Republic Reports 15% Revenue Increase in Q4 2021 Reflecting High Commodity Prices

Shortly after securing of the first major industry acquisition of 2022, Republic Services published Q4 2021 earnings and provided preview of into what 2022 looks like for the company.

The Phoenix-based waste services provider reported year-over-year revenue growth of 15 percent in the final quarter, exceeding full-year performance and meeting the high-end of revised financial guidance.

"We finished the year strong, capping off our best year of financial performance in company history," said Jon Vander Ark, president and CEO. "We consistently exceeded expectations and delivered double digit growth in revenue, EBITDA, earnings and free cash flow during the year."

Core price during Q4 2021 reached 5.4 percent, with open market pricing of 7 percent and restricted pricing of 2.8 percent. CFO Brian DelGhiaccio stated average yield was 3.4 percent, a 20 basis point rise from Q3 2021. The company expects average yield to be the same for 2022, which would signify a 50 basis point increase over full-year 2021. Q4 volume was 3.6 percent. DelGhiaccio noted that organic volume growth in 2022 is expected to be between 1.5 percent and 2 percent for the full year.

Commodity prices drove last quarter's performance, with prices reaching $218 per ton, up from $110 per ton year over year. The company estimates that recycled commodity prices in 2011 will be $187 per ton, consistent with the 2021 average.

"Recycling processing and commodity sales contributed 110 basis points to internal growth during the fourth quarter," he said.

Republic is turning to recycling investments in 2022, with a strong focus on plastics. The company also is leveraging its partnerships to enhance landfill gas-to-energy opportunities. Vander Ark mentioned four projects underway that on schedule to be completed in 2022, with another 14 in the pipeline in the next couple years. 

"These investments will provide a platform for future revenue growth with attractive returns and drive a more sustainable role for future generations," he commented. "We will absorb these investments when our normal level of capital spending."

The CEO also touted Republic's more than $1 billion in acquisitions as well as the more than $800 million that was returned to shareholders via dividends and share repurchases. He dove into the newly-announced $2.2 billion deal to acquire US Ecology, specifically noting cross-selling opportunities and the expansion of Republic's environmental services business.

."With the addition of US Ecology’s national footprint of vertically integrated assets, leading disposal infrastructure and comprehensive capabilities, we are better positioned to serve our customers with one of the most complete sets of products and services," Vander Ark said. "This acquisition propels Republic into a leading position in the environmental solutions space, and as a platform of high quality assets and difficult to replicate infrastructure."

Earnings Highlights:

Full-year 2021 adjusted EBITDA: $3.38 billion 
Q4 Average Commodity Price: $218 per ton
2021 Acquisitions: $1.06 billion 
Full-year Cash Provided by Operating Activities: $2.79 billion
Full-year EPS:$4.04
2022 Expected Earnings Per Share: $4.58 to $4.65
2022 Expected Adjusted Free Cash Flow: $1.625 billion to $1.675 billion.