Waste Management Services

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 18,700 waste management companies in the US provide hazardous and nonhazardous waste collection, hauling, and treatment; operation of transfer stations and landfills; septic system pumping; and remediation including specialized cleanup of contaminated buildings, mine sites, soil, or ground water. About 66% of industry sales receipts come from services to businesses, organizations, and farms; 19% to residences; and 15% to government.

Worker Injury

Workers are exposed to a wide variety of risks including contact with contaminated and hazardous materials in trash and remediation sites, working with heavy machinery, and handling curbside trash bins near traffic.

Vertical Integration

Waste management companies are using vertical integration to control their waste streams, broaden services, cut costs, and improve profitability.

Industry size & Structure

The average waste management company operates out of a single location, employs 23-24 workers, and generates about $5-6 million annually.

    • The waste management industry consists of about 18,700 firms that employ about 445,700 workers and generate about $110 billion annually.
    • Average revenue per employee is about $246,000.
    • The industry is concentrated at the top with the four largest firms controlling 29% of revenue. Otherwise, the industry is fragmented with many companies offering one or a few types of waste services.
    • Major US companies include Waste Management, Republic Services, WCA Waste, and Stericycle.
                                      Industry Forecast
                                      Waste Management Services Industry Growth
                                      Source: Vertical IQ and Inforum

                                      Coronavirus Update

                                      Jun 21, 2022 - Waste, Recycling Industry M&A Growth Continues
                                      • Mergers and acquisitions (M&A) activity in the US waste and recycling industry reached a value of nearly $4.3 billion in 2021, according to investment firm Jefferies. Waste firms and industry watchers expect the robust pace of deals to continue in 2022, according to Waste Dive. In the first quarter of 2022, Waste Connections spent more than $355 million on acquisitions, Republic Services spent $65.6 million, and Casella Waste Systems’ six deals reached a value of nearly $49.8 million. Waste Management only did $5 million in deals in Q1, and in its latest earnings call, the company said it would maintain a conservative approach to M&A in 2022.
                                      • During much of the pandemic, higher prices for some curbside recycling materials helped waste management firms’ bottom lines. Prices for curbside commodities have since begun to moderate. Prices for old corrugated containers (OCC) used by containerboard mills to manufacture new containers fell 1.5% in June 2022 on a year-over-year basis, according to RecyclingMarkets.net. Prices for post-consumer polyethylene terephthalate (PET) bottles and jars fell 5.2% in June compared to the prior month but grew 74.6% year-over-year. Curbside collected natural high-density polyethylene (HDPE) prices rose 2.5% in June over May but were down 43.9% compared to year-earlier levels. Prices for polypropylene (PP) were down 1.2% in June compared to the prior month and declined 3.5% from year-earlier levels. Sorted, baled aluminum can prices dropped 28% in June compared to the preceding month but were up 26.8% from June 2021.
                                      • Major waste management firms are benefitting from higher commodities prices for recyclable materials. In the first quarter of 2022, Waste Connections’ recycling revenue increased 94% compared to Q1 2021. Waste Management (WM) saw its recycling revenue rise 32% year over year in Q1. Some waste management firms are increasing capital spending to improve efficiencies at their materials recovery facilities. As a whole, the US waste management and remediation services industry saw a revenue increase of 2% in Q1 2022 compared to Q4 2021, according to the US Census Bureau. Revenue was up 14.4% compared to Q1 2021.
                                      • The pandemic worsened an existing labor shortage in the solid waste collection industry, according to the Solid Waste Association of North America (SWANA). Increases in consumer spending and e-commerce during the pandemic led to a significant uptick in demand for trucking, which competes with the solid waste collection industry for drivers. To attract workers, firms are emphasizing the industry as recession-resistant, boosting collection fees to pay for higher wages and benefits, and offering education and training programs. The industry is also making capital investments in automated collection equipment that reduces labor requirements. Worker shortages are also driving up costs. Waste Management’s labor and benefits expenses increased 9% year-over-year in Q1 2022 compared to Q1 2021.
                                      • In addition to higher labor costs, some waste management firms may also be experiencing cost pressure from rising diesel fuel prices brought on by the war in Ukraine. For the week ended June 10, the spot price for Gulf Coast ultra-low sulfur diesel was more than double what it was the same week in 2021. In its Q1 2022 reporting, Waste Management said its higher diesel fuel costs were partially offset by its expanding fleet of compressed natural gas vehicles.
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