2013 Waste Age 100 Premium In-Depth Analysis

The Waste Age 100, which ranks the 100 largest waste services firms in North America based on revenue, marks a milestone this year with its 20th annual edition. Despite a still-sluggish economy and falling commodity prices in 2012, seven of the top ten companies were able to increase revenues compared with 2011 levels, and overall, industry revenues (as encompassed by the Waste Age 100) were down around 1 percent to slightly more than $39 billion. Within the index, the number of employees rose 1 percent to more than 183,000, though that may reflect changes in the composition of the list itself, rather than an apples-to-apples comparison. In comparison, in the June 2008 Waste Age 100, industry revenues (again as encompassed by the Waste Age 100’s 2007 revenues) were roughly $37.7 billion. Thus, in the past five years the Waste Age 100 companies have increased revenues just over 4 percent. In the same timeframe, the number of employees rose just over 1 percent, likely due to headcount reduction during the course of the Great Recession and subsequent slow recovery, but also due to increased automation and productivity programs within the industry.

The perennial top two, Waste Management and Republic Services, again dominated in terms of size, though the gap between the two widened for the second straight year to $5.5 billion in 2012 versus $4.4 billion in 2010, as Waste Management’s revenue grew 2 percent last year, while Republic’s revenue declined about 1 percent. Aided by acquisitions, number 3 and number 4 players Clean Harbors and Stericycle, as well as number 6 player Waste Connections, grew 10 percent or better, while number five player Progressive Waste Solutions grew 3 percent.

The gap between the biggest and smallest firms on the list also widened, with this year’s 100th company generating well under $1 million in 2012 revenues versus around $1 million in 2011. As a result, the concentration in the industry remains very high, with the top five players accounting for more than 70 percent of the total Waste Age 100 revenues and the top 10 more than 85 percent. This compares to less than 70 percent and slightly more than 80 percent, respectively, in 2011.

The composition of the top 10 players is little changed from last year (other than a few place changes), with one new entrant. Advanced Disposal Services rose to number 8, up from number 13 last year, unsurprisingly, given its acquisition of last year’s number 4, Veolia Environmental Services of North America, as well as its merger with last year’s number 21, Interstate Waste Services. For the most part, the composition of the next ten players is also similar to last year. Although both Waste Industries USA and WCA Waste Corp. have been acquired by private equity player Macquarie, they remain independent entities (just no longer publicly traded) and thus both remain part of the Waste Age 100.

This year’s list also underscores the diversity and bifurcation in the industry. The top seven players are all fully integrated (collection, recycling and disposal), publicly traded companies. Three privately held but fully integrated companies round out the top ten. The majority of the next ten players are the privately held large regional companies, still primarily fully integrated. However, it’s worth noting that a few pure play recyclers have crept up in the ranking over the past several years. Most typically, firms 50 through 100 represent the traditional smaller haulers — primarily collection only with less than $25 million in 2012 revenues. Interestingly, in a sign of the times, even these small hauling companies now commonly list recycling services in addition to traditional collection services.

— Analyst Leone Young, author of The Circular File

Editor’s Note on methodology: This ranking consists of firms that have collection or long-haul fleets, own or operate processing or disposal sites, or are in some way involved with the handling/processing of solid waste or recycling. This year we also opened the list to firms that exclusively handle compost and organics. We collected companies’ revenue by reviewing annual reports when available, and collecting financial information via an online form. The form was publicized using e-mail blasts to our subscription and promotion lists, via social media, and by other means. While we strive to make the Waste Age 100 the most comprehensive list of the industry’s largest solid waste and recycling firms, we recognize that it is not bulletproof because some privately held firms can’t be ranked, as they decline to disclose their revenue information and often no other source for those firms’ revenues exists.