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CLEAN HARBORS INC (CLH)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 revenue grew 7% to $1.43B, with diluted EPS of $1.55; Adjusted EBITDA was $257.2M and margin 18.0% as ES strength offset SKSS headwinds .
  • ES delivered 9% revenue growth, 11% Adjusted EBITDA growth, and 50 bps margin expansion; incineration utilization reached 94% (vs. 85% LY), average pricing +4% .
  • SKSS remained challenged by base oil/lubricants pricing; management moved to charge‑for‑oil (CFO) in mid‑November and idled the California re‑refinery to lower costs .
  • 2025 guidance: Adjusted EBITDA $1.15–$1.21B (midpoint +6% YoY), Adjusted FCF $430–$490M, and Q1 ES Adjusted EBITDA +4–6% YoY; consolidated Q1 EBITDA flat .
  • Catalyst path: Kimball incinerator commercial launch and ramp (12% capacity increase), robust PFAS pipeline, continued field services growth with HEPACO synergies .

What Went Well and What Went Wrong

What Went Well

  • ES segment delivered record performance: revenue +9%, Adjusted EBITDA +11%, margin +50 bps; “11th consecutive quarter of year‑over‑year margin growth” .
  • Network execution: incineration utilization 94% and average pricing +4%; strong field services (+47% revenue, HEPACO integration) and technical services (+8% revenue) .
  • Operational milestones: Commercial launch of Kimball (on schedule), TRIR 0.65 for 2024, integrations of HEPACO and Noble, and PFAS “Total Solution” expansion; “We believe we have the ideal strategies in place to deliver a great financial performance in 2025.” .

What Went Wrong

  • SKSS headwinds: base oil/lubricant pricing deterioration; Q4 SKSS revenue -5% YoY and profitability down vs. LY; CFO shift reflects weaker conditions .
  • Q4 consolidated Adjusted EBITDA margin down YoY to 18.0% (19.0% LY) with ~$4M Kimball start‑up costs included; Q4 income from operations declined to $137.0M (vs. $147.3M LY) .
  • Industrial Services softness persisted into Q4 given weaker refinery turnaround scope; management expects recovery in 2025 .

Financial Results

MetricQ4 2023Q3 2024Q4 2024Consensus (S&P Global)
Revenue ($USD Millions)$1,338.2 $1,529.4 $1,431.1 N/A (SPGI unavailable)
Diluted EPS ($)$1.81 $2.12 $1.55 N/A (SPGI unavailable)
Adjusted EBITDA ($USD Millions)$254.9 $301.8 $257.2 N/A (SPGI unavailable)
Adjusted EBITDA Margin (%)19.0% 19.7% 18.0% N/A (SPGI unavailable)
Segment MetricQ4 2023Q3 2024Q4 2024
ES Third‑Party Revenue ($USD Millions)$1,112.2 $1,287.7 $1,214.1
SKSS Third‑Party Revenue ($USD Millions)$225.9 $241.7 $216.9
ES Adjusted EBITDA ($USD Millions)$278.7 $332.5 $310.6
SKSS Adjusted EBITDA ($USD Millions)$46.8 $41.2 $24.6
Corporate Items Adjusted EBITDA ($USD Millions)$(70.6) $(71.9) $(78.0)
KPIsQ4 2023Q3 2024Q4 2024
Incineration Utilization (%)85 89 94
Avg Incineration Pricing (YoY %)—+6 +4
Field Services Revenue Growth (YoY %)—+68 +47
Technical Services Revenue Growth (YoY %)—+8 +8
Parts Wash Services (#)——246,000
Waste Oil Collected (mm gal)—69 63
Blended Volumes (% of total sold)—21 20

Note: Consensus comparisons unavailable due to S&P Global daily limit while fetching estimates; management stated Q4 results “beat Street expectations” .

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDA ($USD Billions)FY 2025—$1.15–$1.21 (midpoint $1.18) New (implies ~6% YoY growth)
GAAP Net Income ($USD Millions)FY 2025—$376–$427 New
Adjusted Free Cash Flow ($USD Millions)FY 2025—$430–$490 (midpoint $460) New; excludes Phoenix growth spend
Net Cash from Ops ($USD Millions)FY 2025—$775–$865 New
ES Adjusted EBITDA Growth (YoY %)Q1 2025—+4% to +6% New
Consolidated Adjusted EBITDA (YoY)Q1 2025—Flat New
SKSS Adjusted EBITDA ($USD Millions)FY 2025—~$140 (midpoint) New
Corporate Negative Adjusted EBITDA (YoY %)FY 2025—Up 3%–7% New
Depreciation & Amortization ($USD Millions)FY 2025—$440–$450 New
Provision for Income Taxes ($USD Millions)FY 2025—$135–$157 New
Phoenix Growth Project Capex ExclusionFY 2025—$15M excluded from Adj. FCF Policy change

Earnings Call Themes & Trends

TopicQ2 2024 (Previous Mentions)Q3 2024 (Previous Mentions)Q4 2024 (Current Period)Trend
PFAS regulation/testingPlanned EPA/DoD OTM-50 testing; PFAS “Total Solution” and growing pipeline Testing to meet stricter PFAS standards in Nov; pipeline up 15–25% QoQ Expect PFAS test results in Q2; confidence PFAS eliminated in incinerators; pipeline building Strengthening
Incinerator capacity (Kimball)On track for Q4 launch; adds ~70k tons; network leverage Commercial launch in Nov; start‑up costs expected Launched in Dec; 28k tons planned in 2025; EBITDA ~$8–$12M ramp to $25–$45M over 3–4 yrs Ramping
SKSS pricing/CFO actionsGroup III pilot; blended volumes 19%; market spot weaker; modest guidance Base oil pricing deterioration; inventories elevated; California re‑refinery idled CFO shift mid‑Nov; SKSS EBITDA guided ~$140M FY25; blended 20%; collections 63M gal Stabilizing actions amid headwinds
Field Services & HEPACOHEPACO drove +64% FS revenue; major ER events FS +68% YoY; integration ahead of plan; AR timing issues noted FS +47% YoY; healthy ER pipeline; Q1 impact from CA wildfires likely net neutral Strong and integrated
Industrial ServicesTurnarounds -10% revenue; expect Q3 recovery Fall turnarounds reduced scope; recovery expected in 2025 Recovery expected in 2025; stronger turnaround count booked Improving outlook
Captive incinerators & MACTCapacity tightness favors commercial network MACT review may spur captive upgrades/closures Active work with captives; MACT timing 3–5 years; potential tailwind Opportunity building
Semiconductor/region expansionBaltimore expansion; pipeline of internal projects —Phoenix hub expansion targeting semiconductor growth; $15M spend Targeted growth

Management Commentary

  • “Our ES segment capped a record 2024 with a robust performance, including the 11th consecutive quarter of year‑over‑year margin growth.”
  • “Incineration utilization was an outstanding 94% for the quarter, up from 85% in the same period a year ago.”
  • “In response to the weakening market… we took aggressive action in mid‑November by shifting customers to a charge‑for‑oil (CFO) position.”
  • “We expect a year of profitable growth in 2025… The commercial ramp up of our Nebraska incinerator is underway… We anticipate a return to growth in our Industrial Services business this year.”
  • “Based on our Q4 and 2024 results… we expect 2025 adjusted EBITDA in the range of $1.15 billion to $1.21 billion… adjusted free cash flow $430 million to $490 million.”

Q&A Highlights

  • Disaster response: Participating in California wildfire cleanup; Q1 net impact likely neutral given regional slowdown .
  • SKSS trajectory: Q1 pressured by lower pricing and high‑cost inventory; benefit from CFO and inventory normalization in Q2/Q3 .
  • Kimball ramp cadence: Minimal in Q1, then ~$2M in Q2, ~$3M in Q3, ~$5M in Q4 toward ~$10M 2025 EBITDA midpoint .
  • Captive incinerator market: ~41 captive units; ~20 with potential change; multi‑year MACT could drive closures; not baked into 2025 .
  • M&A multiples rising; active pipeline; disciplined approach to strategic fit and returns .
  • Demand by vertical: Strong across chemicals, retail, manufacturing; drum collections up high single digits entering 2025 .

Estimates Context

  • S&P Global consensus EPS/revenue/EBITDA data for Q4 2024 was unavailable at the time of request due to system limits; therefore estimates comparisons are not shown (management stated Q4 results “beat Street expectations”) .
  • Guidance implies Street may reassess FY25 segment mix: ES growth sustained by pricing/network leverage and Kimball ramp; SKSS guided ~$140M EBITDA reflecting conservative base oil assumptions .

Key Takeaways for Investors

  • ES momentum intact: 11 straight quarters of margin expansion; utilization 94%; pricing +4% — core earnings power resilient .
  • Kimball adds strategic capacity: 12% incineration capacity increase; ~$8–$12M 2025 EBITDA with multi‑year ramp to $25–$45M — supports throughput/pricing mix .
  • SKSS actions to stabilize: CFO pricing shift and refinery idling to align feedstock cost with spot base oil dynamics; blended sales and Group III initiatives progressing .
  • 2025 outlook: Adjusted EBITDA $1.15–$1.21B (+~6% YoY midpoint), Adjusted FCF $430–$490M; Q1 ES +4–6% YoY vs consolidated flat .
  • Field Services/HEPACO synergy: Strong ER pipeline and integration continue to drive growth; watch AR collections execution (improved in Q4) .
  • PFAS optionality: Testing results expected in Q2; growing pipeline; regulatory momentum likely supports volumes across disposal network .
  • Capital allocation: Healthy cash and <2x net leverage; Phoenix expansion targets semiconductor demand; ongoing opportunistic buybacks .

Additional Press Releases (Q4 2024 context)

  • SKSS pricing actions: “Increases to Used Oil Pricing and Service Stop Fees” announced Nov. 11, 2024 — underpin CFO shift and service economics .