Republic Services (RSG) 6 May 222022 Q1 Earnings call transcript

Company Profile

Participants

Stacey Mathews	VP, IR
Jon Vander Ark	President and CEO
Brian DelGhiaccio	EVP and CFO
Tyler Brown	Raymond James
Toni Kaplan	Morgan Stanley
Michael Hoffman	Stifel
Jerry Revich	Goldman Sachs
Kevin Chiang	CIBC
Sean Eastman	KeyBanc Capital Markets
Noah Kaye	Oppenheimer
Mike Calleja	Bank of America
Stephanie Yee	JPMorgan

Call transcript

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Operator

Good day, and welcome to the Republic Services' First Quarter 2022 Investor Conference Call. Republic Services is traded on the New York Stock Exchange under the symbol RSG. All participants will be in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask question. [Operator Instructions] Please note, this event is being recorded. to of conference Investor like Mathews, to now President Vice Relations. would turn over the Stacey I Please go ahead.

Stacey Mathews

involve Vander Executive Hello. I Chief discuss quarter Jon our first to Financial Republic our would like me and I to to XXXX welcome take Officer, are call that be performance. information the conference of on from as DelGhiaccio, would a today's everyone actual and Brian uncertainties like we Officer; everyone joining Services' forward-looking contains risks materially different which statements, some may Ark, moment to our Chief we and discuss results. call. remind

related non measures at Republic's activities; today's along GAAP to call filings; business development. out and in with without recent call, Our should a the SEC written original want the expressed call, of the or listen to note projects that are property Services you material redistribution, Inc. cause of GAAP discussion any date The republicservices.com. call, that results XXXX. a filings we is call, this recording under On website Any forward-looking which a be discuss release, of I rebroadcast call future, sensitive prohibited. the will our to you Please May or is recording the Republic time SEC available of which press the this could Xth, Services, that on to our strictly tables of earnings consent acquisitions in includes this actual form of differ today conference this materially If all point expectations. Republic rebroadcast factors of is we discuss reconciliation and provide to retransmission from is that sensitive.

turn projects purchase to unable to remind vary. scheduled, are these GAAP efforts that, are the reconcile over timing you and that not want unreasonable in the team and the website. call without presentations investor because adjustments are routinely to events are our conferences. posted complete, participates public Jon. on these of can like relevant accounting dates, I development We to management With When our times, measures to estimates I'd

Jon Vander Ark

set afternoon the strong keeps focus to recycling Good business outcomes undeniable taking The year three our which making environmental our and our business, digital, offer and value, of goals. sustainability. for creating the us had to so achieve start Stacey. everyone of to we're solutions the we're customer complete joining hold thank further and delivering and a investments waste year our strengthening while we We and are zeal, business growing, well-positioned the us. on Thanks customers. services full you solid and capabilities can expanding our most The profitably products in reflect differentiated

earnings a first XX%, million adjusted of is per which increase adjusted the delivered year the $X.XX, free a over growth which generated XX% flow, quarter, revenue year. over a produced prior XX% the $XXX of is increase cash prior During we share and

we acquisitions We and of flow a closed Republic create of high acquisition Earlier a propels in the the to assets. value. use to adds investing week, platform quality cash of solutions free that environmental This long-term in this position believe continue the Ecology. acquisition US is leading best into

deep at We expertise We're to $X.X $X our business. customer specialty US billion million. cross excited from $XXX million their We of handling. book our and the to team estimate and have $XX overlap between will Ecology Ecology's in welcome waste employees opportunity vertical US billion benefit to Republic manufacturing selling

also $XX million We in acquisitions other during invested the quarter.

of traditional stages which solid approximately of are in closing, also of the $XXX in waste deals advanced We million and have recycling all the space.

dividends. in in we investing acquisitions, share includes our million shareholders, $XXX million to to this $XXX returned $XXX addition in repurchases million In and

meaningful are differentiated to developing where outcomes. We our are capabilities actions experiencing leading traction

Our aspiration we which is Customer Zeal. experience live a customer call world-class in to

of company enabled throughout setting business. rate outsized record retention and XX%. This a revenue pricing has retention and history at us the customer highest generate to remains growth Our level level generate of the

and reached growth. During increased price the the X.X%. an to first all-time prior and core points high quarter, increased of basis to yield average incremental an contributed year total acquisitions X%, compared X.X% to Volumes revenue XXX

RISE Regarding digital, we completed large container in and fleet. our the tablets rollout of small

operation. benefits to of for see and customers this our tangible proprietary continue We technology our within

our We which and be of residential data. by will month later this back and leaders fleet local begin ERP procurement empower the in mid-XXXX. finance complete and expect streamline recently system, will live with the deploying to activities with new We modules tablets went office enhanced

to sustainability. turning Next,

sustainability economic and continue environmental go believe that hand-in-hand. sustainability We to

this that We a Center nation's the will the demand good doing integrated and recycled the expand meet plastics, in our open for plastics growth brands nationwide, things business. about first enabling value future plans first are Based Vegas, Polymer goals. Services Republic address passionate generates a the be in is scheduled to that three profitable the chain in In The of for facility. XXXX. centers growing with will announced plastics recycling five sustainability Las while participation to CPG for in their way to late to are company generations our our March,

venture of are XX%. landfill and which gas at performance. goal be XXXX of by incremental generate projects XX joint EBITDA an $XXX reuse with margin XX% joint develop XXXX, beneficial an We are million our to polymer with total or that will incremental our our to we These landfills. achievement will with today, million gas attractive renewable and venture returns energy expect company natural gas $XX are between expected beneficially EBITA. above expected generate Archaea approximately projects reused. announced together collected of approximately landfill development This point Earlier generate XXXX for of projects this revenue accelerate total The online come to at under of projects XX biogas center sustainability increasing our ambitious to

commitment Brian. recognized Sustainable to We Most named the a time. continue to Services to over I was turn XXX Barron's now list Republic our sustainability, will call Companies fourth the for be for

Brian DelGhiaccio

X%, The match during of first the of work container points and container which illustrates quarter open demand and quarter our X.X% included retention an and was large cost pay willingness rates adjusting more outperformance core was pricing of inflation, to performance. unrelated price price with total XX persistent Core on restricted a X.X%, when of average customer Average face core of increases high market components X% compared price three result and The Jon. services. X.X% price value basis revenue of represents Thanks of percent. residential revenue of which a small pricing yield which half and X.X%. included of X.X%. direct the dynamically increase yield is yield in Average fourth to to for new higher for increase

X% remainder We of expect the yields year. average above for the remain

volume of volume components with increase of of an small of The This X.X%. quarter volume X.X%. in First X.X% increased container and performance increase in container an an included expectations. our X.X%, was increase line level landfill large of in in

XX the first recycling. growth ton ton Recycling to and to year. in the the quarter. first $XXX quarter. in Commodity internal compares sales on during This processing basis prices prior contributed $XXX commodity per were per to points Moving

to turning Solutions business. Environmental our Next,

from by revenue from Solutions same-store and underlying from basis quarter first year, acquisitions. points the Solutions EBITDA million Environmental the to a basis performance growth organic internal XX.X%. compared quarter a Environmental from included quarter. increased during growth net acquisitions. the commodity and $XX recycled was contributed basis basis, XX.X%. points contribution XX the XX prior was basis point which In from from margin recent the for decrease quarter margin increase offset First prior point a basis On driven headwind point a first increased during activity This to and the Adjusted prices, of XX This expansion XX fuel year. by margin was XX

increased the was million XX% to was the the of wage the remain the total improvements. budgeted XX% approximately compared with and on $XXX deal our of X%. during represents Adjusted business, of full business. Capital spend, Within flow expense projected $XXX This revenue. and than for flat more full expenditures track million $XX This was year. spend approximately US inflation growth SG&A was year. EBITDA excluding by year we driven XX.X% quarter costs prior in first liquidity cost billion. debt seeing was is from before level we impact $X.X the Total price to increase million our cash expenditures. quarter of productivity was prior and offset are this considering of Ecology $X.X or underlying the year capital free billion integration inflation

in combined respect an tax end during the of quarter ratio the X.X taxes, solar investments tax from quarter. leverage resulted non-cash the of times. to impact and charges first rate our XX% Our at equivalent With was

closed we earlier acquisition the this us week. As of ecology mentioned, Jon

Our for of $XXX initial remaining of realized of adjusted synergies. million contribution eight and million, the year, EBITDA perspective $XXX revenue on is includes as the which approximately follows million approximately of ecology us the $X from months

flat expect be contribution EPS We to also positive. slightly to

year. is cost synergies million we that will the impact highest call questions. would year reminder, and open With are one the amortization, years. intangible realized impact first of into to year $XXX billion areas We the to US believe incorporate Annualized, and full $XX July. a subject Once revenue, as during higher approximately a like still our expense, of which interest at be of three purchase the of evaluation accounting Ecology the expected first debt be least year synergies, and the for million operator, intend in first million would contribution there with As from contribution $XX EPS includes other substantially includes the during EBITDA, $X is acquisition to that complete. relatively this of represent of associated I known, of better guidance

Operator

go We from Instructions] will first with question-and-answer James. The today question now Brown Raymond [Operator Please Tyler session. the ahead. begin comes

Tyler Brown

afternoon. good Hey,

Jon Vander Ark

afternoon Tyler. Good

Tyler Brown

So, pretty announcement, obviously gas the exciting. landfill

report, little of scary, than up you is municipal solid that my but I I think half think on. have data something guys you right, collect your a maybe projects always sustainability landfills is operating in XX the makes waste And which if like math that today. more already

or am you're in some for the call to one, support XX them, the existing landfills a the ways in gas to right account XX to development much closest where this two, [ph]? upgrading project, at I deal pretty remaining R&D dirt your going number -- in I'm these projects of enough And with operations, So, ballpark? with fleet this

Jon Vander Ark

good Yes, question.

those XX. mostly announced the projects XX of the projects existing we recapping I new of is basically so another Archaea and Four incremental. are are in solar with XX, those XX this project the is We another about portfolio XX then in right? put talked of And those together development, So right? projects. eight We it's sustainability, today, existing about, of XX talked our

that of because that So, few fast-forward got sunset more XXXX, it. the of a obviously, to if come you kind you goal an -- become to is landfill, the inert, that's

from today talking So, we're that take XXXX with everything to us XXX and would about. XX

Tyler Brown

And Okay, perfect. do Or up you And that just back? Yes, very the what Or how just an one as Brian in of they'll helpful. we will see it chunk? And kind interest? recognize you go along? the then what we would money exactly you in big like what were? put do then dividend basically as you financially, then pay mechanics income non-controlling a

Jon Vander Ark

not a of more joint what could be in going and is projects, then the we to which get, two typical the we'll in then typical on we'll And rather. equity ratably there's about, these it's right no, we existing projects, royalty one Yes, on into then just this hit you there's investor our minority it that essentially, talk we're of geographies. chunk, forums return big know, investing, have our agreement, you And venture. do Brian, or

Brian DelGhiaccio

Yes.

-- what So that the no of just revenue, line be we see cost that royalty really a right. through flows that'll for that today, royalty offsets, will our contribution the then you most And separately again, similar the be to line there's item. to distinguished its come down it'll have you'll and EBITDA pickup, will most Tyler, then see EBITDA, for actually it'll got is. we've the be which what -- where in so that be one minority included interest, portion can but And

Tyler Brown

helpful. Okay, okay. Guys that’s very That's helpful.

really -- of perusing just Ecology US on to were kind you're struggled pinched quarter the tend like of look cost. that kind Lastly, they this we

I was year-on-year. down XX% think EBITDA maybe

this to year first there, plan the expecting of the of business momentum? is around like think better that about the is around kind get things get contribution, turned plays gave what's turning I bit you're color as So, just out. maybe the to around quickly? But of you talk XXX for the that seems confidence a kind which some little really what kind days the positive

Jon Vander Ark

we Yes, of of on pro in businesses. relatively now about country, what welcoming And colleagues been that for Integration of had in planning things. weeks no, And forma, teams all can we in on what do over right we pre how quarter had going within we're for and our it's first listen with the DOJ together. we think was the of we valued integration. begins kind terms frankly, terms the the how there right parameters conservative antitrust

So, geographically, defined the up and the assets driving and divisions we've the for, that leader got that. we're four already Director the flow outlined, through, and we've teams got where those through right areas all

solutions into environmental that. And our so includes that business integrating own

people in structured. of we the So, best those best are terms in and of assets things terms how both, took of

on way front. our on that well, are we So,

the stage be that big COVID. services, the you resources. And collection them with a very for but in kind the that of full do COVID, post to set was assets way. different up a there of of great being we've to in integrate out the not know, of And know, to able of you of being a trip benefit One field got is have COVID opportunities

applying integrating are those the so looking And our revenue approach, things again, underway now. together go-to-market that right those all at to and, capabilities management things considerable business,

Brian DelGhiaccio

I in performance to quarter, the quarter. on as the thing would that one Yes, better the as well throughout add the Tyler, first got performance just

Tyler Brown

to quickly, XXX just $XXX was and $XX you $XX cost just and Okay, and million what--? -- synergies million thought Brian and said said clarify, real million I Jon, just million or to

Brian DelGhiaccio

$XXX really intrinsic value $XX value the value of and -- a see that of that and we opportunities, and yes, because we million do, in all addition of costs a that getting especially we half synergies, an cross incremental better very there's on have $XX the work in to make pricing. and that, million year million, revenue, we're understand environment, return two then getting hard realized in look -- right, to like period immediately, every inflationary cost cost the we've of me let to covered to our understanding got we're three sure then sight where synergies, we'll line And right, Yes, just an that is right an take we've good right? standalone to probably enterprise sell any a sorry. And to opportunity, more. and than $XX we million deal, terms We over

Tyler Brown

right. Right,

it pass Thanks. I'll great. on. Okay,

Operator

Stanley. next Kaplan question Morgan go ahead. The comes Toni with from Please

Toni Kaplan

Thanks so much.

the cetera? inflation You you've color around what maybe et inflation Can been limit others. had and we've from that seemed really you've environment wage give mentioned wage strategies how heard on to that any this X% and good any you if for able

Jon Vander Ark

a Yes, year. right, people the I get place about would ago, our and increase seeds fair that making say where sown sure many being a the were best come years to work we people that think every

we X% added very gave a environments, of north was wages, X% where their increase benefits people, in inflationary X%, our even running sub and CPI to probably always the low in So that.

fit would cost I very coming to then surgical, disciplined structure pay. so we environment. healthy in believe very And this in inflationary And market say, and we're and

And where on all understand and dots of market operate. we dynamics, map the market XXX pay our so across right we

board then team. living competitive in cost And right. the where process, we going And across That's do we make an science. we've we're through believe made the we're of indelible kind to ongoing moves, very in And still and every we increases additional the staying local that year. market. individual sure ongoing need And so of in ratable go that,

in team. see believe our do the HR quarter I in expertise And way. be And also we're and more that do a centralized discipline we'll some review, the and the you'll that to smart a of doing able in We us of fourth here. think third things

cost pricing allow margins. All which inflation to of our of ahead a will scale expand in our better productivity, result of us which will

Toni Kaplan

diesel approach more that just pulling has great. to investments thoughts the prices, on really facilities energy also increase new or Has any renewable your sounds I wanted it alternative fuel vehicles? forward changed about gasoline energy projects? in given and That caused Thanks. strong ask renewable to the side, in

Jon Vander Ark

on the our returns. after that we're take joint of partner, think we projects, and Yes, we this of get process, about as very those us excited all and a it portfolio excited really reasons landfills, we of out, one to right about those really that venture this allows varying in a of and but projects bid competitive

basis, probably size wouldn't standalone after the And given a some those we have and independently just things, gone in of scale.

deeper XX to to which also to addition So, be with really of that can the is to haven't go exciting, feel of or market. that we're these the something flight, all go we get able flight, in because we and have after that able XX in next, we opportunity projects, go we our fleet able right, landfills that quickly of into we're excited after to faster,

we to electric certainly XX% CNG forward of relates and as have that fleet, energy our on electrification, is on going is it of portfolio. all our fleet But As about part vehicles. we of are long the

Toni Kaplan

Perfect. Thank you.

Operator

from Hoffman go comes The Stifel. next with ahead. Please question Michael

Michael Hoffman

appreciate And for total you -- of translate the to X% does want you into it. inflation, Thank few did how The thank a gesture cost inflation Hi. cost kind ago. very also you. internal wage internal I that I inflation? weeks

Brian DelGhiaccio

and a the basis expansion four seeing you cost you XX XX, of productivity, expansion just half, we're inflation perspective, underlying think XX revenue, and quarter. I yield the -- a that to points compare you that put of unrelated when about the I is I look take take that in business X% think it and that points, get, I consistent, is in basis into Relatively that mean, which Michael, then to talked

Michael Hoffman

Okay.

fully You that B that. anticipated about large productivity it RISE and it out to And of it taking small out hours comprehensively and ask of the But rate then walk all I take up will part because have and container? engine Does distributed? you more like? rolled and is now, you is this in improvement minutes lowering

Jon Vander Ark

listen, those there's biggest and And you it quarter. We're get to routing to this productivity learning then time. just happy the of get right improvement start wave right? When improvement, our number efficiently. a in, first start can and little then standardize productivity when incremental you you see over in your you really you Yes, the put work existing about sites, curve,

of Given we into forward, that or we the steady to there's do we'll we had and a coming to see true go in was more people improvement more of and kind scientifically? indicator then delivering geographies, back, back still performance as society RISE be understand How start yes, what do as overcome And we you'll starting signal How benchmarking opening a the to lot forward. a of build analysts see coming some do more go us advanced a traffic fleet. we headwinds RISE able routes of this that and a think still the is what those get great to up analytics. across And take residential is X.X to of the productivity opportunities even see are? I improvement radical of to right work more

Brian DelGhiaccio

have way probably is now, that at Michael, realized we it left the we're opportunity we right we life-to-date. than more And looking

Michael Hoffman

landfill on and they other do, can't they to one energy of got need you're putting gas what gas a the to do these last the gas, of assuming development, even want lot then guys And I'm the the capital? they up control it. XX% you if money. Got

split? economic the what's So,

Brian DelGhiaccio

in investment, we that have a ownership XX% the JV. For

Michael Hoffman

XX, that is talked million million you've now the now Okay, thing and like and for this lot again, an consistently, developing, Jon, it looks I plus XX? but over incremental the it over about number were your $XXX $XXX $XXX the thought Because to were, million is million or a whole and $XXX or bigger. related you

Jon Vander Ark

this No, Michael. total, million is $XXX

then a for -- under all it again, that new total $XX JV of million call this million $XX incremental. So it And XX million, $XXX XX the development. are for that was, about call projects

Michael Hoffman

Okay.

Jon Vander Ark

are Hey, keep sites. in -- mind, these Michael, into we're medium sized

this the what over bigger randomly it'll the SCFM times, are these to of of, sub time legacy then end through natural X,XXX Many be electricity take have sites that kind see on RNG project their project , sites, into needs those And and is bigger into going venture. will joint of some sites. we'll that recapped. kind projects they'll be will -- will of So be we reach go

Michael Hoffman

All right. you. Thank it, Got

Operator

with Hamzah question Please Jefferies. ahead. next Mazari from go The comes

Unidentified Analyst

in Hi, filling this is [indiscernible] for Hamza. Han

of So what versus margin cadence my first and comment this just on leverage is quarterly question is, And then could operating labor just running you turnover year? pre-pandemic? the your

Brian DelGhiaccio

know, question the Yes, margin let me take that, here. you

how at that right we're That's again, basis increasing if first the is the performed, going what of and year. the take on the So, and we you elevated. saying right kind the sequential see stay assumption of we're started a now look in quarter, forward, for March, it's rest we a going to now, fuel really

So basis impact sequentially, XX of see the a from headwind, fuel. point we

we're also seeing better Now, pricing. of level

and margin can the solid from on recycling we that if qX that waste you performance, traditional will, think relatively But that. space. So would stay mostly offset flat, that's our we

you point margin XX going for the create to layer the, remainder the the basis know, in If acquisition, year. you then about US that's of Ecology impact a

Jon Vander Ark

pre-pandemic running labor year right? for labor some that if and for them picture, running hire Labor And quarter to long-term. and drivers, but a it for some levels to of the slightly business sure, down get market could of certainly -- tight, we a we for the remains so in terms and right, it's look back the more I'd would the other mixed say, elevated the of turnover, roles, roles. little bit

why, we and will where a elevated schedule, markets people the can need wage understanding, put things. reason at the to it leader work. any those looking lots can shift is markets, as be be If answer it we part not right? It's can of all we we're not be of now have turnover seeing more So, their into little all why the always wage

very very again, But So, pricing that. handle inflation our ability our of costs. good to to like mindful got certainly and we've we're cover a we relative on feel

Unidentified Analyst

the portfolio exposure, how just you of could now? your what that Okay, to right you what big and it know, understanding And portfolio touch waste about compared is you will on could hazardous can solid of grow? then just, level the exposure cyclicality on that waste just, And also of talk get, the then if is hazardous waste business?

Jon Vander Ark

say our project right revenue, and terms respect. of been we recurring higher, and any a space, work our solid of prospects. and but in exposure. growth parts waste. hazardous, now, have And more that we think doesn't I'd solutions space excited mix that environmental your and two Well, didn't the based recycling acquisition is any business there's slightly mix $XXX that broadly Technically, in about about through the of together, we a the mix the us with Ecology question growth, business with forward, and profile I and in you space. about probably versus With Right services million relatively solid a opportunity that it's in got similar of in M&A. integrating never takes when volatility that They're a terms a of of post the when more meaningfully field US waste. start both organically change we prospects, recycling that billion We've think side profile fast growth collection $X.X of to got

service gives to US with follow-on platform geographies. smaller tuck-in great coverage this fill do or addition, out and build opportunity us Ecology and few to lines a product acquisitions geographic some out In an to

Unidentified Analyst

Thank it. you. Got

Operator

go comes Sachs. Revich question Goldman ahead. Jerry with next The Please from

Jerry Revich

everyone. afternoon, Good

Jon Vander Ark

Hi, Jerry.

Brian DelGhiaccio

Jerry Hi,

Jerry Revich

talk look, part about the agreements? Ecology, too the it's contract but Hi. can something I'm nature based pricing RSG's on to comfortable this what's discussing could Is maybe US apply business on landfill the of that their quickly mechanism you're of wondering, structure? the soon, landfill if call? just you on How you

Jon Vander Ark

assets. Yeah. Look, very are we well-run

assets, great right, Ecology. are compliance well compliance, right? with great So of that capability we with acquired compliance great a US that maintained, start technical capability Great compliance, and culture, we've set

us we're them go So foundation, allows and solutions will producer have – offer because So their liability, that create customers allows that waste the we're to for comfortable compliant about a then that really that us to that streams delivering we they're maintain right, customers right? liability really in our they about, the feel doesn't is good That customers. that value to that way right? very they for price our is with and that excited that we to

into assets. think, in look that obviously, And that take the start of We that. contracted business in we'll very So see, steady our area. work of a at The spot. side quickly. customers, we a the can little Again, hard a asset. will I not contractor But take and with that improvement spot, at more way time. over time, start the it's you'll we we right with and mix look back the And begins away,

Jerry Revich

the on commenting this you gas on you're in about if off-take have at Okay. point price the million per terms any you contracts, RNG opportunity you thinking just would agreements then just on how can of what that touch set? $XXX or assumes And the And assumption MMBTU? mind

Jon Vander Ark

the JV developed Yeah, we right? And the project just yet. got haven't announced,

time, So can price. fixed have over It over fixed more we beat gas don't some we'll looks agreements. which together. time. assumptions spot right? Brent $X will we pretty give any probably what a than the decide about like probably I of But We've mix could spot, got assumes This we think versus you that but be of a flow, conservative assumptions,

Jerry Revich

announced play the on, Super. if course lastly, to you you of based pricing when expect you've if Okay. the peak And can cadence you on actions type that you that have out to talk you how over visibility? second the customers? expect touch And of about quarter can inflation to

Brian DelGhiaccio

year. my we second Again, X%. our you price XX% if portion in in Yeah. of at have average the those look take can as portfolio expect comments, business index-based above a where remain to resets half resets, I restricted Jerry, mentioned the the yield of we the of

you in half look year, slightly sit half. for can if say than but consistent throughout the I there we in probably saw So and the would higher first performance second relatively the

Jon Vander Ark

Thanks. Terrific.

Brian DelGhiaccio

You bet.

Operator

from The comes next ahead. Chiang Please question go with Kevin CIBC.

Kevin Chiang

Thanks question. there. If guess, at But I trending been that's way for a look up at it. rate, I conversion great nicely. yield not I look my that's taking to Hi, to know your core average price,

in things in rate? that hit this here. first XX%. quarter remarks, conversion the close think prepared to gap? narrow you to mentioned there Or continue bound can to do upper retention Does You I XX% of are is you an that that at And are suggest there your

Jon Vander Ark

There's do we are strategy which just better all that. we think our deeply, and certainly differentiated. willing can customer things pay and provider as our offering, more and longer. are right, a talk can it, to value are not things create is And we sustainability, And our every zeal improve we to around those offer about and digital customers customers stay when

of So do. what that's we essence the

Now are move, things a close. there is structural or – there like businesses right, people

industry because the And customers and get and very But this to stay a certainly kept that's little structurally, to as XXX% for the very economics of don't that's us. loyalty we'll So then got continue much stronger. that better one we in very, valuable loyalty. When get climbing know, offering you to bit longer, the is the are strong. to right, and point, we curve, there's were ever then at XX% I we that things think aspiration sub XX%,

Brian DelGhiaccio

And more right? into two There's pricing a components the Both retaining to business, of new go also for at level higher those there's equation. Yeah. there's but calculation. that

We of from as So expand business proposition, that better those more we perspective. to solutions set can as offer the we have the value a most we services customers products charge a offerings. we and we have new then our environmental business, think and for complete

Kevin Chiang

Right. No, that makes sense.

seeing great You're obviously momentum there.

second Or guess mentioned you're bottleneck think it a I'm my do front like how chain I the now does role? given supply KPIs would things prefer example, battery Is you're just question, like greater most? technology of else, adoption? when had all mass matter that, past just you, that the do Just creates at execution play a you technology, Or battery that I you you're at in your risk think their here. is somebody are so that right the in things for And of wondering you what's that's they're vertically vendor what not for of months, earlier on Just vehicles here. orders? focused in And what density? wondering as look all electric on or like you that that dependent least resiliency evolution buyer X which evaluating the integrated kind a like on happened

Jon Vander Ark

range, our a short-term barrier. Again, some not last I've being front be progress on made relevant. the days. of good but partners be deliver the for time a metric a to Yeah. a with that, because creates hey, has full hard lot a on obviously, able municipalities. kind already burn think XX a right, truck midday question. or you right? will the we two to Certainly, Both what's that of over this supply changed the that to about again, chain really That it the very world exemptions and economics in having has in on on a We're don't working productivity hurdle right, the up Well, charge. are and able mid-day them and charge. headed a on as well, only And in and day, our operative But functionality, without is us, weight confidence bottlenecks route deliver got mindful local late, with to some of the Of of whatever understand I feel optimistic you very get, state years, benefit front. where that last, are we and we're

all progress starting the cognizant the we're at vehicles our that of scale said, about to but buy being optimistic and within half, next into that electric baked years. still and that So certainly plans, of three two

Kevin Chiang

it That's me. you Perfect. for taking for my questions. Thank

Operator

comes Sean Capital question ahead. next with from Please The go Markets. KeyBanc Eastman

Sean Eastman

an here. Hi, flow annualized for Would start and outlook on be both to to the to drop guys. Nice this possible commentary it basis? Ecology US the year free year cash

Brian DelGhiaccio

And these and the see of for XXXX. in Look, particular some in years, before, about And XX% out first us we've this landfill. conversion couple again, call there's company modulates. which capital consolidated just We're talked Yeah. the as we by disposal XX% takes into that take example, with XXXX as elevated it, landfill spending then building conversion still capacity, we're let's a XXXX range. thinking in year

Sean Eastman

maybe components refresh pricing And from million helpful. the looking year-over-year it, could full to the aside, Got margin Ecology at inflation. RSG, you of US year? putting $XX million of just and Okay. stand-alone the ahead any for bridge had $XX of We the

offset had be for points to there then and normalizing acquisitions. XX and from us here? by from basis anything that we was net basis that able comp, in from $XX you'd refresh incentive bridge XX points Is million fuel I think

Brian DelGhiaccio

the point that relative Yeah. What say think at excess prices additional fuel that probably headwind assumption XX is would US that that, about Ecology. of cost basis current outside to creates and in offsetting is I pricing things our big initial an inflation of change

full different consistent way. relatively there expectation just year, slightly So, getting for the a

Sean Eastman

Very Okay. Thanks. helpful. Got it.

Operator

ahead. The next comes Noah Kaye from Oppenheimer. question go with Please

Noah Kaye

to trends that ask know too about weren't industry. very think, the the I some to tough, outperform, the volume but quarter. much. want comps in Thanks I relative of you the I did

I And the on is have of And of right I formation? gains? attributable touch trends? share part potentially it in the the if what how What last business in What being of could surprised you bit are of might seeing in Where much how is, volumes on terms upside net really So to that seeing is the new the to a business you're just markets. little quarter? in markets? actually much are you guess wonder this

Jon Vander Ark

rather open kind company Yes. up Look, country of you're post-COVID. still of the seeing I think this -- you're

summer, hit didn't lift mentioned saw but were we have And them, the opening right up -- California, think, variant some we Omicron before up, I really last see see we the some there. open And do didn't, lift, thinking the, that this didn't because they of about we I right. quite

up geographic our is, our that that, comeback. Texas, listen growth. is winning that population the growing, organic And including So other you're where going And see right, as zeal and Arizona seeing we’re in volumes. digital terms on into customer places all you from that at footprint certainly of street. showing our of we're benefiting people on some of investments that And are Sun in and then Belt to right into our helps, exposure large

compete right tough now in labor a I very think it's challenge environment. to

there's good feel equipment some is people I shortages. a And challenges, equipment our but on tight feel very deliveries, market. think, our right, about about good given supply it labor team, we chain

about could pretty but how service them being customers. place, able take we sell would we more we're to this feel drivers So good if

Noah Kaye

Yes.

But probably of But have and how opportunity? it in the the I activities its Now is remain do they last helped that see And of we certainly you challenging of helped And industry front, that leads wanted year. us Yeah, the pipeline things seen number remains last get think which potential pipeline. right. encouraged We think and M&A? to the in operating you short-term of into my outlook M&A affecting on that the do you current environment next the about three question, some what terms and as space. started $XXX pace in strong. M&A on about potentially mentioned, million I a the impact think pretty year, the healthy years, very the our

reform, driving around First, tax that you the and fear selling had some activity.

right? tougher all and we're it's just it making investments making now had got a And you challenging getting organically, for that digital very market, tough our for inflationary M&A customers. other not And labor I have an to Add where the a very You at environment with providing product to attractive replicate, grow going a think very that to to also pipeline better us only forward. that compete, that's drives the a are but people COVID, scale opportunity environment. a to that constrained

Noah Kaye

Nice quarter. Great, thanks.

Jon Vander Ark

Thank you.

Brian DelGhiaccio

Thanks.

Operator

Mike question Please from Bank comes America. of ahead. go with next The Calleja

Mike Calleja

back taking this I you integrate target think kind think now, for dilutive to out my a about of year? Brian, And it margins question. Thanks How think this you in bps there, think for margins as now Ecology, do it's How year. I everyone. year? your we can business? the Ecology, this pushing context we mentioned XX%, integration getting of XX with your XX% is especially Hey, about guys

Brian DelGhiaccio

Yes.

are sit to going about going we're separate segment. separate Mike, reporting, and space we're we going solutions its own there to we into So environmental when to the think

there's different direct So opportunity. as the that XX% to business this solid space, is is structurally sight waste space, But but of about we we solution the margin. environmental think and line recycling on think the have that we

the take Jon we sure. revenue basis, as something continual mentioned, we'll synergies, is the any consolidated didn't longer get cost look only price into performance. on that synergies, whether to the synergies, the improvement, of additional include at but we it of But where realization be not company this there so And a any

about you'll again, our able be guidance. to Difficulty] the we So, we'll [Technical as provide see and expertise case, talk annual

Mike Calleja

And $XXX eco million helpful. That's just reported Perfect. Brian, XXXX. I in then think, lastly, EBITDA of

not are of what assuming and look last the it's be of margins over might year? the we months, So I a $XXX like the than eight higher million organic level little comparing EBITDA growth there. apples-to-apples

up? side does just any know business? on, that color earlier. Jerry pricing the So waste add asked CPI you pick I And curiously, how the book. on just plays I services the We work of that can and market. kind the address think on restrictive in can curious, out environmental this solid I'm like, And that open Thanks, lastly, calls if on on know on how you guys.

Brian DelGhiaccio

Yes.

So EBITDA. little a the me talk about let bit

the So again, there's seasonality in business.

So expecting year full equivalent. let's on first what we're for talk about contribution a an

odd that you to. sit So compare say, before would any of were synergies, about expecting EBITDA the XXX we to there and million referring that we worth were million would $XXX

of date, translates be $X what into again, synergies. a life first then year-over-year We EBITDA, the includes means would for real which $XX million So acquisition the that What be in year synergies. that months layered the full would worth $XXX on about million that's growth. million of based that year of eight

Jon Vander Ark

think on space. the is solid I recycling Mike analog and then, pricing, best And about waste think the

of both more taker more collections, recurring it only those, you're collection pricing, post Ecology Those you in but think So based special streams are post You're special and sometimes contracted assets typically typically in based a waste the are you're spot U.S. of And based and contracted, if event right? about streams. has event giving for streams, waste, continuous some has right? deals, and the assets, bids those which right, that The they of integration, collector time. of opportunity or drive consistency of the And out. integrate driving periods shorter and full to the the from field that that longer is more demand. streams the you have into volatility generator customer, but services, price, in to pricing more the reduces then here contracted then allows which right, some drives

not able generators again them, so right, that, streams integrating hazardous and we understanding And this how it's pricing about overtime over as a is specialty power being and separate. decade And those half. consistent a right and waste, always the things is into two And two and saw That's right, landfills. thinking emanated of those supply of that handling, to recycling the space. focus integrating things

Operator

[Operator Instructions] with JPMorgan. Stephanie Yee ahead. The next from question comes go Please

Stephanie Yee

to $XXX how ask came opportunity. of the to good up Hi, the team I afternoon. cross-selling $XX wanted with million

that a number? kind Specifically, there estimate, in of realistic that is or is conservatism

Jon Vander Ark

Yes.

in we're -- So in for now we big one. space, this few it pretty footprint It was Coast the Gulf a wasn't in year, We've And Mid-Atlantic. in acquired the Last ACB, gave Northeast big right? which top bottom years. us been a the down certainly footprint up. and

now set gone already services, we're customers, to seeing we've the of serve right, it, seeing services. environmental we're have products opportunities and we together. so market to because And And broadest

stop And offering, those materials. they we assurance facility, with -- in that suppliers customers of can the fewer bigger one so what customers value like shop do they want their

to ecology. So that used in We think we're seeing space. we're winning that

with across and Now of billion billion conservative And million lay how million. to you terms a about XX a about a XXX in half estimate that. fairly right? just of got number can the land, customers across up penetration in that right. bigger and terms we of business. types in much take of we we manufacturing They're That's revenue, have We've came of patch a get

Brian DelGhiaccio

And already as done acquisitions see real. opportunity with be able been we've Jon that cross-sell our to existing that that have mentioned, in there is the proof business points to the

Stephanie Yee

the ecologies part you the closed Or talking the Okay. That's parts you can that's that about would feel helpful. you're of of U.S. ask, line? business? whether that And evaluating on consideration now whether comfortable divesting if acquisition, down even consider any I do you

Jon Vander Ark

Sure, businesses. smaller Both business, good international a and There's a have standby business. are yes. they

think assets there that? look is, an national player. -- start and then We'll how question we But review interaction again, hard something and international stay that right? overlap North sometimes divest tightly go that is to It's that are of ability we'll and customer the integrated get disintegrate start it's American and Whatever is the view then the and to in tough it, sequence we and put not We're and if and those easier into devise owners that both we right? we're those we'll that. player, right, so connected, with the update share our do put hey, of facilities, what else you of to in of of we it's under on So it, answer so typically and in take we international always it's and with under the a accordingly. into I next assets assets? I to customer I side a we'll terms of understand, give we'll the customer, the unrelated level have the while get what's

Stephanie Yee

Okay, okay, great. you. Thank

Operator

questions. to closing Mr. appear you call there Vander back be the to Ark, time, over remarks. At I'll turn this for further no

Jon Vander Ark

proud our In first Betsy. are strategic investments creating. which the are value of closing, demonstrates we performance, our quarter you, Thank

to celebrate look a the evening forward of as and Hall for create I commitment thank and stakeholders. long-term four week, We all Don induction the recognize all at we Expo NWRA a more to sustainable to world. employees everyone our Have to manage drivers would like seeing proudly the create work customers hard safe. be into continued to and next to our with value their for good well-deserved business of continue We Fame. partnering Waste year Slager's

Operator

Thank this conference the Ladies and attending. gentlemen, concludes you for call.

may disconnect. You now

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