Republic Services Inc, Phoenix, reported a net income of $289.3 million, or $0.90 per diluted share, for the three months ended Dec. 31, 2019, versus $301 million, or $0.92 per diluted share, for the comparable 2018 period. Excluding certain benefits and expenses, on an adjusted basis, net income for the three months ended Dec. 31, 2019, was $291.7 million, or $0.91 per diluted share, versus $260 million, or $0.80 per diluted share, for the comparable 2018 period.

For the year ended Dec. 31, 2019, net income was $1.073 billion, or $3.33 per diluted share, versus $1.036 billion, or $3.16 per diluted share, for the comparable 2018 period. On an adjusted basis, net income for the year ended Dec. 31, 2019, was $1.075 billion, or $3.34 per diluted share, versus $1.014 billion, or $3.09 per diluted share, for the comparable 2018 period.

"The Republic Services team finished the year strong, and we are well-positioned for continued success in 2020. By focusing on delivering superior service to our customers and increasing employee engagement, we profitably grew our business and outperformed our adjusted EPS and free cash flow guidance for the year," Donald Slager, CEO of Republic, says. "In 2019, we invested over $525 million in value-enhancing acquisitions to expand our leading market position and increase the scale of our service offerings. Our acquisition pipeline remains strong, and we could see another outsized year of investment in 2020."

Fourth quarter 2019 and full-year highlights, include:

• Fourth quarter EPS was $0.90 per share, and adjusted EPS, a non-GAAP measure, was $0.91 per share, an increase of 14 percent over the prior year.
• Full-year EPS was $3.33 per share, and adjusted EPS was $3.34 per share, an increase of 8 percent over the prior year. Adjusted EPS exceeded the company's upwardly revised full-year guidance range.
• Full-year cash provided by operating activities was $2.4 billion and adjusted free cash flow was $1.2 billion. Adjusted free cash flow exceeded the company's full-year guidance range.
• Cash flow invested in acquisitions was $526 million, or $463 million net of divestitures. The year-to-date annual revenue acquired, net of divestitures, was approximately $181 million.
• Full-year cash returned to shareholders through dividends and share repurchases was $891 million and total shareholder return was 27 percent.
• Full-year core price increased revenue by 4.7 percent. Core price consisted of 5.7 percent in the open market and 3.2 percent in the restricted portion of the business. This is the highest level of core price the company has achieved in over a decade.
• Full-year revenue growth from average yield was 2.8 percent, driven by small-container yield of 3.9 percent and landfill municipal solid waste of 3.3 percent.
• Full-year adjusted EBITDA, a non-GAAP measure, was $2.9 billion and adjusted EBITDA margin was 28.3 percent, an increase of 30 basis points over the prior year. Underlying margin expanded 70 basis points after normalizing for the 40 basis point headwind from lower recycled commodity prices.
• Republic continued to convert CPI-based contracts to more favorable pricing mechanisms for the annual price adjustment. The company now has approximately $780 million in annual revenue, or 31 percent of its legacy $2.5 billion CPI-based book of business, tied to the water-sewer-trash index or a fixed-rate increase of 3 percent or greater.
• The company continued to reprice and de-risk its recycling collection and processing businesses. Through the end of the year, the company repriced approximately 36 percent of its recycling collection contracts and 55 percent of its contracted recycling processing volume. The company also implemented a recycling processing charge to its open market customers. As a result, the company's earnings sensitivity to changes in recycled commodity prices is expected to decrease in 2020.
• The company was named to the CDP Climate "A List" for its science-based goals, strategies and actions to lower greenhouse gas emissions and mitigate climate risks.

2020 financial guidance

Republic's financial guidance is based on current economic conditions and does not assume any significant changes in the overall economy in 2020.

• Adjusted diluted earnings per share: The company expects adjusted diluted earnings per share to be in the range of $3.48 to $3.53. This guidance includes a benefit from CNG tax credits of approximately 4 cents.
• Adjusted free cash flow: Republic expects adjusted free cash flow to be in the range of $1.175 billion to $1.225 billion. This guidance includes a net benefit from CNG tax credits of approximately $30 million.
• Revenue: Republic expects an increase in revenue of 4.25 to 5 percent.

• Property and equipment: The company anticipates receiving $1.2 billion of property and equipment, net of proceeds from the sale of property and equipment.
• Adjusted EBITDA margin: Republic expects adjusted EBITDA margin to expand by approximately 20 to 40 basis points.
• Taxes: The company expects an effective tax rate of approximately 21 percent and a non-cash charge of approximately $110 million related to solar energy investments that qualify for tax credits. The charge will be recorded as a loss from unconsolidated equity method investments.
• Cash utilization: Republic expects to invest approximately $200 million in tuck-in acquisitions and $120 million in solar energy investments that qualify for tax credits. Additionally, the company expects to return approximately $925 million of cash to shareholders through approximately $525 million of dividends and $400 million in share repurchases.

"We increased our 2020 adjusted EPS and free cash flow guidance relative to the outlook we provided last October," Slager says. "We have a lot of positive momentum heading into 2020, including one of the strongest acquisition pipelines we have seen in quite some time. Additionally, this year we will continue the steady roll-out of our 'RISE' platform and in-cab technology. Through this technology, we look to further enhance the customer experience, empower our employees and increase productivity."

Company declares quarterly dividend
Republic announced that its board of directors declared a regular quarterly dividend of $0.405 per share for stockholders of record on April 1, 2020. The dividend will be paid on April 15, 2020.

Waste Today magazine has announced the dates and location of the 2020 Corporate Growth Conference. The event, which builds on the success of last year’s conference, will present success strategies to drive growth. It is specifically designed for operators in the waste and environmental services industry who are looking to grow their business as well as investors and capital providers seeking to participate in the industry.  

Waste Today’s Corporate Growth Conference will take place September 8-9, 2020, at the Loews Chicago Hotel. It will offer a blend of sessions to provide strategies for increasing profits, analysis of industry sectors, and a better understanding of the application of technology and the capital markets available to finance growth in these sectors.

The conference is designed for operators in the waste management, specialty waste, recycling and waste cleanup industries, as well as investment bankers, private equity firms, venture capitalists, family offices, banks and other financial market participants.

“The waste and environmental services industry continues to offer unique growth opportunities. Waste Today’s Corporate Growth Conference has been structured to give today’s professionals the insights they need to capitalize on these changes and opportunities,” Jim Keefe, publisher of Waste Today, says. “Additionally, the event provides professionals the unmatched opportunity to meet face to face with their peers to network, learn and build new relationships.”

A limited number of sponsorships are available for those interested in raising awareness of their company and services. Contact Shelley Brown (SBrown@gie.net / 216.393.0236) or Sierra Davis (SDavis@gie.net / 216.393.0335) for more information.

Visit WasteTodayEvents.com to stay up to date on the developing agenda and speaker lineup, and for information on how to register.

About the Recycling Today Media Group

The Corporate Growth Conference is produced by the Recycling Today Media Group. Founded in 1963, the group publishes Recycling Today, Recycling Today Global Edition, Construction & Demolition Recycling, and Waste Today magazines as well as companion websites and e-newsletters. The group also produces Paper & Plastics Recycling Conference, MRF Operations Forum, and Paper & Plastics Recycling Conference Europe. The Recycling Today Media Group is a business unit of GIE Media, Inc.

On average, America’s top beverage companies produce about 100 billion plastic bottles every year, according to estimates from the American Beverage Association. While an estimated 35 billion bottles are collected and recycled annually, the majority of these bottles end up in the waste stream, according to that association. 

In 2019, The Recycling Partnership, Falls Church, Virginia, released a report, “The Bridge to Circularity: Putting the ‘New Plastics Economy’ into Practice in the U.S.,” that provides a case study of polyethylene terephthalate (PET) bottle recycling. According to that report, an annual gap of about 1 billion pounds exists between current U.S. supply and projected demand for recycled PET (rPET) from major brands. Sarah Dearman, vice president of circular ventures at The Recycling Partnership, says the study reached the conclusion that in its current state, the U.S. recycling system can’t help companies meet their goals to use rPET in their products. She adds that to meet companies’ demand for rPET, each person in the U.S. would need to recycle an additional 100 PET bottles per year. 

“But people don’t have enough access to recycling,” she says. “They are not participating at the levels they need to, and significant investment is needed in the system.”

Investment in PET bottle recycling is needed to meet demand, and some investment is coming this year. The American Beverage Association, Washington, has launched the Every Bottle Back initiative to invest about $400 million toward plastic bottle recycling efforts in the U.S. The initiative aligns top beverage makers with nonprofit groups, such as Switzerland-based World Wildlife Fund, New York-based Closed Loop Partners and The Recycling Partnership. 

Katherine Lugar, president and CEO at the American Beverage Association, says the new initiative has four major pieces: 

• partner with the World Wildlife Fund to measure progress in using less new plastic;

• invest an equivalent of $400 million in recycling infrastructure to reclaim as many bottles as possible; 

• leverage packaging to remind consumers that bottles are 100 percent recyclable; and 

• communicate to consumers that bottles are not intended to be single-use packages.

Together, the American Beverage Association hopes these groups will be able to collaborate to make investments into a more circular system to ensure PET bottles are reclaimed, recycled and remade. 

“Ultimately, we hope to support the creation of a more circular system for recreating bottles to new bottles that reduces our industry’s plastic footprint and conserves resources,” Lugar says.

Precompetitive collaboration

Members of the American Beverage Association include brands such as The Coca-Cola Co., Keurig Dr Pepper and PepsiCo. Lugar says all these companies had expressed a desire to work across the industry to recycle more PET bottles. All companies have committed funds toward this initiative.

“Companies had already been talking about a desire to work across industry on these areas precompetitively,” she says. “Much of this comes from the fact that just like our consumers are frustrated when they see plastic bottles end up on beaches or the side of the road, we share that frustration, too. Bottles were made to be remade.”

While Coca-Cola, Keurig Dr Pepper and Pepsi are competitive businesses and each has their own separate sustainability targets and platforms around recycling plastics, Lugar says it was important for them to work precompetitively on Every Bottle Back to develop long-term solutions to recover more PET. 

Nicole Smith, sustainability manager at Coca-Cola North America, Atlanta, says the initiative requires groups to work together regardless of market share competition to come up with a long-term solution.

“I think not one of us can solve this on our own,” she says. “It’s fantastic to have industry partners come together. That’s what this is all about—how can we collectively do good?” 

Monique Oxender, chief sustainability officer at Keurig Dr Pepper, Boston, adds that it’s been easy to partner with other beverage brands on Every Bottle Back because they all agree on the impact that they want to have on U.S. communities. “Sitting together, working for a common purpose of eliminating plastic waste is something we can all agree on, she says.

Kathleen Niesen, director of recycling and sustainability at PepsiCo Beverages North America, Purchase, New York, adds that having three major beverage brands work together on Every Bottle Back demonstrates the importance of the plastics recycling issue to society.

“Here are market competitors who spend a lot of time and energy promoting their particular products and image in the marketplace, and yet we have seen that this recycling and sustainability work is so important that we can put competitiveness aside for the sake of addressing this issue,” Niesen says. “It’s only by collaboration that we’re going to make a problem of this scale a nonproblem.”

Lugar adds that this is not the first initiative its member companies have collaborated on. She says that in the past, these companies have collaborated on health-related initiatives to reduce the amount of sugar in their beverages as well as to create clear calorie labels on beverage packaging. 

“We don’t know of another industry that’s working in partnership with leading brands,” she adds. “These three companies are committed to sustainability with a long track record of delivering on sustainability goals. I think it’s important to note that they have recognized that by harnessing the power of the three companies together will help to deliver the greatest impact; they all recognize the need to work together to reduce plastic in the environment.”

Improving education and infrastructure

Beyond consistently measuring these brands’ progress using less virgin plastics, the key components of Every Bottle Back include improving recycling education and improving infrastructure at material recovery facilities (MRFs) to recycle PET bottles. 

Smith at Coca-Cola says recycling is confusing, so the companies involved in Every Bottle Back already have been working to develop improved consumer awareness campaigns to help educate the general public on how to recycle PET bottles. 

“We’re working on a more uniform label that each of the different stakeholders can voluntarily place on beverage bottles to help communicate to consumers to keep caps on and to recycle the bottle when they’re finished with it,” she says. 

“As a product leaves a store shelf and goes into a consumer’s hands, we want to be sure that consumer knows what to do with that product and how to recycle it,” Oxender of Keurig Dr Pepper adds. “The result of the consumer recycling right increases recycling rates and also increases the quality of the material that’s being recycled.”

Also, funds from the initiative will help MRFs invest in new technology that ensures they can recover PET bottles easily. 

“We want to make sure the recyclers have the facilities and equipment to be able to sort and capture the material coming in blue bins to the facility to increase the amount of PET recycling, which allows us in turn to use more recycled content,” Oxender says.

Long-term goals

The Every Bottle Back initiative will roll out the $400 million of investments in a seven-to-10-year period, so it’s just in the early planning stages currently. Dearman of The Recycling Partnership says the initiative will have a bit of a regional focus and will gradually rollout to different communities in the U.S.

“We’re in the planning process of finding where the greatest opportunities are for us to make an impact,” she says. “It will scale over time.”

American Beverage Association

Dearman says the initiative will have a “significant impact” in several communities in 2020. She adds that toolkits will be made with information and experiences learned in each of the communities served during the Every Bottle Back initiative; the toolkits will provide education resources to communities not directly served in the initiative.

In mid-January, the initiative announced its plans to rollout recycling education improvements in the Dallas-Fort Worth community first. The initiative committed about $3 million toward recycling education and infrastructure improvements in that community.

About $2 million of that investment will be applied toward infrastructure improvements at Austin, Texas-based Balcones Resources’ material recovery facility (MRF) in Farmers Branch, Texas, just north of Dallas. Sometime in 2020, the MRF will be enhanced with optical sorters, artificial intelligence and robotics that separate recyclable plastics. New belt configurations will help to improve recyclables processing. 

The initiative also will help improve recycling education at multifamily housing complexes in the community. The American Beverage Association reports that about 50,000 residents in multifamily housing units across the community will benefit from expanded recycling access and better on-site and in-unit signage about recycling. 

Additionally, the initiative will share a “Know What to Throw” public service campaign to educate residents across 230 communities in Dallas-Fort Worth about how to decrease recycling contamination. 

Similar rollouts will occur in other communities across the U.S. in the coming months and years, the American Beverage Association reports. Lugar says she estimates that about 9 million households will have improved access to recycling as a result of Every Bottle Back, which could lead to a 20 percent increase in the amount of PET recycling over what’s currently done. She says the association also hopes this initiative will encourage other industries to collaborate on improving PET recycling. 

“We hope this is a catalyst for others,” she says. “With leading voices in the environmental community, we know we can have a greater impact.”

The Brussels-based Bureau of International Recycling (BIR) has announced the InterContinental hotel in Geneva, Switzerland, as the site of its autumn 2020 convention. The group will convene Oct. 11-13 at the venue.

The BIR also continues to prepare for its Spring 2020 World Recycling Convention, which will take place May 17-20 May at the Swissôtel-The Bosphorus in Istanbul.

The recycling organization also selected dates for its spring and autumn events for the years 2021 to 2023:

• 2021: May 30-June 2; Oct. 24-26
• 2022: May 29-June 1; Oct. 16-18; and
• 2023: May 21-24; Oct. 22-24.

Although host cities have not been chosen for those meetings, BIR says it “will continue to alternate global destinations and European business hubs for its forthcoming conventions.”