Financial report: Republic Services spent $1.8 billion in acquisitions in 2023

By
Recycling Product News Staff
February 28, 2024

A collection truck picks up curbside recyclables

Republic Services has shared its financial results for the fourth quarter and full-year of 2023. Republic Services

Republic Services has reported a net income of $439.6 million, or $1.39 per diluted share, for the three months ended December 31, 2023, versus $346.8 million, or $1.09 per diluted share, for the comparable 2022 period. Excluding certain expenses and other items, on an adjusted basis, net income for the three months ended December 31, 2023, was $446.4 million, or $1.41 per diluted share, versus $358.1 million, or $1.13 per diluted share, for the comparable 2022 period.

For the year ended December 31, 2023, net income was $1,731.0 million, or $5.47 per diluted share, versus $1,487.6 million, or $4.69 per diluted share, for the comparable 2022 period. Excluding certain benefits and expenses, on an adjusted basis, net income for the year ended December 31, 2023, was $1,775.1 million, or $5.61 per diluted share, versus $1,562.8 million, or $4.93 per diluted share, for the comparable 2022 period.

"We finished the year strong and produced results that exceeded our expectations," said Jon Vander Ark, president and chief executive officer. "During 2023, we delivered double-digit growth in revenue, EBITDA, earnings and free cash flow, while continuing to invest in the business to accelerate profitable growth."

Republic Services' fourth-quarter 2023 highlights

Total revenue growth of 8.6 percent includes 5.7 percent organic growth and 2.9 percent growth from acquisitions.
Core price on total revenue increased revenue by 7.2 percent. Core price on related business revenue increased revenue by 8.8 percent, which consisted of 10.6 percent in the open market and 6.0 percent in the restricted portion of the business.
Revenue growth from average yield on total revenue was 6.3 percent, and volume increased revenue by 0.3 percent. Revenue growth from average yield on related business revenue was 7.7 percent, and volume increased related business revenue by 0.4 percent.
Net income was $439.6 million, or a margin of 11.5 percent.
EPS was $1.39 per share, an increase of 27.5 percent over the prior year.
Adjusted EPS, a non-GAAP measure, was $1.41 per share, an increase of 24.8 percent over the prior year.
Adjusted EBITDA, a non-GAAP measure, was $1,145.2 million, and adjusted EBITDA margin, a non-GAAP measure, was 29.9 percent of revenue, an increase of 260 basis points over the prior year.
Cash invested in acquisitions was $828 million.
The company completed construction on its first polymer centre, located in Las Vegas.
The company's average recycled commodity price per ton sold during the fourth quarter was $131. This represents an increase of $19 per ton from the third quarter of 2023 and an increase of $43 per ton over the prior year.

Republic Services' full-year 2023 highlights

Total revenue growth of 10.8 percent includes 6.0 percent organic growth and 4.8 percent growth from acquisitions.
Core price on total revenue increased revenue by 7.4 percent. Core price on related business revenue increased revenue by 8.9 percent, which consisted of 10.9 percent in the open market and 5.6 percent in the restricted portion of the business.
Revenue growth from average yield on total revenue was 6.1 percent, and volume increased revenue by 0.5 percent. Revenue growth from average yield on related business revenue was 7.3 percent, and volume increased related business revenue by 0.7 percent.
Net income was $1,731.0 million, or a margin of 11.6 percent.
EPS was $5.47 per share, an increase of 16.6 percent over the prior year.
Adjusted EPS, a non-GAAP measure, was $5.61 per share, an increase of 13.8 percent over the prior year.
Adjusted EBITDA, a non-GAAP measure, was $4,447.1 million and adjusted EBITDA margin, a non-GAAP measure, was 29.7 percent of revenue, an increase of 60 basis points over the prior year.
Cash provided by operating activities was $3,617.8 million, an increase of 13.4 percent over the prior year.
Adjusted free cash flow, a non-GAAP measure, was $1,985.1 million, an increase of 13.9 percent versus the prior year. Adjusted free cash flow exceeded the company's guidance.
Cash invested in acquisitions was $1.8 billion.
Five renewable natural gas projects were completed and commenced operations during the year.
Cash returned to shareholders was $899.9 million, which included $261.8 million of share repurchases and $638.1 million of dividends paid.
The company's average recycled commodity price per ton sold during the year was $117. This represents a decrease of $53 per ton over the prior year.

Republic Services' full-year 2024 financial guidance

Revenue: Republic Services expects revenue to be in the range of $16.100 billion to $16.200 billion. The company expects growth from the average yield on total revenue to be in the range of 5.5 percent to 6.0 percent and volume growth to be in the range of 0.0 percent to 0.5 percent. The average yield on related business revenue is expected to be in the range of 6.5 percent to 7.0 percent.
Adjusted EBITDA: Republic Services expects adjusted EBITDA to be in the range of $4.825 billion to $4.875 billion.
Adjusted diluted earnings per share: The company expects adjusted diluted earnings per share to be in the range of $5.94 to $6.00.
Adjusted free cash flow: Republic Services expects adjusted free cash flow to be in the range of $2.100 billion to $2.150 billion. The company expects to receive between $1.760 billion to $1.800 billion of property and equipment, net of proceeds from the sale of property and equipment.
Acquisitions: Republic Services expects to invest at least $500 million in acquisitions in 2024. The 2024 financial guidance provided above only includes the expected contribution from acquisitions that closed through December 31, 2023.

"We expect another outsized year of growth in revenue, EBITDA, earnings and free cash flow in 2024," said Mr. Vander Ark. "Our strong financial guidance is supported by pricing in excess of cost inflation, leveraging our digital tools to enhance productivity and improve customer loyalty, and continuing to invest in Sustainability Innovation to drive long-term value creation."