Waste Management Inc.

Overview Key strengths Key risks Strong market position as the largest solid waste services company in North America. Relatively high absolute adjusted debt levels, including sizable asset retirement and environmental obligations. Fairly predictable demand due to the essential nature of its services, which leads to a relatively stable earnings stream across all macroeconomic environments. Exposure to cyclical demand in some segments, such as roll-off hauls and commodities recycling. Good geographic and customer diversity across the U.S. and Canada. Solid profitability supported by a variable-cost structure, the contractual nature of its services, and its ownership of a considerable number of landfills. Waste Management Inc.?s revenue growth in 2022 was roughly 10%, due to stronger pricing and modestly higher company volumes. We

...Operating performance remained solid in 2021 and 2022, and, despite some macroeconomic uncertainty, we expect the company's operating results to be resilient in 2023. Waste Management Inc.'s revenue growth in 2022 was roughly 10%, due to stronger pricing and modestly higher company volumes. We expect moderate EBITDA growth in 2023, building on the momentum from 2022, based on our expectation for continued pricing actions, modest volume growth, and operating efficiencies While the company does have some exposure to the general macroeconomic environment, Waste Management has proved to be recession- resilient through a variety of operating conditions. This was most recently exhibited in the low point of the recession in 2020; though the company experienced a moderate contraction in revenues, it was still able to maintain S&P Global Ratings-adjusted EBITDA margins of about 30%. We expect financial policies will remain supportive of maintaining credit metrics that we view as appropriate for...

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