WCN.TO - Earnings call 4 2022 | Waste Connections, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to Waste Connections' Fourth Quarter Earnings Call. [Operator Instructions] Please note that this event is being recorded.

Now I'd like to turn the call over to Mr. Worthing Jackman. Please go ahead, sir.

Worthing Jackman

good and operator, you, morning, everyone. Thank to discuss fourth like the quarter XXXX. welcome outlook everyone to call first year full conference this and quarter both to for I'd results our and by joined of members Mary I'm management. morning Anne our several senior CFO; Whitney, other and this

and for since with provided the and margin acquisitions commodity-related in noted more execution period inflationary once of points, pricing, closed Strong the a headwinds entry during the point year and completed visibility waste release, margin XX and highlighted for by by for operational off than an QX year-ago providing period, again XX% As Connections, the period. pressures EBITDA topped We better-than-expected impact continuing excluding enhanced along XXXX. results. adjusted basis earnings extraordinary our solid to Waste over outperformance expand during dilutive offset higher acquisitions

XX% in along excluding Looking of We percentage full and differentiate our wage, core in and during and a year growth pricing double-digit overcame acceleration expansion, year margin revenue EBITDA for the results. with elevated of XXXX. EBITDA, drop inflationary at fuel an year, the continued in in recycled commodity momentum the providing adjusted to pricing second both adjusted acquisitions, pressures in half higher values the the impact with

year-to-date, approximately Acquisition with activity activity during acquisition X% in provides million $XXX of annualized dialogue for also acquired which, additional outpaced total the in with already year contribution a ongoing. revenues, along expectations XXXX, of

XXXX, activity year. adjusted well execution inflationary commodity improvement line double-digit as EBITDA operational values any as or expansion has for in incremental in top upside from In outsized along in provided the acquisition XXXX with recovered short, during with visibility pressures margin growth tremendous

to we Anne our into housekeeping for disclaimer Mary over turn detail, call items. more and me other Before forward-looking let the get much

Mary Whitney

U.S. the The Reform materially made results Private differ today's harbor applicable provisions good and call forward-looking XXXX, risks Actual the in Canadian to securities including within pursuant various discussion of of safe due forward-looking forward-looking to laws. Act uncertainties. information statements of meaning those such Thank made you, statements during and Securities from Worthing, morning. the includes could Litigation

cause the included are Canada. February in to the differ greater and could cautionary earnings that in filings U.S. actual or statement release authorities in XX Exchange in in with and both Securities discussed Factors regulatory similar detail Commission our Waste Connections' securities commissions the results and

we statements may revise aware You may to additional should presently not forward-looking adverse place are make circumstances We are immaterial, to impact which have risks events could not reflect date. after today's on change or order reliance currently that be as forward-looking any commitment there statements or our in which no believe we that undue of update business. on or an

Other evaluate to measure. measures for releases performance differently. uses such non-GAAP On the call, measures flow. measures monitor of to per both we and of on the most non-GAAP attributable our Connections discuss adjusted the comparable ongoing measures diluted EBITDA, calculate as reconciliation certain dollar and companies cash our and adjusted these adjusted net share Waste GAAP earnings refer a non-GAAP the to Please free such income will to may basis Management non-GAAP operations. financial

I will now turn to the call back Worthing. over

Worthing Jackman

Thank you, Anne. Mary

in the arguably most efforts few notably years our over the I'd of face to continued most of has the off, results. the past local whose recognize drive to differentiated operating environment, challenging teams and applaud First like execution,

X once trade-off hallmarks we our Connections: the again and ability. demonstrated XXth anniversary of year, sustaining sustainability between Waste no There should XXXX, In be two.

drive drop QX in adjusted 'XX pressures and EBITDA in elevated a operating financial expansion, values wage, and extremely performance are as inflationary year. we we with As acquisitions fuel to in strong pleased the and noted margin XX% our overcame and throughout recycled excluding earlier, commodity

XXXX, and during to was a of essentially XX% above year, higher new already outlook the and CPI pricing our XXX we from increase for fourth than to resets up core initial about the lagging given more to basis by points X.X%, the the the points in which price. year, average of pricing acceleration delivered in X.X% strong basis and QX in quarter in of pricing XX.X% of core benefit about XXX start we're also sequentially about set XXXX, In to price. Moreover, all

step-up our the purchases. XX% Net outlook free purposeful about $XX of We $X.XXX XX% of opportunistic above billion for in sales, of adjusted year-over-year reflecting million CapEx constraints million, XXXX, cash ongoing on supply over chain year-over-year, for flow during asset fleet CapEx spite year up and $XXX in up delivered in a of estate CapEx equipment. real was

that noted uncertainties expect and fleet take now was $XX in expected our manufacturer release, As press additional in been to navigating of XXXX we've million in the XXXX. timing originally delivery in an in delivery

facilities about $XX for projects, about was originally about completed. than total facilities million for RNG included primarily also CapEx million recycling two the $XXX million once previously XXXX we've Our will sustainability-related and that expected, two $XX we less which had discussed

additional expected Our outlays due recently into this completed an of initiation well XXXX as at be large as sustainability CapEx XXXX up of expected is RNG a to to that the of expected the year timing XXXX project of acquisition. some development from the drifted

we facilities of at described recovered range strategic for with As resources. paybacks a have are values R&D previously, these attractive investments

others about over owned project $X on, in an EBITDA of of the $XXX capital or XXXX a of These to for noted, between EBITDA XXXX. estimated CapEx. we've dollar are projects million are per aggregate additional $XXX With partnered million incremental along generate XXXX and approaching outlays now conservatively dozen our RNG projects, with

this would of year. half plants one in to recently Provisions soon new the start Inflation as the tax-related as XXXX online returns scheduled and provide the benefits as and expected Act Recovery promulgated of further in is be enhance contributing could second

business, to have additive As something not these acquisitions. of our strategy, and to creation our consistently consistent approach growth value ESG, focus on our in we to are lieu emphasized with projects in our integral

We approximately in across and markets, closed solid new franchise U.S. acquisitions, new market million both completed and integrated Looking number entries of in competitive the spread revenue. all in annualized $XXX in we including to markets, operations. and and waste a Canada acquisitions, next XXXX, existing XX tuck-ins to

XXXX. in start activity outsized robust years' strong had XXXX six the $X.X annualized we've over consecutive year totaling This capped billion XXXX. another revenue, And since to in acquired

year-end, X%. always, $XX along West As evaluations with we the Coast which, franchise maintain to revenue, already another closed we the selection, appropriate. acquisition profiles in in contribution approach and annualized deals market contribution rollover for completed disciplined to be up risk a we we've integrated Since over million from over provides with XXXX, accept determine XXXX

up acquisition $X.X in potential below XXXX. activity outlays year Continued remain over spite the of dialogue entered which for outsized of we Xx for well of positioned, another billion sets with leverage XXXX having during

balance growth and capital profile projects acquisitions investments along solid Our shareholders. of provide strategy, solid with while in elevated of organic flow renewable to strength free sheet energy continued our waste increasing cash our flexibility for return levels and also waste

acquisitions and future invested to XXXX, XX% In $XXX the from and for and million over up growth. in repurchases, we CapEx nearly returned shareholders year, opportunistic through dividends share billion prior $X.X we

detailed highlights Now and XXXX. the and wrap to fourth review provide into of to year a for heading the up pass I'll full quarter outlook call I'd Mary to the Anne before Q&A. more like QX financial then in depth

Mary Whitney

over year-ago or since Thank revenue XX.X% of the XXXX, fourth outlook X% million $X.XXX year-over-year. QX about you, our net was $XXX quarter, QX. price by of our sequentially X% markets. completed or total stepped billion levels our exclusive $XXX the XX% million million in competitive about between XX% our Worthing. in Acquisitions about Western in and quarter basis XX.X% about core points of revenue region price million up ranged In included from highest period in QX the mostly which price, $XXX to market of Reflecting divestitures. Total above XX $XX from in up contributed and

in for competitive total place about all XXXX, already market during time 'XX, over The regions in with for X.X% CPI-linked in benefit price lagging now. at core, this XXXX, position pricing pricing that of along increases largely us from acceleration XX% higher with the essentially in

Solid two waste basis from line noted points XX our expectations with the X.X%, in contracts of winter were the were QX quarterly from municipal impact purposeful final of nonrenewal late spite excluding the down December. severe volumes throughout in in in XXXX. Volumes weather

in E&P Roll-off pulls on and results the due revenue were landfill quarter year-over-year about about day at pull finally, revenue partially in the Commercial up X%, waste daily were waste down flat higher million per Looking about and rates X%, C&D than $XX waste, per with and of was price. basis. year-over-year. with quarter to tons XX% per X%. a XX%, same-store down ton X.X% up collection line special up to fourth mostly on up up And each X%, offset by more revenue with prior was MSW X%

at from commodities. QX Looking recycled revenues

OCC, were about the ton, of with been XX% relatively November ton $XX July, since through acquisitions, commodity which to sequentially Prices indications continued per Excluding year-over-year, in since $XX pricing per in stable value corrugated as from expected, QX to about old some precipitous declined $XX range about XX% in the QX. recycled containers, or down OCC due average decline about of November. improvement. has revenues for to recent

up renewable landfill in declined around credits energy about RINs. year-over-year in with nominally values gas to by levels lower and $X. Finally, were QX $X.XX offset RIN have looking higher at or gas and RIN revenues QX sales averaged values volumes. since Landfill

year-over-year $XX beat of million XX our for basis XX.X% outlook, QX, a reconciled our earnings outlook. to EBITDA million, $XXX EBITDA in adjusted about as point above and XX.X%, release, Adjusted up our was margin driving

of XXX values. points from up quarter the including lower more recycled points toughest year-over-year, in the we basis Margin impact XX commodity quarterly as comparison, the almost was excluding overcame than in basis acquisitions, headwinds

$X.XXX free We year. in adjusted we cash of the to adjusted our above billion adjusted EBITDA CapEx We real over-delivered XX% as cash spite million purchases an during opportunistically year Moving revenue. free at converted XX.X% incremental to full estate in $XX flow outlook of over certain of or made flow.

outlook $XX are Worthing our is XXXX expected all due what for As in CapEx of include, in as for which outlays, and CapEx. fleet XXXX sustainability-related to were about it that included delivery noteworthy doesn't $XX in million also XXXX about million our as now in delays is well manufacturer noted,

outlook I will the year quarter XXXX. and first for our review full now

results factors review commissions we'd based carefully. on do, in filings outlined Canada. we've once again similar significantly or regulatory SEC to the I harbor and and statement like safe vary securities to investors uncertainties our the and everyone these that in encourage remind We Before authorities actual with risks may made

transaction-related of also current the period. It expensing assumes remainder acquisitions any outlook items impact close the the may economic Our from during during excludes no in additional environment. year of change the that and

first Looking Revenue at full $X.XX the estimated XXXX in at is XXXX. billion. year

For pricing flat waste, line solid and assumed revenue range estimated all expect and core, to in recovered E&P million already $XXX X%, we recent X.X%, in for about essentially down of and of of completed values activity XXXX plus levels. acquisitions from commodities with waste in the volumes about

reconciled margin year-over-year approximately in the EBITDA release, tracks. expected guidance be Adjusted of X way, RIN our in up another commodity recycled about or to XX points Said basis billion XX.X% XXX adjusted is face earnings year-over-year, as values. those EBITDA of in basis XXXX, points commodity revenue, $X.X XXX excluding up headwinds in is from and approximately points basis

in additional $X an from outlook. move XX% increases improvement recycled which, E&P both which clear, annual does with not the such Any XX% would or To this closed commodities move revenue for outlook inflationary RIN during or be to flow-through. very for acquisitions in values the levels; which million earlier price our upside $XX in in commodity trends, revenue moderation or XXXX values in waste year our in any high in activity every for levels, provide assume for instance, add in approximately values, annual million would year, would price every of add recovered

recent from we with our we're to encouraged commodities prices up such some That for than have be in hearing February the about into markets recycled pickup We're improvement reported lows. more in any already not factored outlook. said, XX% by

XX% is with our effective expense at million, for quarter-to-quarter Interest tax XXXX approximately is variability. rate estimated expected be approximately $XXX some and to

of $X.XXX Adjusted flow delayed prior release, year, XXXX, delivery fleet noted the million, as at in earnings from in $XXX on reconciled expected in $XX free including CapEx our earlier. as million is billion cash

sale asset or excess proceeds, expect also million exited. replaced in We about with $XX facilities either associated primarily we've

quarters. and adjusted in Given the of QX the start and other expected ramp is this relatively lower timing expected flow CapEx the outflows year free in year, higher subsequent to cash

our to for QX approximately is now $X.XXX XXXX. outlook QX estimated Turning at billion. Revenue in

solid about remain pricing with of approximately of XX.X% price and on for million, commodity of seasonality. $XX values waste We levels. typical waste revenue in Recovered XX.X%, reflecting E&P are line to growth expect plus expected volume recent

EBITDA XXXX for at revenue of $XXX Adjusted estimated is in what quarterly in and XX% sets or comparison RINs. approximately the as up million recycled QX in toughest commodities

amortization intangibles diluted and Interest expense for is about revenue, of $X.XX estimated about or of first is share about XX%. net expense at net XX.X% million amortization of of including to and $XX estimated income is Depreciation per be quarter rate approximately taxes. estimated the of interest million, at the tax $XX.X

before some And the Worthing now to turn me final for remarks call let over back Q&A.

Worthing Jackman

Mary Thank you, Anne.

and cornerstone outperformance of are value the a Connections' Our testament of to that history the has accountability creation. XX-year results positioning in into of been Waste culture XXXX and XXXX

and proud efforts not resilient inflation, are positions over the emerge during employees whose of team. on also commitment XX-year for overcome our drop-off a our and grateful XXXX only We dramatic a us cohesive challenges high recycled to year, but the compounded in tireless by accomplishments values more the XX,XXX commodity of to of

have with basis efforts commodity without causing to double-digit their flow point RIN cash assumed in low XXXX industry-leading with recycled positioned margin and from adjusted margin expansion revenue improvement an EBITDA all free growth, multiyear And XXX that's Moreover, expected any us conversion. headwind. along values, clear, be for

well these any We're moderation sustainability to M&A and encouraged indications commodities from as inflationary and we that Again, in look improvement lows upside off be may pressures sustaining additional as recovered already or in forward sustained by ability. activity. realizing those

your turn Operator? to We I'll now today. for appreciate questions. the open your to over time this call the operator up lines

Operator

will [Operator Instructions] from Jerry Revich, be Goldman question First Sachs.

Jerry Revich

you cadence wonder the on I if implied can by folks just guidance. margin expand

got and outlook, be up, XX.X%. that's just you're adjusted to wondering even outsized might look the XX quarter as margins the And commodity in wondering like I'm you've you're 'XX about 'XX. first year before points about the quarter call seasonally to exiting looks some to what natural it, year-over-year margin a So cadence year flows. if like, do is drive in prices rate of what margin basis up with that setting I'm with looks consistent how like fourth it thinking thinking think improvement about we momentum closer the with

Worthing Jackman

I for off 'XX the it start I'll the in Well, to with you're right the hand with think observation and quarterly progression to Mary regards But year. Anne 'XX.

expansion this as and basis up underlying As obviously, excluding we commodities, target not about points, from XXX. XX the typically talk means much being XXX. a XX we to XXX headwind up have said up of year it is an the basis And point they margin is a XX%, here, outsized recovered to headwinds guide

during for next into If the seeing office you move markets, next printing, got year the year again, we're midyear. CPIs, by year, you've pricing franchise this year,

X% plus stay the this obviously, in that year. the or should We're printing franchise X within minus so market pricing And range.

the the what average in X%, is inflation ink franchise to moderates year becomes inflation next an year. we does in markets of that if into 'XX, the fund next recapture seeing outsized so like what year, X% you're couldn't more really in of get As

And more. you pricing within typically XXX basis structure, again, exceed CPI as overall or by know, points about we our

steps average the it XX combined year, basis And if margin up that points. another values the recycling full XX with, so year, improving year to next stay should again, should provide above for above for the during typical expansion

with to flow year? the the And regards during

Mary Whitney

Worthing. Sure. Thanks,

look think flow quarters. headwind you during at at if to basis of when RINs, think is year, to point X the instructive from come do. weighted year course Jerry, commodities look the the And it over to I the about recycled you headwinds heavily the most the the what XXX way the So it's about and first

So by essentially X goes QX points about basis the and if cut first each away have you that headwind of XXX in about quarters, in half in QX. gets

way, through, of we've QX, have point, to in the course, X, your the to QX similar over way still the likelihood quarter comparison see If with the pretty of to 'XX is, even most QX reported before the be QX, QX. I improvement ramp your you'd play the in diminishing case already and by we over X, you thing, the important year the highest of X, because of that being toughest And and earliest course the headwinds you'd terms the improvement. is any seasonality we you overlay just there see of the guided then see course would the which, the about X the to how, year, guided But seasonality. can think,

Jerry Revich

I a RNG since to bit rollout And talk public as last little gears could I essentially wonder viable And effective get with an blesses that really monetize and cetera, the Super. in economically eRINs et currently of that that the about sites EPA if monetize over just plan framework you your of the can gas levels. overall you biofuel. shift RNG you comments, permitting, gas talk could time, if folks about context, ultimately, don't number have what at

And share be you're separately, if gas of I'm your adjusted obviously, to much for wondering lots details be on out electric but ownership you'd position? willing energy eRINs, generating are facilities to how worked to

Worthing Jackman

is any the on there's you almost out. final within hypothetical, until Well, still on of anything you promulgated year to before providing would because And how details our can hypothetical is get this you be it, rules now now right? be just right answered I think question a the asked eRINs view which it worked right comment to lot wait

compare But seen we who the OEMs eRIN to as Clearly, et it eRINs remains R&D generators, versus owns do approach. provides cetera. projects regards with actually still think the we the be eRIN I one optionality have to underway for versus

our So is promulgated comments get let's then some until we'll on and rules wait the -- view make it. final let's

Jerry Revich

enough, on of of just facilities, the part Worthing. if Fair number question. the could I you wonder comment

So what's not of number in of get terms monetized yet facilities that within monetized? your could footprint

Worthing Jackman

at we of our have Well, generation electric currently sites. XX facilities

Operator

Morgan will question Next of from Stanley. be Kaplan Toni

Toni Kaplan

about ask volume. to wanted I

have You running through the 'XX. expiring in contracts

So that progressively that getting softer. did was seem volume an impact there. it But is

sort bit have it it implying out I Or or you should waste You price improvement, else? special seems but 'XX. I the you called that are comps, of about quarter last it to a something wanted in did or say, little is discipline? talk tough like some And of benefit is

wanted So sort the it contracts about are the just will and I I ask really to so level. rolling know just that help. normalized expiring off, of

Worthing Jackman

year, why price, Yes. thing, and that's that the industry. about that And be volume out that plays X. plus this we're thing the is obviously, that, shedding we price above nicely there we'll for do the pleased episodically X.X% above range. Obviously, to that things us of wait about staying that X% environment is how as it of couple We we're but service us the still X price, that we're another minus likely the positive core core a or a X to waste gravitational and think new to year. year the more But said negative important mean quarter, for industry Episodically, pull through we a negative this talked Obviously, that. between may be this of contract back X of X wins, on push I volume or kind drive could that business. to X, see last look a at as X any then of pushed in reported X. volumes in it's the Episodically, more special X%. kind the the year contracts guiding price important on type we whether X brings of year of fixed below within adjusted purposeful based negative

Mary Whitney

we'd no of And thing been any say seen. to the we've would that -- I'd trends in no really only add the that, discernible change be Toni, change there's

to different. a last There's any at little haven't is of to think the than kind long. January If January been volumes little you been seen not market have a was. really landfill year X, in Maybe X a bit it, that change December flattish about all point numbers, down for is materially key year that or the better flat roll-off little we or up noise polls they're the look winter. so. I have always But in

Toni Kaplan

your talk guess, CapEx. Great. was benefit really strategy just could question differentiators you hoping area. your future? the broadly, sustainability. talk the EBITDA ability know gave the and the as maybe your you bigger But just sustaining And a I see about sustainability versus is, being of in sustainability within My peers do about I you I in part

Worthing Jackman

core speaking that years. telling about we've going it few our what's a at just more Well, think and right? first years. efforts have story, to I about been we on of discussion getting we've XX been our these been through off, we're sustainability years noted always who are So better more I these we're past for think being transparent It's bit little

is a about, dollar Obviously, again, doesn't projects we we view on our versus return But approach, in And we change for in EBITDA talked it investment it view CapEx of are. on. take partner dollar-for-dollar aggregate. of who as we the projects is deployed own balanced the that and

of all is way the pendulum mean sometimes our to sustainability think really the out from sustaining folks ability swings what X-year might one about the it discussion over -- and promises reminding on I I that execution deliver.

the and quarter quarter out, to in, here I on both, mean step out, focus we've challenging our -- think of talked doing operating seen now. we're how again, in, proud some the I to environments about, year proud up most these years. folks to talk few we're what And we past about year we're

the hard execution market, more of conversation swung -- you've to hopefully, that and swings XX really seen side wanted execution more sustainability. balanced performance to XX and you both it's hopefully, ability, a a if years, that's so And to years. that back we've sustainability sustaining the in find pendulum think think view to from sustainability over just I I And stripping from over that

hear check what's the If [Technical Operator? people calling on the we're Next to call. operator question. can us, happened in to Difficulty].

Operator

for is Are Pardon your me, question? ready next the you this operator.

Worthing Jackman

Yes, you. Nick. Thank

you If let through. the question could next come

Operator

Yes, Chiang CIBC. with that's Kevin

Kevin Chiang

changed if look all, bigger larger a given pipeline maybe the of in companies the be few you'd composition few seeing terms past i.e., I getting you Maybe just the at about a over steadily past we've the the sounds wondering, talk are acquisition? they average seen But look per years. for in average at and of sale? we just at years jump interesting of I that should Are just of as If saw deal marked the pipeline in the XXXX. another M&A the really size And could maybe kind of outsized deals, of expect pipeline. like increased I'm has tuck-in you year XXXX. what terms seeing the It'd some size in trends it

Worthing Jackman

or type outsized or to $XX transactions, you're might million four But be million, million new million profile. $XX That of call, $X look, XX and more as mean, is million $X then million. expansion be high XX $X as million might or and of average as $X transactions. as two market for million low kind I'll some, entries acquisitions. $XXX or revenue, $XX $XX or That there's could I year million be with between market us it XX to XX $XX tuck-in And companies been Sure. what million, Kevin, revenue or right, an

us those that's right? to an typically just $XXX really when XX to them number gotten transactions acquisitions the with It's that has have of XX to million XX $XX-plus million. average of of the year good do $XXX million, we drives being what revenue, just in of a combination It's a about handful

pipeline the early at never. and say middle never lot call $XX there's and the a that's call, mean outsized, well. look right I now, I what still, XXs in would nothing where there right? we million is in would transaction, $XX It's as year, a I of There's but the considered large million what you Xs If it's to fairway,

great years year, to the in fully it's the of this But transaction $XX you've dialogue, no, decide no spot come just million, time XX integrated Coast, sellers finally $XX sell, franchise are sell. million. targeting the the time of in different. again, It's it's sweet million after to more The XX of earlier what profile of West again, to people or pick seen say, to and $XX average hey, we're that right just to is businesses market

Kevin Chiang

helpful. That's just clarification. a one super Perfect. a And maybe just second for me,

You talked with potential IR the rate. the upside about

on investments it that in in assuming confirming, Just numbers of remarks. kind you're even doesn't to or any the sound be guess, your, your numbers RNG. return XXXX I would longer-term prepared of provided sounds in that upside like profile these the in It like you

Worthing Jackman

reduce million basis anything eRINs, get assumed year. -- plant. in with Mary that's online not and noted, again, and that's mean apply outlook second of wait higher plays in see ITC probably right. could our be an Anne year, It's half credit the would have $XX to that That's investment see the to in how it's -- first it number. first one finalized. our on help through. wait But for And to that not we we how got, we've of the it the could moves we clearly, be in flow rule than cash I us tax to the in that, Obviously, for that this out. about that net that be free let's we're regards again, savings current this applied that tax might thing obviously cash invested bringing but -- that could to as the process plant the

Kevin Chiang

XXXX very there. on strong Congrats Perfect. a

Worthing Jackman

you. Thank

Operator

from be will Our question next RBC. Walter Spracklin,

Walter Spracklin

the was flows that although the $XX said Presumably, as line, OCC. -- for right you think normalize EBITDA XX% to million some that a it that things management it Thanks have analysts in estimates for and on to And have it. It's is for that bottom that say of varying also for well? to that's -- the I is big teams sensitivity these fair right? conservatism is revenue, on different challenge

Mary Whitney

it's in RINs. flow say OCC we that, Yes. very through to remarks, Yes, fair high and prepared on both said the as

Walter Spracklin

Okay.

something as that when your in So Would one possibility of something sometimes of come And that that acquisitions, on in kind that's great. pruning consider peers indicated of you lot and it selling of be assets then that want your a Would areas companies, as they you're or was are larger more markets areas be swapping? buying by you're to buying or assets area? be some asset well? in that want of of see are that finding in and it's with in are that you Is peers. necessarily some leading doing? that your sales one not and to smaller you may where competitors operate your to and you they're build up by that versa? kind you is difficult Or vice in Is a acquisitions most perhaps to

Worthing Jackman

Yes.

you two a but about, operations So again, like we of the coming in state, think singular states, the and market, cetera. multistate it's profile the third with love the they're If we're they're typically companies not buying, of et right? not

a they episodically, geographic it and contract municipal really profiling, Sure. reprice So that the have we're it? nothing keep that need it's companies whether exit. size then out mean, not when with you're bad to I talking to and wholesale agnostic But come play lose they and -- we do might there's divest. about we be or a

Walter Spracklin

Turn addresses back. questions. Okay. my it. That it Appreciate

Operator

Noah from Oppenheimer. be question Kaye, Next will

Noah Kaye

Maybe a that you through that some we on back these single-digit front. the of play the give labor for expectations you've flowing P&L. that XXXX? pressure for would lap labor high of outlined and rates margin How outlook picture into the us outlined the to start When half the

Worthing Jackman

of say, generally from an for overall Well, I wage and high would the what stay course, pressure wage I call Sure. pressures digits a in mid single from rates standpoint, wages think to I It's the than consistently. economy service that the above price you've wage software laid in be that more will seen engineers getting headlines and -- and we pressures, you've obviously, seen persistent others off.

new month-to-month as that labor we say current was intersecting somewhere two was of pressure existing ability when years good scale in that within move move the our employee has the for during And through hire wages of periods we the as pressure turnover news put this sequentially wage QX employees, the the on and year, was of our we through that's I'd which QX, scale say because that for highest operation, abated. the move coming difficult year, improved I on through been wage hiring the one and one the more to was hires. is year improved last that's new on entered the existing as

more now And we're typical looking normalized so at wages. and

year are we wages the in Obviously, place. in the mostly for place put

low And I -- so get to mid and move year. retention wage with we be into inflation to improve, continues wages throughout down 'XX. if 'XX, certainly But this live steps clearly, the turnover expect to improve we as we'll single that as pressure digits as into year and the move

Noah Kaye

you budget And mentioned That's great guidance specific color. the but some timing? is sustainability want actual some ask, for since I'm items, just I others XXXX about sure CapEx in the shift to what ask will

Mary Whitney

Right.

spent So did to little to and $XX from that we and project. little a shifted as the get been million in given than more million that more 'XX, million $XX a bit -- $XXX or originally $XXX new we $XX the had like million million would contemplated, 'XX, shift and mentioned, 'XX

So to it, XX -- in million million call $XX $XX XXXX.

Noah Kaye

Okay.

ahead, Worthing. no sorry, go -- So really

Worthing Jackman

again, renewable the that as move layering as conversion burns down. 'XX flow of of two as And that contribution the if dipped XX.X% on to 'XX, and total revenue to then out free we've again. a start million off so approaching that mean RNG you generation revenue. when CapEx back that with CapEx plants. play about you you've of I 'XX, then that's a see the -- when cash got start -- you additional kind for to about the facility the revenue fuel percentage of flow $XXX or That's talked the XX.X% revenue, $XXX of recycling you structurally million cash free by through see by see plants that of So

Operator

Next Raymond Tyler James. question will be from Brown,

Tyler Brown

you feel this point, in fair? year, hear right, be point right, doesn't did XX% more that your the is if for Anne, at already but visible a that Mary of And would this bit 'XX. I that is at set pricing

Mary Whitney

That is. point, a It's great Tyler.

in plus report that, time So to we're linked a in XX% look-back the which of either the of ahead is we're by we place adjustment, QX, this to increases known or a that because into the the a the statement typically position year, coming in has 'XX. nature because like year, is make it's CPI period. And much that price further

different contribution year, the buckets One that's course the the of So course, or in are is about done a there contribute the you place. it, year. that PIs from XX% which, think over few known of to rollover accelerated if last

contracts, to up talked us XXXX. sets we've more up CPI-linked about, it X% from so which as piece X% next over. And in having for is the The step rolling

in our this So majority January is what And piece year. We is we've this price no put piece final early known. the doing then which approach hard place year. vast the hit to pricing, our already it was typical in different of that with increases

gets three And already what buckets so place. to or it XX%, you those as the really in is about combination described we known of

Tyler Brown

Yes. Perfect.

Okay. That's QX points. I we quickly basis margins can then And very margin? down the XX helpful. think were re-walk

maybe I from XXX But quick? M&A commodities. some in you headwind said specifically really much those how fuel think just you margins? point and Can impacted go basis

Mary Whitney

Sure.

own. ex points was we of the face was XX year-over-year So X-X, about a XXX on there it basis basis point point was up XX fuel the a acquisitions, made why from that XX their in basis point And were and the pieces drag, headwind which recycled was is about commodities that are acquisitions. that

Tyler Brown

this like 'XX. position very about in certainly what integrated 'XX your in nice margin just do have think play does I'm year? hedge But not if a when want that's next I -- then out assuming to we And maybe fuel. that I'm guide. the just in you for mistaken, How about well, from It companies points what some the bought And from specifically M&A? you XXX then as about walk, you fuel? talked vertically seems basis commodities, about from but

not So is drag? as a big maybe that of

Mary Whitney

bridge of this Tyler, year, of sure. couple because Yes, The simpler reasons. is a

because, the acquired over drag in the that's in there acquisitions to full we and disposal your nature the no and aggregate, assets. the assets 'XX the of point, to year, really is discernible So of acquisitions, from looking concentration

it's a Now so drag is QX. little and And as as a a it I year similar I'd XX for and basically prices fuel QX in then dynamic headwind that and not because, hedges, It's that. we that in between our of flips to last that's fuel full by that look now all. about through in place I a at year, year, we year, full the hedged. year, in is for considered abate, then done said, basis where the about have -- And derisked has in locks incremental headwind really there's points. the about And what about XX% advantageously put And question basically your fuel movement flat. late the -- the

at So impact levels, no from current there's fuel.

Tyler Brown

Perfect. then a couple had I Okay. And questions. of

want head. in over just sure and kind straight I've make the all guide flow my I to So it cash of free go got

there's billion a say which was there cash low I $X.X it, quarter, flow off line to than it it you have was put like growth. I'm to assuming, about your that low, million call guidance, of anticipated. going billion, double-digit in a $X.XX $XX of free you think double-digit CapEx sounds was last call But So just under would said sight growth. more

me take that? guide. what of square kind that right kind the gets of to So that that's back Is to where all I way the off, if kind of

Mary Whitney

agree over-delivered would $XXX.X increase The before of would what I I we is a with that. million. deliver off use we Yes, was XX% expected 'XX number in to

the off You at million, we provided. that $XXX.X $XX guide back million you're

Tyler Brown

about you unit my all in and 'XX, in? what of kind Worthing, is this, but kind real including talked the cost holistically, labor Yes, perfect. assumption And quick. and then just inflation last everything one a subcontractor of bit little

Worthing Jackman

a X% between in. we're Yes, assuming and X% range about all

Operator

Michael Next be question from will Hoffman Stifel. of

Michael Hoffman

I'm X-year on cash growth the -- free How of X- free in growth different flow should cash? cash days? things what's or given stack you ask if So the there's I stack, message to going cash lots given a about think will, any way. The period free flow these about free

Worthing Jackman

the -- at look XXX you in of projects Again, or again, mean first year. basis points rounding. sustainability off, the I'm CapEx revenue of on next current year got revenue I Sure. and you've side, X% almost from

'XX. As you to get it moderate you starts as -- into

XX% back as about it puts and it guiding revenue, XX.X% EBITDA, once that range EBITDA. above we're percentage so that, XX.X% puts to of percentage as that we're or And of revenue, a through above what more us comfortably over this puts a of year, back the that

we're why flow to generation And as or ought I the we that about so again, the EBITDA up XXXX, RNG into then getting, stacking a in, XX.X% percentage as again, that's get But of as cash or tax $XXX another before, incremental 'XX, of to said about said, of as we kicking X.X%, that's by EBITDA. XX% effect putting starts by as revenue. X.X% million be we approaching

Michael Hoffman

million, the closer to $XX million. the to point a that's And $XX towards you've Okay. been million you're back $XX important in the living is low moving end,

Worthing Jackman

cash million up up. knew total Yes, $XXX are so know for sort that here, as you the for going well is going, that's changes. not October, $X.X taxes, us any more the rate But We et of of cash by something or cash were billion and we floating rates, the interest I'm rates just the year-over-year cetera. on million right, debt is up taxes as you sustainability don't taxes higher $XX surprised we obviously, to Anne's Right. were where us It's we We interest year-over-year. outlays. $XX additional X%, X.X% to about outstanding million. as year-over-year. higher isn't -- interest puts Because cash -- what grew what knew knew closer put CapEx, in that, It's by here point, Mary this see that, that. today is to And interest acquisition in know, cash surprised

just -- million not It's unit it's in $XX anyway, the surprise. so a And the that's -- fleet. XX

to X last fleet we hasn't a waiting early for XXX the 'XX. The X mean year. we'll to to months, years delivered, the from ago maybe ordered XX was that to sitting right? ordered delays been exited here get the than through in CapEx you moved I went we numbers as 'XX them units less XXX and As still We're XXX XXX of still

XXX-plus it because just $XX the the able uncertainty. to into it's we we that on million that chassis. that news to shifted so the is that, it's And for of The bodies And held units really were cost good year. this pay

Michael Hoffman

Okay. going can is through? depreciation to unwinds, as share dollar bonus us that walk And you what's total then amount back with the

Worthing Jackman

dollar happens on Yes. I certain is in appreciation tough any this bonus to a CapEx X year. limitations it's -- outlay, in emerge. apply of it's there's basis, But mean it's much what we how to obviously, because going

of cash so to little we GAAP of step year accrual because amount XX% that bonus a been XX% have down talking prior the the might have other be different about ought not that book it's this right? years, And companies a as to use carryover of Our taxes didn't because here. direct depreciation in we

Michael Hoffman

the gears four to If developed, are Louisiana, RNG. the own done shift I EBITDA? in how Okay. And then will $XXX I you're of plus many being if million MMBTU that could when include that you

Worthing Jackman

we're look, be and bigger $XXX 'XX, we revenue think But if the about to revenue guiding by so and up we're or if what, $X company, million we did, gas That sounds an now. more number. to RINs that obviously, engineering and last more so I about and of or going have will by year, like the -- landfill than end, the we don't are I that stepped billion -- $XXX million question.

overall, the on become RINs to of from X.X could a get revenue X% or right so so And that now. gas landfill basis, could revenue percentage X, in

Michael Hoffman

base is revenue number? to get to a $X.XX gas and your RIN that at way, $X Sliced different at Okay. assumption

Worthing Jackman

Right.

Michael Hoffman

volume another way small I've underlying container price the trend Okay. ask I in the sort think always to and you of day talk about would is what's service Because to for volume, you'll trade long. How the... But all volume Everybody frame about heard say business. that? you wants intervals, that's

Worthing Jackman

basis. I business new of through last on remained a at year see as look net the that the last to month-to-month I year mean, months positive X just

offsetting And are any so than more decreases. loss obviously, than new increases business in

Michael Hoffman

Okay. each year. And then you always have for phrase a

what can share growth the of us with gratitude is So you message? what's

Worthing Jackman

in meant talked me, me, intentional, about I what to but line lot we cetera. the not was through Sure. and the and health, after growth on is growth very won't years. much top exhausting spend intentional have and about to our personal time and about for pandemic, growth looking business, et it's professional Look, growth welfare spent Obviously, us of this, our leaders, right? of effort time, last amount development a people the mean year leaders more challenging I their issues, and through a

our and their but -- lot lot development. training And the to so to we and discretionary, just we effort to the leaders And need obviously, amount remember personal growth. put on own of further of based and themselves don't dollars training of as -- into discretionary will a invest the that a in be view I

to a themselves personally as of so leaders leaders. of others they grow forget after themselves, And while don't take of and reminder take care look care as our serving to

the appreciating And gratitude employees that. the in and chipped benefits obviously, from of and their in come any leader good DNA is servant that recognizing all

on of to chance organization to And we how part so be center grateful as front and move a reflect it that individuals forward. it's all and -- just are this keep we and

Operator

from Markets. Chris ATB will Murray, Next be question Capital

Chris Murray

to parts this. Maybe I bit. turning back of to a guess, the CapEx question a little couple

the I a One, into things with, any CapEx guess First, kind if of as of doesn't the think start of of step this things bit later to to out CapEx reason you we years there is a little look guess, catch-ups. percentage it's historical around levels of and the believe to of 'XX and as normalize, kind move back XX% revenue? to at going I year revenue, about. be a this couple higher to of is kind

second, just cost then And looking line. at the

reductions in these can anything to that mentioned maybe just vehicles or reprice? the cost can about terms You've improvement other look maybe things or kind generate margins of above is some that you you fuel a what cost and additional labor getting there -- talk margin little bit, in does of but over and

Worthing Jackman

mean, the a and we local great decision? some recklessly I'll Yes. of from the labor it. -- and Yes, a I are not going run out mean automate their I there's Is X,XXX that's we to part we change how do business push profile communities business. the heads investment standpoint, that automate? to take take of from this

theoretically on I robot side. have in Obviously, to of facilities. so up. some recycling And be cases, celebrated And help take obviously, dialogue, will we'll that go couple it's the long think but that we've each a should very a automating our our XXth one just labor we into markets

double headcount shifted each deployed. in If to three per you four robot

the getting looking much that's to product. not. sheets the move we if above curious quality if on headcount, higher the and the outbound product be obviously, at the high benefit I'll gotten have of actually or But see happened of the huge for our has on product given high a benefit sheet ability the the we're of to been pricing us -- and quality

labor are as just other not benefits they're there So benefits sometimes, well.

heads so there's approach of to we're customer different. say, a technology and bit little edges to use the scenes a a up that, anyway, lot customer the that, not is bit to We're lighten just constantly improve and behind AI of to regards on we pressures to not how we're make suffice on replace with inbounds experience to retention to to -- responding looking obviously, message goes this. service service. regards right? people, trying our replace around with it is the using so But and little And around to that And try improved the around to that

Mary Whitney

observation making of outlays period described, as forward as been you're it's for this for in whether whether reasons. opportunistically respect percentage that estate real And Chris, it's future a to we for growth we've have investments, various right, with revenue, CapEx as look to your we where sustainability-related

seen I P&L, you the of cost we important side, reminder think it's construction the remind the a in been look price has higher. not You've just why but And as inflation, people, CapEx there's done. what projects has that on running so also at of

that of do think look to you the move encourage forward of is base as as XX.X% a through kind period this we for amount had low to XX% kind And a CapEx year. growth getting of we've really, we volume glad said, rate, to the how typical to about we I'd all more being and as in more normalized focus price back think had. to a of as that But we're on

Operator

question from next of be will The Stephanie Jefferies. Moore

Stephanie Benjamin Moore

inflation wanted do that case a think, way accounting pressures the maybe see expectations. realize elevated, I have I out, XX% stay upside been you're opportunity pretty I I lot good more in it, of trying kind already an But that but improvement not of that's for if called visibility, mean asked, think put to inflationary you elevated? upside bit questions to the asked you for on some if side? a the a different realize is -- about that stays together, there could I'm inflationary pricing even your but in there's still does much

would from then clearly both? here, abate kind upside together. be little But kind front of of a there there'd a is the expect Or to pieces possibility then of side, other on the to all it the as does that trying see bit put from margin if Just improves?

Worthing Jackman

pricing assuming elevated. Good Sure. No, question. stays it we've implemented

that elevated like staying anticipated longer. so back And that. we've a in not going It's again. to be need surprise it's to we go

upside noted, that So done. to because is pricing start the does is it we abating that extent as

trying no, X years, that's past these as had that chase more inflation -- to we to right? so do upside we've And like view than

our of folks ahead And so it. are

inflation you consistently upside wrong, January if business, we'll we've going the December right? longer. not end they've the for do this they're most mispriced lot And to didn't elevated crossing be which slope have get is our of that. -- We economists that that it because year. assuming we've We the been to think And downward of extent economists so assumed X%, from and to by have X.X% then abate, pretty does and wrong, from the price

Operator

Kyle be Bank. Deutsche Next White, from question will

Kyle White

year that fact talked quite know do Or you internal of on year, firepower be have we bit last relatively as just integrate the about another in of to you lot been this subdued last outsized should the and I'm XXXX? has work acquisitions appetite curious, but given those M&A, year? you expect it a deals complete some I spent to acquisition just a to

Worthing Jackman

cash billion after fund question. our dividend, of flow to M&A. still free Remember, Good $X we have almost

of I -- to let's average And mean $XXX not that's from constrained we us do acquired about billion. million outsized probably spending another do $X.X standpoint revenue $XXX is $XXX and, sheet so we're to balance we if year, year. this year million a million just an if say,

billion $X.X And left over that along to so or other another purposes. to anything put come XXX we that apply for still number might have above for

have that so that to opportunities and remain leverage And generation we're blessed to the and flow growing the brings also the think flexible come. of flexibility given I the business denominator in EBITDA, strength the any for down cash

Mary Whitney

just course down come sheet balance of deals, we're we'd if that amount at to And kind average to a leverage an expect do then over over debt-to-EBITDA. of year. that environment, we delever, the of ended a the point to the X.Xx year normalized in little X.Xx year about about we And just dynamically flexibility,

Kyle White

will for behavior levels? the the could the that very in step byproduct all what's more Do on you years. a reception we're better Got has in? industry longer do the and signs sense. the like the few as that view been discipline customer it. compared change the or the maybe this just pre-pandemic just been see pricing, pandemic past then a kind reception, pricing recently to any pricing of it on of the term? you seems And environment That Or then see you carry to forward such over over since that, disciplined front on inflationary this makes And pricing environment

Worthing Jackman

environment. inflationary that they pressure byproduct a given byproduct lower margin, It's of of CapEx Obviously, that I much had of think live are kind wages the up. on to kind that some into support pricing. on it's having a wage pandemic the dollars companies an profile going more of the low of

is umbrella cost et of wage so commodity And pricing because declining the of pressures, values, there cetera. pressures, because

in X% so as steps too. doesn't X% mean it a spread down, to think down, mean does as a step we'll And pricing we exceed price with To maintain go down expect expect do and about inflation environment, next extent because year. inflation right? should step -- I that you just down that, that doing as X.X%, but right? comes I can our be should -- certainly inflation certainly you it, it's I the that spread to longer-term XX% inflation inflationary we'll down X%,

Operator

Stephanie will Next question be JPMorgan. from Yee,

Stephanie Yee

wanted ask I to as perhaps at of capital point part consider you this what share allocation repurchases your would year?

Worthing Jackman

on know, repurchases. Sure. year, Well, share what, you about as spent, $XXX last we million

And so we're opportunistic.

But authorization we in toe And dip it's our a X% repurchase our market to remains to are best of higher use excess always the again, so the extent it of look, acquisitions -- be up and shares And maintain annually. our seen. to we to capital.

way. And so that directed it's first and foremost,

Mary Whitney

that debt are course, then is environment over incremental costs another an of avenue we'll X.X%, repayment borrowing consider. Stephanie, this, where in And like

Stephanie Yee

a And sense. just makes customer retention Okay. rates overall? comment make you That can on your

Worthing Jackman

mean talk about is other when it reality Yes, labor talked the is constraints, I have I it's retention about quite The as we think the companies well. industry. across high.

to for that the as great constrained deal. by environment ability poach capacity it's service lack matters So I'd competitors others. a is excess their in say as of this

You well. even can't all-time say on level at say retention quite I'd been and highest not right? price And has your I'd at so as a levels these is high, put customers, retention on service street the high. its pricing

that under is company that the everyone And operating another. overall so again, you or one just not just shows constraints

Operator

from Markets. will Capital [Operator be Eastman, Sean Instructions] KeyBanc question Next

Unknown Analyst

plastic of consistent lot to Sean today. what the if exploring A something for come to of competitors for down sort are in increasing on demand the maybe that Nick just is I consider you'd further you're talking back so, with about marketplace? sustainability. Is circularity. would be seeing wanted line? This your that And

Worthing Jackman

others right that think of investments a is our plastics these happy to of view I some are to now supplier this. or chasing we're be recovered

Operator

our turn Worthing go for Jackman the to question-and-answer over concludes remarks. call Please like closing to ahead. session. Mr. I'd This back

Worthing Jackman

Mary applicable If and our your and today. for Terrific, to team, questions, the Reg that being there Joe allowed G appreciate of no in are the us entire today. there thanks behalf for Nick, to we interest and any call FD, further laws Anne on management Box direct answer not to are today and Reg on cover available did Canada. questions that in answer we're we securities listening

you you Thank upcoming again. or forward We Thank you. look investor next on at to call. earnings seeing our conferences

Operator

attending concluded. today's you now for Conference has Thank presentation.

disconnect. You may now

Waste Connections (WCN) 16 Feb 232022 Q4 Earnings call transcript