Stephanie Lynn Benjamin Moore

Stephanie Lynn Benjamin Moore asked about the underlying economic environment, specifically if recent industrial data like the ISM Manufacturing PMI, which inflected to expansionary, suggests a warming up on the manufacturing side of the business based on customer conversations. She also inquired about the underlying inflationary expectations for 2026.

Answer

CEO Jon Vander Ark acknowledged positive signs, particularly in the western U.S., but noted that some customers are still awaiting policy stability for capital investment. He observed that manufacturing output per facility remains flat despite Republic Services gaining market share. He expressed cautious optimism for construction, given housing needs and potential interest rate movements, but indicated it would take a few months for a clear read. Mr. Vander Ark stated that underlying inflationary expectations for 2026 are approximately 3.5%.

Stephanie Lynn Benjamin Moore requested an update on the progress and impact of GFL's self-help initiatives, including pricing, automation, employee turnover, fleet conversion, and procurement, and how these investments enhance M&A integration and synergy capture.

Answer

CFO Luke Pelosi highlighted the success of self-help levers in 2025, including pricing outperformance (6.1% vs. low to mid-5s expectation), improved labor turnover (high teens), and progress in fleet conversion to CNG (mid-20s to nearly 30%). He noted that these initiatives, combined with procurement benefits, are driving differentiated margin expansion and contribute to the strong synergy capture from M&A, reinforcing confidence in GFL's ability to exceed 2026 expectations.