Waste Management : 2025 Investor Day Transcript

Published: 2025-07-03 14:43:11 ET WM

Published on 07/03/2025 at 14:43

24-Jun-2025

Waste Management, Inc. (WM)

Investor Day

Ed Egl

Vice President-Investor Relations & Financial Analysis, Waste Management, Inc.

James C. Fish, Jr.

Chief Executive Officer & Director, Waste Management, Inc.

John J. Morris

President & Chief Operating Officer, Waste Management, Inc.

Michael J. Watson

Chief Customer Officer & Senior Vice President, Waste Management, Inc.

Kimberly G. Stith

Chief Human Resources Officer & Senior Vice President, Waste Management, Inc.

Marcel Dalby

Vice President-Collection Operations & Business Optimization, Waste Management, Inc.

Rebecca McMorris

Senior Director-Enterprise Digital Services, Waste Management, Inc.

Ronald S. Ward

Area Vice President-Capitol Area, Waste Management, Inc.

Heather Miller

Director-Investor Relations, Waste Management, Inc.

Tara J. Hemmer

Senior Vice President & Chief Sustainability Officer, Waste Management, Inc.

Rafael Carrasco

Senior Vice President, Enterprise Strategy & President, WM Healthcare Solutions, Waste Management, Inc.

Devina A. Rankin

Executive Vice President & Chief Financial Officer, Waste Management, Inc.

.....................................................................................................................................................................................................................................................................

Jerry Revich

Analyst, Goldman Sachs & Co. LLC

Toni Kaplan

Analyst, Morgan Stanley & Co. LLC

Patrick Tyler Brown

Analyst, Raymond James & Associates, Inc.

Trevor Romeo

Analyst, William Blair & Co. LLC

Noah Kaye

Analyst, Oppenheimer & Co., Inc.

Michael Feniger

Analyst, Bank of America Merrill Lynch

Bryan Burgmeier

Analyst, Citigroup Global Markets, Inc.

Sabahat Khan

Analyst, RBC Capital Markets

David John Manthey

Analyst, Robert W. Baird & Co., Inc.

Konark Gupta

Analyst, Scotia Capital, Inc.

Tami Zakaria

Analyst, JPMorgan Securities LLC

Kevin Chiang

Analyst, CIBC World Markets, Inc.

Ed Egl

Vice President-Investor Relations & Financial Analysis, Waste Management, Inc.

Welcome to WM's 2025 Investor Day. Thank you for making the long train ride down to Lower Manhattan here. To those of you watching online, appreciate your attendance. And to those of you who are fast forwarding through this section on a replay, no, your video player is not stuck at 2 times speed. I just talk this fast. Appreciate everyone's attention and interest in WM.

So, as customary, I'd like to start with a quick safety briefing. As you can tell in the room here, we're pretty crowded, lots of tripping hazards, so please be careful when you get up and move about. In the unlikely event of an emergency that we have to evacuate, you go out both these doors here, on either side, there's a staircase, so leading down on both sides. We'll meet downstairs and wait further instructions. If there's a medical emergency, Eric Dixon and [ph] Dave Brennan (00:00:49) are both certified CPR, and [ph] Kim Moore (00:00:52) has volunteered to dial 911.

As someone who grew up in the Bronx, of course, I had to go to the Yankees game on Saturday. Sorry, [ph] Noah (00:01:02). And being in this room, I'm reminded of a great Yankee quote from Yogi Berra, feels like deja vu all over again. A little delay here in moving the slide. Sorry. Too fast. Sorry. Don't look at these slides. These are not the right size. Okay. One more. All right. We'll get there in a second. Hold on.

Okay. So, looking at this agenda, though, we have a really great day ahead of us, and I think Yogi was actually misquoted. I think his quote is, it feels like deja vu all over again, but only better. And looking at this Investor Day, it's exactly that. It was only six years ago we were in this exact same room with many of the same presenters, many of the same people listening in the audience here, talking about our strategy. And what you're going to hear today is excitement about the future of WM for the next several years.

We're going to start today off with an overview, talk about our operations, talk about our customers, talk about our people. Heather Miller will come up on stage and moderate a Q&A session, followed by a brief break. Now, the bathrooms will probably be busy during that break time, so I encourage everyone to go to our demonstration area over to the right to see some of the cool things that we're doing at WM.

So, as you listen to the presentations, I hope you reflect back on our 2019 Investor Day. We accomplished great things during that time period. We set high expectations and we exceeded all of those expectations. You'll see many people in the room today wearing WM badges that have green on it. It's thanks to those people's hard efforts that we were able to accomplish such great things. In about a month and a half's time, I'll be celebrating my 30th anniversary with WM, and I can honestly say there's been no better time to be with the company than there is today. And as you go through these presentations, you'll hear the excitement about the opportunities that lie in front of us.

So, I know you guys want me off the stage quickly so we can start the presentations, but I have to go through your favorite slide and my favorite slide, the cautionary statement. And we have many people from our legal team in the audience today, so if I don't read this correctly, this will be the last time you see me presenting. So, indulge me while I actually read a portion of the forward-looking statement or the cautionary statement slide. Please refer to the slide, slide 4 in the deck, for additional details.

Today, you'll hear us discuss certain non-GAAP measures, including our adjusted operating EBITDA and free cash flow. Please see the end of the presentation for reconciliations to the most comparable GAAP measures. Also, you will hear forward-looking statements which are based on current expectations, projections, or opinions about future periods. Those statements are subject to risks and uncertainties that could cause actual results to differ materially. Please refer to the cautionary statement slide, slide 4, of today's deck and our filings with the SEC, including our most recent Form 10-K and 10-Q, for further discussion of these risks and uncertainties. We assume no obligation to provide updates to any forward-looking statements.

Now, let's get the show started with a short video titled Only WM followed by our CEO, Jim Fish. Thanks for your attention and enjoy the presentations.

[Video Presentation] (00:04:26-00:05:24).

James C. Fish, Jr.

Chief Executive Officer & Director, Waste Management, Inc.

Okay. I gave our video people a hard time. I said, could we not have put an Astro in there? We have to put Philly in there. But he is a good guy. [ph] Kyle Schwarber (00:05:31), he played in our tournament last year, so very good guy.

Well, welcome to our 2025 Investor Day. Hard to believe it's been six years since we were in this room. It is an amazing room, by the way. But a lot has happened with our company, a lot's happened with the world in the last six years. You're going to hear a lot of messages today. And my hope is that you take a couple of things away as you leave.

First of all, I want you to take away that this company has some traits that are unmatchable by any other company in our space. I hope you take away from this that that they have a sharp leadership team, a team that's focused on doing the right thing for all of its constituents. I hope you take away that we have a long-term strategy that makes a lot of sense that makes sense for you, and produces the way it's produced in the past. And lastly, I hope what you take away is that this is a company that is a forever stock. I call it a forever stock. You buy it and you hold it indefinitely because you know that it's going to perform year in and year out. I hope you take those messages away from today.

So here are my key messages for today, and I'm going to start off with one that's near and dear to my heart. When I took this job in 2016, I said, I want to be a people-first leader. It doesn't mean I want to be Santa Claus. People-first leader means I want people to feel like they're valued, their opinions matter, they're included. That's what people-first mean. So at the top of this list, fostering a people-first leadership approach, and building an experienced and dynamic leadership team fueled by a powerful long-term growth engine for sustained value creation. A unique, unreplicable asset network and materials management expertise. Building distinctive platforms for incremental growth supported by some secular trends that I'm going to walk through. And then, executing a clear and disciplined capital allocation strategy focused on long-term shareholder value creation.

This is a slide that I'm sure you're all familiar with. It has changed a lot since 2019, but this gives you an idea of who we are and where we are. You can see 62,000 now employees once we've rolled in our Stericyle folks, 2024 revenue of $22.1 billion and $6.6 billion in EBITDA. And the map on the right there shows the density of our network, and you can see pretty much a spot everywhere. I did notice there's a spot in Jackson, Wyoming, John, so I need to make sure I visit that in the next few weeks. But, obviously, we are where the population is.

Okay. So, this slide really demonstrates how we've performed, and I think it's important to understand how we've performed over the past few years. And you remember when we were here in 2019, we talked about 4% to 6% organic revenue growth, and we talked about 5% to 7% operating EBITDA and free cash flow. And so, through the pandemic, 3% revenue growth was pretty impressive right through the middle of the pandemic, and then 7% adjusted operating EBITDA growth, and 14% free cash flow growth, incredibly impressive performance right through the middle of the pandemic. And then from 2022 to 2024, similarly impressive, 6% top line, 9% EBITDA, 13% free cash flow.

So, here's what that resulted in, and you're all aware of this, but you can see the performance of this company over the last 10 years. And, obviously, the numbers on the left are impressive when compared to the Dow Jones and the XLI, but I think equally impressive is the fact that the volatility is not nearly what those two indexes are at

0.6 versus 0.98 and 0.93, and all of this, you know all of this. But all of this through administration changes, regulatory changes, COVID-19 obviously, labor shortages, and we'll talk a lot more about labor shortages today, and inflation. You will remember in 2022 the highest CPI in 40 years. And even with all that, you still see the performance there.

Here's the team. This is the team that I have really proudly assembled over my nine years. This is the team that is - has continued to perform year in and year out. And you'll hear from a number of these folks today, and they're all here so you'll have a chance to meet each of them.

Okay. So, let's talk a little bit about what is this engine. And this kind of puts it in a kind of pictorial form, but if you think about this unreplicable core business, I mentioned people-first, and so on the outside, you have people-first and customer centricity. And we'll talk a lot about the customer today and then operational excellence. And John Morris will spend a lot of time talking about operational excellence and what we've done to improve margins with operational excellence.

And then the gears inside of that, the strategic asset network, technology, and automation which we've talked a lot about on earnings calls, and logistics and materials management expertise. And then you have these new growth platforms, and each of those will be addressed. Sustainability will be addressed by Tara Hemmer today, and Rafa Carrasco will talk about WM Healthcare Solutions. And all of that equaling - what we've done over the last six - or the last 10 years, I guess, all of it equaling what we expect to do going forward, which is revenue growth, margin improvement, free cash flow generation.

Let's talk about the unreplicable core business. So, disciplined price growth, and I'm going to give a little bit of credit to my predecessor, Dave Steiner, our new Postmaster General. And when he started talking about pricing back in 2004, some of you may remember that a lot of you weren't you - weren't even old enough to remember that, but some of you were. And you might remember that Dave started talking about pricing when pricing was 1%. And I remember when I came to the company in 2001, it was kind of accepted that the best you could do on pricing was 1%, maybe. And there were quarters where we reported 0.7%.

And so, David, credit to him really started to focus us as a company on disciplined pricing, and we've continued to focus on that. And you can see the number here just in 2023 and 2024, 300 basis points over inflation. And at the same time, we've really focused on the customer to make sure that when we price them that way, that we're providing a true customer service product that is worthy of that 300 basis points.

And then targeted volume expansion, and I think of that as a net number because there's a positive and a negative here as we grow volume. The negative, which you've heard John Morris talk a lot about, is we've called out some of the bad business in the residential line of business. And as a result, residential margins have almost

Disclaimer

Waste Management Inc. published this content on July 03, 2025, and is solely responsible for the information contained herein. Distributed via Public Technologies (PUBT), unedited and unaltered, on July 03, 2025 at 18:42 UTC.