Post on 25-Feb-2016
description
Solid Waste ManagementKelli Alcantar, Jackie Cremer, Cordy SmithBradley Hall, Joey Lafleur, & Yannick Ohle
History1910: 80% of cities had organized collection1910: garbage trucks appearedMid 50’s: prohibit feeing pigs garbage (trichinosis)1920: landfilling wetlands with garbage
History
History1970: clean air act closures of incineratorsRecent decades: recycling to new materials2007: 34% of city waste is recycled or composted2010: capture greenhouse gas for energy
History
OrganizationsCompaniesCompaniesWaste ManagementRepublic servicesCovanta Stericylcle inc. Waste connectionsClean Harbors
Share of Market2004-2009
Company Market Share % 2004 2005 2006 2007 2008 2004 2005 2006 2007 2008Public 27,589 29,351 30,753 31,909 33,139 58.6% 58.9% 59.0% 58.0% 59.5%
Waste Management 12,516 13,074 13,363 13,310 13,390 26.6% 26.2% 25.6% 24.2% 24.0%Allied Waste Industries 5,660 5,735 6,029 6,110 12.0% 11.5% 11.6% 11.1% 0.0%Republic Services Inc 2,710 2,864 3,071 3,176 9,440 5.8% 5.7% 5.9% 5.8% 16.9%Covanta Energy 700 979 1,269 1,433 1,664 1.5% 2.0% 2.4% 2.6% 3.0%Veolia Environmental Services 737 1,000 1,045 1,140 1,214 1.6% 2.0% 2.0% 2.1% 2.2%BFI Canada 484 577 762 906 1,117 1.0% 1.2% 1.5% 1.6% 2.0%Stericycle Inc 516 610 790 933 1,084 1.1% 1.2% 1.5% 1.7% 1.9%Waste Connections 629 722 824 959 1,050 1.3% 1.4% 1.6% 1.7% 1.9%Clean Harbors 643 711 830 947 1,031 1.4% 1.4% 1.6% 1.7% 1.9%All other public companies 2,993 3,079 2,772 2,995 3,150 6.4% 6.2% 5.3% 5.4% 5.7%
Private Companies 6,368 7,438 8,478 9,171 9,780 13.5% 14.9% 16.3% 16.7% 17.6%Municipalities 13,100 13,000 12,900 12,900 12,800 27.8% 26.1% 24.7% 23.5% 23.0%Total 47,057 49,834 52,131 54,980 100.0% 99.9% 100.0% 98.2% 100.0%
Share of Market
SOM
2004
26.6%
12.0%
5.8%
1.5%1.6%1.0%1.1%1.3%1.4%
6.4%
13.5%
27.8%
Municipalities
Private
WM
Allied
RSG
VeoliaCVA
2005
26.2%
11.5%
5.7%
2.0%2.0%1.2%1.2%1.4%1.4%
6.2%
14.9%
26.1%
Municipalities
Private
WM
Allied
RSG
VeoliaCVA
2006
25.6%
11.6%
5.9%
2.4%2.0%1.5%1.5%1.6%1.6%
5.3%
16.3%
24.7%
Municipalities
Private
WM
Allied
RSG
CVA
Veolia
2007
24.2%
11.1%
5.8%
2.6%2.1%1.6%1.7%1.7%1.7%
5.4%
16.7%
23.5%
Municipalities
Private
WM
Allied
RSG
CVAVeolia
2008
24%
17%
3%2%2%2%2%2%
6%
18%
23%
Municipalities
Private
WM
RSG AlliedVeolia
CVA
Key MetricsGDPHousing StartsU.S. Population GrowthDaily MSW (municipal solid waste generated per capita)Landfill and incinerator capacity
Key Metrics
Key Metrics
Key Metrics: GDP2010: 2.7% Economic growth has been soft but recovery will strengthen in 2011
GDP
Key Metrics
Key Metrics: GDPPrivate homes: 10% below April estimate but, 7.8% above may 2009Single Family: 17.2% below April estimate
Housing Starts
Key Metrics
Key Metrics: GDPDaily MSW (municipal solid waste generated per capita)409,029,000 tonsIncrease of 26,435,000 tons from year before32% is recycled0.979 tons/person
Daily MSW
Key Metrics
Key Metrics: GDPLandfill and incinerator capacityMost incinerators are at capacityLandfill capacity has remained constant, new landfills are much larger than the past.As of 2000, many states had less than 10 years till landfill capacity
Landfill Capacity
Key Metrics
Key Metrics: GDPNet Profit Margin of 9.08
Financials
$$$
industry WM RSG CLH WCM SRCL CVAQuick Ratio 0.06 0.98 0.55 2.7 0.82 1.11 1.65Current Ratio 0.08 1.02 0.56 2.89 0.82 1.11 1.65interest coverage 4.3 4.54 2.35 4.18 4.99 9.34 2.18ROE, 5yr average 15.09 18.48 8.53 16.9 10.42 19.21 12
Key Metrics: GDPInsert table???
Revenue
Performance
Key Metrics: GDPInsert table???
Stock
Performance
Key Metrics: GDP
Middle of the Mature stage
Product Life Cycle
Performance
Key Metrics: GDPSCP
Structure
Market Leader has 24% of the market The next biggest Company has 16%The industry is otherwise fragmented among small players Growth is coming from two sides
The general industry and From the decrease in Municipality activity
Further consolidation of the industry is expected.
This is specifically shown in the recent acquisitions
Key Metrics: GDPSCP
Conduct
Due to the Logistical Nature of the companies, competition is in terms of Geography
This means that companies expand in a regionDue to the heavy investment required to enter markets - more companies are choosing to purchase existing companies
Cross Selling among diversified customer base Growth through related and selected acquisitions Diversified Customer Base (Government and Private Entities)
High Switching Cost for many providers Long tenure of Management Team Aim for
Product differentiation and Cost effectiveness High Barriers to entry in Industry
Strategic GroupsStategic Groups
Map
Key Metrics: GDPInsert table???
Macro
Forces
Key Metrics: GDPInsert table???
Macro
Forces
Key Metrics: GDPGoing green/sustainability worrying about landfillsAcquisitionsOther services to expandRevenues
Prognosis
OrganizationsCompaniesCompaniesWaste ManagementRepublic servicesCovanta Stericylcle inc. Waste connectionsClean Harbors
OrganizationsCompaniesWaste Management
Waste Management
Kelli
OrganizationsCompaniesRepublic Services
Republic Services
Joey
OrganizationsCompaniesRepublic Services
Republic Services
2009 Revenue: $8,199.1 million2nd largest provider in solid waste industry as measured by revenue
OrganizationsCompanies???
Republic Services
2009 Revenue: $8,199.1 million2nd largest provider in solid waste industry as measured by revenue
OrganizationsCompaniesStrategy
Republic Services
Operating strategy for revenue: increase operating margins and enhance shareholder valueGrowth strategy: internal growth and acquisitions
OrganizationsCompaniesRepublic Services
Republic Services
Joey
2009
2007
2005
$0.00 $1,000.00 $2,000.00 $3,000.00 $4,000.00 $5,000.00 $6,000.00 $7,000.00 $8,000.00 $9,000.00
RevenueStock-holder's Equity
Republic: SOMMost dramatic way to increase market share is a mergerAllied Services merger in 2008
RSG
Revenues for Solid Waste Management
IndustryRepublic Services, Inc.
Republic: SCPOperations are national in scope, but physical collection is a local serviceCombine local management with standardized business practicesThis creates greater operating efficienciesThe basis of competition is around their pricing and location
RSG
OrganizationsJackie
OrganizationsJackie
OrganizationsJackie
OrganizationsJackie
OrganizationsCordy
1986 Dr. James Sharp developed waste disposal idea Enter David Lane 1988 Company brought to life in 1991 50.1 million raised through venture partners in 19921993-1996 with extra cash acquisitioned other companies to expand1996 became public
1996-2010 has expanded through acquisitions such as waste management and Allied waste industries medical waste disposal businesses
History
SWOTStrengths
SWOT AnalysisStrengths
strongest firm in medical waste incinerationSteri-safe BBP training Strong diversification Ability to integrate acquisitions with ease and speed WeaknessesProfile diversification all in medical field. Limited customer population
SWOT AnalysisOpportunities
Steri-safe worldwide Medical waste collecting promises steady sales growth Expansion into hazardous and pharma waste across country
Sweats
BradRepublic Services
Republic Services
YannickClean Harbors
Clean Harbors
Founded by now CEO Alan McKimFounded 30 years agoFour Person tank cleaning business
History
Clean Harbors
Started in the area of Field servicesMoved into Waste Management through the acquisition of Braintree and Natick in the early 80’sAdded Industrial Services around 1998In 2009 acquired Canadian based company Eveready Inc.
History
Clean Harbors
Geographic Service Line ExtensionsMarket PenetrationAcquisitions
Growth Reasons
Clean Harbors
Organizational Definition
GoalAs with any business – to create satisfactory value for the owners of the business
MissionDiversified Customer Base of related businesses in the fields ofEnvironmental, Energy and Industrial ServicesTechnical Services – hazardous and non-hazardous waste removal
Field Services – Environmental Cleanup ServicesIndustrial Services – Industry tailored solutions, including cleaning of chemicalsExplorations Services – Oil and Gas Exploration Technical Services – 49% of RevenuesField Services – 15% of RevenuesIndustrial Services – 32% RevenuesExplorations Services – 4% of Revenues
“Lodging” issue“Oil and Gas Exploration” issue
Left over from acquisition in 2009Company has recently chosen to spin off
Vision“We strive to be recognized as the premier supplier of a broad range of value-added services based upon quality, responsiveness, customer service, information technologies, breadth of service offerings and cost effectiveness.” Values
to maintain the highest professional standardsto exceed the operating requirements imposed by regulationEntrepreneurial SpiritHealth and Safety culture
ObjectivesHigh Growth – continued track record of 15-20% Revenue and EBITA growth
Organizational Definition
Clean Harbors
Sales and Share of MarketSee slides Profit HistorySee Excel Spreadsheet
Consistently underperforms both the Industry and the MarketHowever – the company also shows strong gains in terms of Revenue and EBITA growthThe growth strategy the company is pursuing might undermine much of the Profit performanceAlso – different markets of operation – skew of figures? ROA?
Focus on Cost, Pricing and Productivity Initiatives We provide multi-faceted and low cost services to a broad mix of customers Appendix Stuff Technical Services—provide a broad range of hazardous material management services includingthe packaging, collection, transportation, treatment and disposal of hazardous andnon-hazardous waste at Company-owned incineration, landfill, wastewater, and other treatmentfacilities.1• Field Services—provide a wide variety of environmental cleanup services on customer sites orother locations on a scheduled or emergency response basis including tank cleaning,decontamination, remediation, and spill cleanup.• Industrial Services—provide industrial and specialty services, such as high-pressure and chemicalcleaning, catalyst handling, decoking, material processing and industrial lodging services torefineries, chemical plants, pulp and paper mills, and other industrial facilities.• Exploration Services—provide exploration and directional boring services to the energy sectorserving oil and gas exploration and production, and power generation.
Sales?
Clean Harbors
Stock Performance vs other companiesSee Slides .
Stocks
Clean Harbors
Stock Performance vs other companiesSee Slides StrengthsLeading Provider of Environmental, Energy and Industrial Services
Large size, able to support multiple locationsLarge and Diversified Customer Base
Limited credit ExposureStable and Recurring Revenue Base
Long term agreements with customersComprehensive Service Capabilities
Full service provider with ability to cross sellIntegrated Network of Assets
Vertically integratedRegulatory Compliance
Capital Intensive and tediousEffective Cost Management
Efficiency through scaleProven and Experienced Management Team
16 Executives with long standing experience in the IndustryWeaknesses Opportunities Threats
Swot
Clean Harbors
Corporate Level StrategiesExpand Service Offerings and Geographic Coverage
Further expansion of Business will allow for growth target to be achievedFocus more heavily on Field Services Segment by Geographic ExpansionIndustrial and Exploration Services by Geographic Expansion
Business Level StrategiesCross-Sell across Segments
Focus on “full packages” in terms of Environment and IndustryCapture Large-Scale Projects
To increase utilization of existing assetsExpand Throughput Capacity of Existing Waste Facilities
By change of terms able to capture more market sharePursue Selective Acquisitions
Enhance or Expand existing BusinessFocus on Cost, Pricing and Productivity Initiatives We provide multi-faceted and low cost services to a broad mix of customers Appendix Stuff Technical Services—provide a broad range of hazardous material management services includingthe packaging, collection, transportation, treatment and disposal of hazardous andnon-hazardous waste at Company-owned incineration, landfill, wastewater, and other treatmentfacilities.1• Field Services—provide a wide variety of environmental cleanup services on customer sites orother locations on a scheduled or emergency response basis including tank cleaning,decontamination, remediation, and spill cleanup.• Industrial Services—provide industrial and specialty services, such as high-pressure and chemicalcleaning, catalyst handling, decoking, material processing and industrial lodging services torefineries, chemical plants, pulp and paper mills, and other industrial facilities.• Exploration Services—provide exploration and directional boring services to the energy sectorserving oil and gas exploration and production, and power generation.
Strategy
Clean Harbors
Appendix Stuff Technical Services—provide a broad range of hazardous material management services includingthe packaging, collection, transportation, treatment and disposal of hazardous andnon-hazardous waste at Company-owned incineration, landfill, wastewater, and other treatmentfacilities.1• Field Services—provide a wide variety of environmental cleanup services on customer sites orother locations on a scheduled or emergency response basis including tank cleaning,decontamination, remediation, and spill cleanup.• Industrial Services—provide industrial and specialty services, such as high-pressure and chemicalcleaning, catalyst handling, decoking, material processing and industrial lodging services torefineries, chemical plants, pulp and paper mills, and other industrial facilities.• Exploration Services—provide exploration and directional boring services to the energy sectorserving oil and gas exploration and production, and power generation.
Rest?
Clean Harbors
"Natonal Economic Accounts." Bureau of Economic Analysis. U.S Department of Commerce, 25/06/2010. Web. 26 Jun 2010. <http://bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm>. Cheeseman, Jennifer. "National Population Projections." Population Profile of the United States. U.S Census Bureau, n.d. Web. 26 Jun 2010. <http://www.census.gov/population/www/pop-profile/natproj.html>. "U.S Department of Housing." U.S Census Bureau News. U.S Department of Commerce, n.d. Web. 26 Jun 2010. <http://www.census.gov/const/newresconst.pdf>. "Waste Statisitics." Research Bulletin. Environmental List Every Day, n.d. Web. 26 Jun 2010. <http://environmentalistseveryday.org/docs/research-bulletin/Research-Bulletin-MSW-Recycling-10-05.pdf>.
Sources
Clean Harbors
Solid Waste ManagementKelli Alcanter, Jackie Cremer, Cordy SmithBradley Hall, Joey Lafleur, & Yannick Ohle