SRCL - Earnings call 4 2023

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Operator

Good day, and thank you for standing by. Welcome to the Fourth Quarter 2023 Stericycle Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Andrew Ellis, Senior Vice President of Finance. Please go ahead.

Andrew Ellis

you Stericycle's thank Earnings Fourth and Call. morning, for XXXX joining Quarter Good

today Miller, Chief be Officer; the Commercial will On call Cindy Cory our our Financial Officer. and Janet Chief our Officer Officer; and Information White, Chief Zelenka, Executive Chief

today will, involve and The forward-looking expressions, are goal we or includes uncertainties anticipates, expects, statements. statements as making such similar words believes, forward-looking estimates, when that discussion risks use may, plan, we

facts are Forward-looking future on but statements subject historical prospective uncertainties. based are of events about and therefore, rather and expectations management not projections nature are, and to current risks on in our and

actual Our Exchange Factors safe in in detail U.S. our cause differ could our Risk described those actual and the Securities within and earnings results the press harbor in statement release are from in the such results to greater our statements. in that could forward-looking with Factors differ Commission. filings significantly discussed

our reliable legal performance Our anticipate should financial revise of with disclaim results or historical not future obligations. other past and any considered results to update statement in trends. than not a investors any to regulatory or use We accordance should indicator future and obligation be forward-looking performance,

we non-GAAP call, will On the financial measures. discuss

redistribution, recorded, investor replay Throughout presentation. specific be an for the and is to Events March call, on the reconciliation provided on the slides found conference For retransmission today's Stericycle's schedules section time during information available Stericycle's please after refer at prohibited. website. Investor Stericycle in XX, Stericycle's call comparable reference being this which is or the the in website end call additional the to today's XX, in until information Any will to correspond a be U.S. longer is Relations and rebroadcast without call be of investors.stericycle.com. The may Relations the hour which X release, our Replay any most Relations the available a is Investor GAAP of available This Time-sensitive comments information presentation, approximately may we replay. no prepared can on measures, consent earnings accurate website. is XXXX. at form today press which of also at call call, Investor XXXX, of from the February occurring written expressed

to I'll now call turn the over Cindy.

Cindy Miller

Their call. instrumental Thank and to work start earnings customers you, great all thanking in our today's been their of our year. key their to quarter off successful for discussion priorities. I'd has Andrew, fourth performance our our team our and to commitment welcome all members across by dedication the throughout like business of

Over tremendous the progress, allowed X on Slide has make this to years, us XX. illustrated dedication as last

to the of with our also today's quarter in focused business which generally results line our generation On that expectations. pleased are foundation we for company, share call, priorities unpacking addition next quarter for building the year, phase unveil results will our on established. am fourth this I to the on we were have next and in growth the the key of

Compliance points, margin and progress of a supported initiatives ratio of gross XXX quarterly revenue seeing Romania. points; our divestiture by Waste margin X.XXx; we in in sequential Services X.X%; the included: Our of optimization adjusted improvement basis productivity leverage XXX that and quarterly of organic benefits Regulated results business from savings the EBITDA with debt basis growth cost are expanded of portfolio

members in in successful technology beginning enhancements September. our with Compliance I'll key to off the of focus Regulated Throughout international earnest Services XXXX, progress deployment our Services accomplishments, system with ERP priorities. we which start Information and continued Waste Secure to we our a and team the Compliance meaningful Destruction transformation, Regulated Europe, and the of our to kicked recap month. U.S. In X Waste made planning last on with and business upgrades our made for business

quality in brief achievements by and of the solutions. our by improving in developing expanded provide a and cross-selling deepening recap now penetration, Regulated launching our implementation Information and members XXXX customer of enhanced for areas: Secure across I'll Destruction partnerships customer customer velocity revenue U.S. our Waste team expanding service Compliance We Services X service penetration capabilities key sales

penetrate also health large we serve. accelerate partnerships which We ability cross-sell will purchasing and with expanded expect Destruction we organizations, Secure better care group the to Information our markets

we deal and it improving a velocity, to we by improved regards cutting to complex hospital begin of North conducting our excitement speed customer in customer-focused services compliance revenue America. to takes These container by enhanced our value implementation partnerships generated servicing strengthened customers providing to amount sessions throughout award-winning XXXX, the customer time With sooner. for our and and solutions. close Throughout the half workshops

scores high of from Our the customers most recent level our reflect loyalty customer value services. our receive

Compliance focused through the ERP was in Services organization Additionally, September, supporting system U.S. our and Waste our on in deployment commercial transition. support of customers the Regulated

the leverage In have quarter below reducing year, continued target. debt and goal our leverage our maintain achieved to of last of second Xx we our debt

XXXX a way countries. have our alone, leverage the XX having company over have focus major operational better our improved contributor our driving X XX performance in exited X We debt long by efforts debt our key divested will services core markets. since we In over billion. in completed us we and and exited optimization $X.X business reducing our as and reduction Portfolio to XXXX, and financial has and businesses helps on to divestitures This allow our a countries. X.Xx XXXX since simplify come and been streamlining

we our wastewater operational North installing than and new In new X half processing new treatment quarter, X facility we and including efficiency, Ohio refurbishing autoclaves, North including autoclaves boilers expanded than XXXX, growth. more than boilers. Since new X America and facilities conveyance future over new handle upgraded our and to X of an XXXX, waste the one facilities. systems, to plant improvements successfully modernization XX XX installing autoclaves, introduced XX additional completed more in fourth have and incinerator more innovation. In infrastructure waste shredders medical an we to at America, Turning of upgrades, treatment

also age than to We to focus the have modernizing powered less average non-powered continued units. America North years fleet on we've and X XXXX our of reduced as since our

on Our incinerators project engineering the and the operations the incinerator on to construction completed, have ramp construction boilers. up teams In of in newest been equipment testing into we full the in a production phase We installed waste first half target Nevada. the expect our of complete, foundational we of is in the complete to phase, McCarran, regulatory focused successfully mid-XXXX. is including facility remain which we the construction with track and to processing successfully XXXX. moving of includes anticipate testing review. After November, achieve Once

our our to excellence; foundation as and next four, are: These springboard, Leveraging digital we transformed two, of allocation. excellence, service positioned and introduce key priorities. business one, a and operational are strategic growth capital generation excited for commercial implementation; three,

turn key Cory our key business to it thoughts commercial other on talk to then about over I share priority, our and further I'll priorities. his will and service excellence

Stephen White

Cindy. Thank you,

enhancing relationships. service revenue creating priority and commercial growth key service includes proposition sales, retain product business a and is and experience. to Our and This a excellence delivering driving value profitable strong on focused customer win, customer differentiated seamless excellence grow

productivity. e-commerce capabilities, sales market expect intelligence, quality including we excellence contract excellence sales the presence of to and initiatives, sales expanding into marketing, management. market-to-quote on ERP, greater further opportunities, enhance enhancing by focus our our and driving digital sales continue gaining to revenue, Through Utilizing we insights pricing

experience which Service one, focused sustainability value customer digital touch life visibility including includes: for on on-time real-time enhance solve making phases excellence tracking, is enhancing on benchmarking collection routing customers making all accessing invoices; initiative customer first a easier enhanced three, service and ensure container in it portal, waste contact; and to service technology seamless points trending our their customer to is changes through strengthen manage leveraging cycle relationships field services, our tools and experience by management. to delivering requesting two, through customer compliance operations to modern with new further accounts proposition. waste training, and and reporting, to This issues utilizing ERP-enabled of expected our online and tracking improved our

Finally, and product that customers' innovation. adoption deepen solutions safety launching further goals developing and on support our promote our and partnerships, sustainability enhanced customer and excellence of product focuses existing products

solutions commercialize products and well-being we drive to communities opportunities our continue purpose organizations, and serve. innovative and revenue fulfilling the that protect We commercial care businesses, while of additional health to health

the Cindy provide to turn overview of X priorities. the an back key now business remaining to call I'll

Cindy Miller

Cory. you, Thank

approximately and on Turning fleet. leveraging businesses safety, and technologies, on expansion approximate drive and the $XX is infrastructure improvement in structural and priority XXXX, dedicated modern new our million management sustainability, X% business excellence. in our service, an and reduction cash workforce equipment a skilled updated following: to reflects savings This key driving expect focused a $XX by flow margin modernized operational and second we in workforce. million In to year-over-year retained workforce savings. This to focused

the in million million from and expected reduction reduction began force estimated from quarter is expected that the million $X in an with come to is savings, in approximately in the This is additional attrition million $XX $X from occurring resulted place $XX in $XX incurring and took XXXX. continued to hiring in $X balance in quarter our expected reduction in severance first cost first in the careful quarter. approximately million we on come severance. savings the of The announced savings million force October come to the Of anticipate in that to XXXX to we targeted of third of Over million call. $X is that savings

to efficiencies We digital digital, next our are capabilities services. will that of beginning deliver AI using modern our of new and across our network priority, capabilities ERP and and foundation help implementation us the our further to shared system. commercial explore service we excellence On and data generation anticipate strategically

tuck-in Xx, final is allocation, business elements: foundational ratio the and fourth acquisition between the capital our and a potential business strategic to efficiencies, drive targeted consideration and maintain of following in for share which repurchases. optimization accretive integration growth infrastructure leverage and and key the acquisitions a portfolio debt using our of priorities X.X has to and next-generation playbook investments modernize The including disciplined

to In revenue. generate capital expected acquisition U.S. the successfully a completed allocation regulated this priority, with business we strategic million January, Consistent in company. of approximately this in medical $X is waste XXXX, Southeastern

We expect platform acquisition second new integrate ERP to in half into of the XXXX. this technology our

we next have transformation proud the updating are We you our on have look forward the we to on are progress excited and we been journey about generation priorities We of on of future calls. outlined.

the Janet our turn over review now to I'll financial results. to call

Janet Zelenka

summarizing I quarter Cindy. you, fourth will our by Thank start results.

$XXX.X quarter revenues As $XXX compared quarter fourth the fourth million noted were of on the X, in Slide in to XXXX. million

Secure by $XX exchange revenues recycling declined foreign environmental of organic revenues revenues lower by lower impacted favorable Excluding the Waste Regulated in revenues revenues organic million. $X Secure while and $XX rates surcharges index offset of of partially Compliance impact to million. divestitures Information million. million commodity Organic Services lower $XX.X due fuel was million and $X Information of service increased $X.X million, $XX.X grew of revenues higher and Destruction and million, Destruction

noted on the X, in million of Compliance Regulated were million Services and As $XXX.X Waste revenues XXXX. $XXX.X fourth Slide quarter to compared

organic the and Regulated Waste or include revenues X.X% Services exchange customer Waste Regulated by X increased International existing mainly the $XX.X Compliance our by divestitures, contracts, grew Regulated driven Excluding of quarter, grew pricing Services pricing impact Compliance $X.X revenues America foreign pricing in levers million and rates million organic Services or fourth Waste in fees. mainly revenues pricing. new surcharges and X.X%. and driven X.X%, Compliance which and and for North organic

$XXX.X in Secure Information were million of to XXXX. fourth quarter Destruction revenues million the compared $XXX.X

$XXX declined Excluding revenues lower impact office and to surcharges. and sorted divestitures lower paper per fuel reflecting rates, Information revenues Organic reduction due foreign Secure commodity than ton exchange a more environmental year-over-year X.X%, Destruction pricing mainly and the of in for index

of decline in pricing contributed or revenues recycling XXXX. XXXX surcharge, revenues Service sorted tonnage. XX% of is offset reflected revenue In Information paper X.X% quarter North and Secure to Approximately million to $X.X approximately revenue. lower by growth in the the of fuel of recycling pricing, the paper Recycling environmental organic partially offset America, was lower $XX.X a by quarter revenues paper sorted service office of due million $X.X which million approximately X.X% or lower recovery office lower compared due decreased contributed fourth to Destruction fourth the and or X% surcharges.

Information continued call, discussed on customers to Secure a due to at service As some national XXXX, store International, revenues that fourth mainly quarter to contraction organic slower surcharges. or quarter. a footprint, reducing the This in fourth recycling reminder, and lower contraction in pace compared environmental the million Destruction were third X.X% we steps. which revenues In and fuel decreased their their quarter related a of $X.X led the

cost from of in $X.X result by margin offset $X.X Secure million million to of Destruction quarter the savings These debt due on fourth and million, operations a and million of fourth of fourth from commodity level the higher expense lower $XX.X $XX.X initiatives. flow-through were as million $XX.X last in bad to XXXX lower Information million decrease expense collections Income quarter of the XXXX $XX quarter mainly mainly $XX.X Destruction due index The in flow-through including stock-based year. compared was of a of productivity partially Information America incentive improved following: in $XX.X items divestiture higher compensation a margin North a Secure bad gain of revenue was XXXX. to expense million, million, debt

Net or mainly $XX to per million. per fourth in diluted million to $X.XX earnings operations lower $XX.X quarter related from The share million was the income year. share $XX.X income earnings diluted or difference of was of $X.XX last compared

operations for the million $XXX.X XX, to December $XXX.X XXXX was Cash flow XXXX. for ending compared million from year

As million compensation by receivables million, by $XX.X X, partially settlement of shown deferred million lower incentive the of revenues $XX.X which payments were $XX.X FCPA of $XX.X on annual of Slide mainly of year-over-year increase million. net payments was offset and lower accounts driven

basis as XX.X% $XX.X index a to revenues XX fourth income lower Adjusted Secure basis percentage Adjusted income quarter of revenues million from as of compared of or XX% commodity driven percentage from million the was $XX.X year. last mainly in operations or were higher operations XXX decreased of of a Information by expansion Destruction points, flow-through and points, cost debt XXX These flow-through bad margin by stock-based productivity of partially basis savings optimization. points expense through points. XXX incentive including offset margin initiatives portfolio points, of XXX revenue compensation and basis margin from basis and higher

diluted earnings share was fourth in quarter $X.XX per the Adjusted to compared $X.XX XXXX.

X, year-over-year flow-through, commodity on higher bad Slide higher and from As decrease bridge Secure debt the $X.XX partially the illustrated were index by expense Destruction by margin lower revenue driven compensation. on $X.XX flow-through. $X.XX from $X.XX offset $X.XX from Information incentive of These was

cash million flow million to $XX XXXX. for for expenditures to $XXX.X were million Capital XXXX XXXX compared was $XXX $XXX.X XXXX. for million compared Free in

holding free mainly Waste by cash million. our $XX cash $XXX.X Slide flow severance $XXX of X, on due noted As below of excluding these timing After ensure considering some $XXX million mainly million. which was implementation million driven of Regulated the billings XXXX operating we was invoices items ERP to difference by U.S. guidance the year-over-year litigation range This higher to to driven flow $XX.X as customers XXXX increase is approximately million adjusted and $XX reworking million, the cash payments, X is our are free and of largest Customer accuracy. for

full XXXX. Revenues $X.XX XX. in XXXX the results to were to compared $X.X billion year billion Turning Slide on

divested foreign revenues businesses, in million. Services and XXXX. XXXX $XX.X were organic XXXX billion of impact unfavorable million, X.X%. revenues the approximately declined revenues $XX.X compared organic $X.X Information $X.XX Secure of million revenue $XXX.X are normalized Regulated the while rates $X.XX When or exchange results to growth Destruction million, organic $XX.X divestitures Waste to was billion in XXXX million from Excluding increased of Compliance revenues exclude and and

million rate, a XXXX. surcharges. organic was Secure recycling to it Secure compounded annual growth index and X.X% grew since commodity revenues Information of by When lower considering Destruction's Information almost revenue X-year lower growth environmental impacted fuel over Destruction and revenues lower $XX due

December ended of of $XX.X XXXX. $XXX.X million productivity Secure fleet lower was in Income mainly and from and and for compensation $XX.X The the stock-based to decline from change margin XXXX Information XX, compared cost higher million of of lower million $XX.X $XX $X.X $XX.X due million, year to $XX.X initiatives savings million. timing corresponding of $XX.X were and million, of commodity and flow-through million, mainly compensation debt These losses from bad Destruction million index was of in operations net incentive partially the million. offset impact expense cost margin flow-through by divestiture revenues

for was $X.XX was difference $XX million mainly income or of $XX.X of XXXX as The with per XXXX. income $XX.X million, earnings or diluted diluted net share million Net loss in loss per lower compared discussed. related to $X.XX operations from share previously

due and Information million XXXX. of of of businesses, divested $XX.X businesses stock-based to decline million million and results chain revenues generated EBITDA partially bad compensation was inflationary Secure in offset These Adjusted supply compensation approximately $X.X expense lower nominal mainly XXXX, amount EBITDA and to million million was been index $XXX.X $XXX margin corresponding to and higher EBITDA. adjusted costs divested million. Destruction flow-through by and the $XX.X exclude impact a XXXX of XXXX $XX.X XXXX million. in were still of $XX.X of timing $XX.X of compared would In million. million, adjusted $XXX have incentive normalized commodity lower from results margin debt flow-through When The are

Adjusted per was XXXX. earnings in to in diluted share $X.XX $X.XX compared XXXX

of and exchange lower $X.XX $X.XX XX, taxes. by These from from lower impact from higher higher bad and from were driven on expense. As debt and the Secure Information flow-through mainly Destruction the from decrease $X.XX, bridge divestitures on the stock-based margin $X.XX commodity illustrated from and offset fleet incentive remaining $X.XX partially $X.XX $X.XX index from compensation, revenues, costs higher $X.XX by: Slide foreign year-over-year was excluding rates

this call. guidance, turn the I statements our XXXX referenced statement harbor in contemplated which of our safe includes now forward-looking as to opening will at as

$X.XX as grow we to X% per base earnings share assumes normalized XX% to million. is in organic X% guidance a of adjusted adjusted EBITDA approximately and $X.XX on shown XXXX Two, Our on $X.XX. This we of of expect XX $XXX on revenue a adjusted to expect base revenues EBITDA growth a billion. One, is normalized follows: Slide

paper As cost by partially anticipates by cost These growth ton the $XXX shown to estimates Information the on and the last a the revenue ton revenue the mainly for approximately XXXX general and selling, to half sorted cost and average XXXX pricing on $XXX range year, commodity first actions management X%, average Slide initiatives, XX, fuel are paper sorted by operational half assumes a quarter mainly $XXX challenging historical rate XXXX approximately offset management for second Compared mainly of X%, $XXX reductions impacts on above price and driven and efficiencies first paper of and our to X% efficiencies approximately return with second margin range. associated was which workforce XXXX office Energy our XXXX reductions driven be expected the administrative of will X% the of above that of more margin from per flow-through this average U.S. year-over-year and office of we as workforce of a and Administration. of anticipate of quarter variance for of pricing, to pricing actions. have

with expect interest due Three, of revolver as severance million $XXX XX, excluding $XXX we on proceeds bond payments additional and the cash to redeeming noted million $XXX generate free Slide flow from payments. the million to to

to XXXX. will be payments redeem cash expected When payments The additional interest bond redeeming X payments XX% million $X payments are million. to expected outlays, to interest in we flow to monthly $X higher interest to an to of being in payments. revolver these from bond, rate $XX cash cash bond we million. Excluding XXXX Severance in-year be million shift adjusted rates to semiannual the cash approximately the free XX% from and conversion anticipate EBITDA interest are $XX

$XXX capital And expenditures to million. million four, we expect $XXX of

to generation of cash accounts use timing free of the the the quarter in to it to debt our our is utilization our to cash first leverage the collections. XXXX, range first cash be and quarter ratio in Xx payouts, return first leverage heavier as interest receivable debt of above anticipated debt timing the Xx of includes of be through XXXX. anticipate incentive we X.X quarter, ratio we of Because payments compensation the will Regarding anticipate that flow and semiannual then a annual

Cindy. now will the back to turn call I

Cindy Miller

Thank you, Janet.

into we ESG of grade B that achieved and our score, early to focus highest into organization. on continued we ongoing on our awards follows years our filing since and sustainability we X and began CDP, from practices CDP an share is sustainability X rating with In recent This diversity actively February, the Our incorporate of our excited strategic everyday our and plans. I'm which we ago. that business heels a pursuit, recognize the the maturation on received

we the our continued what With open team that, serve members, the I'd customers, Stericycle for our shareholders please for communities and their in like protect line to having matters. thank trust Operator, Q&A.

Operator

question line first Our the RBC from come Markets. Dodge Instructions] Capital from Sean will of [Operator

Sean Dodge

strong Congratulations finish on to year. the the

bridge, super helpful On the guidance think and that the that. specifically so thank I on this, provided for you you all

initiatives. to cost half those of efficiencies, from XXXX Cindy, of us what's your you expected lot a what Can prepared give the and strategic remarks. things initiatives it strategic of looks contribute? and a are, operational revenue mentioned in the like reductions new what for couple workforce of you examples driven On operational are that of half by

Cindy Miller

Yes.

question. the there's always as you're quite moving right. as make we with thorough a the think easy be And and wanted parts thanks for to it lot make Sean, that can. try we to did We I Yes, sure know of -- bridges. we

driving do. we on from moving We're executing the doing now efficiencies. into need phase we're plans, think the into really the into to things we're As transformation and XXXX, moving delivering the I pivoting plans, now

you'll are going some familiar We've recall, workforce dispatchers very put And and similar for still some through And really platform a we are with the got of routing year. an got just a not They've of handhelds. If now last making things. to some on efficiencies really regulated the gaining on We quite in we're time. ] that what reduction Shred there. now, We've we I that's that dispatching, familiar we're took catch perspective. with that you'll as XXXX talked lean second right recall, [ had been business been in certainly from for is, in are just operational gains. half. to ERP ERP the QX some to going starting of And a they're lean rift efficiencies quite we develop piece. on the did you quarter. the this advanced the about into working but force rhythm, into side on those And whole But

whether Sean, The and with the we're do, those when that is When a of some that you work other talk modernization the amount our leaning we you work, along about environments in thing, into facilities those are lean we've productivity whether work containers which and the lot equipment that and people upgrades building and the in it's just those do you of it's as things things, terms a conveyance, into. things, of making the resetting of better. standardizing initiatives in done

along to of a that, some we continuation. the think have, for are are I Thanks the driving that with things just new, some things margins. ability are capabilities our improved And the improve some So are routing really and that question. those

Sean Dodge

our then And as base rationalization only taper? that you're you it's you have had any seeing in fourth the well. it of on you SID. it Is continuing your And stop continued still national in Or seeing other stabilized? Are the where that? to service it seen quarter. parts quickly accounts Has that slowed year? Great. this as into evidence Janet, the said Okay. just

Cindy Miller

add. that If, for like Janet, start. Thanks Sean, else question. Yes. I'll to there's you'd

of I have faced level for our to much proud have to think side service. of $XXX to -- of a still service ton there faced To half demand the year, we're for pretty of the the for the have shred a is and that the customers, continued the very the year, business. certainly difference headwind our second still the of opportunity,

what talk still the comparison and 'XX, think that for growth. business, so speaks XXXX over in with X 'XX like a actual -- that is, growth business. that for speaks we've the the at years, the last me, over demand about fact the I seen X-year us we since year-over-year And that if for look there's X.X% for you of volumes to comparison

you if are number, you retail are customers you that It But correct, we just I'll every stores reduce having We serviced spaces every of go time customers. that few them either of not take And you this you get contraction. types and from out an they Any now or We've X,XXX those is big national throw that other week feel week retail isn't X,XXX space. the -- to is a average and those reduce a seeing -- that. that footprint. see specific. lost and it take

As of a generated. paper as customers. to continue fee feel stop, the grow of fact, terms we well service with as But we both in the matter it the that wasn't

adapting with So they're getting how we're still data. from very, better, their especially very they're learning business, how positive and about the the shred side efficiencies, of

Thanks very a integral question. play role continued for our they So in growth. that

Operator

line from question Our Dave next Baird. comes of for the Manthey

David Manthey

for My additional does Are pretty And is they to regarding Cindy, outlined your instance them, as that much key next-generation the already you business XHANA? within plug-ins required Or of around ERP? tools. investments first be centered functionality exist all technology question there priorities to seem your

Cindy Miller

great question, a that's No, about Dave. very We're Yes. excited those.

current them of that many we platform. quite do. ERP lean think I our now and effort It's with in the money, time invested into and energy to the frankly,

that's and So if into getting I taking I excellence, excellence service we commercial operational as the us, into now, you better we the for do. think us, -- have further think look and diving us, what and right digital for implementation us then we what were at

some see major engagement talk harnessing where things developing we digital we're streamlined at. and to that more things or the point, your technology required at implementation, can look with looking But the digital of kind we of don't we about for else those are investment these you When and AI, of at other we customers look deploy or any that.

David Manthey

That's great to hear.

formula on of Or the we're And Second, is to there which you in the is your -- the that you per have a ton. and that for downside below figure for needle give experienced typical XX% I think be expectation Is the tonnage could $XXX about what you formula? as used thinking side, us paper 'XX? XXXX the moved same? it the about on

Cindy Miller

bounces Yes. I'll is seeing Right much between good one. table from start now to XXX. we're now, in -- that with XXX the anywhere its paper right there. news same. the pretty XX-year It average. is It's The in

As so, than you probably closely, I if you Dave, your team. not as and follow, know, most, think, more you

gotten predictability. think So yes, and now it's of far stable I rationalized more in terms

at of looking kind a nonentity. So being we as that are

about that has scale do being correct. have, protection -- you. $XX, quite that the the But have around the somewhere check around same bottom has that, that on -- to the stayed are I'd for the sliding it. to not that the paper there. think $XXX got the on think, -- floor stats And sure we top. you Janet, And for in goes floor year-over-year. with I'm And tons yes, of the scale The then I the I is for

Janet Zelenka

and sorted year divestitures in have the on for Yes. tons XXX,XXX tons call the normalized, paper. were before of we versus After office the XX-K, also thanks being for that the Dave, And today. XXX,XXX

That the a any the SOP pipe, that where end be for -- the the reflects And today. it's a see. of ton. which wanted it our some to some recycling to paper what not in good is range talked fluctuation range $XX. of $XXX -- in and recovery out of So for around spot we we of contraction between range doing sweet And did the index the we bottom assume given in also X/X surcharge a we of seems guidance recovers that about nationals to that the see unanticipated, is business rate about the that $XXX run point decline stops, and I

Operator

Our from Michael Stifel. will next line question come of the Hoffman from

Michael Hoffman

So on line. opportunity drive the at the operating gross to leverage margin

talked about processes manual lot convergence result of a a of You've this ERP. as

we percentage have $XX what that shared this So are initial with $XX what million of you million, to us, capturing? opportunity

Janet Zelenka

the reduction. $XX due million over -- -- of that the the of targeted workforce is remain is $XX So million, million $XX increase to that to

on modernized that so referring we things leverage on that XX% of say So a to The we've kinds efficiencies, is modernized we're the improvement in margin route already on about things fleet, modernized is there I action. rest and taken facilities of all would can it optimizations, system. of

Michael Hoffman

headcount with the certain There's what was of doing is did amount manual I processes. question. That's to tied I trying a bad of percent Are you been of... Or done that's at. What to more come? job get to So there a risk? asking this

Cindy Miller

top up of had now, really on be Sorry, where of -- right will being and you will we last a of risk on focus and October reduction the right are X% opportunities. process recall, -- year, if are end now to first growth in that's we in to positioned had we It driving more believe about line quarter really in be equally, if year-over-year year. headcount, smaller and a we important, we this and able bottom then executing in Michael. drive it not Yes, line

else. anything foresee don't we -- don't I -- that's So

Janet Zelenka

anticipate through Yes. And continue that don't we'll year. this we terms hiring Cindy more we and and year. leveraged to as also any an in of careful But action, do said, the attrition

Michael Hoffman

Right.

operating Okay. -- so guidance sort line, or is the on couple about put the to X XX% year's and -- the do then talking Is mostly that together And EBITDA that a into revised things? the in the and XX% the then under cash, plan. new X combination if plan. can outlook, the that adds? under about, XX% of And is top in to One, top take sort the line the it are outlook, about incrementally this of asset conversion better here from price? to starting -- digital how of the from Or I expect free utilization, cash -- was talked how the the coming you're of I we get adds, much stop we leverage customer long-term is

happen to So the to so what has one, adjust into conversion? cash questions Trying to do four two. I

Janet Zelenka

that's Michael. fine, No, Yes.

XX, go to to to XX for and I'm Slide going I'm XX So Listen, on going ask those. this.

the is So to X% X% balanced.

an volume and and of organic to revenue -- growth expect only. price be We that's our part

the does the call. acquisitions tuck-in include mentioned So acquisition it on not for we opportunity the nor tuck-in

So pure organic. that's

about, leveraging drive the executed underlines EPS within XX% efficiencies, getting adjusted we our talked largely rate that -- with adjusted where as amount already drivers I the a EBITDA we is the In terms of all the what so it mentioned. our control growth range, about things we're significant of

The Slide free at free that, adjusted to basis. around pure XX% our look is range the go you cash you flow, on if and XX cash flow to XX% a

and the have in the to to interest shift And payments the versus effect. do wouldn't maturation we normally not we our a had in the range severance going XX-month onetime I also year we is rate that. of of the However, at and contemplated That a payments payments due bond when normal the were long-term payments, bonds. looking the

about out, mention business XX% that when normal And you on free those then thought we in operations your as we'd you're for when the looking So the you're flow of at cash well. the range XXXX. take

answered go and didn't, go next person. I the more questions, say all Michael. to I thing think I we'll your one ahead and If then

Operator

Our Oppenheimer. next Schneeberger of question will come from from Scott line the

Scott Schneeberger

they sounds following I'd for longer-term organically How waste the segment? Are contracts, It half up because roll volume. regulated like, Janet, have the guidance kind revenue off. like of just -- pricing on is you half you in pricing. it's to environment long-term particularly the price, is start

inflationary of you to seems of of it You've been would and both kind end, I for through -- an now? is the your kind pricing guess, this is on I getting still how environment, ability tail be

Cindy Miller

Yes.

Scott, -- great think hear to from I you. Good question.

the ability have our to in market price We to market according take conditions.

great a doing with been that. we've job think I

I of things We have making. think well positioned But few been commodity a and the may I we've gains that some the other been the market. mask think some -- in headwinds of we're

let's customers, the new the level opportunities we're feedback the fact can on based with stickiness now and of the you side, abilities on if that changes will, regulated now with an kind that right is greater do of, the some even to and given we from things the the say, and the of there portal, And visibility them, platform. we've on a

of things solutions lead to with that to marketplace those all think customers you the need, if to bring I to continue to our they and lend to come up themselves continue to value our ability So will. in

Scott Schneeberger

on dynamics. one the it you're a customers, Stericycle on competitive just But more. the -- then XX And expect. would there competitive leader, you competitively years of environment? and as follow-up X, frame curious back was adversely with quick response the just that was the you pricing, a industry bit last enhanced some how categorize where Going But of ago, on would by a there. How that You out just we impacted now? looks how a mentioned in would kind shift

Cindy Miller

Yes.

I the one the businesses of is think regional. competition thing same our that is both the that still stayed in

we've both So little waste regions got think there where are on some I stronger little players side. a leverage where that where the are stronger and than -- a a shred some others. others footprint, And the bigger got regulated can a regional we've ourselves we've than presence, we got some better

there opportunity, potential be us And those where may in towards not depth this whatever level I of now are to to where and our and our serve. to things what's grow the we may -- more think competition acquisition or ability all really in leading in tuck-in areas see understanding now can that really it's of

same both probably competition to regional tuck-in in it to as we're I still very organically the region. very, opportunities. take and So very of advantage drive is and specific, deliberate with it's further laser, in think some terms But I a every think very growth, different overall well positioned as it's well

Scott Schneeberger

what that's would be It what divestitures, ERP And to like international. kind And question. remains regard this bit still with implementation you to compare have you my year. for a start to have great tuck-ins want of the and you little a internationally that contrast segue sounds doing I more actively. final propensity obviously, a remains by which presumably

So make this and international? we is on divestiture or see tying would acquisition much guide divestiture the headwind the contribution to in the how all there or And net that together question, there on year? left

Cindy Miller

the think Scott, in just divestitures XXXX of and we got had alone, Yes, countries. I is X we good X out -- divested of there news

you, to can the story countries would I be tell describe anything to of left probably folks follow takes, ability I with continue So of. won't the We and like X it puts have don't to divest that. the

think at, opportunistic overall, have We're I looking priority. into and great as markets the portfolio optimization insights operate. we still to -- So got we're a which what we've we be see looking in

to driving focus we've and in core divestitures markets made, really the on in years in quite and last financial core businesses. frankly, XX the X The operational us X, our allowed have performance

we like it to opportunistic. I now execute ball few seen right be I and priority have we're get remains the So certainly it years focused buckle we to that anything the last isn't ability plans very guarantee down, a we bouncing simply as think you've have. over to -- can still the because the look constantly But really

Operator

Our next question Truist Securities. will come from line from Tobey Sommer

Tobey Sommer

be key your new view of you acquisitions? do share Stericycle A view a in if look context follow-up parameters how here. of the to in that, And view including maybe of you similar sort acquisitions, you the on you How valuation. for do opportunity a could systems the market consolidator theme change And again? for

Cindy Miller

Yes.

couple changer a platform ability that have game line or key to technology think our of on like that to you're top manner. in base seamless we in opportunity a into base elements. is have, is about customer the those. be is really terms modern visibilities brought with a would and Technology of new customer you greater integrate whether key talking all the have line engage ability insights as our a the quicker, I Anytime -- integrate, you the bottom productivity

do to -- catalyst our a in us us, really to things. for able to it's ability for get that So more platform be has

But Tobey. that, you have combine to

thing but generates is sheet; of cash we to, number the able an that the being to number us discipline on two, take that other do that then opportunity very being and balance afforded focused manner a so continue that just we've in market presents. advantage to the improve opportunity whatever really The this financially have one, operate had

think answers, I of to going prior us, Well, are looking we're I the in strategic. be very So as we for? we've one -- got what for mentioned

culture much terms last the conditions structure a the as the standardization, would things are few at and to in right strong have that make of we've our to got of discipline focused. what years, of make market course put do We've the myriad and look the over company, us very that -- what a We network, now we're the more in what's does us ability be that tuck-ins. opportunistic, do of overall we that playbook

some would might be years past. familiar not folks Stericycle anything be we However, the with tuck-in engagement maybe that like from

Tobey Sommer

cash conversion sort the a should be think and takes and your light 'XX more I'm extent the guidance? CapEx to but puts would could knowable asking future over there guidance, of not long-term How in you shine to about for free that long are we And that term to helpful. medium relative on,

Janet Zelenka

Yes.

to to have So invest maintained, we ourselves business, rates. the and we XX% do there. conversion free this is cash terms still actually in we of opportunity XX% needs We flow our long-term of out that business use the grow. the And of to capital have outlook that in a see needs

anticipate that in So much capital the the I we've different don't a the profile of future. past ranges in given in

capital. reducing that free conversion to get rate cash not flow will We by

Operator

comes Fargo. Our John from of line Mazzoni the Wells from question next

John Peter Mazzoni

then Maybe a production use be and Could puts commentary McCarran. should what been helpful. year around kind Or kind us there, give and kind would you for of looking the once we full and volumes in Nevada we it's just of sense with ramped, in a the the of that the quick permit? the of maybe that terms should and And other of some you of expect color It's takes of construction be regulatory would full testing of any half ramp ramped especially around for? review fully milestones helpful the in first on completion the very and one the mid-'XX. of once

Cindy Miller

Yes.

the to think X to more -- be come, going we I was project move in we whole we I phases. will through said think as this,

the got we've full We've then of construction, So talked testing. we're We've about in. got and kind up which ramping production.

or stacks at good we maybe terms the -- that or a any steady in, spite point, chain issues is of journey. of fact their potential track getting types us, and both the boilers us as the we this materials, of on boilers news it with of those for positions. The supply remain in So getting in see incinerator for John, problems

it. We're to testing able to of the being close getting part start

budget That's deal. on For milestone. on big we're with us, very We've that's there. been effort pleased going a a the and that's

these a So give cadence that through and it's folks volume regular understanding, things, in to there. different regulations terms of those quarters including passing we we it's -- us, and a ramping move as better as of think types we'll we'd testing when hit or these of I whether things, and March we and in get terms where throughout be so can up are running testing some

this So there can I pretty think given of I more to much come what in we think point. now, we've terms to Right that.

John Peter Mazzoni

acceleration a the conversations cross-sell, of other velocity points was quick share? on with helpful color. how And to initial it terms close. just proof you can are been the maybe customers? the just of has in there any then maybe Great And going But follow-up

Cindy Miller

jump customers on engagement Yes. than been anybody No, Cory don't I'll as velocity Officer, and has great. been more know I've in with engaged this let White, I Commercial cross-selling Chief our I Cory. who's -- the got that year think customers past the with

customers where Core, in terms of the So are? any updates,

Stephen White

days. Yes, Very great question. early

new the house customers the of provided I the actually service I the ERP as are think time at of spectrum that for this opportunity to and that utilizing us you're sides overlap. has point, full the think our more first to come see on the both on this aware system

evaluation drive is growth our But opportunity in data what excited early perspective. our a area. we're providing the go-to-market to about days in and very that So from

come So to that. of ERP on system. lessons the in days of our lot utilization early a very But more learned,

tool our So added in just one quiver.

Operator

come from will Research the from And Steinke our Associates. next Barrington question Kevin of line

Kevin Steinke

revenue commodity you So gave in for the commodities adjusted that to EBITDA What target? impact in growth organic on I assuming X% if of apologize XXXX? the but the growth on And XXXX. you X% revenue into this, I growth baked is are the impact missed organic

Janet Zelenka

Yes.

the the from the mostly paper office surcharges driven sorted the to the impact, commodity to organic flow-through X% into fuel by That's top price. a baked it's basically down revenue. So X% line and

Cindy Miller

of with for paper to $XXX. thing $XXX. around RISI Yes. $XXX. And is rate. still that in facing that And about I about was of It when everybody paper was RISI comparative we know, the important XXXX, terms -- talked XXXX are just we was still -- think QX one over up let a headwinds perspective, last of quarter from QX

good a still is with $XXX, let's see a demand. $XXX. a different. right where headwind. to comparison QX grow And So to continue we see then opportunity little of and as it $XX around bit headwind, being But to show an QX $XX say, certainly, customers we is, now

the of of But is. was or get around remember, we're for confident $XXX, QX when of the $XXX, QX 'XX, we to we paper XX head-to-head if around averaged $XXX much where much more pretty year terms years. in second that believe is where, you averages even where of half normal past paper the That's we're

than the more as first bit QX a commodity will, situation. if half, we more So see you little type a of QX

Kevin Steinke

is faster growth mean, if I asked than organic you'd to revenue an I the X% targeting presumably, commodities we that basis be on Okay. apples-to-apples year-over-year, put X%. then that reason

So I was get sense just trying to of the...

Cindy Miller

Absolutely.

it I mitigate from something Stericycle very and as was continue much to I we really customers the here proud with commitment think And people the line bottom the the depend relationship a continued shows team think that and line on through have.as a the great fought headwind they You top can, try they that did. up us. as We're we at to that we resilience much and point. the of of faced dedication just the as with bring efforts that as to

necessarily a the that big So the with didn't fantastic. in fact facing group. $XX that spite pleased was top million, that for look that terms deal that of very, in But very of numbers line.

Operator

time. questions would Thank you. at now for I'm not turn closing showing to any it like I back this any further remarks. to Cindy

Cindy Miller

Victor. you, Thank

future. Thank much. you interest . in this So on to our listening for call, very your excitement we your Stericycle all shared and everyone appreciate

Operator

today's program. for conclude you participation This your conference. the Thank does in

great now day. Everyone, have a disconnect. may You

Stericycle (SRCL) 28 Feb 242023 Q4 Earnings call transcript