Gfl Environmental Inc · TSX:GFL
Gfl Environmental — Investor Day (February 2025)
65 slides from Gfl Environmental's investor day presentation, Feb 27, 2025
Slide 1: 2025 Investor Day
2025 Investor Day February 27, 2025
Slide 2: Disclaimer
Disclaimer Unless otherwise indicated, all references in this presentation to ‘‘GFL,’’ ‘‘we,’’ ‘‘our,’’ ‘‘us,’’ the “Company’’ or similar terms refer to GFL Environmental Inc. and its consolidated subsidiaries. Forward-Looking Information This presentation includes certain “forward-looking statement
Slide 3: Today's Agenda
Today’s Agenda Topics Presenters Patrick Dovigi 9:00 am Opening Remarks Founder and Chief Executive Officer Billy Soffera 9:15 am Operations Update Chief Operating Officer Ben Habets Matthew McAra 9:30 am Operational Initiatives Senior Vice President, Solid Waste Operations Senior Vice President, So
Slide 4: Opening Remarks
Opening Remarks Patrick Dovigi Founder and Chief Executive Officer
Slide 5: Best-in-Class Team – Today's Presenters
Best-in-Class Team – Today’s Presenters Billy Soffera Ben Habets Matthew McAra Stephen Miranda Nicole Willett Chief Operating Officer Senior Vice President, Senior Vice President, Vice President, Vice President, Solid Waste Operations Solid Waste Operations Recycling EPR Jennifer Ahluwalia Craig Ore
Slide 6: Strategically Positioned Asset Base
Strategically Positioned Asset Base North America Solid Waste Footprint(1) Solid Waste Revenue Mix(2) MRF Other 3% 7% Transfer Residential Station 24% 8% Landfill 12% ~$6.1B Commercial Industrial 27% 19% Collection Revenue Mix(2) Headquarters Industrial Solid Waste 27% Residential 34% ~$4.3B Commerc
Slide 7: Industry Leading Growth Across Key Financial Metrics
Industry Leading Growth Across Key Financial Metrics Revenue Adjusted EBITDA(1) (C$ millions) (C$ millions) 17.0% 20.2% More Than Doubled Adjusted EBITDA(1) & $7,862 $2,251 CAGR CAGR Adjusted Free Cash Flow(1) Since GFL IPO(2) $4,196 $1,077 Completed Non-Core Asset Sales for Mid-Teens Multiples(3) 2
Slide 8: Created Significant Shareholder Value
Created Significant Shareholder Value Total Shareholder Return Since GFL IPO ~22.5% Annualized Total Shareholder Return(1) 180% 160% 140% 120% 100% 80% 60% 40% 20% 0% GFL Waste Peer Group (2) S&P 500 TSX 60 GFL’s Total Shareholder Return has Outperformed the Waste Peer Group(2) by ~61% Source: FactS
Slide 9: On Track to Generate $3.0B+ of Adjusted EBITDA in the Near Term
On Track to Generate $3.0B+ of Adjusted EBITDA(1)(2) in the Near Term Solid Waste EPR & RNG Self-Help Levers Contribution $150(3) Potential $175(3) Incremental Tuck-Ins $420(3) 4 Organic Growth 3 $375 – $425 2 $3,045 – $3,120 1 $1,925 – $1,950 $1,760 2024Fiscal Pro2024 Forma Potential 2025 Run-Rate
Slide 10: Key Strategic Pillars
Key Strategic Pillars Drive Industry Improve Free Cash Returns Focused Leading Growth Flow Conversion Capital Deployment ▪ Strategically optimize portfolio pricing ▪ Expand margins through strategic initatives ▪ Maximize shareholder value with opportunistic leveraging market selection and digital to
Slide 11: Operations Update
Operations Update Billy Soffera Chief Operating Officer
Slide 12: Natural Evolution From Solid Foundation
Natural Evolution From Solid Foundation The Next Phase of Platform Optimization ▪ Adjacent Markets Leveraging Post- Collection Network ▪ Positioning for Emerging Industry Trends Strategic ▪ Enhancing Digital Platform for Incremental Development Value Creation ▪ Accelerating Organic Growth Perfecting
Slide 13: Solid Foundation for Growth and Optimization
Solid Foundation for Growth and Optimization Solid Waste – Overview & Market Areas(1) Solid Waste Revenue by Geography(2) Canada 32% ~$6.1B U.S. 68% 90+ Landfills 175+ Transfer Stations Hauling Landfill 20+ Transfer Station Organics Facilities MRFs & Recycling Facilities Organics Facilities 30+ MRFs
Slide 14: Focused on Highest Quality Growth Markets
Focused on Highest Quality Growth Markets Market Selection Matters Solid Waste Revenue by Market Type Secondary Primary Markets Markets 27% Margin Profile Primary Markets Secondary Markets 73% Secondary Markets Non-GFL Market leader Primary Markets Vertically integrated or disposal neutral Primary M
Slide 15: Operational Priorities Underpin Key Strategic Pillars
Operational Priorities Underpin Key Strategic Pillars Drive Industry Improve Free Cash Returns Focused Leading Growth Flow Conversion Capital Deployment Robust Leadership Experience with Perfecting Platform & Accelerating Strategic Development Price Employee Customer Operations Organic & Inorganic D
Slide 16: Operational Initiatives
Operational Initiatives Ben Habets Senior Vice President, Solid Waste Operations Matthew McAra Senior Vice President, Solid Waste Operations
Slide 17: Price Discovery – Price Led Organic Growth Drives Margin Expansion
Price Discovery – Price Led Organic Growth Drives Margin Expansion Pricing Mechanism Mix Pricing Trends 2022 / 2023 Pricing Other Restricted Benefited from Contract 28% Optimization Initiatives Open Market 52% CPI 20% Market Selection (~73% Secondary Market Exposure) Drives Pricing Enhancement of Pr
Slide 18: Price Discovery – Ancillary Surcharge Pricing Initiative
Price Discovery – Ancillary Surcharge Pricing Initiative Well Defined Execution Playbook for Incremental Surcharges Based on Prior Fuel Surcharge Program Rolled Out ~3,000 Tablets Connected to Cameras & Interfaced with Billing System, Improves Efficiencies in Capturing Overage Charges Successful Imp
Slide 19: Employee Experience – Team Green
Employee Experience – Team Green Safe for Life Culture of Engagement ▪ Completed first Employee Engagement Survey in 2024 highlighting strong Safe for Life program is implemented through a management system overall engagement scores framework that includes: ▪ Proactive assessment of risks ▪ Training
Slide 20: Employee Turnover Case Study
Employee Turnover Case Study Lower Voluntary Turnover Drives Improvement in Safety, Service & Adjusted EBTIDA Margins(1) Adjusted EBITDA Margin(1) Expanded ~180 bps TRIR Improved ~40% Incoming Service Calls Improved ~40% Voluntary Turnover Improved ~55%+ Q2-23 Q3-23 Q4-23 Q1-24 Q2-24 Q3-24 Q4-24 Adj
Slide 21: Employee Experience – Driving Retention
Employee Experience – Driving Retention Voluntary Turnover(1) Impact of Lower Employee Turnover 30% Impact 29% 25% 22% Lower Labor Costs Mid-Teens ▪ Less reliance on overtime and lower subcontractor costs ▪ Lower recruitment, training and onboarding costs ▪ Better driver productivity (i.e., familiar
Slide 22: Customer Experience – Differentiated Approach to Service
Customer Experience – Differentiated Approach to Service Exceptional Customer Experience Drives High Quality Revenue Case Study: Service Excellence Drives Customer & Price Retention ▪ Dedicated to providing on-time and seamless service quality to drive customer satisfaction and retention Missed Pick
Slide 23: Operations Optimization – CNG Fleet Conversion Driving Margin Expansion
Operations Optimization – CNG Fleet Conversion Driving Margin Expansion CNG Fleet Mix CNG Conversion Strategy ▪ CNG fleet expansion supported by annual fleet replacements consisting of 50%+ CNG vehicles 50% to 70% ▪ Reduce average fuel cost per vehicle with incremental opportunity to close the loop
Slide 24: Operations Optimization – Procurement & Fleet Optimization
Operations Optimization – Procurement & Fleet Optimization Taking Advantage of Greater Scale ▪ Leverage greater scale to drive significant incremental savings through National / Managed Procurement Programs ▪ Procurement optimization covers a multitude of opportunities (e.g., tires, parts, lubricant
Slide 25: Recycling & EPR
Recycling & EPR Stephen Miranda Vice President, Recycling Nicole Willett Vice President, EPR
Slide 26: GFL Recycling Update
GFL Recycling Update EPR Increases Processing Fee Mix & Reduces Commodity Price Volatility Recycling Revenue Mix(1) 37% 53% 63% 47% 2022 2025E Longer-Term Commodity Sales Processing Fee Commodity Sales Mix(1) Non-Fiber 45% MRF & Recycling Facilities (2) Fiber 55% (1) Reflects Fiscal 2025 projections
Slide 27: Recycling Strategic Priorities to Drive Growth
Recycling Strategic Priorities to Drive Growth Drive Industry Improve Free Cash Returns Focused Leading Growth Flow Conversion Capital Deployment Pursue Internalization Opportunities Strategically Enhance Revenue Position for Emerging Trends ▪ Internalize volume, leveraging collection contracts ▪ MR
Slide 28: MRF Case Study – Mayville, Wisconsin
MRF Case Study – Mayville, Wisconsin Mayville, WI MRF – Incremental Adjusted EBITDA(1) Savings Through Internalization ▪ MRF allowed for costs savings through internalization of tonnes previously sent to a third-party processor ▪ Constructed (2023) and commissioned (2024) leading-edge single-stream
Slide 29: Key Takeaways
Key Takeaways Continuous Advancement of Technology to Provide Distinguished Recovery Rates MRFs as "Magnets" for Upstream Revenue Creation & Internalization Maintain First Mover EPR Advantage in Canada & Certain Targeted U.S. Markets 29
Slide 30: Extended Producer Responsibility – Overview
Extended Producer Responsibility – Overview What is EPR? Where is EPR? – Packaging EPR in North America ▪ Extended Producer Responsibility (“EPR”) is a legislated regime that shifts the operational and financial burden of recycling away from governments to the producers of the goods (e.g., consumer
Slide 31: GFL's Strategic Pathway to Achieving EPR Success in Canada
GFL’s Strategic Pathway to Achieving EPR Success in Canada Explore Unique Ways to Position GFL ▪ Establish creative solutions leveraging existing assets and infrastructure Partner with PROs ▪ Municipalities no longer decision maker Seize First Mover Advantage ▪ Leverage experience and expertise Pric
Slide 32: Case Study: EPR in the City of Toronto
Case Study: EPR in the City of Toronto GFL’s City of Toronto Footprint GFL’s Success – Key Differentiating Factors ▪ GFL processed 100% of City of Toronto residential recyclable materials since 2013 ▪ Operating efficiencies from strategically located post-collection facilities D4 ▪ In-depth knowledg
Slide 33: Recycling Pipeline in North America
Recycling Pipeline in North America Executed on Well Planned Vision for Recycling Opportunities GFL starts Quebec EPR Future Opportunities for processing all finalized; Alberta Internalization & recyclables for Quebec EPR commences Incremental Tonnes: first full EPR transition EPR; U.S. ▪ Quebec (CA
Slide 34: Sustainability & RNG
Sustainability & RNG Jennifer Ahluwalia Senior Vice President, Renewables, Environmental Responsibility & Sustainability
Slide 35: Sustainability Action Plan Incorporates Our Vision: To Be Green for Life
Sustainability Action Plan Incorporates Our Vision: To Be Green for Life Drive Industry Improve Free Cash Returns Focused Leading Growth Flow Conversion Capital Deployment Our Sustainability Our Sustainability Goals, Our Values Our Business Governance Targets & Commitments ▪ Safe for Life ▪ Drive op
Slide 36: Our Sustainability Goals – Circular Economy & Climate Leadership Goals
Our Sustainability Goals – Circular Economy & Climate Leadership Goals Use 100% Increase Recyclables 85% of Our CNG Renewable Electricity Recovered at Fleet to be Powered at GFL Facilities GFL MRFs by by RNG by 2030(1) by 2030 40% by 2030 50% of Annual Solid Increase Beneficial Decrease Scope Waste
Slide 37: Doubled GHG Reduction Goal
Doubled GHG Reduction Goal Emissions Target Three Pillar Alignment Progress Towards Our Scope 1 & 2 Emissions Target (‘000s tonne CO2e) International Energy Science Based Global Methane Agency’s (“IEA”) 5,000 Target Initiative Assessment Pathway (“SBTi”) Majority of GHG to Net Zero reductions in 202
Slide 38: GFL Renewables – RNG Project Update
GFL Renewables – RNG Project Update RNG Project Detail RNG Projects – Portfolio Update ▪ 4 RNG facilities operational by the end of Fiscal 2024 Under Development / Operating / • Expected to generate ~$50M(1) of Adjusted Negotiation Commissioned EBITDA(2) in Fiscal 2025 ▪ 15 RNG Projects ▪ 4 RNG Proj
Slide 39: Break
Break
Slide 40: M&A Strategy
M&A Strategy Craig Orenstein Vice President, Corporate Development
Slide 41: M&A is a Key Differentiator
M&A is a Key Differentiator Proven Track Record of Execution & Integration Disciplined ▪ 270+ acquisitions completed 45 40 39 Valuation & ▪ ~$9.9B invested in strategic, accretive acquisitions since IPO 33 Capital Allocation ▪ Historically completed acquisitions at an average Adjusted Prioritized Po
Slide 42: Rigorous & Repeatable Due Diligence Process
Rigorous & Repeatable Due Diligence Process Expertise in Field Aligned Approach to Acquisitons Small Average Deal Size De-Risks M&A Execution ▪ Disciplined approach to executing strategic, accretive acquisitions ▪ Corporate Development team intimately involved with Operations’ Enterprise Value > $80
Slide 43: Tuck-In Acquisitions Compound ROIC Improvement
Tuck-In Acquisitons Compound ROIC(1) Improvement Year 1 Synergy Capture Reduces Multiple by ~2x Illustrative ROIC(1)(2) on Tuck-in Acquisitions 15.5% ~7.0x – 8.0x Pre-Synergy Multiple 12.3% 7.5% Cost Synergies ▪ Route optimization / maximize route density At Close Year 1 - Synergized Year 5 ▪ SG&A r
Slide 44: Enterprise Transformation
Enterprise Transformation Julie Boudreau Chief Transformation Officer
Slide 45: Enterprise Transformation Team: Expertise & Focus
Enterprise Transformation Team: Expertise & Focus Drive Industry Improve Free Cash Returns Focused Leading Growth Flow Conversion Capital Deployment Integrations and M&A Business Process Transformation Enterprise Transformation Enterprise Integrations Integrations Integrations Performance Business E
Slide 46: Transformation – Unlocking Untapped Potential
Transformation – Unlocking Untapped Potential Transformation is Part of Our Fabric 270+ Strategic, Accretive Acquisitions Executing Large Separations Cloud AI Scalable Datalake Conversion Technologies Systems Harnessing Our Digital Foundation to Drive Organic Growth & Adjusted EBITDA Margin(1) Expan
Slide 47: The Opportunity & Our Strategic Approach
The Opportunity & Our Strategic Approach Opportunities Operations HR IT Finance Initiatives Initiatives Initiatives Initiatives Multi-Year Roadmap Focusing on the Next 24 Months: People Real Time Visibility Frameworks 0 on Customer & Employee Ops Trends Experience: Continue Journey Systems Further i
Slide 48: Financial Outlook
Financial Outlook Luke Pelosi Chief Financial Officer
Slide 49: Key Strategic Pillars
Key Strategic Pillars Drive Industry Improve Free Cash Returns Focused Leading Growth Flow Conversion Capital Deployment ▪ Strategically optimize portfolio pricing ▪ Expand margins through strategic initatives ▪ Maximize shareholder value with opportunistic leveraging market selection and digital to
Slide 50: Fiscal 2025 Full Year Guidance
Fiscal 2025 Full Year Guidance Assumes No Incremental M&A in Fiscal 2025 Fiscal 2024 Fiscal 2025 (C$ millions, unless otherwise noted) Pro Forma(1) Guidance YoY Growth Revenue ▪ Solid Waste organic growth between 4.8% – 5.3% ▪ Net M&A contribution of (0.8%) ~$6,139 ~$6,500 – $6,550 ~6% – 7% ▪ F/X im
Slide 51: GFL Growth Opportunity
GFL Growth Opportunity GFL Industry Average Incremental Organic M&A(3) Organic + M&A(2) Organic(1) Opportunities(2) ▪ Earlier stages of price discovery Revenue Mid-Single Digits ▪ Incremental surcharge Mid-Single Digits+ Mid-Single Digits Low-Teens CAGR opportunities ▪ Contribution from EPR & RNG pr
Slide 52: Revenue Growth Bridge
Revenue Growth Bridge ~13% CAGR EPR & RNG Solid Waste Potential Contribution Self-Help Levers Incremental Tuck-Ins $305(1) $60(1) $1,375(1) 4 3 Organic Growth $1,000 – $1,200 2 $9,240 – $9,490 1 $6,500 – $6,550 $6,029 2024Pro 2024 PF Revenue Forma 2025G 2025 Revenue Revenue Organic Revenue Growth Po
Slide 53: Adjusted EBITDA and Adjusted EBITDA Margin Bridge
Adjusted EBITDA(1)(2) and Adjusted EBITDA Margin(1)(2) Bridge ~17% CAGR Solid Waste Low-to-Mid 30s EPR & RNG Self-Help Levers Adjusted EBITDA Contribution $150(3) Margin(1)(2) Potential Incremental Tuck-Ins $175(3) $420(3) 4 Organic Growth 3 $375 – $425 ~29.7% Adjusted EBITDA Margin(1)(2) 2 $3,045 –
Slide 54: Adjusted Free Cash Flow Conversion Bridge
Adjusted Free Cash Flow(1) Conversion Bridge Adjusted Free Cash Flow(1)(2) Conversion – GFL vs Industry Average GFL – 2025 Guidance GFL – Fiscal 2028E(2) Industry Average(3) Implementation of Self-Help Levers Adjusted EBITDA(1) 29.7% & RNG + EPR Contribution Low-to-Mid 30s ~30.0% Normal Course Maint
Slide 55: Deleveraging Driven by Adjusted EBITDA Growth & Free Cash Flow Generation
Deleveraging Driven by Adjusted EBITDA(1) Growth & Free Cash Flow Generation Committed to maintaining BB- (CreditWatch) / B1 Potential for credit rating Unique opportunity to (Under Review) upgrades in the near-term Net Leverage(1) further reduce Cost of Debt (Corporate Credit Ratings with further c
Slide 56: Capital Allocation Priorities
Capital Allocation Priorities Drive Industry Improve Free Cash Flow Returns Focused Leading Growth Conversion Capital Deployment Organic Growth Investment M&A Return of Capital to Shareholders ▪ Normal course net capex spend of ~11.0% ▪ Focus on core Solid Waste acquisitions in the ▪ Delevered balan
Slide 57: Capital Allocation – Near Term Share Repurchases
Capital Allocation – Near Term Share Repurchases Expect Majority of the Shares to be Repurchased from the Financial Sponsors ~$2.25B ~36M(1) Shares Repurchased Intended share repurchase (~9% of Basic Shares Outstanding) Balance of Shares will be Repurchased in the Open Market Under NCIB Program (1)
Slide 58: Prime Position For Index Inclusion
Prime Position For Index Inclusion GFL Currently Meets All TSX 60 Criteria Top Contenders for TSX 60 Inclusion(1)(2) ▪ Potential near-term changes to TSX 60 constituents Sector Under / Over-Weight could create an opportunity for index inclusion for GFL Rank Company Float Weight Market Cap Sector vs
Slide 59: Closing Remarks
Closing Remarks Patrick Dovigi Founder and Chief Executive Officer
Slide 60: Key Takeaways
Key Takeaways Outsized Margin Expansion in Base Business Drives Industry Leading Adjusted EBITDA(1) Growth Adjusted Free Cash Flow(1)(2) Conversion Accelerates Toward Mid 40s Balance Sheet Leverage to Run in the Low 3s with Pathway to Investment Grade Reignition of Solid Waste M&A Engine Driving Hig
Slide 61: Appendix
Appendix
Slide 62: Adjusted EBITDA Reconciliation
Adjusted EBITDA Reconciliation (C$ millions, unless otherwise noted) 1. Loss (gain) on foreign exchange: Consists of (i) non-cash gains and losses on foreign exchange and interest Year ended rate swaps entered into in connection with our debt instruments and (ii) gains and losses attributable to for
Slide 63: Adjusted Free Cash Flow Reconciliation
Adjusted Free Cash Flow Reconciliation (C$ millions, unless otherwise noted) 1. Costs associated with IPO related debt repayments: Consists of costs, including related fees, premiums, Year ended accrued interest and the termination of swap arrangements, associated with the extinguishment of certain
Slide 64: Definitions
Definitions “EBITDA” represents, for the applicable period, net income (loss) plus (a) interest and other finance costs, plus (b) depreciation and amortization of property and equipment, landfill assets and intangible assets, plus (less) (c) the provision (recovery) for income taxes, in each case to
Slide 65: investors.gflenv.com ir@gflenv.com
investors.gflenv.com ir@gflenv.com