Waste Connections reports 13 percent increase in revenue in 2021

The company has released its fourth-quarter financial results and its 2022 outlook. 

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Waste Connections Inc., Toronto, has released its results for the fourth quarter of 2021 and an outlook for 2022.  

“The year ended on a high note as strong solid waste organic growth and acquisition activity, along with continuing underlying margin expansion, drove Q4 financial results once again above expectations,” says Worthing F. Jackman, president and CEO. “We are also extremely pleased with our results for the full year, as adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margin expanded 70 basis points. Moreover, we delivered 20 percent growth in adjusted free cash flow to $1.01 billion, despite capital expenditures up 25 percent, as we continued to reinvest in and grow our business.”  

The report shows revenue in the fourth quarter totaled $1.62 billion, up from nearly $1.4 billion in Q4 in 2020. Operating income was $249.3 million, which included $28.4 million primarily related to impairments and other acquisition-related costs. This compares with operating income of $197.1 million in Q4 of 2020, which included $29 million primarily related to impairments and other acquisition-related costs, according to Waste Connections.  

Net income in Q4 was $166.3 million, or 64 cents per share on a diluted basis of 261.3 million shares. In 2020, the company reported a net income of $130.7 million, or 50 cents per share on a diluted basis of 263.6 million shares. Adjusted net income in Q4 was $217.1 million, or 83 cents per diluted share, compared with $178.6 million, or 68 cents per diluted share, in Q4 2020.    

According to the report, EBITDA in the fourth quarter was $495.4 million and 30.5 percent of revenue compared with $426.6 million and 30.5 percent of revenue the prior year.  

"Acquisition activity accelerated in the fourth quarter, resulting in approximately $400 million in acquired annualized revenues in 2021 and setting up acquisition contribution approaching 6 percent in 2022, including transactions completed year to date,” Jackman says. “Along with solid waste pricing growth of about 6.5 percent, this already positions us for double-digit percentage growth in revenue, adjusted EBITDA and adjusted free cash flow in 2022. Additional acquisitions expected to be completed during the year, improvement in commodity-driven revenues and E&P waste activity, or moderation of inflationary trends would provide incremental benefit."  

In 2021, revenue was $6.15 billion, up from $5.45 billion in 2020. Operating income was $1.04 billion, compared with operating income of $412.4 million for the same period in 2020.  

Net income in 2021 was $618 million, or $2.36 per share on a diluted basis of 261.7 million shares. In 2020, the company reported a net income of $204.7 million, or 78 cents per share on a diluted basis of 263.7 million shares.   

Adjusted net income in 2021 was $846.6 million, or $3.23 per diluted share, compared with $695.8 million, or $2.64 per diluted share, in 2020. Adjusted EBITDA in 2021 was $1.919 billion and 31.2 percent of revenue, up from $1.662 billion and 30.5 percent of revenue in 2020.   

Waste Connections also announced its outlook for 2022, which assumes no change in the current economic environment:  

  • Revenue is estimated at approximately $6.88 billion.  

  • Net income is estimated at approximately $846 million.  

  • Adjusted EBITDA is estimated at approximately $2.15 billion, or about 31.2 percent of revenue. 

  • Net cash provided by operating activities is estimated at about $2 billion.  

  • Capital expenditures are estimated to be about $850 million.

  • Adjusted free cash flow is estimated at about $1.15 billion, or 16.7 percent of revenue.  

  • Fully diluted share count is estimated at 259 million.  

"The strength and consistency of our results reflect the durability of our market model and the benefits of an intentional culture focused on employees and value creation,” Jackman says. “Proactive pricing, along with a step-up in capital expenditures and over $1 billion in acquisition outlays in 2021, positions us for continued double-digit growth in 2022, while preserving the balance sheet strength and flexibility to capitalize on another potential above-average year of acquisition activity, invest in sustainability-focused growth projects and increase return of capital to shareholders." 

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