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Major waste and recycling firms express cautious optimism despite challenging Q2

financials

The North American waste and recycling industry's major integrated service providers, WM, GFL, Waste Connections and Republic Services, as well as sustainable packaging producer and fibre recycler Cascades, have reported financial results for the second quarter. This is the first full quarter to accurately reflect the effects of the COVID-19 pandemic. While revenue is down overall and net losses also increased for most, there has also been an overarching theme of resiliency in operations, increased volumes and positive cash flow within the waste and recycling industry over the last few months. Notably, in the Canadian sustainable packaging sector, Quebec-based Cascades also indicated similar results.

The latest results from these five major waste and recycling industry firms' Q2 financial reports are listed below, highlighting the highs and lows of their second quarters.

GFL Environmental

"We are very pleased with our strong results for the quarter. Despite the impacts of COVID-19 on parts of the North American economy, we were able to grow revenue in the quarter by 19.5% and adjusted EBITDA by 23.4%, compared to the second quarter of 2019, resulting in our highest ever reported revenue. Our results for the quarter re-inforce the resiliency of our business model and our success in executing our margin enhancing strategic initiatives. Our skilled team of managers and operators exceeded our expectations in responding to the slowdown resulting from the pandemic," said Patrick Dovigi, Founder and Chief Executive Officer, GFL Environmental.


  • Revenue increased by 19.5% to $993.3 million in the second quarter of 2020 compared to the second quarter of 2019. 

  • Solid waste core price for the second quarter of 2020 was 3.7% compared to 4.4% in the comparable quarter of the prior year, resulting from the decision to temporarily suspend pricing initiatives in response to COVID-19 disruptions. 

  • Revenue for the six months ended June 30, 2020 was $1,924.6 million, an increase of 24.0% compared to the same period in 2019. The increase in both periods was driven by significant revenue growth across all reportable segments both organically and through acquisitions. 

  • Net loss increased from $161.4 million for the six months ended June 30, 2019 to $393.5 million for the six months ended June 30, 2020 driven by costs associated with the initial public offering and the early redemption of several series of outstanding unsecured bonds.

  • Cash flow from operating activities increased by 137.3% to $132.2 million in the second quarter of 2020 compared to the second quarter of 2019. For the six months ended June 30, 2020, cash flow from operating activities was $82.0 million, an increase of 125.9% compared to the same period in the prior year. 

Waste Management

"I am proud of how our employees have continued to provide dependable, essential services to our customers and communities during the pandemic," said Jim Fish, Waste Management's President and Chief Executive Officer. "While keeping health and safety as the top priority, the team adapted through difficult circumstances, finding ways to improve efficiency across the collection and disposal business and reduce discretionary spending."


  • Revenues for the second quarter of 2020 were $3.56 billion compared with $3.95 billion for the same 2019 period. Net income for the quarter was $307 million compared with $381 million for the second quarter of 2019. 

  • In the second quarter of 2020, revenue declined $331 million in the company's collection and disposal business, driven by $386 million in volume declines partially offset by $55 million of yield growth.

  • Core price for the second quarter of 2020 was 1.3% compared to 4.2% in the second quarter of 2019.

  • Collection and disposal yield was 1.6% in the second quarter of 2020 compared to 2.7% in the second quarter of 2019.

  • Total company volumes declined 10.3% in the second quarter of 2020. Volumes declined almost 11% in the commercial line of business, 16% in industrial, and 18% in landfill, primarily related to the COVID-19 pandemic. Adjusting for natural disaster volumes that occurred in the second quarter of 2019, landfill volumes declined 13% in the second quarter of 2020.

Waste Connections

"Strong operational execution and continued recovery in solid waste volumes drove better than expected results in the second quarter. In fact, the reported year-over-year margin decline in the period was entirely attributable to reduced E&P waste activity, as underlying solid waste margin expansion more than offset over $20 million in incremental COVID-related costs. These results reflect the resilience of our underlying solid waste business as well as the dedication and commitment of our employees," said Worthing F. Jackman, President and Chief Executive Officer of Waste Connections.

  • The reported year-over-year margin decline in the period was attributable to reduced E&P waste activity, as underlying solid waste margin expansion more than offset over $20 million in incremental COVID-related costs, primarily related to frontline supplemental wages.
  • Business was impacted by COVID-19 due to a reduction in revenue primarily in solid waste commercial collection and solid waste transfer and disposal resulting from a slowdown in activity associated with shelter-in-place or other closure restrictions or requirements imposed in response to the COVID-19 pandemic.

  • Commercial collection activity slowed down in certain markets due to service reductions or suspensions by customers whose business activity was curtailed by such measures.

  • Through the second quarter, about 53% of solid waste commercial customers and 42% of associated revenue in competitive markets that had suspended or reduced service had reached out for a resumption in service or increase in frequency, up from 12% and 9%, respectively, in early May.  

  • Volumes in all solid waste regions exceeded preliminary expectations, resulting in solid waste revenue down 5.3% year over year on a same store basis in the second quarter, about 70 basis points better than the preliminary expectations provided in May.

Republic Services

"Our second quarter results clearly demonstrate the resiliency of our business and the strength of our cash flow," commented Donald W. Slager, Chief Executive Officer. "During the quarter, we expanded adjusted EBITDA margin 170 basis points, increased adjusted earnings and delivered double-digit growth in adjusted free cash flow.

  • Net income was $258.2 million versus $254.1 million for the comparable 2019 period, for the three months ending June 30, 2020.
  • The company is reinstating annual cash flow guidance and now expected to generate $1.1 billion to $1.175 billion of adjusted free cash flow in 2020.

  • Year-to-date cash flow invested in acquisitions was $124 million, or $95 million net of divestitures. The company expects to invest $600 to $650 million in acquisitions for the full year.

  • Second quarter adjusted EBITDA margin was 29.6 percent of revenue and increased 170 basis points over the prior year. This included a 110 basis point benefit from higher recycled commodity prices and lower fuel costs and a 130 basis point headwind from $31 million of COVID-related costs.

  • The company's average recycled commodity price per ton sold in the second quarter was $101. This represents a sequential increase from the first quarter of $25 per ton as well as an increase versus the prior year of $23 per ton.

Cascades

"Our operations executed and adapted well during the second quarter, delivering improved consolidated results on both a sequential and year-over-year basis. This strong performance resulted in a record quarterly adjusted OIBD for the corporation, highlighting the resiliency of our business model focused on providing customers with essential, sustainable quality packaging and tissue solutions," commented Mario Plourde, President and CEO of Cascades.


  • Sales in the second quarter decreased by 2% as the elevated COVID-19 related demand levels present in the first quarter eased. This resulted in lower volumes in all segments with the exception of specialty products. Sales increased modestly when compared to the comparable period in 2019, supported by a 12.5% growth in tissue.

  • Sales of $1,285 million (compared with $1,313 million in Q1 2020 and $1,275 million in Q2 2019)

  • Operating income of $94 million (compared with of $90 million in Q1 2020 and an operating income of $82 million in Q2 2019)

  • Net earnings per share of $0.57 (compared with $0.24 in Q1 2020 and $0.33 in Q2 2019)

  • Operating income of $111 million (compared with $90 million in Q1 2020 and $84 million in Q2 2019)

  • Net debt of $2,077 million as at June 30, 2020 (compared with $2,212 million as at March 31, 2020) reflects a favourable foreign exchange variance and solid cash flow from operations, including acquisition of CDPQ's interest in Greenpac Mill realized in the first quarter.