SECURE Waste Infrastructure Corp Q4 2024 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Konark Gupta - Scotiabank Global Banking and Markets - Analyst : I wanted to dig into the metal recycling business here, if you can help us understand. The Edmonton shredder you purchased, obviously, vertically integrates you. But in terms of synergies and integration, what's your expectation there? Like how should the process unfold? Is this going to take a six months' time line or it's more like a one-year process? And what kind of synergies are you expecting?

Question: Konark Gupta - Scotiabank Global Banking and Markets - Analyst : That's great color. Thanks so much Allen. On the [tax] side, so if you can make up to speed on how things have evolved historically. As you said, the scrap metal prices can go up. Your business today, after this latest acquisition, if you look at the sensitivity due to price changes, how should we think about it? And are you more sort of like a mix of US dollar and Canadian dollar on the metal recycling side? Or it's all Canadian dollar?

Question: Konark Gupta - Scotiabank Global Banking and Markets - Analyst : Understood. Thanks. And last one before I turn over. You talked about more potential M&A opportunity. Is it fair to expect that these opportunities are currently only confined to the metal recycling? Or could there be other avenues you're exploring within the waste spectrum?

Question: Patrick Kenny - National Bank Financial, Inc. - Analyst : Sorry, just back on the Edmonton acquisition. I missed it, but now that you've closed it, any clarity on the EBITDA or free cash flow multiple paid for the business? And then, I guess, pro forma the realized synergies to come, how that transaction multiple might look on a run rate basis as well?

Question: Patrick Kenny - National Bank Financial, Inc. - Analyst : Got it. And then maybe just on the margin front for the base business. So still quite healthy at 35% EBITDA margins in the quarter, but they have been higher in the past. So I'm just curious if you could point us towards any specific initiatives that might be underway either on the cost structure side or perhaps the commercial side that might generate another few points of margin, say, by this time next year.

Question: Patrick Kenny - National Bank Financial, Inc. - Analyst : Okay. That's great. Thanks Allen. And then just lastly for me, back on your comments surrounding tariffs. So so far, I mean, the strong rig count remains pretty well unaffected, and there's also been some additional consolidation within the E&P space over the past few months. So I'm just curious how some of these acquisitions by customers, assuming a 10% tariff has a de minimis impact on activity itself? How this consolidate might bias your outlook for either business development opportunities or just throughput itself?

Question: Arthur Nagorny - RBC Capital Markets - Analyst : Just on the topic of tariffs, I appreciate the color you gave, but circling back, I guess, to the metals recycling business. Can you share what percent of sales go to the US? And assuming scrap steel does get impacted by tariffs, what is your ability to pivot this volume to Canadian customers?

Question: Arthur Nagorny - RBC Capital Markets - Analyst : Got it. And then on the Edmonton acquisition, can you share what percent of the scrap supply mix comes from residential and industrial markets? And how does this change the overall mix of the entire metals recycling business?

Question: Arthur Nagorny - RBC Capital Markets - Analyst : Got it. And then I appreciate you're still doing due diligence on the other metals recycling acquisition. But assuming that one does go through, what would you say is the dollar opportunity that's left, I guess, with M&A in the metals recycling space going forward? I think you've previously REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 21, 2025 / 4:00PM, SES.TO - Q4 2024 SECURE Waste Infrastructure Corp Earnings Call outlined $200 million to $300 million, and you've kind of mentioned you're focusing on tuck-ins going forward. But just wondering if you can outline the dollar opportunity there.

Question: Arthur Nagorny - RBC Capital Markets - Analyst : All right. And then last one for me. I guess just on the growth CapEx guide, can you share the expected timing of the earnings contribution from those investments, I guess, just over the course of the year?

Question: Arthur Nagorny - RBC Capital Markets - Analyst : And then actually, if I can just squeeze in one last one here, just on the adjusted EBITDA guide. Obviously, a couple of moving pieces in there. But can you share your expectations for same-store sales growth? And were there any sort of more one-off items that happened in 2024, like maybe TMX, that you're not factoring in for 2025?

Question: Arthur Nagorny - RBC Capital Markets - Analyst : Perfect. That's all for me. Thank you very much.