Price Not Reflecting Growth and FCF

Research evidence excerpt

Price Not Reflecting Growth and FCF

Australia | Environmental Services

Cleanaway EquityJuneResearch11, 2026

COMPANY UPDATEPrice Not Reflecting Growth and FCF

In this note, we assess the delivery of revenue and earnings under the BP RATING BUY

2030 1.0, which implies adjusted revenue growth of mid-single digits (ex- PRICE AUD2.39^

acquisitions) and EBIT of high-single digits (ex-acquisitions and adjusting PRICE TARGET | % TO PT AUD3.21 | +35%

for below-the-line items). The current consensus forecasts are for delivery 52W HIGH-LOW AUD2.96 - AUD2.14

of similar growth rates, and with FCF inflection expected from FY27, we FLOAT (%) | ADV MM (USD) 78.8% | 17.79

view the current share price as trading on undemanding multiples. MARKET CAP AUD5.3B | $3.8B

TICKER CWY AU

Revenue growth of mid-single digits: Over FY22-FY26, Cleanaway is estimated to deliver ^Prior trading day's closing price unless otherwise noted.

revenue CAGR of ~9.9%. Ex acquisitions (SRN / GRL in FY23, Citywide / CR in FY26), organic

growth is ~4.4%. This was achieved against a challenging environment in Industrial Services

(organic CAGR -0.3%), fire disruptions in OTS / Health (CAGR +5.6%), and the New Chum FY (Jun) CHANGE TO JEFe JEF vs CONS

flooding in Solid Waste (organic CAGR +4.3%). 2026 2027 2026 2027

REV NA NA +10% +10%

Yet, EBIT growth is double digits: Underlying reported EBIT CAGR over FY22-26 is estimated

EPS NA NA -1% +6%

at 15.7%. Ex-acquisitions, growth remains strong at 10.6%, rising to ~12% after adjusting

for $20mn of fuel and Middle East impacts. The concern is quality of this growth, and

2026 (AUD) 1Half 2Half FY

adjusting for below-line items (fires in Health of ~$6mn and Christie Street of ~$26mn, strategy

EPS -- -- 0.10

restructuring of $7mn), the EBIT CAGR is at ~9.2%.

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