Waste nections(WCN)2025-02-13 15:34Financial Data and Key Metrics Changes - Q4 2024 revenue reached $2.26 billion, an increase of $225 million or 11% year-over-year, bringing full year 2024 revenues to $8.92 billion, also up 11.2% year-over-year [23] - Adjusted EBITDA for Q4 was $732 million, up 11.6% year-over-year, representing 32.4% of revenue, while full year 2024 adjusted EBITDA was $2.902 billion, up 15% year-over-year with a margin increase of 100 basis points to 32.5% [27][28] - Adjusted free cash flow for 2024 was $1.218 billion, converting over 50% of adjusted EBITDA to free cash flow [15][31] Business Line Data and Key Metrics Changes - Solid waste core pricing in Q4 was 6.7%, with a range from about 5% in the Western region to about 7% in competitive markets [24] - Solid waste volumes in Q4 were down 2.7%, excluding a 50 basis point negative volume impact from Chiquita Canyon landfill [24] - Adjusted EBITDA margin was over 33% when excluding the reduction in tonnes at Chiquita and the drop-off in commodity-driven revenues [27] Market Data and Key Metrics Changes - The company closed approximately $750 million in annualized revenue from 24 acquisitions in 2024, contributing about $169 million of revenue in Q4 [19][23] - The company expects acquisition revenue contribution of about 3.5% in 2025, with a robust pipeline already having over $75 million in annualized revenue either closed or signed [20][35] Company Strategy and Development Direction - The company is focused on delivering excellence with humility, aiming for revenue growth to $10 billion and more while investing in innovation and sustainability [43] - The company is introducing electric trucks and expanding renewable natural gas generation in landfills, along with digitizing employee and customer experiences [43][44] - The disciplined approach to acquisitions remains unchanged, focusing on market selection and integration to provide value creation [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the economic environment improving, which could positively impact volume growth in 2026 [66] - The company anticipates revenue in 2025 to be in the range of $9.45 billion to $9.6 billion, with adjusted EBITDA expected between $3.12 billion and $3.2 billion [35][36] - Management highlighted the importance of maintaining a balance between price and volume, with a conscious trade-off strategy in place [62] Other Important Information - The company closed the Chiquita Canyon landfill due to economic infeasibility, redirecting waste throughput to other landfills [16] - The company expects total 2024 outlays related to the Chiquita Canyon ETLF event to step down significantly in subsequent years [30] Q&A Session Summary Question: Can you clarify cash flow and green CapEx spending? - Management confirmed that green CapEx spending will increase to about $125 million in 2025, with expectations to be completed by 2026 [50][51] Question: What is the outlook for volume growth? - Management indicated that volume growth may remain down in 2025, with a focus on shedding unprofitable contracts and redeploying capital into more profitable ones [58][62] Question: How is employee retention in acquired businesses? - Management noted that employee turnover is significantly higher in acquired companies, often around 30% to 35% in the first year, but overall voluntary turnover is under 13% [71][72] Question: What is the margin outlook for 2025? - Management expects a margin expansion of 50 to 80 basis points, driven by the strength of the underlying business despite commodity and FX headwinds [76] Question: How does the company view M&A opportunities? - Management remains optimistic about M&A opportunities, with a full pipeline and expectations for above-average activity in 2025 [109]