Bryan Burgmeier

Bryan Burgmeier inquired about the beverage can's penetration rate in Europe (specifically for beer and soft drinks) compared to North America, to understand future share gain potential, and asked about any expected incremental headwinds in Europe from aluminum conversion costs or PPI pass-throughs.

Answer

CEO Oliver Graham highlighted that Europe is significantly less penetrated than North America, with markets like Germany showing substantial growth potential due to historical factors and strong innovation. He noted that the can benefits from sustainability credentials and challenges faced by glass and plastic. Mr. Graham confirmed that the aluminum conversion cost headwind was predominantly a 2025 issue, with no material impact expected in 2026.

Bryan Burgmeier asked about the remaining potential for Safety-Kleen's charge for oil (CFO) opportunity, questioning if Clean Harbors is fully realizing its value or if it's now about compounding at current levels. He also requested an overview of the Group Three oil production opportunity, including its size and any material contribution expected in 2026.

Answer

Co-CEO Mike Battles stated that the ability to charge for dirty motor oil has been a successful differentiator, with minimal gallon loss, effectively offsetting base oil pricing declines. Co-CEO Eric Gerstenberg explained that Group Three production is currently 4-6 million gallons, increasing year-over-year, with a $1/gallon premium over Group Two, and is expected to contribute meaningfully to SKSS EBITDA improvement in coming years, alongside growing direct blended sales.

Bryan Nicholas Burgmeier asked about the 60-70 basis points of underlying margin expansion expected for the year, seeking insights into inflation expectations across major cost buckets like labor, maintenance, and repair. He also followed up on the Environmental Solutions (ES) business, inquiring about its progression from Q4 into the first half of 2026 and the expected sequential recovery.

Answer

CEO Jon Vander Ark stated an overall inflationary environment of approximately 3.5%, with price exceeding cost inflation by 50-100 basis points. He noted that cost buckets are generally close to this average. Regarding ES, Mr. Vander Ark expressed confidence in the team's actions, explaining that the business has a longer sales cycle, so current wins will likely manifest in the second half of 2026 or early 2027. He indicated a conservative posture for the first half of 2026, with more momentum expected in the second half, and mentioned the potential for tailwinds from emergency response events.

Bryan Burgmeier asked about Republic Services' underlying margin expansion target of 60-70 basis points for the year and sought details on inflation expectations across key cost buckets like labor, maintenance, and repair. He also inquired about the sequential recovery and progression of the Environmental Solutions (ES) business from Q4 2025 into the first half of 2026, considering the pipeline rebuilding efforts.

Answer

CFO Brian DelGhiaccio stated that overall inflation is expected to be around 3.5%, allowing for 50-100 basis points of price in excess of cost inflation, with individual cost buckets generally tracking close to this average. CEO Jon Vander Ark explained that the Environmental Solutions business has a longer sales cycle, meaning jobs won now may not impact results until Q3 or Q4 2026, or even Q1 2027. He noted a conservative posture for the first half of 2026, with more momentum expected in the second half, and highlighted that 2025 was a historically low year for emergency response, which could provide future tailwinds.

Bryan Burgmeier of Citigroup asked for a breakdown of the estimated financial impact from recent labor disruptions and inquired about the company's long-term strategy for mitigating higher wage costs from new labor agreements.

Answer

CEO Jon Vander Ark explained that the primary costs from labor disruptions stem from bringing in replacement workers to maintain service and issuing credits to affected customers. He emphasized Republic's focus on providing competitive wages to remain an employer of choice, stating that the current disruptions are not due to uncompetitive pay, as evidenced by low single-digit turnover in many affected markets. He stressed the importance of balancing wages to be fair to employees without becoming uncompetitive in the market.

Bryan Burgmeier of Citigroup asked for a breakdown of the estimated financial impact from recent labor disruptions and questioned how Republic Services historically mitigates the impact of higher wage agreements on its P&L.

Answer

CEO Jon Vander Ark stated the impact is primarily from the additional labor costs of bringing in other colleagues to service customers, plus some customer credits in affected markets. Regarding wage mitigation, Vander Ark emphasized the company's focus on maintaining competitive wages to balance employee retention and market competitiveness, noting that in many markets with disruptions, turnover is in the single digits, suggesting the issue is not wage-related.

Bryan Burgmeier asked for insights into the significant Q1 solid waste margin expansion, which he noted was unusually strong for the first quarter, and also questioned the company's current appetite for M&A.

Answer

CFO Brian DelGhiaccio attributed the strong margin performance to pricing exceeding cost inflation and a favorable business mix, with softer construction activity and strong special waste volumes. CEO Jon Vander Ark confirmed that the M&A pipeline remains strong and that Republic Services will continue to be active, seeking deals that meet both strategic and financial screens, including double-digit unlevered cash-on-cash returns.

Bryan Burgmeier inquired about the future growth prospects for the Environmental Solutions (ES) business following its ERP integration and the key drivers behind the 2025 adjusted EBITDA margin expansion guidance.

Answer

CEO Jon Vander Ark expressed a positive outlook for the ES business, highlighting upcoming M&A and organic growth opportunities. CFO Brian DelGhiaccio detailed the margin bridge, explaining that the underlying business margin expansion is approximately 50-60 basis points, which is masked by headwinds from lower commodity price assumptions and the non-renewal of CNG tax credits.

Bryan Burgmeier asked if GFL provided Q1 2026 guidance for revenue, margin, and free cash flow. He also inquired about whether R&G production costs and startup costs are in line with initial expectations from the previous year's Investor Day, and any broader comments on these costs.

Answer

CFO Luke Pelosi reiterated Q1 2026 guidance: revenue of CAD 1.6 billion-CAD 1.625 billion, approximately 28.8% margin (150 basis points expansion year-over-year), and negative CAD 45 million Adjusted Free Cash Flow due to working capital and CapEx timing. CEO Patrick Dovigi stated no material change in R&G actual costs, but noted a focus on larger sites, potentially adjusting the total R&G investment envelope. Luke Pelosi added that operating costs are in line, but startup has slipped, though overall EPR and R&G combined targets remain intact.

Bryan Burgmeier inquired about GFL's Q1 2026 guidance and whether R&G production costs and startup costs were aligning with initial expectations from the previous year's Investor Day.

Answer

CFO Luke Pelosi provided Q1 2026 guidance, expecting revenue of CAD 1.6 billion-CAD 1.625 billion at approximately 28.8% margin, implying 150 basis points expansion year-over-year. Founder and CEO Patrick Dovigi and CFO Luke Pelosi confirmed that R&G operating costs are in line with pro formas, though startup has slipped, shifting projects to the right. They reiterated that the combined EPR and R&G contribution remains on plan.

Bryan Burgmeier asked for clarification on the expected incremental step-up in R&G production for 2026 versus 2027/2028. Burgmeier also sought details on the trends in restricted versus open market pricing and any preliminary thoughts on pricing strategies for 2026.

Answer

Luke Pelosi, CFO of GFL, clarified that R&G production volume for 2026 is expected to be modest, with the next significant step-up anticipated in 2027 and 2028. He detailed that open market commercial/industrial pricing is in the high single digits, while residential restricted pricing is in the mid-single digits, and GFL, like the industry, is moving away from CPI-related indices to better reflect cost structures.

Bryan Burgmeier inquired about how a potential spike in headline inflation would impact GFL's pricing and asked if the M&A pipeline is focused on specific asset types where the company may be underweight.

Answer

Executive Luke Pelosi noted a potential positive scenario where CPI-linked pricing on restricted contracts could rise while internal labor cost inflation remains muted. CEO Patrick Dovigi stated the M&A priority is not based on asset type but on acquiring tuck-in businesses that drive incremental volume to existing post-collection facilities to maximize return on invested capital.

Bryan Burgmeier asked about the RNG business, specifically regarding plans to lock in RIN pricing, earnings sensitivity to RINs, and remaining CapEx. He also inquired about the 2025 M&A outlook.

Answer

Executive Luke Pelosi stated that every $0.50 change in RIN prices currently drives roughly $15 million of EBITDA. He also noted that after 2025, another $100-150 million of net CapEx remains for RNG projects through 2028. CEO Patrick Dovigi added that while they won't lock in long-term pricing now, they will forward sell all RINs for the year to reduce volatility. He also guided for a return to a normal M&A spend of $500-700 million, with an upside case closer to $1 billion.

Bryan Burgmeier asked about anticipated curtailments continuing into Q1 or Q2, or if they would taper off as footprint actions are completed by mid-year, seeking details on operating rates. He also inquired about stability or modest recovery in markets previously impacted by tariff pre-buying, such as around Liberation Day, given increased clarity.

Answer

CFO John Haudrich explained that underutilized capacity decreased from 13% in 2024 to 6% in 2025 and is expected to drop to about 3% in 2026 as European capacity actions conclude, providing swing capacity for market recovery. CEO Gordon Hardie noted some stabilization and more certainty in tariff-impacted markets compared to a year ago. He mentioned geopolitical developments (e.g., UK trade agreements with India/China) creating export opportunities for Scotch and French spirits, and highlighted customer efforts in the U.S. to increase consumer offtake and reduce inventories through marketing and promotions.

Bryan Burgmeier of Citi inquired whether O-I Glass anticipates continued production curtailments into the first or second quarter of 2026, or if they expect these to taper off as footprint actions conclude by mid-year, seeking details on operating rates. He also asked about market stability or recovery in regions impacted by "Liberation Day" as the company approaches its anniversary.

Answer

CFO John Haudrich explained that underutilized capacity, which was 13% in 2024 and 6% in 2025, is expected to drop to about 3% in 2026 as European capacity elimination actions are completed by mid-year. He noted that carrying some downtime provides valuable swing capacity for future market recovery. CEO Gordon Hardie indicated that impacted markets are showing signs of stabilization and more certainty than a year ago, with geopolitical developments potentially creating export opportunities for spirits. He highlighted the ongoing challenge in the U.S. to boost consumer offtake and reduce inventories, with customers increasing marketing efforts.

Bryan Burgmeier of Citigroup, on behalf of Anthony Pettinari, asked for the drivers behind the improved net price outlook and whether second-half pricing was now largely set. He also inquired about the potential impact of the recent U.S.-EU trade deal on customer ordering patterns.

Answer

CFO John Haudrich explained that the net price headwind moderated due to lower-than-expected inflation, particularly in energy, and relatively stable gross pricing. He confirmed most of the year-over-year pricing pressure was realized in the first half. CEO Gordon Hardie commented on the trade deal, stating that while any certainty is beneficial for customer planning, full clarity is still needed on whether tariffs will apply to key categories like wine and spirits, which is delaying final decisions.

Bryan Burgmeier inquired about footnote H, asking for clarification on why the 2027 financial targets might be put on hold and the reasons behind that decision. He then asked about the 2026 guidance, specifically the level of margin expansion expected in the collection and disposal business on an apples-to-apples basis, including net price and key cost buckets.

Answer

CEO Jim Fish clarified that the 2027 numbers were high-level estimates, not detailed guidance, due to the difficulty of predicting commodity prices 18-24 months out, but stated there's nothing concerning on the horizon. President and COO John Morris indicated a target of 50 basis points of margin improvement for the collection and disposal business on a same-store sales basis, driven by the spread between price and cost.

Bryan Burgmeier from Citi asked for clarification on WM's decision to put the 2027 financial targets on hold, referencing footnote H, and then inquired about the expected margin expansion for the Collection and Disposal business in 2026 on an apples-to-apples basis, including insights on net price and key cost buckets.

Answer

CEO Jim Fish clarified that the 2027 figures were high-level estimates, not detailed guidance, and while the business typically looks 12 months out, WM sees no concerning horizons and expects continued consistent performance. President John Morris stated that WM is targeting 50 basis points of margin improvement on a same-store sales basis for the Collection and Disposal portfolio in 2026, emphasizing the expanding spread between price and cost.

Bryan Burgmeier inquired about the challenges of flexible plastic recycling at scale, specifically asking what it would take to make it work, such as EPR legislation or consumer packaged goods company involvement, and how WM plans to leverage this given the current status of the Natura PCR plant.

Answer

Chief Sustainability Officer Tara Hemmer clarified that WM successfully produced a quality product at the Natura PCR plant but faced challenges in getting customers to pay prices independent of virgin plastic costs. She emphasized that broader minimum content legislation with enforcement and penalties, or consumer demand driving higher prices for PCR products, is necessary for a sustainable business model, as the Natura plant operates on a manufacturing margin model distinct from traditional fee-for-service recycling.

Bryan Burgmeier asked about what it would take to make flexible plastic recycling work at scale, specifically regarding the need for EPR legislation or consumer packaged goods company involvement, given Natura PCR is on the sidelines.

Answer

Tara Hemmer (Chief Sustainability Officer) clarified that WM cracked the code on making a quality product but not on getting customers to pay a price for PCR independent of virgin prices. She stated that broader minimum content legislation with enforcement and penalties, or consumer demand for PCR products driving higher prices, is needed for a sustainable business model.

Bryan Burgmeier of Citigroup inquired about the expected margin cadence for the second half of the year, asking if a peak Q3 margin was possible, and sought confirmation on the full-year volume growth outlook.

Answer

EVP & CFO Devina Rankin detailed the margin outlook, noting that while the legacy business is performing strongly, the Healthcare Solutions acquisition creates a headwind that will lessen in H2. She projected full-year Collection and Disposal margin expansion of about 110 basis points. President & COO John Morris confirmed the full-year volume growth expectation remains between 0.25% and 0.75%.

Bryan Burgmeier inquired about the outlook for the second quarter, specifically the typical seasonality for the new WM Healthcare Solutions business and the expected margin improvement for the core solid waste segment. He also asked for clarification on the Q1 solid waste yield performance and the widening gap between core price and yield.

Answer

EVP and CFO Devina Rankin stated that no unusual seasonality is expected, apart from the impact of California wildfires, and that solid waste margin expansion will continue to be strong. She noted that healthcare synergy capture will accelerate, with Q3 being the strongest quarter. EVP and COO John Morris added that while Q1 yield was affected by anomalies like wildfire cleanup volumes and some industrial softness, the underlying core price performance remains robust and is driving margin expansion.

Bryan Burgmeier of Citi asked if the earnings sensitivity to recycled commodity prices will scale with future earnings growth and whether the solid waste internalization rate, now over 70%, is considered fully optimized.

Answer

EVP and CFO Devina Rankin explained that earnings sensitivity will not scale directly with volume growth, as benefits from automation and a fee-for-service model create a floor and are independent of commodity prices. EVP and COO John Morris stated that while the rate is high, they are constantly focused on optimizing the network and leveraging logistical capabilities, implying continuous improvement rather than a final state of optimization.

Bryan Burgmeier from Citigroup inquired about the timing and regional concentration of volume headwinds, particularly in construction, and asked for the company's updated recycled commodity price assumptions.

Answer

CFO Mary Whitney noted that C&D tons have been down for seven consecutive quarters, with weakness moderating in Q2. The slowdown is most pronounced in the Southern and Eastern regions, while Canada and the West Coast are performing better. CEO Ronald Mittelstaedt stated that the recycled commodity basket assumption for the second half is now $85-$90, down from the initial $105-$110 outlook.

Bryan Burgmeier of Citi asked about visibility into the special waste pipeline and requested an update on the Chiquita Canyon landfill, including costs and remediation progress.

Answer

CFO Mary Anne Whitney noted that special waste visibility is stretched beyond the typical 90 days due to project delays. Executive Ronald Mittelstaedt confirmed the $100-$150 million cost estimate for Chiquita Canyon this year is still appropriate. He reported that the landfill's reaction is contained and stable, with odor complaints down over 90% and reaction volumes down about 30% from their peak.

Bryan Burgmeier asked about the RNG EBITDA contribution in 2024 and 2025, the strategy for locking in RIN prices, and the drivers behind the outsized M&A activity in 2024.

Answer

CFO Mary Anne Whitney stated that RNG contribution was nominal in 2024 and will remain so in 2025, with the significant pickup expected in 2026. She confirmed they will opportunistically lock in RIN prices as they did in 2024. Executive Ronald Mittelstaedt explained that while estate planning drives most deals, factors like rising interest rates, potential tax changes, and post-pandemic fatigue likely contributed to the strong M&A market, which he expects to remain robust.

Bryan Burgmeier from Citigroup Inc. asked for the key drivers behind the company's low single-digit volume growth guidance for 2025, particularly within the Consumer segment, and questioned expectations for the North American metal pack season.

Answer

CEO Howard Coker attributed the guided growth to strength in the North American metals business and the global paper can business. He noted that new capital projects in Thailand, Mexico, and the U.S. are beginning to contribute. Regarding the pack season, Coker stated the company is not forecasting a major recovery, only a 'slightly better' year, meaning a strong season would represent potential upside.

Bryan Burgmeier, on for Anthony Pettinari, asked about the potential impact of U.S. tariffs on products shipped from Mexico and China.

Answer

President and CEO Deon Stander stated that direct exposure to tariffs is limited due to the company's strategy of producing and selling within the same region. He noted that for its new Intelligent Labels facility in Mexico, the company has network flexibility to shift production if needed as part of its scenario planning. For China, much is sold domestically, and for exports, they can support brand partners in migrating production.

Bryan Burgmeier, on behalf of Anthony Pettinari, asked for details on the $10 million inventory reduction impact in the Dispensing and Specialty Closures segment and questioned the drivers behind the high single-digit volume growth forecast for dispensing products in 2025.

Answer

CEO Adam Greenlee clarified that the inventory reduction was an internal, strategic decision related to a restructuring in the flat cap closures business, not a customer-driven action. He attributed the strong dispensing growth forecast to continued new business wins in 2024 and additional expected wins in 2025, driven by the company's competitive advantages in innovation and design.