WCN - Waste Connections Inc. (WCN) Q4 2023 Earnings Call Transcript
2024-02-14 13:30:27 ET
Waste Connections, Inc. (WCN)
Q4 2023 Earnings Conference Call
February 14, 2024 08:30 ET
Company Participants
Ron Mittelstaedt - President and Chief Executive Officer
Mary Anne Whitney - Chief Financial Officer
Conference Call Participants
Tyler Brown - Raymond James
Toni Kaplan - Morgan Stanley
Adam Bubes - Goldman Sachs
Noah Kaye - Oppenheimer
Kevin Chiang - CIBC
Bryan Burgmeier - Citi
John Mazzoni - Wells Fargo
Michael Hoffman - Stifel
Walter Spracklin - RBC Capital Markets
James Schumm - TD Cowen
Stephanie Moore - Jefferies
Jack Wilson - Truist Securities
Presentation
Operator
Good morning, everyone and welcome to the Waste Connections, Inc. Q4 2023 Earnings Conference Call. [Operator Instructions] Please also note today’s event is being recorded. At this time, I’d like to turn the floor over to Ron Mittelstaedt, President and CEO. Sir, please go ahead.
Ron Mittelstaedt
Okay. Thank you, operator and good morning. I would like to welcome everyone to this conference call to discuss fourth quarter results and our outlook for both the first quarter and full year 2024. I am joined this morning by Mary Anne Whitney, our CFO and several other members of senior management.
As noted in our earnings release, adjusted EBITDA margin expansion of 200 basis points in Q4 capped off a remarkable year for Waste Connections, driven by solid execution and continued improvement in operating trends. Solid waste organic growth led by 8.7% core pricing was bolstered by improvements in commodity-driven revenues during the quarter, providing momentum for 2024. Acquisition activity also accelerated into year end as we announced the acquisition of the $225 million revenue E&P waste, disposal-oriented assets of Secure Energy in Western Canada, which has closed as of February 1, bringing expected 2024 revenue contribution from acquisitions to approximately $325 million with incremental dialogue ongoing.
Looking at our differentiated results during the full year 2023, we delivered 70 basis points adjusted EBITDA margin expansion after overcoming 60 basis points in headwinds from recovered commodity values to report an industry leading margin of 31.5%, double-digit growth in both revenue and adjusted EBITDA from price-led organic solid waste growth and outside acquisition contribution, along with disciplined execution and focus on the quality of revenue drove adjusted free cash flow of $1.224 billion or 15.3% of revenue, in line with our outlook. Both employee turnover and safety incident rates exit 2023 at multiyear lows, setting up 2024 for continued improvement in trends, along with the opportunity for outsized margin expansion.
Before we get into much more detail, let me turn the call over to Mary Anne for our forward-looking disclaimer and other housekeeping items.
Mary Anne Whitney
Thank you, Ron and good morning. The discussion during today’s call includes forward-looking statements made pursuant to the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995, including forward-looking information within the meaning of applicable Canadian securities laws. Actual results could differ materially from those made in such forward-looking statements due to various risks and uncertainties. Factors that could cause actual results to differ are discussed both in the cautionary statement included in our February 13 earnings release and in greater detail in Waste Connections’ filings with the U.S. Securities and Exchange Commission and the securities commissions or similar regulatory authorities in Canada. You should not place undue reliance on forward-looking statements as there maybe additional risks of which we are not presently aware or that we currently believe are immaterial, which could have an adverse impact on our business. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances that may change after today’s date....
Waste Connections, Inc. (WCN) Q4 2023 Earnings Call Transcript