Waste Management (WM) announced its first quarter earnings today. The Company started off this industry earnings season strong with revenue of $4.11B, which is up 10.2% year over year (YOY). WM also increased its 2021 financial guidance with confidence based on these solid results.

“It was said many times last year that 2020 was a year like no other,” noted Jim Fish, Waste Management’s president and CEO, on the earnings call. But, he went on to say, “the best companies use tough times to better themselves, and [our] first quarter of 2021 showed that with an exclamation point.” He further explained that, “We had an exceptionally strong start to the year with first quarter adjusted operating EBITDA growth of more than 14% and adjusted operating EBITDA margin expansion of 100 basis points.” And, “We achieved these results by generating strong yield, flexing down our cost structure, and executing on the integration of Advanced Disposal. With this solid performance and our confidence in the strength of our business model, we are increasing our 2021 financial guidance that we provided in February for revenue, adjusted operating EBITDA and free cash flow.”

“In addition to the strong performance of our core business, the integration of Advanced Disposal is going remarkably well. Based upon the success of the integration efforts so far, we believe we will capture synergies above our original expectations. We now expect to achieve $130 million in annual run-rate synergies from operating costs and SG&A savings, which is a more than 60% increase from our initial estimates. The revised estimate includes between $75 million and $85 million in run-rate synergies captured during 2021, up from our prior guidance of between $50 million and $60 million.”

Fish emphasized WM’s ongoing commitment to putting “people first, then customers, then we focus on our business.” This, he said, “produces the best results.” He indicated that the business was seeing its renewable-energy investments paying off and noted that, “WM is well positioned to leverage its ESG leadership,” as it is in a “unique position” to help key stakeholders rise to the challenges related to ESG.

Fish also expressed “confidence that our decision to accelerate technology investments was the right one” and noted that the Company’s end-to-end digital transformation is streamlining the customer experience.

Q1 2021 KEY HIGHLIGHTS

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Future Outlook

Fish concluded, “We’ve previously discussed that Waste Management is well positioned to benefit as states and provinces emerge from the pandemic. We expect strong results as our commercial, industrial and landfill businesses—our three most profitable lines of business—continue to recover over the remainder of the year.” He expressed confidence that the Company will “emerge from the pandemic stronger and more agile.”

Fish also mentioned that Tara Hemmer, senior vice president, Field Operations, will be taking a new role as SVP, chief sustainability officer effective July 1. This is another sign that WM is taking their sustainability goals seriously as we head out of this pandemic.