Republic Services, Inc. (RSG) Earnings Call Transcript & Summary

Well, it's a pleasure to having Republic Services. So I get to introduce, it's sort of like saying the new married couple, and it's Mr. and Mrs. for the first time. So this is Jon Vander Ark, who's the new CEO of Republic Services. Thank you very much.

Thanks for having us. Thank you.

Brian Bales, who is the Head of Development -- Corporate Development; Brian DelGhiaccio, who is the Chief Financial Officer; and Stacey Mathews, who is in finance and does IR. And this person has to put up with me most of the time. So thank you all for being here today.

So I think I wrote down 3 days, but I guess it's actually 2 days in the new job. So how is it going?

It feels remarkably similar to the days before. So I give a lot of credit to Don and our Board. I mean this was a very well-orchestrated, very long-term transition. And really in the last 18 months during the pandemic, Don stepped back, knowing this transition was going to occur and let me had a lot of perks of the job without having all the external elements of the job. And so it's been a really, really smooth transition. And certainly, there's going to be new things to learn. I'm not naive to that piece, but I think it's been really stable and really steady.

Well, so he was kind enough to share with me his note that he sent to all of you at the end, and I thought it was totally cool. So I know about his start in this career, starting in the back of the truck, and it was national. He's told me some funny stories of having a young kid with him, and they were pulling up waste stream out of a Greek restaurant. And the next thing you know it's all over him, blah, blah, blah. But I thought it was totally cool that the last day of his -- he got in the truck in Chicago and drove the route. That just -- that was neat.

He did.

So let's talk about within the context of who you are and how you come at managing. And as -- because the buck now stops here. That's probably the biggest issue is as you turn around and realize you have to make that decision, Don is not sitting across the hall. So talk about what the Jon Vander Ark, as I'll say, the JVA era, what does that look like? What are the employees going to see?

Yes. I think there's going to be some things that are going to be really similar, which is we've always cared about our frontline people and that won't change, right? I come at the business from a customer standpoint. That's where I grew up with customers. I started -- I was the Chief Marketing Officer. And so I think about the business not top down, but customer back. And so then it's drivers, technicians, customer service agents, salespeople, credit and collections. These are our frontline people who run the business. And everybody else, myself included, is in a support role. So I think you'll increasingly see, in our company, that hierarchy is just not something we focus a lot on. We focus on our frontline people, how do we enable them to be successful that allow them then to serve our customers in a more differentiated fashion.

So a year from now, what will the employees -- what do you think the employees should be saying because of what they'll see as far as what has transpired in that year?

Yes. So I think we're a relatively young company in the broad scheme of things, right? And Don spent a lot of the time in his tenure of putting 2 companies together and creating a modern Fortune 500 company, so systems, tools, processes. And Listen, we've had a lot of success, especially in the last 2 to 3 years because we've built that stable foundation. That allows us now to do other things. So specifically with employees, we're going to get even more human-centered. So our employee feedback culture, how we talk to one another, getting career pathing for every individual in the company, right, not just a handful of people, but everybody has a path in the company. We have the capacity to do that now because we've worked through some of the plumbing and the nuts and bolts of the business that allow us to do other things.

So I've asked every company that's come up here about culture and how you would define it. I think the -- in a business that is so frontline intensive in a tough labor environment, culture has to be part of this conversation. So what is the Republic culture?

Yes. I think it's increasingly frontline-focused. I think it's not just what you do, but how you do it. So conduct matters a lot, and we've had some talented colleagues along the way who haven't really always adopted the best behaviors, and they're no longer with us. So it's just how we operate, how we treat one another. It's a great place to come to work, right? We all enjoy working together. We all enjoy focusing on tough problems and trying to solve those together.

Okay. So you have often yourself have said and, Brian DelGhiaccio, you talk about this as well, the digitalization, technology. And I don't think you use those words liberally. I think there's purpose and substance behind it. But what does that, in fact, really mean? When you say it, what is it? What's the feel of it? How tactical is it? What's the employee or the customer see?

Yes. Think of 3 broad chunks. So think of the customer, think of operations and then think of kind of back-office core supporting systems. I started out, again, as a Chief Marketing Officer, focusing a lot on the front end of the customers. And again, we had under-invested in digital for a long period of time. So we had the opportunity to really invest on that side. And we spent tens of millions of dollars on our website, e-commerce, apps for customers, online billing, just making that experience better. Now it's not perfect. We've got plenty of room to move and improve on that, but we made a big difference with our customers. So we'll continue to invest there. Right now, our 2 big investments are on the operating side. So putting tablets in all of our cabs and our trucks as well as automating dispatch, which we've already done. So getting out of a paper-based world, getting into a digital world, allowing...

That's the RISE.

That's the RISE platform, allowing us to engage with and connecting with customers, allowing us to engage with customers in a different fashion, provide a better employee experience and drive some productivity along the way. So win on all fronts. And then in parallel to that, and Brian and team are leading that, we're modernizing our ERP system. And we're not a big bang group, right? We've done sales force on the front end of our business. We've done Workday on our HR system. We're going through Oracle for our finance and purchasing. So we're kind of ratably replacing that over the next 3 to 4 years. And we're going to have 4 or 5 big core systems that we operate going forward, which we think is a good mix between best-of-breed where you have 30 applications versus all seeing all dancing, and the history of that has not been very good.

Right. Right. And ERPs of that magnitude and order have been the graveyard of CEOs. So it's -- no need to repeat that sort of trend.

Hopefully not.

And all of that, Brian, is done inside the normal capital spending cycle?

Yes. We -- I mean we've been spending on digital for years. And quite honestly, if you take a look at where we were as a decentralized organization as we move to more standardization, some of the first foundational work was around data, right? So to fully harness...

Capture it.

Yes, to fully harness the power of technology, you need structured data, you need standardized data, you need harmonized data. We've done that work. We continue to do it, but we've done a lot of that foundational work. Now we're starting to be able to see that catalyst to really be able to take the benefits of adding technology on top of that data to really give our customers what they want, to make it a better employee experience, really drive productivity improvements. It's really what we're starting to see now are really the fruits of our labor.

Yes. And I would say this, on technology more broadly, we don't need new to the world [ hour ]. We need application engineering. These are off-the-shelf technology. We just need to apply to our business. And we're still a frontline people-intensive business. So we don't think about replacing people. We think about empowering them. Now along the way, we'll get a little more productive, and that will allow us to do more work with fewer resources. But that doesn't mean we have to do massive automation and take out big swaths of the workforce. We'll naturally attrit into a more efficient workforce, and that's what you'll see in our P&L as well.

Yes. And to your earlier question, Michael, too, just about the pace and the dollars and whether or not you're going to see any sort of change, we've already completed Salesforce. We've completed our Workday implementation. We're in the middle of completing our finance and procurement modernization. So once we have those down from a core system perspective, that will be 60% of the way through what we need to do. And we've been doing that through the normal course span. So to the extent that you've seen it, you're not going to see any additional spending. In fact, once we're done, you'll see that taper off a bit.

Well -- and Stacey, if I remember correctly, you came out of field finance, right? So what's your experience of being in the field and using what you're -- you didn't get mic-ed up, sorry, what's your experience?

Yes. And to your point, I started in corporate finance and then moved to the field organization. And I just see a world of benefit of being able to have more consolidated systems, more standardized data. And it just really empowers our finance organization to help support those profitable growth plans.

And is there -- there's -- sort of speed and accuracy comes with this? Is that sort of what I'm hearing?

Absolutely.

Right. So Brian, this is the capture system is part of this. That's the early piece. And one of the things that you're seeing with -- back to you, Jon, is the -- you've got your customer churn down below 7%. You've got your employee retention in teens. I mean this can't be an accident that, that's happening. This is where this has come through. This is -- there's employee engagement tools that come through this. I mean these are the real sort of KPIs that you can measure. You can point to those issues as the success of it. So this isn't just -- it's cool jargon, we're saying technology, digital?

No. Not all customers are equal. So one of the reason that our loyalties improved, and frankly, that our margins expanded is the quality of our revenue. We took a hard look 4 or 5 years ago and said, "Who do we want to serve? Which customers are willing to pay more, which customers are going to stay?" And that allowed us to churn through some of our portfolio. And we took in a few punches in terms of volume growth that was probably below the industry for a couple of years, but we think we came out of that a much healthier company.

And to your point, Michael, too, again, when you look at that differential, right, between our core price and our average yield, right, that difference is the impact of churn. So the way you can positively impact that is through our capture pricing tool, right? There we can control the price that we're willing to take on new work. But also as we -- further retention efforts and we build to record-setting retention at 94%, that limits the amount of those higher-priced units that exit the system. The combination of those 2 shrink that impact of churn, which just means that we keep more of that core price and report overall higher average yield.

Well, okay. So back to that, the other important statement about that is we're -- there's real inflation in this economy, but -- it's here, and it's been 10 years since everybody has seen inflation in this industry. And these tools are going to allow you to more real time be able to adjust pricing to account for that inflation, whatever it is.

Yes, it will show up in 2 ways. It will show up real time in capture in the open market. And then over time, it will show up in the more contracted portion of the book that works on some escalator index right? As CPI goes up and water and sewer trash goes up, that will naturally put upward pressure on pricing in that part of our portfolio.

Okay. Hard gear switch, so I've talked about alternative fuel vehicles all day long in, as an industry garbage, is at 30% CNG. You all, if I remember correctly, are high-teens, low 20% of the fleet today. But you have openly embraced the concept of battery electric. So talk about this transition and what needs to happen from your perspective where -- 2, 3 -- and I think this is the right conversation 2, 3, 4 years from now, we're having a conversation, and you're 25% converted to something different. But that next increment, was it, in fact, battery electric? Or was it still incrementally more CNG? What has to happen for it?

Yes. Listen, we've -- in the last 3 years, our CNG investment has typically just been replacement trucks. So where we have infrastructure and those trucks aged out or contracted out in terms of age of the fleet, we've replaced those. We haven't put in any new installations, in part because we're so long on electric. And not long meaning it's here today and you can buy at scale today, you can't, but the belief that this is ultimately going to be the right application over time or so, and I still believe that. And because we've had conversations with lots of different suppliers, I'm encouraged by those conversations. There are fits and starts, and there's trial and error in any innovation. And so what the industry needs is an anchor tenant. They need somebody who is willing to buy at scale, and that is us. We're willing to buy at scale. And I'm more confident now than I've ever been that this is going to happen at scale. Now it will take time, right? If we bought every one of our trucks to be electric tomorrow, it would take us about 12 years. because we replaced...

To be 100%.

To be 100% because we buy about -- replace about 7% to 8% of the fleet every year. It's pretty ratable replacement method.

18,000 vehicles.

Yes. And we'll, of course, right, if the economics worked, would we pull some of that forward? Yes. But the idea of us driving our entire diesel or CNG fleet into the ocean and starting over isn't going to happen either. So it will take time. And I don't think we're more than 3 years away from buying at scale.

And what gives you that confidence?

Just the conversations we're having with the suppliers, both those that are core to the space and some new players to the space. I think the -- I don't think we're that far away.

And you have said to me in the past that the tall pole in the tent is the battery. Is that the material science of the battery or the physical design of the battery? What is it about the battery that is that tall pole?

Its weight and its range and then, of course, its performance, right, and heat, coal rattling around, et cetera. And so you think about, wait, well, you can overcome that for part of our vehicles where the recycling immediately, because our recycling trucks, they cube out, they don't weigh out. You can take that off the table, right? If you kind of get to about a 100-mile range on that battery, you were running a full day, and that's the other one is the thing has to run a full day. The idea that we're going to -- 10.5 hours. We're going to stop during lunch and magically park at the landfill and tip and charge, I mean, that works in like 1% of the cases. So that's not realistic, right? The horse has got to leave the barn every morning. It's got to run a full route and got to come back and charge overnight. That's how it works.

And what is missing on the battery side at the moment that you can see a pathway? Because you're an investor in Romeo, for instance. So what do you see that gives you the confidence that the battery is going to get better?

Just the conversations we're having, the pilots we're running right now. We're running pilots right now with Mack and Pete. And I just see the incremental progress. Again, we're not there yet, but I can see the path where this makes it.

And is -- are you just doing electric chassis and mechanical bodies at this point?

Correct. And I think that is the more likely path to development. You could electrify the entire truck over time. But I'm bullish on the idea of let's focus on one thing, get that right and then progressively innovate. I think if you try to do everything at once, that's sometimes why you never leave the barn because you never leave the lab because you just keep tinkering with the thing. You're just trying to do too many things at one time.

Right, right. And so residential markets, is that where you've been doing?

I think residential and small container right behind it. I think industrial is just going to -- it's a less natural application.

You mean roll-off.

Begin roll-off. Because fewer regenerative braking, less stops and starts, longer routes, you just don't have the same dynamics of that.

So kinetic braking is going to be a key component of this to make this work?

It will.

And have they -- so do you have to retrain everybody how to drive?

We will do some training, but this isn't rocket science.

It's not rocket science. And is the technology, the digital IT part of this good enough where with your RISE system, you're going to be able to see that somebody is turning on too many lights or they're using the joystick long and you can manage the power of the truck remotely?

Over time, yes. But again, telematics is, I would say, the long unfulfilled promise in trucking that was supposed to be able to do everything. And some people, some of the long-haul guys do it really, really well. But this idea that we're going to pull all this information out of the cab and we're going to kind of transform and create lights out maintenance and all of the data and analytics, right, that's been an unfulfilled promise. So I would say we're cooler on that in terms of Stage 1 development.

Okay. I've made the statement several times today, but I made it back in December that in 10 years, 50% of the total fleet will be an alternative to diesel. Is that possible?

Yes, I think it's very possible.

Okay. Brian Bales, so 3 years ago, I think, on this stage, you were sitting here and I'm sitting there. And we started a conversation about M&A, and it was humorous because I discovered a topic that I'd like to come back to, which was the idea of investing in industrial like businesses. And at the time you suggested -- when I said, what does that look like, you said wastewater as an example. If you've done anything, they've been little. So it's not been very dramatic. So where is that sort of opportunity? How is that playing out? And is it still -- are you still feeling strong about it as you did 3 years ago?

Yes. I mean we feel -- still feel strong about it. I mean, again, to kind of frame it up a little bit, when we look at our customers' back and look at the products, capabilities and services that our customers are asking for and customers that we're looking to target, I mean there are some definite opportunities to be able to provide these additional products and services to those customers. And there's a lot of different definitions out there depending upon the approaches on kind of the size of the environmental services market. For us, the way we define it, it's about a $20 billion addressable market. That today, we look at it and it's still pretty fragmented, which gives us a lot of opportunity to be able to grow both organically and through M&A. So with that as a framework, I mean, since we were on this stage a few years ago, we've looked at a lot of opportunities. We've closed on a number of acquisitions as well as continued to develop greenfield infrastructure projects to be able to fill in around those opportunities, with, again, with an overall focus on being able to grow that environmental services market.

And so frame, what's in the big high level? What's, not companies, but product lines or service lines in the $20 billion. What does that mean?

So let me give you kind of some examples. So when you think about kind of our industrial and manufacturing and some of our other customer types, today, we handle a lot of their special waste, okay? So to kind of expand on that, when we look into that space, it's solid, liquid waste handling, transportation, disposal, processing. So it's kind of full waste stream processing as well as industrial container rental, which we've talked about before, both on the liquid and solid waste side and also things like remediation services. Those are just some examples.

And get back to customers, right? Customers are saying, right, will you do this, right? They want fewer people in their facilities. They care about sustainability. They increasingly care about a digital footprint, digital interaction. And they want somebody who cares a ton about customers, right? That's where we're going, and they're saying, will you go there with us. So we stepped back and said, "listen, we've gotten all this work done in our company, create a stable foundation. This is a natural extension for us to go there to better serve our customers."

And it's an industrial nonhazardous sort of play? Or does it include the hazards?

I mean today, I'm going...

What I call low hazard.

I mean hazardous in our business is really, really small. But we've got the capabilities to be able to have the solutions for our customers through other relationships. And as we go and develop this, it's -- we'll continue to grow those capabilities.

Well, and the wastewater play seems natural, because you process, I don't know, what, 7 billion gallons of leachate a year. You're handling one of the most complex industrial wastewaters there are. So we are subject matter experts?

A lot of these businesses, Michael, we're already in. When you bring up wastewater, we have 18 wastewater treatment plants at a number of our landfills. I mean we handle a lot of wastewater in our business. It's just -- we're looking at that now and being able to target new customer sets.

Okay. All right. So let's talk about this ESG topic because that, again, is -- everybody in the brothers got it at some point, they work it into a conversation. I actually have said this over and over again all day today. This is table stakes. As a business in North America, you can't be gratuitous about it. You actually have to have substance behind it. I think most corporations, whether public or private, have the S&G pretty much in hand, particularly if any of them are size, but it really is about the E. And in that E, it's mostly about capturing data, setting goals and setting time lines. So talk about the things that you're doing that create the moat and competitive advantage that are consistent and strategically part of who you are as a company, but also now you're measuring and you're providing transparency to.

Yes. I think if you dial way back, we've always had a pretty good culture of compliance, right? We're kind of dutiful. That's who we are in our bones. So we treat landfills appropriately and all those things and got into recycling because customers asked us to. And over time, we started to report on that because people asked us to. And then we started to get ranked on it. Lo and behold, our ranking was pretty good. And I wouldn't say it was entirely by accident, but it wasn't a lot of energy and strategy. It was just this is kind of who we are. And now going forward, we're going to be far more intentional. So we've signed up for the 2030 Paris accord. We're going to reduce -- Paris accord, we're going to introduce scope 1 and scope 2 emissions by 35% right off the baseline of 2018. So this is where we're headed. And that's landfills, that's fleet, right? Those are pretty much the 2 anchors that take us.

But it's sort of 70-30, 70, 80.

It's probably 90-10, closer to that.

90-10, okay.

90-10. So and listen...

So big impact landfill then.

It's landfill gas to energy, and we think that's a great opportunity, both on the revenue side as well as on the environmental compliance side over time. And some of that technology needs to evolve, and it is, to get after more medium-sized blow fills. And so we've got plans with ourselves and third parties to go after that, but it's going to require more innovation. So carbon sequestration, we're going to have to do other things over time if we really want to go make that carbon-neutral, and we're not there yet. We're not even close to there yet. But I don't take that off the table in terms of where we can think about innovation and where we're going to go.

And does this -- there's a subject matter expertise around this. Does this need to be done inside Republic as opposed to owning an equity interest in it and letting a really smart subject matter expert do it for you? So it's outsourcing it?

Yes. Historically, our model has been more opportunistic, kind of site-by-site, whatever kind of works in that occasion. I think we're more intentional, but our mindset is still far more buy than make in that world, in part because I think about where we spend our human talent and where we spend our financial capital. And this is a place I think we can get to scale quicker using third parties. And long term, if we're really successful here, you're kind of in the $7,500 million revenue category. When Brian talks about environmental solutions and environmental services that being a $20 billion opportunity, right, that's where I want to put the company's time and attention, something that gives us the chance for bigger ceiling, higher-end growth, and it's capped at $100 million versus $20 million.

Right, right. And sort of messaging to those third-party providers, does the model have to change on how they're coming at you and saying, "Sure, I'll put the capital up and do the RIN-based, fuel-based RNG plan," do their models have to change? Or do they have pretty good models to present to you, as this is -- I'm happy to do this, and here's your play in this?

Yes. I think we're getting more strategic on getting less site-by-site and more thinking about the couple of partners that are going to help take us to work on dozens of projects versus a 1 or 2 off.

Okay. And then the context of the messaging to the marketplace as far as the goals and the accountabilities, is this something that gets updated on an annual basis from this point forward? You're going to show us real time lines and points of corrections, pro and con, the transparency around this data?

Yes, we're working on our sustainability report right now, and that should be out soon. So that's the natural place where we report out on that. And listen, I think the sustainability, historically, it's been more of the intel inside, how we do things and that we're a good actor in what we do. I think sustainability will also become a source of growth for us as we go forward. So landfill gas energy is a small example of that. Plastics is another good example. We're doing a lot of work right now, right? There's a single-use plastics problem around the world and also in the United States. And we're uniquely positioned to participate in that, because we touch that material over time. So how do we think about working to make sure that, first of all, that value chain is more efficient, right? Right now, some of that material flows to Asia and then flows back to the United States, right? That seems kind of crazy from a carbon footprint standpoint. And how do we maybe work a little further into the value chain and work with some chemical players to think about producing a better product that maybe has a lot higher cell value and less volatility. So lots of work on that front.

So you guys are doing one-on-ones. So you probably -- but we did a recycling panel. One of the things they talked about is that the packaging world is starting to show up and have conversations. So this is what it's going to look like. Can you get it out through the processing technology? Can you -- so at least you start with it, can you get it separated? Is it, in fact, truly recyclable or not that -- are you all getting engaged in the conversation on one about content and to what really is, from a curbside standpoint, legitimately circular?

Yes, we're having conversations with CPGs, with industry associations, with chemical recyclers, material or manufacturing or mechanical recyclers every stage of the value chain because it's one -- it's a tailwind behind us, right? There will be a solution in this space. And we think we're -- again, we're uniquely positioned to solve it because we're touching the material, and that market is short of supply right now. There's not enough recycled plastic.

No enough. Do you think depolarization works?

I think there's a whole broad array of potential opportunities. The question is, can you make money at it. I mean there's a lot of technologies out there that work in a lab, work inside the 4 walls. A lot of companies don't understand kind of the preprocessing, presorting that has to happen before it goes inside the 4 walls. And even inside the 4 walls of whatever the process is, can you actually make money at it? And what's the outbound?

So the old adage of does it work, going to be scalable and does it need subsidies?

Yes. At the end of the day, I mean, we look at a broad range of opportunities in the space.

Okay. So I would -- M&A. In the context of M&A broadly as a firm, this is -- Republic, I would always have described as somebody was buying $75 million to $100 million worth of business in the last few years. That conversation has turned into more of sort of $150 million to $250 million. What's -- how do I think about what that inorganic growth looks like in this company on a sustained basis? Is this you're playing the curve, which was above average M&A, and I'm going back to an old pattern? Or M&A is a much more meaningful part of a long-term growth story?

Well, I'll tell you 2 things are true. One, our discipline hasn't changed. So we are very returns basis. So we have a broad guideline. We have no target, right? Because we look at every individual transaction and make sure that, that is going to generate value for our shareholders. That's where we started, and that's where we finished. And if we have a year where we don't think anything hits our threshold and we only do $50 million or $100 million, that would be just fine because it's better than overpaying for assets. That being said, I think our pipeline has never been robust, right? We did guide $600 million last year. We guided to about $600 million to spend this year. I'm pretty confident we're going to beat that number. And our pipeline has never been fuller. So I'm optimistic about next year. And so I think, again, as we get a more stable business, we create a great employee value proposition where potential sellers are interested in joining our company because they know how we'll treat those people, as our margins improve, right, we're able to create more value by buying people, that formula is starting to create a virtuous circle for us.

And so we started this year and I came into the year going, all right, well, we'll be better in '20 just because the disruptions of '20 -- high level. It appears that the pace of it is even stronger than what I thought it was going to be. And the sense is that virtually every family-owned company in America is having to decide whether this is the time they should be selling their business, whether it's a garbage company, a pest company, a distribution business, whatever. Is this short-lived because it's an administration change and there's some philosophy around likes business, done like business regulation? Or is there really a real generational issue going on here?

I think it's 2 things. I think it is a generational issue and you're starting to get to second or third generation who just aren't interested in running the business. And so it's time. And these families have built great businesses, but it's time because somebody is really not interested in participating in the industry and the day-to-day grind that the business is, right? The garbage -- like the U.S. Postal Service, it keeps coming. So it's not for the faint of heart. So you've got to be willing to do that. And some aren't, and it just -- it becomes a time to sell. I also think that the scale is starting to change, right? We used to talk about landfills and post-collection being the moat. I think digital is becoming the new moat. I mean I just look at what we're doing, and if you kind of take a look back and look forward, you're talking about 9-figure investment into technology on the customer end, on the operating side of it and modernizing our ERP systems. And those are just bigger bets that do have scale advantages over time. So I think companies are looking at that and saying, "Hey, listen, I'm not willing to write that check, right? I'm not well positioned to do it and to take that risk. So now it would be a good time to transition."

And some of this, Michael, too, is a result of some of the intentional actions we've taken. So when we had the old region structure, we had 3 regions, 16 areas that were overseeing 165 business units, we eliminated the regions, collapsed 16 areas down to 10. We took the business development reps. We had 1 in each region, so we had 3. And we actually tripled those resources to 10. So we've actually created more relationships. We're out there. We're meeting more of those owners so that when they're in the window and thinking about selling their company, we're now part of the dialogue.

Right. So you're getting that phone call asking for increasing the load. And would you say that your experience, back to your technology comment, as you can see it and the things you're buying as you buy them, you're realizing that they've not been able to make that investment, that's confirming that thesis as well?

Yes. And I think we bought some great companies that have point solutions for them to really have an integrated solution that connects the customer into the operating side, right, very tough for them to do, and that's where we think we can add more value over time.

Okay. So as we come into the end of our session, not that you're only going to do it for 10 years, but if I think about being a CEO for 10 years, that's a good long run. In 10 years, if we put it in the envelope today and we look at this in 10 years, I hope I'm sitting on the stage with you, what will the business look like, garbage and Republic?

Yes. I think if you look way out, you see a world or I see a world of increasing population, increasing economic prosperity, which creates increased consumption. And I also think you're going to see a world around sustainability in this idea and passion that the generation is coming up, and they'll just expect it. That's how they want things to work right? And in parallel to that, you're going to have a world of resource constraint. So you've got population, increased consumption and resource constraint. And so I think this idea of sustainability isn't going to be some side project, right? That is going to be the ticket to win, right? I think digital is going to be ubiquitous. I don't think our industry is going to be able to kind of ski by and say, "Well, I expect this from Amazon or UPS or FedEx, but my garbage guide, I have lower expectations." I think the customer is going to have really high expectations over time. And they're going to expect the same customer experience that they get with these world-class providers. And so I think that's where you're going to see the winners in this industry. That's where they're going to spend their time and energy. They're going to be great at sustainability. They're going to care about their customer. And they're going to have a digital footprint that helps them deliver both.

Okay. We're at the end of our time. Thank you so much. Congratulations.

Great. Thank you.

Thanks, Michael.

Thank you.