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WM’s record full-year operating EBITDA driven by solid waste business growth

The company grew significantly in 2024 with a number of new recycling automation projects and natural gas facilities

A green refuse truck emptying a dumpster
Adjusted operating EBITDA for the WM legacy business grew more than 10 percent in 2024 and achieved a 30 percent margin for the first time in the company’s history. WM

WM has released its financial results for the fourth quarter of 2024 and the whole financial year. Highlights include:

Record-setting financial performance: WM posted a record full-year operating EBITDA and margin, with a 14.2 percent increase in operating cash flow and a 21.8 percent jump in free cash flow.

Sustainability investments: The company completed five renewable natural gas facilities and 12 recycling automation projects, bringing the total RNG projects completed to seven out of 20 planned facilities, and total recycling automation and new market projects completed to 25 out of 39 planned.

Stericycle acquisition: The $7.2 billion purchase of North America's largest medical waste service provider significantly expanded WM's environmental solutions portfolio.

Operational efficiency: WM reached a 30 percent margin in its legacy business for the first time and expects another year of double-digit EBITDA growth in 2025.

Future growth plans: The company projects continued expansion in solid waste, sustainability, and healthcare solutions, with plans for $100-$200 million in acquisitions and increased dividends.

Growth fueled by sustainability platforms and solid waste business expansion

"The WM team achieved another year of exceptional results by continuously improving our core business, expanding our sustainability platforms, and adding medical waste and secure information destruction solutions for our customers," says Jim Fish, WM's president and CEO.

"We delivered over 11 percent growth in adjusted operating EBITDA for the year as we advanced cost optimization efforts across our operations and executed on disciplined pricing programs in the collection and disposal business. The year also saw the advancement of our sustainability growth investments, expansion of our solid waste business through tuck-in acquisitions, and the acquisition of Stericycle, the largest provider of medical waste services in North America. The momentum across all of these areas is WM's foundation for success in 2025."

Key highlights for the fourth quarter and full-year 2024

  • The $7.2 billion acquisition of Stericycle expanded its environmental solutions into the growing healthcare market. The company will report the medical waste and secure information destruction businesses together as WM Healthcare Solutions.
  • The company generated $5.39 billion of net cash from operating activities in 2024, an increase of 14.2 percent from the prior year. This strong operating cash flow growth resulted in free cash flow increasing 21.8 percent to $2.32 billion. 
  • In addition to the acquisition of Stericycle, the company invested approximately $800 million in acquisitions in 2024, largely for solid waste businesses. These acquired businesses contributed about $150 million in revenue growth in 2024.
  • Adjusted operating EBITDA for the WM legacy business grew more than 10 percent in 2024 and achieved a 30 percent margin for the first time in the company's history. The company's collection and disposal business led the way, driven by organic revenue growth from price, disciplined cost initiatives, and a continued focus on optimizing business mix.
  • Revenue growth in 2024 was driven by a core price of 6.7 percent. An increase in completed acquisitions, including Stericycle, and higher market prices for recycled commodities also contributed to the outsized revenue growth in the year.

2025 financial outlook

WM's 2025 outlook includes a significant step change in revenue and earnings driven by continued growth in the solid waste business, the addition of WM Healthcare Solutions, and increased contributions from sustainability growth investments.

Collection and disposal

  • Strong growth in the collection and disposal business is expected to be driven by disciplined pricing and continued cost optimization. The revenue growth outlook is based on core price in 2025 of between 5.8 percent and 6.2 percent, yield of between four percent and 4.2 percent, and volumes between 0.25 percent and 0.75 percent.
  • Rollover from solid waste acquisitions is expected to contribute $150 million of revenue and $35 million of adjusted operating EBITDA.

Sustainability businesses

  • Growth in the company's sustainability businesses is expected to be driven by increased contributions from growth projects, partially offset by lower commodity prices.
  • The outlook includes a blended average single-stream recycled commodity price of approximately $85 per ton. The company estimates that a $10 per ton change in the blended average single-stream commodity price impacts the total company operating EBITDA by approximately $25 million.
  • About 50 percent of the company's renewable natural gas expected to be sold in 2025 has already been contracted at a blended average price of $28.80 per MMBtu. The company's current sensitivity to a $0.25 change in the value of Renewable Fuel Standard credits is approximately $15 million of operating EBITDA.

WM Healthcare Solutions

  • The WM Healthcare Solutions business is expected to grow about nine percent before synergies in 2025, driven by organic revenue growth and operations initiatives, including fleet and asset network optimization.
  • The integration of the business is expected to generate up to $100 million from synergies in 2025.
  • WM now expects to achieve synergies from the acquisition of $250 million, double its original estimate. The company expects to achieve this run rate in 2027.

Fish concludes, "Our outstanding performance in 2024 underscores our dedication to excellence, sustainability, and innovation. Through the hard work of our team, we've achieved significant growth and are set for continued success. In 2025, we are focused on advancing the growth of our solid waste and sustainability businesses while also optimizing and growing the WM Healthcare Solutions business, which further strengthens our capabilities as the largest environmental services provider in North America. With a solid foundation and a clear vision, we are confident WM is positioned to achieve our targets for the year."

Company info

1001 Fannin Street
Houston, TX
US, 77002

Website:
wm.com

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