Mr. Patrick Dovig reports

GFL ENVIRONMENTAL REPORTS THIRD QUARTER 2022 RESULTS AND RAISES FULL YEAR 2022 REVENUE GUIDANCE FOR THIRD TIME THIS YEAR

GFL Environmental Inc. has released its results for the third quarter of 2022.

• Solid waste price of 8.6 per cent and surcharges of 2.1 per cent, highest in company history.
• Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $473.3-million, increase of 18.4 per cent; net loss from continuing operations of $183.7-million; adjusted net income from continuing operations of $74.0-million;
• Adjusted cash flows from operating activities of $306.4-million; cash flows from operating activities of $286.1-million; adjusted free cash flow of $97.0-million;
• Adjusted earnings per share from continuing operations of 20 cents; loss per share from continuing operations of (55 cents);
• Year to date completed acquisitions generating approximately $430.0-million in annualized revenue.

"Once again in the third quarter, our employees delivered results that significantly exceeded our expectations," said Patrick Dovigi, founder and chief executive officer of GFL. "Revenue increased 32.6 per cent over the prior-year period driven by price, continued strong volume gains in our environmental services segment and contributions from M&A. We made material progress in our fuel cost recovery initiatives and continue to see tremendous opportunity in this area. Excluding the impact of fuel and commodity prices, our record solid waste pricing drove margin expansion on our base business."

Mr. Dovigi added: "Our results this year show the continuing maturity of our business model, allowing us to perform exceptionally well in the face of unprecedented cost headwinds. The challenging environment also demonstrated the business's capability to manage leverage, allowing us to maintain, on a constant currency basis, net leverage within our targets despite a 300- to 400-basis-point rise in rates and the deployment of over $1.1-billion into M&A. We remain committed to continuing to deliver meaningful reductions to our leverage ratio over the near term."

Mr. Dovigi continued: "With the strength of our third quarter results and our current outlook on foreign exchange rates and commodity prices, we are increasing our full year guidance for revenue to between $6,600-million and $6,650-million and are affirming our previously provided ranges for adjusted EBITDA and adjusted free cash flow. Looking forward to 2023, we believe we are already well positioned to achieve high-single-digit organic revenue growth. When combined with 3.0-per-cent M&A rollover revenue already in hand and the impact from current commodity prices and foreign exchange rates, we expect to indicate at least 12.0-per-cent revenue growth when we provide our 2023 guidance next quarter. In terms of profitability, we believe the widening spread between price and cost inflation will allow for a year of outsized adjusted EBITDA margin expansion, likely in excess of 100 basis points, which should translate into adjusted EBITDA growth in the high teens. Additionally, we continue to see incremental upside opportunities ahead of us resulting from our robust M&A pipeline and organic growth initiatives."

Third quarter results

• Revenue increased by 32.6 per cent to $1,831.2-million in the third quarter of 2022, compared with the third quarter of 2021.
• Environmental services revenue of $364.4-million, including organic growth of 37.0 per cent driven by the strength of industrial collection and processing activity at the company's facilities and an increased level of emergency response activity, as well as the impact of higher used motor oil selling prices.
• Adjusted EBITDA increased by 18.4 per cent to $473.3-million in the third quarter of 2022, compared with the third quarter of 2021. Adjusted EBITDA margin was 25.8 per cent in the third quarter of 2022, compared with 28.0 per cent in the third quarter of 2021 (28.9 per cent as adjusted for the divestiture of GFL Infrastructure). Solid waste adjusted EBITDA margin was 28.9 per cent in the third quarter of 2022, compared with 31.7 per cent in the third quarter of 2021.
• Net loss from continuing operations decreased to $183.7-million in the third quarter of 2022, compared with $316.1-million in the third quarter of 2021.
• Adjusted free cash flow was $97.0-million in the third quarter of 2022, compared with $263.1-million in the third quarter of 2021.
  • Capital expenditures were $209.4-million in the third quarter of 2022, inclusive of $11.2-million for the development and construction of RNG (renewable natural gas) projects and aggregate proceeds from asset divestitures and disposals of $12.4-million, compared with $26.1-million in the third quarter of 2021, inclusive of aggregate proceeds from asset divestitures and disposals of $101.2-million.

Year-to-date results

• Revenue increased by 33.6 per cent to $4,940.1-million for the nine months ended Sept. 30, 2022, compared with the nine months ended Sept. 30, 2021.
• Environmental services revenue of $920.4-million, including organic growth of 28.2 per cent driven by the strength of industrial collection and processing activity at the company's facilities and an increased level of emergency response activity, as well as the impact of higher used motor oil selling prices.
• Adjusted EBITDA increased by 23.8 per cent to $1,281.0-million for the nine months ended Sept. 30, 2022, compared with the nine months ended Sept. 30, 2021. Adjusted EBITDA margin was 25.9 per cent for the nine months ended Sept. 30, 2022, compared with 27.0 per cent for the nine months ended Sept. 30, 2021 (28.0 per cent as adjusted for the divestiture of GFL Infrastructure). Solid waste adjusted EBITDA margin was 29.3 per cent for the nine months ended Sept. 30, 2022, compared with 31.2 per cent for the nine months ended Sept. 30, 2021.
• Net income from continuing operations increased to $35.9-million for the nine months ended Sept. 30, 2022, compared with a net loss of $545.3-million for the nine months ended Sept. 30, 2021.
• Adjusted free cash flow was $317.8-million for the nine months ended Sept. 30, 2022, compared with $537.1-million for the nine months ended Sept. 30, 2021.

Q3 2022 earnings call

GFL will host a conference call related to the company's third quarter earnings on Nov. 3, 2022, at 10 a.m. Eastern Time. A live audio webcast of the conference call can be accessed by logging onto the company's investors page. Listeners may access the call toll-free by dialling 1-833-950-0062 in Canada or 1-844-200-6205 in the United States (access code: 688022) approximately 15 minutes prior to the scheduled start time.

The company encourages participants who will be dialling in to preregister for the conference call. Callers who preregister will be given a conference access code and pin to gain immediate access to the call and bypass the live operator on the day of the call. Participants may preregister at any time, including up to and after the call start time. For those unable to listen live, an audio replay of the call will be available until Nov. 17, 2022, by dialling 1-226-828-7578 in Canada or 1-866-813-9403 in the United States (access code: 913091).

About GFL Environmental Inc.

GFL, headquartered in Vaughan, Ont., is the fourth-largest diversified environmental services company in North America, providing a comprehensive line of solid waste management, liquid waste management and soil remediation services through its platform of facilities throughout Canada and in more than half of the U.S. states. Across its organization, GFL has a work force of more than 19,000 employees.

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