VAUGHAN, ON, Feb. 27, 2025 /PRNewswire/ - GFL Environmental Inc. (NYSE: GFL) (TSX: GFL) ("GFL" or the "Company"), a leading North American diversified environmental services company, is hosting an Investor Day today in New York City. The event is scheduled to begin at 9:00 am Eastern Time and will showcase members of senior management who will discuss the Company's growth strategies, capital allocation plan, sustainability initiatives and financial objectives, followed by a question and answer session.At to ...

GFL Environmental Inc. (NYSE:GFL) Q4 2024 Earnings Conference Call February 25, 2025 8:30 AM ET Company Participants Patrick Dovigi - Founder & Chief Executive Officer Luke Pelosi - Chief Financial Officer Conference Call Participants Sabahat Khan - RBC Capital Markets Tyler Brown - Raymond James Kevin Chiang - CIBC World Markets Bryan Burgmeier - Citigroup Devin Dodge - BMO Konark Gupta - Scotiabank Brian Butler - Stifel Operator Hello, everyone, and thank you for joining the GFL Fourth Quarter 2024 Earnin ...

Core Viewpoint - GFL Environmental Inc. reported quarterly earnings of $0.16 per share, exceeding the Zacks Consensus Estimate of $0.13 per share, and showing significant growth from $0.04 per share a year ago, indicating a strong performance in the waste removal services industry [1][2]. Financial Performance - The company achieved revenues of $1.42 billion for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.15% and reflecting an increase from $1.38 billion in the same quarter last year [2]. - Over the last four quarters, GFL has exceeded consensus EPS estimates three times and topped revenue estimates twice [2]. Stock Performance - GFL Environmental shares have increased approximately 4% since the beginning of the year, outperforming the S&P 500's gain of 2.2% [3]. - The stock's immediate price movement will largely depend on management's commentary during the earnings call and future earnings expectations [3][4]. Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $1.37 billion, while for the current fiscal year, the estimate is $1.06 on revenues of $5.93 billion [7]. - The estimate revisions trend for GFL Environmental is currently unfavorable, resulting in a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6]. Industry Context - The Waste Removal Services industry, to which GFL belongs, is currently ranked in the bottom 34% of over 250 Zacks industries, suggesting potential challenges ahead [8]. - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact GFL's stock performance [5].

Core Insights - GFL Environmental Inc. reported strong financial results for Q4 and full year 2024, with a notable organic Solid Waste growth of 7.0% and an Adjusted EBITDA margin expansion of 190 basis points in Q4 [2][6] - The company announced a definitive agreement to sell its Environmental Services business at an $8 billion valuation, which is expected to significantly de-lever its balance sheet and enhance capital allocation flexibility [2][6] - GFL's full year revenue reached $7,862 million, marking an 8.8% increase excluding divestitures, while Adjusted EBITDA rose by 12.3% to $2,250.5 million [6][7] Financial Performance - Q4 2024 revenue was $1,985.9 million, an 8.2% increase excluding divestitures, with Solid Waste revenue contributing $1,571.2 million [7][6] - Full year Adjusted Free Cash Flow was $820.3 million, a 17% increase from the previous year, driven by higher EBITDA and reduced cash interest paid [6][7] - The company reported a net loss of $737.7 million for the full year 2024, primarily due to a non-cash loss from divesting certain U.S. assets [6][7] Guidance for 2025 - GFL anticipates revenue of approximately $8,425 million for 2025, with Adjusted EBITDA estimated at around $2,500 million [8][9] - The guidance excludes contributions from any uncompleted acquisitions and assumes continued organic growth and operational efficiencies [9][8] - The company aims to maintain a targeted Net Leverage of approximately 3.6x by the end of 2025, reflecting growth in Adjusted EBITDA and Free Cash Flow [9][8] Strategic Initiatives - GFL plans to reinvigorate its M&A program and pursue opportunistic share buybacks to drive equity value creation [2][6] - The company has set a new GHG emissions reduction target of 30% by 2030, aligning with science-based pathways [10] - An Investor Day is scheduled for February 27, 2025, to discuss long-term growth strategies and financial objectives [15][2]

Core Points - GFL Environmental Inc. will release its fourth quarter and full year 2024 financial results and 2025 guidance on February 24, 2025, after market close [1] - An investor conference call will be held on February 25, 2025, at 8:30 am Eastern Time to discuss the financial results [1] - The company will host its 2025 Investor Day on February 27, 2025, at the New York Stock Exchange, focusing on growth strategies, capital allocation, sustainability initiatives, and financial objectives [4] Company Information - GFL is headquartered in Vaughan, Ontario, and is the fourth largest diversified environmental services company in North America [6] - The company provides a comprehensive range of services including solid waste management, liquid waste management, and soil remediation across Canada and more than half of the U.S. states [6] - GFL employs over 20,000 individuals across its organization [6]

Group 1 - GFL Environmental is recommended for a buy rating based on expectations to exceed FY24 EBITDA guidance and potential positive valuation revision [1] - The investment is considered ideal if it operates in a sector projected for structural growth exceeding GDP growth over the next 5-10 years [1] - The company benefits from sustainable competitive advantages that lead to attractive unit economics [1] Group 2 - The investment is managed by competent, ethical, and long-term thinkers, which is a crucial factor for success [1] - A fair valuation is emphasized as an important aspect of the investment thesis [1]

Financial Data and Key Metrics Changes - GFL reported consolidated revenue of $2.015 billion for Q3 2024, aligning with guidance and reflecting an 11.3% revenue growth in solid waste, excluding divestiture impacts [24][26] - Adjusted EBITDA grew nearly 20% year-over-year, with adjusted EBITDA margins reaching 31.1%, marking a 300 basis point increase from the prior year [7][27] - Adjusted free cash flow and adjusted net income were $225 million and $126 million, respectively, both meeting expectations [29] Business Line Data and Key Metrics Changes - Solid waste adjusted EBITDA margins increased by 340 basis points, driven by commodity and fuel price tailwinds, despite headwinds from M&A and increased cost of risk [28] - Environmental Services revenue rose by 3% year-over-year, with a 9% increase when excluding lower used motor oil pricing and event-driven revenue from the prior year [26] Market Data and Key Metrics Changes - The company experienced a 6% increase in solid waste pricing, while volumes decreased by 0.8%, showing a sequential improvement over Q2 [24] - The company anticipates positive volume growth in Q4 as it anniversaries the impacts of targeted volume shedding initiatives [25] Company Strategy and Development Direction - GFL is on track to deploy approximately $900 million in M&A and growth investments for the year, with $96 million already invested in Q3, primarily in recycling and RNG infrastructure [12][13] - The company is evaluating the sale of its Environmental Services segment, expecting a minimum of $6 billion in after-tax proceeds, which will be used to repay debt and for stock buybacks [15][16] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to maintain industry-leading financial performance, driven by organic growth and M&A opportunities [37][38] - The company expects to achieve mid-single-digit top-line organic growth and double-digit adjusted EBITDA growth in 2025, with potential contributions from ongoing M&A activities [35][36] Other Important Information - GFL's net leverage at the end of the quarter was 4.05, the lowest in the company's history, demonstrating commitment to capital allocation and deleveraging targets [14][29] - A leadership transition is planned, with Greg Yorston stepping down as COO and Billy Soffera taking over, ensuring continuity in operations [40][43] Q&A Session Summary Question: Clarification on the $6 billion from the Environmental Services sale - Management confirmed that the $6 billion is net of any tax leakage and emphasized confidence in achieving this amount [45][46] Question: Expected incremental EBITDA from EPR and RNG in 2025 - Management projected EPR to contribute $40 million to $50 million and RNG to double its contribution from $25 million to $30 million in 2025 [47][48] Question: Impact of divestiture on organizational structure and M&A - Management indicated that while divesting the Environmental Services segment would simplify certain processes, it would not lead to a significant reduction in overall overhead [72] Question: Sustainability-related spending expectations for 2025 - Management suggested that sustainability-related spending in 2025 would likely align with 2024 levels, pending further contract confirmations [83]

Group 1 - GFL Environmental Inc. reported quarterly earnings of $0.24 per share, exceeding the Zacks Consensus Estimate of $0.23 per share, with an earnings surprise of 4.35% [1] - The company posted revenues of $1.48 billion for the quarter ended September 2024, which was below the Zacks Consensus Estimate by 0.61%, compared to $1.41 billion in the same quarter last year [2] - GFL Environmental shares have increased approximately 21.7% since the beginning of the year, outperforming the S&P 500's gain of 21.2% [3] Group 2 - The current consensus EPS estimate for the upcoming quarter is $0.16 on revenues of $1.45 billion, and for the current fiscal year, it is $0.61 on revenues of $5.72 billion [7] - The Waste Removal Services industry, to which GFL belongs, is currently ranked in the bottom 16% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Revenue Performance - Revenue for the nine months ended September 30, 2024, was $5,876.1 million, representing a 9.0% increase excluding divestitures and a 4.3% increase including divestitures compared to the same period in 2023[1] - Revenue for the three months ended September 30, 2024, was $2,014.7 million, an increase from $1,890.0 million for the same period in 2023, representing an increase of 6.6%[84] - Total revenue growth for the company was 6.6%, with solid waste in Canada growing by 10.3% and in the USA by 6.5%[88] - Total revenue growth for the solid waste segment in Canada was 9.1%, while the U.S. segment experienced a total revenue growth of 2.7%[14] Profitability and Loss - The net loss for the nine months ended September 30, 2024, was $538.2 million, a significant decline from a net income of $94.3 million for the same period in 2023[2] - Net income for Q3 2024 was $110.6 million, a significant increase from $18.3 million in Q3 2023[48] - Adjusted Net Income for the nine months ended September 30, 2024, was $341.7 million, with Adjusted income per share (diluted) at $0.92[72] - Total comprehensive income for the three months ended September 30, 2024, was $20.8 million, compared to $148.4 million for the same period in 2023[84] - Net income attributable to GFL Environmental Inc. for the three months ended September 30, 2024, was $110.4 million, compared to $22.1 million for the same period in 2023, showing a significant increase[84] Adjusted EBITDA - Adjusted EBITDA for the nine months ended September 30, 2024, was $1,672.7 million, compared to $1,511.5 million for the same period in 2023, reflecting a growth of 10.7%[23] - Adjusted EBITDA for Q3 2024 increased by 18.0% to $625.9 million, with an adjusted EBITDA margin of 31.1%, up 300 basis points from the prior year[34] - The trailing twelve months Adjusted EBITDA was $2,165.0 million, up from $2,003.7 million in the previous period[19] - Adjusted EBITDA margin for the total operations was 28.5% for the nine months ended September 30, 2024, compared to 26.8% for the same period in 2023[17] - Solid Waste Adjusted EBITDA margin for the nine months ended September 30, 2024, was 32.8%, compared to 30.7% in the prior year[50] Debt and Leverage - Total long-term debt as of September 30, 2024, was $9,507.3 million, an increase from $8,816.9 million as of December 31, 2023[19] - The net leverage ratio improved to 4.05x as of September 30, 2024, compared to 4.14x at the end of 2023[19] - Net Leverage improved to 4.05x, the lowest in the company's history[44] - Long-term debt significantly increased to $1,031.1 million as of September 30, 2024, from $9.7 million as of December 31, 2023[85] Cash Flow and Investments - Cash flows from operating activities for the nine months ended September 30, 2024, were $974.9 million, compared to $579.0 million for the same period in 2023, representing a 68.2% increase[100] - Adjusted Cash Flows from Operating Activities increased to $1,048.5 million for the nine months ended September 30, 2024, from $905.7 million in 2023, reflecting a 15.7% growth[100] - Adjusted Free Cash Flow, including incremental growth investments, rose to $460.2 million in 2024, up from $235.8 million in 2023, marking a 95.1% increase[100] - Incremental growth investments for the nine months ended September 30, 2024, were $247.0 million, compared to $102.7 million in 2023, indicating a 141.5% increase[100] - Cash flows from operating activities for the quarter ended September 30, 2024, were $347.1 million, up from $125.8 million in 2023, representing a 176.5% increase[102] Asset and Liability Management - Total assets as of September 30, 2024, were $20,138.6 million, up from $19,879.2 million as of December 31, 2023, indicating a growth of 1.3%[85] - Total liabilities increased to $13,133.4 million as of September 30, 2024, compared to $12,493.0 million as of December 31, 2023, reflecting a rise of 5.1%[85] - Shareholders' equity decreased to $7,005.2 million as of September 30, 2024, from $7,386.2 million as of December 31, 2023[85] Operational Highlights - The workforce of GFL Environmental Inc. is approximately 20,000 employees, supporting its operations across Canada and more than half of the U.S. states[4] - The company reported a significant non-cash loss due to the divestiture of certain U.S. assets during the current period[2] - The company plans to continue its market expansion and product development strategies, focusing on solid waste and environmental services[88] Other Financial Metrics - The company incurred transaction costs of $29.3 million for the nine months ended September 30, 2024, down from $63.9 million in 2023, a decrease of 54.3%[100] - Cash taxes related to divestitures decreased significantly to $15.0 million in 2024 from $248.6 million in 2023, a reduction of 93.9%[100] - The company incurred a loss on divestiture of $0.5 million, contrasting with a gain of $494.6 million in the previous year[86] - Founder/CEO remuneration for the nine months ended September 30, 2024, was $15.6 million, with no corresponding costs in 2023[100]

Core Insights - GFL Environmental Inc. reported a record Adjusted EBITDA margin of 31.1%, an increase of 300 basis points year-over-year, and the lowest net leverage of 4.05x in the company's history [1][3][4] - The company is on track to complete the sale of its Environmental Services business, expecting net proceeds of at least $6 billion, which will be used to repay debt and for share buybacks [3][4] - Solid Waste pricing increased by 6.0% excluding divestitures, with a sequential volume improvement of 90 basis points, both ahead of expectations [1][4] Financial Performance - For Q3 2024, GFL reported revenue of $2,014.7 million, a 9.3% increase excluding divestitures, and an 18.0% increase in Adjusted EBITDA to $625.9 million [1][4][5] - Year-to-date revenue reached $5,876.1 million, up 9.0% excluding divestitures, with Adjusted EBITDA increasing by 14.3% to $1,672.7 million [5][24] - Net income for Q3 2024 was $110.6 million, compared to $18.3 million in Q3 2023, while the year-to-date net loss was $538.2 million due to a non-cash loss from divestitures [4][5][24] Operational Highlights - The company completed acquisitions year-to-date that are generating approximately $115 million in annualized revenue [1][3] - GFL's Solid Waste revenue for Q3 2024 was $1,554.2 million, with a core pricing increase of 6.0% despite a volume decrease of 0.8% [4][5] - Environmental Services revenue increased to $460.5 million, a 7.9% increase when excluding the impact of an unusually high level of large event-driven business from the prior year [4][5] Strategic Initiatives - GFL is focused on capital allocation, having deployed $96.4 million in growth initiatives and $47.4 million in tuck-in acquisitions during the quarter [3][4] - The company aims to deploy approximately $900 million into M&A and growth investments in 2024 [3] - A leadership transition is planned, with Billy Soffera set to take over as COO in January 2025, ensuring continuity in operational strategy [3]