Cleanaway Waste Management Limited (CWY) Earnings Call Transcript & Summary

So I would like to acknowledge the traditional owners of the lands on which we meet today, the Gadigal people of the Eora Nation and pay my respects to elders past, present and emerging. Firstly, good morning to everyone, and also good morning or good evening or good afternoon to whoever else is on the call around the country and around the world. Thank you for joining us for the second of our deep dives into our Blueprint 2030 strategy. Today, we will focus mainly on our operational excellence blueprint together with how our landfill optimization blueprint helps to deliver sustainable customer solutions. I'll take the disclaimer on the next page as read. And as you can see from the agenda on Slide 3, we will be covering a broad range of related topics. And you'll have the opportunity to hear from several members of the Cleanaway team who are with me this morning. Rather than give you their backgrounds, I will ask that they introduce themselves at the start of their relevant sections. So in terms of the agenda, I'm going to provide you with some introductory comments around the strategy and the progress that we've made. Chris is going to take you through the customer connect blueprint. Alex will take you through data analytics and fleet optimization. Taku will talk to you about our leadership in carbon and circularity with a particular focus on landfill optimization. Michael is going to cover core processes and lighthouse branches, and Paul will talk to the financial goals and capital allocation, and then I'll come back on recap it and bring it all together for you at the end. Frank and Richie are also with us this morning and will be available alongside the rest of the team to answer any questions at the end of the formal presentation. The way it's going to work is we're going to take questions from the floor initially. And for those of you joining via webcast, please send your questions via the platform, which Richie will grab. We'll monitor them, and we'll try and get through as many as possible. All right. Moving to Slide 5. This is the slide we've shared with you before, and it's how we think about our business and our strategy. Through our growth framework, our strategic pillars build upon each other to generate superior shareholder value while providing customers with great service and value for money and sustainable solutions. If we start on the left-hand side, our current business is well diversified across all sectors of the economy, and our contracts with our customers have inflation protection mechanisms. Together, this drives GDP plus growth to the core business and creates the opportunity to deliver operating leverage as the business grows. Under our operational excellence pillar, we align our culture with our strategy and extend our performance culture to the front line to both deliver for today and improve for tomorrow. We will better connect our frontline teams to our business, be branch-led and work together for continuous improvement. We will be able to work smarter through the data analytics and digitization programs that are now rolling out and which you will hear about from Alex. It's through these programs and how we use them that we achieved a step change in operational productivity. Then under our strategic infrastructure growth, we continue to invest to extend our recycling and landfill diversion infrastructure and service platforms. In addition to our blueprint, our innovation blueprint, it ensures we are well positioned to capture opportunities from emerging at-scale waste streams to meet the country and our customers' future recycling needs. And then under our sustainable customer solutions pillar, we integrated all together, our priced assets for circularity, carbon and seamless customer service. We will create products and services to provide our customers with access to integrated platforms that best meet their needs and the evolving shape of their waste. That leads to growth in market share through our compelling customer proposition of service and value and sustainability. As I outlined before, the strategy is very detailed. It has 14 blueprints that address the key opportunities that we have identified. Within each of these blueprints are clearly defined location-specific and coordinated objectives and goals that will deliver our target outcomes. In our session on the 7th of June, we focused on the left-hand side, which covered the strategic infrastructure blueprints. Because we won't be focusing on that section today, I'll take this opportunity to give you a brief progress update on some of the blueprints. Starting with energy-from-waste, we continue to make good progress across each of our projects. We have identified our preferred site for our energy-from-waste development in Queensland, and subject to final due diligence, we expect to complete the site acquisition in the coming weeks. In C&D, we've created a separate C&D, and when I say C&D I mean construction and demolition business unit. Given the distinctive characteristics and requirements that waste stream has compared to our general C&I business. On organics, we are currently undertaking a FOGO processing trial at GRL. This trial is designed to further understand the capacity of the plant and the quality of the compost produced over time. As part of the trial, we are leveraging our advanced resource recovery facility at Kemps Creek to simulate the indoor maturation that we are proposing to develop at the GRL facility. This trial is being conducted with part of the plant running NSW, inerting mode and the rest running FOGO and hence, simulates the transition. Our pipeline of innovation projects continues to move at pace. We intend to assemble a privileged set of high circularity low-carbon infrastructure assets that will meet the evolving needs of our customers. For example, you might have seen in the media last week that we are making good progress on our feasibility study for a soft plastics circular solution in joint venture with Qenos. This proposal has the potential to manage over 100,000 tonnes per annum of soft plastic that is currently destined for landfill. And finally, and while I can't name names today, our industrial waste services team have recently negotiated a significant contract with a Tier 1 energy player. This will enable us to put additional capital to work at attractive returns and pick up on the energy transition growth vector. The team continues to build its pipeline of these attractive large contract opportunities. And so moving to today's focus, which is the right-hand side of the page. These are the blueprints that really get at improving profitability of the existing business by working smarter rather than harder. It's about providing our people with the tools that make it easier to get it right and providing a better experience for our customers by making us easier to deal with. Now I'm going to hand you over to Chris, who will take you through the Customer Connect blueprint.

Thanks, Mark, and good morning to everyone. I'm Chris Avramopoulos. I've been with Cleanaway just over 2.5 years. And amongst my accountabilities very simply is our customers. When I joined pretty early on in the piece, I realized that our processes and our systems didn't really help our people to be the best that they could be in servicing our customers. I've heard firsthand from our customers around some of the challenges in solving their problems. The other thing I noticed was that we're a very, very high transaction business. We're very geographically spread. And we've got lots of people working really, really hard to service our customers. For you to appreciate why we need something like Customer Connect, I just want to share some of the dimensions of our business. Through other presentations, you'd have heard, we have over sort of 250 branches, as a part of our network. We service over 150,000 C&I, C&D customers. And we service millions of households on a day-to-day basis through our municipal contracts. Now while our frontline teams did a heavy lifting in terms of delivering services, we've got a very dedicated team of around 250 customer service offices, 280 salespeople and 350 administrative staff that sort of stitch this all together to make sure that we maintain high levels of service to our customers. But it's really, really hard for those guys, given our poor systems that are in place today. In addition to that, we do about 1.6 million services every month to C&I, C&D customers, about 5 million municipal services. We receive about 92,000 calls from customers. We established about 600 new customers every month, excluding international customers. And we deal with about 1,500 sales leads. So that's sort of evidence of the scale and size and transactional nature of our business. When you're talking about very, very large numbers like this, even if you operate at 99% SIFOT, which is our solids business, that's 15,000 things that go wrong every month. And there's a lot of effort that goes on in terms of recovering from those in our business, high level of inefficiency, high level of manual number of processes. From an invoicing accuracy point of view, and we've improved this over the last couple of years when I came into the business, we were running at about 4%. So every 100 invoices, we had to reissue 4 of those. Given our processes, we've improved that to about 2, but we've still got a long way to go in terms of being best practice. But 2% invoice accuracy means about 1,800 invoices that need to be reissued every month, and it's very, very labor-intensive when you get that dispute from a customer to sort of get to the bottom of [indiscernible] to get a resolution. So what's it all about? Hopefully, you're getting a bit of a flavor of where I'm going to go with this. We're focusing on the call to cash process. So for whatever the matter might be that the customer calls us all the way through to collecting the cash. Now I want to give you -- to show you a short video, which gives you a flavor of the typical problems we encounter on a day-to-day basis. And I'll give you the insight into something pretty small turns into a lot of effort. So fingers crossed on the video. [Presentation]

We're excited. But generally, we have a huge enthusiasm and excitement across the organization about what we're going to do here. Obviously, you need to have systems and processes, which help you get better at what you need to do, but the new ones in Cleanaway with this high transactional nature of our businesses, you've got to plan for when things go wrong as well, too. And so our customers absolutely appreciate that things can go wrong, but they want a seamless experience in terms of remitting it. When I speak to customers, one of the common things they say is when things go wrong, we don't want to ring you to basically highlight a particular issue to you. You should know about it and you should fix about it, and that's the key element of what our customer connect is about. So that's sort of what we call when things go wrong. We're absolutely designing that in many facets of this particular program to reduce that administrative effort and reduce those calls that come in that are basically unnecessary. Beyond the customer experience and employee satisfaction, it's going to give our people the tools to serve our customers better. We really truly believe this is going to be competitive advantage. Many of our customers, they want that seamless hassle-free out-of-mind experience. For a lot of our customers, it's smaller and particularly, waste is not a big issue for them. They just want it to happen routinely without hassle like in our many utilities that we encounter in our private lives. So in doing that, we really believe we can get some price leverage. We can expand our margins, not only through efficiency, but also through continued organic growth and reducing customer churn. Now when I look at our churn of our customers, invariably a significant proportion of it is customers being disappointed when we repeatedly fail in our service levels to them. Some more examples of the program and what it's going to feature. One of the headline metrics is what we call first call resolution. We operate at about 30% today. So that's when a customer calls us for whatever the matter might be. We can usually resolve that on the spot in about 30% of the times. Best practice is somewhere around 70%, 75%. That's what we're aspiring to do, and we will do. We're going to streamline information to provide it realtime to our customers. And we're going to reduce those thousands of calls. They come in for a variety of issues to make complaints from customers. We've improved that employee experience, which I highlighted earlier on. We're going to reduce significant amount of highly manual time-consuming processes, multiple handoff points, data error issues as we pass it from person to person today. And importantly, our employees are going to be more satisfied. So in a very competitive labor market, providing these tools to people to attract prospective employees become more and more important. And particularly these administrative tasks that people don't want to be doing these types of activities today. So they're becoming more challenging to fill. And then just another example, we're going to really -- this is not just about the process of interacting with our customers. It's giving them realtime information and reporting, so this is where you're going to see an intersection when you hear from Alex in a little bit, how the data analyst is going to intersect Customer Connect and a simple example of that would be with our sales teams. We'll feel -- we'll feed to them realtime leads, but they can act on instantaneously whereas today. We obviously generate leads in a variety of ways across our business through analytics, but it requires a lot of effort at how it is going to make that hell of a lot easier and we'll be able to feed that realtime to our salespeople. Now on this particular page, you've got some of the facets which you can digest it time around what the program is all about and the benefits. But in essence, outstanding service is a core pillar of what Mark is trying to achieve with the organization that we all want to achieve. That's been integrating our assets together to deliver that similar service to our customers. Whether it's a large retailer who wants to report that shows realtime what the carbon impact is of waste management, or it's a small customer who wants extra service. We're going to give them a portal where they can go in at their leisure and make those changes themselves. We've got a lot of small businesses that it's not convenient for them to deal with us during our typical operating hours. They want portals where they can go and do routine things themselves. That's part of the program also. We want to be easier to deal with. We want to be even more reliable than we are today. We want to fix issues, know about our issues and fix them immediately and seamlessly, and we want to provide that realtime information to our customers and the information that they value when they need it. You've heard me talk about the theme of, you've seen the headline numbers around our administrative staff, our sales staff and our customer service staff. It's pretty heavy from an organizational perspective, hopefully, getting a feel for the efficiencies that such a program is going to bring us. Today, there's a reality across our fleet of over 300,000 -- of 3,000 trucks that a number of those trucks still don't have technology in them. So you've got drivers dealing with paperwork, which is cumbersome, prone to error and often [indiscernible] not accurate. So I've covered a lot around why we're doing this, what we're aiming to deliver. So where are we at with the program. We've just completed what we call our pre-execution phase, which is our planning phase. We'll commence implementation early in the new year after we selected our delivery partners, and that's a pretty critical decision for us, obviously, in a program like this. The business case, it's about our core systems as well, too. So we've recognized through this journey that we need to upgrade our core systems, our core platforms, which are business-as-usual sort of the systems that help us with our day-to-day activity. Many of our current systems fail or fall short of giving us the functionality that we need. So we're going through a pretty major upgrade, which is going to give us the reliability and scalability going forward for our business as we grow. And we've had our business case externally reviewed with a focus on making sure the cost, the time line, the governance, most particularly the benefits were robust, and that review was very, very positive in terms of our efforts to date. In line with our current timetable, we're expecting the first release to be rolled out towards the end of financial year '24 with subsequent releases, expanding the functionality and reach across our business. We've got 3 platforms that we operate are across Cleanaway. These program continue to fall in that so that we have a standard view of a customer across the organization. The costs, which includes delivering this foundational functionality is about $100 million with about 50% of this to be spent in the first release. The thing I've got to stress is the foundational functionality is something we would need to do as a business irrespective of this particular program. In aggregate, we're targeting about a net $8 million of EBIT benefit largely coming from cost savings. So these are very, very real. They're not hypothetical growth, price, et cetera, et cetera, very, very robust, and we have a really, really clear line of sight of those benefits and where they're going to come from. We do believe there's additional revenue upside, and we'll continue to explore that as we get into the project. The growth in the efficiency part of the investment is high double digit. So some pricing leverage, there's some reduction in churn. And that's a really, really good rule over and above the efficiencies which form the major part of the business case. As I mentioned earlier, I'm excited. The organization is excited. We're right to really realize this. And when you're undertaking a program of this scale, you really got to make sure that your organization is receptive and really wanting to come along in the journey. And with the executive team sponsorship, particularly under Mark, we're positioned really, really well for a program of this nature. And we truly do believe this is going to be a competitive advantage for Cleanaway going forward. Thank you. And Alex, and I will pass over to you.

Thanks, Chris. Good morning, everyone. My name is Alex Smith, I'm one of the General Managers here at Cleanaway. Amongst other things, I'm responsible for the financial planning, organization pricing across the group. This is for all of our commodities and data analytics. And I've been with Cleanaway now for about 6 years. Today, I'm going to present 2 blueprints, data analytics and fleet optimization. So about 2 years ago, we first spoke about data analytics and the opportunities available by understanding the profitability of our customers and by optimizing our runs. Since then, data analytics has become one of the key blue prints in our operational excellence pillar. Data analytics is perfect within our Blueprint 2030 strategy as it's all about three things: firstly, enabling our teams to make better decisions in realtime by improving the data quality, utilizing the wealth of data points we collect from our customers and delivering actionable insights. Secondly, improving productivity and engagement by working smarter, so less manual data manipulation so that our teams can focus on value add. And thirdly, utilizing the insights to drive efficiency gains and operational improvements, which will lead to margin expansion. Importantly, the blueprint is well planned and established. It's been delivering tangible financial benefits and it requires minimal capital. Our data analytics, I believe it has 4 programs. The first, the data infrastructure and governance. When we first embarked on this journey on this program 2 years ago, we had no data infrastructure within Cleanaway and data extraction was done manually by users by connecting to source systems and then cleansing that data on an individual's laptop. Today, we've implemented and delivered our Data Lake, our enterprise data warehouse. We've ingested several of our key source systems. We've cleansed and standardized data and we've defined key metrics. Put simply, we're now all using the same set of cleanse data and metrics to run the business. The second is the Reporting & Business Intelligence. It's focused on creating reports and dashboards for our operational teams to use to run the business, migrating us away from large excel files and data manipulation and creating standardized reporting across the group. The third is the Insights Delivery, which is key programs of work focused on improving margin through identifying and driving key value drivers in the business. For example, our revenue leakage program, which I will talk about on the next slide. And finally, Advanced Analytics, which will really commence in FY '24, '25 and will be building on the work completed in the first 3 programs to predict future behaviors and drive change. The first 3 programs are progressing really well, and we've been delivering incremental financial benefits into the business over the past 2 years through particularly our revenue leakage program. As I'm sure you can all appreciate our heavy reliance on paper-based scheduling worksheets and reporting creates a lot of challenges when rolling out a data analytics program. As the business becomes more digitized through the customer connect blueprint with Chris, the D&A program should go from strength to strength, and providing more immediate actionable insights and assist increase with this vision of delivering seamless services to our customers. One of the examples that I wanted to discuss today is how we can improve our margin at our existing customers by infilling our routes, thereby increase the number of customers that we service on a run. As a result of COVID, we saw a lot of customers review their service schedules, either placing it on hold during lockdown or reducing the frequency of service. Despite our sales team's efforts, we've seen some of these frequency changes stick, reducing the number of pickups we do on a specific run and then making the each remaining pickup more expensive on a per lift basis. The targeted business development program was designed to provide sales teams with leads for customers that were in areas where our existing run has a really low density. The tool creates heat maps over underperforming geographic locations and then identifies customers in the area that are not being serviced by Cleanaway. The tool creates an opportunity in sales force for our sales team to action. And because we're already servicing the area and potentially already driving past that bin, the incremental cost to pick up the bin is really minimal. We can then offer the customer a much sharper pricing. And the addition of the customer then results in the same amount of costs being applied to a greater number of bins, therefore reducing the overall cost to serve for a customer. The trial was completed earlier in the year, and we're in the process of undertaking a national campaign. In the example on the right, there, you can see that we travel over 13 kilometers or 20 minutes on a route between 2 customers. The tool identified the street's highlighted in the overall. There's opportunities to infill that particular route. The tool also really shows the synergies between customer connect and our data & analytics program. It will provide real-time analytics for our customer service team to assist in scheduling and booking customers. For example, knowing that on a Wednesday, we have a lot of capacity from low-density runs, we can offer much more competitive pricing to help infill route. Conversely, if a customer requires a Friday or a Monday service where we're quite full, we'd obviously be looking to charge a premium. The second blueprint I'm going to discuss is fleet optimization. So this blueprint is really focused on, firstly, creating a safer and more engaging workforce for our frontline teams through fleet replacement and management of our cost per operating hour and improving technology in our fleet and providing our teams with access to data and smarts to help them run the business. Secondly, it's focused on optimizing our routes and driving efficiencies in our cost per lift. Thirdly, empowering our branches with tools to drive performance improvements, leaning heavily on the work that's completed in the data analytics footprint. And finally, improving the efficiency of our workshops and the fleet safety through digitization of our fleet maintenance programs. Like data analytics, this blueprint has a lot of synergies with Customer Connect. It's also well developed, has a low risk and minimal capital requirements. So what are we actually doing as part of this blueprint? Well, there are 3 key programs of work that are being undertaken. The first is optimizing routes and reducing truck idle time. Second is optimizing our labor mix and fleet operating costs. And the third is digitizing a workshop and reviewing our maintenance schedules. I'm going to give a brief overview of the first two and then go into some detail and example on the third. So within our solid waste services and C&I collections business, we achieved operational leverage through driving efficiencies in our cost per lift. Our cost per lift includes our major cost lines, so labor, fuel, R&M and is driven by the number of hours that we spend on the road and the number of kilometers that are driven. To improve the efficiency, there are two key actions that we take. The first is ensure that our routes are really dense. So that leads into the conversation we had on data analytics. And then secondly, ensuring that we take the most efficient route to pick up our customer's bin. In most of our branches, the drivers and operational teams plan their routes on whiteboards each morning. Whilst the teams do to the best of their ability, they don't have the visibility or the tools to optimize those runs. It's also a process that generally takes about half an hour to 45 minutes each morning, time where we're paying our drivers and our operational staff, but we're not generating any revenue. Over the past 18 months, we've been working on cleaning up our customer data and developing tools to not only display our routes and customers visually but also provide recommendations on how to optimize those routes through resequencing the order of bins that we collect. The second program of work is about optimizing our labor mix and driving efficiency through our cost per operating hour. We use a combination of company drivers, owner drivers and subcontractors to service our customers. Each of them have a different cost structure associated. The work stream seeks to work through the optimal mix of these labor and R&M models whilst balancing our fleet purchasing requirements. The final work stream looks more at optimizing our workshops and maintenance schedules, and we're going to discuss that on the next slide. We've already rolled out a program of activity for each of these programs of work with the targeted benefits setting to flow into the business already. So any example here, currently, our workshops use a lot of paper. So we complete over 400,000 work orders for fleet maintenance every year, and each work order has about 10 pages attached to it. So that's 4 million pieces of paper that we generate to complete maintenance on our fleet. Each work order is also manually completed. So mechanics are writing the details of the work performed by hand and then passing that into our admin teams who then input that into our operational systems. Often, these work orders have information missing that requires further clarification before they can be input. All of this results in an increase in nonproductive time. We've embarked on a program to digitize our work orders, which means deploying tablets into each of our workshops to replace the current paper, pen and click boards. We should see significant productivity gains from the workshop and from our admin teams. The additional capacity will also result in more work being internalized. Digitizing our work orders also reduces the number of errors that have been made and will also improve the compliance through realtime updates into our operational systems. We're looking at having all of our work orders digitized by the end of calendar year 2024. And we're now going to hand across to Taku, who's going to talk about our leadership in carbon and circularity.

Thank you, Alex. Good morning, everyone. My name is Taku Ide. And in my role as Head of Carbon, I am responsible for setting Cleanaway's climate aligned targets and helping customers achieve their climate visions. And just by way of introduction, between 2000 and 2011, I had the opportunity to learn under world's academic leaders in climate science. And under their mentorship, I researched deeply on carbon capture and storage and developed a patent to extinguish underground coal fires that contribute to greenhouse gases emissions globally. Upon graduating from my doctorate program in 2011, I worked closely with global businesses, public sectors, sovereign nations and universities to deliver greenhouse gas emissions risk management strategies. Cleanaway's mission to make a sustainable future possible together made it an easy choice for me to join the company to make a difference in the world of climate. The world -- the word together, signaled that this was a humble organization coming into the collaboration, and climate challenges and opportunities will require various stakeholders to come together to deliver innovative solutions. The sheer number of customers we serve was attractive as well. It meant that there will be opportunities to design and deliver a wide array of climate aligned products and services. The support I have received from the Board, members of the executive team, my peers and the passion of everyone at Cleanaway have only strengthened my belief that this is the right organization where it can make a positive difference in the world of climate. In August of this year, we announced our emissions reduction targets that are consistent with keeping the atmosphere from warming above 1.5 degrees by the end of the century compared to [ 1850 ]. Consistent with leading science, we split our emissions targets into methane and carbon dioxide, which are the 2 primary greenhouse gases that we emit. 80% of our emissions today are methane and the remaining 20% come from CO2. The targets we have set are also consistent with Australia's recently announced 2030 targets and the global methane pledge. The activities that underpin the reduction of each of these greenhouse gases differ. Methane emission reduction is achieved primarily through increasing the capture rate of landfill gas while CO2 emissions reduction is achieved through reductions from fleet, electricity and natural gases. We prioritize reducing emissions from landfills first because most of our emissions is from methane. And because mass for mass reducing methane emissions is approximately equivalent to removing 28x the amount of carbon dioxide from the atmosphere on a 100-year basis. Today, we'll unpack the landfill gas capture initiative in detail. We do acknowledge, however, that reducing CO2 will be required to meet climate goals, and we are actively pursuing trials to reduce emissions from our fleet, which is our largest CO2 emissions footprint. This next slide we presented in June, and we revisited to restate the exciting and emerging opportunities at the intersection of waste and carbon. As a refresher, this IPCC diagram on this slide depicts the global carbon cycle, and we have identified 3 ways in which the waste sector intersects with the world of carbon. A helpful way to navigate this diagram is to divide it into 2 halves. The upper half with the arrows and the lower half, which highlights the waste sector's relevance. Focusing on the top half of the figure, the arrow show carbon sources and sinks where upward arrow show carbon entering the atmosphere and downward arrows show carbon being removed from the atmosphere. Fossil fuel sources, which is the gray arrow are the predominant sources of carbon into the atmosphere along with land use changes. Once carbon is released into the atmosphere, the carbon can be reabsorbed back into land, remain in the atmosphere or dissolve in the ocean. This is shown by the light green downward arrow, the blue dot and the green downward arrow, respectively. The carbon sources and sinks establish a new higher equilibrium as more carbon is released, and the atmospheric concentration of carbon dioxide will continue to rise so long as we continue to release the carbon that is stored in the subsurface today. Shifting our attention to the bottom half of the diagram, 3 areas of opportunity for waste sector are highlighted. By reducing methane emissions from landfill, which is 80% of our emissions, we satisfy opportunities 1 and 2 in this figure by reducing the use of virgin fossil fuels as well as by supplying lower carbon energy sources. This slide is an illustration of how we capture methane today and how we might beneficially reuse the methane that we capture. Working from left to right of this diagram, fugitive emissions are the portions of the landfill gas that escaped to the atmosphere, and these are shown with arrows from the top of the landfill. This is the emissions that we report from our landfills in our annual [indiscernible] reporting and what we want to reduce. To minimize fugitive emissions, we need to maximize gas capture, and to maximize gas capture, we are now working closely with the landfill gas engineering team to progressively install gas capture wells in concert with operations. The gas captured is approximately 50% methane and 50% biogenic CO2, at minimum, the capture landfill gas is burned in a flare. And by transforming methane into biogenic CO2 through combustion, we achieved a climate benefit. You might wonder how transforming one greenhouse gas into another greenhouse gas could be beneficial for the climate, and there are two reasons. First, methane captures 28x the solar energy that reflects from earth surface than CO2 on a master mass basis. So converting methane in this carbon dioxide allows more of the reflected energy to escape into space. Second, when landfill gas is burned, biogenic CO2 is created. The key difference between biogenic CO2 and CO2 emitted from burning fossil fuels is that while biogenic CO2 is CO2 that would have eventually entered the atmosphere through a natural carbon cycle. Carbon dioxide from burning fossil fuels is carbon that would have otherwise stayed locked within Earth's subsurface had we not banned it. The destruction of methane at landfills is recognized as an emissions reduction activity through the creation of Australian carbon credit units. We move to the right side of this diagram that illustrates the potential reuses of the methane, and at sites, where there's enough methane to be produced, we can repurpose the diagram for beneficial use. Currently, we generate and deliver over 190,000 megawatt hours of renewable electricity into the grid, which is enough electricity to power over 38,500 Australian homes. At one of our landfills, we also supply our raw untreated landfill gas through a local gas pipeline to an industrial customer to support their carbon-neutral products as landfill gas is classified as a renewable energy. Under current market conditions, we see further opportunities to advance new and similar projects. Future beneficial use could include the production of compressed natural gas, the distribution of upgraded landfill gas through intrastate gas networks and using the gas as a feedstock to produce renewable hydrogen. Any post-processing option we will pursue will convert methane into biogenic CO2 and yield the same environmental benefit as burning methane in flare. We will continue to monitor and explore various technologies as they evolve to ensure we are driving the highest economical value from the landfill gas we capture. This next slide provides tangible evidence of the real progress we are making to reduce fugitive emissions aligned to or announced -- our emissions reduction targets announced in August. Over the last 5 months, we have been rectifying, expanding and enhancing gas collection infrastructure at sites where we have operational control with respect to landfill gas. We have increased the monthly capture rate by 700,000 cubic meters, and this uplift gives us confidence that we can meet our long-term emissions targets. Benefits from meeting our emissions targets can be passed on to our customers to lower their Scope 3 emissions footprint associated with waste service. This improvement is underpinned by the reconnection of 30-plus wells and installation and drilling of 118 wells consisting of 28 horizontal wells and 90 new vertical wells, and we plan to install and drill an additional 200 wells in FY '23. Under the current market conditions and the ACCU the Australian Carbon Credit Unit regime, we will be able to meet our return thresholds on the incremental capital expenditure to increase gas capture to meet our emissions reduction targets. In future investment decisions, we'll consider the balance between meeting our emissions targets and return on incremental CapEx spend. We move on to the final slide, and this is one I've also presented before. At the heart of our decarbonization vision is enhancing our customers' experience, and we believe that our efforts to be climate aligned will complement our customers' climate aspirations. Our ambition is to reduce our emissions in accordance with the Paris Agreement to hold the increase in the global average temperature to well below 2 degrees above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5 degrees above pre-industrial levels. We are now on a path to deliver this ambition, which gives us confidence and credibility to offer decarbonization products and services to our customers from our key strategic infrastructure in the future. We are engaging and informing our customers of our carbon journey, and we are receiving positive feedback on how our focus will help fulfill their climate and sustainability goals. Through Customer Connect, we will look to automate the capability to attract the carbon footprint of services associated with our key customers to transform our customers' carbon experience. This is also a powerful use case of how realtime data analytics, that Alex presented before, can be applied. And we will continue to onboard our customers' needs and requests and reflect them in both customer connect and carbon programs. To conclude, we leave you with the next steps in the carbon program, which include building and refining marginal abatement cost curves for Cleanaway to identify and develop investment opportunities to decarbonize, capturing decarbonization opportunities with uniquely positioned strategic infrastructure and developing carbon solutions that are closely aligned to our customers' aspirations. I will now pass you on over to Michael.

Thank you, Taku, and good morning, everyone. My name is Michael Bock, and I'm the EGM for Enterprise Services and Integration. I've been with Cleanaway for almost 5 years now, where amongst other things, I've managed to talk free and SRN integrations, and I'm currently leading the work stream that monitors and ensures Blueprint 2030 is delivered effectively. So when thinking of continuous improvement, we look at two major areas: core processes and site-based processes. So first, I want to start with core processes, and core processes are the backbone. These are the processes that are common across the business at all of our sites. And we want to ensure that everyone performs core process work in an identical way. Now our core processes have a very strong focus on ensuring safety, compliance and also efficiency. And our employees are involved in the design of these core processes which ensure that they reflect what needs to happen in the real world of our branches. And more importantly, our employees are active participants in continuously improving our core processes. Now we have a central IT system that's already installed to capture suggested improvements, which will enable us to make these core processes better over time. The central system is accessible to everyone in the organization. And once we make an improvement, it will automatically flow through the company. So implementing smart core processes in a company with such a large footprint as Cleanaway is really a game changer for us to ensure a best practice way of operating. To the next slide. So we have an expert central team. We're deeply experiencing this type of work. We have identified our first 6 core processes and have work underway on the first three. Now I know that core process is a new concept for many people in this room. So I want to use the first one on the slide as an example to highlight how it works. So management of change could be something like introducing a new piece of equipment into a site. So a core process would address questions such as, what are the risks associated with this equipment? And what are the corresponding controls to manage that risk? What training needs to be done? What maintenance is required? How does adding this equipment change the flow of production? Do other pieces of equipment now need to be adjusted because we've added this one and on and on and on. So the management of change core process provides a standard way of managing these risks so that we do not experience any unintended consequences. And the great part is that we will know that change is managed to the same high standard across Cleanaway regardless of whether the site is in Melbourne, or Karratha or Bathurst. And this slide describes at a very high level, the first 6 core processes. So management of change, manage contract, which includes contractors on our sites as well, manage fixed assets, manage incidents and learning, manage technical competence and safe system of work. Next slide. So we talked about core process, which is the same process carried out identically across the enterprise. Changing now our operational excellence work is about the processes that are unique to a site. And our goal is to make operations at sites compliant, more efficient and more profitable. And we're using lean techniques and teaching our sites how to identify opportunities and build more efficient processes. So although we have a very small group of coaches, the real success of the program comes from operators at site identifying and working through the improvements. And our operators and our drivers know exactly how work is done, and they often have the best ideas on how to improve it. And another key element of the program consists of daily management systems, to bring visibility to operations, which ensures that production is closely monitored and areas for improvement stand out. So moving to the next slide. There we go. So on this page, we introduced a concept in our operational excellence work, which is lighthouse sites. So we have identified 10 sites across our business that cover all the business units. And the concept of lighthouse sites is to identify improvements at a type of site and then we see those improvements across our network to accelerate them. And over the next 3 pages, I will highlight real examples of work we are doing with our process improvement. So on this page, we have an example of improving safety and flow from one of our transfer stations. In the before diagram on the left, you can see how we trace the flow of traffic by type of waste or customer. And our proposed solution on the right is to move the location of the weighbridge which removes the loops and also eliminates vehicles having to reverse. So the end result is a safer site, especially for members of the public who drop off at a busy transfer station. And in addition, we will also be able to reduce the amount of time that drivers are out the facility, which is a real productivity gain. On this page, I would like to share an example of generating capacity at our existing sites. So these images show work we have done on reducing dock turnaround time at our Cleanaway Daniels Health Services facility in Silverwater, so here in Greater Sydney. So in this trial, the starting position to unload a truck of its full medical waste containers and then reload the same truck with empty containers to be delivered to hospitals took 51 minutes. So we applied quick change-over techniques to take the time down to 12 minutes, which is a 76% reduction. So the types of techniques that we used consisted of pre-staging a load on the dock, synchronizing both the driver and dock hands in loading and unloading and separating out the scanning and weighing steps, but we're not stopping there. So we expect further improvements as we gain insights into the new flow. And so now in this last example, I'd like to show you an example about reducing costs. So the image shows a heat map of truck congestion at our Lucas Heights landfill. And obviously, our aim is to get more trucks and loads through the facility. So the insights that emerge from this work include a range of actions that will reduce costs, such as the three shown on this slide. So the first is modifying the schedule of truck movements from transfer stations to landfills, such that the arrivals are during periods of low usage, so trucks don't have to wait extended periods. The second is dropping off trailers at landfills and then switching over to a tractor in order to tip the trailer at the landfill phase, which allows the truck and the driver to get back on the road quickly to retrieve the next load. And the third is changing how we weigh trailers at the transfer station to maximize the amount loaded because the trailer that is fuller means reduced number of runs. So I'll now pass over to Paul on the overall financial impacts of the operational excellence pillar. Paul.

Thank you, Michael, and good morning, everyone. As I hope you'll appreciate from the presentations today, there's a heap of activity going on across our operational blueprints. What I wanted to take away is that we have a coordinated program of projects that are well planned, fully resourced and already decided to deliver benefits to the bottom line. At our last strategy deep dive in June, we said that we would incur an additional $15 million in corporate costs. Today, you've seen some examples of where we've invested in the business today to generate returns for the future. The initiatives discussed today span the entire business from more effective selling to more efficient delivery of service to drive their customers, streamlining the back office, digitizing the workshop, optimizing our landfills and capitalizing on the landfill gas opportunity as well. They've already started to deliver incremental contributions to our earnings. We expect to see further momentum build into FY '24, and we're targeting for our operational excellence blueprints to contribute more than $30 million in incremental EBIT by FY '25, '26. The activities we're undertaking in blueprints 10 to 14 are tangible examples of how we will improve the EBIT margin of our current operations. Furthermore, we expect improved operational leverage as labor availability increases and inflation plans. We'll also have the contributions from SRN and GRL acquisitions. As the market continues to transition and we grow the business by executing on our more of our strategic infrastructure growth initiatives, the mix of contributions to earnings will be different from the past. We see strong EBIT and ROIC accretion through the delivery of the strategy which is our focus when it comes to financial performance. So moving now to the next slide, where I'll touch on the capital allocation and returns. This again is similar to the slide that I presented back in June. Our overarching principle of maintaining a strong balance sheet remains, and it gives us the flexibility to flex our leverage ratios from time to time where it makes sense to do so. When it comes to capital allocation, our disciplines continue to improve. So this includes taking learnings from post-investment reviews into our investment processes, having greater visibility of our pipeline of capital projects to ensure that the best projects are advanced and not merely the ones that meet our investment heads. A simple example of the improvements underway is that we're standardizing our municipal template and checklists to capture the learnings from previous municipal tender PIRs. We've also introduced a clear distinction between HS&E, stay-in business, cell development and greenhouse gas reduction and growth CapEx. As Taku alluded to in his section, for example, we've distinguished between the growth opportunity we see from greenhouse gas reduction activity compared to gas capture and flaring that we simply consider as being stay-in-business capital. When it comes to deploying capital for growth opportunities, our benchmark is always relative to the return of capital to shareholders. As the blueprints have delivered, we forecast a steady improvement in ROIC, adjusting for the unproductive capital work in progress while major infrastructure facilities are being developed and constructed. I also want to emphasize the point that Mark and I have made on many occasions in the past that while we see M&A as an opportunity to accelerate Blueprint 2030, the strategy was not developed with an M&A dependency. We will always look for the organic build where possible, and we will consider bolt-on transactions where organic solutions are not available. So as we've done in the past, we will also look to joint ventures to share risk where cross-value chain collaborations are essential to deliver the most sustainable and circular solutions. And finally, with increasing cost of debt, we've sharpened our focus on ensuring the risk-adjusted returns of our projects are credible and achievable. So I'll now pass you back to Mark to make some final remarks before Q&A. Thank you.

All right. So thanks, Paul, and thanks to the rest of the team. I hope that today's takeaway is that there's a lot of thoughtful work going on across Cleanaway. It's actually not hard to prepare the slides that we've spent the last hour going through because it simply just take a snapshot of what we've been doing and just kind of throw it on the screen and present it to you. Also hope that having the opportunity to hear from the team members that are at the coal face leading-edge of these blueprints gives you a better appreciation of the opportunities that we are pursuing. Just to recap today's focus was about operational excellence. And that's a phrase that I certainly know can be bandied around, I heard it many times in my 30 years. If we bandied around without a lot of substance. It should be clear from today's presentations that what we are going after are significant and tangible opportunities that exist within our existing business. Some of the work that we're doing is about getting the right foundations in place from which we can grow the business further. And we want to be able to grow sustainably. And when I say that, I mean sustainability from sustainability of returns laid in long-term returns, but it also means sustainably in terms of high circularity, low carbon growth. That means ensuring the business can grow, whether it be in a fast growth environment or a market that's transitioning and presenting new opportunities. Having a set of core processes, a digitized business and smart analytics will be key to our success. As Michael talked through our lighthouse branches, we'll inform what operational excellence looks like at our branches, and the learnings are embedded and will become part of our DNA. I'm hoping that we're about to get into the fun part where you've got lots of good questions for me and the team. And so what we're going to do, Richie is going to open it up from the floor. And so that our colleagues that are not in the room can hear your question. If you can just put up your hand and then talk into the mic, maybe introduce yourself and then we'll do that. And then we'll get the presenters also. I'll sort of direct the traffic and we'll try and get them to speaking to the microphones, everybody can hear as we go. All right.

Reinhardt here from Bank of America. Quick question. Maybe, Chris, if you could elaborate on this. It will be good to understand what your competitors' processes are looking like with respect to I'm thinking Customer Connect, is this an initiative for Cleanaway to catch up to competitors? Or are we talking about lifting the standard in the industry here?

It's a difficult question to answer. I mean, in terms of the mainstream competitors, I don't consider from my research that they're ahead of us. So my comments around creating a competitive advantage around the larger competitors is definitely sound in mind in the executive team's -- minds. We've got some small competitors around the trucks that have made some decisions to invest very heavily in technology, but they haven't got the scale of the Cleanaway for example. So the way I describe it is a lot of what you heard of today if you've been exposed to a number of different industries, it's not rocket science. It's something that people sit there and say, why did you do this 10 or 20 years ago, but it's really the modernization of the waste industry, which collectively and specifically with Customer Connect, I think we're shedding the light in terms of really creating a bigger difference, a bigger gap to our competitors, and I think they're going to find it hard to catch us in my personal opinion.

It is good when you slot you want to answer the question as well. That's handy. You can go with that, if you want.

Amit Kanwatia from Jefferies. If I can ask on the EBIT benefit, and you highlighted $30 million of EBIT benefit. Can you give us a sense of the pathway in terms of how you would be delivering those EBIT benefits as far as the time line is there? And the second question is I mean this EBIT benefits there is -- I mean, it seems to be improving capital efficiency of the business and a move -- set of mindset move from EBITDA to more like EBIT and ROIC, which is credit quality. But I mean, the question is, can you tell us what stopped you in providing hard EBIT margin targets, which is more measurable to invest as well as to your executives in giving that focus in achieving those margin targets?

Yes. So I mean in terms of the $30 million. I'm not going to say a lot more than what's on the slide, unfortunately. So -- but we'll pull you back to what we do. So we say more than $30 million. So there's key words in there, and the keywords are more than and we're saying '25, '26. We're not giving an absolute hard date because it will be sometime during that time. I mean the clues that are in there is just remember what Alex talked about in terms of data analytics. That's a large proportion of it that probably makes up the largest amount. And that's well on track when you think about the platforms that have been built. There is data analytics benefit coming through into sort of the numbers that are built within our targets and guidance and consensus that's out there at the moment this year, and we build on that in the future years as we go forward. So it's a year-on-year benefit. And then there also clues as to what Chris said around Customer Connect and the timing of that benefit ratcheting in that obviously adds to that over that '25, '26 period. Maybe just in terms of sort of the question around margins. So we are shifting the organization internally away from just a sole focus on EBITDA margins. Like we've said to investors before, that's quite deliberate. And that's because we need to recognize the capital that's involved in the decisions that we make. I'm not going to sign to 1 investor or 1 else beforehand. We -- the reason that we do that is because we get these strange situations where Paul mentioned that we'll probably review a [ muni ] tender once a week together. And often when we get into that, our solids teams will say to us, we don't want to do this piece of business because it's 25% EBITDA margin. And the target is 29.9%, and it's going to be dilutive to the margin targets. So we spend the next 2 hours rewiring the solids team to say, no, that's a really good business. Let's talk about the EBIT margin of that business because this is a point in time where we need to have a look at what is the capital -- the return on that capital and EBIT margins are much better reflection. But in a day-to-day operational business, of course, everybody is very focused on EBITDA, still to sort of reassure you because there's only 2 items between EBIT and EBITDA and the D&A and you don't influence those sort of in day-to-day decision-making and the sort of decisions of the past. So be reassured, the teams on the ground are very focused on EBITDA still. Paul and I are focused on EBIT at the same time, and we're building that knowledge back into the business. The other danger with EBITDA margins is a driver sort of a landfill focus. The easiest way to get EBITDA is just to drop the price and jam the volume in that's not necessarily sustainable in terms of long-term return on the air space that you've created and long-term return on air space that might may become more privileged and more scarce over time. So we're very thoughtful about the EBIT margin in our landfills and making sure we get an adequate return at the landfills, that's a big focus area for us at the moment. In terms of EBIT margins, externally, we're not ready to talk about EBIT margins externally. I'm not going to give you a time that we are, but you should expect that at some point in time, we'll have more to say around sort of margin and how we're thinking about it. All right.

Peter Steyn, Macquarie. I'm just keen to understand a little bit about where we are from a legacy system perspective because some of what we're seeing today has probably been alluded to over the last few years. But trying to understand just where you are. I was going to say how broken the systems are, but I didn't want to use that term now I have. But if you could just give us a bit of a sense of how incremental the $100 million investment is relative to where you are today? Or just how far reaching this change process will be in the context of the path you're on?

Yes. I might make some initial comments and I'd like Chris, to pick up anything I've missed or recover it. So how -- I mean, how broken is it. It's not broken because the team delivers every day, as Chris said. That said, if we reframe it, is there a giant opportunity? Yes, there is. So where is it you might expect a company like Cleanaway to have one version of an ERP. We've got 27 versions and the versions that we have are out of support these are factual statements, no judgment. The focus in Cleanaway has been very much digit together with people and paper. And so that's what happens. Of course, it's more challenging than that because even though in some locations, we've got the same brand name version of the ERP, the sales within the ERP will be used for different things on different on different instances of the system, which, of course, makes it incredibly difficult for our teams. Now I'll start with our customer teams, they'll receive a phone call, and I'll navigate 17 screens to get it -- to try and get an answer for a customer. And then maybe to Paul's point -- to Chris's point, not be able to do that in the end. And of course, that's frustrating for the customers. It's frustrating for the customer service agent who just wants to do a great job and satisfy that request. And so there lies the opportunity, right, which is to bring it all together in one place, not stitched together with our people and paper. When we also look back and I'm going to start on Chris, if you want to add anything. When we look back on our historical spend in this space, there's benchmarks such as a percentage of revenue or something like that, that you've spent in IT and these sorts of areas progressively over time, we are well under that number for the last decade. And so whilst investors might look at that number and I think it's a big number. If you look back what we haven't spent, it's actually not a big number. But what you did see on the slide we just remember sort of like 60% would be like an SIB number in terms of just fix the base system and bring it all into one. And that's 40%, which is sort of like the growth piece. So Chris tried to do for you to say the $8 million per annum of EBIT benefit, you really think about attaching that to the $40 million, not to the whole $100 million because we need to do the $60 million anywhere. Anything you want to add, Chris? Or we got a better example?

I think I can never stop talking about customer connect. Look, a really just tangible example is a customer portal I alluded to this in the presentation, which is what we're going to spend up through a combination of some of our customers want to deal with us in this way. But equally speaking, as we stabilize this implementation over time, we'll be able to direct customers to that particular channel does drive efficiency. The simple answer of today is we cannot do that with their current systems. So any modern business has got to have some sort of a portal, which our customers can raise with. We've now had identify things that those customers want to do for it to be effective. 3 out of the 5, we just cannot do today with our current systems. Putting aside -- I remember when I came in, which was one of our core systems for our solids business, I didn't even know what it was. It's been our support for 15 years like you just run modern progressive businesses this way.

Got you. Sorry, just if I may, 2 quick follow-ups. Will it all be capitalized, the $100 million? Or is there some element of expense invested?

There's a small element of expense. So things like training, some of the change management activity, again, that they -- we can't capitalize those. So we will be expensing those. But the vast majority will absolutely be capitalized.

And what would the period of depreciation be pulled?

It's really us 10 years, it's going to be a core system.

Got you. And then -- sorry, last one for me, promise. Just the application to municipal solid waste versus C&I, particularly as it draws into the digital analytics. Presumably, there's a greater benefit from an operational performance perspective in the C&I business. But how do you think about the benefit on the municipal solid waste side of things?

Here we go Chris [indiscernible].

I think in terms of the benefit for our municipal business, so in a lot of our municipal vehicles we have a version of rate optimization within them already. So there is an opportunity, much clear opportunity within the C&I business. But as Chris alluded to, some of our municipal vehicles don't have that technology yet. So it's an opportunity for us to stabilize that across the fleet both from C&I and municipal perspective. But to your point, the opportunity is certainly larger in the C&I space.

At the back, Scott Ryall from Rimor Equity Research. Just following on Pete's question there, who's your ERP provider that you're bringing in, please?

There's many, but let's get the list.

Presumably, you've got some on call.

Look, there's 3 sort of...

I mean the one coming in, right? Just to be clear, not so much who does it now. Yes.

We've got one today. So our core ERP is JDE okay? And we'll be using that as a standard across the organization. So transitioning those businesses that are on that platform to that. Salesforce is also our CRM tool. So we'll be doing a reimplementation of that with sort of some progressive functionality, which I think we're on a 10-year-old version there that can't be upgraded. So that's part of it. And then we're just looking at our fleet software, and we just got to sort of make a decision around that, which is still pending.

Okay. This is one is probably for Taku. I think this -- in the chart where you showed your -- all the landfill gas capture you've got a little disclaimer down at the bottom saying it currently excludes some landfills where you own them, but they're not under your operational control. Could you explain that, please?

Do you want to go, Taku? He's asked you you've got it covered. You can answer the one.

So as you may know, our landfills, even if though they're operationally under control from a landfill filling perspective, the landfill gas capture is out to a third party. And when that happens, effectively, the -- we don't have control as to how we optimize the landfill gas collection system, et cetera. So that's the -- those are the caveats that those 3 sites that are listed at the bottom, they're not under operational control from the purposes of landfill gas capture optimization and maximization.

Okay. Do you have plans to in-house that?

We are looking at all various exploring options to make sure that we can hit our emissions targets, and that will be part of the consideration going forward.

Yes. Okay. And Mark, this is probably for you. You're talking about the change in focus of your operational teams from EBITDA to EBIT. And the flow on to that is ROIC, which is something music to my ears. But I was wondering if you could talk to the difference between STIs and LTIs within the firm, the ones that get published for the exec team only reward EBIT and ROIC, if I'm correct, at the -- in STIs but LTIs is an EPS growth metric with a ROIC gateway. How do you encourage the operational team to think beyond 1 year in that respect?

Well, I think that certainly, the operational team think beyond 1 year. And I mean, what I want to say that, Scott, is -- there's no lack of ambition in Cleanaway on budgets and targets. Unlike other companies, and I say that from a little bit of experience. the budgets are set truly like a P50, meaning there is a 50% chance that you won't achieve your budget and so you are scratching to find a way there. And they are based on bottom-up builds. It's not sort of like I took last year and just sort of took it forward. It really does take into account what new and incremental things you could be doing or should be doing. And so that does give a more than sort of just an in-year target, it's giving a real trajectory to the business. I think the other thing that's sort of I would say it's work in progress is also getting the frontline teams more engaged in the value driver that drives their P&L. So in the future, you would have heard me give you some clue in the word branch-led. And what we should expect there is that we'll go to -- we've got branch P&Ls already, but will go much more into branch P&Ls and try and distinguish for our frontline teams their reward linked to that branch level P&L, but also linked to the value drivers within it. Because what goes on is you can say to a branch manager today, talk to me about your P&L, and they'll talk to you about their P&L, and that is awesome. They can tell you what's in there and how and what the numbers are and why those numbers are the numbers. But then if you say, how does this branch make money? It's kind of not such an easy conversation. It's less clear. And so they're less capable of talking about sort of things like the weighbridges, the cash register, it's volume times price. Prices, these 3 numbers. Volume is this is our moves and then it's a cost game where it's labor, and I need as much labor, and this is what drives it. And now it's over time. And over time, I assume 10 hours a week per person. And the sort of things that are less able to talk in those terms. And so what we're trying to do with them is go back to value drivers and then plot for them what is the best day ever, the best week ever, the best month ever and then bridge back to that, so that then not only are you trying to get a multiyear forward, you're trying to actually beat your previous record. And so it becomes record books and stuff like that would obviously safety in the environment as foundations, no deviation from that. But after that, it's value drivers. And then what we're seeing in the early versions of that is we're seeing branch managers go, I focus on this value driver. And then not surprisingly, when I reach a record on that, my EBITDA and my EBIT are record. Well, of course, because the value driver defines the true profitability of the site. And then everybody on site can then engage themselves in that value driver. They all understand that nonfinancial metric that is the key metric that drives the profitability of our cash in. So that's what you should expect going forward.

It's Paul Butler from Credit Suisse. So apologies if I drag you back to the EBITDA margins. So just to be clear, are you still standing by those EBITDA margin targets?

Yes. So yes. So the answer is -- the short answer is yes. Would you like I mean basically, we haven't removed them. We haven't restated the moto. And so they're not -- therefore, they still exist. In previous presentations, what we've said is we voiced them over and said, we still intend to meet them. And we can see a pathway to them because I can't say that too unless we can see a pathway towards them. What I said today was and what I said to investors the whole way through the last year is that they don't. They're not necessarily serving the purpose internally as they may have in the past. And that's not to say they were incorrect in the past. So great target. It's just that internally, we spend a fair bit of time needing to manage some of our general managers because when we attach their performance to that, they want to do things which aren't necessarily the right answer.

Okay. And then can I ask is you very clearly said that you're not ready to talk about EBIT margin targets. What is that you don't know today that you need to know or understand in order to be comfortable providing EBIT margin targets?

Well, I think we want to see another 6 months of performance. We want to see the pandemic unwind itself. We want to see vacancies unwind. We want to see commodities. We want to see the lag impact, all those lags come out as sort of inflation starts to flatten a little bit. And then we'll get a good trajectory on the underlying business and the way we go. We also want to see things like -- we want to see more than 6 months of performance of SRM and the sort of things we want to see the transition plan for GRL. We just want a little bit more timing on some of the blueprints that really do drive it. And then we're going to need to be quite thoughtful also about how we describe those margin targets versus future investments we might make. So we want to be able to describe that quite fully. And we don't want to rush into it. We want to do it when we -- do it when we're ready.

Right. And can I ask when you sort of look at how the business plays out over the next, let's say, 3 to 5 years. Is your vision that it's a business that becomes more capital intensive or about the same or less in terms of do you likely to see more of the growth coming from post collections versus collections?

Yes. Well, I think, I mean, is a simplistic answer, we should say it will become more capital intensive if energy from waste occurs, if and when it occurs, because it's just a different level of CapEx. And if those sort of they come in whole units of 1. And if each one is sort of $700 million, $800 million, $900 million, and that's more capital than what Cleanaway's deployed typically. I think underlying capital remains fairly similar. That's certainly what we're intending to do. But we're also -- I say that with a little bit of caution because if we see an opportunity, then we'll want to invest in that as well. And you saw that with GRL where we wanted to make that investments that we came to the market to support with that. And then obviously, we raised more than we needed. And you would have seen the clue that we gave in the sort of list of strategic infrastructure growth pillar, where I talked about, for example, that Tier 1 contract. And that's exactly consistent with what we said around how we're going to deploy that incremental $170 million, it was on growth aligned to the blueprints. And so again, we'll take those opportunities where we can, bit of a roundabout answer to your question, probably not exactly what you wanted, but...

That's all right. And sorry, just one more if I can. Alex, you talked about revenue leakage opportunity. I just wonder if you could give us a bit more color on that just in terms of what the actual issue is and how you're fixing it?

Sure. I think in -- just from a revenue leakage perspective, I think we probably a consistent theme that you've heard today has been around our systems and the amount of paper that we have to utilize to have to deploy services to our customers. I think naturally with that kind of the amount of paper and the amount of probably back and forth between operations and admin, there's -- it's probably no surprise to anyone that there's leakage -- revenue leakage across the group, either from services not being recorded properly or mistakes being made by our teams because of our cumbersome processes and systems. So it's really focused around those types of areas, and we've seen -- I think by immersing ourselves in the business and listening to some of the challenges that the admin teams face and the operational teams face, it's given us more opportunities to have a look at and more opportunities to explore and probably areas that we can realize were problems until we really got into the business. So a lot of the revenue leakages have been or holes we've been catching have been around prevalence servicing scheduling with our drivers and invoicing with our customers.

Have you quantified what the extent of [indiscernible]?

So we're still -- I mean, we have seen incremental benefits come through into the FY into the results into our guidance, as Mark said. And I think as we look to over the next sort of 6 to 12 months as the blueprints become more and more advanced, we'll be able to give firmer numbers around what that opportunity is and what data analytics will deliver incrementally to our earnings.

We might have exhausted the questions, you can have another one if you want since you promised not to ask one.

Reinhardt here again from Bank of America. Mark, can we maybe get a quick update on labor availability. I presume, absenteeism is going to be a little bit of an issue again for maybe the next couple of weeks or months. But how do we get back to a situation where your labor cost inflation looks something a little bit more like CPI again. Is this just a function of low unemployment environment? Were you seeing less participation in the industry? Is immigration still lagging how do we get back to sort of normal stepping phase?

Yes. Well, I think -- I mean the good news is we think it's turning. We certainly passed the peak and what we look at vacancies. That's how big -- that's the big number that we that we look at literally on a daily basis, we can track vacancy numbers across Cleanaway. We've seen for the last couple of months, that number trending down, which is really good news from sort of where we were at the half year -- I'm sorry, the full year, where we were almost at the peak. So I think labor availability is improving. I think also what we were doing in order to improve it or our approach to the vacancies is also starting to finally hit the road as well. And if you remember what we did, we talked about the fact that we've set up what we call the RPO or the outsourcing of our recruitment process, where we have, helping us. So we've doubled the size of our recruitment team to a dedicated has team now within Cleanaway helping recruit our team, we've got sort of almost 200 roles at any point in time being recruited by them. And of course, given it takes like a couple of months to hire somebody. Of course, you personally have to do is hire a people and you have to embed them into the team and you got to give them the team to recruit and that all takes sort of 2 or 3 months by the time you are to where we are today. And now we're seeing them actually recruit people. I think they've recruited their first 20 or 30 people. And so that's winding its way in. So that needs to occur, and we need to start to pull that number down. I think it's going to take another 6 to 9 months to get back to where we want to be if we keep going at this sort of trajectory. And then what will happen over time is as that. As we have less vacancies, you can imagine then the experience of new employees who joined Cleanaway will also improve because. We've got that weed circle at the moment where we've got a lot of vacancies for them when new people arrive, they don't get the best onboarding experience. And so therefore, their sort of willingness to stay and the churn in that first year is quite high. And so we need to drag that down as well. And so it's kind of like those competing for us. Yes, we're hiring people, but the people we're hiring having not as good an experience as they could have, and it's quite difficult to bust that one without sheer numbers. I think what you're seeing in terms of the labor cost, though, is you're seeing sort of you're seeing all the things go on, which are -- we've got more over time. And then we've got more use of expensive subcontractors. And we don't -- we recover a certain amount of over time in our contractual mechanisms and just the way we structure them, but we don't recover the amount over time that we've got and we don't recover the incremental use of subcontractors. And so obviously, we wear that in the labor lines, and that's what's -- that's why we get improved as the vacancies come down. We've got great contractual ability to pass it on, but you need to pass on something that looks like the formula that you've got in all your different contracts, and that means getting back down to sort of having 300 or 400 vacancies rather than sort of double that number, which is what we had. Yes, women's driver academy. So literally, we've done so many women's driver academy to kind of remember which number we're up to. But it'd be something like -- it will be somewhere between 5 and 7 at the moment, is where we're at. It might even be 7 today. Most of those have been sort of picture 10 at a time in a different state. For example, the most recent one on is in Adelaide, 10 women never driven a heavy vehicle before, not from the industry, but they have their car license. Within 6 weeks, they have their heavy rigid license. And within about 12 weeks, they're driving our trucks with a fully paid job on a shift roster. That is kind of like their choice. So what we say is we're big enough to -- you tell us when you can work and we'll integrate that into the shift for us. So if you can do 4 hours a day, that's fine to tell us how that works and we'll find the team to work in and around that. And they are totally oversubscribed, and we'll get 200 applicants for a women's driver academy. They love it and our teams absolutely love it, it game changes the depots and terminals that they go into. We've also done a yellow gear academy for women, which is where they're not driving the trucks, they're driving our gear at the landfills or the transfer stations. So I think the compactors, the diggers those sorts of things, all the earthmoving equipment, anything that's yellow effectively rather than the blue gear. It's the yellow gear. It's going really, really strongly. And we expect -- we're targeting hundreds of women via that pathway. And that's -- the great thing with that is that is new drivers to the industry.

Got a few online questions, Mark. The first one from Rob Koh with Morgan Stanley. For the returns on landfill gas capture projects, is that measured as actual earnings flat expenditure? Or is there an element of cost savings elsewhere in the business? And what's the sensitivity to our key prices?

Yes. So I'm going to have to start on this. So the way you think about it at the moment is if we just increase the capture rate. And we flare the gas, which would be the base case. So you don't just capture an inventor and there would be no -- not much fun at all. You capture the flare from methane through to CO2, just standard combustion as Taku said, that's how we get the climate benefit because methane is much less -- I'm sorry, carbon dioxide is much less potent to the atmosphere than methane. And for that, then there are ACUs generated. Now the reason we didn't put on the slide for you, Rob, the economics around that is because of the uncertainty around how ACUs are going to get treated going forward because there's a whole review going on in the government at the moment and exactly how that plays out and how you can in the past, you could sell an ACU back to the government and also keep the climate benefit, whether or not that's available in the future would obviously depend on what you might do. Otherwise, you can only sell the -- keep the ACU and keep the carbon benefit, or you sell it to a third party, but you transfer the emission as well. And so we've been fairly quiet on that because we want to see how this plays out before sort of thinking that through and sort of talking about how to think about those financials. Obviously, then the game becomes -- I mean, flaring is kind of great, but it doesn't actually get the benefit from the energy content of gas. And that's where then Taku talked about electricity or gas or gas sales, obviously, electricity is easier because you can just sort of burn it in the engine on the side, just picture a big caterpillar engine or something and produce electricity. Gas is more complicated because you either got to treat it or you've got to have a pipeline that's nearby. And often, the landfills are not necessarily directly next door to industry, just by their very nature. The example that Taku talked about where it does go to a landfill where it goes to industrial customers in Erskine Park, which is just sort of west of here, and of course, Erskine Park's quite a built-up area these days not like it would have been. And so there's a local industrial company there that takes the royal gas, which is reasonably unusual, but obviously, a long-term opportunity. Did that answer the question or...

Yes. The next one is probably for Michael. On the -- for the truck congestion case study at Lucas Heights. It looks like the station has actually opened earlier and closed later. Does the cost of extra hours open get covered by additional revenue from truck utilization?

So the question really is about how we utilize or how we make more efficient at times that we're open. So in this particular example, we're taking the actual operating hours and making it more efficient to utilize the facility during those hours. And to those all about scheduling the runs that we have at Lucas heights to take advantage of the softer periods, but not about changing the actual operating hours because we also have customers other than Cleanaway who use the site, so we keep it open for them. But whilst we're using it, we want to make it more efficient for us.

And the next one from Rob. It's probably for Frank. You mentioned you started a feasibility joint venture of Cleanus on South Plastics what's the learnings from Red cycle?

We'll get -- we get to hear from Frank, that will be good. Since he doesn't send any [indiscernible] but he does a lot of the work, so here we go.

Look, the challenge around Red cycle is they did a great job creating a system to collect soft plastics that previously were all sent to landfills. The challenge with that system is that the back-end the actual recycling solutions were either subscale and ultimately didn't stand the test of time. So they lost the recycling component. So the collection is in place. It grew rapidly, but the systems who collected is not robust enough. That's why for quite some time, we've been looking at the [indiscernible] project. We see that as the large-scale solution for those hard-to-recycle plastics rather than what's happened with the red cycling, which is more as we see the down cycling of it, using it in lower grade plastics or asphalt and concrete, et cetera. So our aim consistent with the strategy is to try and turn everything into the highest value most healthier outcomes. And for that soft plastics and on the high to recycle plastics outside of the mechanical recycling, we're looking at the promos process and then reprocess that parallel with in Australia to create a plastic again. So that's the goal of that project.

Got a couple of questions from Russell Gill at JPMorgan and Chris get ready on Customer Connect. Who is building the tech? How much will it cost to build? Can competitors also purchase the same tech off the shelf? Was Cleanaway behind the competition and catching up or leapfrogging or is the industry very antiquated?

So 4 questions in that one. Just try to remember them. So the first one was around the...

Who's building the tech?

Haven't decided just yet. So we put out our RFP actually last week, bundled into 5 or 6 packages, and we'll make that decision early February of next year. So that's number one.

How much will it cost?

Costs. Look, the external partnering cost is probably 30% to 40% of the overall spend. So it's a pretty big decision. And in terms of mitigating risk, we've brought in some external facilitation and consultancy to help us with that decision because we think it's pretty pivotal. The 3 was...

Can you buy it off the shelf?

This is an interesting question. Without getting too philosophical around this. When you look at projects of this nature and I've been involved in various forms of East through my whole career. I think there's too much gravitation to the technology. that you use and not enough emphasis around the data, I think the competitive advantage is around how you maintain your data and how you have integrity in that data. I'll give you a simple example of that. In terms of today, as a business, we don't have a proper pricing engine. So you're going to ask me straight away what's the upside of fixing this, I don't know just yet. But you can basically without absence of a fundamental process to manage your pricing at a customer level robustly, you know you're going to get things wrong from that point of view. Now you can choose a whole bunch of engines out there to do that and they'll do the job for you in some way, shape or form. But how you maintain the data, how you maintain those controls within your organization. That's what I believe the competitive advantage is. And we're putting a lot of effort a huge part of our program is around cleansing our data. If anyone's had sort of experience or knowledge, these programs are livid with issues of people cleaning the data. And then 1 year later, it's back into disrepair again. So that's what we're putting a lot of efforts and focus into getting those foundations right. I think the final question was around competitors. I think, as I said earlier on. There's some niche competitors that have leveraged technology in the marketplace. They've got some nice stuff which we we're learning on, but in terms of our major competitors, we don't think anyone is ahead of us in terms of where we are right now. It's just -- we put a lot of effort to deliver the service levels that we've got today. But with this investment and this integrated investment, but particularly integrating it with our sustainability and a low carbon, the way we can actually manage our data with customers, it's going to be pretty powerful. And to my knowledge, I don't know anyone that is even thinking about this in the same way that we're advancing it with our blueprint.

One more Chris were you there? from Russell again.

Just -- I just wanted to clarify a couple of points that Chris made or to add to them. And a key focus we got here is around derisking the whole technology side as well. So in terms of our current ERP is JD Oracle. Key focus is upgrading and making a purpose. That enables us then to build on that same platform, some additional functionality that allows us to completely decommission our current customer focused system. So this isn't really about simplification. We're going from multiple systems to a single system, and we're using existing core current technology. So we're not seeking to be bleeding edge on this. In fact, quite the reverse. We want a really low-risk sort of simplified solution. So this is not going to be -- we don't want to be bleeding edge. So it's going to be clear that whilst we're talking about some quite significant change in the business here, it's around simplification as opposed to cutting edge technology.

And one more from Russell. One of the key benefits called out from Customer Connect has reduced customer churn, which should be pretty easy to measure as the platform rolls out, what is the current contract churn rate? And where does Cleanaway think this could go?

And putting aside how various different companies measure this. We simply track the customers that we've lost in our solids part of our business. in terms of our overall revenue. We operate at about 3% today. We've brought that down with a lot of focus around service over the last -- certainly, over the last couple of years since I've been there. What we consider to be best practice is about 2%. And that's what we're endeavoring to deliver as a part of the program.

That's all for the online questions. Any more on the floor?

[ Andrew Green ] from First [indiscernible] Infrastructure. Can we go back to methane. Can you talk about the political interest in, I guess, helping subsidize methane capture, given it's such a greenhouse gas?

Taku, hear it from the expert.

So politically, I think where the excitement and opportunities is the global methane pledge that the government just announced. I think that's where a lot of the focus is going to be. And from the waste sector, certainly, right now, we met about 13 million tons of methane per CO2 [indiscernible] methane. And in Australia really needs to hit a 30% reduction target. And so it's the -- if we were to look at opportunities, it's how much policy can influence, the waste sector is 13 million. We can -- we have opportunities to reduce that to, let's say, half of that through good methane landfill gas capture. So I think that's where we'll be advocating for opportunities because if you think about it, if we don't do it, then the 2 other big ethane sources in Australia are ag and fusion methane from oil and gas. Fusion from oil and gas, at least to my past experiences it's sometimes very hard to get because it's the valves and the interface of the pipelines very hard to address. Then you got ags. And then so our pitch, then would be, well, we know that we can capture and destroy this type of methane. The more we do, the less you have to work with the ags, and that's however many cows, right? Like we're calculating millions of cows versus being able to destroy this landfill. So I think that's where the opportunity to be able to talk to the policymakers will be is this is a sure proven technology happens everywhere around the world. We know how to do it well. And if we do this well, the less you have to work with the ags industry.

Is there any state that's showing more interest than the other states in [indiscernible]?

Well, I think this is at the federal level. So I think all states are going to start to look at this as a potential lever.

And if you did -- if there was customer demand for RNG to be, I guess, decarbonize their gas streams. You said the pipelines are too far away from most of the landfills to you've made really long landfills -- is there any landfill that could -- close to...

There are, certainly. And I think what's going to help the RNG business is, as you may be aware, like Gemina is working on RNG certificates. So there are little mechanisms and RNG certificates will work very similar to how the LGC is working in the electricity world. And so as RNG certificates come online, depending on the economics, then that starts to change your views on how close the pipeline needs to be, et cetera.

It's Carlos Castillo from [indiscernible]. Just a sort of a follow-up question more around the CO2 reduction plans in the fleet? And just if you can provide some perhaps color on how those trials have been going that you sort of referred to earlier. And whether it's the local governments that are perhaps the biggest impediment to you doing more on that front and the contract renewal sort of process that happens?

I'll kick it off. So remember what Taku said, 80%, they pay 20% CO2 where that 20% CO2 comes pretty predominantly from burning diesel in our fleet of some 6,000 vehicles. Because you got the 80-20 focus on the 80% fist, it also kind of buys you the time while you do that to see technology and availability for both volume and price of both hydrogen and fuels like that, but also the fuel cell vehicles. I mean, at the moment, you can't just rock up and buy a hydrogen garbage truck very easily. We've got a couple on order. We're doing a trial that's been announced with Arena and through Viva the trial of those vehicles down in down [indiscernible] alongside 6 or so other there's buses and [indiscernible] has got a couple of vehicles and that sort of thing. So it's a real precinct sort of trial. Those vehicles now are something like what, 18 months away, something like that. And then obviously, I think that will be fantastic. But then it will come down to sort of the availability of that more broadly because they're being built almost by hand those vehicles. And of course, the hydro needs to come down in price as well. So then you kind of just if you pull back from that, you kind of say, okay, so just -- that will take some time. And then I think the opportunity is that if we can kind of like pull our emissions down on landfill gas faster than the trajectory that we need to, then we've got a difference between where we're actually emitting versus where that line is. And we can then use that difference to then say, offset -- potentially offset the CO2 from the vehicles and almost sort of repower the fleet through better performance on the landfill. That's one example, all passed up to those benefits back to customers as another opportunity. And then there's obviously this other opportunity that comes over time where potentially you somehow connect the energy source, which is the landfill gas, which is obviously getting to become bigger and bigger numbers or the electricity from energy from waste and then you connect that back to hydrogen to then repower the fleet. And so be a really nice situation where you've got energy from waste facilities on the East Coast, you're kind of using that electricity to then generate hydrogen in the plant locations that you need to then go and repower the fleet, but that is repowered using hydrogen as that technology comes on, and those timing start to actually look quite good. So for us, this idea that we work on methane first is actually quite nice because it's a sound reduction in the period while we need it, whilst we kind of get the technology stack working.

Got a couple more online. [ Led ] at Morgans. Paul, you mentioned the higher debt costs in the capital allocation discussion how much higher do you expect net interest to be in FY '23? Also, have you recalibrated your hurdle rates and particularly cost of equity with the step-up in risk-free rates?

In terms of interest cost, we provided guidance in the full year in terms of as rates move or the impact is on our net interest expense. So you'll find that in that pack. In terms of cost of capital, again, we go through the process regularly simply looking -- getting external guidance and then put in terms of assessing what our WACC is. And that then forms obviously the basis for future investment decisions going forward as well. So it's a relatively a dynamic picture, but we absolutely are focused on the fact that, that is now costing substantially more than it did even 6 months ago.

Paul then from Rob Koh at Morgan Stanley. Can you please talk about your approach to cybersecurity?

Approach to cybersecurity. Yes, thank you, Rich, for putting me on this fall as far as that was concerned. I think from our perspective, cyber is a very real risk. I think the fact is that we are an essential service. We also have significant external contact with a very broad customer base. So we're very alert to, I guess, the cyber concerns. Probably over the last 2 years, we really amped up our focus in terms of cybersecurity. So really conscious again, this is a very fast-moving pace. So we have we beefed up the internal team we beat that team up twice now in the last 18 months. But probably more importantly, we're drawing on external expertise. We're sort of conscious that you kind of only know what you know. And therefore, it's critical to involve third-party experts that are having direct and relevant experience in terms of sort of recent hacks that have gone on. So we're going through a process right now of again, having an external party come in who we know have been involved in a number of these high-profile has simply to review what our plans are, what our processes are. and again, to provide us some continual update in terms of the quality of that cyber protection.

That's it for the online questions. Any further ones from the floor?

Scott Ryall again. I was wondering if you could just talk to -- you mentioned a couple of potentially more chunky uses of capital, energy from waste and potentially chemical recycling. Could you just talk to at the moment, how you see milestones in that area. What has to happen -- we've just had Victorian election on the weekend. So presumably, that process now can restart just and evolve as it was. But just talk to timing and milestones for what would be your gateways to actually investing in those areas.

Yes. So I think -- I mean if we just talk energy from waste and then we can do chemical recycling. So energy from waste, obviously, there's the 3 locations that we're focused on, which is obviously Queensland, Victoria and New South Wales. New South Wales are kind of a bit on is because of the policy settings there. And obviously, we'll review that after the election and just see whether anything changes there because we still think that New South Wales is a location that actually really does need energy from waste just because there's just only really 2 putrescible landfills that service the Sydney basin. And so it's a solution for pure base post all the recycling is key there. So we will wait and see and obviously the election is. So I think it's March next year. If we go to sort of Victoria, in fact, I don't think really the election changed -- It didn't change the pace of movement, and Victoria's government has got a great policy for energy from waste, which is really around the cap allocation and you applied for a portion of the cap, the initial cap's a million tons, we propose a project that's sort of like 1/3 of that. So there's plenty of room for others. We've got the site out at [indiscernible], which everybody knows where that is. And obviously, we'll work through the process. Obviously, there's a lot of things that have to come together from both the permitting sort of side of things, which is sort of 2 or 3 sort of regulatory pieces you need to go through. And then obviously, you need to have your customers and sort out your power agreement, your waste supply agreements. I mean, obviously, the new construction agreement, and we see that sort of taking place over the next 18 months. So give you sort of 18 months to sort of what I would say is FID, so sort of the final investment decision where on that day at that time, you're going to tie all the beautiful pieces of string together and twisted into a rope and suddenly you've got yourself a project, but it's obviously hard to get all the pieces at the same time because it can be held out by one piece of the thread. Similar time line in Queensland, if not probably maybe 6 months behind that. That's just because we've got more work to do on the site just because we're only just securing the site, but obviously, we can leverage a lot of the work that's been done for Victoria. So I think the those projects are probably 6 months offset now rather than the 18 months, it's more like 2 years. And obviously, we'll let you know about that site when we can. If we think about chemical recycling. So we've done the feasibility study. And remember that feasibility study has sort of the twin part. It's got the economic part, but it's also got the technical part. The really good thing with this is this is a technology that's used, and this is done overseas, not like it's brand new. As Frank said, this kind of like -- it's like really nice joint venture in the sense that we would not want to do the bits that Qenos is going to do, and they probably wouldn't want to do the path that we're going to do, where we supply the waste, we obviously sought the waste. The soft plastic out to get it into its different streams. And then we do the initial sort of cleaning and washing type stuff. And then we built in some common plant together at the Qenos location because they would operate this next part, which is the pyrolysis oil part where you take the soft plastic and you burn it in an absence of oxygen to bring it make into pyrolysis oil. We do that piece together, that would be 50-50, then Qenos, would do a cleaning of that or a treatment part, and then they would feed it to the ethylene cracker. And that's a piece of thing I can do because I've actually got the only 2 ethylene crackers in Australia, and that's what's really nice about that, just to reemphasize Frank's point, and then I'll answer your question is that is fully circular in that it's not down cycling. So we take a soft plastic wrapper, and we turn it back into a polyethylene -- recycled polyethylene pellet that then turns back into a wrapper. And so -- and that means for loop, it's a proper circle. And the way to think about what Frank said about down cycling and people can criticize that you use the word down cycling, and we don't say this disrespectfully, all we say is that the issue with that is that if it goes from a soft polyethylene wrap into a park bench, you never recycle the park bench. And so that plastic is locked up forever. Whereas if it comes back to polyethylene that goes back again and again, then round we go. And that's what we really love in that clean way. What we're targeting is the highest order form of recycling is that whether it's bottle-to-bottle or plastic wrap to plastic wrap and it's done domestically. That is the highest form. The second highest form would be to do that internationally. And then you get down to the lower ones. But again, what we're hoping to do sort of towards the end of this year is take just try and get to that investment decision with Qenos. So sorry, the end of '23, calendar '23, not '22, that would be a pretty short time for use and bring all that together. And like if you read the AFR article last week in the press release, which hopefully you did, again, there were some clues in there as to really what needs to happen. And some of the things that need to happen is that, obviously, Qenos needs line of sight to their energy supply. And obviously, that energy supply comes only from 1 of 2 places, which is either from the Cooper Basin or from Gippsland. And obviously, we need line of sight to that for a period of time, so we can confidently take an investment decision together with them that we can obviously build our plants to supply that soft stream of plastic, but also the rest of the fuel supply is going to come at a volume and price that makes sense for the project. So then if we make that decision, then you should think that it's a couple of years from now that the plant starts up and is commissioned.

Unless there are any final questions from the floor, we might wrap it up there.

That's good, Richie. I mean, we will be available -- Well, I guess, firstly, thank you to everybody on the call who's dialed in. or if you're listening back to this, really appreciate your continued support. Obviously, Richie's available 24/7, if you want to text than call him. Otherwise, for the team in the room, obviously, will be around after this, I'd love to chat to you and hear any other questions that you've got or any other comments. So thank you.