The share price of Cleanaway Waste Management Ltd (ASX: CWY) is off to a sluggish start on Wednesday after the group unveiled its results for FY25.
Shares in the company are trading at $2.71 apiece at the time of writing, marking a 5% drop from Tuesday's close.
For comparison, the All Ordinaries Index (ASX: XAO) is down by 0.3% at the same time.
It appears that shareholders weren't too impressed with the FY25 numbers for this ASX 200 industrials stock.
Let's take a closer look at the key takeaways for the year.
Operational background
Cleanaway is an Australian waste management solutions provider offering a full spectrum of services across the waste value chain.
Its services cover everything from household rubbish and recycling to hazardous liquid disposal and large-scale industrial clean-ups.
The ASX 200 industrials stock divides its operations into two groups.
Firstly, its Solid Waste Services unit is the company's dominant revenue driver.
Its other operational group is the Environmental and Technical Solutions (ETS) division.
However, for reporting purposes, it splits its ETS business into two further segments: 'Industrial Services' and 'Oils and Technical Services and Health Services'.
What happened in FY25?
All up, net revenue of $3.3 billion saw a 3.4% uptick from a year ago.
This outcome was driven by a strong performance in the Solid Waste Services segment which recorded a 6% rise in revenue.
Underlying operating earnings (EBIT) for FY25 clocked in at $411.8 million, marking a 14.6% jump on the previous corresponding period.
Here, the Solid Waste Services division generated a 12.8% lift in EBIT, with the Oil and Technical Services and Health Services segment also contributing with a 24.2% increase.
Notably, the company's EBIT margin of 12.5% hit record highs after rising by 130 basis points from FY24.
In turn, earnings per share (EPS) grew by 15.8% year over year to 8.8 cents per share.
Net profit after tax (NPAT) also jumped by 16.1% to reach $198 million.
However, free cash flow of $270.2 million declined by 6.2%.
Cleanaway declared a final fully franked dividend of 3.2 cents per share for the second half of the year.
This takes the total dividends declared for FY25 to 6 cents per share – up by 20% year over year.
What next for this ASX 200 industrials stock?
Management noted that the company's underlying business momentum remains strong.
As a result, it is guiding for another year of double-digit growth for underlying EBIT in FY26.
It expects this metric to range between $470 and $500 million for the year, including some $30 million EBIT contributions from new acquisitions.
Excluding acquisitions, management believes that Cleanaway is well placed to deliver more than $450 million of underlying EBIT in FY26.
It also expects free cash flow to improve thanks to underlying earnings growth, a reduction in catch-up tax, and more efficient cash flow management.
