WM - Earnings call transcript Q3 2022 | Waste Management, Inc.

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Tyler Brown

Okay.

Let's go ahead and get started with the next presentation.

So for those of you that may not know me, I'm Tyler Brown. I'm the Senior Analyst here at Ray J. I cover both the environmental services sector as well as the transportation sector.

Officer, morning, today excited Jim is the Chief still joining have Fish; morning, company's presenting us, the Digital this I'm to really WM and So Sjoqvist. Nikolaj company's CEO, Pretty good.

a to guys Management them but about by change here to as called Waste name design. you want is or bit was I all a a that notice to WM a moment was opposed That it's minute, going talk something really in there more take little Management. This forward. a I and bit of and going So we're WM Waste

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Jim Fish

America. to will years change familiarity is company for those company We're you, more asked. I waste a of was North around And was a don't reflection much kind America. we'll biggest Geographic the It our guess of a transition that National at to give be biggest on focus as company, with of know couple and which always the interesting I was really to Conference sustainability. efforts ago, and talk bit Okay. the a just Thanks, we I we about WM, recycling the North Good Tyler. who have are in in morning. trash solid you the

my well, when company you much WM also way, was, do of into America, biggest response waste An think the the million why do do you the tons our America? it. answer something it's How biggest with sustainable North consider landfill XXX is yourself year we're by generates? we you So much It's all us, think how in that you're And really take productive landfills? in North take the businesses. is we all do and it recycler zero. a of do It's

the well, reflection for part so us. that us move And of the network, of excited a guess, about is been huge Tyler a a since transition have three here, that WM talk to we investments We where be I this sustainability think recycling. years, here. in it's XXXX. been we're four assets, to for can bit But it's I've making we was the the years already differentiator I'm It's maybe

it for but obviously So this of excited I've very can think but we others bullish on I'm I'm I are a three about been which that excited on through. lot it. biased, I'm I'm on And since bullish very I've years recently, company about here, it, said talk also and reasons bullish I'm

Tyler Brown

more And from little deeper change again WM. Waste of a maybe again, a a start again, give about, at move bit context little bit Management let's the just Well, to with just level. maybe what go-to-market strategy name kind Street to a to to or the signal whoever to of the of want for. – there's maybe really to call marketplace, trying be you're kind your in assuming you known kind I'm change that you

little a talk maybe could you bit. So about just that

Jim Fish

the It's it'll not of mean, still say Management. didn't the we And incorporated – I change Waste really XX-K top it's name. at change. a branding the

your on not that couple have It's change. I companies tournament made for to there's name see forum years I mean, of that's here, ours, from lot screen United at reasons a it done our So it's branding and golf IBM, Service, change a linked a Parcel really our sustainability dissimilar obviously. UPS, this that their they what ago. various from for

but you sustain not use Someone I we asked, about think confused was who good you said, you the term waste VP the a I fallen so in if a change call sustainability. a to to talk on helped think company got this why you that make And that change. tended thing want have able And the the the customer the guys golf your I question. other that get from do be Coast, point can at sustainability, where have synonymous with a to want if name with change. you the guy can that to a make that And Senior a I times we're Not sustain, you brand have brand can have on mean, to to term a promote has like West actually job. is that. guys, a yesterday everybody to down it is out

that. look, said, sorry I about so And

Area helps foremost, that Let another just in taking place their waste that turns part brand President. with goes that had confusion and this of name the it but first company. reflect it's company the me Vice Well, waste change transformation connect you really away, so and within was out a it

Tyler Brown

last talk was this around to CapEx. announcement the because of kind want going quarter, call a large. I'm little interesting. do from it bit green was about it to I It So

program. you both think capital about That’s into the billion I recycling really So the tied into $X.X market. R&G announced

off, first So maybe we bifurcate. can

start to talk is of R&G? the R&G it to going a some set specifics into we’ll it. it of of just about We’re kind into you for to the how is? the side moment. about with get And Maybe recycling? we’ll of investment So billion is going big much but can that then $X.X much How recycling, how about

Jim Fish

recycling, visited And it’s you of middle, half close then it’s brokerage the our half. So they’re not, close million. I be our a to a have mean, about business to maybe half. few but X bit pretty pretty process handle We basically half another XX through and not X exactly plants. tons, think plant. million-ish, we and may we down processing If it million as less. to a little may And

So about a ago or away transition way intensive XX million in we’re We shape some to years total, of a form labor a more tons of touching recyclables. year process. in started couple from

employs XX,XXX employs of So month that tomorrow’s is imagine in XXX probably material of kind a a is probably today’s this plant plant, that plant, plant not coming people. and tons

and mechanized more a So to completely that we form plant took in much transitioned Chicago sorting. a of

a optical XX has one optical sorter. This typical So optical might have sorters, plant sorters. and plant

and of XX% produce is that capital cost. is same we plants. believe plant by cost we Salt the the City, the that time And reduce specifically. that And neighborhood We’ve just higher. the I it Lake all So XX% to that better cost end. somewhere reduced at of the to of at plants, can back XX% XX% plant Durham. E at labor the in three material plant at that But the we quality the labor a on somewhere one described, Chicago between now done Raleigh

going is to And We new is in some in the least year at there plants so this in do plants. acceleration largely of retooling, be have rebuilding underserved Tyler, focused on first areas.

plus because towards that excellent kind in And of to know in is and there payback is the but combination is of payback XX% there. exactly rebuilds second the new, – first the labor. a year XX% rebuilds weighted so And we’ve it what we with reduction a

was earnings that we’re theme call heard that that common less the strong a you on Another become effort to labor depend. making

really dad, what about drivers, per jobs. a they’re doing Reducing XX,XXX they’re to employees. don’t of dependency you things Nikolaj aspect sorters, but helpers, CSRs, forward employee, is dependent of about I about revenue collection talk employees go an employees. XX,XXX with the are automation those if important XX,XXX operations strategy. can talk employees, they’re our X,XXX talked – they’re They’re today’s our we very his dependency. a we and complete But labor hourly daughter, in daughter, labor of through me my like are line So reduce Everybody’s truck. you we’re a business, and X,XXX about will old that’s gaming talk And and company talking graduating labor going that is nobody’s a year working to talking nobody then college, class said, team. earnings who for may change my heard or about calls a driving about my in significant and be truck. driving talking about on from that have school nobody world high helps XX

these X,XXX roles, not we big in achievable. reduction talking of that’s interested as labor maybe to XX% of in is only collection, think in or recycling some where generation I jobs XX% to in generation, not generation in part therefore, we’re my as a disposal, corporate about so the And dependency. dad’s reduce my labor, trade And need that but X,XXX very business, is to

Tyler Brown

the we’re subject. since let’s So pivot on

Jim Fish

Okay.

Tyler Brown

the you where talk can does to automated and kind that of Is Exactly call So and of come it Or down? between does break that about recycling residential? half it how from? half X,XXX? maybe X,XXX

Jim Fish

It’s mean, different shifting probably four or residential ASL rear to load is I is six five, buckets. from one.

great a people from that a still the is has probably It’s capital safety most and truck a If two had so up trucks, It’s truck that into standpoint. we’ve runs behind perspective. a efficient on the but your your there, it cases, of that back helper helpers not truck not productivity We have texting in a trucks have not load the it’s picked truck. one the and killed we good. cheap truck call neighbourhood X,XXX a – truck those typically it’s Unfortunately when back. somebody from rear parents’ X,XXX, standpoint, and some helper the back from

place place truck, of most on you large the place. line of the So those the majority rear the truck, residential that’s is of because and have it in somebody the safety in dangerous load from standpoint, entries outside our take take XX% the of rear business a load

ultimately them Not in difficult they’re be these the it come but converted. very that used everything there conversation call conversation can California, is helpers only area municipalities little to in Or if in in you’re convince has off in talk a and to Pennsylvania, tougher So area, doable. it’s think challenge have in to there, Arizona, my that we you’re Vice to I already if old all those President trucks. you X,XXX The car. a go

which – big recycling, So certainly bucket about bucket. there’s another a as just talked big that’s we one

we about don’t day, focused I other dispatchers As route we of Nikolaj And that every on that have dispatch. route XXX trucks. busy some routing these analysts analysts, can know, are maybe XXX, – talk positions and

talked thunder, and that’s but can, pull talk another can And so his jobs Nikolaj is can about customer maybe I service to If the the team kind we’ve area we what think XXX to ability took which than about about of in past big automated customer giving pulling us don’t of year, jobs. we I more want we service, customer part he fully out but digitalization together jobs, is steal with out. it last setup where XXX what

Nikolaj Sjoqvist

was it XXX about think I times…

Jim Fish

it jobs. XXX just jobs. it better, I All for XXX sound right. doubled but make

ability A centers. calls And many gives automate we digitalization a year service take, think into calls the million automatable. customer of that that of us XX those So fully calls lot the to about call are experience. fully I our

calls check the status payment. wants and Somebody of to the

whereabouts Somebody wants check of the their to truck.

we’ve All of automated. those

traveling you’re domestically, year, make years onto mean to going it’s Unless an your traveling the just transition ticket we’re nobody and but those so the own internationally, starting anymore. used customers And airlines pretty to did make simple. a now calls website you you’re book the way airline, reservation, direction if the and airline you this and call I ago. That’s we’re an go quickly.

as systems just amount big talked a we’ve bucket systems, Even – and jobs, finance about a big that’s spending HR So systems. well. fair we on

should we journal board And our approximately of that our of reduction are that. doing XX% week accountants manual that we’ve transition into our so who eliminated XX% a of told last entries

more, of you big jobs, you the of X,XXX to and there’s pickup. to set X,XXX neighborhood all get those somewhere of have So then jobs, this a categories, or productivity kind to in X,XXX bunch maybe add up

to is because the we That know up back. we and a because X,XXX. XX% – is had from In out We’ve are that around, to So an and on, X,XXX to in a a to load ASL load When and truck another feet. drives when load back, done rear a we’ve has some to XX% actually add Tyler a on rear go you done. ASL, from cases, the but can up the we a at productivity. picking goes is XX ASL, six obviously there pickup moving buckets, of five transition that productive, lot around, the an rear helper walks gets have just gets of rear load in transitions. it, you that we’ve there in throws or the think walks truck guy about the back There’s least

Tyler Brown

best the math, like, at on mean, talked the but jobs, jobs. I $XX,XXX probably $XXX,XXX this these still you maybe think about, aren’t not they’re I call seems know, I’m loaded, fairly you consequential. type fully had but

this know horizon. my I that’s is the five but This $X.X and mean, if math in So that right, something two on of isn’t this big is a phases I something is I maybe pretty don’t billion. year assume that a order over just… opportunity to something

Jim Fish

about mean, reason significant when asked asking it. how calls about earnings the a helpers and I of asking said, technology. stress guy to I I’ll that say, about a buying going one that do and – X,XXX nobody jobs, I driver. basically contract. efficient is we’re transitions, But four. was need We’ve this take and actually kind recycling, the if it been get not. three no X,XXX said type off the the R&D, I of XX% a after believe truck to don’t everybody to that’s municipality maybe was or to the that. take there to asked X,XXX pickup, I from those if I cart just you different this truck. a the shift you I you asked a about huge the to he asked of back not did call more truck head to surprised That’s morning, there’s of I think And many I XX% become said, everything can X,XXX convincing that. with to honestly, There’s And away everybody nobody’s a see off

have in It now XX% take $XX,XXX. the no of – had entry level can on our way, theory the to driver really So questions average our XX% drivers drivers, it. out, Houston, a some of by our but we is driver, a in – is mean, out in can’t to hire MBA is tier Entry for a the yet making Devina I school figures. making making we XX. and of bay work Texas it’s six level an second area so of kind

Nikolaj Sjoqvist

on about into known is some of opportunity I’d an commercially what of beyond way, just example work third as to We’ve getting doing had got we kind for of the specifics. and well, the side ourselves. lot routing back to year give independent algorithms the and them And quite sort Tyler, a And optimization bring last assess this available. without an that it there we’ve mentioned talked of by of the Yes. say while and we’ve a come we’ve best you automation the Jim we’re routing. I’ll built life. party

the scaling be we’re now. be just going piloting of to it, give day, for an baseline running algorithms technology, route average fully we line six year people the of can’t right human buy a pretty for every used route is automating The a but in by to about better a And adjust across with ability off that you next ultimately actual of dispatching process. ideal it, our manual changed, an a the to truck could the It deal that about creation and as known then to on is a very is And do customers thing this, answer but series So instilled, route through the tickets a would the complicated a put of of That’s sort absolutely The to fairly the to and is laborious XXX will it you day marketplace but that not it. create or and the roll we It the today. is XXX adopt is but example. anything math the we’ve was series series when the a routes. while. being sort a to the business we’re in incredible. shelf weeks, a April working learned meaning optimal the these on creating this route feed little surprising I’ll that of to and the onboard at because OBU, process timing off that than probably together up WM we amount would this routes. be it across big driver. truck need trouble of you dispatch take stops do route in come throughout being Human and a unit of

and look to able be efficiently about know XX be optimize to to of customer to lot. ultimately That’s to those you’d need you put you service be need way, zeros. those together, of routes things at If to truck math, most calculations about a all the this XX do basically that quintillions by each doing able the That’s the XXX stops. stops to

Jim Fish

XX the… said I zeros on

Nikolaj Sjoqvist

That’s right.

amount manual routes there a line can’t just days And that’s still achieved of we because share are other what validating are is already baseline suffice you won’t this And do to compared we the to what start say – we’re there’s human able year, through a off but through the room tremendous being intervention conference of you so quite the doors. are with that again, and now to of effects like we’re is several talking line it business. taken run When and We’ve to impact running actually so we and that. last so labor in numbers I potential line which forth. algorithm. behind scale of And closed to lines right that business, improving, what they even lot efficiency about business, gains was the gearing beyond of And process goes of last business, the facing algorithm we the Well, expanding this a in of to of limited now, roll with negating a the you’re incredible. do be commercial had. the from up year, worth a of pilot right residential are impact now now,

Jim Fish

we’ve of analysts. part only savings role of Not the job that was in that and discussed that dispatcher terms route really

the about the productive. talked We much have you so do that when you more not fact are math,

pickup so all not enables jobs this to, have these way, that the us turnover by And high what’s then the are to efficiency – of jobs.

So to there’s that’s for not if that mean, XX%. here. our position take a place going turnover I for think CSRs, rift about just was CSRs, for XXXX we our

don’t we on don’t that whatever They the So you a trash not XXXX, Maybe mean, their imagine, to We we drivers. when XXXX through out turnover. And out, taking get take helpers significant use drivers, only have a XX% we truck, who plants you positions take we as We on these order somebody helper then that in of become we down pretty the just wants of is still a truck. XXs, planning can of replace. pay that for XX,XXX I more to we XX% back on number productive, turnover leave and to back automation out the in CSRs as This just in the we’re have and is leave. helpers. need don’t out pay taking we’re down XX,XXX, to need be but own the or we anybody. XX,XXX attrition, to XXXX. the and on but drivers number that’s those those that

Tyler Brown

Right.

this, step about at mean, the back out Management to So Waste but because this I I of want Day, of digitization we and then. laid Analyst talk kind Nikolaj, back

improvement for on multi-year into I it your So where help define this the mean, scratching journey? probably probably that future. you it we like – like, drive or and and however feels costs I it out continuous multi-year feels this we’re something per surface ultimately is still are timeframe stop a mean, the can

Nikolaj Sjoqvist

if Stock bit So Exchange so where I about looking had got if this with perspective, we we tech available came think and really XXXX, was late job talked virtually good look we kind strategy. XXXX. in a Investor about what In Day New a where customer little you we York website had capability. you self-service XXXX from capability of no from, at transactional a

submit looks it would If he were you it ultimately sort out out. information, you with e-comm has talk up a an key We’ve other five that of form really and take the system, what is human went like were to an make filling into all order an number now which of e-comm out in fully or for we of platform. Phoenix. That is digital phone, Behind you built been up usable. and service, whole platforms our to sign in be feel folks you like one some platform, interacting wm.com, But probably a would pick being that was the a customer experience that scenes, it sent wanted built doing got to transaction. fully platform have and

But We’re capabilities. is and evolving shared of earnings we’ve – features I some and already on this adding still call. think it

of half business our business. So for line market new, close growing comes but sales collection open residential platform. this our of is It that isn’t through our channel fastest to

up we That’s transacting signing and more and a So good thing. business that more platform. are more customers and through more

thing – to going Of you can got It’s up. when some to that. to course, you schedule are so you the the want an another truck’s it always more. arrive, that we you’ve we can back great, it’s is data, ETA extra that are you to know looks time we’re questions self capabilities we connected Those when we arrival. one the pickup, when that that it’s about But of that, now, we’ve add But so of bill want to front you – a sign the do end platform estimated building have into out, have pay, end course, of reliable. give got or but is you bill,

in customer a Officer even the capabilities only Chief XX – customers together no. to and say example Watson calls those big increasingly get to of to are with the adopt year a to Jim it as to calling. drive Management this and organization make on very Customer million customers customers mentioned with. frankly to are had he we Million hard So Mike complain a that those Waste called the it mentioned that that ours realize aren’t complaint of of wasn’t that customer Jim

even route agent, take to not Let’s those an let’s out. them

through in to have the So speak an even get not system, identify to phone and self agent. them

want using you the opposed pay to the If bill, pay they app, through. the come bill when or as online to

change. called basically down delivery if So time. people. we capabilities, more XXXX, the what day was amount you doing different But from the It happening you on those of great impact It think the ago, means was Because exciting that can like perspective weeks side. might forth. really XX and when day minutes the service a and the back in end is I Back we’ve I matured we’ve said of different back optimization we things, it stuff what doing words beginning were do talked, of couple what to remember it’s process lot were optimization. slim was minutes optimization the XX take to of – you a as a end everything that’s a was on at to XXXX, routing use the and Board so be we deal. an all routing I And

move that a MXXX, we a standing about not Then which does drivers a a part about a That to tech. MXXX management, driver, idle So middle was lot that that that and of the taking day show performance route tool. for was and we for mean? process around we we would bit. optimizing. basically little aren’t meant of created in What when talked

So was for take driver and the that they did then route the actual take. route the route a overlay manager, supposed to

driven management we that of breed the the piloting coached in called route they to math, this So our XX follow fully exciting. are leveraging we’re What is in is what complicated numbers doing cobble share very best AI shouldn’t that we prescribed. so And thing creation again, originally of still these by and through to the applications because routes. process numbers, that, whole automating But the now potential of platform mean, is that all performance Newton And incredibly together. be cloud-based we share can’t tuning. I is and fine could and we’re impact

front service. the go So connecting self together also unlocking automating important the savings an we perspective, some about optimizing to cost It’s pressure, for frankly, from to to which and is it’s not a operations the back, some reducing how of put but just and labor with about things these view capture.

Tyler Brown

talk old a Management this a and there’s at to want capture and People talk from to to to look industry you, in as I I the mean, antiquated customer. let’s way, I’m want but end you. front move this to say I Waste but don’t really

forth. I pick you’re Tuesday. maybe want up back want not that going data So to to flow know me and have to on I

a of there’s And optimization the driving so costs and customer back end aspect. service And more kind of there’s even an on then down.

Jim Fish

in out person. end is FedEx, human industry, other customer and anybody not certainly maybe our there, middle process there the the opposed routing there’s not the a on truly to of isn’t end. unit one as interaction But when you of take Amazon UPS, that, short on of the mean, I process that onboard mean, I through optimizing entire out not the the a

not talked fill. a jobs change trade are lot. reduction This So it’s we to there’s we’ve have to mean, labor mean, this to – become not it’s is about down And going we going huge I us. for think these road. go – a to big not type that a improve. I easier

or areas can reduce seven eight, just risk. of one is this there So are we or whatever that five six,

Nikolaj Sjoqvist

how they’ve put several great the of much challenge And antiquated. trying out ago not go. man, where of thing known a old have viewed because The years. director sometimes opportunity, your as figure is. biggest my but is where we’re point direct There’s routing this algorithm much sophisticated new management that we’re on, and have at prioritizing I’ve of tech that heard four have together to last that the perspective, say that relatively told building It’s a it. to said, would’ve to learning me so most to if sort team that’s going that really, we so years there’s like over I I challenge of the ex are. you what be, But joined. three, a biggest I this a The I’ve machine WM from think is sort to got just opportunity we’re to as I’d all we was that

So long I to we’ve part much needle de-risking about because prioritize And an really bottom the way. is are perspective. bullish in going from And the a the come that the line opportunity. and going so move to hard to to cash continue company very future are things is those there be addition register awfully frankly,

Tyler Brown

so lot a hauls do a time? think digital able this of versus may not think of be a competitive smaller competitively moat And builds to Do advantage the not you be a really offer where big I may also? to... that mean, who how though, able over you offering,

Jim Fish

the the being a does Tyler to advantage the revenue, I’m going customer’s standpoint to looking where I how does. is see structure. and cost from of end front versus to WM because of to make is somebody they’re I XX%? I pretier it think more But is, going opt or Connections the us customer? competitive a can for advantage decision a about than, And well. we It have looking of works so else our – it at okay, it cost want at much XX% part And instead competitive OpEx differentiate how

is or is bottom differentiation lot, about there and line there. is, which this But some have this I talked I think Nikolaj top a line.

the at bit But XX% that sales better how growing a offering costs XX%. the to That’s I’m it’s I’m to on focused focused about That’s fastest our time, great. XX%, think – to on I now of service, a line. extent taking really it’s XX% not same on, revenue being, I’m I of the what I on. channel. I’m bottom focused better what do really maybe a a product. talked focused because get it focused on he both. And from driver, below though. I’m That’s the And out organization.

Tyler Brown

like a an opportunity. term feels more little is of it bit But intermediate this

in we’re the labor mean, pressure So feeling near-term, I today.

from and bit we just focused frankly, quite little little here on. out offset a about flexibility that what because a pivot just talk your you around that’s price to away cost is as inflation, unit can bit really discussion, everybody underline ability So your

Jim Fish

some of think jobs. the don’t out, what your we’ll intermediate is, taking about I out these take I XXXX know term definition talk we of because way, By

inflation. I of given haven’t transition combat to XXXX, look, in to going but these mechanism price, insignificant. taking out be We number we’re jobs I to is and not natural And to think mean, Though the some for XXXX. it’s a XXXX prices

yet at we’re We’re there’s much possibly historic as lows, out price street. put not increase putting can inflation our and out churn. is that me creating strong churn churn as price our we tells on putting and It’s are any real – numbers why the significant what that there

So they that go those not they’re to realize that know they anybody XX% that get but seeing may XX% a like increase, a they increase going customers yes, to. with

So XXXX. absolutely... anybody me expectation. exceed isn’t with we to in very aggressively look, think because successful to being the we surprise if not that But about – is I we’re – it normal, that price inflation. what we’re it. what that expectation living real is think inflation combat And It’s says talked We’ve is using going for

Tyler Brown

too. there bad probably It’s

Jim Fish

Maybe.

Tyler Brown

sure. not I’m Yes,

That the fun, our XX because was here’s much too So on minutes. problem. up we’re

us So so appreciate I for you thank much. and everybody joining

Jim Fish

right. All Tyler. Thanks,

Waste Management (WM) 8 Mar 222022 Q3 Earnings call transcript