Waste Management (WM) Citi´s 2025 Global Industrial Tech and Mobility Conference summary

Market environment and financial performance

• Revenue growth in the industry is slowing, but margin and earnings improvements remain achievable through operational discipline and cost management.

• Residential volume was deliberately reduced, contributing $180 million to the bottom line despite a 3.5% volume loss.

• Margin improvement and OpEx discipline have been key, with a focus on SG&A and capital efficiency.

• Collection and disposal margins rose by 210 basis points, with net price tailwinds expected to moderate but remain positive into 2025.

• About 40% of pricing is indexed to inflation, supporting margin resilience as inflation moderates.

M&A and network strategy

• $780 million in M&A was completed in 2024, with a strong pipeline and carryover into 2025.

• Strategic acquisitions, such as Winters Brothers in Long Island, expand network capacity and logistics capabilities.

• Investments in logistics (truck, rail, water) ensure flexibility as disposal networks evolve and metropolitan facilities close.

• M&A focus is on growth geographies, especially in the South and previously unserved regions.

• Higher interest rates are prompting some private players to consider selling, benefiting those with strong industry relationships.

Recycling and sustainability initiatives

• $1.34 billion recycling investment targets 39 facilities, with automation reducing labor costs by 30% and increasing capacity by 2.5 million tons.

• Recycling is now the second highest return on invested capital business, with a target of 20% EBIT margin.

• Nearly all recycling contracts have shifted to fee-for-service, raising profitability floors and reducing commodity price sensitivity.

• Extended producer responsibility (EPR) is seen as a growth opportunity, with new facilities in Ontario and ongoing U.S. legislative engagement.

• Secure document destruction from the Stericycle acquisition is contributing to synergy targets and is being integrated with recycling operations.