6%), all expressed in CO2-e basis.
The FY24 NGERs reportable emissions represent a 7.6% reduction in
methane and an overall GHG reduction of 5.4% compared to FY23.
We remain on track to meet our net 2030 greenhouse gas emissions
reduction targets for methane and carbon dioxide.
The international carbon credit offsets we purchased and retired
to reduce our net FY24 emissions are created from capturing and
permanently destroying methane that would have otherwise ended
up in the atmosphere.
1.5°C ambition
We are prioritising greenhouse gas emission
reductions that are both readily addressable
and material to our footprint. For Cleanaway,
that means initially focusing on reducing
methane emissions from our landfills through
improved landfill gas capture.
Measuring methane at Melbourne Regional Landfill.
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Landfill gas capture
The methane gas produced at our landfills is derived from
the biogenic waste streams – organic matter such as plants
and animals. This methane, when burned to generate
electricity or consumed as natural gas, creates biogenic
carbon dioxide, which is treated as part of the natural
carbon cycle under both international and Australian
frameworks. Thus, electricity or natural gas that results
from the captured landfill gas is considered renewable.
For example, at the Melbourne Regional Landfill (MRL),
Cleanaway’s largest landfill, we generated 70,290 MWh
of renewable electricity which powers an equivalent of
approximately 11,700 Victorian homes.
Converting biogenic methane into biogenic CO2 through
combustion also slows down climate warming, as the
impact of a kilogram of methane on the climate is 28 times
greater than the impact of a kilogram of CO2. In Australia,
this positive contribution is rewarded in the form of
Australian Carbon Credit Units (ACCUs) under the Landfill
Gas Method. In FY24, we improved the efficiency of landfill
gas capture by 12.5% across our portfolio of landfills,
substantially reducing methane emissions. We achieved
this through gas capture improvements at MRL and
New Chum landfills.
Combined GHG emissions
Scope 1 and Scope 2 emissions by source
72%
Methane
27%
Carbon dioxide
⬤ Inkerman, SA
10%
⬤ Kemps Creek, NSW
13%
⬤ Melbourne Regional
Landfill (MRL), VIC
24%
⬤ New Chum, QLD
7%
⬤ Lucas Heights, NSW
27%
⬤ Other
19%
Methane by landfill site
⬤ Diesel
70%
⬤ Waste incineration
2%
⬤ Petrol
3%
⬤ Natural gas
8%
⬤ Electricity
17%
Carbon dioxide by source
GHG emissions reduction on
track to meet 2030 targets
Compared with
FY23 NGERS
5.4%
reduction in
overall GHG
emissions
7.6%
reduction in
methane
800
900
1,000
1,100
1,200
1,300
1,400
FY30
FY29
FY28
FY27
FY26
FY25
FY24
FY23
FY22
FY24 1.5°C aligned
GHG emissions
1,191
1.5° Paris aligned range
FY22 GHG Baseline
1,308
FY30
GHG
target
838
FY23
NGERS
GHG
1,187 1
FY24
NGERS GHG
1,122
GHG emissions, in kt CO2e
Our emissions in FY24 1
1
FY23 NGERS figure was adjusted from 1,189 ktCO2-e after submission to the Clean
Energy Regulator.
1
The percentage does not sum to 100% due to rounding.
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SUSTAINABILITY HIGHLIGHTS
Decarbonising our fleet
As our second largest source of emissions, we are actively exploring
ways to decarbonise our vehicle fleet.
In FY23, we committed to a hydrogen truck trial with the aim of
understanding how hydrogen fuel vehicles perform relative to their
fossil diesel counterparts and to better understand the technology
in practice.
Throughout FY24, we continued to assess the viability of enhancing
our electric and hydrogen-powered fleet however; disappointingly
the trial was set back, with the hydrogen truck manufacturer
announcing it had entered administration.
Despite this setback, we continued to explore alternative fuel
sources and successfully demonstrated the use of renewable diesel
with an on-road trial in Melbourne, Victoria. See page 25 for more
on our HVO100 demonstration.
Reducing emissions continued
4.8PJ
1
Captured from landfill gas
Landfill gas capture
48%
of captured gas used by
third parties as renewable energy
18%
of captured gas flared
to reduce impact
34%
of captured gas
converted to electricity
Cleanaway’s Head of Corporate Affairs Mark Biddulph
and Coles General Manager of Sustainability Brooke
Donnelly at HVO100 launch.
1
Data is currently under assurance and may be subject to change.
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Climate risk and opportunity
In FY24, Cleanaway updated its scenario analysis
and assessment of climate risks and opportunities
to align with the Taskforce on Climate-related
Financial Risk Disclosure’s Good Practice
Handbook (2nd Edition 2021).
We also undertook a deep dive into our physical climate
risks – the risks associated with extreme weather and other
climate‑related hazards. This suggested that, while most Cleanaway
sites will not be highly impacted, sites exposed to increasingly
intense rainfall and extreme heat need further assessment.
This will be completed in FY25.
The assessment from FY24 highlighted the following sources of risk:
• contraction in carbon‑intensive industries and reduced service
demand from affected sectors because of the decarbonisation
of the economy
• the introduction of an explicit or implied carbon price
• an increase in the frequency and severity of extreme
weather events.
Equally, transition to net zero brings various opportunities:
• increased regulation favouring the domestic recycling industry
(e.g. container deposit schemes, government investments into
recycling infrastructure) to reduce embodied carbon emissions
• emergence of new waste streams and growth in low‑carbon
customer solutions for existing waste streams
• utilisation of the inherent energy content of waste and
incentives to invest in energy‑from‑waste plants.
For more information visit Cleanaway’s ESG databook
at cleanaway.com.au/sustainability-report
Our ongoing emissions
reduction journey
As we move into FY25, we will
focus on the following actions:
• Continue investing in landfill
capping and gas capture
to deliver further methane
emission reductions.
• Explore opportunities for
the use of renewable diesel
to reduce fleet emissions.
• Identify opportunities to
increase the use of renewable
energy to reduce emissions
from electricity use.
• Expand carbon offerings
to customers to lower our
customers’ waste-related
Scope 3 emissions.
• Analyse our upstream and
downstream Scope 3 emissions
to identify emissions hotspots
in our supply chain.
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Working together
A sustainable future for all requires
teamwork at all levels of our economy and
society, which is why we are partnering with
our people, customers, communities and
regulators to connect and grow together.
SUSTAINABILITY HIGHLIGHTS
Health and safety
The health and safety of our people and
the protection of the environment are
the foundations upon which Cleanaway
operates. Strong HSE performance is vital to
Cleanaway’s continued operations and future
growth, instilling confidence in our customers,
communities and shareholders.
During FY24, we set out a five-year strategy
and roadmap to drive improvements in our
HSE performance and culture. Cleanaway’s
operations are varied and complex; as such
the strategy is multifaceted with a focus
on risk prevention, capability building and
cultural transformation. The roadmap outlines
how everyone at Cleanaway will work to
keep each other, the environment, and our
communities safe.
Taking action on Critical Risks
During FY24 we continued our HSE Critical Risk program which
encompasses personal and process safety, and environmental risks.
This program forms part of our ongoing efforts to simplify and
improve our approach to risk management at Cleanaway.
The Critical Risk program encompasses:
• Simplified standards and guidance that clarify minimum
mandatory requirements.
• Visual risk bowties for each event that detail the event,
preventative and mitigative controls and consequences that
assist the frontline teams in better understanding and managing
the risks.
• Simple first line of defence field assessments for each risk to
support the site teams in verifying the effectiveness of controls.
To date there have been more than 1,000 field assessments
completed for the Critical Risks.
• Additional second line of defence assurance processes to further
validate the effectiveness of controls.
Throughout FY24 there were six Critical Risks released including
Mobile Plant and People Interaction, Driving (including Chain of
Responsibility), Waste Acceptance, Fire Management, High Pressure
Water Jetting and Falls from Height. This program will continue
into FY25.
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Culture, Diversity, and Inclusion
In August 2023 we introduced our Respect@Cleanaway program to build a safe, inclusive and
respectful culture. It draws a clear line against abuse, harassment, discrimination and disrespectful
conduct. In 2024, 96% of our people completed the Respect@Cleanaway online training program,
and 691 of our leaders completed the Respect@Cleanaway facilitated leader program.
Leaders play a critical role in fostering a safe, respectful and inclusive culture and will be a key focus for FY25. The data collected through our
employee listening strategy and cultural deep dives will be used to facilitate improved psychological safety and cultivate a sense of belonging.
In June 2024, we launched our Guiding Principles, a connected set of guidelines that shape how we work and behave. Collectively we believe
they will promote a culture of collaboration, care, connection, courage and forward thinking.
Female participation
Fostering diversity at Cleanaway includes increasing female
participation, a focus we continued across the Group in FY24.
In FY22, we challenged ourselves to achieve at least 40% women
in the executive team (defined as CEO-1) by the end of FY27.
Subsequently, this target was broadened to include at least 40%
of women in leadership roles (defined as CEO-2) by 2030.
We have met our FY27 commitment to achieve 40% female
Executive team participation (CEO-1) three years before projected,
and at an operational level, female participation increased from
10.0% in FY23 to 11.9% in FY24.
40.0%
39.3%
Proportion of
females in
CEO-1 roles
Proportion
of females in
CEO-2 roles
Up from 33.3% in FY23
Up from 36.2% in FY23
Our workforce
In March 2024, we ran our Employee Engagement Survey.
7,533 participants were invited to participate; and, pleasingly,
our participation rate was 65%.
Our overall engagement score was 62%. Support to work flexibly,
our alignment to sustainability, and feeling like part of a team
came through as highlights for our employees.
Over the coming 12 months we will look to embed our new
Guiding Principles with a focus on collaboration and connection
between our teams, an area highlighted for improvement.
Response
rate
March 2024
Engagement
4,872 of 7,533
responded
Australia 1,000+
Benchmark: 68%
65%
62%
Our Guiding Principles
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SUSTAINABILITY HIGHLIGHTS
Working together continued
Community education
and engagement
Cleanaway continues to play an active
role in the communities in which we
operate. Education remains a crucial way
we drive engagement and provide value
to communities, delivered in conjunction
with our council contracts, schools and
within businesses. In FY24 we delivered over
1,500 community and education sessions.
Clean Up Australia Day
This year marked the ninth year of our partnership with Clean
Up Australia. We celebrated our largest Clean Up Australia Day
yet, with 35 events nationwide, led by Cleanaway volunteers.
Our collaboration extends beyond this day, focusing on mobilising
Australians to protect the environment and educate on key issues
like battery disposal, reducing single-use plastics, and promoting
a circular economy.
Recycling Behaviours Report
and Battery Disposal Campaign
In partnership with the Clean Energy Finance Corporation (CEFC),
we proudly delivered our fourth annual Recycling Behaviours Report
in May 2024.
This year our research questions delved deeper into battery and
rechargeable device disposal, an issue that has been topical across
the waste industry as battery fires in trucks and facilities continue
to put lives and communities at risk.
Our research revealed 52% of
respondents think recycling batteries
is difficult, and 23% don’t know
batteries and rechargeable devices
cannot be placed in kerbside bins.
Concerningly, our research also
demonstrated that a third of people
don’t realise disposing of batteries
in kerbside bins can cause fires in
collection vehicles and waste facilities.
Following these results, we developed a national PR campaign with
input from the Battery Stewardship Council to drive awareness of
the issue of incorrectly disposing of batteries and the risk of fire this
causes; and educate on how to safely dispose of batteries.
NSW Sustainability Team Clean Up Australia event
at Galstone Recreation Reserve.
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Philippe Etienne
Independent Non-Executive Chairman since 20 September 2023
Independent Non-Executive Director since 29
May 2014, appointed Deputy Chair on 14 June
2023 and appointed Board Chairman on 20
September 2023. Philippe is a Non-Executive
Director of Lynas Rare Earths Limited (since
January 2015) and Aristocrat Leisure Limited
(since 1 October 2019). Formerly Chief Executive
Officer of Orica Mining Services, Managing
Director and Chief Executive Officer of Innovia
Security Pty Ltd (retired September 2014) and
Non-Executive Director of Sedgman Limited
(February 2015 to November 2015). Philippe has
held a range of other senior executive positions
with Orica in Australia, the USA and Germany,
including strategy and planning and responsibility
for synergy delivery of large-scale acquisitions.
He holds a Bachelor of Science in Physiology
and Pharmacology and a Master of Business
Administration (MBA). He is a graduate of the
Australian Institute of Company Directors and
has completed post-graduate qualifications
in marketing.
Board of Directors
Mark Schubert
CEO and Managing Director since 30 August 2021
Mark joined Cleanaway as Chief Executive Officer
and Managing Director in August 2021. Mark
was formerly the Executive General Manager,
Integrated Gas at Origin Energy for four years.
Prior to joining Origin Energy in 2015, Mark held
a number of senior positions during an 18-year
international career with the Shell Group of
companies. He has a track record of operating
and transforming major assets, including world
class LNG projects and oil refineries.
Mark has a Bachelor of Engineering (Chemical)
degree from the University of Sydney and Masters
of Finance and Financial Law from the University
of London.
Samantha Hogg
Independent Non-Executive Director since 1 November 2019
Chair of the Human Resources Committee
Member of the Audit and Risk Committee
Samantha is a Non-Executive Director
of IGO Limited (since January 2023).
Samantha was formerly Deputy Chair, Lead
Independent Director and Non-Executive Director
of Adbri Limited (ceased 1 July 2024), a Non-
Executive Director of De Grey Mining Limited
(resigned 17 October 2022), Australian Renewable
Energy Agency (retired July 2020), TasRail
(resigned December 2019), MaxiTRANS Industries
Limited (resigned March 2021), Hydro Tasmania
(retired August 2021) and Infrastructure Australia
(ceased November 2021), former Chair of Marinus
Link Pty Ltd (resigned June 2023) and former Chair
of Tasmanian Irrigation (resigned December 2022),
and formerly a Board member of the National
COVID-19 Commission (NCC) Advisory Board
(ceased March 2021).
Samantha is an experienced executive with
international experience across the transport,
infrastructure, energy and resources sectors.
She has held senior executive positions at
Transurban Group and Western Mining Company
across a broad range of portfolios including
finance, strategic projects, marketing and
corporate services. Her most recent executive
role was as the Chief Financial Officer of
Transurban Group.
Samantha holds a Bachelor of Commerce
and is a member of the Australian Institute
of Company Directors.
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Michael Kelly
Independent Non-Executive Director since 1 December 2021
Chair of the Audit and Risk Committee
Member of Sustainability Committee
Michael is the Chairman of Cleary Bros Group
and has been an Independent Director since
October 2023.
Michael was Chief Financial Officer of Adbri
Ltd from 2010 to 2018 and Executive General
Manager of Strategy and Development at Adbri
Ltd from 2006 to 2010. Prior to this, Michael held
senior positions at Rinker Ltd 2003 to 2006 and
at CSR Ltd from 2001 to 2003.
Michael is an experienced executive with over
30 years’ experience in finance, corporate strategy,
operations and acquisitions across construction
materials, building products, resources and media,
within Australia and internationally.
Michael holds a Bachelor of Commerce and
is a Certified Practising Accountant.
Jackie McArthur
Independent Non-Executive Director since 1 September 2022
Chair of the Sustainability Committee
Member of Human Resources Committee
Jackie is a Non-Executive Director of Qube
Holdings Ltd and Kelsian Group Limited. Jackie
was formerly a Non-Executive Director of
Inghams Group Ltd, Blackmores Ltd, Invocare
Ltd and Tassal Group Ltd. Jackie has held various
senior executive positions including Managing
Director of Martin-Brower ANZ, a global leading
distributor and supply chain services provider. She
has also held various senior executive positions
with McDonalds, both in Australia and overseas,
including Vice President of Supply Chain for Asia,
Pacific, Middle East and Africa. Ms McArthur has
more than 20 years’ experience at executive and
board level roles in general management and
strategy, supply chain and logistics, operations,
food and packaging manufacturing, emerging
brand issues and crisis management, corporate
social responsibility, governance, engineering and
information technology.
Jackie was the 2016 Telstra NSW Business Woman
of the Year and 2016 Telstra Business Women’s
Awards – Corporate and Private National Winner.
She has completed the INSEAD International
Executive Program, has a Bachelor of Engineering
from the University of Sydney and is a member of
the Australian Institute of Company Directors.
Ingrid Player
Independent Non-Executive Director since 1 March 2021
Member of the Sustainability Committee
Member of the Human Resources Committee
Ingrid is a Non-Executive Director of Integral
Diagnostics Limited (since August 2023), Cogstate
Ltd (since August 2019) and Epworth Foundation
(since November 2021).
Ingrid was formerly a Non-Executive Director
of HealthShare Victoria (ceased 30 June 2024).
Ingrid is an experienced executive with
international commercial and regulatory
experience in mergers and acquisitions, corporate
governance, capital developments, risk and
sustainability that spans different markets and
industries in Australia and Europe. During her
executive career she held senior executive roles
with Healthscope Ltd, including the positions
of Group Executive – Legal, Governance and
Sustainability, and General Counsel and Company
Secretary. Prior to this, she worked as a lawyer in
private practice in Australia and overseas.
Ingrid holds a Bachelor of Economics & Bachelor
of Laws (Hons) and is a member of the Australian
Institute of Company Directors.
BOARD OF DIRECTORS CONT.
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Clive Stiff
Independent Non-Executive Director since 1 June 2023
Member of the Audit and Risk Committee
Member of the Sustainability Committee
Clive is a Non-Executive Director of Rabobank
Australia Limited (since March 2024) and of
GrainCorp Limited (since October 2021). He is also
a member of the advisory boards of Quantium
and of the University of New South Wales Business
School. Clive was formerly a Non-Executive
Director of Australian Pharmaceutical Industries
Limited, Chair of the Australian Food & Grocery
Council, Chair of T2 Tea, Non-Executive Director
of Foodbank NSW & ACT and a member of the
Genpact Australian Advisory Council.
Clive has over 35 years of experience in the
fast moving consumer goods industry. He
was formerly CEO of Unilever Australia & New
Zealand, CEO of Procter & Gamble France and
previously held other senior executive roles with
the company internationally, as well as locally
with Goodman Fielder.
Clive holds a Master of Science in Management
and is a Fellow of the Australian Institute of
Company Directors.
Robert Cole
Independent Non-Executive Director since 12 March 2024
Member of the Audit and Risk Committee
Member of Human Resources Committee
Robert is the Non-Executive Chair of Iluka
Resources Limited (since April 2022) and Perth
Airport (since January 2023), and is Pro-Chancellor
of Curtin University. Robert was formerly the Chair
of Perenti Ltd, Electricity Generation and Retail
Corporation, The Southern Ports Authority, and
The WA Land Information Authority.
Robert was formerly an Executive Director at
Woodside Petroleum Limited, Managing Director
at Beach Energy, and partner-in-charge of
law firm King and Wood Mallesons Perth.
Robert has more than 35 years, experience
in commercial operations, business strategy
and planning obtained primarily in the energy,
resources, infrastructure and legal industries.
Robert holds a Bachelor of Science and a Bachelor
of Laws (Honours) from the Australian National
University, and has completed the Harvard
Business School Advanced Management Program.
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Senior Executive Team
Mark Schubert
CEO and Managing Director
Mark joined Cleanaway as Chief Executive Officer
and Managing Director in August 2021. Mark
was formerly the Executive General Manager,
Integrated Gas at Origin Energy for four years.
Prior to joining Origin Energy in 2015, Mark held
a number of senior positions during an 18-year
international career with the Shell Group of
companies. He has a track record of operating
and transforming major assets, including world
class LNG projects and oil refineries. Mark has a
Bachelor of Engineering (Chemical) degree from
the University of Sydney and Masters of Finance
and Financial Law from the University of London.
Paul Binfield
Chief Financial Officer
Paul joined Cleanaway as Chief Financial Officer
in February 2021. He has held the CFO role at a
number of public companies including Nufarm,
Mayne Pharma and Mayne Group. He has broad
finance experience having led finance functions
in listed and private companies, both in Australia
and the United Kingdom. Paul holds a Bachelor
of Mathematics and is a member of the Institute
of Chartered Accountants in Australia and
New Zealand.
Tracey Boyes
Executive General Manager, Solid Waste Services
Tracey joined Cleanaway as Executive General
Manager, Solid Waste Services in February
2022. Tracey has broad experience in managing
large-scale operations, with particular expertise
in driving value creation and innovation, HSE
and risk management, corporate strategy,
and sustainability. Prior to joining Cleanaway,
Tracey held a number of senior and executive
roles at Origin Energy, Contact Energy and
News Corporation. Tracey holds a Bachelor
of Commerce and Administration majoring in
accounting and commercial law and is a member
of the Institute of Chartered Accountants in
Australia and New Zealand.
Scott Nicholls
Executive General Manager, Liquid Waste and Health Services,
Industrial and Waste Services
Scott joined Cleanaway in March 2023 as
Executive General Manager, Liquid Waste and
Health Services, Industrial and Waste Services.
Before joining Cleanaway, Scott was the President
of Resources and Industrial for five years at Linfox
Pty Ltd. Prior to this Scott spent over 15 years with
Caltex Australia Ltd where he fulfilled a variety
of senior executive roles in strategy, operations
and sales. Scott holds a Bachelor of Engineering
(Mechanical) from the University of Wollongong
and has completed the Advanced Management
Program at Harvard Business School.
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Chris Avramopoulos
Executive General Manager, Customer and Growth
Chris joined Cleanaway in February 2020 as
Executive General Manager, Customer and
Growth. Prior to joining Cleanaway, Chris held
several senior positions at Orica over more
than 20 years including Vice President – Asia,
Chief Transformation Officer, Vice President –
Commercial. He has vast international experience
serving customers in all continents, including
a secondment in Asia. Chris has a Bachelor of
Science, majoring in Mathematics & Computer
Science, having graduated with distinction at
Swinburne University.
Frank Lintvelt
Executive General Manager, Strategy, Mergers & Acquisitions
Frank was appointed Executive General Manager,
Strategy, Mergers & Acquisitions in November
2019. He first joined Cleanaway in 2013 as
Corporate Development Manager and in his
current role oversees the Group strategy, M&A,
innovation, carbon and circularity and select other
new growth areas. Frank has more than 25 years’
experience in senior corporate development,
strategy and investment banking roles. Prior to
joining Cleanaway, he spent 13 years in investment
banking in London and Sydney, most recently with
Morgan Stanley.
Frank holds a Bachelor of Business Administration,
a Masters of Business Administration from
York University in Toronto (Canada) and is
CPA qualified.
Preet Brar
Executive General Manager – Energy from Waste
Preet was appointed Executive General Manager,
Energy from Waste in December 2023. She first
joined Cleanaway in November 2022 as General
Manager, Solid Waste Services Victoria/Tasmania.
Preet has over 20 years’ experience in the waste
management industry, with a focus on leading
large, complex business functions and influencing
policy and government relations. Prior to joining
Cleanaway, she spent 17 years at Veolia in various
senior executive positions, most recently as
Chief Executive Officer for Veolia India and Chief
Financial Officer for Veolia Australia and New
Zealand. Preet holds a Masters of Professional
Accounting, a Bachelor of Business Administration,
Masters of Business Administration and is
CPA qualified.
Deborah Peach
Executive General Manager, Health, Safety and Environment
Deborah joined Cleanaway in August 2022 as
Executive General Manager, Health, Safety and
Environment. Deborah joins Cleanaway from
Woodside Energy where she most recently held
the roles of Vice President Australia Operations
Support and Vice President Governance, Risk and
Compliance. Prior to that she held executive and
senior leadership roles spanning Health, Safety
and Environment in the mining, consulting and
energy sectors. Deborah brings to Cleanaway 30
years of HSE expertise in high-risk operational
settings with demonstrated success in driving
transformational change, aligning businesses with
regulatory requirements, practical mitigation of
risk, improving performance and strengthening
organisational culture. She has a Bachelor of
Science (Hons) majoring in Environmental Science
and is a Graduate of the Australian Institute of
Company Directors. Deborah is a Board Member
and Co-Chair of Safer Together WA/NT, a not-for-
profit organisation committed to improving safety
culture and performance across industry.
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
39
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
SENIOR EXECUTIVE TEAM CONT.
Alex Smith
Executive General Manager – Commercial
Alex was appointed Executive General Manager,
Commercial in December 2023. He first joined
Cleanaway in August 2017 and has held various
senior roles, most recently as General Manager,
Commercial. Alex has over 15 years’ experience in
Senior Commercial Finance roles, leading finance
& pricing divisions, large-scale integrations and
transformation programs. Alex holds a Bachelor
of Commerce from Macquarie University, is a
member of the Institute of Chartered Accountants
in Australia and New Zealand and has completed
the General Management Program at Harvard
Business School.
Dan Last
General Counsel and Company Secretary
Dan joined Cleanaway as General Counsel and
Company Secretary in March 2014. Dan is an
experienced General Counsel and Company
Secretary with over 20 years experience in law
firms and senior in-house legal roles. Prior to
joining Cleanaway, Dan was the General Counsel
and Company Secretary of Foster’s Group
Limited. He has also worked in top tier law firms
in Australia and overseas. Dan has a Bachelor of
Laws (Hons), a Bachelor of Commerce and is a
Fellow of the Governance Institute of Australia,
and a Graduate of the Australian Institute of
Company Directors.
Jade Paterson
Chief People Officer
Jade was appointed Chief People Officer in
November 2023. She first joined Cleanaway in
November 2022 as Head of People Delivery &
Culture. Jade has more than 16 years’ experience
in senior Human Resources and Transformation
roles. Prior to joining Cleanaway, she spent
12 years at AusNet Services in various senior
Human Resources roles, most recently as General
Manager People, Safety & Change and the
Program Director leading a rectification and
business transformation program of work. Jade is
an experienced People & Culture professional with
demonstrated success in disrupted and dynamic
environments. She has expertise in strategic
human resources management, organisational
design and transformation, commercial strategy
execution and leading teams through complex
transformation programs. Jade holds a Masters of
Human Resource Management and a Bachelor of
Applied Science (Psychology).
40
40
Contents of Financial Statements
For the financial year ended 30 June 2024
Directors’ Report
42
Remuneration Report
54
Auditor’s Independence Declaration
76
Consolidated Income Statement
77
Consolidated Statement of Comprehensive Income
78
Consolidated Balance Sheet
79
Consolidated Statement of Changes in Equity
80
Consolidated Statement of Cash Flows
81
Notes to the Consolidated Financial Statements
82
Consolidated Entity Disclosure Statement
145
Directors’ Declaration
147
Independent Auditor’s Report
148
Notes to the Consolidated Financial Statements
Information about the Group and basis
of preparation
1. Corporate information
2. Statement of compliance
3. Basis of preparation
4. Critical accounting estimates and judgements
Information about our financial performance
5. Segment reporting
6. Revenue
7. Other income
8. Net finance costs
9. Income tax
10. Earnings per share
Information about working capital
11. Cash and cash equivalents
12. Trade and other receivables
13. Inventories
14. Trade and other payables
Information about our capital structure
15. Borrowings
16. Issued capital
17. Reserves
18. Dividends
19. Capital management
Other information about our financial position
20. Property, plant and equipment
21. Leases
22. Intangible assets
23. Equity accounted investments
24. Other assets
25. Employee entitlements
26. Provisions
27. Other liabilities
Information about our Group structure
28. Business combinations
29. Subsidiaries
30. Deed of Cross Guarantee
31. Parent entity
Information about financial risks and
unrecognised items
32. Financial risk management
33. Contingent liabilities
34. Commitments
Other information
35. Share-based payments
36. Auditor’s remuneration
37. Related party transactions
38. Events occurring after the reporting date
Accounting policies
39. New standards adopted
40. New standards and interpretations not yet adopted
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
41
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
The Directors present their Report (including the Remuneration Report) together with the Consolidated Financial
Statements of the Group, consisting of Cleanaway Waste Management Limited (the Company) and its controlled entities
(Cleanaway or the Group), for the financial year ended 30 June 2024 and the Independent Auditor’s Report thereon.
Directors
The names of Directors of the Company at any time during or since the end of the financial year are set out below.
Directors were in office for this entire period unless otherwise stated.
P G Etienne
Chairman and Non-Executive Director (appointed as Chairman on 20 September 2023)
M P Chellew
Chairman and Non-Executive Director (retired 20 September 2023)
M J Schubert
Chief Executive Officer and Managing Director
R M Smith
Non-Executive Director (retired 31 August 2023)
T A Sinclair
Non-Executive Director (retired 30 April 2024)
S L Hogg
Non-Executive Director
I A Player
Non-Executive Director
A M Kelly
Non-Executive Director
J McArthur
Non-Executive Director
C M Stiff
Non-Executive Director
R J Cole
Non-Executive Director (appointed 12 March 2024)
The office of Company Secretary is held by D J F Last, LLB (Hons), B.Com, FGIA, GAICD.
Particulars of Directors’ qualifications, experience and special responsibilities can be found on pages 35 to 37.
Principal activities
During the financial year the principal activities of Cleanaway were:
• Commercial and industrial, municipal and residential collection services for all types of solid waste streams,
including general waste, recyclables, construction and demolition waste and medical and washroom services;
• Ownership and management of waste transfer stations, resource recovery and recycling facilities,
secure product destruction, quarantine treatment operations and landfills;
• Sale of recovered paper, cardboard, metals and plastics;
• Collection, treatment, processing and recycling of liquid and hazardous waste, including industrial waste,
grease trap waste, oily waters and used mineral and cooking oils in packaged and bulk forms;
• Industrial solutions, including industrial cleaning, vacuum tanker loading, site remediation, sludge management,
parts washing, and high pressure cleaning;
• Refining and recycling of used mineral oils to produce fuel oils and base oils; and
• The generation and the sale of carbon credits and electricity produced utilising landfill gas.
Directors’ Report
42
Dividends
The Company declared partially franked dividends on ordinary shares for the financial year ended 30 June 2024 of 5.00 cents
per share, being an unfranked interim dividend of 2.45 cents per share and a fully franked final dividend of 2.55 cents per share.
The record date of the final dividend is 16 September 2024, with payment to be made 7 October 2024. The financial effect
of the final dividend has not been brought to account in the Financial Statements for the financial year ended 30 June 2024
and will be recognised in a subsequent Financial Report.
Details of distributions paid in the financial year are as follows:
RECOGNISED (PAID AMOUNTS)
2024
$'M
2023
$'M
Fully paid ordinary shares
Final dividend for 2023: 2.45 cents per share (2022: 2.45 cents per share)
54.5
54.5
Interim dividend for 2024: 2.45 cents per share (2023: 2.45 cents per share)
54.6
54.5
Total dividends paid
109.1
109.0
Operating and financial review
Review of financial position
Operating cash flows increased by 12.5% to $542.1 million (2023: increase of 3.3% to $481.8 million).
The Group’s net assets have increased from $2,945.4 million to $3,001.6 million. At 30 June 2024, the Group had a net
current asset deficiency of $223.0 million (2023: $170.0 million). The Group has sufficient unutilised committed debt facilities
at 30 June 2024 and therefore the Directors are satisfied that the Group can meet its financial obligations as and when they
fall due.
At balance date, the Group had total syndicated debt facilities of $1,075.0 million (2023: $1,145.0 million), US Private
Placement Notes of $351.0 million (2023: $348.3 million), financing arrangements with the Clean Energy Finance Corporation
of $90.0 million (2023: $90.0 million) and an uncommitted bank guarantee facility of $95.0 million (2023: $95.0 million).
The headroom available in the Group’s facilities at 30 June 2024 was $328.4 million (2023: $528.2 million) and cash on hand
was $120.6 million (2023: $102.1 million). Further information on the Group’s financing facilities is provided in note 15 to the
Financial Statements.
The Group’s gearing ratio at period end, defined as net debt over net debt plus equity, was 35.6% (2023: 34.3%).
The weighted average debt maturity is 4.0 years (2023: 3.8 years).
Review of Operations
The Group comprises three operating segments, being Solid Waste Services, Industrial & Waste Services and Liquid Waste
& Health Services. Unallocated items include the Group’s share of profits from equity accounted investments and corporate
balances. A description of the operating segments and a summary of the associated segment results are set out on
pages 16 to 21.
Review of financial results
The Group’s statutory profit after income tax (attributable to ordinary equity holders) for the financial year ended 30 June 2024
was $156.6 million (2023: $21.6 million).
The Group’s underlying profit after income tax (attributable to ordinary equity holders) for the year ended 30 June 2024
of $169.0 million was up 15.2% on the prior year (2023: $146.7 million) after adjusting for the significant items which
impacted the Group’s result during the current period by $12.4 million, net of tax (2023: $125.1 million, net of tax).
Revenue from ordinary activities increased by 5.6% to $3,758.2 million (2023: $3,558.8 million). Excluding the collection
of levies, net revenue increased by 7.7% to $3,194.5 million (2023: $2,965.8 million).
Total expenses (before depreciation and amortisation expenses) increased by 1.1% to $3,065.6 million (2023: $3,031.0 million).
Excluding levies collected and paid, total expenses increased by 2.6% to $2,501.9 million (2023: $2,438.0 million). Depreciation
and amortisation expense increased by 1.0% to $369.5 million (2023: $365.9 million).
Key business strategies and prospects
The update of key business strategies and prospects can be found on pages 12 to 15 of the Annual Report.
Directors’ Report
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
43
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Operating and financial review (continued)
Review of financial results (continued)
Group results for the financial year ended 30 June 2024
UNDERLYING ADJUSTMENTS
STATUTORY 1
$'M
INTEGRATION
COSTS 4
$'M
NET INSURANCE
RECOVERIES 5
$‘M
IT
TRANSFORMATION
COSTS 6
$‘M
UNDERLYING 1
$'M
Solid Waste Services
612.8
Industrial & Waste Services
53.1
Liquid Waste & Health Services
115.2
Equity accounted investments
(6.1)
Waste management
775.0
Corporate
(46.3)
EBITDA 2
713.0
2.0
(12.3)
26.0
728.7
Depreciation and amortisation
(369.5)
–
–
–
(369.5)
Write-off of assets
(2.0)
–
2.0
–
–
EBIT 3
341.5
2.0
(10.3)
26.0
359.2
Net finance costs
(115.7)
–
–
–
(115.7)
Profit before income tax
225.8
2.0
(10.3)
26.0
243.5
Income tax expense
(67.6)
(0.6)
3.1
(7.8)
(72.9)
Profit after income tax
158.2
1.4
(7.2)
18.2
170.6
Attributable to:
Ordinary equity holders
156.6
1.4
(7.2)
18.2
169.0
Non-controlling interest
1.6
–
–
–
1.6
1
The use of the term ‘Statutory’ refers to IFRS financial information and ‘Underlying’ refers to non-IFRS financial information. Underlying earnings are
categorised as non-IFRS financial information. The exclusion of underlying adjustments provides a result which, in the Directors’ view, more closely
reflects the ongoing operations of the Group.
2
EBITDA represents earnings before interest, income tax, depreciation, amortisation and impairments.
3
EBIT represents earnings before interest and income tax.
4
The final costs associated with the integration of Global Renewables Holdings Pty Ltd of $2.0 million were incurred during the period.
5
Insurance recoveries of $12.5 million were recognised during the period in relation to property damage and business interruption claims agreed by the
insurers for the June 2022 fire that occurred at the medical waste processing facility in Dandenong, Victoria. This is offset by the write-off of plant and
equipment totalling $2.0 million and legal costs of $0.2 million resulting from the East Coast floods that occurred during late February and early March
2022. Further insurance recoveries are expected to be recognised in the year ending 30 June 2025.
6
IT transformational project costs related to customisation and configuration of cloud-based software, which Cleanaway does not control and therefore
the costs do not qualify for capitalisation as intangible assets.
Directors’ Report
44
Group results for the financial year ended 30 June 2023
UNDERLYING ADJUSTMENTS
STATUTORY 1
$'M
ACQUISITION
AND
INTEGRATION
COSTS 4
$'M
FLOOD
IMPACTS 5
$‘M
MEDICAL
WASTE
FACILITY
INCIDENTS 6
$‘M
NEW CHUM
HEIGHT RISE 7
$‘M
OTHER 8
$‘M
UNDERLYING 1
$'M
Solid Waste Services
562.7
Industrial & Waste Services
52.7
Liquid Waste & Health Services
92.4
Equity accounted investments
(0.7)
Waste management
707.1
Corporate
(39.0)
EBITDA 2
546.6
7.9
62.2
22.1
23.2
6.1
668.1
Depreciation and amortisation
(365.9)
–
–
–
–
–
(365.9)
Write-off of assets
(51.3)
–
–
0.2
51.1
–
–
EBIT 3
129.4
7.9
62.2
22.3
74.3
6.1
302.2
Net finance costs
(96.1)
–
–
–
–
–
(96.1)
Profit before income tax
33.3
7.9
62.2
22.3
74.3
6.1
206.1
Income tax expense
(9.8)
(1.1)
(18.7)
(6.7)
(22.3)
1.1
(57.5)
Profit after income tax
23.5
6.8
43.5
15.6
52.0
7.2
148.6
Attributable to:
Ordinary equity holders
21.6
6.8
43.5
15.6
52.0
7.2
146.7
Non-controlling interest
1.9
–
–
–
–
–
1.9
1
The use of the term ‘Statutory’ refers to IFRS financial information and ‘Underlying’ refers to non-IFRS financial information. Underlying earnings are
categorised as non-IFRS financial information. The exclusion of underlying adjustments provides a result which, in the Directors’ view, more closely
reflects the ongoing operations of the Group.
2
EBITDA represents earnings before interest, income tax, depreciation, amortisation and impairments.
3
EBIT represents earnings before interest and income tax.
4
Acquisition and integration costs of $7.9 million include transaction costs and other costs associated with the acquisition and integration of Global
Renewables Holdings Pty Ltd of $5.3 million and the final integration costs related to the Sydney Resource Network acquisition of $2.6 million.
5
Several Cleanaway sites were impacted by the East Coast floods that occurred during late February and early March 2022. Flood impacts in the period
of $62.2 million relate mainly to further rectification works on the cell at the New Chum landfill which was under construction at the time of the floods.
More stringent requirements have been imposed by the regulator and works to rectify the damaged cell have taken longer than anticipated.
6
In June 2022, a fire caused significant damage to equipment at the medical waste processing facility in Dandenong, Victoria. The Victorian Health
business has incurred additional expenses of $39.3 million during the financial year, largely related to alternative waste disposal costs. Insurance
recoveries of $17.0 million have been recognised during the period in relation to property damage and business interruption claims agreed by the
insurers. Further insurance claims have been recognised in the year ended 30 June 2024.
7
On 20 June 2023, the Planning and Environment Court in Queensland dismissed an appeal by Cleanaway against the decision of the Ipswich City Council
to refuse an application that would have allowed for additional airspace at the New Chum landfill. As a result of this decision, assets related to the New
Chum landfill of $51.1 million were written-off. In addition, the remediation provision has increased by $23.2 million as future spend on infrastructure,
including gas and stormwater management, will no longer qualify to be recognised as assets when incurred. Furthermore, capping works will be brought
forward and results in discounting the cash flows in the nearer term.
8
Other underlying adjustments comprise:
•
IT costs associated with the transformational CustomerConnect project of $6.1 million related to customisation and configuration of cloud-based
software, which Cleanaway does not control and therefore the costs do not qualify for capitalisation as intangible assets. The income tax benefit
related to these costs is $1.8 million.
•
During the period, the Group agreed a final settlement with New Zealand Inland Revenue regarding its review of various matters related to the
Group’s prior ownership of the New Zealand business, which resulted in an additional tax liability. As a result, the Group has raised an additional
tax provision of $2.9 million.
Operating and financial review (continued)
Review of financial results (continued)
Directors’ Report
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
45
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Principal risks
The Board has adopted an Enterprise Risk Management Policy which articulates Cleanaway’s commitment to the establishment
of a sound system of risk oversight, management, and internal control.
Our growth and success depend on our ability to understand and respond to the challenges of an uncertain and changing
world. This uncertainty generates risk, with the potential to be a source of both opportunities and threats. By understanding
and managing risk, we provide greater certainty and confidence for all our shareholders.
The Policy is supplemented by an Enterprise Risk Management Methodology that seeks to embed risk management
processes into Cleanaway’s business activities. The material business risks that could adversely impact the Group’s financial
prospects in future periods and the broad approach Cleanaway takes to manage these risks are outlined below. These risks
are not to be taken to be a complete or exhaustive list of the risks Cleanaway is exposed to; nor are they listed in order
of significance.
RISK
DESCRIPTION
MITIGATION
Economic
growth
Cleanaway provides its services and products
to individuals, companies and government across
a range of economic sectors in Australia. Changes
in the state of the economy and the sectors of the
economy to which the Group is exposed may have
an adverse impact on the demand and pricing for
Cleanaway’s services and products and the Group’s
operating and financial performance. Factors which
have impacted results in recent periods include
increases and decreases in GDP and CPI, increases
and decreases in the manufacturing, industrial and
construction industries, and resource sector activity.
To the extent possible, the Group manages
these risks by incorporating a consideration
of economic conditions and future expectations
into its corporate and financial plans.
Regulatory
environment
Cleanaway’s operations are subject to a variety
of Federal, State and local laws and regulations
in Australia. These laws and regulations establish
various standards about the types of operations that
can be undertaken and the manner in which they
are undertaken. Regulatory requirements which
have impacted historical results include State-based
waste levies, carbon tax and trading, environmental
regulation and planning regulations. Changes in
regulatory requirements or failure to comply with
conditions of permits and licences could adversely
affect Cleanaway’s ability to continue operations on
a site and, in turn, the Group’s financial performance.
Cleanaway manages these risks by developing
and implementing appropriate systems,
policies and procedures to ensure compliance
with applicable regulatory requirements.
Furthermore, to the extent possible,
the Group incorporates consideration
of changes in regulatory requirements into
its corporate and financial plans and forecasts.
Employee
and Industrial
Relations risks
Cleanaway operates in a complex industrial relations
environment, with a large number of enterprise
agreements and underpinning awards that potentially
apply across its more than 300 operational sites.
Cleanaway is currently assessing the impact of recent
regulatory reforms introduced by the Australian
government across its operations. Also, due to the
range of enterprise agreements and awards that
apply across the Group’s operations, there is a risk
that some of these agreements and awards may
not have been applied correctly in relation to the
payment of employees in all circumstances.
Cleanaway has a significant program of work
to understand and address the impacts of the
reforms on our operations and implement
actions and changes to processes, practices,
and/or systems as required. In addition,
comprehensive, ongoing, enterprise audit
and assurance programs will be introduced
to ensure prompt identification, rectification
and remediation of any non-compliance with
an enterprise agreement that is identified.
Operating and financial review (continued)
Directors’ Report
46
RISK
DESCRIPTION
MITIGATION
Operational
risks
Delivering on our mission and customer proposition
relies, among other things, on control over a network
of infrastructure assets. This requires high quality,
competitive, integrated assets in the right locations
across the value chain which provide the most
sustainable outcomes in the waste hierarchy for each
of the waste streams.
A prolonged and unplanned interruption to
Cleanaway’s operations could significantly impact
the Company’s financial performance and reputation.
Cleanaway is exposed to a variety of operational risks,
including risk of site loss or damage, environmental
and climatic events, global pandemic risks, industrial
disputes, technology failure and systems security
or data breaches.
Delivery of the Cleanaway strategy requires the
construction of additional assets and landfill cells
and gas infrastructure. These projects will need
to be delivered in line with our sustainability
standards, on time and within the approved budget.
The projects must also be delivered in a manner
that ensures that required metrics/assumptions and
performance standards are delivered.
Operational risks also include the ability of Cleanaway
to continue to build a strong customer service culture
to ensure we service and retain our customers.
Cleanaway has a range of controls and
strategies in place to manage such risks,
including site business continuity and
crisis management plans, inspection and
maintenance procedures, compliance
programs, training, site and business
interruption insurance and systems
security testing and improvements.
Cleanaway has a range of controls and
strategies in place to manage the delivery
of major projects, including project gateway
and financial metrics, specialist infrastructure
and landfill engineering teams and proven
partnerships to deliver on time and
on budget.
Customer requirements and service levels
for the treatment and recycling of waste are
constantly changing. There is a heightened
expectation from customers for waste
providers to fulfil requirements for appropriate
disposal/recycling of waste once collected.
By understanding our customers’ needs and
executing on this, Cleanaway can use our
capability as a differentiator to drive growth
and value.
Industry
consolidation
Cleanaway operates in a competitive and evolving
landscape. It is important that Cleanaway
understands the competitive threats and builds
appropriate action plans in the context of industry
consolidation, single waste stream entrants and
potential disrupters.
Cleanaway mitigates these risks by maintaining
a strong understanding of the industry,
key drivers of success, improving business
performance and identifying potential
acquisitions. Maintaining a strong balance
sheet also allows Cleanaway to respond
decisively to emerging opportunities.
Attract and
retain key
management
Cleanaway’s operations are dependent upon
the continued performance, efforts, abilities and
expertise of its senior management. The loss
of services of such personnel may have an adverse
effect on the operations of Cleanaway as the Group
may be unable to recruit suitable replacements within
a short timeframe.
Cleanaway has in place human resource
strategies and remuneration and employment
policies to attract, retain and motivate
executives and align their interests with
those of stakeholders.
Health and
Safety
Cleanaway’s operations involve risks to property,
personnel and members of the public. A health and
safety incident may lead to serious injury or death,
which may result in reputational damage and
adverse operating impacts with consequential effects
to Cleanaway’s financial performance and position.
Cleanaway manages these risks by developing
and implementing appropriate strategies,
systems, policies and procedures in respect
of operational health and safety matters
to ensure compliance with legal and
regulatory obligations.
Cleanaway embraces fit-for-purpose
technologies and engineering controls
which enhance the safety of our fleet,
fixed plant and equipment.
Operating and financial review (continued)
Directors’ Report
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
47
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
RISK
DESCRIPTION
MITIGATION
Sustainability
risks
Cleanaway faces a variety of risks that could
impact on its sustainability due to changing social
and environmental factors. Managing these risks
is integral to ensuring the Group achieves its mission
of making a sustainable future possible together.
Sustainability encompasses building a resilient
business focused on sustainable performance,
investing in people and relationships with customers
and the communities in which Cleanaway works,
and leading industry to leave the planet in better
shape for future generations. Managing these risks
effectively is critical to ensuring that Cleanaway
maintains its regulatory and social licence
to operate in the communities in which it has
significant operations.
Cleanaway assesses and manages
sustainability-related risks in accordance with
its Enterprise Risk Management Framework,
which is aligned to International Standard
AS/NZS ISO 31000 and broader industry
practice. This includes regularly reviewing
our operating environment, emerging
and current risks, and risk mitigation and
control. Cleanaway continues to focus
on Environmental, Social and Governance
(ESG) risks and enhance its disclosure
in relation to ESG matters. ESG disclosures
set out in our Sustainability Report are
underpinned by a comprehensive materiality
assessment conducted every two years, with
the next one to be in FY25; and alignment
with the Sustainability Accounting Standards
Board (SASB) Waste Management Standard.
Environment
risks
There is potential for damage to the environment
arising from Cleanaway’s operations. If mishandled,
waste can pose hazards to the environment, such
as contaminating waterways, contaminating soil,
harmful air emissions and fires. Failing to operate
in accordance with environmental standards not
only has the potential to result in environmental
harm but also increases compliance costs, jeopardises
our regulatory approvals and our social licence
to operate, and causes reputational damage with
our stakeholders and investors.
Upholding the highest standards in
environmental performance is crucial to the
success and sustainability of our business.
Our collection, sorting, treatment and
disposal processes are designed to mitigate
the risk of these hazards.
Our approach to managing environment
risk is aligned to Our Foundations and there
are various internal systems, processes
and toolkits that support our approach
to compliance with environmental regulations,
standards and requirements.
Our Environment Policy sets out our
commitment to achieving our mission,
and to continually improve our environmental
standards for the benefit of the environment,
our employees, stakeholders and
the community.
Operating and financial review (continued)
Principal risks (continued)
Directors’ Report
48
RISK
DESCRIPTION
MITIGATION
Climate change
Climate change presents complex challenges for
companies, governments and society.
Balancing the risks and impacts of climate change,
Cleanaway has the opportunity to address its own
emissions as well as develop solutions to help
customers reduce their emissions.
Cleanaway understands and acts on its responsibility
to identify and respond to physical and transitional
climate risks and ensure climate change adaptation,
mitigation and resilience strategies are embedded
in Cleanaway’s risk management framework.
We believe that the transition to a carbon constrained
economy presents opportunities for our business as
well as risks. These risks include the decarbonisation
of the economy, leading to a contraction in carbon-
intensive industries, the introduction of government
policy to effect rapid decarbonisation and an
increase in the frequency and severity of extreme
weather events. Opportunities for Cleanaway may
include increased regulation to reduce embodied
carbon emissions favouring resource recovery
and the domestic recycling industry, development
of low-carbon customer solutions and increased
incentives to invest in Energy from Waste plants.
Cleanaway aligns with the Task-Force
on Climate-related Financial Disclosures
(TCFD) framework. The TCFD recommends
companies assess and disclose the financial
impacts of climate-related risks and
opportunities. Our Sustainability Report
and ESG Databook sets out our response
to the TCFD recommendations.
In anticipation of the upcoming Australian
Sustainability Reporting Standards, we
are taking proactive measures to prepare
and respond. Cleanaway is developing
a multi-year plan to report in line with
the incoming standards and enhance our
management and disclosure of climate-related
risks and opportunities.
We see this development as an opportunity
for Cleanaway, given that we expect it
will provide greater insight to investors
and other stakeholders as to our role in
delivering a sustainable future for our
business, our customers, our communities,
and the environment.
Financial and
insurance risks
Cleanaway is exposed to a variety of financial risks,
including credit risk, adverse movements in interest
rates and foreign currency exchange rates, as well
as liquidity risk. In addition, Cleanaway is exposed
to the risk of attracting and retaining insurers
to prudently transfer insurable risks. These risks may
have an adverse effect on the Company’s operating
and financial performance.
The Group has in place treasury and insurance
policies that focus on managing these risks.
These policies are reviewed by the Audit and
Risk Committee and approved by the Board.
Treasury and insurance activities are reported
to the Audit and Risk Committee and
Board on a regular basis, with the ultimate
responsibility being borne by the Chief
Financial Officer (CFO).
Information on how Cleanaway manages
financial risks is included in note 32 to the
Financial Statements.
Commodity
risks
Cleanaway is exposed to changes in the prices
of commodities, particularly paper, cardboard,
glass and plastics from recycling activities as well as
energy and carbon. The demand for, and the price
of, commodities is highly dependent on a variety of
factors, including international supply and demand,
the price and availability of substitutes, actions taken
by governments such as the Council of Australian
Governments’ (COAG) decision to ban waste exports,
and global economic and political developments.
Cleanaway closely monitors global commodity
markets and market conditions relating
to production of commodities to minimise
potential exposures to commodity risks.
Where practical, collection contracts are also
economically hedged via the use of rebates
linked to underlying commodity prices.
Information on how Cleanaway manages
commodity price risks is included in note 32
to the Financial Statements.
Operating and financial review (continued)
Principal risks (continued)
Directors’ Report
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
49
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
RISK
DESCRIPTION
MITIGATION
Cyber risks
Cleanaway, like any large organisation, faces
an ever-changing cyber security threat, and needs
to prevent, detect and respond to cyber security
threats by maintaining a high standard of information
security control.
Cleanaway has a range of user access controls
that restrict and contain the ability for a user
to have wide-reaching access.
We utilise extensive technology-based controls
and undertake both in-house and independent
technology controls testing, validation and
maintenance to actively prepare for, monitor
and respond to potential threats.
Cleanaway is continuing to build its capability
to recover from a successful cyber attack,
including through its cyber incident response
team and business resilience plans.
Significant changes in the state of affairs
Other than matters mentioned in this Report, no other significant changes in the state of affairs of the Group occurred
during the financial year ended 30 June 2024.
Events subsequent to reporting date
The Group is not aware of any matter or circumstance that has occurred since 30 June 2024 that, in the Group’s opinion,
has significantly affected or may significantly affect in future years:
• its operations;
• the results of those operations; or
• the state of its affairs.
Likely developments and expected results of operations
The Group will continue to pursue strategies aimed at improving the profitability, return on capital employed and market
position of its principal activities during the next financial year.
Disclosures of information regarding the likely developments in the operations of the Group and the expected results
of those operations in future financial years have been included in the Operating and financial review section of this Report.
Environmental regulation
The Group’s operations are subject to significant environmental regulation and the Group holds environmental licences for its sites.
The Group is committed to achieving the highest standards of environmental performance. There were no material breaches
of environmental statutory requirements and no material prosecutions during the year. Aggregated fines paid during the
year and up to the date of this report were $198,104 (2023: $151,960).
The Group is registered under the National Greenhouse and Energy Reporting Act 2007, under which it is required to report
energy consumption and greenhouse gas emissions for its Australian facilities.
Operating and financial review (continued)
Principal risks (continued)
Directors’ Report
50
Indemnification of auditors
To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young, as part of the terms of its
audit engagement agreement, against claims by third parties arising from the audit (for an unspecified amount). No payment
has been made to indemnify Ernst & Young during or since the end of the financial year.
Directors’ and officers’ insurance
During the financial year, the Company paid insurance premiums to insure the Directors and Officers of the Company against
certain liability incurred in performing those roles subject to some exceptions. The Directors’ and Officers’ insurance policies
prohibit disclosure of the premiums payable under the policies and the nature of the liabilities insured.
Directors’ meetings
The number of Directors’ meetings and Committee meetings, and the number of meetings attended by each of the Directors
who was a member of the Board and the relevant Committee, during the financial year were:
BOARD
MEETINGS
AUDIT AND
RISK COMMITTEE
SUSTAINABILITY
COMMITTEE
HUMAN RESOURCES
COMMITTEE
MEETINGS
HELD WHILE
A DIRECTOR
NUMBER
ATTENDED
MEETINGS
HELD WHILE
A DIRECTOR
NUMBER
ATTENDED
MEETINGS
HELD WHILE
A DIRECTOR
NUMBER
ATTENDED
MEETINGS
HELD WHILE
A DIRECTOR
NUMBER
ATTENDED
Directors
M P Chellew 1
2
2
–
–
–
–
–
–
P G Etienne 2
9
9
1
1
1
1
–
–
I A Player
9
9
–
–
4
4
4
4
M J Schubert
9
9
–
–
–
–
–
–
J McArthur 3
9
9
–
–
4
4
1
1
R M Smith 4
2
2
1
1
–
–
1
1
T A Sinclair 5
6
6
3
3
–
–
3
3
S L Hogg
9
9
4
4
–
–
4
4
A M Kelly 6
9
9
4
4
1
1
–
–
C M Stiff 7
9
9
3
3
3
3
–
–
R J Cole 8
4
4
1
1
–
–
1
1
1
Resigned as Non-Executive Director and Board Chair on 20 September 2023.
2
Appointed Board Chair, and resigned as Member of Audit and Risk Committee and Sustainability Committee, on 20 September 2023.
3
Appointed as Member of Human Resources Committee on 23 April 2024.
4
Resigned as Non-Executive Director, Chair of Audit and Risk Committee and Member of Human Resources Committee on 31 August 2023.
5
Resigned as Non-Executive Director, Member of Audit and Risk Committee and Member of Human Resources Committee on 30 April 2024.
6
Appointed as Member of Sustainability Committee on 23 April 2024.
7
Appointed as Member of Audit and Risk Committee and Sustainability Committee on 1 September 2023.
8
Appointed as Non-Executive Director on 12 March 2024, and Member of Audit and Risk Committee and Member of Human Resources Committee
on 23 April 2024.
Directors’ Report
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
51
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Directors’ interests
The relevant interests of each Director in the shares and performance rights over such instruments issued by Cleanaway
Waste Management Limited, as notified by the Directors to the Australian Securities Exchange in accordance with
section 205G(1) of the Corporations Act 2001, as at the date of this report, are as follows:
ORDINARY
SHARES 4
PERFORMANCE
RIGHTS
CURRENT EXECUTIVE AND NON-EXECUTIVE DIRECTORS
M J Schubert
418,175
2,375,190
P G Etienne
152,202
–
C M Stiff
98,759
–
A M Kelly
87,198
–
J McArthur
61,453
–
I A Player
50,000
–
S L Hogg
20,000
–
FORMER NON-EXECUTIVE DIRECTORS
M P Chellew 1
170,442
–
R M Smith 2
143,034
–
T A Sinclair 3
54,920
–
1
The balance at the end of the year for Mr Chellew reflects his shareholding on the date he retired from being Chairman and Director on 20 September 2023.
2
The balance at the end of the year for Mr Smith reflects his shareholding on the date he ceased being a Non-Executive Director on 31 August 2023.
3
The balance at the end of the year for Mr Sinclair reflects his shareholding on the date he ceased being a Non-Executive Director on 30 April 2024.
4
Mr R J Cole was appointed as an independent Non-Executive Director on 12 March 2024. The balance of his shareholding as at the end of the year is nil.
Shares under option and performance rights
During the financial year ended 30 June 2024 and up to the date of this Report, no options were granted over unissued shares.
As at the date of this Report, there are no unissued ordinary shares of the Company under option.
Details of performance rights granted under the short-term incentive and long-term incentive offers in the 2024 and 2023
financial years are set out in the Remuneration Report. Total performance rights outstanding as at 30 June 2024 are 8,759,998
(2023: 7,585,392). Performance rights outstanding at the date of this report are 8,537,187.
Shares issued on the exercise of performance rights
During the financial year ended 30 June 2024 and up to the date of this Report, the Company issued 1,135,082 shares
as a result of the exercise of performance rights that vested during the year. During the financial year ended 30 June 2023 and
up to the date of the 2023 Report, the Company issued 1,603,565 ordinary shares as a result of the exercise of performance
rights that vested on 30 June 2023.
Directors’ Report
52
Non-audit services
The Company may decide to employ the auditors on assignments additional to their statutory audit duties where the auditors’
expertise and experience with the Company and/or the Group are relevant. During the financial year ended 30 June 2024,
non-audit services provided by Ernst & Young included other advisory services relating to the Group’s FY23 and FY24
Sustainability Reports and a readiness assessment in relation to the Australian Sustainability standards exposure draft.
The Directors have considered the position and, in accordance with written advice provided by resolution from the Audit
and Risk Committee, are satisfied that the provision of the non-audit services is compatible with, and did not compromise,
the auditor independence requirements of the Corporation Act 2001 for the following reasons:
• The value of non-audit services of $262,920 provided by Ernst & Young during the period represented 11.7% of the
total services;
• All non-audit services were subject to the corporate governance procedures adopted by the Company to ensure they
do not impact the integrity and objectivity of the auditor; and
• The non-audit services provided do not undermine the general principles relating to auditor independence as set out
in APES 110 Code of Ethics for Professional Accountants, as they did not involve the reviewing or auditing the auditor’s
own work, acting in a management or decision-making capacity for the Company, acting as an advocate for the
Company or jointly sharing risks and rewards.
2024
$
2023
$
Ernst & Young (Australia)
Audit services
1,820,676
1,554,800
Audit related services
170,805
393,346
Non-audit services:
Other advisory services
262,920
227,960
Total
2,254,401
2,176,106
A copy of the Auditor’s Independence Declaration as required under section 307C of the Corporations Act 2001 is set out
on page 76.
Rounding of amounts
The Company is of a kind referred to in ASIC Legislative Instrument 2016/191 issued by the Australian Securities and Investments
Commission, relating to the ‘rounding off’ of amounts in the Directors’ Report. Amounts in the Directors’ Report have been
rounded off in accordance with that Legislative Instrument to the nearest hundred thousand dollars or, in certain cases,
to the nearest dollar.
This Report, including the Remuneration Report set out on pages 54 to 75, is made in accordance with a resolution of the Board.
P G Etienne
Chairman
M J Schubert
Chief Executive Officer and Managing Director
Melbourne, 20 August 2024
Directors’ Report
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
53
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Contents
The Report contains the following sections:
PAGE
Introduction from the Chair of the Human
Resources Committee
54
FY24 Remuneration Report (Audited)
1.
Key Management Personnel (KMP)
56
2.
Executive reward strategy
and framework
57
3.
FY24 Company performance and
Executive remuneration outcomes
59
4.
FY24 Incentive plans
– detailed outcomes
61
5.
Executive KMP – remuneration tables
65
6.
Executive KMP – equity grants
66
7.
FY25 remuneration changes
71
8.
Executive KMP – contract terms
71
9.
Governance and role of the Board
72
10. Non-Executive Directors’ remuneration
72
11.
Shareholdings and other related
party transactions
74
Introduction from the Chair of the Human
Resources Committee
Dear Shareholders,
On behalf of the Board of Directors of Cleanaway, I present
to you the Remuneration Report for the financial year ended
30 June 2024.
Approach and framework
At the FY23 Annual General Meeting, we received
strong support for our Remuneration Report, with over
98% voting in its favour. This was a pleasing result given
it endorsed the approach by the Board following feedback
from shareholders.
For FY24 a range of changes were incorporated to
strengthen the alignment between management incentives
with shareholder outcomes. The changes were designed
to have a greater focus on the performance of shareholder
returns when assessing management’s performance, with
an increased STI weighting on Earnings Before Interest and
Tax (EBIT) and inclusion of Return on Invested Capital (ROIC)
in our LTI. What is important about both these measures is
they drive discipline around growing profits and improving
returns through the efficient use of capital.
Consistent with the framework increased focus on
disciplined, profitable growth, management’s FY24 LTI plan
was aligned with the mid-term ambition of more than $450
million in EBIT and improving returns in FY26, announced
by management at the FY23 results.
A year of execution and progress
Cleanaway’s strong FY24 results reflected the continued
execution and progress of our Blueprint 2030 strategy.
During the year, management addressed the three key
headwinds that impacted FY22 and FY23, and in doing so,
restored the performance of the Queensland operations of
our Solid Waste Services business, transformed our national
Health Services business and stabilised our workforce, which
like so many Australian businesses had been impacted by the
labour market shortages in FY21 and FY22.
Our focus on operational excellence and strategic infrastructure
growth continues and the progress made in FY24 provides
confidence in our ability to deliver our mid-term ambition.
This confidence stems from the increasing momentum
of our operational efficiency initiatives such as the on time
and on budget roll-out of Release One, of our two stage
Group-wide technology upgrade, known as ‘Customer
Connect’, as well as our efforts to drive branch-optimisation,
and transforming our fleet.
It also includes the execution of a number of strategically
significant infrastructure projects including the launch of our
VIC CDS operations, the roll-out of the Santos contract, the
continued construction of our Western Sydney MRF – which
is progressing on time and on budget, and the accelerated
transition of our Eastern Creek Organics facility to FOGO,
to take advantage of the evolving market.
Remuneration Report
54
FY24 Business performance and context for
remuneration outcomes
In FY24, Cleanaway has had a strong year of performance.
Management delivered in line with or ahead of all financial
commitments made for FY24.
EBIT is the key measure (with a 60% weighting) in our short-
term incentive (STI) plan. In FY24 we delivered a record
underlying EBIT growth rate of 18.8%, increasing EBIT to
$359.2 million from $302.2 million in the previous year. This
outcome was above our budget for FY24 and resulted in an
STI outcome between target and stretch.
Our people are key to achieving our strategy and
commitments to shareholders. Pleasingly, we continued
to improve Group Female representation as part of our
diversity targets to 24.3% of our workforce. We did,
however, miss our STI target of 25.1% for the year and this
resulted in an outcome of between threshold and target for
FY24. We achieved a stretch outcome on reducing voluntary
turnover by 18.1% from FY23 levels, which has helped
to stabilise our workforce and deliver material cost savings.
While we continued our commitment to improving Group
safety, particularly in relation to critical risks and process
safety, we did not achieve threshold on our total recordable
injury frequency rate (TRIFR) measure for the year.
We met our target of no major or significant environmental
incidents for FY24.
FY24 Remuneration outcomes – STI and LTI
The performance outlined above resulted in outcomes under
the FY24 STI of 81.4% of maximum for the CEO and MD
and 77.7% of maximum for our KMP. Further details are set
out in section 4B of this report.
The FY22 Long-Term Incentive Plan covering the three-year
performance period of FY22 – FY24 was tested at the end
of this year and vested at 29.1%. Our relative TSR over
the performance period ranked above median at the 54th
percentile of peers and resulted in partial vesting of that
part of our FY22 LTI.
The ROIC FY24 target, which acts as a gate for the EPS
measure, was not achieved and therefore resulted in nil
vesting for this measure. Had the gate been achieved, we
did not achieve the level of EPS growth required for vesting
of this component.
Further details are set out in section 4C of this report.
The Board believes that our incentive outcomes for FY24
are a fair reflection of the achievements of management
throughout the year.
FY25 Changes
During FY24, the Board continued to assess Cleanaway’s
Executive Remuneration framework as part of our
ongoing commitment to keeping it fit for the purpose
of attracting, retaining and motivating appropriately
skilled and experienced management to deliver both our
ambitious but achievable mid-term financial ambition and
our Blueprint 2030 strategy – which the Board believes
will deliver attractive short, medium and long-term returns
for shareholders.
As a result of this review, a number of changes have been
made to our remuneration framework for FY25, the key
of which include:
• Increasing the amount of any STI Award made that
is to be deferred from 20% to 33.3% and including
a service condition;
• Aligning the maximum STI opportunity of the CEO & MD
and the rest of the Executive Team at 175% of target for
most measures in the STI scorecard
• Increasing the STI opportunity by 10% of TFR and
the LTI opportunity by 20% of TFR for Executive
KMP (excluding the CEO and MD) to address market
competitiveness issues
Details regarding these changes are set out in section 7
of this report.
We look forward to ongoing engagement with our
shareholders and welcome your feedback on this report
or our approach to Executive remuneration.
On behalf of your Board, I thank you for your ongoing
support and commend this report to you.
Samantha Hogg
Chair, Human Resources Committee
Remuneration Report
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
55
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
1
Key Management Personnel (KMP)
For the purposes of this Report, KMP are defined as those persons having authority and responsibility for planning,
directing and controlling the major activities of the Group, directly or indirectly, including any Director (whether Executive
or otherwise) of the Company.
The KMP disclosed for the year ended 30 June 2024 are set out in the table below.
NAME
TITLE
TERM
NON-EXECUTIVE DIRECTORS
P G Etienne
Chairman
Director for the full year and Chairman from
20 September 2023
S L Hogg
Non-Executive Director
Full year
I A Player
Non-Executive Director
Full year
A M Kelly
Non-Executive Director
Full year
J McArthur
Non-Executive Director
Full year
C M Stiff
Non-Executive Director
Full year
R Cole
Non-Executive Director
Appointed to the Board on 12 March 2024
FORMER NON-EXECUTIVE DIRECTORS
M P Chellew
Former Chairman
Retired from the Board on 20 September 2023
R M Smith
Former Non-Executive Director
Retired from the Board on 31 August 2023
T A Sinclair
Former Non-Executive Director
Retired from the Board on 30 April 2024
CURRENT EXECUTIVE KEY MANAGEMENT PERSONNEL
M J Schubert
Chief Executive Officer (CEO) and Managing Director (MD) Full year
P A Binfield
Chief Financial Officer (CFO)
Full year
T Boyes
Executive General Manager – Solid Waste Services
Full year
S Nicholls
Executive General Manager – Liquid Waste & Health
Services and Industrial & Waste Services
Full year
Remuneration Report (Audited)
56
2
Executive reward strategy and framework
2A.
Strategy and framework – applied for FY24
The Group’s remuneration strategy is designed to attract, retain and motivate high calibre senior executives to ensure
the sustainable success of the Group for the benefit of all stakeholders. Remuneration is intended to be competitive and
fair, aligned with the achievements of Cleanaway’s annual plans and long-term ambitions and the creation of long-term
shareholder value. The remuneration structure is driven by these principles and comprises a mix of fixed and variable (at risk)
remuneration, weighted heavily to at risk incentives, illustrated below.
As set out in section 7, further changes to the executive remuneration framework have been made for FY25.
CLEANAWAY REMUNERATION STRATEGY
Remunerate competitively
to attract, motivate and
retain talent
Align remuneration
to Cleanaway’s annual
business strategy
Link outcomes to
Cleanaway’s financial
performance and individual
strategic objectives
Align to long-term
shareholder value
CLEANAWAY REMUNERATION STRUCTURE
TFR
Total Fixed Remuneration
STI
Short-Term Incentive (at risk)
LTI
Long-Term Incentive (at risk)
CASH
EQUITY
Annual TFR (Base Salary
plus superannuation)
Set based on market
and internal relativities,
performance and
experience
80% of STI outcome
paid in September after
financial year end
STI outcome based on
Cleanaway’s performance
measured against Financial
and Non-Financial KPIs
20% of STI outcome issued
is deferred as Deferred
Equity Rights
Deferred Equity Rights are
restricted for one year
LTI Performance Rights
subject to performance
conditions over three years
40% subject to TSR
20% subject to EPS CAGR
20% subject to
Emission reductions
20% subject to ROIC
Remuneration time horizon
Our FY24 remuneration structure for Executive KMP is outlined below.
Year 1
Element
Total Fixed
Remuneration
Base Salary plus
superannuation
LTI
STI
Year 2
Year 3
Performance testing
Payment/vesting 1
Annual Scorecard assessed at
conclusion of Financial Year
Performance Rights tested at the conclusion of three-year performance period
Cash
80%
Deferred Equity Rights
20%
1
Equity vesting coincides with the release of our annual results which is ordinarily in late August each year.
Remuneration Report (Audited)
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
57
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
2B.
Total Fixed Remuneration (TFR)
TFR consists of base salary plus statutory superannuation contributions. Senior Executives receive a fixed remuneration
package which is reviewed annually by the Human Resources Committee and the Board with reference to Company and
individual performance, size and complexity of the role, and external peer benchmark market data. There are no guaranteed
base pay increases included in any Executive KMP contract.
2C.
Short-Term Incentive
Executive KMP, other Senior Executives and eligible employees participate in the Group STI Plan. The table below represents
the annualised target and maximum annual STI opportunity as a percentage of TFR for Executive KMP.
TARGET
MAXIMUM
EXECUTIVE KEY MANAGEMENT PERSONNEL
M J Schubert
100%
150%
P A Binfield
60%
120%
T Boyes and S Nicholls
50%
100%
Executive KMP awards are paid as 80% cash payment with the remaining 20% awarded as deferred equity rights with
a 12-month deferral period.
2D.
Long-Term Incentive
Offers under the Cleanaway Long-Term Incentive (LTI) Plan are made on an annual basis. Executive KMP and other selected
Senior Executives are eligible to be invited to participate in the Group LTI Plan. The table below represents the annualised
maximum LTI opportunity as a percentage of TFR (at grant) for Executive KMP.
MAXIMUM
EXECUTIVE KEY MANAGEMENT PERSONNEL
M J Schubert
120%
P A Binfield, T Boyes and S Nicholls
60%
Executive KMP LTI grants are determined at face value (TFR multiplied by maximum opportunity) and based on the five-day
volume weighted average price of Cleanaway’s shares on the ASX during the five trading days prior to 30 June each year.
2E.
Remuneration elements and mix
Cleanaway aims to provide a competitive mix of remuneration components that reflect the Board’s commitment
to performance-based rewards. The total remuneration mix for Executive KMP comprising Total Fixed, STI at maximum
opportunity and LTI at maximum grant value is illustrated below.
Operational
KMP
CFO
CEO
REMUNERATION MIX
TFR
STI Cash
Deferred STI (equity)
LTI (equity)
27.0%
32.4%
8.2%
32.4%
35.7%
34.3%
8.6%
21.4%
38.4%
30.8%
7.7%
23.1%
2
Executive reward strategy and framework (continued)
Remuneration Report (Audited)
58
3
FY24 Company performance and Executive remuneration outcomes
3A.
Company performance – FY20–FY24 summary
The following table shows Cleanaway’s annual performance over the last five years. For further explanation of details
of Cleanaway’s performance, see the Operating and Financial review section of the Directors’ Report.
COMPANY PERFORMANCE
2020
2021
2022
2023
2024
Net Revenue – $’M 1
2,100.1
2,198.9
2,603.8
2,965.8
3,194.5
Statutory profit attributable to
ordinary equity holders – $’M 2
112.9
145.3
78.9
21.6
156.6
Underlying EBIT $’M
256.6
258.7
257.1
302.2
359.2
EPS – cents 3
5.5
7.0
3.8
1.0
7.0
Underlying EPS – cents 3, 4
7.3
7.3
6.9
6.6
7.6
Dividends per share – cents
4.10
4.60
4.90
4.90
5.00
Shares on issue – number
2,053,944,831
2,059,434,558
2,062,587,594
2,226,243,110
2,229,377,942
Market capitalisation – $’M
4,518.7
5,436.9
5,197.7
5,766.0
6,175.4
Share price at 30 June – $
2.20
2.64
2.52
2.59
2.77
Change in share price – $
(0.13)
0.44
(0.12)
0.07
0.18
1
Net Revenue is Revenue excluding landfill levies (2020: $232.0 million; 2021: $207.5 million, 2022: $402.4 million, 2023: $593.0 million and 2024: $563.7
million).
2
Includes underlying adjustments after tax; (2020: $37.4 million; 2021: $5.5 million, 2022: $64.4 million, 2023: $125.1 million and 2024: $12.4 million).
All underlying adjustments from FY20 – FY24 represent a net expense to the statutory profit.
3
The calculation of EPS for comparative periods prior to FY23 was adjusted to reflect the bonus element in the equity raising which occurred during
August 2022 and September 2022.
4
Basic EPS on underlying results are categorised as non-IFRS financial information.
ASSESSED INCENTIVE OUTCOMES
2020
2021
2022
2023
2024
STI Outcome MD – % of Maximum 1
25.2
N/A
53.1
36.8
81.4
STI Outcomes – Exec KMP – % of Maximum 1
25.2
48.9
44.8
30.8
77.7
1
2024 STI outcome % of maximum is calculated based on the FY24 maximum opportunity of 145% (CEO and MD) and 190% (Executive KMP) of target.
This takes into account the Environmental Incidents KPI which did not contain any Stretch performance criteria and a maximum vesting opportunity
of 100%.
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
Total Shareholder Return: CWY vs ASX 200 Industrials Sector Index (XNJ)
June
2019
June
2024
June
2023
June
2022
June
2021
June
2020
ASX 200 Industrials Sector Index
CWY
Remuneration Report (Audited)
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
59
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
3B.
Remuneration outcomes for FY24 – summary
Total Fixed
Remuneration (TFR)
The Board reviewed external market benchmarking data from a number of ASX-listed company
peer groups. The Board considered that the existing levels of fixed remuneration remained
broadly in line with market median of ASX51-150 peers when taking into account each
incumbent’s role scope, accountabilities and experience.
As a result of this review, the following TFR increases of between 2.5% and 4% were made
to Executive KMP during FY24:
• Mr Schubert from $1,550,000 to $1,596,500 – Effective 1 October 2023
• Mr Binfield from $840,000 to $865,000 – Effective 1 October 2023
• Ms Boyes from $750,000 to $780,000 – Effective 1 October 2023
• Mr Nicholls from $725,000 to $745,000 – Effective 1 October 2023
Vesting of deferred
rights arising from
FY23 Short-Term
Incentive outcomes
As participants in the FY23 STI, Executive KMP had 20% of their total STI award deferred
as equity rights for a period of 12 months. These rights were granted at face value determined
by the five-day volume weighted average price of Cleanaway’s shares on the ASX during
the period 24 June to 30 June 2023 being $2.5285. These rights were granted immediately
following the publication of Cleanaway’s FY23 annual results apart from Mr Schubert’s, whose
rights were granted immediately following shareholder approval granted at the Annual General
Meeting held in October 2023.
Accordingly, the FY23 deferred rights, each which will vest in August 2024 and result in the
allocation of one ordinary share in Cleanaway, are as follows:
• Mr Schubert – 67,713
• Mr Binfield – 24,501
• Ms Boyes – 18,230
• Mr Nicholls – 5,890
FY24 Short-Term
Incentive Plan
outcomes
The Board assessed the FY24 STI Scorecard with outcomes driven by strong financial
performance and positive improvements in the Environmental and People related KPIs.
The CEO and MD Scorecard was assessed at 81.4% of maximum and our Executive KMP
Scorecard assessed at 77.7% of maximum.
Details of the FY24 STI Scorecard and performance outcomes can be found in section 4B
of this Report.
FY22 Long-Term
Incentive Plan
Outcomes
(performance period
FY22 – FY24)
The assessed overall vesting of the FY22 LTI was 29.1%. This outcome was driven by Cleanaway’s
TSR increase of 9.47% and TSR percentile ranking of 54.1% against the prescribed comparator
peer group being the ASX 200 (with exclusions). This resulted in partial 58.2% vesting for the
Relative Total Shareholder Return (rTSR) measure. The ROIC FY24 target which acts as a gate for
the EPS measure was not achieved; as a result there was no vesting for this component of the
LTI. Had the gate been achieved the EPS measure did not reach threshold performance.
Details of the FY22 LTI grant assessment can be found in section 4C of this Report.
3
FY24 Company performance and Executive remuneration outcomes (continued)
Remuneration Report (Audited)
60
3C.
Actual remuneration – summary
The table below sets out the actual remuneration paid or, with respect to incentive outcomes, payable in relation to FY24
to Executive KMP.
The following table is categorised as non-IFRS information and therefore has been presented in compliance with
ASIC Regulatory Guide 230 – Disclosing non-IFRS information. Statutory disclosures for Executive KMP are set out
in section 5C of this Report and will differ from actual pay received as set out below due to the accounting treatment,
which includes unvested LTI awards.
TOTAL SALARY 1
$
STI
CASH PAYABLE 2
$
STI
DEFERRED 3
$
LTI
VESTING 4
$
SIGN-ON
VESTED
$
POST
EMPLOYMENT
BENEFITS
$
TOTAL
$
CURRENT EXECUTIVE KEY MANAGEMENT PERSONNEL
M J Schubert 5
1,557,476
1,507,096
376,774
509,478
452,471
27,399
4,430,694
P A Binfield
831,351
612,835
153,209
148,823
–
27,399
1,773,617
T Boyes 6
745,101
460,512
115,128
127,370
307,589
27,399
1,783,099
S Nicholls 7
701,561
439,848
109,962
–
183,784
27,399
1,462,554
Total
3,835,489
3,020,291
755,073
785,671
943,844
109,596
9,449,964
1
Total salary equates to gross taxable cash salary.
2
Represents 80% of the total FY24 STI award amount to be paid as cash in September 2024.
3
Represents 20% of the FY24 total award to be deferred into deferred rights for a period of 12 months. The number of rights will be allocated by taking the STI
deferred value divided by Cleanaway’s Volume Weighted Average Price (VWAP) for the five trading days for the period ended 30 June 2024 being $2.7703.
4
Represents the indicative value of the FY22 LTI rights vesting multiplied by Cleanaway’s Volume Weighted Average Price (VWAP) for the five trading days
for the period ended 30 June 2024 being $2.7703. Mr Nicholls was not eligible for FY22 LTI awards as these grants were made prior to his appointment
to Cleanaway.
5
Tranche 2 of Mr Schubert’s sign-on rights converted to shares on 3 October 2023. The value represents 190,114 shares times $2.38 being the closing
share value of Cleanaway on the day of conversion.
6
Tranche 2 of Ms Boyes’ sign-on rights converted to shares on 3 October 2023. The value represents 129,239 shares times $2.38 being the closing share
value of Cleanaway on the day of conversion.
7
Tranche 1 of Mr Nicholls’ sign-on rights converted to shares on 3 October 2023. The value represents 77,220 shares times $2.38 being the closing share
value of Cleanaway on the day of conversion.
4
FY24 Incentive plans – detailed outcomes
4A.
FY24 Short-Term Incentive
The Board introduced changes to the FY24 STI Scorecard to align with Cleanaway’s key strategic focuses for FY24.
Changes for FY24 are as follows:
Financial measures – 60% of the overall STI Scorecard.
• Underlying EBIT
– Group Underlying EBIT is the sole financial KPI with a weighting of 60% (previously 45%)
• Net Revenue
– removed as KPI (previously 15%)
The Board removed Net Revenue as a financial measure in FY24 and increased the weighting in EBIT to focus and prioritise
growth in profitability and shareholder value creation in line with our publicly announced mid-term financial ambition
of growing EBIT to at least $450 million for FY26.
Non-financial measures – 40% of the overall STI Scorecard.
• Non-financial measures remained the same as FY23 being TRIFR, Environmental Incidents, Female Representation and
Voluntary Turnover each with a 10% weighting
• These non-financial measures ensure focus on delivering diverse, safe, reliable and cost-efficient operations along with
reducing the impact of our business on the environment
3
FY24 Company performance and Executive remuneration outcomes (continued)
Remuneration Report (Audited)
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
61
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
The details of the FY24 STI arrangements are summarised in the following table:
Purpose of the
STI Plan
Reward the achievement of key Financial, People and Culture and Health, Safety and
Environment (HSE) metrics that are key to the sustainable success of Cleanaway
Performance period
1 July 2023 to 30 June 2024
Gateway
•
Achievement of a gateway based on a level of Group Underlying EBIT performance for
Executive KMP. In addition, no breaches of the Company’s Code of Conduct also acts
as a gateway to overall personal STI eligibility
Key performance
metrics
• Financial metrics: 60% weighting
• HSE metrics: 20% weighting
• People and Culture metrics: 20% weighting
Financial metrics
• Group Underlying EBIT: 60% weighting. Underlying EBIT has threshold, target and stretch
levels of performance set with reference to the Group budget for the year.
Health, Safety and
Environment (HSE)
metrics and gateways
• HSE metrics and their respective weightings are:
–
Group Total Recordable Injury Frequency Rate (TRIFR): 10% weighting. Included
as it measures the extent of injuries that occur across the company;
–
Group Environmental Incidents: 10% weighting. Included as it measures the
effectiveness of our environmental risk management strategies and programs
• TRIFR metric has a target and stretch level of performance with a corresponding STI
outcome set out below. The gateway condition for the TRIFR metric is that there are
no at-fault work-related fatalities in a year
• Group Environment Incident metric of no significant or major rated environmental
incidents has a target level performance and outcome only
People and Culture
Metrics
• People metrics and their respective weightings are:
–
Group Voluntary Turnover: 10% weighting
–
Group Female Representation: 10% weighting
• Both People measures have a threshold, target and stretch level of performance with
a corresponding STI outcome set out below
Performance
outcomes
• Once gateways are achieved, performance against the Financial, Health Safety and
Environment, and people metrics have the following threshold, target and stretch
STI outcomes:
–
Below threshold – 0%
–
At threshold – 75% of on-target STI opportunity
–
At target – 100% of on-target STI opportunity
–
At stretch – CEO and MD 145% maximum other Executive KMP 190% maximum
of on-target STI opportunity
Board discretion
• The Board has absolute discretion in relation to assessing performance and determining
the amount, if any, of STI awards.
Deferral
• 20% of STI awards to Executive KMP are deferred for 12 months in the form of deferred
equity rights
• Deferred equity rights are granted at face value determined by the five-day volume
weighted average price of Cleanaway’s shares on the ASX during the period 24 June
to 30 June 2024 being $2.7703
• Deferred rights do not attract dividends during the deferral period.
Deferred rights –
Malus and clawback
The Board retains absolute discretion to determine any treatment in relation to the grant
of Deferred Rights, including, without limitation, the vesting conditions or restrictions
applicable to rights or shares, lapsing or forfeiture of rights, and the repayment of the value
of shares allocated on vesting of rights
4
FY24 Incentive plans – detailed outcomes (continued)
Remuneration Report (Audited)
62
4B.
FY24 Short-Term Incentive – scorecard result
The table set out below shows details of performance against the FY24 STI scorecard.
The Board confirmed the gateway to STI eligibility was achieved.
The following table details the FY24 STI scorecard measures and assessments applied to Executive KMP. The Board assessed
the CEO and MD’s FY24 STI outcomes as 81.4% of maximum STI opportunity; Other Executive KMP outcomes were
assessed at 77.7% of maximum.
The Board considers the reward outcomes as appropriate in the context of the FY24 EBIT performance which delivered
a record underlying EBIT outcome and resulted in STI vesting between target and stretch. This strong financial performance
was complemented with overall improvements across non-financial measures, which provide for positive social and employee
culture and engagement benefits.
This year we have shown the outcomes of the scorecard as a percentage of maximum rather than of target as we have
in previous reports. We have implemented this change to allow a better assessment of our Executive KMP STI outcomes year
on year and against peers as the review of our remuneration framework undertaken during this year highlighted that our
‘at target’ and ‘maximum’ STI opportunities for our Executive KMP were not aligned with market practice of our peers.
ELEMENT
MEASURE
WEIGHTING
TARGET
OUTCOME
WEIGHTED
VESTING – CEO
% MAXIMUM 1
WEIGHTED VESTING
–
EXECUTIVE KMP
% MAXIMUM 1
KPIs
Group Underlying EBIT (million) 2
60%
$345.0
$359.2
94.0%
91.0%
Group TRIFR
10%
3.4
4.6
0.0%
0.0%
Group Environmental Incidents
10%
Nil
Nil
100.0%
100.0%
Group Voluntary Turnover
10%
19.8%
17.6%
100.0%
100.0%
Group Female Representation
10%
25.1%
24.3%
55.6%
41.7%
Percentage at Maximum
81.4%
77.7%
1
Outcome % of maximum is calculated based on the FY24 maximum opportunity of 145% (CEO and MD) and 190% (Executive KMP) of target. This takes
into account the Environmental Incidents KPI which did not contain any Stretch performance criteria and a maximum vesting opportunity of 100%.
2
Group Underlying EBIT (million) is used to set targets as it is a measure aligned with budgeting for our business. Adjustments from statutory profit are
made in accordance with our accounting policy and the Board considers whether it is appropriate to adjust remuneration outcomes due to the impact of
these adjustments. For FY24, each adjustment has been assessed in accordance with the policy and no adjustments were made to remuneration outcomes.
KPI commentary
Commentary on our performance against the original scorecard FY24 STI scorecard targets is set out below:
Group Underlying EBIT – Assessed at between target and stretch. As a result of record EBIT growth rate of 18.8%,
increasing EBIT to $359.2 million from $302.2 million in the previous year. Growth driven by factors such as the restored
performance of the Queensland operations of our Solid Waste Services business, transformed our national Health Services
business and ongoing operational efficiencies.
Group TRIFR – Assessed as below threshold. While in FY24 TRIFR increased to 4.6, against an annual target of 3.4.
Group Environmental Incidents – Assessed as at Target. There were no Environmental Incidents that had Major
or Significant consequences in FY24.
Group Voluntary Turnover – Assessed at above stretch performance and maximum vesting. We achieved an
18.1% improvement over FY23 turnover. Improvements made as a result of various cultural and employee experience
initiatives in FY24 including but not limited to Respect@Cleanaway, new listening strategies, inclusive programs,
and Reward programs, in addition to the introduction of new Talent Acquisition capability and a more stabilised
industrial environment.
Group Female Representation – Assessed as between threshold and target. Overall 6.6% improvement on FY23
increasing from 22.8% to 24.3%. Driven by increases in female representation in Operations as a result of focused
initiatives including Woman’s Driver Academy.
4
FY24 Incentive plans – detailed outcomes (continued)
Remuneration Report (Audited)
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
63
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
4
FY24 Incentive plans – detailed outcomes (continued)
4C.
FY22 Long-Term Incentive outcome (i.e. performance period FY22 – FY24)
The Board assessed the performance of the LTI awards granted in FY22, representing the performance period from 1 July 2021
to 30 June 2024. The Board approved partial vesting as set out below:
MEASURE
WEIGHTING
MINIMUM
VESTING
PERFORMANCE ASSESSMENT
WEIGHTED
VESTING
rTSR targets over the performance period.
The Comparator group being S&P/ASX
200 Index (with exclusion for companies
classified as mining, financial services and
overseas domiciled companies)
50%
50th
percentile
and above
Overall TSR of 9.47% which resulted
in a percentile ranking of 54.1. This
generates a partial vesting for this
KPI of 58.2%
29.1%
Earnings Per Share Compound Annual
Growth Rate (EPS CAGR)
50%
5.0%
The ROIC FY24 target which acts as
a gate for the EPS measure was not
achieved; as a result there was no
vesting for this component of the
LTI. Had the gate been achieved the
EPS measure did not reach threshold
performance.
0%
Total
100%
29.1%
Remuneration Report (Audited)
64
5
Executive KMP – remuneration tables
5A.
FY24 Short-Term Incentive Plan outcomes
The STI payments received or receivable by Executive KMP for the year ended 30 June 2024 are summarised in the
following table:
TOTAL STI
$
CASH
COMPONENT 1
$
DEFERRED
SHARE
COMPONENT 1
$
PERCENTAGE OF
MAXIMUM STI
OPPORTUNITY 2
CURRENT EXECUTIVE KEY MANAGEMENT PERSONNEL
M J Schubert
2024
1,883,870
1,507,096
376,774
81.4%
P A Binfield
2024
766,044
612,835
153,209
77.7%
T Boyes
2024
575,640
460,512
115,128
77.7%
S Nicholls
2024
549,810
439,848
109,962
77.7%
1
Executive KMP STI Awards are made based on 80% cash payment and 20% deferred for one year as equity rights.
2
2024 STI outcome % to maximum is calculated based on the FY24 maximum opportunity of 145% (CEO and MD) and 190% (Executive KMP) of target.
This takes into account the Environmental Incidents KPI which did not contain any Stretch performance criteria and a maximum vesting opportunity
of 100%.
5B.
FY22 Long-Term Incentive Plan outcomes
As a result of the Board approved vesting level of 29.1% a summary of FY22 LTI Performance rights subject to vesting is set
out below.
TOTAL FY22
PERFORMANCE
RIGHTS
GRANTED
RIGHTS
VESTING
VALUE 1
$
RIGHTS
LAPSING
M J Schubert
631,983
183,907
509,478
448,076
P A Binfield
184,609
53,721
148,823
130,888
T Boyes
157,996
45,977
127,370
112,019
S Nicholls 2
–
–
–
–
1
Represents the indicative value of the FY22 LTI rights vesting multiplied by Cleanaway’s Volume Weighted Average Price (VWAP) for the five trading days
for the period ended 30 June 2024 being $2.7703.
2
Mr Nicholls was not employed at the time of grant.
Remuneration Report (Audited)
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
65
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
5C.
Statutory Remuneration
The statutory remuneration for each of our Executive KMP for the years ended 30 June 2023 and 30 June 2024 is set out
in the following table:
FINANCIAL
YEAR
SALARY
AND FEES
$
STI
CASH
$
NON-
MONETARY
BENEFITS 1
$
TERMINATION
BENEFITS
$
SHARE-BASED
PAYMENTS 2
POST
EMPLOYMENT
BENEFITS
$
TOTAL
$
PERFORMANCE
RELATED
CURRENT EXECUTIVE KEY MANAGEMENT PERSONNEL
M J
Schubert 3
2024
1,557,476 1,507,096
2,364
–
1,197,291
27,399 4,291,626
63.0%
2023
1,524,708
684,852
1,439
–
1,112,126
25,292
3,348,417
53.7%
P A Binfield
2024
831,351
612,835
2,408
–
288,669
27,399 1,762,662
51.1%
2023
809,617
247,807
2,180
–
276,269
25,292
1,361,165
38.5%
T Boyes 3
2024
745,101
460,512
1,427
–
299,656
27,399 1,534,095
49.6%
2023
712,639
184,380
668
–
191,044
25,292
1,114,023
33.7%
S Nicholls 3, 4
2024
701,561
439,848
5,715
–
465,619
27,399 1,640,142
55.2%
2023
222,471
59,574
1,342
–
257,645
8,431
549,463
57.7%
FORMER EXECUTIVE KEY MANAGEMENT PERSONNEL
T Richards 5
2023
272,469
–
1,942
36,166
(144,554)
12,646
178,669
-80.9%
Total
2024
3,835,489 3,020,291
11,914
–
2,251,235
109,596
9,228,525
2023
3,541,904
1,176,613
7,571
36,166
1,692,530
96,953
6,551,737
1
Non-monetary benefits relate to car parking.
2
Share-based payments consist of performance and deferred rights. The fair value of the performance rights is measured at the date of grant using the
Monte Carlo simulation and the Black-Scholes model and is allocated to each reporting period evenly over the performance period. The value disclosed
is the portion of the fair value of the performance rights recognised as an expense in each reporting period, net of any reversals for forfeited performance
rights or changes in the probability of performance rights vesting. Share-based payments include the expense relating to the deferred share component
of STI.
3
Share-based payments include value of deferred sign-on rights granted on commencement.
4
FY23 values represents the pro rata amounts applicable for the period of employment from 1 March 2023 to 30 June 2023.
5
FY23 values represents the pro rata value applicable for the period up to date of cessation of employment being 23 December 2022. The termination
benefits represent the pay-out of statutory leave entitlements.
6
Executive KMP – equity grants
6A.
FY24 Long-Term Incentive Plan – key features
Our performance measures for the FY24 LTI grant applicable for the three-year performance period covering FY24 – FY26.
Shareholders approved CEO and MD Mark Schubert’s grant at our AGM held in October 2023. A summary of these changes
made are as follows:
• Relative Total Shareholder Return (rTSR) – alignment of the relative TSR percentile ranking against the comparator peer
group being ASX 150 – (excluding companies classified as mining, financial services, overseas domiciled companies and
oil and gas) noting this was previously ASX 200 – with exclusions. Reweighted to 40% (previously 50%)
• Earnings Per Share (EPS CAGR) measure reweighted to 20% (previously 25%)
• CH4 (Methane) Emissions Reduction measure reweighted to 20% (previously 25%)
• In response to feedback from shareholders in FY23, the Board decided to include a ROIC measure with a weighting
of 20% to ensure the efficient deployment of capital in pursuit of our growth aspirations. The Board may consider
excluding investments made that do not contribute earnings during the performance period when assessing the outcome
of this measure
The Board considered the above changes were appropriately balanced to drive sustainable performance outcomes aligned
to longer-term shareholder value creation. Performance ranges for the EPS and ROIC have been set with consideration and
alignment to the key attributes of our mid-term financial ambitions and ongoing delivery of our Blueprint 2030 strategy.
5
Executive KMP – remuneration tables (continued)
Remuneration Report (Audited)
66
The details of the FY24 LTI offer are summarised in the table below.
Purpose of the LTI Plan
• Focus Executive performance on drivers of shareholder value over a three-year
performance period
• Align the interests of the Executive with those of shareholders
Performance period
1 July 2023 to 30 June 2026.
Form of award
Performance rights.
Number of
performance rights
• Performance rights are granted at face value and expressed as a % of participant TFR
• CEO and MD – 120%
• Other Executive KMP – 60%
• The number of rights was determined by dividing a participant’s LTI opportunity by the
Volume Weighted Average Price (VWAP) of Cleanaway’s shares on the ASX during the
period 24 June 2023 to 30 June 2023 being $2.5285
Performance hurdles
Performance rights issued under the FY24 Plan are subject to four performance hurdles:
•
40% of the performance rights will be subject to Relative Total Shareholder Return (rTSR)
targets over the performance period. The Board considers rTSR to be an appropriate
performance measure for Executive KMP reward as it focuses on the extent to which
shareholder returns (being income and capital gain) are generated relative to the
performance of a comparator group of companies being ASX150 – (excluding companies
classified as mining, financial services, overseas domiciled companies and oil and gas)
• 20% of the performance rights will be subject to Earnings Per Share Compound
Annual Growth Rate (EPS CAGR). The Board considers EPS CAGR to be an appropriate
performance measure for Executive KMP reward as it represents an accurate measure
of sustainable profit growth
• 20% of performance rights will be subject to CH4 (Methane) Emissions Reduction
targets. The Board considers the inclusion of a greenhouse gas emissions reduction
target as appropriate and aligned with Cleanaway’s Blueprint 2030 strategy
• 20% of the performance rights will be subject to ROIC. The Board considers ROIC
to be an appropriate performance measure for Executive KMP reward as it represents
an accurate measure of the effective use and management of capital
Vesting date
14 days after the release of the financial results for the financial year ending 30 June 2026.
Retesting
No retesting is available. LTI performance rights are only tested once at the end of the
relevant performance period and unvested rights lapse.
Dividends
LTI performance rights do not attract dividends.
Restriction on trading
Vested shares arising from performance rights may only be traded during trading windows
as stipulated in the Company’s Securities Trading Policy.
Forfeiture and
lapsing conditions
Under the terms of the Plan, where a participant resigns or is terminated by the Company
prior to the end of the performance period, the performance rights are forfeited unless the
Board applies its discretion. Where a participant is determined by the Board to be a Bad
Leaver prior to the end of the performance period, all rights lapse. For participants who
leave in other circumstances, rights remain on foot to be tested in the ordinary course.
The Board has the discretion to determine a lower level of vesting (i.e. pro rata) in individual
cases once the rights are tested. The Board also has discretion to determine the extent
of vesting in the event of a change of control. Performance rights lapse when performance
hurdles are not met.
Malus and Clawback
The Board retains absolute discretion to determine any treatment in relation to the
grant of Long-Term Incentive Rights including, without limitation, the vesting conditions
or restrictions applicable to rights or shares, lapsing or forfeiture of rights and the repayment
of the value of shares allocated on vesting of rights.
Number of
performance rights
remaining on issue
as at 30 June 2024
Executive KMP 1,324,807
All participants 3,171,239
6
Executive KMP – equity grants (continued)
Remuneration Report (Audited)
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
67
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
6B.
FY24 Long-Term Incentive Plan vesting conditions
Performance rights issued under the FY24 Plan are subject to three performance measures with the following performance
vesting schedules:
Relative TSR
performance
measured over three
years from 1 July 2023
to 30 June 2026
40% weighting
Cleanaway’s relative TSR rank compared
with the TSR comparator group
Percentage of TSR performance rights
that vest
Less than 50th percentile
Nil
Equal to 50th percentile
50%
Greater than 50th percentile and
up to (and including) 75th percentile
Straight line pro rata vesting between 50%
and 100%
Above 75th percentile
100%
EPS CAGR performance
measured over three
years from 1 July 2023
to 30 June 2026
20% weighting
Cleanaway EPS CAGR
Percentage of EPS CAGR performance
rights that vest
Less than 13%
Nil
At 13%
35%
Greater than 13% and up to
(and including) 16%
Straight line pro rata vesting between 35%
and 50%
Greater than 16% and up to
(and including) 19%
Straight line pro rata vesting between 50%
and 70%
Greater than 19% and up to
(and including) 22%
Straight line pro rata vesting between 70%
and 100%
Above 22%
100%
Emissions Reduction
performance measured
over three years
from 1 July 2023
to 30 June 2026
20% weighting
CH4 (Methane) Emissions Reduction
Percentage of CH4 (Methane) Emissions
Reduction performance rights that vest
FY26 CH4 emissions is greater than 94%
of FY22 emissions
Nil
At 94% of FY22
30%
Between 94% and 83% of FY22
Straight line pro rata vesting between 30%
and 50%
Between 83% and 66%
Straight line pro rata vesting between 50%
and 100%
Below 66% of FY22
100%
ROIC targets measured
over three years
from 1 July 2023
to 30 June 2026
20% weighting
Cleanaway FY26 target for ROIC
Percentage of ROIC performance rights
that will vest
Less than 6%
Nil
At 6%
35%
Greater than 6.0% and up to (and including)
6.3%
Straight line pro rata vesting between 35%
and 50%
Greater than 6.3% and up to (and including)
6.7%
Straight line pro rata vesting between 50%
and 70%
Greater than 6.7% and up to (and including)
7.1%
Straight line pro rata vesting between 70%
and 100%
Above 7.1%
100%
6
Executive KMP – equity grants (continued)
Remuneration Report (Audited)
68
6C.
Prior Long-Term Incentive awards
The following table outlines the terms of prior LTI offers outstanding:
2022 LTI 1
2023 LTI 1
Performance period
Three years: 1 July 2021 to 30 June 2024
Three years: 1 July 2022 to 30 June 2025
Overview
Performance rights vesting subject to:
• Relative TSR (50%)
• EPS CAGR (50%)
• The Return on Invested Capital (ROIC)
for year ending 30 June 2024 acts
as a gateway to EPS CAGR.
Performance rights vesting subject to:
• Relative TSR (50%)
• EPS CAGR (25%)
• CH4 (Methane) Emissions Reductions
(25%)
Relative TSR
performance hurdles
TSR ranking against the constituents of the S&P/ASX 200 with exclusions for companies
classified as mining, financial services and overseas domiciled companies:
• Below 50th percentile – 0% vesting
• At the 50th percentile – 50% vesting
• 50th to 75th percentile – straight line vesting between 50% and 100%
• Above 75th percentile – 100% vesting
EPS CAGR performance
hurdles
EPS CAGR:
• Below 5% – 0% vesting
• At 5% – 30% vesting
• 5% – 10% – straight line vesting
between 30% and 80%
• 10% – 11% – straight line vesting
between 80% and 100%
• At or above 11%–100% vesting
Performance rights under the EPS measure
will only vest if ROIC is at least 5.6%
or more for the financial year ending
30 June 2024
EPS CAGR:
• Below 5% – 0% vesting
• At 5% – 30% vesting
• 5% – 10% – straight line vesting between
30% and 80%
• 10% – 11% – straight line vesting
between 80% and 100%
• At or above 11% – 100% vesting
EPS Emissions
Reduction performance
Not applicable
• CH4 (Methane) Emissions Reduction:
• FY25 CH4 emission is greater than 95%
of FY22 emission – 0% vesting
• At 95% of FY22 – 50% vesting
• 95% and 87% of FY22 – straight line pro
rata vesting between 50% and 100%
• At or below 87% of FY22 – 100% vesting
Expiry date
None
None
Number of
performance rights
remaining on issue
at 30 June 2024
Executive KMP 974,588
All participants 2,287,783
Executive KMP 1,271,125
All participants 2,540,512
1
As a share-based payment, the portion of the performance rights relating to market-based conditions were valued for accounting purposes using
the Monte Carlo simulation method and the portion relating to EPS or ROIC using the Black-Scholes model. Grant dates and fair values are contained
in note 35 to the Consolidated Financial Statements.
6
Executive KMP – equity grants (continued)
Remuneration Report (Audited)
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
69
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
6D.
Performance and deferred rights granted and movement during the year
The aggregate number of performance and deferred rights in the Company that were granted as compensation,
exercised or lapsed in relation to each Executive KMP for the year ended 30 June 2024 is set out in the following table:
BALANCE AT
1 JULY 2023
NUMBER
RIGHTS
GRANTED
DURING
THE YEAR 1
NUMBER
VALUE OF
RIGHTS
GRANTED
DURING
THE YEAR 2
$
RIGHTS
EXERCISED
DURING
THE YEAR
NUMBER
VALUE OF
RIGHTS
EXERCISED
DURING
THE YEAR
$
LAPSED/
CANCELLED
DURING
THE YEAR
NUMBER
BALANCE AT
30 JUNE 2024
NUMBER 3
CURRENT EXECUTIVE KEY MANAGEMENT PERSONNEL
M J Schubert
1,815,881
825,393
1,529,314
(266,084)
633,709
–
2,375,190
P A Binfield
638,367
229,761
438,116
(145,492)
376,804
(111,085)
611,551
T Boyes
472,904
203,316
385,591
(138,852)
359,608
–
537,368
S Nicholls
343,933
182,671
340,060
(77,220)
199,989
–
449,384
1
Deferred rights under the FY23 STI deferral plan were granted in September to all participants, with the exception of Mr Schubert. Performance rights
under the FY24 LTI offer were granted to all KMP in November 2023, with the exception of Mr Schubert. Mr Schubert’s rights under the FY23 STI
deferral plan and FY24 LTI offer were granted immediately following shareholder approval at the Annual General Meeting held in October 2023.
2
The fair value of the performance rights under the FY24 LTI offer, granted to Executive KMP, was calculated using the Monte Carlo simulation and Black-
Scholes model and reflects there is no dividend entitlement during the deferral period. The fair value of $1.22 to $2.26 per performance right for the
Executive KMP, except for Mr Schubert, was determined based on the grant date of 3 November 2023. For Mr Schubert, the fair value of $1.19 to $2.22
per performance right was determined based on the grant date of 20 October 2023, following approval of the grants at the Annual General Meeting.
Refer to note 35 to the Consolidated Financial Statements which sets out the fair value per tranche of performance and deferred rights granted.
3
All performance and deferred rights have no exercise price and once vested they have no expiry date. The grant date for each tranche of performance
rights is set out in note 35 to the Consolidated Financial Statements.
6E.
Performance and deferred rights as at 30 June 2024
The number of performance and deferred rights as at 30 June 2024 by plan for the Executive KMP is set out in the
following table:
ISSUED
2023
STI
2022
LTI
2023
LTI
2024
LTI
SIGN-ON
BALANCE AT
30 JUNE 2024
FY23 STI
TO VEST AND
EXERCISABLE
CURRENT EXECUTIVE KEY MANAGEMENT PERSONNEL
M J Schubert
67,713
631,983
727,700
757,680
190,114
2,375,190
67,713
P A Binfield
24,501
184,609
197,181
205,260
–
611,551
24,501
T Boyes
18,230
157,996
176,056
185,086
–
537,368
18,230
S Nicholls
5,890
–
170,188
176,781
96,525
449,384
5,890
As at 30 June 2024, there are no outstanding vested rights which remain unexercised. No terms of performance or deferred
rights have been altered by the Group during the reporting period. The Board has not previously exercised its discretion
to allow the early vesting of any performance rights under any of the incentive plans.
6F.
Securities trading policy
The Company prohibits Executives from entering into any hedging arrangements or acquiring financial products
(such as equity swaps, caps and collars or other hedging products) over unvested performance rights which have
the effect of reducing or limiting exposure to risks associated with the market value of the Company’s securities.
No Directors or Executive KMP may directly or indirectly enter into any margin loan facility against the Company’s
securities unless the prior written consent of the Chairman of the Board is obtained.
6
Executive KMP – equity grants (continued)
Remuneration Report (Audited)
70
7
FY25 remuneration changes
7A. Changes to Executive remuneration design
The Board undertook a comprehensive review of the Executive Remuneration framework during FY24. The purpose of the
review was to ensure our Executive Remuneration continues to have a clear alignment with shareholder value creation and
delivery of our mid-term financial ambition of generating EBIT of at least $450 million for FY26 and our Blueprint 2030
strategy. Following feedback from key external stakeholders and considering ASX market practice, competitiveness and
internal relativity, a number of changes have been implemented for FY25 as summarised below.
Short-term incentive
• Deferral quantum – increases from 20% to 33.3% of STI award
• Deferral service condition – now forfeited on resignation
• Deferral instrument – to be issued as restricted shares
• Target opportunity – for Executive KMP (excluding CEO and MD), an increase in opportunity of 10% of TFR
• Maximum Opportunity – aligned to 175% of Target
• FY25 STI Scorecard – no changes to existing KPIs or their respective weightings with the exception of the introduction
of Serious Injury Frequency Rate (SIFR) to complement TRIFR
• Threshold performance vesting to commence at 50% for all measures
Long-term incentive
• Opportunity – for Executive KMP (excluding CEO and MD), an increase of 20% of TFR grant value.
• FY25 LTI measures – no changes to the existing measures or weightings with the exception of the existing Methane
reduction measure to be enhanced with a broader Greenhouse Gas emission reduction measure
8
Executive KMP – contract terms
8A.
Current Executive KMP
All Executive KMP are employed on the basis of an Executive Service Agreement (Agreement) that contains a range of terms
and conditions, including remuneration and other benefits, notice periods and termination benefits. Notice periods for
Executive KMP as at 30 June 2024 are as follows:
EXECUTIVE SERVICE AGREEMENTS
TERM OF AGREEMENT
NOTICE PERIOD BY EXECUTIVE
NOTICE PERIOD BY CLEANAWAY
EXECUTIVE KEY MANAGEMENT PERSONNEL
M J Schubert
Open
12 months
12 months
P A Binfield
Open
6 months
6 months
T Boyes
Open
6 months
6 months
S Nicholls
Open
6 months
6 months
Any payment in lieu of notice and/or redundancy is not to exceed average annual base salary as defined by the Corporations
Act 2001 over the previous three years.
The Company may terminate Agreements immediately for cause, in which case the Executive is not entitled to any payment
in lieu of notice or contractual compensation.
The Agreements also provide for an Executive’s participation in the STI and LTI Plans subject to Board approval of their
eligibility and in accordance with the terms and conditions of the respective plans.
Remuneration Report (Audited)
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
71
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
9
Governance and role of the Board
9A.
Human Resources Committee
The Human Resources Committee (Committee) assists the Board in its oversight of the Group’s remuneration and incentives
strategy and arrangements; recruitment; retention and succession plan for the Board and Executive management team;
corporate culture and engagement; and diversity and inclusion strategy.
The Committee’s charter is available online at: https://www.cleanaway.com.au/about-us/for-investor/corporate-governance/
The Committee is comprised entirely of independent Non-Executive Directors: Samantha Hogg (Chair), Ingrid Player,
Jacqueline McArthur (from 23 April 2024) and Rob Cole (from 23 April 2024). In addition the Committee included former
members Ray Smith (up to 31 August 2023) and Terry Sinclair (up to 30 April 2024) prior to their retirements. Non-Executive
Directors, who are not Committee members, are entitled to attend meetings as observers. The CEO and MD and other
Executives are invited to attend Committee meetings as required however they do not participate in discussions or decisions
concerning their own remuneration arrangements.
9B.
Engagement of remuneration consultants
Under the Committee’s charter, the Committee, or any individual member, has the authority, with the Chairperson’s consent,
to seek any information it requires from any employee or external party.
In accordance with the Corporations Act 2001, any engagement of a remuneration consultant to provide a remuneration
recommendation in respect of Executive KMP must be received and approved by the Committee. The remuneration
recommendation must be accompanied by a declaration from the remuneration consultant that it was free from undue
influence of Executive KMP. During the year ended 30 June 2024, remuneration consultants were engaged to provide
services to the Group, including the provision of Executive market benchmarking data, equity plan management and
executive framework benchmarking. The fees paid for these services were $114,180 including GST (2023: $81,900).
No remuneration recommendations were received from consultants during FY24.
10
Non-Executive Directors’ remuneration
10A. Fee structure
There were no adjustments made to the Non-Executive Directors’ remuneration levels made in FY24. The fee structure
(inclusive of superannuation) for FY24 is detailed in the following table:
2023
CHAIR
$
2023
NON-EXECUTIVE
DIRECTOR
$
2024
CHAIR
$
2024
NON-EXECUTIVE
DIRECTOR
$
Board
450,000
170,000
450,000
170,000
Audit and Risk Committee
38,000
20,000
38,000
20,000
Sustainability Committee
32,000
20,000
32,000
20,000
Human Resources Committee
32,000
20,000
32,000
20,000
10B. Aggregate fee limit
The current aggregate amount of remuneration that can be paid to Non-Executive Directors of $2,300,000 was approved
by shareholders at the Company’s FY22 Annual General Meeting.
For the year ending 30 June 2024, the aggregate remuneration paid to all Non-Executive Directors was $1,839,961
(2023 $1,957,000) which results in an 80% utilisation of the aggregate fee limit.
Remuneration Report (Audited)
72
10C. Current Non-Executive Director fees
The remuneration received by Non-Executive Directors for the years ended 30 June 2024 and 30 June 2023 is set out in the
following table:
FINANCIAL YEAR
SALARY AND FEES
$
ADDITIONAL FEES
$
SUPERANNUATION
BENEFITS
$
TOTAL
$
NON-EXECUTIVE DIRECTORS
P G Etienne 1
2024
399,126
8,750
–
407,876
2023
222,000
–
–
222,000
S L Hogg
2024
200,000
–
22,000
222,000
2023
200,905
–
21,095
222,000
I A Player
2024
189,189
–
20,811
210,000
2023
182,504
–
19,163
201,667
A M Kelly
2024
188,156
–
20,697
208,853
2023
171,946
–
18,054
190,000
J McArthur
2024
183,035
–
20,134
203,169
2023
140,272
–
14,728
155,000
C M Stiff
2024
183,183
–
20,150
203,333
2023
12,821
–
1,346
14,167
R Cole 2
2024
53,360
–
5,870
59,230
FORMER NON-EXECUTIVE DIRECTORS
M P Chellew 3
2024
105,650
–
6,850
112,500
2023
424,708
–
25,292
450,000
R M Smith 4
2024
34,234
–
3,766
38,000
2023
206,335
–
21,665
228,000
T A Sinclair 5
2024
157,658
–
17,342
175,000
2023
190,045
–
19,955
210,000
R M Harding 6
2023
58,069
–
6,097
64,166
Total
2024
1,693,591
8,750
137,620
1,839,961
2023
1,809,605
–
147,395
1,957,000
1
Mr Etienne received a special exertion fee to reflect the additional time and engagement required for the period that he was in the role of Deputy Chairman
after 1 July 2023 up until his appointment as Chairman on 20 September 2023.
2
Mr Cole was appointed as an independent Non-Executive Director on 12 March 2024.
3
Non-Executive Director Mr Chellew retired from the Cleanaway Board on 20 September 2023.
4
Mr Smith ceased as an Independent Non-Executive Director on 31 August 2023.
5
Mr Sinclair ceased as an Independent Non-Executive Director on 30 April 2024.
6
Mr Harding ceased as an Independent Non-Executive Director on 20 October 2022.
10
Non-Executive Directors’ remuneration (continued)
Remuneration Report (Audited)
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
73
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
11
Shareholdings and other related party transactions
11A. Shareholding guideline
The CEO and MD and Executive Team are encouraged to build and maintain a shareholding in the Company equivalent to:
• CEO and MD – 100% of TFR
• Executive Team including Executive KMP – 50% of TFR
It is expected that this shareholding will be accumulated within five years from the date of their appointment to the
Executive KMP. The number of performance rights, deferred rights and ordinary shares in the Company held by each
Executive KMP is set out in sections 6D, 6E and 11B.
In FY21, the Board introduced guidelines regarding shareholdings for Non-Executive Directors. Under the guidelines,
Non-Executive Directors will have five years from the later of 1 July 2021 or the date of their appointment to accumulate
a shareholding in the Company equivalent to one year of their base fee.
11B. Shareholdings
The movement for the year ended 30 June 2024 in the number of ordinary shares in the Company held, directly or indirectly
or beneficially, by each Non-Executive Director and each Executive KMP, including their related parties, is set out in the
table below.
The Board had a focus on increasing Non-Executive Director shareholdings over FY24. During the year, five Non-Executive
Directors purchased on-market to increase their shareholdings, with an overall increase of 109% in the number of shares
held by Non-Executive Directors. During the year, two Non-Executive Directors accumulated a shareholding in the
Company in excess of the minimum shareholding guidelines set out above. The minimum shareholding requirement for
Philippe Etienne effectively increased during the year as a result of the increase in his base fee following his appointment
as Chairman. He intends to continue to increase his shareholding to satisfy the minimum shareholding requirement
during FY25.
All shares issued to Executive KMP during the year on the exercise of remuneration outcomes or sign-on rights were held.
NAME
BALANCE
AT THE START
OF THE YEAR
RECEIVED DURING
THE YEAR ON THE
EXERCISE OF RIGHTS
OTHER CHANGES
DURING THE YEAR
BALANCE
AT THE END
OF THE YEAR
NON-EXECUTIVE DIRECTORS
P G Etienne
91,925
–
60,277
152,202
S L Hogg
20,000
–
–
20,000
I A Player
30,228
–
19,772
50,000
A M Kelly
51,123
–
36,075
87,198
J McArthur
30,571
–
30,882
61,453
C M Stiff
–
–
98,759
98,759
R Cole 1
–
–
–
–
FORMER NON-EXECUTIVE DIRECTORS
M P Chellew 2
170,442
–
–
170,442
R M Smith 3
143,034
–
–
143,034
T A Sinclair 4
54,920
–
–
54,920
CURRENT EXECUTIVE KEY MANAGEMENT PERSONNEL
M J Schubert
152,091
266,084
–
418,175
P A Binfield
47,851
145,492
–
193,343
T Boyes
29,983
138,852
–
168,835
S Nicholls
–
77,220
–
77,220
1
The balance at the start of the year for Mr Cole reflects his shareholding on the date he commenced being a Non-Executive Director on 12 March 2024.
2
The balance at the end of the year for Mr Chellew reflects his shareholding on the date he retired being Chairman on 20 September 2023.
3
The balance at the end of the year for Mr Smith reflects his shareholding on the date he ceased being a Non-Executive Director on 31 August 2023.
4
The balance at the end of the year for Mr Sinclair reflects his shareholding on the date he ceased being a Non-Executive Director on 30 April 2024.
Remuneration Report (Audited)
74
11C. Loans to Executive Key Management Personnel
There were no loans to Executive KMP made during the period and no outstanding balances at the reporting date.
11D. Other transactions and balances with Executive Key Management Personnel and their
related parties
Some of the Directors hold, or have previously held, positions in companies with which Cleanaway has commercial
relationships which are based on normal terms and conditions on an arm’s length basis. Transactions with entities where
the relationship is limited to a common Non-Executive Directorship, including any Chairperson roles, are not considered
related party transactions. The Board has assessed all of the relationships between the Group and companies in which
Directors hold or held positions and has concluded that in all cases the relationships do not interfere with the Directors’
exercise of objective, unfettered or independent judgement or their ability to act in the best interests of the Group.
11
Shareholdings and other related party transactions (continued)
Remuneration Report (Audited)
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
75
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Auditor’s Independence Declaration to the Directors of Cleanaway Waste Management Limited
As lead auditor for the audit of Cleanaway Waste Management Limited for the financial year ended 30 June 2024,
I declare, to the best of my knowledge and belief, there have been:
(a) no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
(b) no contraventions of any applicable code of professional conduct in relation to the audit;
(c) no non-audit services provided that contravene any applicable code of professional conduct in relation to the audit.
This declaration is in respect of Cleanaway Waste Management Limited and the entities it controlled during the financial year.
Ernst & Young
Ashley Butler
Partner
20 August 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Ernst & Young
Tel: +61 3 9288 8000
8 Exhibition Street
Fax: +61 3 8650 7777
Melbourne VIC 3000 Australia
ey.com/au
GPO Box 67 Melbourne VIC 3001
Auditor’s Independence Declaration
76
NOTES
2024
$’M
2023
$’M
Revenue
6
3,758.2
3,558.8
Other income
7
20.4
18.8
Labour related expenses
(1,330.8)
(1,205.9)
Collection, recycling and waste disposal expenses
(1,102.0)
(1,174.2)
Fleet operating expenses
(399.0)
(380.3)
Property expenses
(71.1)
(64.5)
Other expenses
(156.6)
(205.4)
Share of losses from equity accounted investments
23
(6.1)
(0.7)
Depreciation and amortisation expense
(369.5)
(365.9)
Write-off of assets
5
(2.0)
(51.3)
Profit from operations
341.5
129.4
Net finance costs
8
(115.7)
(96.1)
Profit before income tax
225.8
33.3
Income tax expense
9
(67.6)
(9.8)
Profit after income tax
158.2
23.5
Attributable to:
Ordinary equity holders
156.6
21.6
Non-controlling interest
1.6
1.9
Profit after income tax
158.2
23.5
The above Consolidated Income Statement should be read in conjunction with the accompanying notes.
Consolidated Income Statement
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
77
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
NOTES
2024
$’M
2023
$’M
Profit after income tax
158.2
23.5
Other comprehensive income (to be reclassified to profit or loss
in subsequent periods)
Net fair value loss on derivative financial instruments (net of tax)
17
(0.6)
(1.5)
Net comprehensive income recognised directly in equity
(0.6)
(1.5)
Total comprehensive income for the year
157.6
22.0
Attributable to:
Ordinary equity holders
156.0
20.1
Non-controlling interest
1.6
1.9
Total comprehensive income for the year
157.6
22.0
Earnings per share attributable to the ordinary equity holders
of the Company:
Basic earnings per share (cents)
10
7.0
1.0
Diluted earnings per share (cents)
10
7.0
1.0
The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
Consolidated Statement of Comprehensive Income
For the year ended 30 June 2024
78
NOTES
2024
$’M
2023
$’M
Assets
Current assets
Cash and cash equivalents
11
120.6
102.1
Trade and other receivables
12
557.3
551.7
Inventories
13
58.2
31.2
Other assets
24
40.3
29.7
Total current assets
776.4
714.7
Non-current assets
Property, plant and equipment
20
1,777.1
1,577.9
Right-of-use assets
21
611.1
609.4
Intangible assets
22
3,067.9
3,072.5
Equity accounted investments
23
52.6
51.6
Net deferred tax assets
9
45.7
19.5
Other assets
24
41.7
27.7
Total non-current assets
5,596.1
5,358.6
Total assets
6,372.5
6,073.3
Liabilities
Current liabilities
Trade and other payables
14
494.6
495.3
Income tax payable
94.1
3.2
Lease liabilities
21
110.4
98.4
Employee entitlements
25
117.3
97.0
Provisions
26
143.3
144.7
Other liabilities
27
39.7
46.1
Total current liabilities
999.4
884.7
Non-current liabilities
Borrowings
15
1,081.5
950.4
Lease liabilities
21
540.0
540.3
Derivative financial instruments
32
45.1
46.1
Employee entitlements
25
11.3
10.0
Provisions
26
513.6
564.3
Other liabilities
27
180.0
132.1
Total non-current liabilities
2,371.5
2,243.2
Total liabilities
3,370.9
3,127.9
Net assets
3,001.6
2,945.4
Equity
Issued capital
16
3,106.8
3,101.8
Reserves
17
37.4
34.0
Retained earnings
(146.8)
(194.3)
Parent entity interest
2,997.4
2,941.5
Non-controlling interest
4.2
3.9
Total equity
3,001.6
2,945.4
The above Consolidated Balance Sheet should be read in conjunction with the accompanying notes.
Consolidated Balance Sheet
As at 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
79
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
PARENT ENTITY INTEREST
ORDINARY
SHARES
$’M
RESERVES
$’M
RETAINED
EARNINGS
$’M
TOTAL
$’M
NON-
CONTROLLING
INTEREST
$’M
TOTAL
EQUITY
$’M
At 1 July 2023
3,101.8
34.0
(194.3)
2,941.5
3.9
2,945.4
Profit for period
–
–
156.6
156.6
1.6
158.2
Other comprehensive income
–
(0.6)
–
(0.6)
–
(0.6)
Total comprehensive income for the year
–
(0.6)
156.6
156.0
1.6
157.6
Share-based payment expense (net of tax)
–
4.0
–
4.0
–
4.0
Dividends reinvested/(paid)
5.0
–
(109.1)
(104.1)
(1.3)
(105.4)
Balance at 30 June 2024
3,106.8
37.4
(146.8)
2,997.4
4.2
3,001.6
At 1 July 2022
2,700.6
31.6
(106.9)
2,625.3
2.9
2,628.2
Profit for period
–
–
21.6
21.6
1.9
23.5
Other comprehensive income
–
(1.5)
–
(1.5)
–
(1.5)
Total comprehensive income for the year
–
(1.5)
21.6
20.1
1.9
22.0
Issue of shares (net of transaction costs)
395.1
–
–
395.1
–
395.1
Share-based payment expense (net of tax)
–
3.9
–
3.9
–
3.9
Dividends reinvested/(paid)
6.1
–
(109.0)
(102.9)
(0.9)
(103.8)
Balance at 30 June 2023
3,101.8
34.0
(194.3)
2,941.5
3.9
2,945.4
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
Consolidated Statement of Changes in Equity
For the year ended 30 June 2024
80
NOTES
2024
$’M
2023
$’M
Cash flows from operating activities
Profit before income tax
225.8
33.3
Adjustments for:
Depreciation and amortisation expense
369.5
365.9
Write-off of assets
2.0
51.3
Net finance costs
115.7
96.1
Share-based payment expense
4.2
3.4
Remediation and rectification provision remeasurement
1.1
(1.9)
Share of losses from equity accounted investments
6.1
0.7
Net gain on disposal of property, plant and equipment
(6.8)
(0.5)
Net gain on sale and leaseback of property
–
(1.3)
Other non-cash items
(0.3)
(0.9)
Net cash from operating activities before changes in assets and liabilities
717.3
546.1
Changes in assets and liabilities:
Increase in receivables
(4.0)
(19.2)
Increase in other assets
(9.6)
(1.5)
Increase in inventories
(15.7)
(2.9)
(Decrease)/Increase in payables
(1.0)
19.6
Increase in employee entitlements
20.8
5.0
(Decrease)/Increase in other liabilities
(5.1)
6.2
(Decrease)/Increase in provisions
(70.5)
2.6
Cash generated from operating activities
632.2
555.9
Net interest paid
(85.3)
(64.7)
Income taxes paid
(4.8)
(9.4)
Net cash from operating activities
542.1
481.8
Cash flows from investing activities
Payments for property, plant and equipment
(370.4)
(369.7)
Payments for intangible assets
(32.8)
(16.2)
Payments for purchase of businesses (net of cash acquired)
(50.4)
(172.0)
Proceeds from disposal of property, plant and equipment
8.9
10.2
Investment in equity accounted investments
(8.0)
(0.9)
Loans to equity accounted investments
(8.0)
(2.0)
Loans repaid by equity accounted investments
0.3
1.7
Dividends received from equity accounted investments
0.9
0.8
Net cash used in investing activities
(459.5)
(548.1)
Cash flows from financing activities
Proceeds from borrowings
234.0
–
Repayment of borrowings
(100.0)
(94.1)
Repayment of lease liabilities
(89.6)
(93.1)
Payment of debt and equity raising costs
(3.1)
(7.1)
Proceeds from issue of ordinary shares
–
400.0
Payment of dividends to ordinary equity holders
(104.1)
(102.9)
Payment of dividends to non-controlling interests
(1.3)
(0.9)
Net cash (used in)/from financing activities
(64.1)
101.9
Net increase in cash and cash equivalents
18.5
35.6
Cash and cash equivalents at the beginning of the year
102.1
66.5
Cash and cash equivalents at the end of the year
11
120.6
102.1
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
Consolidated Statement of Cash Flows
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
81
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
1
Corporate information
Cleanaway Waste Management Limited and its subsidiaries (Cleanaway or the Group) is a for-profit entity domiciled
and incorporated in Australia. The Financial Report of Cleanaway Waste Management Limited consists of the
Consolidated Financial Statements of the Group and the Group’s interests in equity accounted investments.
The Consolidated Financial Statements of the Group for the year ended 30 June 2024 were authorised for issue
in accordance with a resolution of the Directors on 20 August 2024.
2
Statement of compliance
The Financial Report is a general purpose financial report which has been prepared on a going concern basis and
in accordance with the Corporations Act 2001, Australian Accounting Standards and other authoritative pronouncements
of the Australian Accounting Standards Board. The Financial Report also complies with International Financial Reporting
Standards (IFRS) as issued by the International Accounting Standards Board.
3
Basis of preparation
The Financial Report has been prepared on the basis of historical cost, except for the revaluation of derivative financial
instruments. Cost is based on the fair value of the consideration given in exchange for assets.
The accounting policies and methods of computation adopted in the preparation of the Financial Report are consistent
with those adopted and applied in the prior corresponding period.
The Financial Statements have been prepared on a going concern basis. In determining the appropriateness of the going
concern basis of preparation, the Group has assessed that it is expected to continue normal operations, in particular over
the 12 months from the date of this report. The Group has considered the following matters in making this assessment:
• Forecast cash flows from operating activities, including the expected timing of payments and receipts and the
recommencement of income tax payments by the Tax Consolidated Group;
• Forecast cash flows related to the Group’s investments, including planned capital expenditure and the agreement to
acquire the waste and recycling business and assets (known as Citywide Waste) of Citywide Service Solutions Pty Ltd
(refer note 28);
• Forecast cash flows related to the payment of dividends;
• Repayment of the Clean Energy Finance Corporation (CEFC) term loan maturing 17 August 2025;
• The Group’s cash balance at 30 June 2024 of $120.6 million (2023: $102.1 million) as set out in note 11;
• The Group’s unutilised committed debt facilities at 30 June 2024 of $276.4 million (2023: $504.5 million) as set out in
note 15; and
• The Groups net current asset deficiency as at 30 June 2024 of $223.0 million (2023: $170.0 million).
Further, the Group is expected to remain within its financial covenants over the 12 months from the date of this report.
This assessment is based on the same cash flow forecast assumptions as used in the going concern assessment.
The Financial Report is presented in Australian dollars and all values are rounded to the nearest hundred thousand
dollars, except when otherwise indicated. This presentation is consistent with the requirements of Legislative Instrument
2016/191, issued by the Australian Securities and Investments Commission, relating to the ‘rounding off’ of amounts
in the financial statements.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
82
4
Critical accounting estimates and judgements
The preparation of the Financial Report requires the use of certain critical accounting estimates. It also requires management
to exercise its judgement in the process of applying the Group’s accounting policies. Actual results may vary from these
estimates under different assumptions and conditions. Significant accounting estimates and judgements in the Financial
Report are found within the following notes:
• Note 9
Income Tax
• Note 20
Property, plant and equipment
• Note 21
Leases
• Note 22
Intangible assets
• Note 26
Provisions
• Note 33 Contingent liabilities
5
Segment reporting
Operating segments are identified on the basis of how the Chief Operating Decision Maker reviews internal reports
about components of the Group in order to assess the performance and allocation of resources to a particular
segment. Information reported to the Group’s Chief Executive Officer (Chief Operating Decision Maker) for the
purpose of performance assessment and resource allocation is specifically focused on the following segments:
• Solid Waste Services
Comprises the collection, recovery and disposal of all types of solid waste, including putrescible waste, inert waste,
household waste and recovered waste. Waste streams are generally processed through our resource recovery and
recycling facilities, transfer stations and landfills.
• Industrial & Waste Services
Comprises a wide variety of services provided to the Resources, Oil and Gas, Infrastructure, and Industrial markets.
Services include vacuum loading, high pressure cleaning, pipeline maintenance and non-destructive digging.
• Liquid Waste & Health Services
Liquid Waste comprises the collection, treatment, processing, refining and recycling and destruction of hazardous and
non-hazardous liquids, hydrocarbons and chemical waste, specialised product destruction and hazardous waste.
Health Services comprises the provision of services to the health sector for the safe treatment and disposal of health-related
waste which includes sharps management, medical waste, pharmaceutical waste, healthcare hazardous waste and
quarantine waste.
No operating segments have been aggregated to form the reportable segments.
Segment results include items directly attributable to a segment as well as those that can be allocated on a reasonable
basis. Segment capital expenditure is the total cost incurred during the period to acquire segment assets that are expected
to be used for more than one period.
The Group has the following allocation policies:
• Sales between segments are on normal commercial terms; and
• Corporate charges are allocated where possible based on estimated usage of corporate resources.
Segment assets and liabilities have not been disclosed as these are not provided to the Chief Operating Decision Maker.
This information is provided at a Group level only.
Unallocated items include the Group’s share of profits from equity accounted investments and corporate balances.
Corporate balances relate to shared services functions that are not directly attributable to an identifiable segment.
These functions include management, finance, legal, information technology, marketing, and human resources that
provide support to the other segments identified above.
Net finance costs are not allocated to individual segments as the underlying instruments are managed on a Group basis.
Current taxes, deferred taxes and certain financial assets and liabilities are not allocated to those segments as they are
also managed on a Group basis.
Inter-segment revenues are eliminated on consolidation.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
83
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
OPERATING SEGMENTS
UNALLOCATED
2024
SOLID
WASTE
SERVICES
$’M
INDUSTRIAL
& WASTE
SERVICES
$’M
LIQUID
WASTE
& HEALTH
SERVICES
$’M
ELIMINA-
TIONS
$’M
TOTAL
OPERATING
SEGMENTS
$’M
EQUITY
ACCOUNTED
INVEST-
MENTS
$’M
CORPORATE
$’M
GROUP
$’M
Revenue
Revenue from customers
2,691.4
390.2
618.8
–
3,700.4
–
– 3,700.4
Other revenue
37.0
0.1
20.7
–
57.8
–
–
57.8
Inter-segment sales
59.5
14.3
52.2
(126.0)
–
–
–
–
Total revenue
2,787.9
404.6
691.7
(126.0)
3,758.2
–
– 3,758.2
Underlying EBITDA 1
612.8
53.1
115.2
–
781.1
(6.1)
(46.3)
728.7
Depreciation and amortisation
(283.8)
(26.6)
(47.5)
–
(357.9)
–
(11.6)
(369.5)
Underlying EBIT 1
329.0
26.5
67.7
–
423.2
(6.1)
(57.9)
359.2
Integration costs 2
(2.0)
Net insurance recoveries 3
10.3
IT transformation costs 4
(26.0)
Profit from operations (EBIT)
341.5
Net finance costs
(115.7)
Profit before income tax
225.8
Income tax expense
(67.6)
Profit after income tax
158.2
Capital expenditure:
Property, plant and equipment
285.4
40.8
40.5
–
366.7
–
3.7
370.4
Intangible assets
–
–
6.2
–
6.2
–
26.6
32.8
1
Underlying earnings are categorised as non-IFRS financial information. The exclusion of underlying adjustments provides a result which, in the Directors’
view, more closely reflects the ongoing operations of the Group.
2
The final costs associated with the integration of Global Renewables Holdings Pty Ltd of $2.0 million were incurred during the period.
3
Insurance recoveries of $12.5 million were recognised during the period in relation to property damage and business interruption claims agreed by the
insurers for the June 2022 fire that occurred at the medical waste processing facility in Dandenong, Victoria. This is offset by the write-off of plant and
equipment totalling $2.0 million and legal costs of $0.2 million resulting from the East Coast floods that occurred during late February and early March
2022. Further insurance recoveries are expected to be recognised in the year ending 30 June 2025.
4
IT transformational project costs related to customisation and configuration of cloud-based software, which Cleanaway does not control and therefore
the costs do not qualify for capitalisation as intangible assets.
5
Segment reporting (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
84
OPERATING SEGMENTS
UNALLOCATED
2023
SOLID
WASTE
SERVICES
$’M
INDUSTRIAL
& WASTE
SERVICES
$’M
LIQUID
WASTE
& HEALTH
SERVICES
$’M
ELIMINA-
TIONS
$’M
TOTAL
OPERATING
SEGMENTS
$’M
EQUITY
ACCOUNTED
INVEST-
MENTS
$’M
CORPORATE
$’M
GROUP
$’M
Revenue
Revenue from customers
2,601.7
364.8
540.6
–
3,507.1
–
– 3,507.1
Other revenue
30.6
–
21.1
–
51.7
–
–
51.7
Inter-segment sales
52.4
11.0
48.9
(112.3)
–
–
–
–
Total revenue
2,684.7
375.8
610.6
(112.3)
3,558.8
–
– 3,558.8
Underlying EBITDA 1
562.7
52.7
92.4
–
707.8
(0.7)
(39.0)
668.1
Depreciation and amortisation
(284.6)
(26.2)
(43.6)
–
(354.4)
–
(11.5)
(365.9)
Underlying EBIT 1
278.1
26.5
48.8
–
353.4
(0.7)
(50.5)
302.2
Flood impacts 2
(62.2)
Acquisition and integration costs 3
(7.9)
Medical waste facility incidents 4
(22.3)
IT transformation costs 5
(6.1)
New Chum height rise 6
(74.3)
Profit from operations (EBIT)
129.4
Net finance costs
(96.1)
Profit before income tax
33.3
Income tax expense
(9.8)
Profit after income tax
23.5
Capital expenditure:
Property, plant and equipment
270.4
41.1
51.5
–
363.0
–
6.7
369.7
Intangible assets
0.2
–
–
–
0.2
–
16.0
16.2
1
Underlying earnings are categorised as non-IFRS financial information. The exclusion of underlying adjustments provides a result which, in the Directors’
view, more closely reflects the ongoing operations of the Group.
2
Several Cleanaway sites were impacted by the East Coast floods that occurred during late February and early March 2022. Flood impacts in the period
of $62.2 million relate mainly to further rectification works on the cell at the New Chum landfill which was under construction at the time of the floods.
More stringent requirements have been imposed by the regulator and works to rectify the damaged cell have taken longer than anticipated.
3
Acquisition and integration costs of $7.9 million include transaction costs and other costs associated with the acquisition and integration of Global
Renewables Holdings Pty Ltd of $5.3 million and the final integration costs related to the Sydney Resource Network acquisition of $2.6 million.
4
In June 2022, a fire caused significant damage to equipment at the medical waste processing facility in Dandenong, Victoria. The Victorian Health
business has incurred additional expenses of $39.3 million during the financial year, largely related to alternative waste disposal costs. Insurance
recoveries of $17.0 million have been recognised during the period in relation to property damage and business interruption claims agreed by the
insurers. Further insurance claims have been recognised in the year ended 30 June 2024.
5
IT costs associated with the transformational CustomerConnect project of $6.1 million related to customisation and configuration of cloud-based
software, which Cleanaway does not control and therefore the costs do not qualify for capitalisation as intangible assets.
6
On 20 June 2023, the Planning and Environment Court in Queensland dismissed an appeal by Cleanaway against the decision of the Ipswich City Council
to refuse an application that would have allowed for additional airspace at the New Chum landfill. As a result of this decision, assets related to the New
Chum landfill of $51.1 million were written-off. In addition, the remediation provision has increased by $23.2 million as future spend on infrastructure,
including gas and stormwater management, will no longer qualify to be recognised as assets when incurred. Furthermore, capping works will be brought
forward and results in discounting the cash flows in the nearer term.
5
Segment reporting (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
85
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
6
Revenue
2024
$’M
2023
$’M
Revenue from customers 1
3,700.4
3,507.1
Other revenue 1
57.8
51.7
3,758.2
3,558.8
1
Refer to note 5 for disaggregation of revenue.
The Group has a right to invoice all revenue to date, except those amounts disclosed as contract assets in note 12. The Group
has chosen not to disclose the amount of remaining performance obligations under contracts, where it has a right to invoice
as services are performed. Remaining performance obligations for work which is priced on a fixed basis where the right
to invoice is conditional on the work being completed are set out in note 12.
Accounting Policy
Revenue from sale of commodities
Sale of commodities produced from recycling waste and processing used mineral oils, and the sale of electricity and
gas produced from landfills, generally include one performance obligation. Revenue from the sale of commodities
is recognised at the point in time when the product is transferred to the customer.
Rendering of services
• Solid Waste Services
Revenue from collection and disposal of waste is recognised when the performance obligation to the customer
has been fulfilled, which is generally when the waste has been collected from the customer. Costs to dispose
of the waste are generally incurred at, or close to, the time of collection.
Variable consideration
Some contracts for the collection of waste or acceptance of waste into the Group’s landfills provide the customer
with volume rebates. For the majority of contracts, the variability in the contract price is resolved at each
reporting date. Where the variability is not resolved at a reporting date, the variable consideration is estimated
and, where applicable, revenue will be deferred and reflected in contract liabilities.
Non-cash consideration
In some of the Group’s contracts, rebates are provided to customers or collection is provided at a reduced
rate where waste is collected that has a value as a commodity to the Group. In these circumstances the Group
allocates a fair value to the commodity collected, generally equal to the rebate paid and the value of the
collection service, and recognises this as revenue.
• Liquid Waste & Health Services
Revenue from the collection and treatment of liquid and health waste is recognised when the performance
obligation to the customer has been performed, which is generally when the waste has been collected from
the customer and Cleanaway takes title to the waste.
In some circumstances the Group will charge the customer on delivery of a waste container. Under these
circumstances the Group assigns a value to the separate performance obligations, being the provision
of a container and the subsequent collection of the full container. Revenue received for the collection of the
container where the service has not yet been performed will be deferred and is reflected in contract liabilities.
• Industrial & Waste Services
Contract revenue is recognised over time and is measured using the input method by reference to labour hours and
actual costs incurred, relative to the total expected inputs required to satisfy the individual performance obligations.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
86
7
Other income
2024
$’M
2023
$’M
Net gain on disposal of property, plant and equipment
6.8
0.5
Net gain on sale and leaseback
–
1.3
Insurance recoveries
13.6
17.0
20.4
18.8
Accounting Policy
Insurance recoveries are recognised only when realisation is virtually certain.
8
Net finance costs
2024
$’M
2023
$’M
Finance costs
Interest on borrowings
(61.5)
(46.6)
Interest on leases
(26.2)
(23.4)
Amortisation of capitalised borrowing costs
(1.3)
(1.4)
Unwind of discount on provisions and other liabilities
(27.9)
(24.8)
Amortisation of gain on modification of fixed rate borrowings
(2.1)
(2.0)
Net fair value (loss)/gain on USPP Notes
(2.3)
4.1
Net fair value gain/(loss) on derivative financial instruments 1
2.3
(5.0)
(119.0)
(99.1)
Finance income
Interest revenue
3.3
3.0
3.3
3.0
Net finance costs
(115.7)
(96.1)
1
Fair value loss on derivative financial instruments includes a net gain of $2.3 million (2023: loss of $5.0 million) relating to fair value and cash flow hedges
including net hedge ineffectiveness of $0.1 million (2023: ($1.0) million) and other fair value changes during the period. Refer to note 17(a) for fair value
amounts reclassified from the hedge reserve and note 32(d) for all fair value movements on the CCIRS and USPP Notes.
Accounting Policy
Finance costs are recognised as expenses in the period utilising the effective interest rate method.
Interest
Interest is recognised based on the effective interest rate, taking into account the interest rates applicable
to the financial assets and financial liabilities.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
87
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
9
Income tax
(a) Amounts recognised in the Consolidated Income Statement
2024
$’M
2023
$’M
Current tax expense
Current year
106.1
(1.3)
Adjustments in respect of prior years
0.4
(0.7)
106.5
(2.0)
Deferred tax expense
Origination and reversal of temporary differences
(38.3)
12.9
Adjustments in respect of prior years
(0.6)
(1.1)
(38.9)
11.8
Income tax expense
67.6
9.8
(b) Amounts recognised directly in other comprehensive income or equity
The deferred income tax benefit recognised in other comprehensive income of $0.3 million (2023: $0.6 million) relates to the
tax effect of items recognised in the hedge reserve.
The deferred income tax benefit recognised directly in equity for the year of $0.2 million (2023: $2.7 million) relates to the
tax effect of items recognised in the employee equity benefits reserve of $0.2 million (2023: $0.5 million), and the tax effect
of capital raising costs recognised directly in equity of nil (2023: $2.2 million).
(c) Reconciliation between tax expense and pre-tax net profit at the statutory rate
2024
$’M
2023
$’M
Profit before tax
225.8
33.3
Income tax using the corporation tax rate of 30% (2023: 30%)
67.7
10.0
Increase/(decrease) in income tax expense due to:
Share of losses from equity accounted investments
2.1
0.5
Non-deductible expenses
0.3
0.2
Business acquisition costs
0.5
1.2
Adjustments in respect of prior years
(0.2)
(1.8)
Research and development tax credits
(2.6)
(3.1)
New Zealand tax matter1
–
2.9
Employee share plan benefits
(0.1)
(0.1)
Other
(0.1)
–
Income tax expense
67.6
9.8
1
During the period ended 30 June 2023, the Group agreed a final settlement with New Zealand Inland Revenue regarding its review of various matters
related to the Group’s historic ownership of the New Zealand business, which resulted in an additional tax liability. As a result, the Group had reclassified
$8.9 million of deferred tax liability into income tax payable and raised an additional tax provision of $2.9 million.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
88
(d) Deferred tax
Deferred tax in the Consolidated Balance Sheet relates to the following:
2024
OPENING
BALANCE
$’M
RECOGNISED
IN PROFIT
OR LOSS
$’M
RECOGNISED
IN OTHER
COMPREHENSIVE
INCOME
$’M
RECOGNISED
DIRECTLY
IN EQUITY
$’M
ACQUIRED
IN BUSINESS
COMBINATION
$’M
OTHER
$’M
CLOSING
BALANCE
$’M
Property, plant and equipment
(40.0)
23.8
–
–
(1.7)
–
(17.9)
Intangible assets
(178.3)
16.3
–
–
(2.0)
–
(164.0)
Leases
(14.7)
5.0
–
–
–
–
(9.7)
Employee benefits
35.5
6.6
–
–
0.2
–
42.3
Provisions
176.0
(8.9)
–
–
1.0
–
168.1
Tax losses
11.6
(0.8)
–
–
–
(10.8)
–
Other
29.4
(3.1)
0.3
0.2
0.1
–
26.9
Net deferred tax assets
19.5
38.9
0.3
0.2
(2.4)
(10.8)
45.7
2023
OPENING
BALANCE
$’M
RECOGNISED
IN PROFIT
OR LOSS
$’M
RECOGNISED
IN OTHER
COMPREHENSIVE
INCOME
$’M
RECOGNISED
DIRECTLY
IN EQUITY
$’M
ACQUIRED
IN BUSINESS
COMBINATION
$’M
OTHER
$’M
CLOSING
BALANCE
$’M
Property, plant and equipment
(9.6)
(30.9)
–
–
0.5
–
(40.0)
Intangible assets
(194.7)
19.5
–
–
(3.1)
–
(178.3)
Leases
(8.1)
(6.6)
–
–
–
–
(14.7)
Employee benefits
32.7
2.2
–
–
0.6
–
35.5
Provisions
166.5
8.3
–
–
1.2
–
176.0
Tax losses
4.6
–
–
–
0.3
6.7
11.6
Other
20.0
(4.3)
0.6
2.7
0.6
9.8
29.4
Net deferred tax assets
11.4
(11.8)
0.6
2.7
0.1
16.5
19.5
Deferred tax assets total $237.3 million (2023: $252.5 million) and deferred tax liabilities were $191.6 million
(2023: $233.0 million).
Accounting Policy
The income tax expense or benefit for the period is the tax payable on the current period’s taxable income based
on the applicable income tax rate for each jurisdiction adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the
end of the reporting period in the countries where the Group’s subsidiaries and associates operate and generate
taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which
applicable tax regulation is subject to interpretation. It establishes provisions, where appropriate, on the basis
of amounts expected to be paid to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax
bases of assets and liabilities and their carrying amounts in the Consolidated Financial Statements. With the exception
of deferred tax recognised on initial application of AASB 16 Leases, deferred tax is not accounted for if it arises from
initial recognition of an asset or liability in a transaction other than a business combination that at the time of the
transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates
(and laws) that have been enacted or substantively enacted at the reporting date and are expected to apply when the
related deferred income asset is realised or the deferred income tax liability is settled.
9
Income tax (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
89
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Accounting Policy
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if it is probable
that future taxable amounts will be available to utilise those temporary differences and losses. Deferred tax assets
and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities and
they relate to income taxes levied by the same taxation authority on the same taxable entity, or on different tax
entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will
be realised simultaneously.
Current and deferred tax balances attributable to amounts recognised directly in equity are also recognised directly
in equity.
The Company and all its wholly-owned Australian resident entities are part of a Tax Consolidated Group under
Australian taxation law. Cleanaway Waste Management Limited is the Head Entity in the Tax Consolidated Group
and applies the stand-alone tax payer method. The Tax Consolidated Group has entered into a tax sharing and a tax
funding agreement.
Critical accounting estimates and judgements – Recovery of deferred tax assets
Deferred tax assets, including those arising from tax losses not recouped, capital losses and temporary differences,
are recognised in the Consolidated Balance Sheet, only where it is considered probable that they will be recovered,
which is dependent on the generation of sufficient future taxable profits. Management considers that it is probable
that future taxable profits will be available to utilise those tax losses and temporary differences. Judgement
is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing
and the level of future profits.
These judgements and assumptions are subject to risk and uncertainty, hence there is a possibility that changes
in circumstances will alter expectations, which may impact the amount of deferred tax assets and deferred tax
liabilities recognised on the Consolidated Balance Sheet and the amount of other tax losses and temporary differences
not yet recognised. In such circumstances, some or all of the carrying amounts of recognised deferred tax assets and
liabilities may require adjustment, resulting in a corresponding credit or charge to the Consolidated Income Statement.
9
Income tax (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
90
10
Earnings per share
2024
CENTS
2023
CENTS
Basic earnings per share
7.0
1.0
Diluted earnings per share
7.0
1.0
(i)
Basic earnings per share
Basic earnings per share is calculated by dividing the net profit after income tax attributable to ordinary equity holders
of the Group by the weighted average number of ordinary shares outstanding during the financial year.
The following provides a reconciliation of earnings used as the numerator in calculating basic earnings per share:
2024
$’M
2023
$’M
Profit after income tax
158.2
23.5
Net profit attributable to non-controlling interests
(1.6)
(1.9)
Profit after tax attributable to ordinary equity holders
156.6
21.6
The following provides the weighted average number of ordinary shares:
2024
2023
Weighted average number of ordinary shares used as the denominator
in calculating earnings per share
Number for basic earnings per share
2,228,181,888
2,212,975,561
Effect of potential ordinary shares
8,096,857
7,228,035
Number for diluted earnings per share
2,236,278,745
2,220,203,596
(ii) Diluted earnings per share
Dilutive potential ordinary shares are limited to performance rights issued under the Group’s Long-Term Incentive Plans,
Short-Term Incentive Plans and Executive Sign-On offers. Refer to note 35 for details. The performance rights do not give rise
to any adjustments in the profit attributable to ordinary shareholders in the calculation of diluted earnings per share.
11
Cash and cash equivalents
Composition of cash and cash equivalents
2024
$’M
2023
$’M
Cash at bank and on hand
120.6
102.1
120.6
102.1
Accounting Policy
Cash and cash equivalents comprise cash at banks, short-term deposits and petty cash balances. Cash at bank
earns interest at floating rates based on daily bank deposit rates. Short-term deposits earn interest at the respective
short-term deposit rates.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
91
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
12
Trade and other receivables
2024
$’M
2023
$’M
Trade receivables
545.6
536.8
Contract assets 1
1.6
2.1
Other receivables
13.2
15.4
Provision for expected credit losses
(3.1)
(2.6)
557.3
551.7
1
Contract assets arise when the Group has performed work but does not yet have the right to invoice. This is the case in the Industrial & Waste Services
operating segment when work is performed on a fixed price quote.
The ageing of the Group’s trade receivables at the reporting date was:
2024
$’M
2023
$’M
Not past due
433.9
443.0
Past due 1 – 30 days
67.7
57.1
Past due 31 – 120 days
32.9
25.6
Past due 121 days or more
11.1
11.1
545.6
536.8
The movement in the provision for expected credit losses during the year was as follows:
2024
$’M
2023
$’M
Opening balance
(2.6)
(2.0)
Provisions recognised
(2.8)
(2.2)
Utilisation of provisions
2.3
1.6
Closing balance
(3.1)
(2.6)
No single debtor’s annual revenue is greater than 3.4% (2023: 4.6%) of the Group’s total revenue. Trade and other
receivables that are neither past due or impaired are considered to be of a high credit quality.
Accounting Policy
Trade receivables are amounts due from customers for goods sold or services performed in the ordinary course
of business. Trade receivables are generally due for settlement within 30 days and therefore are all classified
as current. Collectability of trade debtors is reviewed on an ongoing basis.
Trade receivables and contract assets are written off when there is no reasonable expectation of recovery. Indicators
that there is no reasonable expectation of recovery include: a failure of the debtor to engage in the collection attempts
of the Group; confirmation that the debtor has been placed into liquidation or is bankrupt; and an assessment that the
debt is no longer commercially viable to pursue.
The Group accounts for impairment losses relating to financial assets by applying a forward-looking expected credit
loss (ECL) approach. The Group has applied a simplified approach to determining ECLs and has calculated ECLs based
on lifetime ECLs. The Group has established a provision matrix that is based on the Group’s historical credit losses
against the debtors ageing profile, adjusted for forward-looking information.
The Group’s exposure to credit risk related to trade and other receivables is disclosed in note 32(b).
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
92
13
Inventories
2024
$’M
2023
$’M
Raw materials and consumables – at cost
18.3
17.7
Work in progress – at cost
0.1
0.2
Finished goods – at cost
39.8
13.3
58.2
31.2
Total inventory costs recognised as an expense were $116.8 million (2023: $109.9 million).
Accounting Policy
Inventories are valued at the lower of cost and net realisable value. The cost of inventories is based on the method
most appropriate to each particular class of inventory and includes expenditure incurred in acquiring the inventories,
production or conversion costs and other costs incurred in bringing them to their existing location and condition.
In the case of manufactured inventories and work in progress, cost includes an appropriate share of production
overheads based on normal operating capacity.
Finished goods include Australian Carbon Credit Units (ACCUs) which are held for trading. These are initially
recognised as intangible assets as they are generated and reclassified into inventory when they are expected to be
issued in the next 12 months. Refer to note 22.
14
Trade and other payables
2024
$’M
2023
$’M
Trade payables
235.7
226.3
Other payables and accruals
258.9
269.0
494.6
495.3
Accounting Policy
These amounts represent liabilities for goods and services provided to the Group prior to the end of the financial year
which are unpaid. The amounts are unsecured and are usually paid within 45 days of recognition. Trade and other
payables are presented as current liabilities unless payment is not due within 12 months after the reporting period.
Other payables and accruals includes tipping and disposal costs accruals as well as general accruals.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
93
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
15
Borrowings
UNSECURED
BANK
LOANS
$’M
US PRIVATE
PLACEMENT
NOTES
$'M
CLEAN ENERGY
FINANCE
CORPORATION
$’M
TOTAL
BORROWINGS
$’M
Opening balance at 1 July 2023
516.6
348.3
85.5
950.4
Net proceeds of borrowings
134.0
–
–
134.0
Borrowing transaction costs paid
(2.4)
–
–
(2.4)
Cash flows
131.6
–
–
131.6
Non-cash repayments
(7.6)
–
–
(7.6)
Fair value changes
–
2.3
–
2.3
Borrowing costs reversed
1.2
0.2
–
1.4
Amortisation of gain on modification of fixed rate borrowings
–
–
2.1
2.1
Amortisation of borrowing costs
1.1
0.2
–
1.3
Closing balance at 30 June 2024
642.9
351.0
87.6
1,081.5
UNSECURED
BANK
LOANS
$’M
US PRIVATE
PLACEMENT
NOTES
$'M
CLEAN ENERGY
FINANCE
CORPORATION
$’M
TOTAL
BORROWINGS
$’M
Opening balance at 1 July 2022
607.5
351.9
83.5
1,042.9
Repayments of borrowings
(94.1)
–
–
(94.1)
Cash flows
(94.1)
–
–
(94.1)
Non-cash drawdowns
3.2
–
–
3.2
Fair value changes
–
(4.1)
–
(4.1)
Borrowing costs (accrued)/reversed
(1.2)
0.3
–
(0.9)
Amortisation of gain on modification of fixed rate borrowings
–
–
2.0
2.0
Amortisation of borrowing costs
1.2
0.2
–
1.4
Closing balance at 30 June 2023
516.6
348.3
85.5
950.4
Financing facilities
The facility limits and maturity profile of the Group’s main financing facilities are as follows:
FACILITY
AMOUNT
MATURITY
Syndicated Facility Agreement
Facility A
working capital tranche
$210 million
31 July 2026
Facility B
4 year revolver
$200 million
30 June 2028
Facility C
5 year revolver
$265 million
30 June 2029
Facility E
3 year non-revolving
term loan facility
$400 million
31 May 2027
US Private Placement (USPP) Notes
8 year debt notes
US$90 million
11 February 2028
10 year debt notes
US$90 million
11 February 2030
12 year debt notes
US$90 million
11 February 2032
Clean Energy Finance Corporation (CEFC)
8 year term loan
$90 million
17 August 2025
Uncommitted bank guarantee facility
$95 million
31 December 2024
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
94
The headroom available in the Group’s facilities at 30 June 2024 is summarised below:
AVAILABLE
$’M
UTILISED
$’M
NOT UTILISED
$’M
Syndicated Facility Agreement
Facility A 1, 2, 3
210.0
(136.0)
74.0
Facility B 3
200.0
(195.0)
5.0
Facility C 3
265.0
(30.0)
235.0
Facility E 3
400.0
(400.0)
–
US Private Placement (USPP) Notes
351.0
(351.0)
–
CEFC Term Loan 4
90.0
(90.0)
–
Bank guarantee facilities 1
95.0
(80.6)
14.4
1,611.0
(1,282.6)
328.4
1
These facilities include $176.1 million (2023: $179.8 million) in guarantees and letters of credit which only give rise to a liability where the Group fails
to perform its contractual obligations. Included in the not utilised Facility A is $37.6 million (2023: $9.3 million) which can only be used for bank guarantees.
2
This facility includes $5.5 million (2023: $4.5 million) of corporate credit card limit utilisation and $15.0 million (2023: $15.0 million) of overdraft utilisation.
3
Amounts utilised exclude capitalised borrowing costs of $2.1 million (2023: $2.0 million) and nil (2023: $6.1 million) of bank loans advanced under
uncommitted facilities.
4
Amount utilised excludes capitalised borrowing costs of $0.1 million (2023: $0.1 million) and unamortised gains on fixed rate debt of $2.3 million
(2023: $4.4 million).
To access the unutilised facilities the Group must comply with certain financial covenants. During, and at the end of the
reporting periods, the Group was in compliance of its obligations under its financing facility agreements, including these
financial covenants.
The headroom available in the Group’s facilities at 30 June 2023 is summarised below:
AVAILABLE
$’M
UTILISED
$’M
NOT UTILISED
$’M
Syndicated Facility Agreement
Facility A
180.0
(121.2)
58.8
Facility B
200.0
(5.0)
195.0
Facility C
265.0
(5.0)
260.0
Facility E
500.0
(500.0)
–
US Private Placement (USPP) Notes
348.3
(348.3)
–
CEFC Term Loan
90.0
(90.0)
–
Bank guarantee facilities
95.0
(80.6)
14.4
1,678.3
(1,150.1)
528.2
Accounting Policy
Borrowings are initially recognised at fair value of the consideration received net of issue costs incurred. Subsequent
to initial recognition, interest-bearing borrowings are stated at amortised cost with any difference between cost
and redemption value being recognised in the Consolidated Income Statement over the period of the borrowings
on an effective interest basis. Foreign currency exchange gains and losses arising on foreign currency denominated
borrowings are recorded in net finance costs in the Consolidated Income Statement.
Borrowings are derecognised when the obligation specified in the contract is discharged, cancelled or expired.
The difference between the carrying amount of a financial liability that has been extinguished or transferred
to another party and the consideration paid, including any non-cash assets transferred or liabilities assumed,
is recognised in other income or other expenses.
15
Borrowings (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
95
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
16
Issued capital
Issued and paid up capital is recognised at the fair value of the consideration received by the Company. Any transaction
costs incurred by the Company arising on the issue of capital are recognised directly in equity as a reduction of the share
capital received.
Ordinary shares participate in dividends and the proceeds on winding up of the Company in proportion to the number
of shares held. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Ordinary shares have no par value and all issued shares are fully paid.
2024
2023
NUMBER
OF SHARES
$’M
NUMBER
OF SHARES
$’M
Opening balance
2,226,243,110
3,101.8
2,062,587,594
2,700.6
Issue of shares under dividend reinvestment plan
1,999,750
5.0
2,273,267
6.1
Issue of shares under employee incentive plans
1,135,082
–
1,381,952
–
Equity raising 1
–
–
160,000,297
400.0
Costs related to equity raising, net of tax 2
–
–
–
(4.9)
Closing balance
2,229,377,942
3,106.8
2,226,243,110
3,101.8
1
On 24 August 2022, the Group raised $350.0 million in a fully underwritten placement to institutional investors at a price of $2.50 per share.
On 19 September 2022, the Group raised a further $50.0 million in a Share Purchase Plan at a price of $2.50 per share.
2
During the year ended 30 June 2023, costs of $7.1 million (after tax $4.9 million) were incurred in relation to the equity raising.
17
Reserves
2024
$’M
2023
$’M
Hedge reserve
0.4
1.0
Employee equity benefits reserve
37.0
33.0
37.4
34.0
(a) Hedge reserve
The Group’s hedge reserve includes net gains/(losses) relating to changes in AUD/USD currency basis included in the
fair value of cross-currency interest rate swaps (CCIRS). Currency basis is excluded from the Group’s hedge relationships
and accounted for as a cost of hedging recognised in other comprehensive income. The reserve also includes effective
gains/(losses) included in the fair value of CCIRS and Interest Rate Swaps (IRS) that are part of cash flow hedges, net
of amounts reclassified to net finance costs. Amounts in the hedge reserve will be reclassified to net finance costs in
subsequent periods when the hedged item is recognised in the income statement. Refer to note 32(d).
2024
$’M
2023
$’M
Opening balance
1.0
2.5
Net fair value loss on derivative financial instruments (net of tax)
(0.6)
(1.5)
Closing balance
0.4
1.0
The effective portion of cash flow hedges reclassified to net finance costs during the period to offset the net gain/(loss) on
the hedged items was ($0.1) million (2023: $13.8 million).
(b) Employee equity benefits reserve
The employee equity benefits reserve is used to record the value of equity benefits provided to employees as part of their
remuneration. Refer to note 35 for further details on these share-based payment plans.
2024
$’M
2023
$’M
Opening balance
33.0
29.1
Share-based payment expense (net of tax)
4.0
3.9
Closing balance
37.0
33.0
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
96
18
Dividends
The Company declared partially franked dividends on ordinary shares for the financial year ended 30 June 2024 of 5.00 cents
per share, being an interim unfranked dividend of 2.45 cents per share and a franked final dividend of 2.55 cents per share.
The record date of the final dividend is 16 September 2024 with payment to be made on 7 October 2024.
Details of dividends in respect of the financial year are as follows:
2024
2023
CENTS PER
SHARE
$’M
CENTS PER
SHARE
$’M
Dividends paid during the period
Final dividend relating to prior period
2.45
54.5
2.45
54.5
Interim dividend relating to current period
2.45
54.6
2.45
54.5
4.90
109.1
4.90
109.0
Dividends determined in respect of the period
Interim dividend relating to current period
2.45
54.6
2.45
54.5
Final dividend relating to current period
2.55
56.8
2.45
54.5
5.00
111.4
4.90
109.0
Franking credit balance
The available amounts are based on the balance of the franking account at year-end, adjusted for:
(a) Franking credits or debits that will arise from the payment of current tax liabilities or receipt of current tax assets;
(b) Franking debits that will arise from the payment of franked or partially franked dividends recognised as a liability
at the year-end; and
(c) Franking credits that will arise from the receipt of dividends recognised as receivables by the Tax Consolidated Group
at the year-end.
2024
$’M
2023
$’M
30% franking credits available for subsequent financial years 1
99.9
4.7
1
Payment of the final 2024 dividend determined after 30 June 2024 will reduce the franking account by $24.3 million.
The unadjusted balance of the franking account at 30 June 2024 was $5.3 million (2023: $5.3 million).
19
Capital management
When managing capital, the Group’s objective is to ensure that it uses a mix of funding options to optimise returns
to equity holders and manage risk. The facility limits and maturity profile of the Group’s main financing facilities are
contained in note 15.
The capital structure of the Group comprises: debt, which includes borrowings and lease liabilities; cash and cash
equivalents; and equity attributable to equity holders of the parent, such equity comprising issued capital, reserves and
retained earnings as disclosed in the Consolidated Balance Sheet. The Group is subject to certain undertakings under
its debt facilities which include financial covenants typical for corporate financing facilities. The Group’s financial ratios
are reported to the Board of Directors on a monthly basis and the Company regularly assesses its position to ensure
financial covenants are met as part of its capital management activities.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
97
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
The gearing ratio of the Group at reporting date was as follows:
2024
$’M
2023
$’M
Current lease liabilities
110.4
98.4
Non-current borrowings and lease liabilities
1,621.5
1,490.7
Derivative financial instruments related to USPP notes 1
45.1
46.1
Cash and cash equivalents
(120.6)
(102.1)
Net debt
1,656.4
1,533.1
Total equity attributable to the ordinary equity holders
2,997.4
2,941.5
Gearing ratio 2
35.6%
34.3%
1
At 30 June 2024, the Group held cross-currency interest rate swaps (CCIRS) to protect against interest rate and foreign currency movements in relation to the USPP notes.
2
The Group’s gearing ratio at period end is defined as net debt over net debt plus equity. The weighted average debt maturity is 4.0 years (2023: 3.8 years).
20
Property, plant and equipment
2024
NON-
LANDFILL
LAND AND
BUILDINGS
$’M
LANDFILL
ASSETS
$’M
LEASEHOLD
IMPROVEMENTS
$’M
PLANT AND
EQUIPMENT
$’M
CAPITAL
WORK IN
PROGRESS
$’M
TOTAL
$’M
Opening net book value
251.9
361.6
56.2
655.4
252.8
1,577.9
Additions
–
–
–
–
407.2
407.2
Acquisitions of businesses
–
–
–
7.9
–
7.9
Net movement in remediation assets 1
–
0.8
1.5
–
–
2.3
Disposals
(1.4)
(2.0)
(0.1)
(0.7)
–
(4.2)
Transfers of assets
48.7
122.2
16.9
208.6
(395.1)
1.3
Depreciation
(6.0)
(61.6)
(7.4)
(138.3)
–
(213.3)
Write-off of assets
–
–
(0.1)
(1.4)
(0.5)
(2.0)
Closing net book value
293.2
421.0
67.0
731.5
264.4
1,777.1
Cost
313.1
1,117.3
109.6
2,187.5
264.4
3,991.9
Accumulated depreciation
(19.9)
(696.3)
(42.6)
(1,456.0)
–
(2,214.8)
Net book value
293.2
421.0
67.0
731.5
264.4
1,777.1
1
Net movement in remediation assets reflects adjustments to the remediation provision for open landfill sites and leasehold improvements.
2023
NON-
LANDFILL
LAND AND
BUILDINGS
$’M
LANDFILL
ASSETS
$’M
LEASEHOLD
IMPROVEMENTS
$’M
PLANT AND
EQUIPMENT
$’M
CAPITAL
WORK IN
PROGRESS
$’M
TOTAL
$’M
Opening net book value
256.2
364.1
55.3
602.3
156.6
1,434.5
Additions
–
–
–
–
347.7
347.7
Acquisitions of businesses
2.6
–
0.4
19.4
–
22.4
Net movement in remediation assets 1
–
35.1
–
–
–
35.1
Disposals
(4.7)
–
(0.1)
(1.4)
–
(6.2)
Transfers of assets
1.8
57.0
7.3
170.7
(235.0)
1.8
Depreciation
(4.0)
(62.8)
(6.7)
(132.6)
–
(206.1)
Write-off of assets
–
(31.8)
–
(3.0)
(16.5)
(51.3)
Closing net book value
251.9
361.6
56.2
655.4
252.8
1,577.9
Cost
268.3
1,007.1
92.8
2,043.1
252.8
3,664.1
Accumulated depreciation
(16.4)
(645.5)
(36.6)
(1,387.7)
–
(2,086.2)
Net book value
251.9
361.6
56.2
655.4
252.8
1,577.9
1
Net movement in remediation assets reflects adjustments to the remediation provision for open landfill sites and leasehold improvements.
19
Capital management (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
98
Accounting Policy
Landfill assets
The Group owns landfill assets. A landfill site may be either developed or purchased by the Group.
Landfill assets comprise the acquisition of landfill land, cell development costs, site infrastructure and landfill site
improvement costs and the asset related to future landfill site restoration and aftercare costs (landfill remediation asset).
The Group is responsible for a total of 16 landfills (2023: 17 landfills). Of the 16 landfills, eight are open and eight are
closed. Those that are open are expected to close between 2025 and 2079. The Group’s remediation provisions are based
on an average 30-year post-closure period.
It is the Group’s policy that at the time of the development or acquisition of a landfill and at each reporting date to:
• Capitalise the cost of cell development to landfill assets;
• Capitalise the cost of purchased landfill assets;
• Capitalise the estimated future costs of remediation;
• Depreciate the capitalised landfill assets over the useful life of the landfill asset or site; and
• Recognise income generated from the landfill assets in the reporting period earned.
Landfill land will be recognised separately from other landfill related assets when it is considered to have value at the
end of the landfill site’s useful life for housing or commercial development. This land is not depreciated; it is carried
at its original cost and tested for impairment.
Cell development costs include excavation costs, cell lining costs and leachate collection costs. Cell development
costs are capitalised as incurred. Closed cells are capped and may return a future revenue stream to the Group,
such as from the sale of landfill gas.
The landfill remediation assets comprise capping costs and costs to remediate and monitor the site over the life
of the landfill, including post closure. Capping costs together with aftercare costs (see Accounting Policy – Provision
for landfill remediation in note 26) are recognised upon commencement of cell development. The depreciation
for cell development costs and the remediation asset, is calculated by the tonnes of airspace consumed during the
reporting period divided into the total airspace available at the beginning of the reporting period, such that all costs
are fully depreciated upon receiving last waste into the landfill. A landfill is deemed full when its permitted airspace
is consumed and it cannot legally accept any more waste. Alternatively, a landfill may be deemed full earlier should
other factors exist, for example, if it is not economically viable to continue accepting waste.
Site infrastructure and landfill site improvement costs include capital works such as site access roads and other capital
costs relating to multiple cells on the landfill site. These costs are capitalised as incurred and depreciated using the
useful life of the asset or the life of the landfill up until receiving last waste.
Landfill sales
A landfill may be disposed of as an operating landfill or it may be retained until post-closure and then sold.
The Group’s policy on landfill sales is as follows:
• If the landfill is sold as an operating landfill, recognise the profit on sale of an asset; or
• If the completed landfill is intended to be sold and meets the relevant requirements, transfer the landfill balance
to non-current assets held for sale.
Non-landfill land and buildings
Non-landfill land and buildings are shown at cost less accumulated depreciation. Non-landfill land is not depreciated.
20
Property, plant and equipment (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
99
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Accounting Policy
Plant and equipment
Plant and equipment is stated at cost less accumulated depreciation and impairment. Cost includes expenditure
that is directly attributable to bringing the asset to the location and condition necessary for its intended use. In the
event that settlement of all or part of the purchase consideration is deferred, cost is determined by discounting the
amounts payable in the future to their present value as at the date of acquisition. Purchased software that is integral
to the functionality of the related equipment is capitalised as part of that equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of the property, plant and equipment and are recognised net within ‘other
income’ in the Consolidated Income Statement.
Depreciation
Depreciation is provided on property, plant and equipment, including freehold buildings but excluding land.
Depreciation of assets, with the exception of landfill remediation and cell development assets, is calculated
on a straight-line basis so as to write off the net cost of each asset over its expected useful life to the Group.
Leasehold improvements are depreciated over the period of the lease or estimated useful lives, whichever is the
shorter, using the straight-line method. Landfill remediation and cell development assets are depreciated on a usage
basis over the individual landfill expected life.
Estimates of remaining useful lives are made on a regular basis for all assets, with annual reassessments of both the
useful life and any residual value for major items.
The expected useful lives are as follows:
Buildings and site improvements
15 to 40 years
Plant and equipment
2.5 to 20 years
Leasehold improvements
5 to 10 years
Landfill assets
1 to 50 years
Repairs and maintenance
Plant and equipment of the Group is required to be overhauled on a regular basis. This is managed as part of an
ongoing major cyclical maintenance program. The cost of this maintenance is recognised as an expense as incurred,
except where it relates to the replacement of a component of an asset, or where it extends the useful life of the
asset, in which case the costs are capitalised and depreciated in accordance with the Group’s policy. Other routine
operating maintenance, repair and minor renewal costs are also recognised as expenses as incurred.
Critical accounting estimates and judgements – Landfill asset depreciation
Landfill assets comprise the acquisition of landfill land, airspace, cell development costs, site infrastructure and
landfill site improvement costs, gas infrastructure and remediation assets. Landfill airspace, cell development
costs and remediation assets are depreciated on a usage basis. This depreciation method requires significant
estimation of compaction rates, airspace and future costs. Therefore, changes in these estimates will cause changes
in depreciation rates. The depreciation rates are calculated based on the most up-to-date accounting estimates and
applied prospectively.
20
Property, plant and equipment (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
100
21
Leases
(a) Right-of-use assets
2024
PROPERTIES
$’M
PLANT AND
EQUIPMENT
$’M
TOTAL
$’M
Opening net book value
347.4
262.0
609.4
New leases
22.6
42.6
65.2
Acquisition of business
4.6
–
4.6
Remeasurement due to a variation in lease term
18.1
(0.7)
17.4
Remeasurement due to rental increases
14.2
–
14.2
Depreciation
(52.3)
(47.4)
(99.7)
Closing net book value
354.6
256.5
611.1
Cost
542.8
444.5
987.3
Accumulated depreciation
(188.2)
(188.0)
(376.2)
Net book value
354.6
256.5
611.1
2023
PROPERTIES
$’M
PLANT AND
EQUIPMENT
$’M
TOTAL
$’M
Opening net book value
347.5
267.2
614.7
New leases
19.1
45.1
64.2
Remeasurement due to a variation in lease term
15.0
(1.5)
13.5
Remeasurement due to rental increases
11.5
–
11.5
Depreciation
(45.7)
(48.8)
(94.5)
Closing net book value
347.4
262.0
609.4
Cost
483.5
413.6
897.1
Accumulated depreciation
(136.1)
(151.6)
(287.7)
Net book value
347.4
262.0
609.4
(b) Lease liabilities
2024
$’M
2023
$’M
Opening balance
638.7
640.9
New leases
65.2
66.8
Acquisition of businesses
4.6
–
Lease principal payments
(89.6)
(93.1)
Remeasurements
31.5
24.1
Closing balance
650.4
638.7
Current
110.4
98.4
Non-current
540.0
540.3
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
101
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not
included in the lease liability or right-of-use asset until they take effect. When adjustments to lease payments based
on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Where practicable, the Group seeks to include extension options when negotiating leases to provide flexibility and align with
business needs. Extension options are only reflected in the lease liability when it is reasonably certain they will be exercised.
The Group provides residual value guarantees under certain plant and equipment leases. At 30 June 2024, these guarantees
totalled $8.6 million (2023: nil). The Group considers the likelihood of making payment under residual value guarantees
to be remote.
Changes in the assessment of the lease term or residual value guarantees are accounted for as a reassessment of the lease
liability at the date of the change.
The following lease payments were made during the period:
2024
$’M
2023
$’M
Expenses relating to short-term leases (included in property expenses and other expenses)
31.9
25.9
Expenses relating to low-value assets that are not short-term leases (included in other expenses)
2.2
1.7
Expenses relating to variable lease payments (included in labour related expenses) 1
56.3
55.3
Lease principal payments
89.6
93.1
Interest expenses relating to lease liabilities
26.2
23.4
206.2
199.4
1
Variable lease payments included in labour-related expenses reflect payments made to owner drivers, whereby a subcontractor will be paid for both the
use of their vehicle and collection services. Future cash outflows in respect of these leases are dependant upon owner driver jobs completed.
Accounting Policy
The Group leases various property, equipment and vehicles. These leases typically do not exceed 10 years but in some
cases contain further renewal rights. Lease terms are negotiated on an individual basis and contain a wide range
of different terms and conditions.
Leases are recognised as a right-of-use asset and a corresponding liability at the date at which the leased asset
is available for use by the Group. Each lease payment is allocated between the liability and finance cost. The finance
cost is charged to profit or loss over the lease period to produce a constant periodic rate of interest on the remaining
balance of the liability for each period. The right-of-use asset is depreciated over the shorter of the asset’s useful
life and the lease term on a straight-line basis. Assets and liabilities arising from a lease are initially measured
on a present value basis.
Lease liabilities include the net present value of the following lease payments:
• Fixed payments (including in-substance fixed payments), less any lease incentives receivable;
• Variable lease payments that are based on a fixed index or a rate as at the commencement date;
• Amounts expected to be payable by the lessee under residual value guarantees;
• The exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and
• Payments of penalties for terminating the lease, if the lease term reflects the lessee exercising that option.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be determined,
the lessee’s incremental borrowing rate is used, being the rate that the lessee would have to pay to borrow the funds
necessary to obtain an asset of similar value, in a similar economic environment, with similar terms and conditions.
Short-term leases and those where the underlying asset is of low value are recognised as an expense on a straight-line
basis over the lease term.
The Group has elected for the plant and equipment asset class not to separate non-lease components from lease
components, and instead accounts for all payments under the lease together as a single component.
Variable lease payments
Some leases contain lease payments that are linked to variable components such as volumes of waste collected
or landfill revenue. Lease payments which are variable in nature and do not depend on a fixed index or rate are
recognised in profit or loss in the period to which they relate.
21
Leases (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
102
Critical accounting estimates and judgements – Lease terms for right-of-use assets and
lease liabilities
Extension and termination options are included in lease arrangements across the Group. These terms are used
to maximise operational flexibility in terms of managing contracts. In determining the lease term, all facts and
circumstances are considered that create an economic incentive to exercise an extension option, or not exercise
a termination option. Extension options (or periods after termination options) are only included in the lease term
if the lease is reasonably certain to be extended (or not terminated). The assessment is reviewed if a significant
event or a significant change in circumstances occurs which affects this assessment and that is within the control
of Cleanaway.
In determining the lease term, the Group has applied judgement over the facts and circumstances that create
an economic incentive to exercise an extension option, or not exercise a termination option. All property leases
on which a prized asset is situated are considered reasonably certain to exercise an extension option.
22
Intangible assets
2024
GOODWILL
$’M
LANDFILL
AIRSPACE
$’M
BRAND
NAMES
$’M
CUSTOMER
INTANGIBLES
AND LICENCES
$’M
OTHER
INTANGIBLES
$’M
TOTAL
$’M
Opening net book value
2,412.4
424.7
78.6
113.4
43.4
3,072.5
Additions
–
–
–
–
32.8
32.8
Acquisitions of businesses
29.3
–
–
6.5
–
35.8
Remeasurement of associated
remediation liability
–
(4.4)
–
–
–
(4.4)
Transfers to inventories
–
–
–
–
(12.3)
(12.3)
Amortisation
–
(33.7)
–
(16.3)
(6.5)
(56.5)
Closing net book value
2,441.7
386.6
78.6
103.6
57.4
3,067.9
Cost
2,441.7
528.3
78.6
237.8
143.1
3,429.5
Accumulated amortisation
–
(141.7)
–
(134.2)
(85.7)
(361.6)
Net book value
2,441.7
386.6
78.6
103.6
57.4
3,067.9
2023
GOODWILL
$’M
LANDFILL
AIRSPACE
$’M
BRAND
NAMES
$’M
CUSTOMER
INTANGIBLES
AND LICENCES
$’M
OTHER
INTANGIBLES
$’M
TOTAL
$’M
Opening net book value
2,352.2
475.3
78.6
129.8
24.4
3,060.3
Additions
–
–
–
–
16.2
16.2
Acquisitions of businesses
60.2
–
–
–
10.4
70.6
Remeasurement of associated
remediation liability
–
(9.3)
–
–
–
(9.3)
Amortisation
–
(41.3)
–
(16.4)
(7.6)
(65.3)
Closing net book value
2,412.4
424.7
78.6
113.4
43.4
3,072.5
Cost
2,412.4
532.7
78.6
231.3
122.6
3,377.6
Accumulated amortisation
–
(108.0)
–
(117.9)
(79.2)
(305.1)
Net book value
2,412.4
424.7
78.6
113.4
43.4
3,072.5
Goodwill and brand names are monitored at an operating segment level.
21
Leases (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
103
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
The carrying amount of goodwill and non-amortising intangible assets (brand names) are allocated to operating segments
as follows:
2024
SOLID WASTE
SERVICES
$’M
INDUSTRIAL
& WASTE
SERVICES
$’M
LIQUID WASTE
& HEALTH
SERVICES
$’M
TOTAL
$’M
Goodwill
1,871.8
168.2
401.7
2,441.7
Brand names
78.6
–
–
78.6
Total
1,950.4
168.2
401.7
2,520.3
2023
SOLID WASTE
SERVICES
$’M
INDUSTRIAL
& WASTE
SERVICES
$’M
LIQUID WASTE
& HEALTH
SERVICES
$’M
TOTAL
$’M
Goodwill
1,871.8
168.2
372.4
2,412.4
Brand names
78.6
–
–
78.6
Total
1,950.4
168.2
372.4
2,491.0
Annual impairment testing
After initial recognition, goodwill acquired in a business combination is measured at cost less any accumulated impairment
losses. Goodwill and brand names are not amortised but are subject to impairment testing. In accordance with the Group’s
accounting policies, the Group performs its impairment testing annually at 30 June. Cash-generating units (CGUs) are
however reviewed at each reporting period to determine whether there is an indicator of impairment. Where an indicator
of impairment exists, a formal review is undertaken to estimate the recoverable amount of related assets.
Results of impairment testing
Based on impairment testing performed, the recoverable amounts of each CGU exceeded the carrying amounts at 30 June 2024
and 2023.
Key assumptions used for annual impairment testing
The recoverable amount of each operating segment or CGU is determined based on fair value less costs to dispose
calculations using five-year forecasted cash flows of the CGUs and a terminal value calculation, other than those associated
with landfill assets. Cash flows from the landfill assets are limited to the available airspace of the landfill. Capital projects
which are reasonably expected to be developed by a market participant because they have positive NPV have also been
included in the determination of recoverable value. Potential Energy from Waste projects have not been incorporated into
the cash flows. The fair value less costs to dispose calculations use cash flow projections based on actual operating results,
the budget for FY25 and a five-year strategic plan adjusted for known developments and changes in information since the
plan was formulated. As these forecasts are developed using the Group’s own data, they are Level 3 inputs in the fair value
hierarchy. These inputs have been reviewed to ensure they are consistent with market participants’ inputs. CPI and GDP
growth estimates are derived from the Reserve Bank of Australia economic forecasts.
The terminal value growth rate has been based on long-term growth rates. The terminal growth rate for Solid Waste Services
was 2.5% (2023: 2.5%). The terminal growth rate for Industrial & Waste Services and Liquid Waste & Health Services remains
at 2.0% (2023: 2.0%). The discount rate has been based on the Weighted Average Cost of Capital (WACC) as determined
by an independent expert.
Forecast revenue, EBITDA and capital spend assumptions used in 30 June 2024 impairment testing have been adjusted for
known and anticipated future operational changes and additional potential risk identified since 30 June 2023. These changes
are reflected in the following summary of key assumptions table.
22
Intangible assets (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
104
The table below provides a summary of the key assumptions used in the impairment testing:
SOLID WASTE
SERVICES
INDUSTRIAL & WASTE
SERVICES
LIQUID WASTE & HEALTH
SERVICES
ASSUMPTIONS
2024
2023
2024
2023
2024
2023
EBITDA growth 1
4.3%
7.0%
8.2%
12.3%
8.3%
12.1%
EBIT growth 1
5.1%
10.3%
11.7%
13.1%
9.2%
15.5%
Capital spend rate 2
9.8%
11.9%
6.7%
9.3%
8.0%
8.6%
Terminal value growth rate
2.5%
2.5%
2.0%
2.0%
2.0%
2.0%
Post-tax discount rate
8.1%
7.9%
8.1%
7.9%
8.1%
7.9%
Pre-tax discount rate
11.5%
11.3%
11.5%
11.3%
11.5%
11.3%
1
Growth rates represent a compound annual growth rate over five years and have been calculated with 30 June 2024 underlying EBITDA and EBIT
as a base, excluding corporate overheads.
2
Reflects capital spend as a percentage of revenue, excluding government levies collected, calculated as the five-year average of forecast spend.
EBITDA growth assumptions
Solid Waste Services EBITDA growth of 4.3% (2023: 7.0%) assumes long-term GDP of 2.4% (2023: 2.0%) and CPI of 2.5%
(2023: 3.0%) across all activities. Short-term growth also considers major new commercial and municipal contract wins and
cost savings.
Industrial & Waste Services EBITDA growth of 8.2% (2023: 12.3%) assumes long-term GDP of 2.4% (2023: 2.0%) and CPI
of 2.5% (2023: 3.0%) across all activities. Short-term growth also considers new and expiring contracts and cost savings.
Liquid Waste & Health Services EBITDA growth of 8.3% (2023: 12.1%) assumes long-term GDP of 2.4% (2023: 2.0%) and
CPI of 2.5% (2023: 3.0%) across all activities. Short-term growth also considers the current economic and competitive
environment and cost savings.
Capital spend assumptions
Capital spend incorporates consideration of industry benchmarks but also reflects continued capital discipline together
with specific business requirements. The Solid Waste Services segment is the most capital-intensive part of the business
and the Industrial & Waste Services CGU is generally the least as its primary source of revenue is technical labour services.
Climate change
Climate change is an emerging risk and presents complex challenges for companies, governments and society.
Balancing the risks of climate change through enabling the development of the circular economy in Australia, Cleanaway
has the opportunity to help its customers and the broader community take advantage of the benefits of higher-circularity,
low-carbon waste management solutions.
Cleanaway understands and acts on its responsibility to identify and respond to physical and transitional climate
risks and ensures climate change adaptation, mitigation and resilience strategies are embedded in Cleanaway’s risk
management framework.
Cleanaway undertook its first assessment of climate risk and opportunities in the financial year ended 30 June 2020, and
during the current period, the Group updated its climate risk and opportunity assessment and scenario analysis, with the help
of a third-party consultant. This assessment was undertaken in alignment with the TCFD Good Practice guidelines, leveraging
specific experience at Cleanaway in combination with broader sector-based climate expertise.
Risks identified included:
• Decarbonisation of the economy leading to contraction in carbon-intensive industries and a flow through to reduced
service demand from affected sectors;
• The introduction of an explicit or implied carbon price; and
• An increase in the frequency and severity of extreme weather events.
An assessment of the physical climate risks was completed during the period. Results from the modelling suggest that while
the majority of Cleanaway sites will not be highly impacted in future years, further assessment is being undertaken in the
financial year ending 30 June 2025 to assess the impact on those sites that are forecast to experience increased exposure
to extreme rain intensity and extreme heat (above 40oC).
22
Intangible assets (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
105
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Balancing these risks are opportunities associated with the transition to a higher-circularity, low-carbon economy, such as:
• Increased regulation favouring the domestic recycling industry (e.g. container deposits schemes, government investments
into recycling infrastructure) to reduce embodied carbon emissions;
• Emergence of new waste streams and growth in low-carbon customer solutions for existing waste streams; and
• Utilisation of the inherent energy content of waste and incentives to invest in Energy-from-Waste plants.
The results of this assessment have been considered where appropriate within our impairment assessment for 30 June 2024.
Whilst Cleanaway continues to refine its understanding of climate risk and opportunity through research and scenario
analysis, certain adjustments are built into our impairment testing models, reflecting that investment is being made now
to support both physical and transition risk. This includes:
• Investment in landfill gas capture and processing to reduce our carbon emissions. For the year ended 30 June 2024, a
significant number of new wells were drilled to increase gas capture, existing well fields and supporting infrastructure
optimised for gas capture, and investment made in bringing on-line generators to produce renewable energy. Future
cash flows reflect increased investment in these activities; and
• Increased environmental and property risk controls at our sites, in particular controls to manage risk associated with high
rainfall events and fire. The increased cost of management of these risks is included in the Group’s cash flows, together
with the additional expected capital requirements.
Cleanaway is also investing in opportunities to take advantage of the benefits of transitioning to a low-carbon economy.
Future revenue opportunities arising from this investment include:
• Additional Australian Carbon Credit Units will be generated from increased landfill gas capture and other abatement
methods available under Australian legislation;
• The transition of Eastern Creek Organics, (the renamed GRL assets acquired in FY23), to a FOGO facility to capture the
opportunities in the Sydney market as councils seek to meet the State Government landfill diversion targets. Revenue
from an increased focus on resource recovery and emerging policy to incorporate recycled content in packaging,
including our investment in three plastic pelletising plants in Victoria and New South Wales; and
• Participate in collection activities related to Container Deposit schemes across mainland Australia as they evolve.
To the extent that opportunities are still in concept phase and the projects are not yet endorsed by the Board, the expected
cash flows have not been incorporated into the determination of the recoverable amount.
22
Intangible assets (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
106
Impact of possible changes in key assumptions
Any variation in the key assumptions used to determine the recoverable amount would result in a change to the estimated
recoverable amount. If variations in assumptions had a negative impact on the recoverable amount it could indicate
a requirement for some impairment of non-current assets. If variations in assumptions had a positive impact on the
recoverable amount it could indicate a requirement for a reversal of previously impaired non-current assets, with the
exception of goodwill.
Estimated reasonably possible changes (absolute numbers) in the key assumptions would have the following approximate
impact on impairment of each CGU as at 30 June 2024:
REASONABLY
POSSIBLE CHANGE
SOLID WASTE
SERVICES
$’M
INDUSTRIAL &
WASTE SERVICES
$’M
LIQUID WASTE &
HEALTH SERVICES
$’M
Decrease in CAGR% – EBITDA
2%
nil
nil
nil
Increase in capital spend rate
1%
nil
nil
nil
Decrease in terminal value growth rate
1%
nil
nil
nil
Increase in post-tax discount rate
1%
nil
nil
nil
Whilst the table above outlines management’s best estimates of key assumptions and reasonably possible changes in key
value drivers, changes in the level of business activity may also materially impact the determination of recoverable amount.
Should the regulatory and macroeconomic factors that are specific to the Australian domestic market change, this could
impact the level of activity in the market, as well as competition, and thereby affect the Group’s revenue and cost initiatives.
If conditions change unfavourably, changes in recoverable amount estimates may arise.
Each of the sensitivities above assumes that the specific assumption moves in isolation, whilst all other assumptions are held
constant. In reality, a change in one of the aforementioned assumptions may accompany a change in another assumption.
Action is also usually taken to respond to adverse changes in economic assumptions that may mitigate the impact of any
such change.
Modelling incorporating the assumptions identified in the key assumptions table provides that the recoverable amount
exceeds the carrying amount (headroom) as outlined below. The recoverable amount of the operating segment or CGUs
would equal its carrying amount if the key assumptions were to change as follows:
2024
SOLID WASTE
SERVICES
INDUSTRIAL &
WASTE SERVICES
LIQUID WASTE &
HEALTH SERVICES
Headroom $’M
420.5
139.5
381.4
Decrease in CAGR% – EBITDA 1
5.4%
3.9%
5.2%
Increase in capital spend rate 1
6.2%
1.8%
3.0%
Decrease in terminal value growth rate 1, 2
3.1%
3.7%
3.4%
Increase in post-tax discount rate 1
2.5%
2.5%
2.5%
2023
SOLID WASTE
SERVICES
INDUSTRIAL &
WASTE SERVICES
LIQUID WASTE &
HEALTH SERVICES
Headroom $’M
358.3
99.7
180.8
Decrease in CAGR% – EBITDA 1
3.6%
2.3%
2.8%
Increase in capital spend rate 1
4.4%
1.3%
1.7%
Decrease in terminal value growth rate 1, 2
2.2%
2.5%
2.2%
Increase in post-tax discount rate 1
1.8%
1.8%
1.6%
1
Percentage changes presented above represent the absolute change in the assumption value (for example post-tax discount rate increasing by 2.5% from
8.1% to 10.6%).
2
The decrease would result in a negative growth rate for all segments as they are currently modelled at 2.5% for Solid Waste Services and 2.0% for
Industrial & Waste Services and Liquid Waste & Health Services. In the comparative year, the decrease would result in a negative growth rate for Industrial
& Waste Services and Liquid Waste & Health Services as they were modelled at 2.0%.
22
Intangible assets (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
107
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Accounting Policy
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net
identifiable assets of the acquired business, subsidiary, associate or joint venture at the date of acquisition. Goodwill
on the acquisition of businesses or subsidiaries is included in intangible assets. Goodwill on acquisition of joint
ventures and associates is included in investments in joint ventures and associates. Goodwill is not amortised.
Instead, goodwill is tested for impairment annually, or more frequently if events or changes in circumstances indicate
that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the disposal
of a business include the carrying amount of goodwill relating to the business sold.
Goodwill is allocated to operating segments for the purpose of impairment testing.
Brand names
The useful lives of brands are assessed on acquisition. The brands which are not considered to have foreseeable brand
maturity dates have been assessed as having indefinite useful lives as there is a view that there is no foreseeable limit
to the period over which brands are expected to generate net cash inflows for the entity. These brands are therefore
not amortised. Instead, these brand names are tested for impairment annually, or more frequently if events or changes
in circumstances indicate that they might be impaired, and are carried at cost less accumulated impairment losses.
Research and development
Expenditure on research activities, undertaken with the prospect of gaining new technical knowledge and
understanding, is recognised in the Consolidated Income Statement as an expense as incurred.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production
of new or substantially improved products and processes, is capitalised if the product or process is technically and
commercially feasible and the Group has sufficient resources to complete development. The expenditure capitalised
includes the costs of materials, direct labour and overhead costs that are directly attributable to preparing the
asset for its intended use. Borrowing costs related to the development of qualifying assets are also capitalised.
Other development expenditure is recognised in the Consolidated Income Statement as an expense as incurred.
Capitalised development expenditure is stated at cost less accumulated amortisation and impairment losses.
Other intangible assets
Other intangible assets include customer contracts recognised on business combinations, Australian Carbon Credit
Units (ACCUs) and licences. Other intangible assets that are acquired by the Group are stated at cost less accumulated
amortisation and impairment losses. ACCUs are measured at cost, which is determined on initial recognition based
on the fair value at the time the ACCUs are generated. ACCUs are reclassified as inventory when they are expected
to be issued in the next 12 months.
Amortisation
Amortisation is charged to the Consolidated Income Statement on a straight-line basis over the estimated useful
lives of intangible assets unless such lives are indefinite (e.g. brand names). Other intangible assets are amortised
from the date they are available for use. The estimated useful lives of customer contracts are three to 10 years.
Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not amortised but are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other
assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and
value-in-use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash inflows which are largely independent of the cash inflows from other assets or groups
of assets (cash-generating units). Non-financial assets other than goodwill that previously suffered an impairment
loss are reviewed for possible reversal of the impairment loss at each subsequent reporting date.
22
Intangible assets (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
108
Critical accounting estimates and judgements – Recoverable amount of non-financial assets
Each asset or cash-generating unit (CGU) is evaluated every reporting period to determine whether there are any
indications of impairment. If any such indication exists, a formal estimate of recoverable amount is performed and
where the carrying amount exceeds the recoverable amount, an impairment loss is recognised. Goodwill and other
intangible assets with an indefinite life are tested for impairment on an annual basis, irrespective of whether there
is an indication of impairment.
The recoverable amount of each CGU is determined based on the higher of fair value less costs to dispose (FVLCD)
and value-in-use. Both of these valuations utilise a discounted cash flow approach which requires the use of
estimates and assumptions. In determining the net present value of the discounted cash flows of the CGUs, cash
flow projections are based on forecasts determined by management. The discounted cash flows of the CGUs, other
than those associated with landfill assets, are determined using five-year forecasted cash flows and a terminal value
calculation. These cash flows include estimates and assumptions related to revenue growth, capital expenditure,
terminal value growth rates, commodity prices expense profile, and costs to dispose in a FVLCD calculation.
Cash flows from the landfill assets include estimates and assumptions in relation to: waste volumes over the life
of the landfill, cell development capital expenditure, waste mix, revenue and growth, expense profile, cost of
compliance and timing of land sales.
These estimates and assumptions are subject to risk and uncertainty; such that there is a possibility that changes
in circumstances will alter these projections, which may impact the recoverable amount of the assets. In such
circumstances, some or all of the assets may be impaired, or a previous impairment charge reversed. Any potential impact
arising from an impairment or reversal of an impairment would be recorded in the Consolidated Income Statement.
23
Equity accounted investments
The Group holds a 50% interest or greater than a 50% interest in some of the following equity accounted investments but
does not have control. Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement
with the investee and has the ability to affect those returns through its power over the investee. The Group does not have
power over these entities either through management control or voting rights.
OWNERSHIP
INTEREST
CARRYING VALUE
OF INVESTMENT
NAME OF ENTITY
COUNTRY
REPORTING
DATE
2024
%
2023
%
2024
$’M
2023
$’M
Joint ventures:
Cleanaway ResourceCo RRF Pty Ltd
Australia
30 June
45
45
11.4
14.4
Circular Plastics Australia Pty Ltd
Australia
30 June
50
50
12.6
7.7
Tomra Cleanaway Pty Ltd
Australia
30 June
50
50
6.2
6.2
Tomra Cleanaway (Victoria) Pty Ltd
Australia
30 June
50
–
2.0
–
Western Sydney Energy and Resource
Recovery Centre Pty Ltd 1
Australia
30 June
51
51
9.5
9.5
Wonthaggi Recyclers Pty Ltd
Australia
30 June
50
50
0.5
0.4
Daniel Sharpsmart New Zealand Limited
New Zealand
30 June
50
50
–
–
Associates:
Circular Plastics (PET) Holdings Pty Ltd
Australia
30 June
33
33
10.4
13.4
52.6
51.6
1
Decisions regarding relevant activities of the entity require unanimous consent of owners, and as such, the Group has joint control.
22
Intangible assets (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
109
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
(a) Cleanaway ResourceCo RRF Pty Ltd
The Group has a 45% interest in Cleanaway ResourceCo RRF Pty Ltd, a resource recovery facility located at Wetherill Park
in Western Sydney. The Group’s interest in Cleanaway ResourceCo RRF Pty Ltd is accounted for using the equity method
in the Consolidated Financial Statements. Summarised financial information of the joint venture, based on its IFRS financial
statements, and reconciliation with the carrying amount of the investment in the consolidated financial statements are set
out below:
Summarised statement of financial position of Cleanaway ResourceCo RRF Pty Ltd:
2024
$’M
2023
$’M
Current assets, including cash and cash equivalents $0.8 million (2023: $1.6 million) and
prepayments $1.9 million (2023: $1.5 million)
6.1
5.7
Non-current assets
81.6
82.4
Current liabilities
(4.3)
(3.9)
Non-current liabilities, including deferred tax liabilities $0.6 million (2023: $0.6 million) and
long-term borrowings $55.8 million (2023: $49.5 million)
(58.1)
(52.2)
Equity
25.3
32.0
Group’s share in equity
11.4
14.4
Group’s carrying amount of the investment
11.4
14.4
Summarised statement of profit or loss of Cleanaway ResourceCo RRF Pty Ltd:
2024
$’M
2023
$’M
Revenue from contracts with customers
25.1
22.8
Cost of sales
(16.1)
(13.6)
Administrative expenses, including depreciation $3.2 million (2023: $3.0 million)
(11.6)
(9.9)
Finance costs, including interest expense $3.9 million (2023: $3.3 million)
(4.0)
(3.3)
Loss before tax
(6.6)
(4.0)
Income tax benefit
–
–
Loss for the year
(6.6)
(4.0)
Total comprehensive loss for the year
(6.6)
(4.0)
Group’s share of loss for the year
(3.0)
(1.8)
The joint venture had nil capital commitments as at 30 June 2024 (2023: $0.3 million). The joint venture had nil contingent
liabilities as at 30 June 2024 (2023: nil). Cleanaway ResourceCo RRF Pty Ltd cannot distribute its profits without consent
from both venture partners. The Group has assessed its investment in the joint venture for impairment at 30 June 2024 and
determined that the investment is recoverable.
23
Equity accounted investments (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
110
(b) Circular Plastics Australia Pty Ltd
The Group has a 50% interest in Circular Plastics Australia Pty Ltd, a plastics recycling plant for the processing of post-consumer HDPE
and PP located in Laverton, VIC. The Group’s interest in Circular Plastics Australia Pty Ltd is accounted for using the equity method
in the consolidated financial statements. Summarised financial information of the joint venture, based on its IFRS financial statements,
and reconciliation with the carrying amount of the investment in the consolidated financial statements are set out below:
Summarised statement of financial position of Circular Plastics Australia Pty Ltd:
2024
$’M
2023
$’M
Current assets, including cash and cash equivalents $1.8 million (2023: $1.6 million)
4.5
1.6
Non-current assets
54.8
34.6
Current liabilities
(11.1)
(2.4)
Non-current liabilities, including long-term borrowings $23.0 million (2023: $18.4 million)
(23.0)
(18.4)
Equity
25.2
15.4
Group’s share in equity
12.6
7.7
Group’s carrying amount of the investment
12.6
7.7
2024
$’M
2023
$’M
Revenue
–
–
Expenses
(0.8)
–
Loss before tax
(0.8)
–
Income tax benefit
0.3
–
Loss for the year
(0.5)
–
Total comprehensive loss for the year
(0.5)
–
Group’s share of loss for the year
(0.3)
–
The joint venture had capital commitments of $0.2 million as at 30 June 2024 (2023: $8.0 million). The joint venture had
nil contingent liabilities as at 30 June 2024 (2023: nil). Circular Plastics Australia Pty Ltd cannot distribute its profits without
the consent from both venture partners.
(c) Tomra Cleanaway Pty Ltd
The Group has a 50% interest in Tomra Cleanaway Pty Ltd, a provider of network operator services for the NSW Container
Deposit Scheme. The Group’s interest in Tomra Cleanaway Pty Ltd is accounted for using the equity method in the consolidated
financial statements. Summarised financial information of the joint venture, based on its IFRS financial statements, and
reconciliation with the carrying amount of the investment in the consolidated financial statements are set out below:
Summarised statement of financial position of Tomra Cleanaway Pty Ltd:
2024
$’M
2023
$’M
Current assets, including cash and cash equivalents $33.0 million (2023: $30.2 million)
and prepayments $0.5 million (2023: $0.5 million)
43.2
37.2
Non-current assets
0.1
0.1
Current liabilities
(30.9)
(24.9)
Equity
12.4
12.4
Group’s share in equity
6.2
6.2
Group’s carrying amount of the investment
6.2
6.2
23
Equity accounted investments (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
111
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Summarised statement of profit or loss of Tomra Cleanaway Pty Ltd:
2024
$’M
2023
$’M
Revenue
245.0
218.4
Expenses
(245.0)
(216.2)
Profit before tax
–
2.2
Income tax expense
–
(0.7)
Profit for the year
–
1.5
Total comprehensive profit for the year
–
1.5
Group’s share of profit for the year
–
0.8
The joint venture had nil contingent liabilities or capital commitments as at 30 June 2024 (2023: nil). Tomra Cleanaway
Pty Ltd cannot distribute its profits without the consent from both venture partners.
(d) Tomra Cleanaway (Victoria) Pty Ltd
The Group has a 50% interest in Tomra Cleanaway (Victoria) Pty Ltd, a provider of network operator services for the
Victorian Container Deposit Scheme, which commenced in November 2023. The Group’s interest in Tomra Cleanaway
(Victoria) Pty Ltd is accounted for using the equity method in the consolidated financial statements. Summarised financial
information of the joint venture, based on its IFRS financial statements, and reconciliation with the carrying amount of the
investment in the consolidated financial statements are set out below:
Summarised statement of financial position of Tomra Cleanaway (Victoria) Pty Ltd:
2024
$’M
2023
$’M
Current assets, including cash and cash equivalents $4.2 million (2023: nil)
10.1
–
Non-current assets
2.7
–
Current liabilities
(4.4)
–
Non-current liabilities, including long-term borrowings $4.4 million (2023: nil)
(4.4)
–
Equity
4.0
–
Group’s share in equity
2.0
–
Group’s carrying amount of the investment
2.0
–
Summarised statement of profit or loss of Tomra Cleanaway (Victoria) Pty Ltd:
2024
$’M
2023
$’M
Revenue
36.3
–
Expenses
(36.7)
–
Loss before tax
(0.4)
–
Income tax benefit
0.1
–
Loss for the year
(0.3)
–
Total comprehensive loss for the year
(0.3)
–
Group’s share of loss for the year
(0.2)
–
The joint venture had nil contingent liabilities or capital commitments as at 30 June 2024 (2023: nil). Tomra Cleanaway
Pty Ltd cannot distribute its profits without the consent from both venture partners.
23
Equity accounted investments (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
112
(e) Western Sydney Energy and Resource Recovery Centre Pty Ltd
The Group has a 51% interest in Western Sydney Energy and Resource Recovery Centre Pty Ltd, an entity which holds the
investment in the energy-from-waste project in Western Sydney. The non-current assets held by the joint venture reflect the
cost of property purchased and located in Eastern Creek, Western Sydney. The Group’s interest in Western Sydney Energy
and Resource Recovery Centre Pty Ltd is accounted for using the equity method in the consolidated financial statements.
Summarised financial information of the joint venture, based on its financial statements, and reconciliation with the carrying
amount of the investment in the consolidated financial statements are set out below:
Summarised statement of financial position of Western Sydney Energy and Resource Recovery Centre Pty Ltd:
2024
$’M
2023
$’M
Current assets, including cash and cash equivalents $0.1 million (2023: $0.1 million)
0.1
0.1
Non-current assets
18.6
18.6
Equity
18.7
18.7
Group’s share in equity
9.5
9.5
Group’s carrying amount of the investment
9.5
9.5
The joint venture had nil contingent liabilities or capital commitments as at 30 June 2024 (2023: nil). Western Sydney Energy
and Resource Recovery Centre Pty Ltd cannot distribute its profits without consent from both venture partners.
(f) Other joint ventures (disclosed in aggregate)
Summarised statement of profit or loss of all other joint ventures:
2024
$’M
2023
$’M
Profit for the year
2.0
1.8
Total comprehensive income for the year
2.0
1.8
Group’s share of profit for the year
1.0
0.9
(g) Circular Plastics (PET) Holdings Pty Ltd
The Group has a 33% interest in Circular Plastics (PET) Holdings Pty Ltd, which constructed PET recycling facilities in Albury,
NSW and Altona North, VIC. The Altona North facility commenced operations during the period. The Group’s interest in
Circular Plastics (PET) Holdings Pty Ltd is accounted for using the equity method in the consolidated financial statements.
Summarised financial information of the associate, based on its financial statements, and reconciliation with the carrying
amount of the investment in the consolidated financial statements are set out below:
Summarised statement of financial position of Circular Plastics (PET) Holdings Pty Ltd:
2024
$’M
2023
$’M
Current assets
15.3
9.6
Non-current assets
113.8
98.0
Current liabilities
(44.0)
(21.1)
Non-current liabilities
(54.0)
(46.5)
Equity
31.1
40.0
Group’s share in equity
10.4
13.4
Group’s carrying amount of the investment
10.4
13.4
23
Equity accounted investments (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
113
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Summarised statement of profit or loss of Circular Plastics (PET) Holdings Pty Ltd:
2024
$’M
2023
$’M
Revenue
37.4
33.5
Expenses, including interest expense $4.8 million (2023: $2.2 million)
(53.3)
(36.1)
Loss before tax
(15.9)
(2.6)
Income tax benefit
4.9
0.8
Loss for the year
(11.0)
(1.8)
Total comprehensive loss for the year
(11.0)
(1.8)
Group’s share of loss for the year
(3.6)
(0.6)
The associate had nil capital commitments as at 30 June 2024 (2023: $9.0 million). The associate had nil contingent liabilities
as at 30 June 2024 (2023: nil). Circular Plastics (PET) Holdings Pty Ltd cannot distribute its profits without the consent from a
simple majority of associate partners. The Group has assessed its investment in the associate for impairment at 30 June
2024, and determined that the investment is recoverable.
(h) Transactions with equity accounted investments
The following table provides the total amount of transactions with equity accounted investments during the year ended
30 June 2024:
SERVICES TO EQUITY
ACCOUNTED INVESTMENTS
PURCHASES FROM EQUITY
ACCOUNTED INVESTMENTS
INTEREST REVENUE FROM EQUITY
ACCOUNTED INVESTMENTS
2024
$’M
2023
$’M
2024
$’M
2023
$’M
2024
$’M
2023
$’M
Joint ventures
124.8
93.0
0.6
0.8
1.4
1.2
Associates
5.1
9.6
–
–
0.4
0.2
129.9
102.6
0.6
0.8
1.8
1.4
TRADE AMOUNTS OWED
BY EQUITY ACCOUNTED
INVESTMENTS
TRADE AMOUNTS OWED TO
EQUITY ACCOUNTED
INVESTMENTS
LOANS TO
EQUITY ACCOUNTED
INVESTMENTS 1
2024
$’M
2023
$’M
2024
$’M
2023
$’M
2024
$’M
2023
$’M
Joint ventures
2.3
0.4
–
–
22.6
15.4
Associates
0.8
0.1
0.5
0.3
7.5
3.7
3.1
0.5
0.5
0.3
30.1
19.1
1
Loans to equity accounted investments comprise unsecured loans to: Cleanaway ResourceCo RRF Pty Ltd of $17.9 million (2023: $15.1 million) repayable
on 28 June 2029; subsidiaries of Circular Plastics Australia (PET) Holdings Pty Ltd of $7.5 million (2023: $3.7 million) repayable between 31 October
2025 and 2 March 2026; Daniels Sharpsmart New Zealand Limited of nil (2023: $0.3 million); Circular Plastics Australia Pty Ltd of $2.5 million (2023: nil)
repayable on 15 December 2026; and Tomra Cleanaway (Victoria) Pty Ltd of $2.2 million (30 June 2023: nil) repayable on 31 October 2028.
23
Equity accounted investments (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
114
Accounting Policy
Equity accounted investments are those entities over which the Group has either significant influence (associate
entities) or joint control and has rights to the net assets of the entity (joint venture entities). The Group does not
have power over these entities either through management control or voting rights. Investments in associates and
joint ventures are accounted for using the equity method of accounting and are collectively referred to as ‘equity
accounted investments’ in this report.
Under the equity method of accounting, the investments in associates and joint ventures are initially recognised
at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profits or losses of the
associate or joint venture in the Consolidated Income Statement. Dividends received from associates and joint
ventures are recognised as a reduction in the carrying amount of the investment.
Where the Group’s share of losses in an associate or joint venture equals or exceeds its interest in the associate
or joint venture, including any other unsecured long-term receivables, the Group does not recognise further losses,
unless it has incurred obligations or made payments on behalf of the associate or joint venture.
Unrealised gains on transactions with associates and joint ventures are eliminated to the extent of the Group’s
interest in the associates and joint ventures. Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred. Accounting policies of the associates and joint ventures have
been changed where necessary to ensure consistency with the policies adopted by the Group.
24
Other assets
2024
$’M
2023
$’M
Current
Prepayments
40.2
29.7
Other loans
0.1
–
Total current other assets
40.3
29.7
Non-current
Loans to equity accounted investments 1
30.1
19.1
Costs to fulfil contracts 2
9.0
7.8
Prepayments
1.6
0.8
Derivative financial instruments
0.6
–
Other loans
0.4
–
Total non-current other assets
41.7
27.7
1
The Group has assessed expected credit loss (ECL) on the loans to equity accounted investments, and based on the expected earnings to be generated
by the joint ventures, has not recognised any provisions for ECL.
2
The Group amortised $2.3 million (2023: $1.6 million) of capitalised costs to fulfil contracts during the period.
Accounting Policy
Costs to fulfil a contract
For some larger long-term contracts the Group incurs costs up front to mobilise equipment and organise the
workforce in order to commence performing under the contract. This is often the case when larger municipal
council contracts, or industrial and waste services contracts in remote areas, are entered into. In these circumstances,
the upfront costs associated with the contract are capitalised as contract costs and amortised over the term
of the contract.
23
Equity accounted investments (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
115
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
25
Employee entitlements
2024
$’M
2023
$’M
Current
Annual leave
57.8
53.3
Long service leave
29.7
26.6
Other
29.8
17.1
Total current employee entitlements
117.3
97.0
Non-current
Long service leave
11.3
10.0
Total non-current employee entitlements
11.3
10.0
During the year the Group contributed $73.4 million (2023: $60.7 million) to defined contribution plans. These contributions
are expensed as incurred.
Accounting Policy
Wages and salaries, annual leave and sick leave
Liabilities for wages and salaries, including non-monetary benefits, annual leave and vesting sick leave are recognised
in other payables and employee benefits in respect of employees’ services up to the reporting date and are measured
at the amounts expected to be paid when the liabilities are settled.
Long service leave
The liability for long service leave expected to be settled within 12 months of the reporting date is recognised
in employee benefits and is measured in accordance with the other employee benefits described above. The liability
for long service leave expected to be settled more than 12 months from the reporting date is recognised in employee
benefits and measured as the present value of expected future payments to be made in respect of services provided
by employees up to the reporting date. Consideration is given to expected future wage and salary levels, experience
of employee departures and periods of service. Expected future payments are discounted using market yields at the
reporting date on the corporate bond rate with terms to maturity and currency that match, as closely as possible,
the timing of estimated future cash outflows.
Short-Term Incentive (STI) compensation plans
A liability for employee benefits in the form of STIs is recognised in other current employee entitlements when
it is probable that STI criteria has been achieved and an amount is payable in accordance with the terms of the STI
plan. Liabilities for STIs are expected to be settled within 12 months and are measured at the amounts expected
to be paid when they are settled.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
116
26
Provisions
2024
$’M
2023
$’M
Current
Rectification provisions
21.7
42.4
Remediation provisions
73.6
66.3
Other
48.0
36.0
Total current provisions
143.3
144.7
Non-current
Rectification provisions
1.2
16.6
Remediation provisions
486.3
514.4
Other
26.1
33.3
Total non-current provisions
513.6
564.3
Included in other provisions is an amount of $16.8 million (2023: $21.4 million) in relation to workers compensation
self-insurance of the Group under the Comcare scheme. This amount is comprised of $6.8 million (2023: $8.1 million)
classified as current and $10.0 million (2023: $13.3 million) classified as non-current. The provision for workers compensation
represents the future claim payments required under the Safety, Rehabilitation and Compensation Act 1998, and associated
expenses, in respect of claims incurred from 1 July 2006, being the commencement of the self-insurance arrangements,
up to 30 June 2024. The provision has been calculated using a claim inflation rate of 3.50% (2023: 3.62%) and
a discount rate of 4.30% (2023: 4.18%). The workers compensation self-insurance provision is reassessed annually based
on actuarial advice.
The table below provides a roll forward of provisions:
RECTIFICATION
REMEDIATION
OTHER
TOTAL
2024
$’M
2023
$’M
2024
$’M
2023
$’M
2024
$’M
2023
$’M
2024
$’M
2023
$’M
Opening balance
59.0
43.2
580.7
540.8
69.3
149.0
709.0
733.0
Acquisitions of businesses 1
–
–
3.3
–
0.1
(70.4)
3.4
(70.4)
Provisions made
–
–
13.8
23.2
39.6
29.4
53.4
52.6
Provisions used
–
–
–
–
(26.2)
(36.3)
(26.2)
(36.3)
Provisions reversed
–
–
–
–
(5.0)
(1.3)
(5.0)
(1.3)
Provisions disposed
–
–
(2.2)
–
–
–
(2.2)
–
Unwinding of discount
0.1
0.4
18.0
15.1
0.3
0.3
18.4
15.8
Change in discount rate
–
(0.1)
(13.3)
(22.0)
–
(1.4)
(13.3)
(23.5)
Change in assumptions 2
(0.9)
51.0
(2.1)
56.6
(4.0)
–
(7.0)
107.6
Rectification and remediation spend
(35.3)
(35.5)
(38.3)
(33.0)
–
–
(73.6)
(68.5)
Closing balance
22.9
59.0
559.9
580.7
74.1
69.3
656.9
709.0
1
The amount of $70.4 million relates to the unfavourable contracts recognised in the acquisition of the Sydney Resource Network, which were settled
in the prior period as a result of the acquisition of GRL. Refer to note 28.
2
The change in assumptions represents changes in environmental guidelines and cost estimates.
The provision for remediation has been estimated using current expected costs. These costs have been adjusted for the
future value of the expected costs at the time of works being required. These costs have then been discounted to estimate
the required provision at a rate of 4.45% (2023: 4.18%) for landfill remediation and rectification of landfills and 4.21%
(2023: 4.12%) for industrial property remediation.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
117
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Accounting Policy
A provision is recognised in the Consolidated Balance Sheet when the Group has a present legal or constructive
obligation as a result of a past event, it is probable that an outflow of economic benefits will be required to settle
the obligation, and a reliable estimate can be made of the amount of the obligation. If the effect of the time value
of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate
that reflects current market assessments of the time value of money and, where appropriate, the risks specific
to the liability.
The costs of treating and disposing of waste collected, in accordance with government regulation, are provided
for if they have not yet been incurred.
Landfill remediation and rectification
Landfill sites are constructed to receive waste in accordance with a licence. These licences generally require that
once a landfill is full, it is left in a condition as specified by the Environmental Protection Authority (EPA) or other
government authorities and monitored for a defined period of time (usually 30 years).
Remediation occurs on an ongoing basis, as the landfill is operating, at the time the landfill closes and through
post-closure. Remediation comprises:
• The costs associated with capping landfills (covering the waste within the landfill); and
• Costs associated with remediating and monitoring the landfill in accordance with the licence
or environmental requirements.
Landfill airspace is generated through the development and construction of ‘cells’ of a site. The obligation
to remediate the landfill is triggered upon commencement of cell development. Accordingly, landfill remediation
costs are provided for when development commences and a landfill remediation asset is recognised.
The provision is stated at the present value of the future cash outflows expected to be incurred, which increases
each period due to the passage of time, and is recognised in current and non-current provisions in the Consolidated
Balance Sheet. The annual change in the net present value of the provision due to the passage of time is recognised
in the Consolidated Income Statement as a time value adjustment in net finance costs.
Due to the long-term nature of remediation obligations, changes in estimates occur over time. Any change
in the provision for future landfill site restoration and aftercare costs arising from a change in estimate of those
costs, and related to landfill sites which are still accepting waste, is recognised as an addition or reduction to the
remediation asset in the Consolidated Balance Sheet. Changes to the remediation provision once the last customer
waste is received are expensed to the Consolidated Income Statement.
Rectification provisions differ to remediation. Rectification costs must be provided for at a reporting period end when
there is an obligation to bring an asset back to the normal operating standard required under the licence and EPA
or council requirements. Rectification provisions are calculated based on the net present value of all costs expected
to rectify the site. All rectification costs are expensed to the Consolidated Income Statement.
Industrial property remediation
The Group leases and owns industrial properties and operates these sites under license and in accordance with the
requirements of the EPA or other government authorities. In addition, under lease agreements, the Group is required
to remove infrastructure placed on a site, during the tenancy, and in most cases, return the leased site to its original
condition upon entering into the lease, taking into consideration usual wear and tear on the property.
The constructive obligation to remediate industrial properties is triggered upon erecting leasehold improvements
to leased sites, or upon any event occurring which has given rise to contamination requiring remediation.
26
Provisions (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
118
Accounting Policy
The provision is stated at the present value of the future cash outflows expected to be incurred, which increases
each period due to the passage of time and is recognised in current and non-current provisions in the Consolidated
Balance Sheet. The annual change in the net present value of the provision due to the passage of time is recognised
in the Consolidated Income Statement as a time value adjustment in net finance costs.
Changes in estimates can occur over time as industrial properties are operated over a long period. Any change in the
provision related to site restoration will be adjusted against any related assets on the site. If there is no related asset,
changes to the remediation provision are recognised through the Consolidated Income Statement.
Critical accounting estimates and judgements – Provision for remediation and rectification
The Group’s remediation and rectification provisions related to landfills are calculated based on the present value of the
future cash outflows expected to be incurred to remediate landfills which will include the costs of capping the landfill
site, remediation and rectification costs and post-closure monitoring activities. The measurement of the provisions
requires significant estimates and assumptions such as: discount rate, inflation rate, assessing the requirements of the
Environment Protection Authority (EPA) or other government authorities, the timing, extent and costs of activity
required and the area of the landfill to be remediated or rectified, which is determined by volumetric aerial surveys.
These uncertainties may result in future actual expenditure differing from the amounts currently provided.
The provisions for remediation and rectification for each landfill site are periodically reviewed and updated based
on the facts and circumstances available at the time. Changes to the estimated future costs for remediating open
sites, still accepting waste, are recognised in the Consolidated Balance Sheet by adjusting both the remediation asset
and provision. For closed sites, changes to the estimated costs are recognised in the Consolidated Income Statement.
Changes to estimated costs related to rectification provisions are recognised in the Consolidated Income Statement.
The rectification provision related to the damage caused by the 2022 flood events at the New Chum landfill site
was determined by applying the most likely method to bring the landfill back into compliance. These activities have
commenced and are expected to be completed by 30 June 2025. Judgement has been applied in determining the
amount of leachate expected to be extracted from the landfill body and the method of treating and disposing of
groundwater which rose after the flood event.
Remediation and makegood provisions in relation to the Group’s owned and leased industrial properties are
reviewed periodically and updated based on facts and circumstances known at the time, applying certain
assumptions about the risk rating related to the relevant site and the timeframe of when the site may require
remediation. Changes in estimates related to removing structures on leased sites and remediating those sites are
recognised in the Consolidated Balance Sheet by adjusting the leasehold improvement asset and the remediation
provision. For closed industrial sites or where subsurface remediation is identified, changes to the estimated costs
are recognised in the Consolidated Income Statement.
Critical accounting estimates and judgements – Climate Change
The Group has considered the emerging risk of climate change in determining the remediation provisions for the
landfills. In particular, an assessment has been conducted to determine the most reliable and durable capping design.
Across most of the Group’s landfill sites conventional geosynthetic capping designs have been assumed. There has
been a move away from Phytocaps where extreme drought and rainfall events can affect the viability of the cap.
With increasing rainfall and the likelihood of extreme events, judgement is applied around remediation provisioning
for water management at site for evolving requirements, including developing storm water management plans,
ground water assessments and environmental management plans (which includes leachate management).
The Group has a range of landfill sites – some that were purchased and others that have been constructed under
ownership – each having been constructed under differing regulatory requirements that existed at that point in time.
Environmental obligations that apply to each of these sites continue to evolve. Management assess the provisions for
remediation and rectification based on known or likely outcomes at each reporting date.
26
Provisions (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
119
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
27
Other liabilities
2024
$’M
2023
$’M
Current
Deferred settlement liabilities 1
6.0
5.8
Landfill creation liability 2
27.5
28.5
Contract liabilities 3
6.2
11.8
Total current other liabilities
39.7
46.1
Non-current
Deferred settlement liabilities 1
78.6
78.7
Landfill creation liability 2
99.3
51.8
Contract liabilities 3
2.1
1.6
Total non-current other liabilities
180.0
132.1
1
Includes $84.6 million (2023: $84.5 million) relating to the acquisition of the Melbourne Regional Landfill, acquired on 28 February 2015. The deferred
consideration was recognised at the acquisition date resulting from transaction payments for site preparation and operation under the agreement
to be paid to Boral over the life of the landfill and was determined using a discount rate of 7.0%.
2
The landfill creation liability relates to the Melbourne Regional Landfill and is the amount payable to Boral in relation to airspace progressively made
available by Boral. Cleanaway pay Boral for the airspace as the airspace is consumed, however the liability arises as Cleanaway takes control of the
airspace.
3
A contract liability is the obligation to provide services to a customer for which the Group has received consideration from the customer. These liabilities
generally arise when a customer is invoiced upon delivery of a container or bin, but Cleanaway still has the obligation to pick up the container or bin
and dispose of the waste collected. Revenue for the period included $11.8 million (2023: $6.4 million) which was included in contract liabilities at the
beginning of the year.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
120
28
Business combinations
Year ended 30 June 2024
(a) Australian Eco Oils
On 21 August 2023 the Group acquired the business and assets of Australian Eco Oils Pty Ltd (AEO). Trading under the
Scanline brand, AEO collects and processes used cooking oils (UCO) to improve the quality and then sells the product
into the stockfeed and renewable fuel sectors. The AEO acquisition provides an attractive entry point into a new, adjacent
market for Cleanaway at a time when high-quality UCO is becoming an increasingly important source of feedstock in the
production of renewable fuels, including sustainable aviation fuels and renewable diesel. Details of the business combination
are provided below:
BUSINESS ACQUIRED
DATE OF ACQUISITION
DESCRIPTION OF THE BUSINESS
OPERATING SEGMENT
Australian Eco Oils
21 August 2023
Licensed processing facilities based
in New South Wales, Queensland
and Victoria
Liquid Waste & Health
Services
The final fair values of the identifiable assets and liabilities of the business combination at the date of acquisition were:
2024
$’M
Assets
Trade and other receivables
1.6
Inventories
0.3
Property, plant and equipment
7.9
Right-of-use assets
4.6
Intangibles
6.5
Other assets
0.5
21.4
Liabilities
Trade and other payables
0.4
Lease liability
4.6
Employee entitlements
0.8
Provisions
3.4
Deferred tax liabilities
2.4
11.6
Total identifiable net assets at fair value
9.8
Goodwill arising on acquisition
29.3
Purchase consideration
39.1
Goodwill acquired comprises the value of expected synergies arising from integration of the acquired business and
is non-deductible for income tax purposes.
2024
$’M
Cash paid (included in cash flows from investing activities)
(39.1)
Transaction costs of the acquisition (included in cash flows from operating activities)
(1.0)
Net cash flow on acquisition
(40.1)
From the date of acquisition to 30 June 2024, the business contributed $14.9 million of revenue and $2.0 million of profit
before tax to the Group. If the business had been acquired at the beginning of the reporting period, revenue of $17.3 million
and profit before tax of $2.3 million would have been contributed to the Group.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
121
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Year ended 30 June 2024 (continued)
(b) Citywide Waste
On 24 June 2024, it was announced that the Group had agreed to acquire the waste and recycling business and assets
(known as Citywide Waste) of Citywide Service Solutions Pty Ltd for total consideration of $110 million. At 30 June 2024,
$5.5 million was held on deposit pending certain completion terms. The acquisition included concurrently entering into
a 35-year lease for the waste transfer station at Dynon Road in West Melbourne.
Citywide Waste provides waste management services to approximately 1,500 municipal, commercial and industrial
customers in Melbourne, including Melbourne City Council. Citywide Waste also operates the Dynon Road waste transfer
station, Victoria’s second-largest waste transfer station.
As part of the transaction, Cleanaway has committed to redevelop the Dynon Road waste transfer station into a larger,
efficient, modern post collections facility. This is expected to cost approximately $35 million with an additional $10 million
contribution expected from the City of Melbourne over the first four years of Cleanaway’s ownership.
The transaction will be fully debt funded, and is subject to a range of conditions precedent including ACCC regulatory
approval. Subject to the timing of completion, the acquisition is not expected to make a significant contribution to
profitability in the year ending 30 June 2025.
28
Business combinations (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
122
28
Business combinations (continued)
Year ended 30 June 2023
Global Renewables Holdings Pty Ltd
On 31 August 2022 the Group acquired a 100% interest in Global Renewables Holdings Pty Ltd (GRL). GRL is a New South
Wales (NSW) Environmental Protection Authority (EPA) licensed, large-scale composting facility that processes approximately
220kt per annum of Sydney’s mixed household waste in Western Sydney. The acquisition of GRL accelerated Cleanaway’s
BluePrint 2030 organics strategy by providing high circularity, low-carbon solutions for ‘Red Bin’ mixed waste today and
future FOGO bin waste. In acquiring this business the unfavourable contract provision, recognised in the acquisition of the
Sydney Resource Network from Suez, was settled. Details of the business combination are provided below:
BUSINESS ACQUIRED
DATE OF ACQUISITION
DESCRIPTION OF THE BUSINESS
OPERATING SEGMENT
Global Renewables Holdings
31 August 2022
Licensed composting facility based
in Sydney, NSW
Solid Waste Services
The final fair values of the identifiable assets and liabilities of the business combination at the date of acquisition were:
2023
$’M
Assets
Cash and cash equivalents
0.9
Trade and other receivables
5.0
Tax receivable
1.6
Inventories
3.4
Property, plant and equipment
22.4
Intangible assets
10.4
Net deferred tax assets
0.1
Other assets
0.7
44.5
Liabilities
Trade and other payables
5.8
Employee entitlements
2.3
8.1
Total identifiable net assets at fair value
36.4
Goodwill arising on acquisition
60.2
Purchase consideration
96.6
Intangibles represent the value assigned to 748,367 Australian Carbon Credit Units (ACCUs). The fair value attributed
to these ACCUs represents the value a market participant with a goal of reducing carbon emissions would pay.
Goodwill acquired comprises the value of expected synergies arising from integration of the acquired business and
is non-deductible for income tax purposes.
2023
$’M
Cash paid (included in cash flows from investing activities)
(167.0)
Effective settlement of the unfavourable contract
70.4
Total purchase consideration
(96.6)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
123
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
2023
$’M
Net cash acquired (included in cash flows from investing activities)
0.9
Cash paid (included in cash flows from investing activities)
(167.0)
Transaction costs of the acquisition (included in cash flows from operating activities)
(3.4)
Net cash flow on acquisition
(169.5)
From the date of acquisition to 30 June 2023, the business contributed $2.2 million of revenue and $16.4 million to profit
before tax to the Group. If the business had been acquired at the beginning of the reporting period, revenue of $2.7 million
and profit before tax of $19.7 million would have been contributed to the Group.
Accounting Policy
Business combinations are accounted for using the acquisition method, whereby the identifiable assets, liabilities and
contingent liabilities (identifiable net assets) are measured using their fair values at the date of acquisition. Goodwill
arises in a business combination when the consideration transferred to the acquiree is greater than the net of the
acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Acquisition related costs
incurred in a business combination transaction are expensed as incurred and included within other expenses in the
Consolidated Income Statement.
28
Business combinations (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
124
29
Subsidiaries
The Group’s principal subsidiaries at 30 June 2024 are set out below:
EFFECTIVE INTEREST 4
2024
%
2023
%
Active Industrial Solutions Pty Ltd 1
100
100
AJ Baxter Pty Ltd 1
100
100
ASP Plastics Pty Limited 1
100
100
ASP Healthcare Pty Limited 1
100
100
Baxter Business Pty Ltd 1
100
100
Baxter Recyclers Pty Ltd 1
100
100
Cleanaway Co Pty Ltd 1
100
100
Cleanaway Daniels Australia Pty Ltd 1
100
100
Cleanaway Daniels FMD Pty Ltd 1
100
100
Cleanaway Daniels Laboratory Products Pty Ltd 1
100
100
Cleanaway Daniels NSW Pty Ltd 1
100
100
Cleanaway Daniels Pty Ltd 1
100
100
Cleanaway Daniels Services Pty Ltd 1
100
100
Cleanaway Daniels VIC Pty Ltd 1
100
100
Cleanaway Daniels Waste Services Pty Ltd 1
100
100
Cleanaway Daniels Wollongong Pty Ltd 1
100
100
Cleanaway Equipment Services Pty Ltd 1
100
100
Cleanaway Hygiene Pty Ltd 1
100
100
Cleanaway Industrial Solutions Pty Ltd 1
100
100
Cleanaway Industries Pty Ltd 1
100
100
Cleanaway Landfill Holdings Pty Ltd 1
100
100
Cleanaway (No. 1) Pty Ltd 1
100
100
Cleanaway Operations Pty Ltd 1
100
100
Cleanaway Organics Pty Ltd 1
100
100
Cleanaway Pty Ltd 1
100
100
Cleanaway Recycling Pty Ltd 1
100
100
Cleanaway Refiners Pty Ltd 1
100
100
Cleanaway Resource Recycling Pty Ltd 1
100
100
Cleanaway Solid Waste Pty Ltd 1
100
100
Cleanaway Superior Pak Pty Ltd 1
100
100
Cleanaway Waste Management Limited (Parent entity)
100
100
Daniels Manufacturing Australia Pty Ltd 1
100
100
Eastern Creek Operations Pty Ltd 1
100
100
Enviroguard Pty Ltd 1
100
100
Environmental Recovery Services Pty Ltd 1
100
100
Global Renewables Eastern Creek Pty Ltd 1
100
100
Global Renewables Holdings Pty Ltd 1
100
100
Grasshopper Environmental Pty Ltd 1
100
100
Landfill Land Holdings Pty Ltd 1
100
100
Landfill Operations Pty Ltd 1
100
100
Mann Waste Management Pty Ltd 1
100
100
Max T Pty Ltd
100
100
Nationwide Oil Pty Ltd 1
100
100
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
125
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
EFFECTIVE INTEREST 4
2024
%
2023
%
NQ Resource Recovery Pty Ltd 1
100
100
Oil and Fuel Salvaging (Queensland) Pty Ltd 1
100
100
Pilbara Environmental Services Pty Ltd 2
50
50
Pilbara Logistics Pty Ltd 1
100
100
PT Environmental Services Pty Ltd 1
100
100
Rubus Holdings Pty Ltd 1
100
100
Rubus Intermediate One Pty Ltd 1
100
100
Rubus Intermediate Two Pty Ltd 1
100
100
RWS Admin Pty Ltd 3
100
–
Sterihealth Sharpsmart Pty Ltd 1
100
100
T Environmental Services Pty Ltd
100
100
Transpacific Baxter Pty Ltd 1
100
100
Transpacific Cleanaway Holdings Pty Ltd 1
100
100
Transpacific Co Pty Ltd 1
100
100
Transpacific Environmental Services Pty Ltd 1
100
100
Transpacific Innovations Pty Ltd 1
100
100
Transpacific Paramount Service Pty Ltd
100
100
Transpacific Resources Pty Ltd 1
100
100
Transwaste Technologies Pty Ltd 1
100
100
Transwaste Technologies (1) Pty Ltd 1
100
100
Waste Management Pacific (SA) Pty Ltd 1
100
100
Waste Management Pacific Pty Ltd 1
100
100
1
These subsidiaries are parties to a Deed of Cross Guarantee with Cleanaway Waste Management Limited created on 25 June 2018 pursuant
to ASIC Class Order 2016/785 and are relieved from the requirement to prepare and lodge an audited Financial Report. Refer to note 30 for the
Consolidated Statement of Profit or Loss and Other Comprehensive Income and Consolidated Balance Sheet of the entities who are a party to the
Deed of Cross Guarantee.
2
Control is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect
those returns through its power over the investee. As subsidiaries, the Group has power over the investees through management control and the
casting vote. The Group has the capacity to dominate decision making in relation to the relevant activities so as to enable those entities to operate
as part of the Group in pursuing its objectives.
3
The entity was reinstated on 19 February 2024.
4
All entities were incorporated in Australia.
Accounting Policy
The Consolidated Financial Statements comprise the financial statements of the Group and its subsidiaries. Control
is achieved when the Group is exposed, or has rights, to variable returns from its involvement with the investee and
has the ability to affect those returns through its power over the investee.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant
facts and circumstances in assessing whether it has power over an investee, including:
• The contractual arrangement with the other vote holders of the investee;
• Rights arising from the contractual arrangements; and
• The Group’s voting rights and potential voting rights.
The Group reassesses whether or not it controls an investee if facts and circumstances indicate that there are changes
to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control
over the subsidiary and ceases when the Group loses control of the subsidiary.
29
Subsidiaries (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
126
Accounting Policy
Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included
in the Consolidated Income Statement from the date the Group gains control until the date when the Group
ceases to control the subsidiary.
All intra-group balances, transactions and unrealised gains and losses resulting from intra-group transactions
are eliminated in full.
Non-controlling interests represent the portion of profit or loss and net assets not held by the Group and are
presented separately in the Consolidated Income Statement and within equity in the Consolidated Balance Sheet,
separately from parent shareholders’ equity.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities,
non-controlling interest and other components of equity, while any resultant gain or loss is recognised in the
Consolidated Income Statement. Any investment retained is recognised at fair value.
30
Deed of Cross Guarantee
The Consolidated Statement of Profit or Loss and Other Comprehensive Income and the Consolidated Balance Sheet of the
entities who are a party to the Deed of Cross Guarantee are set out below:
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
2024
$’M
2023
$’M
Revenue
3,688.4
3,504.6
Other income
21.7
19.6
Labour related expenses
(1,294.6)
(1,183.3)
Collection, recycling and waste disposal expenses
(1,074.6)
(1,151.1)
Fleet operating expenses
(399.0)
(380.2)
Property expenses
(71.2)
(64.5)
Other expenses
(156.2)
(205.1)
Share of losses from equity accounted investments
(6.1)
(0.7)
Depreciation and amortisation expense
(368.3)
(363.3)
Write-off of assets
(2.0)
(51.3)
Profit from operations
338.1
124.7
Net finance costs
(115.7)
(96.2)
Profit before income tax
222.4
28.5
Income tax expense
(66.3)
(8.0)
Profit after income tax
156.1
20.5
Other comprehensive income
Net fair value loss on derivative financial instruments (net of tax)
(0.6)
(1.5)
Net comprehensive loss recognised directly in equity
(0.6)
(1.5)
Total comprehensive income for the year
155.5
19.0
Refer to note 29 for details of subsidiaries who are a party to the Deed of Cross Guarantee.
29
Subsidiaries (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
127
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
BALANCE SHEET
2024
$’M
2023
$’M
Assets
Current assets
Cash and cash equivalents
116.5
99.1
Trade and other receivables
541.3
541.7
Inventories
58.2
31.2
Other assets
39.5
29.2
Total current assets
755.5
701.2
Non-current assets
Property, plant and equipment
1,776.6
1,577.6
Right-of-use assets
611.1
609.4
Intangible assets
3,067.9
3,072.5
Equity accounted investments
52.6
51.6
Net deferred tax assets
45.7
19.5
Other assets
42.3
46.3
Total non-current assets
5,596.2
5,376.9
Total assets
6,351.7
6,078.1
Liabilities
Current liabilities
Trade and other payables
486.8
489.1
Income tax payable
94.7
3.3
Lease liabilities
110.4
98.4
Employee entitlements
116.8
97.0
Provisions
143.3
144.7
Other liabilities
39.7
46.1
Total current liabilities
991.7
878.6
Non-current liabilities
Borrowings
1,081.5
950.4
Lease liabilities
540.0
540.3
Derivative financial instruments
45.1
46.1
Employee entitlements
11.3
10.0
Provisions
513.6
564.3
Other liabilities
178.0
153.3
Total non-current liabilities
2,369.5
2,264.4
Total liabilities
3,361.2
3,143.0
Net assets
2,990.5
2,935.1
Equity
Issued capital
3,106.8
3,101.8
Reserves
37.4
34.0
Retained earnings
(153.7)
(200.7)
Total equity
2,990.5
2,935.1
The effect of the deed is that all subsidiaries that are parties to the deed have guaranteed to pay any deficiency in the
event of winding up of any subsidiary that is a party to the deed or if they do not meet their obligations under the terms
of overdrafts, loans, leases or other liabilities subject to the guarantee.
30
Deed of Cross Guarantee (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
128
31
Parent entity
2024
$’M
2023
$’M
Current assets
0.9
0.1
Total assets
4,494.9
4,356.2
Current liabilities
100.1
10.0
Total liabilities
1,239.5
1,020.5
Issued capital
3,106.8
3,101.8
Retained earnings
110.8
199.5
Reserves
37.8
34.4
Total equity
3,255.4
3,335.7
Profit for the period
20.4
72.7
Total comprehensive income for the period
19.8
71.2
The parent entity guarantees the contractual commitments of its subsidiaries as requested.
32
Financial risk management
The Group is exposed to market risk, credit risk and liquidity risk. The Group has in place a Treasury Policy that focuses
on managing these risks. The policy is reviewed by the Audit and Risk Committee and approved by the Board. Treasury
activities are reported to the Audit and Risk Committee and Board on a regular basis, with the ultimate responsibility being
borne by the Chief Financial Officer (CFO).
The Group’s overall financial risk management focuses on mitigating the potential financial effects to the Group’s financial
performance. The Group also enters into derivative transactions to manage the interest rate and currency risks arising from
the Group’s operations and its sources of finance. It is the Group’s policy that no speculative trading in financial instruments
shall be undertaken.
(a) Market risk
Market risk is the risk that the fair value of future cash flows will fluctuate because of changes in market prices. Market risk
includes foreign currency risk, interest rate risk and commodity price risk.
Foreign currency risk
Foreign currency risk arises as a result of having assets and liabilities denominated in a currency that is not the Group’s
functional currency (balance sheet risk) or from transactions or cash flows denominated in a foreign currency (cash flow risk).
The Group holds cross-currency interest rate swaps (CCIRS) to protect against USD interest rate and currency exposures
in relation to USD denominated USPP Notes. The Group does not have any other material foreign currency risk exposures.
Interest rate risk
Interest rate risk is the risk that the fair value of the financial instrument or cash flows associated with the instrument will
fluctuate due to changes in market interest rates. The Group’s exposures primarily relate to its exposure to variable interest
rates on borrowings and fair value changes relating to USD denominated borrowings.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
129
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
At the reporting date the interest rate profile of the Group’s interest-bearing financial instruments was:
2024
2023
WEIGHTED
AVERAGE
INTEREST RATE
%
BALANCE
$’M
WEIGHTED
AVERAGE
INTEREST RATE
%
BALANCE
$’M
Fixed rate instruments
Clean Energy Finance Corporation (CEFC) term loan
2.1
87.6
2.1
85.5
Lease liabilities
4.2
650.4
3.6
638.7
Bank loans 1
3.9
100.0
–
–
838.0
724.2
Variable rate instruments
Bank loans 1
5.7
542.9
5.3
516.6
USPP Notes 2
6.0
351.0
5.5
348.3
893.9
864.9
1
At 30 June 2024, the Group held IRS to protect against interest rate in relation to floating rate borrowings. The IRS economically transform the variable
rate debt into fixed rate debt. Under the terms of the IRS the weighted average fixed rate of 3.92% is paid against one-month BBSY rate monthly on a
notional principal of A$100.0 million.
2
At 30 June 2024, the Group held CCIRS to protect against USD interest rate and currency exposures in relation to USD denominated USPP Notes.
The CCIRS economically transform the fixed rate USD denominated debt into variable rate AUD denominated debt. Under the terms of the CCIRS the
variable three-month Bank Bill Swap Rate plus a weighted average margin of 1.61% (2023: 1.61%) is applied against a fixed principal balance of A$397.6
million and is paid quarterly to the bank counterparties in AUD and fixed semi-annual amounts in USD are received equal to meet the interest payments
due to the USPP Noteholders. The principal amounts of US$270.0 million (2023: US$270.0 million) are also exchanged at drawdown and maturity for
A$397.6 million (2023: A$397.6 million) under the terms of the CCIRS. The maturity dates and principal amounts are equal to the USPP Notes (refer to
financing facilities in note 15).
The carrying amount of the Group’s AUD fixed rate borrowings, carried at amortised cost, is not impacted due to interest
rate movements; neither will future cash flows fluctuate due to a change in market interest rates.
An analysis of interest rates over the 12-month period was performed to determine the impact of a change in interest rates
on the variable rate borrowings. A change of 100 basis points in interest rates, based on borrowings at the reporting date,
would have decreased/increased net finance costs by an estimated $9.4 million (2023: $8.7 million).
Commodity price risk
The Group is exposed to market prices of various commodities. The primary sources of the Group’s exposures are paper,
cardboard, plastics and glass from its recycling and manufacturing activities; oil and oil-derived products used as inputs in its
Group operations and sold through its hydrocarbons business; and electricity and carbon used in Group operations and sold
through its landfill operations.
Commodity price risk exposures are actively managed and coordinated through centralised commodity trading desks, who
focus on maintaining and developing strategies to mitigate market volatility and capture value chain margins. This includes
diversifying access across domestic and international markets; and deploying spot medium and long-term market linked
purchase and sales contracts to net-off exposures and transfer market risk to counterparties. Additionally, quality risk is
managed through technology investments and process improvements to optimise premiums received, and inventories and
supply chain risk are controlled vertically at all pricing points throughout the value chain, from collections and production
to downstream processing investments. The Group does not currently use derivative products to hedge its commodity price
exposures.
Market risks are also measured and managed at the Group level where there are offsetting exposures. An example of which
is where as oil-derived products and carbon purchase commitments are offset against production and sales activity in the
associated commodities.
Under the Recycling Waste & Reduction Act 2020, Federal Government export bans and licensing have been introduced
progressively from 2021 to 2024 across recycled glass, plastics and fibre exports, improving the quality of licensed exports
and increasing the amount of waste material that is recycled and processed into value added products in Australia. All
levels of Government have been committed to supporting the waste industry through this transformation involving various
initiatives, including making available direct grants of which Cleanaway has been a beneficiary. Cleanaway has transitioned
through this period to ensure that all effected recycled commodities have optimal domestic or licensed export outcomes, to
align with our commodity risk management strategy.
32
Financial risk management (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
130
(b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet
contractual obligations, with the maximum exposure being equal to the gross carrying amount of these instruments.
Management has a credit policy in place and exposure to credit risk is monitored on an ongoing basis. Credit evaluations
are performed on all customers requiring credit over a certain amount. The Group does not require collateral in respect
of financial assets. For certain export sales, the Group requires the vendor to provide a letter of credit from its bank.
The Group minimises concentrations of credit risk by undertaking transactions with a large number of customers. In addition,
receivable balances are monitored on an ongoing basis with the objective that the Group’s exposure to expected credit losses
is minimised.
Credit risk on foreign exchange contracts, including cross-currency interest rate swaps (CCIRS), is mitigated as counterparties
are large Australian and international banks with acceptable credit ratings determined by a recognised ratings agency.
Credit risk from cash balances, undrawn finance facilities and other financial instruments with banks and financial institutions
is managed by the Group in accordance with the Group’s Treasury Policy which permits only dealing with large reputable
financial institutions.
The Group’s maximum exposure to credit risk at the reporting date was:
CARRYING AMOUNT
NOTE
2024
$’M
2023
$’M
Cash at bank and on hand
11
120.6
102.1
Trade and other receivables 1
12
557.3
551.7
Other financial assets 2
30.6
19.1
708.5
672.9
1
Refer to note 12 for an analysis of credit risk and impairment associated with the Group’s trade receivables balance.
2
Refer to note 24 for an assessment of credit risk and impairment associated with the loans to equity accounted investments.
(c) Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group’s
objective is that it has access to sufficient cash resources to meet its financial obligations as they fall due, including taxes and
dividends, and to provide funds for capital expenditure and investment opportunities as they arise.
The Group regularly reviews existing funding arrangements and assesses future funding requirements based upon known
and forecast information. The Group’s liquidity position is reported to the Board on a monthly basis.
The Group’s unutilised committed debt facilities at 30 June 2024 is $276.4 million (2023: $504.5 million) as set out in note
15. The current portion of the Group’s borrowings at 30 June 2024 is nil (2023: nil). The Group considers liquidity risk to be
mitigated due to the level of unutilised facilities available, the level of headroom in each covenant measure and the maturity
profile of existing facilities.
32
Financial risk management (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
131
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
The following table discloses the contractual maturities of financial liabilities and derivative financial instruments,
including estimated interest payments and excluding the impact of netting agreements:
2024
< 1 YEAR
$’M
1–2 YEARS
$’M
2–5 YEARS
$’M
> 5 YEARS
$’M
CONTRACTUAL
CASH FLOWS
$’M
CARRYING
AMOUNT
$’M
Non-derivatives
Unsecured borrowings
57.0
145.3
976.7
286.1
1,465.1
1,081.5
Lease liabilities 1
117.0
114.8
231.4
168.0
631.2
650.4
Trade and other payables
494.6
–
–
–
494.6
494.6
Other financial liabilities
33.5
34.4
101.8
162.8
332.5
211.4
Total
702.1
294.5
1,309.9
616.9
2,923.4
2,437.9
Derivatives
Cross-currency interest rate swaps
inflow
23.7
23.7
194.2
293.2
534.8
n/a
(outflow)
(11.8)
(11.8)
(166.8)
(286.2)
(476.6)
n/a
Interest rate swaps
inflow
4.3
2.5
–
–
6.8
n/a
(outflow)
(3.9)
(2.3)
–
–
(6.2)
n/a
Total
12.3
12.1
27.4
7.0
58.8
(44.5)
2023
< 1 YEAR
$’M
1–2 YEARS
$’M
2–5 YEARS
$’M
> 5 YEARS
$’M
CONTRACTUAL
CASH FLOWS
$’M
CARRYING
AMOUNT
$’M
Non-derivatives
Unsecured borrowings
47.0
532.9
393.7
294.3
1,267.9
950.4
Lease liabilities 1
105.8
94.3
228.2
197.6
625.9
638.7
Trade and other payables
495.3
–
–
–
495.3
495.3
Other financial liabilities
34.2
37.2
44.5
167.8
283.7
164.8
Total
682.3
664.4
666.4
659.7
2,672.8
2,249.2
Derivatives
Cross-currency interest rate swaps
inflow
22.0
21.7
196.2
305.6
545.5
n/a
(outflow)
(11.8)
(11.8)
(170.5)
(294.3)
(488.4)
n/a
Total
10.2
9.9
25.7
11.3
57.1
(46.1)
1
The contractual commitments of lease liabilities excludes extension options which are reasonably certain to occur but are not contractually committed.
If these extension options were included it would increase the future commitments by $233.1 million (2023: $240.6 million). The Group has committed
to future cash outflows of $0.1 million (2023: $11.0 million) relating to leases that have not yet commenced. No lease liabilities or right-of-use assets
have been recognised in relation to these leases at 30 June 2024 (2023: nil).
The Group has bank guarantees and insurance bonds in place in respect of its contractual performance related obligations.
These guarantees and indemnities only give rise to a liability where the Group fails to perform its contractual obligations.
In the event that the Group does not meet its contractual obligations, these bank guarantees and insurance bonds are
callable and the Group becomes liable to repay amounts paid by the bank or insurer. Refer to note 34(b) for details of the
Group’s bank guarantees and insurance bonds.
32
Financial risk management (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
132
(d) Fair value measurement and hedges
The following table provides the fair value measurement of the Group’s financial instruments which have been valued using
market observable inputs (level 2), including interest and foreign currency rates and models using present value and future
potential exposure calculations where applicable:
FIXED RATE BORROWINGS MEASURED
AT AMORTISED COST
DERIVATIVES MEASURED
AT FAIR VALUE
2024
CLEAN ENERGY
FINANCE
CORPORATION
$’M
USPP NOTES
(HEDGED ITEMS)
$’M
CCIRS 1
(HEDGING
INSTRUMENTS)
$’M
IRS 2
(HEDGING
INSTRUMENTS)
$'M
Opening fair value of liability as at 1 July 2023
(83.7)
(351.2)
(46.1)
–
Amortisation of fair value loss on recognition
–
–
0.2
–
Movement relating to changes in AUD or USD interest rates
Fair value hedges
–
(2.4)
1.9
–
Cash flow hedges
–
–
–
0.6
Other
(3.1)
–
(0.1)
–
Movement relating to change in AUD/USD exchange rates
Cash flow hedges
–
0.1
0.5
–
Movement relating to change in AUD/USD currency basis
–
–
(1.5)
–
Closing fair value of (liability)/asset as at 30 June 2024
(86.8)
(353.5)
(45.1)
0.6
Carrying amount of liability as at 30 June 2024
(87.6)
(351.0)
(45.1)
0.6
Accumulated fair value adjustments on the hedged items
–
44.1
n/a
–
FIXED RATE BORROWINGS MEASURED
AT AMORTISED COST
DERIVATIVES MEASURED
AT FAIR VALUE
2023
CLEAN ENERGY
FINANCE
CORPORATION
$’M
USPP NOTES
(HEDGED ITEMS)
$’M
CCIRS 1
(HEDGING
INSTRUMENTS)
$’M
IRS 2
(HEDGING
INSTRUMENTS)
$'M
Opening fair value of liability as at 1 July 2022
(83.5)
(355.3)
(39.3)
–
Amortisation of fair value loss on recognition
–
–
0.3
–
Movement relating to changes in AUD or USD interest rates
Fair value hedges
–
17.9
(19.3)
–
Other
(0.2)
–
0.1
–
Movement relating to change in AUD/USD exchange rates
Cash flow hedges
–
(13.8)
14.2
–
Movement relating to change in AUD/USD currency basis
–
–
(2.1)
–
Closing fair value of liability as at 30 June 2023
(83.7)
(351.2)
(46.1)
–
Carrying amount of liability as at 30 June 2023
(85.5)
(348.3)
(46.1)
–
Accumulated fair value adjustments on the hedged items
–
46.4
n/a
–
1
Fair value hedge movements of $1.9 million (2023: ($19.3) million) includes an effective portion of $2.4 million (2023: ($17.9) million) and an ineffective
portion of ($0.5) million (2023: ($1.4) million). Cash flow hedge movements of $0.5 million (2023: $14.2 million) includes an effective portion of ($0.1)
million (2023: $13.8 million) and an ineffective portion of $0.6 million (2023: $0.4 million). The notional amount of the derivatives are US$270.0
million/$397.6 million.
2
Interest Rate Swaps (IRS) fair value movements of $0.6 million (2023: nil) for cash flow hedges includes an effective portion of $0.6 million (2023: nil)
and an ineffective portion of nil (2023: nil). The notional amount of the IRS is $100.0 million (2023: nil), swapping floating rate interest exposure on this
notional amount to fixed rate interest.
32
Financial risk management (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
133
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
The cross-currency interest rate swaps (CCIRS) and interest rates swaps (IRS) are hedging instruments in designated fair value
and cash flow hedging relationships. The hedging relationships are expected to remain effective as:
• There is an economic relationship between each hedged item and hedging instrument where the fair value of the
hedged item and the hedging instrument substantially offset each other. This economic relationship is assessed
on a qualitative basis by comparing the critical terms of the hedge items with the hedge instruments. These critical terms
are contracted and expected to remain unchanged for the term of all hedged items and matching hedging instruments;
•
The effect of credit risk does not dominate the value changes that result from the economic relationship. The Group expects
counterparties, and likewise itself, to maintain high creditworthiness over the period of the economic relationship; and
• The hedge ratio of each hedging relationship is maintained at a ratio of 1:1. The 1:1 ratio is determined by allocating
all amounts of the hedged items to notional amounts of hedging instruments with matching terms and vice versa.
The main source of ineffectiveness expected in the hedging relationships relates to credit and debit adjustments (CVA/DVA)
which reflect changes to future potential exposures and the credit risk of the counterparties as well as the credit risk of the Group.
The hedged items in the fair value hedges are the US$270.0 million USPP Notes and the hedged risk reflects movements
in fair value relating to changes in USD interest rates, excluding credit margins. The fair value movements in the fair value
hedges are recorded in net finance costs in the Consolidated Income Statement.
The hedged items in the CCIRS cash flow hedges are the US$270.0 million USPP Notes and the hedged risk is variability in
expected payments relating to changes in the AUD/USD exchange rates. The hedged item in the IRS cash flow hedges is $100.0
million of floating rate borrowings and the hedged risk is variability in expected payments relating to changes in AUD interest
rates. The effective portion of the cash flow hedge fair value movements relating to the CCIRS and IRS is recognised in the hedge
reserve through other comprehensive income. Effective amounts accumulated in the hedge reserve relating to the cash flow
hedges are reclassified through other comprehensive income to net finance costs in the same period that the cash flow hedge
fair value movements relating to the USPP Notes are recorded in net finance costs in the Consolidated Income Statement. Any
ineffective portion relating to the cash flow hedges is recorded directly in net finance costs in the Consolidated Income Statement.
The fair value movements of the CCIRS relating to changes in AUD/USD currency basis are excluded from the hedging
relationships and recognised in the hedge reserve through other comprehensive income.
Refer to note 8 for amounts recorded in net finance costs and note 17(a) for amounts recognised in the hedge reserve.
Accounting Policy
The Group measures certain assets and liabilities at fair value at each balance sheet date.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction
between market participants at the measurement date. The fair value measurement is based on the presumption
that the transaction to sell the asset or transfer the liability takes place either:
• In the principle market for the asset or liability, or
• In the absence of a principle market, in the most advantageous market for the asset or liability.
The principle or the most advantageous market must be accessible by the Group.
The fair value of an asset or liability is measured using the assumptions that the market participants act in their
economic best interest. A fair value measurement of non-financial assets takes into account a market participant’s
ability to generate economic benefits by using the asset in its highest and best use.
The Group uses the following valuation techniques that are appropriate in the circumstances and for which sufficient
data is available to measure fair value, maximising the use of relevant observable inputs and minimising the use
of unobservable inputs:
• Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities;
• Level 2 – Valuation techniques for which the lowest level input that is significant to the fair value measurement
is directly or indirectly observable; and
• Level 3 – Valuation techniques for which the lowest level input that is significant to the fair value measurement
is unobservable.
Foreign currency transactions are translated at the foreign exchange rate ruling at the date of the transaction.
Monetary assets and liabilities denominated in foreign currencies at the reporting date are translated into Australian
dollars at the foreign exchange rate ruling at that date. Foreign exchange differences arising on translation are
recognised in the Consolidated Income Statement and are reported on a net basis. Non-monetary assets and
liabilities that are measured in terms of historical cost in a foreign currency are translated using the exchange rate
at the date of the transaction.
32
Financial risk management (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
134
33
Contingent liabilities
On 18 August 2014, a Cleanaway vehicle was involved in a motor vehicle accident on the South Eastern Freeway
in Glen Osmond, South Australia. The incident resulted in the death of two members of the public, and two other persons
were seriously injured. During the year ended 30 June 2017, Cleanaway was charged with work health and safety offences
in relation to the incident. Cleanaway was found guilty of these health and safety offences in April 2021 but this decision
was appealed to the South Australian Supreme Court and was partly successful, with six of the eight charges being set aside.
A further appeal to the full bench of the South Australian Supreme Court with respect to the two outstanding charges has
been made by Cleanaway. The appeal was heard in November 2022 and Cleanaway is still awaiting the appeal judgement.
There is a potential that other claims may emerge in due course and the extent of Cleanaway’s liability and the timing for
these matters to be resolved is not known at this time.
On 11 September 2020, the Victorian Environment Protection Authority (EPA) issued an invoice to the Group in the amount
of $6.9 million for an alleged underpayment of the landfill levy payable for financial year ended 30 June 2018. The alleged
underpayment related to materials purchased from the adjacent Boral quarry. The Boral material was used by Cleanaway at
its Melbourne Regional Landfill as daily cover during financial year ended 30 June 2018. The EPA’s position is that the landfill
levy is payable in respect of the Boral material as it was ‘waste’ within the meaning of the Environment Protection Act 1970.
Cleanaway does not agree that this material was ‘waste’ as the material was purchased from Boral and used in its landfilling
operations. On 16 August 2021, the EPA commenced proceedings in the Magistrates’ Court of Victoria seeking recovery
of the $6.9 million plus interest and costs (the Proceedings). The Proceedings have been moved to the Supreme Court and
Cleanaway is still awaiting a court date (expected to be set at the next directions hearing in September 2024). On 2 February
2022, the EPA issued an invoice to the Group for $4.7 million in relation to an alleged underpayment of the landfill levy for
financial year ended 30 June 2019. The alleged underpayment also relates to material Cleanaway purchased from Boral for
use as cover material. Cleanaway’s position is that the material is not waste and as such, does not attract the landfill levy.
For the financial years ended 30 June 2020 and 2021, no levy underpayments by Cleanaway were recorded. For the financial
year ended 30 June 2022, the EPA has undertaken an audit and has indicated that there is an underpayment of levy in the
amount of $7.2 million. Cleanaway has disputed the auditor’s findings and discussions have commenced with the EPA. No
invoice has been issued as yet. The Group’s arguments to avoid payment of landfill levy for the year ended 30 June 2022 are
the same arguments that apply for the years ended 30 June 2018 and 2019, and are similar to those that were accepted by
the EPA in relation to the assessment of landfill levies for the years ended 30 June 2020 and 2021.
Consistent with disclosure in the prior period, ongoing assessments continue of any potential remediation obligations related
to environmental contamination that pre-dated the Group’s acquisition of sites acquired in December 2021 from Suez Group
(S.A.S) and Suez International (S.A.S), which formed part of the Sydney Resource Network assets. The Group maintains
that there remains no present remediation obligations on Cleanaway in relation to such contamination and any such future
obligation is remote.
Management is reviewing a possible compliance matter relating to employee entitlements (including superannuation)
covering certain depots in Northern New South Wales. Cleanaway’s enterprise bargaining and employee contract
environment is complex, and should a compliance matter be identified, the Group is committed to rectifying the issue
and, to the extent there has been any underpayment, compensating impacted employees as a matter of priority. Potential
underpayments identified to date are not significant to the Financial Report, however a comprehensive review remains in
progress. In addition to this, a detailed review of the application of the terms of the relevant Enterprise Agreements has
commenced, including independent expert advice. Cleanaway also intends undertaking additional reviews of its compliance
with other industrial instruments which apply across its broader operations. As at year end and the date of this report, any
material obligation and likelihood of payment is yet to be determined.
Certain companies within the Group are party to various legal actions, commercial disputes and/or negotiations that arise
in the normal course of business including with customers, suppliers and/or regulators. As at year end and the date of this
report, it is expected that any liabilities or assets arising from these matters would not have a material effect on the Group.
Critical accounting estimates and judgements – Contingent liabilities
Contingent liabilities are possible obligations whose existence will be confirmed only by the occurrence or non-
occurrence of uncertain future events outside Cleanaway’s control. They may also be present obligations arising
from past events that are not recognised on the basis that an outflow of economic resources required to settle the
obligations is not viewed as probable, or the amount of the obligation cannot be reliably measured. Due to the
inherent uncertainty associated with these items, judgement is required in assessing the existence, quantum and
likelihood of these events, and inevitably, actual outcomes may differ to assessed positions as disclosed. Management
continue to reassess each item at reporting date to take in to account latest information available.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
135
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
34
Commitments
(a) Capital expenditure
Significant capital expenditure contracted at the end of the reporting period but not recognised as liabilities is as follows:
2024
$’M
2023
$’M
Property, plant and equipment
86.7
102.7
Intangible assets
12.1
6.7
98.8
109.4
(b) Guarantees
The Group is, in the normal course of business, required to provide guarantees and other security to third parties on behalf
of joint ventures and associates in respect of their contractual related obligations, including financing agreements. The types
of guarantees and other security include contract performance and financial guarantees and indemnities, mortgages over
real property, bank guarantees and insurance bonds. The guarantees and other security only give rise to a liability or loss
to the Group where the joint venture or associate concerned fails to perform its contractual obligations.
Bank guarantees and insurance bonds are also issued in the normal course of business and held by beneficiaries as financial
assurance in relation to subsidiary customer contracts, property leases and licences. The bank guarantees and insurance
bonds only give rise to a liability to the Group where the subsidiary concerned fails to perform its obligations.
2024
$’M
2023
$’M
Guarantees and other security provided on behalf of joint ventures and associates 1
19.0
18.6
Bank guarantees issued in respect of subsidiaries
176.1
179.8
Insurance bonds issued in respect of subsidiaries
83.9
80.9
279.0
279.3
1
Excludes performance related obligations and other amounts that cannot be ascertained, including enforcement and other costs and charges which the
Group may become liable for in the event of non-performance.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
136
35
Share-based payments
Total share-based payment expense included in the Consolidated Income Statement is set out in note 17(b).
Performance rights outstanding at the reporting date consist of the following grants:
OFFER
GRANT DATE
END OF
PERFORMANCE
OR SERVICE
PERIOD
PERFORMANCE
RIGHTS AT
30 JUNE 2023
GRANTED
DURING THE
PERIOD
VESTED AND
EXERCISED
DURING THE
PERIOD
FORFEITED
DURING THE
PERIOD
LAPSED
DURING THE
PERIOD
PERFORMANCE
RIGHTS AT
30 JUNE 2024
LONG-TERM INCENTIVE PLAN
2021 LTI
16-Dec-20
30-Jun-23
1,534,801
–
(653,162)
–
(881,639)
–
2022 LTI
25-Oct-21
30-Jun-24
2,317,331
–
–
(29,548)
–
2,287,783
2023 LTI
Various 1
30-Jun-25
2,608,324
–
–
(67,812)
–
2,540,512
2024 LTI
Various 2
30-Jun-26
–
3,209,304
–
(38,065)
–
3,171,239
SHORT-TERM INCENTIVE PLAN
2022 STI
Various 3
30-Jun-23
221,613
–
(221,613)
–
–
–
2023 STI
Various 4
30-Jun-24
–
222,811
–
–
–
222,811
OTHER GRANTS
CEO sign-on
22-Oct-21
Various 5
380,228
–
(190,114)
–
–
190,114
EGM SWS sign-on 18-Feb-22
Various 6
129,239
–
(129,239)
–
–
–
EGM LW&H and
I&WS sign-on
1-Mar-23
Various 7
173,745
–
(77,220)
–
–
96,525
Executive sign-on 29-Aug-22
Various 8
145,048
–
(34,255)
–
–
110,793
Executive sign-on
10-Oct-22
Various 9
75,063
–
(19,593)
–
–
55,470
Executive sign-on
3-Oct-23
Various 10
–
84,751
–
–
–
84,751
Total
7,585,392
3,516,866
(1,325,196) (135,425) (881,639)
8,759,998
Vested and exercisable at 30 June 2024
222,811
1
On 16 September 2022, 1,841,190 LTI 2023 rights were granted. On 10 October 2022, 32,419 LTI 2023 rights were granted. On 2 November 2022,
19,937 LTI 2023 rights were granted. Mr M Schubert’s 727,700 LTI 2023 rights were granted on 21 October 2022 following approval at the Annual
General Meeting (AGM). On 22 November 2022, 78,247 LTI 2023 rights were granted. On 16 December 2022, 31,672 LTI 2023 rights were granted.
On 16 January 2023, 25,621 LTI 2023 rights were granted. On 1 March 2023, 170,188 LTI 2023 rights were granted. Of the 2,926,974 LTI 2023 rights
granted, 318,650 were forfeited during the period ended 30 June 2023.
2
Mr M Schubert’s 757,680 LTI 2024 rights were granted on 20 October 2023 following approval at the Annual General Meeting (AGM). On 3 October
2023, 42,256 LTI 2024 were granted. On 3 November 2023, 2,328,952 rights were granted. On 1 December 2023, 80,416 LTI 2024 rights were granted.
3
Grant Date for all Executive STI 2022 rights was 15 September 2022, except for 75,970 rights which were granted to Mr M Schubert following approval
at the AGM on 21 October 2022.
4
Grant Date for all Executive STI 2023 rights was 15 September 2023, except for 67,713 rights which were granted to Mr M Schubert following approval
at the AGM on 20 October 2023.
5
Of the 380,228 sign-on rights issued, 190,114 vested on 30 August 2023 and 190,114 vest on 30 August 2024.
6
Of the 159,222 sign-on rights issued, 29,983 vested on 22 August 2022 and 129,239 vested on 21 August 2023.
7
Of the 173,745 sign-on rights issued, 77,220 vested on 31 August 2023 and 96,525 vest on 31 August 2024.
8
Of the 145,048 sign-on rights issued, 34,255 vested on 31 August 2023, 65,574 vest on 31 August 2024 and 45,219 vest on 31 August 2025.
9
Of the 75,063 sign-on rights issued, 19,593 vested on 31 August 2023 and 55,470 vest on 31 August 2024.
10 Of the 84,751 sign-on rights issued, 31,782 vest on 31 August 2024, 31,782 vest on 31 August 2025 and 21,187 vest on 31 August 2026.
The vesting date for LTI offers is on or after 14 days after the date on which the annual financial results of the Group for
the financial year associated with the end of the performance period are released to the ASX. Other offers vest on or after
the end of the relevant performance or service period.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
137
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
(a) Long-Term Incentive (LTI) Plan
The Cleanaway LTI plan is designed to provide long-term incentives for senior executives to deliver long-term shareholder
returns. Under the plan, participants are granted performance rights which only vest if certain performance standards are met.
Offers made in previous reporting periods
The following table outlines the terms of the outstanding LTI offers made in previous reporting periods which remain on issue:
PERFORMANCE
PERIOD
2022 LTI AWARD UP TO THREE YEARS:
1 JULY 2021 TO 30 JUNE 2024
2023 LTI AWARD UP TO THREE YEARS:
1 JULY 2022 TO 30 JUNE 2025
Overview
Performance rights, of which:
Measured over three years to 30 June 2024
• Up to 50% vest if a certain relative TSR
ranking is achieved against the constituents
of the S&P/ASX 200 Industrial Sector Index
• Up to 50% vest if a certain EPS CAGR target
is achieved
• The ROIC for year ending 30 June 2024 acts
as a gateway to EPS CAGR
Performance rights, of which:
Measured over three years to 30 June 2025
• Up to 50% vest if a certain relative TSR
ranking is achieved against the constituents
of the S&P/ASX 200 Industrial Sector Index
• Up to 25% vest if a certain EPS CAGR target
is achieved
• Up to 25% vest if a certain CH4 (Methane)
emissions reduction is achieved
Offer made in current reporting period – 2024 LTI award
During the period, the Group issued performance rights attached to the Group’s LTI plan to the CEO and other senior
executives. The performance rights are subject to four performance hurdles:
•
40% of the performance rights vest if a certain relative Total Shareholder Return (TSR) ranking is achieved against
constituents of the S&P/ASX 150 Industrial Sector Index (excluding those classified as mining, financial services, oil and
gas and overseas domiciled) that remain listed for the duration of the performance period;
• 20% of performance rights vest if a certain underlying Earnings per Share Compound Annual Growth Rate (EPS CAGR)
target is achieved;
• 20% of performance rights vest if a certain CH4 (Methane) emissions reduction is achieved; and
• 20% of performance rights vest if a certain Return on Invested Capital (ROIC) is achieved.
35
Share-based payments (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
138
The following table sets out the assumptions made in determining the fair value of these performance rights:
2024 LTI
TSR
TRANCHE
2024 LTI
EPS CAGR
TRANCHE
2024 LTI
CARBON
TRANCHE
2024 LTI
ROIC
TRANCHE
VALUATION APPROACH
Monte Carlo Simulation
Black Scholes Model
Black Scholes Model
Black Scholes Model
Performance period
1 July 2023
– 30 June 2026
1 July 2023
– 30 June 2026
1 July 2023
– 30 June 2026
1 July 2023
– 30 June 2026
Volatility (%) 1
25.0%
25.0%
25.0%
25.0%
GRANT DATE 3 OCTOBER 2023
Number of rights
16,903
8,451
8,451
8,451
Risk-free interest rate (%)
4.08%
4.08%
4.08%
4.08%
Fair value per right 2
$1.22
$2.26
$2.26
$2.26
GRANT DATE 20 OCTOBER 2023
Number of rights
303,072
151,536
151,536
151,536
Risk-free interest rate (%)
4.22%
4.22%
4.22%
4.22%
Fair value per right 2
$1.19
$2.22
$2.22
$2.22
GRANT DATE 3 NOVEMBER 2023
Number of rights
931,588
465,788
465,788
465,788
Risk-free interest rate (%)
4.28%
4.28%
4.28%
4.28%
Fair value per right 2
$1.22
$2.26
$2.26
$2.26
GRANT DATE 1 DECEMBER 2023
Number of rights
32,167
16,083
16,083
16,083
Risk-free interest rate (%)
4.07%
4.07%
4.07%
4.07%
Fair value per right 2
$1.29
$2.34
$2.34
$2.34
1
Expected volatility is based on the historic volatility of Cleanaway shares over a range of periods.
2
The fair value is reduced to reflect there is no dividend entitlement during the performance period.
35
Share-based payments (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
139
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
The performance targets of the 2024 LTI award are set out in the table below:
Relative TSR performance measured over three years
from 1 July 2023 to 30 June 2026
Relative Total Shareholder Return (TSR) Ranking against
the constituents of the S&P/ASX 100 Industrial Sector
Index:
• Below 50th percentile – 0% vesting
• At 50th percentile – 50% vesting
• 50th to 75th percentile – straight line pro rata vesting
between 50% and 100%
• Above 75th percentile – 100% vesting
EPS CAGR performance as measured over three years
from 1 July 2023 to 30 June 2026
Earnings per Share Compound Annual Growth Rate
(EPS CAGR):
• < 13.0% – 0% vesting
• At 13.0% – 35% vesting
• > 13.0% – ≤ 16.0% – straight line pro rata vesting
between 35% and 50%
• > 16.0% – ≤ 19% – straight line pro rata vesting
between 50% and 70%
• > 19.0% – ≤ 22% – straight line pro rata vesting
between 70% and 100%
• > 22.0% – 100% vesting
FY2026 CH4 (Methane) Emissions (% of FY2022)
FY2026 CH4 Emissions:
• Greater than 94% of FY2022 – 0% vesting
• At 94.0% of FY2022 – 30% vesting
• < 94.0% – ≥83.0% of FY22 – straight line pro rata
vesting between 30% and 50%
• < 83.0% – ≥66.0% of FY22 – straight line pro rata
vesting between 50% and 100%
• < 66.0% of FY2022 – 100% vesting
FY2026 return on invested capital
Return on invested capital to be achieved:
• < 6.0% – 0% vesting
• At 6.0% – 35% vesting
• > 6.0% – ≤6.3% – straight line pro rata vesting
between 35% and 50%
• > 6.3% – ≤ 6.7% – straight line pro rata vesting
between 50% and 70%
• > 6.7% – ≤ 7.1% – straight line pro rata vesting
between 70% and 100%
• > 7.1% – 100% vesting
(b) Short-Term Incentive (STI) Plan
The Cleanaway STI plan is an annual plan that is used to motivate and reward senior executives across a range of performance
measures over the financial year. Under the plan, participants are granted a combination of cash and rights to deferred shares
if certain performance standards are met. The Group uses EBIT targets as the main performance standard for the STI plan.
Vesting of the performance rights granted is deferred for one year. The fair value of the 2023 STI deferred rights was $2.45
for 155,098 rights granted on 15 September 2023 and $2.35 for 67,713 rights granted on 20 October 2023. The deferred
rights are not entitled to dividends during the vesting period.
35
Share-based payments (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
140
(c) Other grants
Offers made in previous reporting period
The CEO and EGM L&HS and IWS and other executives were awarded sign-on rights as they forfeited incentives upon
resignation from their previous employer. The following table sets out the assumptions in determining the fair value of these
performance rights.
SCHEME
CEO RIGHTS
EGM L&HS
AND IWS
OTHER EXEC
OTHER EXEC
OTHER EXEC
Number of rights
190,114
96,525
65,574
45,219
55,470
Grant date
22 Oct 21
1 Mar 23
29 Aug 22
29 Aug 22
10 Oct 22
Performance period
30 Aug 21
– 30 Aug 24
1 Mar 23
– 31 Aug 24
29 Aug 22
– 31 Aug 24
29 Aug 22
– 31 Aug 25
10 Oct 22
– 31 Aug 24
Risk-free interest rate
0.63%
3.53%
3.31%
3.35%
3.32%
Volatility (%) 1
35.0%
30.0%
30.0%
30.0%
30.0%
Fair value per right 2
$2.69
$2.74
$2.65
$2.60
$2.60
1
Expected volatility is based on the historic volatility of Cleanaway shares over a range of periods.
2
The fair value reflects the closing share price on the grant date and is reduced to reflect there is no dividend entitlement during the performance period.
Offers made in current reporting period
Executives were awarded sign-on rights as they forfeited incentives upon resignation from their previous employer.
The following table sets out the assumptions in determining the fair value of these performance rights:
SCHEME
OTHER EXEC
OTHER EXEC
OTHER EXEC
Number of rights
31,782
31,782
21,187
Grant date
3 Oct 23
3 Oct 23
3 Oct 23
Performance period
3 Oct 2023–
3 Oct 2023–
3 Oct 2023–
31 Aug 24
31 Aug 25
31 Aug 26
Risk-free interest rate
4.26%
4.16%
4.10%
Volatility (%) 1
25.0%
25.0%
25.0%
Fair value per right 2
$2.34
$2.29
$2.25
1
Expected volatility is based on the historic volatility of Cleanaway shares over a range of periods.
2
The fair value reflects the closing share price on the grant date and is reduced to reflect there is no dividend entitlement during the performance period.
Accounting Policy
Share-based payment transactions
Share-based payments are provided to Executives and employees via the Cleanaway Waste Management Limited
Short-Term Incentive Plan and the Long-Term Incentive Plan.
Share-based compensation payments are measured at fair value at the date of grant and expensed to employee
benefit expense with a corresponding increase in the employee benefits reserve over the period in which the service
and, where applicable, performance conditions are fulfilled. Fair value is measured by using the Monte Carlo simulation
or the Black-Scholes option pricing model, the term of the performance right, the impact of dilution, the share price
at grant date and expected price volatility of the underlying share, the expected dividend yield and the risk-free interest
rate for the term of the performance right.
35
Share-based payments (continued)
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
141
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
36
Auditor’s remuneration
Details of the amounts paid or payable to the auditor and its related practices for audit and non-audit services are set out below.
2024
$
2023
$
Fees to Ernst & Young (Australia):
Fees for auditing the statutory financial report of the parent covering the Group and auditing
the statutory financial reports of any controlled entities
1,991,481
1,948,146
Fees for other assurance and agreed-upon-procedures services under other legislation or
contractual arrangements where there is discretion as to whether the service is provided by
the auditor or another firm
–
72,000
Fees for other services
262,920
155,960
Total auditor’s remuneration 1
2,254,401
2,176,106
1
Fees to other overseas member firms of Ernst & Young (Australia) is nil (2023: nil).
37
Related party transactions
(a) Key Management Personnel
Disclosures relating to Key Management Personnel (KMP) are set out in the Remuneration Report on pages 54 to 75.
The KMP compensation included in employee expenses is as follows:
2024
$
2023
$
Short-term employee benefits
8,570,035
6,571,859
Post-employment benefits
247,216
244,348
Equity compensation benefits
2,251,235
1,692,530
11,068,486
8,508,737
Some of the Directors hold, or have previously held, positions in companies with which Cleanaway has commercial
relationships which are based on normal terms and conditions on an arm’s length basis. Transactions with entities where
the relationship is limited to a common Non-Executive Directorship, including any Chairperson roles, are not considered
related party transactions. The Board has assessed all of the relationships between the Group and companies in which
Directors hold or held positions and has concluded that in all cases the relationships do not interfere with the Directors’
exercise of objective, unfettered or independent judgement or their ability to act in the best interests of the Group.
(b) Wholly-owned Group transactions
The wholly-owned Group consists of Cleanaway Waste Management Limited and its subsidiaries listed at note 29.
Transactions between Cleanaway Waste Management Limited and other entities in the wholly-owned Group during
the years ended 30 June 2024 and 30 June 2023 consisted of:
(i) Loans advanced by Cleanaway Waste Management Limited and other subsidiaries;
(ii) Loans repaid to Cleanaway Waste Management Limited and other subsidiaries;
(iii) The payment of interest on the above loans;
(iv) The payment of dividends to Cleanaway Waste Management Limited and other subsidiaries;
(v) Management fees charged to subsidiaries; and
(vi) Sales between subsidiaries.
The above transactions are all eliminated on consolidation.
(c) Other related parties
There were no material transactions with, or amounts receivable from or payable to, other related parties during the years
ended 30 June 2024 and 30 June 2023, except as presented in note 23.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
142
38
Events occurring after the reporting date
The Group is not aware of any matter or circumstance that has occurred since 30 June 2024 that, in the Group’s opinion, has
significantly affected or may significantly affect in future years:
• its operations;
• the results of those operations; or
• the state of its affairs.
39
New standards adopted
The Group has adopted all new and revised Standards and Interpretations issued by the Australian Accounting Standards
Board that are relevant to its operations and effective for the current reporting period.
New and revised Standards, amendments thereof and interpretations which became effective during the current year and
relevant to the Group include:
• Disclosure of Accounting Policies – Amendments to AASB 101 and IFRS Practice Statement 2
The amendments provide guidance and examples to help entities apply materiality judgements to accounting policy
disclosures with the aim of making the accounting policies more useful. The Group has assessed that it is in compliance with
these amendments and their application had no impact on the Consolidated Financial Statements.
• Definition of Accounting Estimates – Amendments to AASB 108
The amendments clarify the distinction between changes in accounting policy, changes in accounting estimates and
the correction of errors. Also, they clarify how entities use measurement techniques and inputs to develop estimates.
Cleanaway has not changed its accounting policies in the current period. The Group changes measurement techniques
if the change is assessed as providing a more accurate estimation. These amendments had no impact on the Consolidated
Financial Statements.
• Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to AASB 112
The amendments clarify the scope of the initial recognition exception under AASB 112 so that it no longer applies
to transactions that, on initial recognition, give rise to equal taxable and deductible temporary differences. Cleanaway
assessed this change and as the Group already account for deferred tax in accordance with the requirements in the
amendment, there is no impact to the Group on adoption of this amendment.
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
143
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
40
New standards and interpretations not yet adopted
A number of new standards, amendments to standards and interpretations are effective for annual periods beginning after
1 July 2024 and have not been applied in preparing these Consolidated Financial Statements. Those which may be relevant
to the Group are set out below. The Group does not plan to adopt these standards early.
New standards
STANDARD/INTERPRETATION
EFFECTIVE
FOR ANNUAL
REPORTING
PERIODS BEGINNING
ON OR AFTER
EXPECTED TO BE
INITIALLY APPLIED
IN THE FINANCIAL
YEAR ENDING
Classification of Liabilities as Current or Non-Current – Amendments to AASB 101
The AASB has issued amendments to AASB 101 Presentation of Financial Statements
to specify the requirements for classifying liabilities as current or non-current. The
amendments clarify:
• What is meant by a right to defer settlement
• That a right to defer must exist at the end of the reporting period
• That classification is unaffected by the likelihood that an entity will exercise
its deferral right
• That only if an embedded derivative in a convertible liability is itself an equity
instrument, would the terms of a liability not impact its classification
Cleanaway has not early adopted this amendment in the current period. The impact of
the amendment to the Group’s Financial Statements is yet to be determined.
1 January 2024
30 June 2025
Lease Liability in a Sale and Leaseback – Amendments to AASB 16
The AASB has issued amendments to AASB 16 Leases to specify the requirements
that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback
transaction. AASB 16 does not specify how a seller-lessee measures the lease liability
in a sale and leaseback transaction and whether variable lease payments (regardless of
whether they depend on an index or rate) should be considered in the measurement of
the lease liability in these specific circumstances. The amendment does not prescribe
specific measurement requirements for lease liabilities, instead it requires an entity to
develop and apply an accounting policy that results in information that is relevant and
reliable.
Cleanaway has not early adopted this amendment in the current period. The impact of
the amendment to the Group’s Financial Statements is yet to be determined.
1 January 2024
30 June 2025
Presentation and Disclosure in Financial Statements – AASB 18
The AASB has issued AASB 18 Presentation and Disclosure in Financial Statements
to replace AASB 101 Presentation of Financial Statements. AASB 18 introduces the
following changes to the presentation of financial statements:
• Income and expenses must be classified in the statement of profit or loss into one
of five categories – investing, financing, income taxes, discontinued operations and
operating;
• Two new mandatory subtotals – operating profit or loss, and profit or loss before
financing and income taxes;
• Strict rules for labelling, aggregation and disaggregation of items in the financial
statements;
• New disclosures about management-defined performance measures; and
• Amendments to the presentation requirements for interest income and expenses,
and dividend income in the statement of cash flows.
Cleanaway does not intend to early adopt this amendment. The impact of
the amendment to the Group’s Financial Statements is yet to be determined.
1 January 2027
30 June 2028
Notes to the Consolidated Financial Statements
For the year ended 30 June 2024
144
The table below provides details including the tax residency of Cleanaway Waste Management Limited and each of its subsidiaries
in accordance with section 295(3A) of the Corporations Act 2001, including those subsidiaries that are not considered to be principal
subsidiaries as disclosed in note 29 of the Notes to the Consolidated Financial Statements.
ENTITY NAME
ENTITY TYPE
BODY
CORPORATE
COUNTRY OF
INCORPORATION
BODY
CORPORATE
% OF SHARE
CAPITAL HELD
COUNTRY OF
TAX RESIDENCE
Active Industrial Solutions Pty Ltd
Body Corporate
Australia
100%
Australia
A.C.N. 122 808 324 Pty Ltd
Body Corporate
Australia
100%
Australia
AJ Baxter Pty Ltd
Body Corporate
Australia
100%
Australia
ASP Healthcare Pty Ltd
Body Corporate
Australia
100%
Australia
ASP Plastics Pty Ltd
Body Corporate
Australia
100%
Australia
ASP Rights Management Pty Ltd
Body Corporate
Australia
100%
Australia
Australian Terminal Services Pty Ltd
Body Corporate
Australia
100%
Australia
Baxter Business Pty Ltd
Body Corporate
Australia
100%
Australia
Baxter Recyclers Pty Ltd
Body Corporate
Australia
100%
Australia
Clarinda Landfill Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway (No. 1) Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Co Pty Ltd (formerly known as Tox Free Australia
Pty Ltd)
Body Corporate
Australia
100%
Australia
Cleanaway Daniels Australia Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Daniels FMD Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Daniels Laboratory Products Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Daniels NSW Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Daniels Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Daniels Services Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Daniels VIC Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Daniels Waste Services Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Daniels Wollongong Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Equipment Services Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Hygiene Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Industrial Solutions Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Industries Pty Ltd (formerly Tox Free Solutions
Pty Ltd)
Body Corporate
Australia
100%
Australia
Cleanaway Landfill Holdings Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Operations Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Organics Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Recycling Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Refiners Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Resource Recycling Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Solid Waste Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Superior Pak Pty Ltd
Body Corporate
Australia
100%
Australia
Cleanaway Waste Management Limited
Body Corporate
Australia
100%
Australia
Daniels Manufacturing Australia Pty Ltd
Body Corporate
Australia
100%
Australia
Dolomatrix Australia Pty Ltd
Body Corporate
Australia
100%
Australia
Eastern Creek Operations Pty Ltd
Body Corporate
Australia
100%
Australia
Enviroguard Pty Ltd
Body Corporate
Australia
100%
Australia
Environmental Recovery Services Pty Ltd
Body Corporate
Australia
100%
Australia
Global Renewables Australia Pty Ltd
Body Corporate
Australia
100%
Australia
Global Renewables Eastern Creek Pty Ltd
Body Corporate
Australia
100%
Australia
Global Renewables Holdings Pty Ltd
Body Corporate
Australia
100%
Australia
Consolidated Entity Disclosure Statement
As at 30 June 2024
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
145
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
ENTITY NAME
ENTITY TYPE
BODY
CORPORATE
COUNTRY OF
INCORPORATION
BODY
CORPORATE
% OF SHARE
CAPITAL HELD
COUNTRY OF
TAX RESIDENCE
Global Renewables Pty Ltd
Body Corporate
Australia
100%
Australia
Global Renewables Technology Pty Ltd
Body Corporate
Australia
100%
Australia
Grasshopper Environmental Pty Ltd
Body Corporate
Australia
100%
Australia
Grasshopper Holdings Pty Ltd
Body Corporate
Australia
100%
Australia
GRL Operations Pty Ltd
Body Corporate
Australia
100%
Australia
GRL Sydney Pty Ltd
Body Corporate
Australia
100%
Australia
Landfill Land Holdings Pty Ltd
Body Corporate
Australia
100%
Australia
Landfill Operations Pty Ltd
Body Corporate
Australia
100%
Australia
Mann Waste Management Pty Ltd
Body Corporate
Australia
100%
Australia
Max T Pty Ltd
Body Corporate
Australia
100%
Australia
Melbourne Energy and Resource Centre Hold Trust
Trust
Australia
N/A
Australia
Melbourne Energy and Resource Centre Holdings Pty Ltd 1
Body Corporate
Australia
100%
Australia
Melbourne Energy and Resource Centre Pty Ltd 1
Body Corporate
Australia
100%
Australia
Nationwide Oil Pty Ltd
Body Corporate
Australia
100%
Australia
NQ Resource Recovery Pty Ltd
Body Corporate
Australia
100%
Australia
Oil and Fuel Salvaging (Queensland) Pty Ltd
Body Corporate
Australia
100%
Australia
Pilbara Environmental Services Pty Ltd
Body Corporate
Australia
50%
Australia
Pilbara Logistics Pty Ltd
Body Corporate
Australia
100%
Australia
PT Environmental Services Pty Ltd
Body Corporate
Australia
53%
Australia
Queensland Energy and Resource Centre Hold Trust
Trust
Australia
N/A
Australia
Queensland Energy and Resource Centre Holdings Pty Ltd 2 Body Corporate
Australia
100%
Australia
Queensland Energy and Resource Centre Pty Ltd 2
Body Corporate
Australia
100%
Australia
QORS Pty Ltd
Body Corporate
Australia
100%
Australia
Rubus Holdings Pty Ltd
Body Corporate
Australia
100%
Australia
Rubus Intermediate One Pty Ltd
Body Corporate
Australia
100%
Australia
Rubus Intermediate Two Pty Ltd
Body Corporate
Australia
100%
Australia
RWS Admin Pty Ltd
Body Corporate
Australia
100%
Australia
Steri Health Sharpsmart Pty Ltd
Body Corporate
Australia
100%
Australia
T Environmental Services Pty Ltd
Body Corporate
Australia
100%
Australia
Tox Free (Henderson) Pty Ltd
Body Corporate
Australia
100%
Australia
Tox Free (Kwinana) Pty Ltd
Body Corporate
Australia
100%
Australia
Transpacific Baxter Pty Ltd
Body Corporate
Australia
100%
Australia
Transpacific Cleanaway Holdings Pty Ltd
Body Corporate
Australia
100%
Australia
Transpacific Co Pty Ltd
Body Corporate
Australia
100%
Australia
Transpacific Environmental Services Pty Ltd
Body Corporate
Australia
100%
Australia
Transpacific Innovations Pty Ltd
Body Corporate
Australia
100%
Australia
Transpacific Resources Pty Ltd
Body Corporate
Australia
100%
Australia
Transwaste Technologies (1) Pty Ltd
Body Corporate
Australia
100%
Australia
Transwaste Technologies Pty Ltd
Body Corporate
Australia
100%
Australia
Transpacific Paramount Services Pty Ltd
Body Corporate
Australia
100%
Australia
Transpacific Manufacturing Systems Pty Ltd
Body Corporate
Australia
100%
Australia
Waste Management Pacific (SA) Pty Ltd
Body Corporate
Australia
100%
Australia
Waste Management Pacific Pty Ltd
Body Corporate
Australia
100%
Australia
1
Trustee of Melbourne Energy and Resource Centre Hold Trust which is consolidated in the consolidated financial statements.
2
Trustee of Queensland Energy and Resource Centre Hold Trust which is consolidated in the consolidated financial statements.
Consolidated Entity Disclosure Statement
As at 30 June 2024
146
In the Directors’ opinion:
(a) The Financial Statements and Notes together with the additional disclosures included in the Directors’ Report
designated as audited, are in accordance with the Corporations Act 2001, including:
(i) Giving a true and fair view of the Group’s financial position as at 30 June 2024 and of its performance for the
financial year ended on that date;
(ii) Complying with Australian Accounting Standards (including the Australian Accounting Interpretations), and the
Corporations Regulations 2001; and
(b) The Financial Statements and Notes also comply with International Financial Reporting Standards as disclosed in note 2;
(c) The Consolidated Entity Disclosure Statement required by section 295(3A) of the Corporations Act 2001 is true
and correct;
(d) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable;
(e) This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section s295A of the Corporations Act 2001 for the financial year ended 30 June 2024; and
(f) As at the date of this declaration, there are reasonable grounds to believe that the members of the closed Consolidated
Group identified in note 29 will be able to meet any obligation or liabilities to which they are or may become subject to,
by virtue of the deed of cross guarantee.
This declaration is made in accordance with a resolution of the Directors.
P G Etienne
Chairman
M J Schubert
Chief Executive Officer and Managing Director
Melbourne, 20 August 2024
Directors’ Declaration
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
147
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Cleanaway Waste Management Limited (the Company) and its subsidiaries (the
Group), which comprises the Consolidated Balance sheet as at 30 June 2024, the Consolidated Statement of Comprehensive
Income, the Consolidated Statement of Changes in Equity and the Consolidated Statement of Cash Flows for the year then
ended, and Notes to the Financial Statements, including material accounting policy information, the Consolidated Entity
Disclosure Statement and the Directors’ Declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including:
(a) Giving a true and fair view of the consolidated financial position of the Group as at 30 June 2024 and of its consolidated
financial performance for the year ended on that date; and
(b) Complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those standards
are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report. We are
independent of the Group in accordance with the auditor independence requirements of the Corporations Act 2001 and the
ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the financial report in Australia.
We have also fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
report of the current year. These matters were addressed in the context of our audit of the financial report as a whole, and
in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our
description of how our audit addressed the matter is provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial report section
of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures
designed to respond to our assessment of the risks of material misstatement of the financial report. The results of our audit
procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the
accompanying financial report.
Ernst & Young
Tel: +61 3 9288 8000
8 Exhibition Street
Fax: +61 3 8650 7777
Melbourne VIC 3000 Australia
ey.com/au
GPO Box 67 Melbourne VIC 3001
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Independent Auditor’s Report
to the Members of Cleanaway Waste Management Limited
148
Valuation and completeness of remediation and rectification provisions
WHY SIGNIFICANT
HOW OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
Under the National Environment Protection
Council Act 1994 and various State based
regulations, the Group has obligations to
remediate and rectify the land in which landfill
and industrial activities occur. These obligations
must be accounted for in accordance with
Australian Accounting Standards.
At 30 June 2024, the Group recognised
$582.8 million of remediation and rectification
provisions, calculated based on discounted cash
flow models that incorporate critical assumptions
and estimates in relation to capping, post closure
and ongoing remediation and rectification costs.
There are significant judgements in relation
to appropriate cost escalation and discount
rates, the timing of expected expenditure, the
possibility of new remediation practices and
methods being available in the future and the
adequacy of contingency factors. Estimates are
developed based on site-specific plans, taking
into consideration historical and emerging
practice in relation to remediation activities,
including better practice climate and sustainability
responses.
Because of the subjective nature of the estimates
involved in accounting for remediation and
rectification obligations, this is a key audit matter.
Note 26 of the financial report provides further
detail on the rectification and remediation
provisions.
Our audit procedures included testing the mathematical integrity of
the discounted cash flow models and evaluation of the assumptions
and methodologies used.
We involved our environmental specialists to assist in the execution
of these procedures.
With respect to the Group’s remediation and rectification
provisions, we:
• Conducted site visits to the Kemps Creek, Lucas Heights,
New Chum and Willawong landfill sites;
• Held discussions with the Group’s technical experts, third party
specialists, and the Group’s project managers and engineers
involved in the remediation and rectification activities;
• Assessed the competence, qualifications and objectivity of the
Group’s internal and external experts used in the determination
of the provisions;
• Assessed the Group’s cost estimates for capping, post closure
and ongoing remediation and rectification activities with
reference to available external data, including third party
invoices, quotes, statements of work and relevant environmental
authority regulations and correspondence, where available;
• Agreed area disturbed and to be capped to aerial surveys from
an independent third party;
• Assessed the quantum and nature of expenditure for
remediation spend;
• Assessed the appropriateness of the escalation rate in light of
current wage price, labour availability and other inflationary
factors and performed a sensitivity analysis;
• Assessed discount rates with reference to observable
market inputs;
• Benchmarked cost rates for similar remediation and rectification
activities between Cleanaway sites; and
• Assessed the adequacy of contingency amounts carried within
the remediation and rectification provisions.
We also assessed the adequacy of the Group’s disclosures in the
financial report regarding its remediation and rectification obligations.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Independent Auditor’s Report
to the Members of Cleanaway Waste Management Limited
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
149
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Information other than the Financial Report and Auditor’s Report thereon
The directors are responsible for the other information. The other information comprises the information included in the
Company’s 2024 annual report other than the financial report and our auditor’s report thereon. We obtained the directors’
report that is to be included in the annual report, prior to the date of this auditor’s report, and we expect to obtain the
remaining sections of the annual report after the date of this auditor’s report.
Our opinion on the financial report does not cover the other information and we do not and will not express any form of
assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion.
In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with the financial report or our knowledge obtained in the
audit or otherwise appears to be materially misstated
If, based on the work we have performed on the other information obtained prior to the date of this auditor’s report, we
conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing
to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of:
(a) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view in accordance
with Australian Accounting Standards and the Corporations Act 2001; and
(b) the consolidated entity disclosure statement that is true and correct in accordance with the Corporations Act 2001, and
for such internal control as the directors determine is necessary to enable the preparation of:
(i) the financial report (other than the consolidated entity disclosure statement) that gives a true and fair view and is free
from material misstatement, whether due to fraud or error; and
(ii) the consolidated entity disclosure statement that is true and correct and is free from material misstatement, whether due
to fraud or error.
In preparing the financial report, the directors are responsible for assessing the Group’s ability to continue as a going concern,
disclosing, as applicable, matters relating to going concern and using the going concern basis of accounting unless the directors
either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the Australian
Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error
and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design
and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than
for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
•
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control.
•
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by the directors.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Independent Auditor’s Report
to the Members of Cleanaway Waste Management Limited
150
• Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant
doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures
are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our
auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether
the financial report represents the underlying transactions and events in a manner that achieves fair presentation.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities
within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and
performance of the Group audit. We remain solely responsible for our audit opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and
significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear
on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated to the directors, we determine those matters that were of most significance in the audit of
the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
Report on the Audit of the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in pages 56 to 75 of the directors’ report for the year ended 30 June 2024.
In our opinion, the Remuneration Report of Cleanaway Waste Management Limited for the year ended 30 June 2024, complies
with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance
with section 300A of the Corporations Act 2001. Our responsibility is to express an opinion on the Remuneration Report,
based on our audit conducted in accordance with Australian Auditing Standards.
Ernst & Young
Ashley Butler
Partner
Melbourne
20 August 2024
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Independent Auditor’s Report
to the Members of Cleanaway Waste Management Limited
CLEANAWAY WASTE MANAGEMENT LIMITED 2024 ANNUAL REPORT
151
5
FINANCIAL
REPORT
4
CORPORATE
INFORMATION
2
OPERATING AND
FINANCIAL REVIEW
1
OVERVIEW
3
6
OTHER
INFORMATION
SUSTAINABILITY
Top 20 Shareholders as at 23 August 2024
RANK
NAME
UNITS
% UNITS
1
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
738,043,593
33.11
2
J P MORGAN NOMINEES AUSTRALIA PTY LIMITED
482,129,905
21.63
3
CITICORP NOMINEES PTY LIMITED
318,364,751
14.28
4
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
111,530,049
5.00
5
BNP PARIBAS NOMINEES PTY LTD
111,370,336
5.00
6
BNP PARIBAS NOMS PTY LTD
71,484,952
3.21
7
NATIONAL NOMINEES LIMITED
59,424,186
2.67
8
CUSTODIAL SERVICES LIMITED
38,303,254
1.72
9
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
24,334,371
1.09
10
AUSTRALIAN FOUNDATION INVESTMENT COMPANY LIMITED
18,185,006
0.82
11
WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED
15,785,257
0.71
12
BNP PARIBAS NOMS (NZ) LTD
13,785,020
0.62
13
CITICORP NOMINEES PTY LIMITED
9,360,100
0.42
14
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2
7,855,393
0.35
15
BNP PARIBAS NOMINEES PTY LTD
6,128,938
0.27
16
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
5,265,626
0.24
17
NETWEALTH INVESTMENTS LIMITED
4,778,197
0.21
18
FIRST SAMUEL LTD ACN 086243567
3,502,555
0.16
19
MIRRABOOKA INVESTMENTS LIMITED
3,167,500
0.14
20
BNP PARIBAS NOMINEES PTY LTD
2,228,000
0.10
Totals: Top 20 holders of FULLY PAID ORDINARY SHARES (Total)
2,045,026,989
91.73
Total Remaining Holders Balance
184,350,953
8.27
Total Fully Paid Ordinary Shares on Issue
2,229,377,942
100.00
Substantial Shareholders
Substantial shareholders as shown in shareholding notices
received by the Company as at 23 August 2024:
Challenger Limited
141,233,692
UniSuper Limited
136,003,711
United Super Pty Ltd
135,155,724
TPG Entities
109,592,136
State Street Corporation
111,598,891
Vanguard Group
111,326,051
An entity has a substantial shareholding if the total votes
attaching to shares in which the entity and their associates
have a relevant interest is 5% or more. The list of the 20 largest
shareholders is based on the number of shares held in the
name of each shareholder on the register of members, even if
the shareholder holds the share as a nominee (i.e. no beneficial
or relevant interest in the shares). The list of the 20 largest
shareholders of the Company and the list of substantial
shareholders of the Company differ for this reason.
Statement of Quoted Securities
The Company’s total number of shares on issue as at
23 August 2024 was 2,229,377,942 ordinary fully paid shares.
As at 23 August 2024, the total number of shareholders
owning these shares was 17,704 on the register of members
maintained by Computershare Investor Services Pty Ltd.
91.73% of total issued capital is held by or on behalf of the
20 largest shareholders.
Voting Rights
Under the Company’s Constitution, every member present
is entitled to vote at a general meeting of the Company
in person or by proxy or by attorney or, in the case of a
corporation, by representative, and shall, upon a show of
hands, have one vote only.
Proxies – Where a member is entitled to cast two or more
votes it may appoint not more than two proxies or attorneys.
Where a member appoints two proxies, neither proxy
is entitled to a vote on a show of hands.
Poll – On a poll, every member entitled to vote shall, whether
present in person or by proxy or attorney or, in the case of a
corporation, by representative, has one vote for every share
held by the member.
At 23 August 2024, there were 8,759,998 performance
rights on issue to current (30) and former (6) executives
under the Company’s incentive schemes. Voting rights are
not attached to the performance rights unless they have
been exercised into ordinary shares.
Distribution Schedule of Shareholders
NO. OF SHARES
1–1.000
1,001–5,000
5,001–10,000
10,001–100,000
100,001 AND OVER
TOTAL
4,817
5,911
2,979
3,792
205
17,704
The number of shareholders each holding less than a marketable parcel of the Company’s ordinary shares ($500 in value)
based on the closing price of $2.96 on 23 August 2024 was 418.
Securities Exchange Listing
The shares of the Company are listed on the Australian Securities Exchange under the code CWY.
Other information
152
Company Secretary
Dan Last
Registered Office and Principal Office
Level 4
441 St Kilda Road
Melbourne, VIC 3004
Telephone: +61 3 8397 5100
Share Registry
Computershare Investor Services Pty Limited
452 Johnston Street
Abbotsford, VIC 3067
Telephone: 1300 850 505 (within Australia) and +61 3 9415 4000 (outside Australia).
Please contact the Share Registry if you have any questions in relation to your shareholding or wish to update your contact
details, banking details, communication preference or DRP election. You can also update your details online by visiting
http://www.computershare.com.au/easyupdate/CWY.
This Annual Report is printed on ecoStar. ecoStar is an environmentally responsible paper made Carbon Neutral.
The greenhouse gas emissions of the manufacturing process including transportation of the finished product to Ball and
Doggett Papers Warehouses has been measured by the Edinburgh Centre for Carbon Neutral Company and the fibre
source has been independently certified by the Forest Stewardship Council® (FSC®). ecoStar is manufactured from 100% Post
Consumer Recycled paper in a Process Chlorine Free environment under the ISO 14001 environmental management system.
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