GFL(US:GFL)2022-11-05 16:58Financial Data and Key Metrics Changes - Organic revenue growth exceeded 15%, with double-digit growth in both segments for three consecutive quarters [9] - Solid waste pricing increased over 10%, with solid waste volume growth of over 2% [10] - Environmental Services achieved organic revenue growth of 37%, driven by customer reengagement and pricing strategies [11] - Adjusted EBITDA grew nearly 20% quarter-over-quarter, despite significant cost pressures [12] - Reported net leverage was 5.19, impacted by currency fluctuations [29] Business Line Data and Key Metrics Changes - Solid waste pricing, excluding surcharges, was 8.6%, a 130 basis point increase from Q2 [10] - Environmental Services' growth was attributed to emergency response services and pricing of used motor oil [11][66] - Adjusted EBITDA margins were affected by fuel prices and third-party service costs [13][14] Market Data and Key Metrics Changes - Commodity prices averaged $250 in the quarter, lower than expectations [20] - Significant price increases from third-party service providers were noted, particularly in long-haul transportation [21] Company Strategy and Development Direction - The company completed six acquisitions in the quarter, adding density to its platform [15] - Focus on integrating the Terrapure acquisition and expanding material recovery services [15] - Anticipation of significant margin expansion opportunities in 2023 due to pricing strength and moderating cost inflation [14][32] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future performance, expecting high single-digit organic price and volume growth in 2023 [32] - The company plans to continue leveraging pricing strategies to offset cost pressures [55] - Management highlighted the importance of maintaining a strong balance sheet while pursuing growth [38] Other Important Information - The company is set to release its 2021 sustainability report, outlining ESG-related goals and commitments [15] - Five RNG projects are in active development, expected to generate cash flow starting mid-2023 [16] Q&A Session Summary Question: Impact of fuel costs in 2022 and recovery in 2023 - Management indicated a $150 million increase in fuel costs for 2022, with expectations to recover a significant portion in 2023 [41][43] Question: Leverage and credit rating expectations - Management noted that leverage would aim to maintain levels similar to 2021, with potential for credit rating upgrades based on improved financial metrics [46][48] Question: Margin expectations for 2023 - Management discussed headwinds from recycling pricing but anticipated strong pricing power to offset these challenges [52][55] Question: Environmental Services growth sustainability - Management clarified that growth in Environmental Services was broad-based and not solely reliant on used motor oil prices [66] Question: M&A environment and asset sales - Management indicated a robust M&A pipeline and discussed the potential for asset sales to improve leverage and financial flexibility [80][88]