Clean Harbors (CLH) Goldman Sachs Industrials and Materials Conference summary

Industry trends and margin performance

• Environmental services margins have expanded over 400 basis points in five years, driven by strong demand, complex waste streams, and improved pricing power.

• New incinerator capacity, such as the El Dorado and upcoming Kimball facilities, has been highly margin accretive.

• Customers value specialized services, safety, and efficiency, supporting continued pricing strength.

• No signs of price elasticity yet; strong demand and tailwinds like reshoring and infrastructure investments support further pricing.

• Long-term margin aspirations remain at 30% for environmental services, with current margins at 25%.

Operational efficiency and technology

• Proprietary, homegrown logistics and routing systems optimize transportation and reduce costs.

• AI and automation initiatives are being implemented to improve efficiency, billing, and operational processes.

• Incremental volumes leverage the network, driving higher margins as scale increases.

• Most transportation is internalized, with limited third-party use, enhancing control and customer satisfaction.

• Technology investments target incremental margin gains of 25-50 basis points through network efficiency.

Market structure and network advantages

• Nine of 13 commercial incinerators in North America are part of the network, providing strategic coverage and logistical benefits.

• The network allows for efficient handling of complex waste streams and reduced transportation costs, with most savings retained.

• Captive incinerators are declining due to financial, operational, and regulatory pressures, with commercial facilities handling more complex waste.

• The incinerator footprint is historically concentrated east of the Mississippi due to industrial development patterns.