Waste Management: Working With Less
WM had fewer landfills in 2023 than it did in 2009. Revenue increased 73%, FCF increased 57%, and landfill capacity in tons increased 12%.
In 2009, Waste Management had 273 landfills. Those landfills could handle over 5.2 billion cubic yards of waste, translating to 4.8 billions tons.
By the end of 2023, management had reduced the company’s landfill count to 263. With ten fewer landfills, Waste Management could handle the same 5.2 billion in cubic yards and almost 12% more tons of waste than it could in 2009.
Over the same timeframe, revenue jumped 73%. But opex (labor, transfer, disposal, maintenance, repairs, fuel, and other operating costs) and capex (spending on recycling and renewable energy projects and on fixed asset purchases) increased 74% and 146%. Free cash flow increased 57%.
The value of Waste Management’s properties has also increased over the years. Its landfill holdings are now worth over $19 billion, and its waste collection vehicles are altogether worth almost $6.6 billion.
By buying back outstanding shares, management has been able to juice shareholder returns. Free cash flow per share is up over 90% from 2009 to 2023, and share count is down over 17%.
Waste Management’s customers are municipalities, restaurants, oil and gas companies, construction companies, and hospitals, among others. Management groups its customers into three categories: commercial, industrial, and residential. Between 2010 and 2023, the company’s industrial collections business grew the most with that segment’s revenue up 93%. Commercial collection revenue grew 71%. Residential was the slowest of the three, growing only 34% during that timeframe. The company’s largest customer represents less than 5% of its revenue.
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