HSC - Earnings call transcript Q4 2021

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Operator

Good morning. My name is Valerie and I will be your conference facilitator. At this time, I would like to welcome everyone to the Harsco Corporation Fourth Quarter Release Conference Call. All lines have been placed on mute to avoid any background noise. After the speakers' remarks, there will be a question-and-answer period. are telephone Harsco and copyrights Corporation Corporation all this on webcast by Also and of behalf are rights Instructions] conference accompanying presentation made Harsco [Operator reserved. subject to this No recordings are without expressed the conference Corporation. any consent Harsco other permitted of telephone written or party by of redistributions

would indicates Mr. your begin Martin, I to Dave now participation Your agreement. Martin introduce please call. like your of Corporation. Harsco

David Martin

and for VP Harsco. joining everyone outlook me XXXX. Thank President you, Harsco's we of this our for morning our I'm Grasberger, Investor Dave welcome Senior will This Relations Chief and results Nick for Valerie, is the us Martin, and Executive With XXXX morning. today to Vice Chairman quarter Anshooman fourth CFO. discuss and our and Officer; Aga, of

however, a Before few me our mention items. presentation, let

well quarterly are call on for the release First, earnings the slide presentation this as our website. available as

considered on forward-looking and Second, to cause that make statements uncertainties that those to are today actual expectations and These knowledge may results based we differ statements are risks current and from forward-looking. are statements. certain will subject our

The forward-looking a undertakes revise such risks and XX-Q. section in obligation uncertainties, no For statements. any our most discussion or XX-K and the update Risk to recent see of Factors company

this I'll that considered earnings we release With well call financial non-GAAP. Lastly, as results presentation. adjusted on included the are call said, our in may the to A that GAAP results to refer is reconciliation to turn as Nick. slide

Nick Grasberger

I to by joining for to contributions the on the unfolding their appreciation during and events efforts Thanks like our impact everyone. of begin and for markets. financial remarkable in morning, especially, us, my employees light in Good XXXX. expressing the Ukraine would

pandemic, and protocols. and professional overcame including health staffing work, the the team shortages safety Our and changing illness, of challenges remote personal

Our company, in the year. never the takes our past great the than perhaps of team so pride and culture values more over leadership

our and Environmental our in that revenue Corporate, adjusted increased segments efforts. times. and results in EPS plus Harsco's reflect results Environmental EBITDA the is XXXX the half of XXXX degree, continuing our supply effects labor produced those financial dampened to the X.X XX% impact of in most the COVID adjusted in Clean chain some improved, by Our bottlenecks both of shortages operations, growth second particularly year. although businesses Earth and Demand and inflation, following

our reported on Our financial as an its maintenance-of-way chain had European continuing which our discontinued especially weakness face supply on also and now results. contracts demand Rail is business, for and customers. with long-term operations, business, constraints services, Rail which Inflation products major its effect adverse impacted rail

while faced fundamentally we Rail many underlying However, strong. were in remains challenges timing believe of related, the XXXX the in business

strengthening provide As the the will quarter the and part are of the of evidenced year. in driven our now on signs results passage we demand market, by American detail more in seeing North Anshooman bill. infrastructure the core clear for

So discussion our let for me outlook shift a XXXX. about strategic to

ambition, societal acute step our this context, sheet. our healthier thereby taking business, divest balance that meet need. an achieving is another cash year become flow a products solutions As few company with ago, one better prospects and growth company, services many declared to improved a single-thesis In top to strategic in objective Rail profile you our may a with this ambition significant our environmental recall, yielding of we a a and providing along years

or generate in contract cash of each Clean leaders environmental market flow remaining and compelling to platforms segment prospects. of needs revenue should cycle, renewals. Throughout Environmental economic meaningful propositions and Harsco Earth, after Our excess the each are with two related XX% and funding value growth capital maintenance

mix our focus of businesses that to in long-term not solutions provide Rail Harsco on and stated, aligned broad previously environmental growth is with drive a to strategy end As markets.

the and our competitive we recovering with have last sale quarter. global plan are we XXXX a business demand the result, executed is launch opportunities. with Rail on a to a track as call, reduction EBITDA we more line Rail cost earnings laid out market expect started and last the In significant reach business And coming noted the the unique growth expect to to on dynamics a improve. program and levels, based However, earlier the in process we formal on very weeks and in process. I a flow normalized reach cash

ongoing Our and both cash a increase in Harsco revenue significant particularly XXXX reflects outlook for in growth Environmental. continuing EBITDA flow, operations and in

to somewhat exits drivers from benefits revenue, prices and mitigated year we be remain to will by offset growth higher million, addition major in inflationary are in and Harsco margin a last segments. cash flow and to realize received earnings expected will and year. robust lower in as U.S. of integration terms dollar will capital increase about benefits owing be gains Earnings by working effects stronger will in and pressures. be currency, Clean contracts. in prices full few both Environmental $XX In Earth, the commodity primarily effects to cash spending demand a demand. of will strong higher Earnings capital strong Environmental, Harsco growth of more tax muted the due Free and the underlying Pricing and

the a persist tight half the also supply disruptions chain labor through market will assumes the of guidance Our year. of first impacts and

I social like Before over the turn minute initiatives. to to spend and on governance environmental, call our I'd a Anshooman,

integrating significant our processes progress on to ESG Harsco. continue at our We on ESG into planning strategic and journey make

of Harsco below X. helping their four. achieve Clean Recordable You can and our in us company-wide ESG Rate Incident highlights a of see our XXXX, on goal Total some improved safety records XXXX from Environmental slide Earth

solutions market, Our record number a fact than XX% in of environmental new more to brought business in XXXX.

the We strategic plan ESG also to modifier pay of successfully of year incentive links and our a number implemented annual new that objectives Executive targets. first

XX% improvement continue in our a our recently responses ratings from We to Sustainalytics. positive from most and groups ESG ESG see rating investors including

year. in a So summary, we delivered solid

I'll strategic over on for our outlook the of value drive now turn progress Anshooman. confidence are road execution to in We to our And ability year map. call meaningful creation. our this us with provides shareholder making the

Anshooman Aga

Nick, share or by everyone. Relative with prior morning, were Corporate. slide similar. with were adjusted quarter, at EBITDA $XXX Improved compared per our Corporate turn Please from prior for adjusted $XX our by X%, This our Harsco year adjusted impacted and This as the quarter, continuing spending and adjusted expectations, QX movements $X.XX. as FX lower in business year provided quarter from labor million particularly as Harsco's Thanks, results we continuing earnings and guidance. We the Earth offset to at in increased and Clean offset guidance million. operations items challenges, prior the at was change lower to well favorably continuing Environmental quarter Clean for these is totaled drivers spending including mix figure expected. results EBITDA inflation. the compares results to revenue adjusted good year X. to beginning fourth Compared the Earth quarter. with QX Environmental. in of operations the consistent EBITDA EPS with technicians the the by $X.XX impacted was and were of

in benefited QX allowance in tax Brazil. to valuation deferred Our an from our tax rate adjustment

guidance. for deficit below quarter free million, was cash was the Lastly, flow $X a of our our which modestly

on Oracle and by EBITDA six million. in implementation and higher increased well mainly Segment cash site prices. X% on flow less decreased variance FX turn operating the higher within a reflects to as change is adjusted of including adjusted negative commodity and weighed volumes performance. services eco-products an $X Earth, exits to $XXX our EBITDA Environmental mix Meanwhile, revenues and costs, impacts. Clean year-on-year. This where cash its Revenues million was translation quarter segment. as attributable totaled for favorable fourth Our Please slide million $XX

to Next, turn Clean our to please slide seven Earth segment. discuss

EBITDA was quarter, within revenues of revenues level fourth materials dredge The For Both the reflects to relative X%, pandemic. million. the partially offset favorable customers a segment by in services trends, fourth beginning to and as revenues reaching positive $XX inflation healthcare well the volume million price the and volumes to XXXX, with XXXX industrial contributing of totaled of the the quarter quarter dredge some and contributed million soil higher hazardous the soil Compared growth. $XXX increased with EBITDA the and increased since less increase as over our $XX revenue to QX year. highest this to just business Meanwhile, the of mix. adjusted

slide to eight. turn please Now

For billion EBITDA the million. increased full to operations continuing to year revenues increased $XXX and $X.X from adjusted

at just year the XX%. during under stable were margins EBITDA Our

the the cost results the a number of were the year, provided for there consistent XXXX offset Much this Rail, guidance our without Strong flow, the cash free overall during $XX-plus execution, Meanwhile, in for year. year, beginning continuing inflation versus were as spending essentially moving the the impacts of of capital was of during to and XXXX. the management, XXXX. Harsco million change as during XXXX. in with with pressures While chain operations from increase deferred at well supply was pieces zero CapEx attributable

a to including leverage, on Before I comment Rail. outlook, few let and items, me turn pension the

First on pension.

X.X improved year-end billion. with $XXX leverage million of from the million; net times for XXXX underfunded an status year to ended of position $XX by funded Our net we $X.X secondly, year-end of and debt

you thirdly, selling are are our leverage. aware, cash reducing Rail XXXX to this on you financial are a discontinued our ability from complete flow key year. operations we and proceeds a aware is use nine. lower As now Rail under to our and and slide on priority optimistic is And we as plan debt the transaction reported to

quarter which items fourth we the $XX recorded Rail in special million. During two totaled

program million annualized million for first $X a savings. that item cost-out $X approximately The will was deliver of

costs inflation second materially price that million three supply chain contract the charge fixed relate European anticipated increased and The with costs delayed a adjustments estimated primarily These customers. have future $XX challenges our to on projects. these complete for progress contracts was and to

XXXX. these adjusted record upfront. $XX Rail's to in expect performance losses required we its are improve to million in approximately We totaled and XXXX meaningfully EBITDA

of million. is current closer EBITDA Our expectation $XX be approximately its Rail much to normalized EBITDA that will

let's XXXX slide XX. with to outlook, starting Now our turn

in XXXX. to Both in Here XXXX segment growth you'll our adjusted after find guidance. realize are earnings in segments strong seeing expected growth

Environmental, and Harsco Environmental volumes, headwind for related year-end be The are increased EBITDA to are volumes to single-digit rates. grow year drivers business similar revenues rate. margins expected offset service and customer expected the The exits. and eco-product XXX higher output FX for low a For by XXXX partially will roughly to levels. FX in points, be HE basis at XXXX using is

to most grow Clean basis For expect approximately XXX anticipated from of we Also growth XXX hazardous points. to increase CE line mid-single business. revenues to digits with EBITDA are margins low Earth to this materials of

of program lowering for and goal inflation offset Earth drivers to increases cost-out SG&A. EBITDA revenues, higher of Beyond a Clean the price the include; impact with

million $XX Corporate spending, and Lastly, are Corporate million expected The XXXX. be as in compensation incentive and Corporate $XX change costs be costs cost in other including travel to smaller attributed of items. versus can as $XX IT between million compensation, to insurance, well

is which XX, slide our consolidated to XXXX Turning outlook.

Our net rate $X.XX $XX per million share guidance to of EBITDA interest of rate we of XX% EPS XX% to expected million. the $XXX translates contemplates adjusted an This in from to tax $XX adjusted earnings $X.XX. $XXX to effective assumed to is tax within and a benefited XX% expense allowance million increase adjustment. XXXX range the to million range EBITDA Brazil when of to This versus

$XXX of cash of capital million $XX spending of which $XX This is excluding net million $XXX Lastly, than net free free will million, direction million, to targeting flow is XXXX targeting right Rail. our we flow for with cash anticipates to be and critical a $XXX lowering is increase CapEx within coming forecast leverage. Harsco are range lower for in priority cash years. are along better in our a Improving the a The performance the XXXX. in step we flow in our million

well QX conclude And that Let will which to lower to you QX $XX a to and to decline adjusted I from adjusted tax lower first used XX favorable XXXX. is our and be million, anticipated soil-dredge on markets XXXX expected remind volumes FX of benefited mix. is earnings slide range million. to less modestly million driver with are exits, impacts. to would sales in results expected due $XX from as guidance. be Environmental due quarter me industrial EBITDA our credit Clean repeated mix EBITDA business not on Earth from adjusted retail shortages and as Brazil $X

will addition, now modestly above in XXXX. call In back for comparable Q&A. I Thanks. figure the be costs the should the operator And Corporate QX hand to

Operator

come Thank the question of sir. Instructions] you, of [Operator Michael line And first Stifel. from will Hoffman the

Michael Hoffman

call the Nick Good taking for and Thank you morning, and Anshooman, Dave. questions.

because, away, question a -- as With look at does I US Harsco? the the ask not traded should missed the the that table well might Nick, why got get to strategic for So, market market potentially off early. Ecology it opportunity being as

Nick Grasberger

going more be And Well the And US it the Ecology is is strategically recycling Earth a us putting not anything, focus on and much business. be for than to frank. Clean on ground, waste more in repurposing interest to hazardous does that strategically. landfill than

it's think that I So really simple.

going of in opportunities acquisition line is those forward, strategic we Earth. we for Clean us, the quite As at landscape more full opportunities with look for our ambition think

So all a we don't fit view a us. It -- not missed at as it for was opportunity.

Michael Hoffman

XXXX I'm us enough. right. Fair I think, what, on And just needed off There's phone We table. That's street several to this call. we that model the clearly of then, Okay. get didn't a analyst.

better, What are missing? you need you're don't missing So this are we the is? headline missing didn't do given guidance you we So right, consensus? what we that where or says your because guidance get

Nick Grasberger

I Yes, largest argue, are Harsco I'll acknowledge business. the cash I EBITDA are performance value if all trending of look quite think, And of and I the than drivers would want yes. the increase well, Environmental. Well, Those minus CapEx with EBITDA at that in flow year-over-year. which start margins, to that higher HE you do the

think drivers standpoint, think we HE flow a we about as EBITDA value margins. much minus in financial So CapEx creation about more cash and from

with And that or year-over-year we're increase versus XXXX in we X-point so, expect pleased quite X the XXXX.

a is EBITDA, to adverse And the are we'll even the But factors perspective. of business see unfortunately, to number stronger a dollar seeing and revenue currency. that holding we're One of is settles terms invasion our back. an are growth reaction in that from today of In there translation Ukraine, of course, out. that where

times with some Europe X been. prices energy they and had Secondly, geographies in right the very now, X in high what

are of customers cutting leveraged back we're our volume. course, And production. of Some on to

at so that's And It's I'll was of its profit. difficult back whose cut there XXXX. where say also throughout as revenue that purchased that, site one the and that modeled adverse company, by world, in contract large what an our we've Chinese in-source to owner but in respect revenue as going, production say to the is was model we U.K., they affects in with U.K. where a our from point largest a this do. the to impact steel

the we was profit happened had XXXX And on the and exited. as so we in that the affecting assets impact that business a gain somewhat XXXX. revenue muted, But of sale the because lost and is certainly in

that of a come number will of say, I doing in largely outside the that the contracts the on that, everything So mitigate of in will control. our mentioned to factors revenue I just new Those in how I'll happy with impact less things the have can, EBITDA I'm are being very our those team year. and from than what can expected. we the We're market are, control. perhaps later a drivers HE, that performance those. of bit we say standpoint, cost executing is fact And we a online

that the first certainly reverse trends will seeing as later of year, contracts in these HE in the come online. major So the we're quarter in some year-over-year

would margins modeled highs. some affect prices, historic highs course are which also expect, is So basis as in or that the of predict, look proving which given very with year-over-year, at near is HE we've commodity growth difficult historic we're and of X%, the what prices are in steel -- of X%, kind those we roughly up line market think at many revenue the you like-for-like I a but on lower commodity to where at slightly in our

more conservative a little on been commodity our in costs. we've assumptions So

to I'm HE in sorry better that no day Earth. by Clean business start a that saying building turning are I have I'll -- So Clean doubt we single Earth. every

that extracting know, that you was day. and bought business. Environmental business poorly think Solutions every the benefits Stericycle I We're that Michael of others, we run from very integration

think the targeted there's of labor the did market. items line to impacts price we're there cover not happy the offsetting very with plan. this XXXX were we're benefits. tightness benefits in kind hopefully, lot of our in but net with our And We I of the fact, a we'd of that there, also ability basis saw. In a integration And coming pandemic the anticipate, a inflation the lag and out have that worst in in on we

upwards to a So on I think net the of impact of in $XX that Clean Earth year was basis in half earnings. million second the

conservative full ability in we that to very to allow the need I'd XXXX think, to truck on perhaps down But mentioned, expect cautious staffing in facilities. process offset to I us As do to our view to for back the therefore, be pressures price. taking, a our or XX% inflationary levels. We're we and like XX% in those we're by waste get drivers to collect

something to So It's that every we're and situation, and onboard we're affects number remedy hire how the a us. that day is focused we changes clearly revenue and hurting on it but in drivers of both truck making profit. again single

could drivers. capital-intensive we're minus bit of and overly are would guidance. an our investors one But the in being that's business, us in which those to point our fundamental but making a balance cash CapEx like we're the cautious, EBITDA stance the again, the margins, sheet accuse and I flow ours, taking So progress that a think in I

Michael Hoffman

So then Clean piece one on out Earth. last

Earth? difference your get Clean would If you guidance in could the be the labor, on what

Nick Grasberger

to you -- want Anshooman,

Anshooman Aga

Yes.

EBITDA. would drivers Clean been would could existed for higher few when been that in we Earth, above -- if more we have for have consensus us Just you say have million XX% we a

Michael Hoffman

helpful. very That’s Okay.

that. for questions. that us levers to you Thank taking of the helps think I the understand

Nick Grasberger

Michael. you, Thank

Operator

Securities. Larry will line from the come of [ph] of CJS Thank you. question Solow And the next

Larry Solow

Nice Great. figures.

Clean there up Michael's on on Earth. questions I'm following Just

like basically you're is it labor above, But -- able is They’re able with this shortage. it just meet it's would I'm sounds serve, basically a that you're inflation it's able lack issue is demand? -- demand volume demand actually just so really to Is to obviously, I -- not saying little minimal? a is And or think surprised guess, mainly demand So guidance. the what are a getting shortage just revenue not on you -- or meet XXXX just it I -- to really your you're really so pricing well? is growth a in the as thereof

Nick Grasberger

it's We that not demand in the to able seeing process No, issue. simply because serve not business, underlying Yes. the and the are an demand we're shortage. of

early the year account the Now, quarter, churn. another dynamic affects first is in and of some therefore, our

switch common the on quite retail that accounts. if impact first side, the that at you if particular to So churn, a us adverse the you in win it's you comes and positive particular, is new to look also in year. the accounts lose to and quarter where in later And it then in of

quarter you're considering our that's guidance. if factor first the just So another affecting revenue, that's

Larry Solow

up Right. some -- was have Has you impacting had begun -- that had play? in of What to also there you you’re waste, still bit pass in clear inability I some little on that stuff you hold all couldn't basically held your being about in. moving -- facility, know is a so logjam you the up or to is process,

Nick Grasberger

say was capacity No, but last it like good it's begun has let's Yes, yet we'd where the clear question. be, earlier not it to incineration where to up, year.

levels. we're not to more normalized back no, So,

of this flip quarters of I our and But four. as be to it's material But there's was we a two, now, capacity in bit think to three it challenge. a still around. know continues next year mean, a to the or business for in an all incineration going lot online it as effect. not coming may is You it's so

Larry Solow

line the side, this hazardous and little return And there. that more labor you I That's growth the Is shortages more kind growing the side? thought in and how that on stuff, there? top to and about see bit impacted thing of also is issues, surprised another is soil overall hazardous the terms by outlook the of singles. a so this on low year there would labor -- that the What's to more be

Nick GRASBERGER

same the indirect delayed No, labor as our as contaminated soils of but the challenges third-party in we affecting many an yes. -- of to be But they're the to that been facing logistics, shortages. unlike contaminated margin non-res well of is business through remind Yes, course more of that not not highest materials. contaminated back We material certainly pre-pandemic that the side shortage because of within -- way, is you, processing underlying the projects is on in have materials own, our And continues our levels. demand those relatively large received the segment labor to weak, of so or are. these have most hazardous contaminated we the the segment cleaner the

Larry Solow

Right.

And is Okay. my business. Rail the question last on just then

this like optimistic, not, So I what pretty it by if midyear. year, sounds you'll right? have a you're heard still completed think I sale That's

Nick Grasberger

Yes. to Again with that frustrated we're will improving. potential we I But demand relative of XXXX XX No, interest. that there half of be to And different signs in It the continue the year that's process. our clear are expected. have that strong noted express of part some very the situation buyers we disappointed XX, Larry. what right, second in

competitive and ability relatively move quite to the fast. be the to it expect a therefore us give along we So at process

Larry Solow

that. get have the and concerned quarters a less to am say certainly want kind less is the maybe disappointing picture quarters little the a but get bit And buyer, it, in not -- its or -- The terms you're maybe good, longer-term because few in I'm of long-term right very a that pay been that strong. little of disappointing, of looks step last not And concerned very been a I backlog bit I have if business. last few

Nick Grasberger

that And good at. it's we Well, think to pretty But, again, point will Yes. look returning. demand they have data certainly I certainly visibility we a can.

$XX as we the the second we'll able successfully Anshooman be that for what As one business to half in of we seeing, with EBITDA increases of position as think noted year kind around we're the normalize million. demand happened that the

in If reasons, you the has again, $XX say, look million $XX simply XXXX over, for years to strengthening out, million. business demand to the last obvious on of EBITDA let's we're five taking not relying averaged a And of took full million the million benefit of get is for We to $X.X we'll the out quarter that and year fourth $X $XX that run in mostly million. the get business. cost rate

I U.S. the of the cost the clear right? have allocated of that's demand. part benefits passenger rail. the of infrastructure weakest by the our market And think to and And we to lot serve $XX So far between reduction of passenger that has a the business in billion of signs and been some margins bill higher again, Passenger just in rail rail. we highest the

so rail a to passenger need to big at be and bill that will business. infrastructure we back come the help And aimed the

Larry Solow

Got it.

you Thank much. there. appreciate Great. the very I Okay. color

Operator

Thank from of you, Hammond next the KeyBanc And sir. Markets. question the Cap will of come Jeffrey line

Mitchell Moore

Jeff. Moore Hey, guys. Mitchell for on is This

maybe Rail in was I of your early the bit a signs how quarter, expectations? maybe detail momentum about quarter talk could you in just just if give curious here performed to And the guys So so far. relative Thanks. internal first on the of maybe

Nick Grasberger

Yes, yes.

at to quarter. to the looking point within lumpy of the those that's at equipment. in Rail to an is business. business assign success fairly Rail mostly we're probabilities sell different inexact science And any XX equipment And at best. the course that's side. opportunities And given given of Harsco of course, a the So on a XX we weakness And

single has to A customers the be And can't having we was be in elsewhere, so, equipment things for an issue many orders. of of U.S. year, into half pushed the that would a them clarity we orders It's those the to as think that which waiting just came second honest, not was sale our placed, most out. infrastructure of that fact get it of have. lost continue of in we've on I to now related judgment the of been weren't. of bill, course the gone tracking lot

our can't tracking as the do pushed in I bill And of I a the out. think, in well overstate we And Asia COVID, passage so have continued America. get will to of of effect We're that, business really, largely of don't number business. Asia North and importance on here because it the global opportunities in that

So they're orders will radar. It's placed. the still not on of still be a when, if. We more the think question

Mitchell Moore

I just the was wondering maybe like the talk you. on bottom implied cadence the about you're if you top could Okay. Thank then, And year line. and That's through helpful. seems It headwinds pretty a of off? back labor is kind pickup kind in infrastructure and combination half a that from that of year. of expecting the Is big or spending, the of falling supply

Anshooman Aga

I -- Just assume now. about you're operations continuing talking

QX from there's So natural our in of there's seasonality mind business. keep being quarter seasonality usually strongest the in and just with quarters, for business perspective operations so continuing QX usually a weakest both the QX and are four the the in Harsco Environmental for Earth. Clean

-- go is, mentioned, new Nick The looked to changes at as forward, onboarding thing we drivers. second and bringing we few on as a we

the also of part shortage we start assumptions also the definitely business. improving later have that and about of cost-out of we the So And that some efficiency in would that help so us, year, course during improves which will definitely talked year. kicking the

half for be So expect slightly to year. seasonality the XXXX, we from the second perspective than weighted higher previous a

Mitchell Moore

pass Okay, I’ll it great. along. Thanks.

Anshooman Aga

you. Thank

Operator

Brown the Rob the And you. Capital of line will of Lake from come Street next Thank question Markets.

Rob Brown

morning. Hi. Good

Nick Grasberger

Hi. Good morning.

Rob Brown

business that see single growth the over the the But here thinking? the said revenue in Kind that five now, the growth business. you've that past few think business of of back that I prior Earth rate was low in mid-single I but growth years? sort in has moving and over next you your of what's business, digits some I of right in pieces but sort in Clean period from know of digit, see there's think should year terms changed a rate to sort high to getting what that your guidance

Nick Grasberger

Yes.

I always, think cycle, GDP cover points. Pricing, would growth a course, to be expect inflation. of kind of you few should at think volume over we plus a least

number a is that's our inflation repurposing. we honest. our a hear for, many to a that's the revenue and least. GDP what recycling by over plus and growth, model if points. is think market big it. what of and me over think we customers opposed on -- tell can often We to of burying be from to amount, But than as that do think enable our And volume that the business again, increasingly probably I that looking burning you us And to as cycle time it they're at better So bit increase or I few of focused going

So in say. mentioned our volume difficult believe I just finished high those what that business and planning based the side. time, factors a on Earth. leverage really labor to years. We into of incremental of We cost the some ability that is And as our our to enable be will IT process on of over declining think translates investments over terms base the long-range we we'll us EBITDA three double just become for Clean efficient all in relatively more to next

targeting. organic. $XXX roughly that's And $X getting EBITDA, of close so, And that's to that's million business with billion what we're

how reducing those that's -- there. components plus leveraging so And that at revenue the base, you you that and get if -- mentioned, I look cost

Rob Brown

does pretty -- support great. in landscape good but strategic when target. alluded that early, a Okay, to do on acquisitions could sheet them? go What's that your it's you maybe little acquisition you're sort there of thinking? how to sort thinking add a of to great what want the That's And about activity market have directions then, and a balance your you. couple Thank know it. you of I to And a the

Nick Grasberger

not acquisitions this right? value more our than created organically in aware a Rob, of what relative to good There's, to we're business value. create doing profit Yes, balance it's increase sheet. we're do on on We're what and question. all by basis, would a focused be to Certainly, acquisitions revenue the year,

take acquisition. referenced a ambition increase the over that organically. to just our time, to double focus. is absolutely, So is and to But The execute that's the platform that billion to really business I plan through focus this $X EBITDA

that's opposed create today. as acquisitions the will be more I And at to most where type landscape we across real look we anything likely think we think size, least of value. the it bolt-on can as

Rob Brown

you. turn Okay, great. I’ll Thank along. it

Nick Grasberger

you. Thank

Operator

the Instructions] question the Thank from Howe Chris line will And of Research. of [Operator come next Barrington you.

Chris Howe

Good morning, everyone.

Nick Grasberger

Chris. Hi,

Chris Howe

Hi.

Rail next process of some underway weeks the that, progress as we on head and few of over With make the the formality we'll sale already towards mid-year.

asked about a question has already versus You’re expectations. the your how been internal faring business

and wanted at up Indirectly to although next I evolution can months? you on And ask backlog the follow from Rail will level XX towards challenged from of volatile, the the sale? head backlog in can backlog. the the Rail and outlook to about confidence your talk you may about I'm more is, unchanged be demand the perhaps you is the six mix getting about the it of just a quarter-to-quarter be that And perspective. that and talk as what over of So

Nick Grasberger

a grinders a the side, heart rail bit rail aftermarket side, the bill the we are we'll of typical into a Asia, passenger increase and see market. the think of the there. given focus process Those in and we mix on that the side, are the North the particular which kind the I U.S. high-margin that for I infrastructure products. of America Harsco, backlog also the on in But also products mix in oriented the backlog think more equipment sold have should think nice technology are that and period. richer tampers, the in pickup an passenger here throughout than expect which certainly be is the sale very I the Well, to to In range on

Chris Howe

And like other or U.S.? the you talk That's here Rail programs programs that is of benefit Can the segment? the outside to in about infrastructure Okay. bill the about the may segment. U.S. funding benefits Rail What helpful.

Nick Grasberger

Yes. the throughout the XXX Well, the the the profit rail Network that large on Rail the We European over fact fairly contracts, Swiss machines Europe have these Bahn I Europe, market think the will has remained in National and industry ultimately earn were new we Railway is, all with and in we'll but Deutsche high-tech installed who disappointed U.K. who's strong. in in

have been all not significant will of challenge business. potential been for have any so valuation Asia, us of And play those business In stimulus those certainly infrastructure-like our the been stayed delayed. market machines of has projects aware in into our the those and the XXX-plus is serve just markets that the programs again, -- introduced, and strong or aftermarket that have rail that Asia on

level don't need we order really in break a Asia. back to We of So program a and get to to stimulus package that type flow. or more just need then normalized logjam

Chris Howe

question give Applied you hop Products. and here you helpful. kind queue. your outlook the just Can the update is of one strategic Thank me then you. Applied And for an us I'll Products last within off and what provided? just That's on outlook

Nick Grasberger

eco-products Yes, Applied the longer yes. good now that's Thanks Products. call Well about Products. asking by way a no And Applied them we for question.

So revenues them The in our been few on in quite challenge eco-product we eco-products. inflation has trends been few costs. a million the a area. of in input have have of Volume good

we're and we steel So and other that have margins makes bitumen being environmentally business product, energy have are, and and material. the energy prices process is road-based takes suffered. but prices slag friendly a a where a and they expanding called that things bitumen SteelPhalt with very That and effectively

XXXX two in SteelPhalt Now bring on the we're and online hoping good U.S. new actually the forward again move and have going first to we're actually volumes plants been to in

a about So challenges there, bit of again recover a we from And be need input We to the in faced just that lot side. lag there's volume excited standpoint. to the on a a price.

Chris Howe

Thank Great. you.

Operator

a do line follow-up the of [Operator Instructions] have from Stifel. Michael And Hoffman we of

Michael Hoffman

sheet. you get well the to balance Hi, paid Nick. can figure everybody to Rail, enough out, is delever Clearly questions trying as around

when aftermarket the or basically the around rate. have all the back last assets potential, times number something discounting XX going So of bankers big help understand Because in run -- room? us know these these is EBITDA enough the three the sellers the to doing size and of what the aftermarket look, XX are the between So them. sold implied four be document backlog we

XX starting if times, the at number a gets So to we're see comfortable delevered? buyers how going do that we are everybody you get

Nick Grasberger

first of little Yes, yes. our all, XX would beyond expectation a be Well, times.

elsewhere, again, our profile our of look have right? business, are to platform base, that. very mentioned not there it's in at product asset. ours, there a build And and as much very have the particular handful maintenance-of-way traded, This unique is I a want Europe businesses pipeline, very, the a maintenance-of-way nearly in want asset other The of very and breadth If strategics our and do business, scarce our installed but you a that that been historically. that those to geographic of of reach new assets and

over this the why I think there's very process. that's have and needs X, the business be but will we've past that preparing we data robust X, performance business receive. So the value for lot -- of value months, very, -- points the strategic we around also to XX of into consideration effort the for a it a a But been much very of putting

are buyers better say we've there on the very maintenance-of-way it's fair to up a that a of help commissioned which the understand I speed will example, think need as So the detailed to that study And sector market maintenance-of-way space. an process. probably interested number

for process the be we're the way. received good education track. we're setting to on So of that competitive leverage in doing our what advance highly it have it up also, along of for a the for process bit be we've there and outreach prepare really keep to But and throughout terms to in it some to will with us

Michael Hoffman

terrific. That's Okay.

then I helps And think bring clarity Earth. Clean that. to back that to

on thank own. in expectation back be for margins. that. million its and might saw this Clean virtually it years. There might the the $X saying some three you Obviously, original had be but none, The billion So higher pushback Earth had $XXX you in is the to mid-teens

theoretically XX%. first deal started all different this in in when versus XXXX? today than should So be the Earth blended better What's Clean on the

Nick Grasberger

that Yes. growth around the the the strategic and pretty business choices two but as business -- on believe consistently one three over from think customer in the already we forward. awful in we've real relatively our next base, lower We have the made strategic side. that's And it's we've those of them, materials fundamentally Well of the think choice that next over and things making than we're dampening arena, the not positive assuming a we it the that years. But the we're bit margins. experience the data the will that few contaminated will feedback top We've customer the improving a made. an in transparency, that going to line, us a investments business we on commitment that in but also a I certainly of received or implement lot help analytics, only rate to all therefore improving what digitizing we've done flow, investing of years, that going around be effect hazardous those

we're So the in a investing strategic that's differentiator real in, that business.

Michael Hoffman

that. And digitizing but just --- That's the unsustainability sellings the and need that everybody, KPIs all be not is to? with to only rate, the to data all be real-time customer for growth connecting issues, what clear of getting you're

Nick Grasberger

trucks, say. even let's absolutely. Yes, in And our

our in the it and the field. usage and to of data efficient and our more in being routing drivers So flow others

well customer satisfaction both a an as type So efficiency it's intimacy a as goal, kind of objective.

Michael Hoffman

me. for question Last Okay.

and you're certain the you I prescriptively But point Given, there's are I [ph]. in the to amount your go waste and making, emphasis a as have of scraps aware, is directed both appreciate to recycle/repurpose.

about applicable about I when think billion So services, billion you and which you $XX markets tackle. haz that's $XX and to that's industrial are to the customers the waste of five want think

do as market, an opposed has or convince a or fuels' go want customer something you the of B, incinerator given your addressable position processing that to an market. A how addressable you go So to of or billion of piece we're is into you operation option Help can XX, to that that it what's it understand that the this? to the has $XX everybody nature. to playing the have sort the to Inside

Nick Grasberger

certainly I hear that that to to from I'll I the fact day of you. don't say, kind every is, would we offhand. Michael defaulting Yes. estimate landfilling back can customers But option. and another are, incinerating love they have that get

believe term, that towards strong but to incinerators. recycle is real always But a there would be always I be, in a And and types landfills be think, some trend required off and of there's will we will disposed so yes, repurpose. waste

will, you're the going if it's you market win time for approach. following and a never right, never so, It's on hazardous to we basis, relative to But And that go there's away. of volume think growth away. waste go going share, us over to

Michael Hoffman

No, to got its it, there's certain do has to no. certain amount regulation prescriptively of of you this a go, -- the There's says, with amount because but

Nick Grasberger

today there and doesn't that's answer shows that it focused if there's to that that have on, answer. we're what better of lot a better There's go there, a

Michael Hoffman

I what right. All Thanks. at. trying Okay. That’s get was

Nick Grasberger

you. Thank

Operator

there time the queue. for follow-up this turn in now will Mr. comments. the I call are over to questions Martin at further no And

David Martin

any that Thanks, Valerie, and your thank have questions. me us you and day. Take for interest joined we Harsco Please everyone in care. morning. a great contact with this follow-up free again appreciate And to feel

Operator

Thank you for your in participation conference today's call.

disconnect. now may You

Enviri (NVRI) 26 Feb 222021 Q4 Earnings call transcript