Clean Harbors FY Conference Summary Company Overview - **Company**: Clean Harbors (NYSE: CLH) - **Industry**: Environmental Services, Hazardous Waste Management - **Key Executives**: Co-CEO Eric Gerstenberg, CFO Eric Dugas Core Business Model - Clean Harbors focuses on sustainability through the disposal and recycling of hazardous waste, operating with a workforce of 24,000 employees and managing over 340,000 customer locations across 900 branches in North America [3][4] - The company operates under two main reporting pillars: Environmental Services and Safety-Kleen Sustainability Solutions, with six different business units [3][4] Environmental Services - **Business Units**: - **Technical Service Branch**: Packages and collects large quantities of hazardous waste [4] - **Safety-Kleen Environmental**: Collects smaller quantities of hazardous waste, primarily from manufacturing and automotive sectors [4] - **Field Service Branch**: Responds to emergency events, contributing approximately $1 billion to the overall $6 billion business [4] - **Industrial Services**: Works with major chemical refining plants, employing 2,600 staff on-site [5] Safety-Kleen Sustainability Solutions - Largest collector of used motor oil, processing over 250 million gallons from 160,000 customers [5][6] Competitive Advantages - Clean Harbors is the largest hazardous waste collector in North America, with a significant share of the market despite competition from fragmented collectors [10] - The company has a robust transportation network, being the 14th largest private motor carrier, managing over 2,600 rail cars and a diverse fleet of vehicles [14] Disposal and Recycling Facilities - Operates 33 Treatment Storage Disposal Facilities (TSDFs) and 10 incinerators, managing approximately 70% of commercial incineration waste [18][19] - Recently invested $230 million in a new incinerator in Nebraska, capable of handling 38,000 tons of waste [19] - Manages seven Subtitle C hazardous waste landfills and 11 wastewater treatment facilities [20] Market Opportunities - **Captive Incinerators**: The number of captive incinerators has decreased from 90 to about 40, presenting opportunities for Clean Harbors to manage waste for these customers [22][23] - **PFAS Cleanup**: The company generated $120 million from PFAS-related services, with a projected growth rate of 15%-20% quarterly [32][33] - **Reshoring**: Clean Harbors is positioned to benefit from reshoring trends, with existing customers expanding their manufacturing capabilities [36][37] Financial Performance and Projections - The company aims for top-line growth of GDP plus 1%-3% and EBITDA growth slightly above that [39] - Free cash flow conversion rate is above 40%, with a target to maintain this level [40] - Recent acquisition of DCI's environmental services division, generating $40 million in revenue, indicates ongoing M&A activity [44] Technology Integration - Clean Harbors is leveraging AI across various operations, with 40 active projects aimed at improving efficiency and compliance [52][55] - Examples include electronic worksheets for billing and a packaging tool for hazardous materials, reducing training time for new employees [53][54] Conclusion - Clean Harbors is well-positioned in the environmental services industry with a strong operational model, competitive advantages in waste management, and significant growth opportunities in PFAS cleanup and reshoring trends. The company maintains a disciplined approach to capital allocation and technology integration to enhance service delivery and operational efficiency.

Financial Data and Key Metrics Changes - The company reported record revenues exceeding $6 billion for the first time in its history, with a 5% increase in adjusted EBITDA for 2025 [7][18] - Q4 revenue increased by 5% to $1.5 billion, with adjusted EBITDA rising 8% to $279 million, marking the highest growth rates seen in fiscal 2025 [19][20] - The adjusted EBITDA margin improved by 60 basis points year-over-year to 18.6% in Q4, and by 40 basis points for the full year [20][21] Business Line Data and Key Metrics Changes - The Environmental Services (ES) segment achieved a 6% growth in adjusted EBITDA, with a 60 basis point increase in its adjusted EBITDA margin [7][9] - Technical Services revenue rose by 8%, while Safety-Kleen Environmental Services revenue grew by 7%, driven by pricing and higher volumes [8] - Field Services revenue grew 13% in Q4, significantly aided by large-scale emergency response projects [8][9] Market Data and Key Metrics Changes - The company handled nearly 22,000 emergency response events in 2025, reflecting a 5% increase from the previous year [10][58] - Incineration utilization was reported at 89% for the full year, slightly up from 88% in 2024, while landfill volumes increased by over 50% in Q4 [8][9] - The PFAS business is expected to grow by 20% in 2026, supported by regulatory developments and ongoing projects [10][11] Company Strategy and Development Direction - The company plans to continue expanding its PFAS services and has secured a three-year, $110 million contract for PFAS water filtration work [10] - A purchase agreement to acquire environmental businesses from Depot Connect International for approximately $130 million was announced, expected to generate $40 million in annual revenue [14][15] - The company is focusing on internal investments, including a $50 million expansion of its vacuum truck fleet, to capitalize on growth opportunities [16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth trajectory, anticipating another strong year in 2026 with revenue and adjusted EBITDA growth [17][30] - The outlook for 2026 is based on modest economic assumptions, with potential upside from ongoing projects and market conditions [17][30] - Management highlighted the importance of safety, reporting a record total recordable incident rate of 0.49, which is below the prior year and industry-leading [4] Other Important Information - The company achieved a record $509 million in annual adjusted free cash flow, representing nearly 44% of its 2025 adjusted EBITDA [23] - The net debt to EBITDA ratio was approximately 1.8 times, the lowest leverage in nearly 15 years, providing flexibility for capital allocation strategies [22] Q&A Session Summary Question: Update on captive market and incineration pricing trends - Management indicated that discussions regarding captive closures are ongoing, with potential for additional closures in 2026 and 2027, while incineration pricing is expected to improve in the mid to upper single digits [34][36] Question: Confidence in industrial services growth - Management noted positive indicators in industrial services, with ongoing assessments of turnaround needs for over 400 customers, although guidance remains conservative [38][39] Question: Insights on vacuum truck and field investments - Management emphasized the importance of internal growth investments to meet demand, with a focus on building capacity rather than relying solely on acquisitions [43][46] Question: M&A pipeline and opportunities - Management confirmed active engagement in the M&A space, particularly in environmental services, with several opportunities being pursued [51] Question: Drivers of Safety-Kleen EBITDA expectations - Management acknowledged challenges in base oil pricing affecting Q1, but expects improvements throughout the year as pricing modifications take effect [52][53] Question: Emergency response work quantification - Management reported over 22,000 emergency response events in 2025, with expectations for continued growth in this area [58][60]

Core Viewpoint - Beikong Urban Resources (03718.HK) has won a bid for a sanitation integrated operation labor subcontracting project in Suizhou City, Hubei Province, with an estimated total contract value of approximately 137 million yuan [1]. Group 1: Company Overview - Beikong Urban Resources primarily engages in providing environmental sanitation services, hazardous waste treatment services, and waste electrical and electronic products processing services [1]. - The company operates through its wholly-owned subsidiary, Beikong Urban Environmental Services (China), which is established under Chinese law [1]. Group 2: Project Details - The scope of services for the Suizhou City sanitation integrated operation labor subcontracting project includes cleaning and sanitation, landscaping maintenance, municipal facility maintenance, and other sanitation services in the Hedong area [1].

Core Viewpoint - Modern Investment reported a solid performance in the first half of 2025, with total revenue of 4.042 billion yuan, a year-on-year increase of 11.74%, and a net profit attributable to shareholders of 299 million yuan, up 15.97% [2] Group 1: Financial Performance - The company achieved a net profit of 293 million yuan after deducting non-recurring items, reflecting a growth of 15.78% year-on-year, indicating strong profit quality [2] - Despite slight fluctuations in gross margin due to industry conditions, the overall expense ratio decreased, with financial expenses reduced from 471 million yuan to 390 million yuan, a decrease of 17.28% [2] - The company lowered the comprehensive financing cost of existing debt by 11 basis points compared to the end of the previous year through proactive debt replacement and issuing low-cost financing tools [2] Group 2: Operational Efficiency - The highway business, as part of the company's "one body," continued to play a stabilizing role, managing approximately 563 kilometers of highways, including major national routes [3] - Toll revenue from Xiangheng Expressway reached 530 million yuan, a year-on-year increase of 12.16%, while Huai-Zhi Expressway revenue was 37.99 million yuan, up 11.67% [3] - The company implemented a digital transformation strategy, enhancing operational efficiency with initiatives like the "Highway Huaitong" platform and AI applications, resulting in a 50% improvement in toll efficiency [3] Group 3: Business Expansion - The company is leveraging its strengths in finance, environmental protection, and new energy sectors to drive growth, aligning with national policies on financial strength and carbon neutrality [4] - The financial segment generated revenue of 2.166 billion yuan, focusing on providing precise services to the upstream and downstream of the highway industry [4] - The environmental segment has strengthened its market position, with successful renewals of hazardous waste permits and advancements in smart wastewater treatment technology [4] Group 4: New Energy Initiatives - The company is positioned as a pioneer in photovoltaic power generation along highways, actively expanding its solar energy initiatives in line with government policies [5][6] - Future plans include seeking to extend toll collection periods and acquiring quality road assets through mergers and acquisitions to sustain long-term growth [6] - The company aims to enhance its internal risk control systems and focus on the core highway business while integrating financial, environmental, and new energy operations to stabilize revenue [6]

Group 1 - The company, Beijing Enterprises Urban Resources (03718), expects a significant decrease of approximately 70% to 75% in profit attributable to shareholders for the first half of 2025 compared to the same period in 2024, primarily due to an asset impairment loss provision of approximately RMB 162 million [1] - The company’s subsidiary, Xianju Pingfu Environmental Technology Co., Ltd., which focuses on hazardous waste treatment, has suspended operations due to an unexpected leakage incident discovered in early 2024, despite having completed facility construction and trial operations in late 2022 [1] - The company has strategically decided to cease operations of the Xianju project to focus on other sustainable growth opportunities, citing competitive pressure and a significant decline in local disposal prices since the project's inception [1] Group 2 - The asset impairment provision for the first half of 2025 is approximately RMB 162 million, which includes a property and plant impairment loss provision of about RMB 95.44 million, equipment impairment loss provision of approximately RMB 65.79 million, and other intangible asset impairment loss provision of about RMB 294,000 [2] - This asset impairment is expected to reduce the profit attributable to shareholders by approximately RMB 162 million for the first half of 2025; however, it will be a one-time non-cash expense and is not anticipated to impact the group's cash flow [2]

Group 1 - The company, Beikong Urban Resources, expects a significant decrease of approximately 70% to 75% in profit attributable to shareholders for the first half of 2025 compared to the same period in 2024, primarily due to an asset impairment loss provision of about RMB 162 million [1] - The company’s subsidiary, Xianju Pingfu Environmental Technology Co., Ltd., which focuses on hazardous waste treatment, has suspended operations due to an unexpected leakage incident discovered in early 2024, despite having completed facility construction and trial operations in late 2022 [1] - The company has decided to strategically cease operations of the Xianju project to focus on other sustainable growth opportunities, citing competitive pressure and a significant decline in local disposal prices since the project's inception [1] Group 2 - The asset impairment provision for the first half of 2025 is approximately RMB 162 million, which includes property and plant impairment losses of about RMB 95.4 million, equipment impairment losses of approximately RMB 65.8 million, and other intangible asset impairment losses of about RMB 294,000 [2] - This asset impairment is expected to reduce the company's profit attributable to shareholders by approximately RMB 162 million for the first half of 2025; however, it will be a one-time non-cash expense and is not expected to impact the group's cash flow [2]

Core Viewpoint - The company expects a significant decrease in shareholder profit for the first half of 2025, primarily due to an asset impairment loss provision related to its waste treatment project [1] Group 1: Financial Outlook - The company anticipates a reduction of approximately 70% to 75% in shareholder profit for the first half of 2025 compared to the same period in 2024 [1] - An asset impairment provision of around RMB 160 million will be recognized in the first half of 2025 [1] Group 2: Project Status - The Xianju Project, a wholly-owned subsidiary established in 2018, focuses on hazardous waste treatment services, specifically solid hazardous waste incineration [1] - The project completed facility and equipment construction in 2022 and began trial operations in the fourth quarter of 2022 [1] - Operations were suspended due to an unexpected leakage incident discovered in early 2024, with temporary emergency measures implemented to prevent further leakage [1] Group 3: Strategic Decisions - A remediation plan has been developed based on an environmental assessment by third-party experts, but additional costs and time are expected to restore production [1] - The company has strategically decided to cease operations of the Xianju Project to focus on other sustainable growth opportunities due to competitive pressures and an oversupply of local disposal capacity [1] - The company believes that the assets related to the Xianju Project require impairment provisions due to the current operational status and declining sales prices [1]