2021 Earnings
| Revenue | $11.295B |
| Year-over-Year Difference | 11.2% |
| Net Income | $1.290B |
Q4 Earnings
| Revenue | $2.953B |
| Year-over-Year Difference | 14.8% |
| Net Income | $313.1M |
It’s been announced that it is now available for purchase. US Ecology acquires environmental solutions giantFor $2.2 BillionRepublic Services also stated in fourth quarter earningsCall Thursday night at midnight to 2021 Did in factIt was the most significant year for acquisition investment in more a decade. M&A spending reached $1.06 billion and executives indicated that there was more to come.
CEO Jon Vander Ark reportedThe company’s customer retention rate was at an all-time high of 95%. Other superlatives included an all-time high core price of 5.4%. This includes small container at 8.6% and large container at 5.6%. residential at 4.8%.Execs also stated that the full-year combined yield of volume and yield of 6.7% was the highest in company history.
What’s next in environmental solutions?
- Vander Ark spoke out about the US Ecology deal highlighting the hard-to-replicate infrastructure and immediate cross selling opportunities with existing customers. This was also something that the company saw with the 2021 acquisition ACV Enviro.Vander Ark said, “We now believe that we will have a leading set of products & services in the environment services space to serve customers.”
- Vander Ark listened to customers’ feedback when analysts pointed out that the past performance of solid waste and specialty combinations has not been good.“Solid waste recycling customers [have]They wanted a one-stop shop and asked us to take them here.
- Republic stated this week that it expects to earn at least $40 million in cost synergies within the first three years of US Ecology’s acquisition. Vander Ark explained Thursday that the figure does not include “any of our revenue synergies including cross-sell or bolt-on acquisitions which we have a number down the road” and stated that “all those things will become opportunities to accelerate.” He also stated that bundling could ultimately lower overall costs for customers and that the value proposition included speed, ease-of-service, and a digital interface.
- Republic’s environmental solutions business generated $91.7 million in the quarter and $202.5 millions over the course of 2018, a $65 million increase on 2020. These gains can be attributed to ACV’s acquisition.
US Ecology has a 36% market share for hazardous post-collection at its key landfills, more than any other company in the industry. Vander Ark was unambiguous In prepared remarksThat the company is not capital-constrained, and that it will not place too much emphasis on this business sector.
It is a strategic priority to expand our business in environmental solutions. This acquisition is a significant addition. However, we are not limiting growth nor reducing the focus on traditional recycling and solid waste businesses by making these investments. This is not an option that can be either/or. [a]Vander Ark said both approach. Vander Ark added that the company intends to make large investments in both companies.
Vander Ark stated Republic will be taking over any potential divestitures. “Take a very objective view” of US Ecology’s offerings and evaluate what can connect well with customers versus what “might not be very standalone and not very scaleable,” in which case “somebody other might be the natural owner.” Stifel, an investment company, speculated this week that Republic may decide to offload its international operations. This includes oil response operations in the U.S.
Workforce and sustainability
- The company highlighted the $1,000 awards it gave to every frontline worker in 2021. Republic stated that the incremental or additional awards would cease, but Chief Finance Officer Brian DelGhiaccio stated that the company had “elevated increases to all of our frontline employees given its inflationary environment.”
- Republic’s RISE platform to digitalize, the company stated that it has now implemented tablets in 90% of its large and smaller container fleets. Next is to get tablets to the residential fleet in the early part of this year with a goal to complete that rollout by mid-2023.
- According to the company, four landfill gas-to–energy projects are planned for completion by 2022. Vander Ark added that there are 14 other projects in the pipeline that will be completed in the next few years and that 40 additional projects are possible.
2022 outlook
- The company anticipates that adjusted free cash flow in 2022 will be between $1.625 billion to $1.675 billion, as compared with last year’s $1.515 million. Vander Ark stated that “we continue to believe that investing is the best way to create long-term value” and added that they will continue to believe in acquisitions.
- DelGhiaccio stated that the company anticipates that the average yield will rise to 3.4% by 2022. Republic expects organic volume growth between 1.5% and 2.2% this year. DelGhiaccio said that this “remains well beyond our long-term mean.”
- Republic predicts that recycled commodities will fetch $187 per tonne in 2022, which is consistent with 2021’s average. Republic reported that The fourth quarter saw commodity prices nearly double the previous year at $218 per tonne.
- Republic is still authorized to purchase back stock worth $1.7 billion through 2022. According to the company, $805 million was returned to shareholders last year by share repurchases or dividends.
Vander Ark also showed a new recycling initiative at end of the call. This was in response to an earlier mention that the company would be “To integrate plastics in the value chain, make recycling investments starting in 2022. He said that the chain currently It’s not very well-constructed.
We believe we have the opportunity to move forward with some simple processing that will allow us to capture higher selling prices and take out more volatility right from those sales through longer-term contracts.
