GFL announces a 27.4% increase in revenues for the first quarter of 2022
GFL Environmental Inc. released its results for the first quarter of 2022.
“I am extremely proud of the hard work and commitment of our more than 18,000 employees as we have had another outstanding start to the year,” said Patrick Dovigi, Founder and CEO of GFL. “The 27.4% revenue growth in the first quarter of 2021 was driven by the quality of our pricing strategies, significant volume improvements and the outperformance of the M&A we closed in 2021. for the one-time margin benefits we realized in the first quarter of 2021, our record solid waste pricing drove underlying margin expansion We achieved these extraordinary results despite the impact of winter weather challenges, acute labor pressures at the start of Omicron’s year and rising inflationary costs, demonstrating the resilience of our business model and the effectiveness of our growth strategies.”
“We remain focused on executing our strategy to create long-term value for all stakeholders,” continued Mr. Dovigi. “We completed nine acquisitions this quarter and 12 additional acquisitions after the end of the quarter, including the acquisition of Sprint Waste Services. These acquisitions, the majority of which were small add-on acquisitions, have significantly increased our solid waste footprint within the markets we serve. Our outsized M&A activity in the first part of this year is expected to generate annualized revenue of approximately $300 million. We also continued to make good progress on RNG projects at four landfills, for which we have agreements in place, with eight other sites in various stages of negotiation and development.
“In addition to the acquisitions made since the beginning of the year, we received cash consideration of approximately $91.9 million from the sale of non-core assets and $224.0 million from the spin-off of GFL Infrastructure Group to Green Infrastructure Partners, the proceeds of which are redeployed into our organic and inorganic growth strategies. The spin-off provides us with the opportunity to leverage the greater weighting in our solid waste segment both organically and through accretive acquisitions. We also believe that our approximately 45% equity investment in Green Infrastructure Partners, which combines GFL Infrastructure Group with Coco Paving’s business to form a leading Canadian provider of vertically integrated infrastructure services with annualized revenues of $1.1 billion, will create significant value for our long-term shareholders. »
“Our success in the first quarter sets us up for a strong 2022,” concluded Mr. Dovigi. “We continue to see upside opportunities ahead of us this year, driven by our organic initiatives and our strong M&A portfolio. With our strong first quarter results, we are on track to break through the high end of the year. our guidance for the full year range and we expect to provide an updated guidance for our core business when we release our second quarter results.However, based on the success of our M&A strategy in the first quarter, we are currently increasing our guidance to reflect the additional contribution from acquisitions made so far this year.”
First quarter 2022 results
- Revenue increased 27.4% to $1,401.4 million in the first quarter of 2022 compared to the first quarter of 2021. Solid waste revenue organic growth of 10.3%, including:
- 6.4% of base pricing and 0.2% of surcharges, compared to 4.0% combined in Q1 2021.
- 2.6% positive volume (3.1% excluding non-recurring MRF volumes), compared to 0.4% in Q1 2021 (negative 3.2% excluding non-recurring MRF volumes).
- Environmental services revenue of $231.7 million, including organic growth of 19.3% driven by the strength of industrial collection and treatment revenues.
- Adjusted EBITDA increased 19.0% to $354.4 million in the first quarter of 2022 compared to the first quarter of 2021. Adjusted EBITDA margin was 25.3% in the first quarter of 2022, compared to 27, 1% in the first quarter of 2021. EBITDA margin was 29.9% in the first quarter of 2022, compared to 31.0% in the first quarter of 2021.
- Solid Waste Underlying Adjusted EBITDA Margin Increase in Q1 2021 normalization for typical seasonality profile.
- Fuel costs and the impact of mergers and acquisitions drove an adjusted EBITDA margin of 135 basis points in solid waste, compared to the first quarter of 2021.
- Overall Adjusted EBITDA and Solid Waste margins were above expectations excluding the impact of fuel costs and segment mix.
- Net income from continuing operations increased to $137.0 million in the first quarter of 2022 from a net loss of $283.7 million in the first quarter of 2021.
- Adjusted free cash flow increased to $118.6 million in the first quarter of 2022 from $116.9 million in the first quarter of 2021.
- Interest paid in cash was $96.9 million in the first quarter of 2022, compared to $42.0 million in the first quarter of 2021, an increase mainly attributable to a non-linear cadence of cash interest payments in 2021.
- An initial investment of $12.2 million was committed in the first quarter of 2022 for the development and construction of renewable natural gas facilities operated as a joint venture.
- Capital expenditures were $203.2 million in the first quarter of 2022, compared to $131.3 million in the first quarter of 2021. The increase was offset by asset disposal proceeds of 91, $9 million realized in the first quarter of 2022.
Based solely on the expected contribution from acquisitions completed so far this year, net of divestitures completed during the quarter, the guidance provided previously for 2022 is increased as follows:
- Revenues are estimated at $6,000–6,100 million (previously $5,825–5,925 million).
- Adjusted EBITDA is estimated between $1,680 million and $1,720 million (previously between $1,625 million and $1,665 million).
- Adjusted free cash flow3 is estimated between $645 and $675 million (previously between $625 and $655 million).
Any updates to non-M&A-related guidance are expected to be provided with the company’s second quarter 2022 earnings release. Certain current assumptions are implicit in the forward-looking information regarding our 2022 expectations, including, among others, no changes to the current economic environment and that none of the jurisdictions in which GFL operates are instituting additional COVID-19 contingency measures, including shelter-in-place or similar orders. The updated guidance for 2022 assumes that GFL will continue to execute on its strategy to grow our business organically, leveraging our scalable network to attract and retain customers across multiple service lines, realize operational efficiencies and extract supply and cost synergies.