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25 November 2015 FOR RELEASE TO MARKET Investor Day Presentation Please find attached the Company’s presentations to be made to investors at 10.00am (AEDST) today. A live webcast of these presentations can be accessed via the following link http://webcast.openbriefing.com/2508/ . For those unable to listen to the live webcast, a replay will be available on http://www.openbriefing.com/OB/1998.aspx Investor and Media Relations: Frank Sufferini Group Investor Relations Manager Telephone: 0416 241 501 Email: [email protected] END Transpacific Industries Group Ltd ABN: 74 101 155 220 1 st Floor, 159 Coronation Drive Milton QLD 4064 PO Box 1824 Milton QLD 4064 Phone: + 61 7 3367 7800 Fax: + 61 7 3367 7899 For personal use only

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Page 1: FOR RELEASE TO MARKET Investor Day Presentation · Investor Day Presentation ... Reduce our capital intensity –Capex in line with D&A ... • Uniforms • Major facility signage

25 November 2015

FOR RELEASE TO MARKET

Investor Day Presentation

Please find attached the Company’s presentations to be made to investors at 10.00am (AEDST)

today.

A live webcast of these presentations can be accessed via the following link

http://webcast.openbriefing.com/2508/ .

For those unable to listen to the live webcast, a replay will be available on

http://www.openbriefing.com/OB/1998.aspx

Investor and Media Relations:

Frank Sufferini

Group Investor Relations Manager

Telephone: 0416 241 501

Email: [email protected]

END

Transpacific Industries Group Ltd

ABN: 74 101 155 220 1st Floor, 159 Coronation Drive Milton QLD 4064 PO Box 1824 Milton QLD 4064 Phone: + 61 7 3367 7800 Fax: + 61 7 3367 7899

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Investor Day Presentations

25th November 2015

Cleanaway Waste Management Limited

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Agenda

Making a good company great

Liquids & Industrial Services

Solids

Depart for Clayton Landfill and tour of the site

Depart for Melbourne Regional Landfill and tour of the site

Buses depart for Melbourne Airport and City Centre

TopicPresenter

Vik Bansal

Anthony Roderick

Vik Bansal

Site tours

Time

10:00am

10:45am

11:30am

12:45pm

2:30pm

5:00pm

Break Morning tea 11:15am

Break Lunch 12:00pm

Hosts:Clete Elms, General Manager –Vic/Tas, Brendan Gill, Chief Financial Officer Frank Sufferini, Head of Investor Relations

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Vik BansalChief Executive Officer and Managing Director

25th November 2015

Making a good company great…..

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Cleanaway is Australia’s leading provider of total waste management services, with operations in both solid and liquid waste…

Note: *As of 20 November 2015; **Includes corporate and other revenue of A$12.5m; ^Includes share of associates of A$1.4m and corporate and other expense of A$24m

Cleanaway

A$mMarket cap(*): 1,108EV(*): 1,445FY15A revenue(**): 1,385FY15A EBITDA(^): 231Margin (%): 17%

Solid Waste – Collections and Post-Collections

FY14 FY15

Net revenue 911.8 926.5

EBITDA 189.8 198.0

Margin (%) 21% 22%

EBIT 98.8 99.0

Margin (%) 11% 11%

Liquids & Industrial Services

FY14 FY15

Net revenue 485.0 445.9

EBITDA 90.1 55.8

Margin (%) 19% 13%

EBIT 60.7 28.9

Margin (%) 13% 7%

68%

32%

Solid Waste Liquid Waste

Revenue by Division (FY15)

Collection, transportation, recycling and disposal of waste for municipal, commercial and industrial and construction and demolition clients across Australia

Operates waste processing facilities, transfer stations, landfills, resource recovery and recycling facilities

Collection, treatment, processing and recycling of liquid and hazardous waste

Collection, refining and recycling of used mineral oils to produce fuel oils and base oils

Industrial cleaning, vacuum handling, sludge management, site remediation, facilities maintenance services, emergency response services

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We sit among the world’s top waste management companies

Re

ven

ue

s ($

USD

)> $1500m

> $750m

> $400m

> $250m

Was

te M

anag

emen

t

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Suez

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Rem

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lic S

ervi

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ors

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(Urb

aser

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lsen

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ach

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AV

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Cleanaway is an integrated national player

Major landfill sites 6

Transfer stations 15

Liquid and Industrial Services

~70

Recycling sites ~25

Depots ~80

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Cleanaway offers a comprehensive suite of services nationally

Solids Liquids and Industrial Services

CompanyRevenue

($m)C&I Municipal

Post collections

Liquid and Hazardous collections

HydrocarbonsIndustrial Services

$1,385m

$1,073m

$1,079m

$693m

$325m

$407m

Cleanaway

Competitor 1*

Competitor 2*

Competitor 3*

Competitor 4*

Competitor 5

*Estimated

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Our Mission, Vision and Values will provide clarity and direction for our strategy, operating model, structure and systems

To make a sustainable future possible MISSIONWhy we exist

Cleanaway is a market leader in Waste Management, Industrial and Environmental Services. We leverage our expertise, assets and infrastructure to deliver on our commitments. We are an employer of choice and we generate superior value for our customers, community and shareholders.

VISIONWhere we are

headed

VALUESWhat we stand for

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Fleet & Network

Performance

Infrastructure

Engineering &

Compliance

Ensuring focus on value creation by leveraging our expertise and cost is the only way we can make a sustainable future possible

Growth &

Marketing

Collections

Post-collections and conversions

Val

ue

Ch

ain

En

terp

rise

Se

rvic

es

Corp

ora

te

Commodities/Trading

Solids

MetroC&I / C&D

RegionalMetro Muni

Resource Recovery

Landfill

Waste to Energy

Liquids & Hazardous

Waste

Hydrocarbons

Liquids & Industrial Services

Industrial Services &

Remediation

Customers

Customers

ExternalM&A/JV & Alliance

Partners

Industry

Associations

Regulatory

Authorities

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The new value operating model aims for empowerment with high accountability

The Solids business will be organised by region and be accountable for all related activities from collection through to post-collection.

Leadership structure: Five state-based General Managers with each managing Municipal, C&I, Regional and Post-Collections in their State.

Accountable for managing our: People (e.g. safety) Markets (e.g. sales execution, customer service) Assets (e.g. operations, divisional finance)

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The new value operating model aims for empowerment with high accountability

The Liquids & Industrial Services business will be organized nationally by service type and be accountable for all related activities from collection through to post-collection.

Leadership structure: Two General Managers

Accountable for managing our: People (e.g. safety) Markets (e.g. sales execution, customer service) Assets (e.g. operations, divisional finance)

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EGM of Sales & Marketing, accountable for: Markets (e.g. national accounts, corporate

branding, pricing guidelines and sales support)

Growth in new markets

Shared Services, IT, Property, Legal, HR and Procurement

We are decentralising by standardising to leverage the cost base

The ‘Design Authority’, accountable for designing and implementing: Standards Processes Measures

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‘Thin ASX Layer’, including Corporate Executives, Finance, Audit & Risk and Investor Relations accountable for: Strategy/overseeing execution Risk & Reporting Governance External Stakeholder Management

The new value operating model aims for empowerment with high accountability

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We will go to the market by 3 divisions

Liquids and Industrial Services

Solids Collections

Post-CollectionsFor

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Our journey from “good to great” will be underpinned by our five key pillars – the five C’s

Pillar 1

Customer

for Growth

Increasing focus

on customers and

customer service

to achieve

stronger growth

Pillar 2

Continuous

Improvement

for Cost

A fit for purpose

organization with

unrelenting focus

on productivity

Pillar 3

Capital

for Cash

Rigrous capital

management

Pillar 4

Clarity

for Alignment

Ensuring transparency

and accountability

across the organization

Pillar 5

Competitive

Advantage

for Excellence

Ensuring our elements

of competitive

advantage are first

best in class and then

benchmark.

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Our Group Initiatives

Organic Volume Growth – National Accounts, Mid Market and SME. Sales Productivity, Growth Agenda

Target Market Verticals as per strategic intent –Develop specific positioning and Go To Market

Inorganic Growth –Acquisitions ( Strategic Assets and Tuck Ins)

Develop a Single Brand –Create Brand Equity

Fit for Purpose Organisations –Decentralised, Empowered and Accountable

Procurement led Cost avoidance – Target 5% on all discretionary categories

Productivity Agenda –Labour, non-Labour and Assets.Foot print Rationalisation

Best In Class Agenda

Reduce our capital intensity – Capex in line with D&A

Capex to justify strategic intent, improve customer service or reduce costs

Working capital and Balance Sheet rigor optimisation

Organisation Structure to align with Value Operating Model

Strategy, Metrics, Reporting, Review, Reward, Rigour

Employee Engagement & LeadershipAccountability around Engagement.

Customer Service an absolute differentiator –standards & discipline around sales process, pricing & customer service

Fleet Optimisation -Management and Standardisation

Infrastructure, Remédiation and Rectification - Discipline & Compliance

Customer

for Growth

Continuous

Improvement

for Cost

Capital

for Cash

Clarity

for Alignment

Competitive

Advantage

for Excellence

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Branding Update

4500 mobile assets

Thousands of bins

Inconsistent presentation across all digital and

print assets

200 sites

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Branding Update - Timing

The transition to the Cleanaway brand will occur over two key phases before completion June 2018

1. Phase One – Transition commences 30 October 2015• Transition approved with AGM resolution• Internal communication campaign has commenced• External communications will be low key

2. Phase Two - Formal Launch 1 February 2016• Major elements unveiled

• Website • Uniforms• Major facility signage• Vehicle branding

• Physical asset transition commences • ASX ticker to CWY

3. Project Completion 30 June 2018• Full fleet, bins and facility signage completed For

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Cost reduction update - Achieving a sustainable cost structure around the operating model

By 30 June 2016Net impact immaterial as savings achieved reinvested in improving systems, teams, and processes

By 30 June 2017$30 million on an ongoing 12-month run rate

Plans identified and in place targeted at corporate and administration areas:

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Anthony RoderickManaging Director

25th November 2015

Cleanaway Liquids and Industrial Services

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Cleanaway Liquids and Industrial Services

Cleanaway Liquids and Industrial Services is the market leader in:• Collection and treatment of hazardous and non-hazardous liquids• Collection, refining and recycling of used mineral oils• Industrial cleaning and facilities management

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Liquids and Industrial Services operate ~70 sites across Australia(a)

(a) Shared sites consolidated as 1 site. 17 consolidated shared sites in total (b) Shared sites have been included in each division which shares the site (i.e. not consolidated)

Split by state Sites(a)

NSW & ACT 21

QLD 18

WA 12

VIC 10

SA 4

NT 2

TAS 1

Total 68

Perth

Sydney

Brisbane

Darwin

Hazardous and Non-Hazardous Liquids

Hydrocarbons

Industrial Services

Melbourne

Adelaide

Hobart

Cairns

Townsville

Karratha

Broome

Gladstone

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We are making a number of changes

Structured the business in line with our operating model

Major overhaul of our systems and processes in progress

Merging sites

Introducing new technology for treatment of liquids and oil processing

Streamlining the management team

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Hazardous Liquids

> Manufacturing and Industrial activity

> Compliance

Non-hazardous liquids

> Population growth

> Density of treatment network across Australia’s population centres

> Large network of transfer stations in regional centres

Cleanaway Liquids - Hazardous and Non-Hazardous

What we are doingDrivers

Cleanaway will maximise market share through an integrated waste management offering as a unified brand

Utilising our privileged assets more strongly

Utilising the scale of our specialised vehicles and assets

Utilising the scale of our treatment sites

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Unlike the hazardous market, the restaurant sector continues to grow. Restaurant chains are gaining share, favouring larger participants

Restaurant business revenue

(2000-16F)

Billions of dollars

60

45

30

15

0

Chained

fast-food

services

Chained

food services

Total

Food Services

1

6

1

4

1

2

1

0

0

8

0

6

0

4

0

2

200

0

Forecast

CAGR%(2000-11)

8.1

7.7

3.6

2000 2005 2010 2015 2020

Number of restaurants

(2000-16F)

Thousands

80

60

40

20

0

Forecast

CAGR%(2000-16)

1.2

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Brent Crude Price

USD/AUD Exchange rate

Competition for volumes

Product Stewardship for Oil (PSO)

Population growth

What we are doingDrivers

Cleanaway will expand product range and improve operational performance through investment in technology

Maintain/grow market share which allows for better scale

Improve refining performance generating higher and faster yields

Technology enhancements on:

> Yield

> New products

Cleanaway Liquids - HydrocarbonsF

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Base Oil Re-Refinery

Pre-Treat Refinery

Processing Facility

ULO Facility

End-Users

Re-refined Base Oil

Markets

Cleanaway Liquids - Hydrocarbons

Closed Loop Oil Recycling

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Used Lube Oil Pre - Treat Oil Finished LubricantRe-refined Base Oil

Life cycle of Lubricant

Cleanaway Liquids - HydrocarbonsF

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Hydrocarbons has effectively managed revenue in a period of significant declines in global oil prices

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Energy sector growth

Mining volumes

Commodity growth

Property development

Cleanaway Industrial Services

What we are doingDrivers

Cleanaway will offer the core services required by mining, oil & gas and industrial customers and leverage to provide higher margin total waste management solutions

Flexible labour arrangements

Innovation/partnerships

Leveraging client base for total Cleanaway waste management services

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Vik BansalActing Managing Director

25th November 2015

Cleanaway Solids

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The post-collections dynamic is changing in favour of resource recovery, key to a sustainable future is to build a robust position in the waste value chain

Our long term key strategic levers

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Cleanaway Solids Collections

Cleanaway Solids Collections is the leading waste collections business in Australia supported by over 3,500 vehicles

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We are focused on the key drivers of value in the waste industry that will enable us to grow

High marginal contribution

Recurring revenue

Variability in local dynamics

Waste industry drivers

Mix of ‘2 worlds’

‘Utility-like’ spend category

Momentum business with multi-year contracts—customers generally accepting annual price rises

Revenue, costs and competitive dynamics are significantly different market by market

Large enterprise-level selling juxtaposed against mass market, consumer-like selling

Network economics are ‘king’

End to end route density and profitability critical

Low share of mind category —little incentive for customers to leave incumbent

Key is to maintain steady customer satisfaction levels

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Mid-marketSME National accounts

Our go-to-market has strong links between central strategy and customer insights

Routes-to-market

Lean backbone

Telesales / Web sales

Save desk

Major account managers (product generalist with vertical specialisation)

BDMs, AMs, TMs (liquid and solids)

Key account managers (single-state, liquid and solids) Sales experts (e.g. recycling,

sustainability)

Tender desk

Customer service Platinum service center and reporting

Pricing (mass market)

Key account managers (multi-state product generalist)

Strategic marketing: verticals, customer specific

Sales operations e.g., pipeline management, quota setting, training, SalesAdvantage

State strategy and executionCentral strategy and state executionCentral strategy and execution

Pricing (customised)

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Cleanaway Post-Collections

Landfills; Waste transfer stations; Resource Recovery and Recycling Facilities

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The attractiveness of putrescible landfills is largely determined by state government regulation.

There is a regulatory risk as landfills need regular relicensing and volumes are on the decline in some jurisdictions due to government and non-government initiatives

Post-collections – Landfills

What we are doingSegment attractiveness

Maintaining well-engineered landfills close to waste sources and transport networks

Linking fill rate with whole of life model to ensure optimum returns on capital

Selectively invest in owned airspace or airspace swaps – decision driven by profitability and long-term economics of the region

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The total landfill airspace available for use in Sydney adequately meets demand when forecasted diversion rates are taken into account

Note: * Assuming no changes in waste collections and landfill disposal trends and stable consumer trends for waste consumption and source recycling/disposalSource: NSW EPA, NSW EPA Waste Less, Recycle More Report

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

7,000,000

8,000,000

2019181716 21

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Max. landfill acceptanceCollections Putrescible landfill disposal Resource recovery capacity available

Sydney collections and putrescible landfill volumes*

(2015-2021F)Resource Recovery Capacity Availability

(2015-2021F)

The annual landfill acceptance ceiling will continue to cover putrescible landfill requirements up until 2021*

Whilst airspace will always be in demand to some extent, resource recovery is emerging as a viable alternative for material previously landfilled

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Alternative waste treatment including advanced resource recovery (ARR) and waste to energy are attractive in regions where:

> Landfill levies are high making alternative technologies more economical

> Regulatory requirements and increasing diversion rates require lower uses of landfills

> Feedstock is reliable and contaminant free

Waste to Energy

What we will need to doSegment attractiveness

Focus on collection volumes

Monitor technology and actively seek to invest when economically viable

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Landfill Remediation and Rectification update

In August 2015 stated that Remediation and Rectification spend per the cash flow would be:> FY16 - $59 million> FY17 to FY20 - ~$50 million per annum, reducing significantly thereafter

Project management, governance and review controls are in place

Complete review of spending patterns and timetable in conjunction with the EPA and local government authorities is being undertaken

We want to ensure that we deliver on all our commitments while spending money with diligence and rigor

Further update on spending patterns and timetable will be provided on release of the FY16 interim results in February 2016F

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