Waste Management and Recycling Market Update

8/12/2019 Waste Management and Recycling Market Update

1/21

Waste Management and RecyclingMarket UpdateQ3 2013

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1

E-Waste

Solid Waste

Collection

Specialty Waste

Hazardous

Recycling

Solid Waste

Disposal

Specialty Waste

Industrial

Waste Management and Recycling

Sector Overview

HW&Co. understands the key trends and dynamics driving the waste management andrecycling (WMR) sector.

Waste-to-Energy

(WtE)

Recycled ContentSpecialty Waste

Medical


3/21

2

Public Markets Update

Data as of October 29, 2013.

Source: S&P Capital IQ.

Data as of October 29, 2013.

Source: S&P Capital IQ.

Comparable Company TEV/LTM EBITDA (Oct. 2008 Oct. 2013)Trading Statistics (TEV/LTM EBITDA)

TEV/EBITDA Current Trading Performance

Diversified Waste

Management and Recycling

Waste management and recycling comparables are trading at a 3.2% discount to the S&P 500but 19.4% above their five-year median.

Solid Waste Management

and Recycling

Recycled Materials

Waste-to-Energy

S&P 500

9.8x5.4x 8.4x8.0x 9.7x

Specialty Waste

All Waste Management and

Recycling Comps

14.6x5.8x 7.8x7.6x 8.9x

10.5x5.6x 8.6x8.4x

31.6x3.2x 6.7x 7.5x 16.6x

11.0x3.8x 7.4x6.7x 9.5x

9.7x5.7x 8.1x 9.6x

9.9x5.8x 8.5x8.4x

5-Year Min. & Max. 3-Year Median 5-Year Median Current

8.6x

8.9x

9.5x

9.6x

9.7x

9.9x

10.6x

16.6x

0x 5x 10x 15x 20x

Metals Processing

and E-Waste

Waste-to-Energy

Diversified WasteManagement and Recycling

S&P 500

All Waste Management

and Recycling Comps

Recycled Materials

Solid Waste Management

and Recycling

Specialty Waste

2x

4x

6x

8x

10x

12x

Oct-08 Oct-09 Oct-10 Oct-11 Oct-12 Oct-13Waste Management and Recycling S&P 500

Metals Processing and E-

Waste

12.3x7.4x 10.3x10.0x 10.6x


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August October November

26 7 14 21 28 4 11 18 25

$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0

Enterprise

Value

($ in mm)

Q3 2013 Earnings Release Calendar

Oct. 29

Nov. 7

Oct. 24

Oct. 17Oct. 29

Aug. 29

Oct. 31

Oct. 23

Oct. 22Oct. 24

Nov. 6

Nov. 5

Nov. 7


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4

Earnings Update

Q3 2013

Half way through the Q3 2013 earnings season, the overall waste management and recyclingsector has experienced positive performance over prior periods.

Q3 2013 Earnings Update

Company Ticker Release Date Location Key Observations

LTM Revenue: $466 Y-o-Y : 1.7%

LTM EBITDA: $79 Y-o-Y : (7.0%)

LTM Net Income: ($46) Y-o-Y : (44.6%)

LTM Diluted EPS: ($1.24) Y-o-Y : (60.0%)


LTM EBITDA: $12 Y-o-Y : 5.6%

LTM Net Income: $2 Y-o-Y : (30.1%)

LTM Dilut ed EPS: $0.09 Y-o-Y : (41.5%)

LTM Revenue: $1,892 Y-o-Y : 18.8%


LTM Net Income: $182 Y-o-Y : 13.1%

LTM Dilut ed EPS: $1.47 Y-o-Y : 9.0%

LTM Revenue: $2,079 Y-o-Y : 12.0%




NasdaqGM:HCCI 10/17/2013 Elgin, IL

The Woodlands, TX

NasdaqGS:CWST 8/29/2013 Rutland, VT

Q3 2013 Performance

NasdaqGS:SRCL 10/23/2013

NYSE:WCN 10/23/2013

Lake Forest, IL

Casella continues to see the same recessionary trends

in the business and the weak regional economy that

has plagued the company all fiscal year. Casella made progress on improved pricing of

collections, integrating the BBI acquisition, and

closure of Maine Energy.

Revenue, EBITDA and free cash flow met or

exceeded the upper end of WCNsexpectations.

Volume once again exceeded expectations at over2% in the quarter, with continued broad-based

disposal activity and the addition of R360 driving

another quarter of double-digit year-over-year

increases in solid waste landfill volumes.

Stericycle closed 17 transactions in the third quarter,

totaling $60 million in revenue and maintains a

pipeline of opportunities worth $100 million.

This increase in customer base provides a long-term

growth platform for selling multiple services that

can more than triple the customers' revenues.

Growth in revenue was aided by HCCIs ability to

continually add new customers serving 93,000

individual customer locations from 74 branches.

Improved efficiency of HCCIs used oil collection

routes and its transportation in the Oil Business

during the third quarter.


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5

LTM Revenue: $19,441 Y-o-Y : 3.8%

LTM EBITDA: $3,070 Y-o-Y : 20.0%



LTM Revenue: $2,020 Y-o-Y : 8.7%



LTM Dilut ed EPS: $0.81 Y-o-Y : (144.2%)

LTM Revenue: $1,643 Y-o-Y : (0.1%)

LTM EBITDA: $418 Y-o-Y : (3.0%)


LTM Dilut ed EPS: $0.36

Y-o-Y:

(15.8%)





LTM Revenue: $13,917 Y-o-Y : 2.2%

LTM EBITDA: $3,400 Y-o-Y : 2.3%



ENXTPA:SEV 10/24/2013 Paris, France

TSX:BIN 10/24/2013 Ontario, Canada

NYSE:CVA 10/24/2013 Morristown, NJ

NYSE: WM 10/29/2013 Houston, TX

NasdaqGS:ECOL 10/29/2013 Boise, ID

Earnings Update (cont.)

Q3 2013

Company Ticker Release Date Location Key ObservationsQ3 2013 Performance

In the third quarter, Progressive delivered its highestorganic revenue improvement of the past five years.

This growth reflects a continuation of the higher

construction and demolition volumes that it

experienced in the second quarter this year, which

have continued to date.

Acquired a 1,050-ton-per-day Energy from Waste

facility in Camden, NJ for $49 million, which was

immediately accretive.

Energy sales were lower than expected not because

of its production but because of a couple of unusual

circumstances related to customers' inability to take

its steam and electricity.

Suez expects its European waste volumes to drop

3% for 2013E, but expects stabilization in 2014P.

Suez continues to close sites in Europe to restructure

its waste division the company shut 13 additional

sites in Q3 2013.

Q3 2013 Earnings Update

Strong results were driven by WMscontinued focus

on increasing revenue growth from yield gains and

controlling costs.

Margins expanded despite continued headwinds

confronting WMs recycling and waste-to-energybusinesses and modestly lower volumes.

Treatment and Disposal revenue grew at 10% over

prior year levels, attributed to continued strength of

its project-based work or Event Business.

Its Event Business grew 23% during the quarter, led

by growth in the commercial sector, which offset

U.S. Ecologyssoftness in the government sector.


7/216

Overall M&A Activity

Global Waste Management and Recycling Middle Market M&A Volume1,2

For the Quarters Ended Q1 2007 Q3 2013

2007 2009 2010 2011 20122008

All M&A: 1,711

WMR M&A: 10

All M&A: 1,847

WMR M&A: 21

All M&A: 1,421

WMR M&A: 11

All M&A: 1,795

WMR M&A: 15

All M&A: 1,979

WMR M&A: 14

All M&A: 1,797

WMR M&A: 12

All M&A: (23.1%)WMR M&A: (47.6%)

All M&A: 26.3%WMR M&A: 36.4%

All M&A: 10.3%WMR M&A: (14.3%)

Sources: Thomson FinancialSDC database, S&P Capital IQ

(1) Includes transactions between $50 million and $1.5 billion in enterprise value.

(2) Excludes minority purchases, acquisitions of remaining interest, self-tenders and repurchases.

M&A volume across the waste management and recycling sector has been generally in line withthe broader market despite some year-to-year variations.

Rebound in volume

after sluggish 1H .

All M&A: 7.9%WMR M&A: 110.0%

All M&A: (9.2%)WMR M&A: (14.3%)

0

1

2

3

4

5

6

7

8

9

10

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13


8/21

7

Meta lico Neville /

Metalico

OmniSource Southea st /

Steel Dynamics

Allied Wa ste Industries /

Repub lic Services

EnviroServ Holdings /

Absa Capital Private Equity

Harold Lemay Enterprises /

Waste Connections

Indeck Ma ine Energy /

Covanta Holding

Republic Services, Certain Assets /

Waste Connections

Swire SITA Waste Services/

Suez Environnement Compa ny

Potrero Hills Landfill /

Waste Connections

Clean Harbors Industrial Services Ca nada /

Clean Harbors

MedServe /

Stericycle

Veolia ES Waste-to-Energy /

Covanta Holding Corporation

Sanipac /

Waste Connections

Waste Services /

Progressive Waste Solutions

Greenstar Environmenta l /

Biffa Group

US Liquids of Louisiana /

R3 Treatment

Seaway / US Ecology

WSN Environmental Solutions /

Suez Environnement Compa ny

Healthcare Waste Solutions /

Stericycle

Griffin Ind ustries /

Darling I nternational

EnGlobe /

ONCAP

Intechra Group /

Arrow Electronics

Touch stone Wireless Repa ir and Logistics /

Brightpoint

Interstate Waste Services, Certain

Assets / Action Environmenta l

FCR and Blue Mountain Recycling /

HarbourVest Partners

Choice Environmental Services /


Hudson Valley Waste Holding /

Waste Connections

Oakleaf Waste

Management /Waste Management

Alaska Pacific Environmental

Services Anchorage / Waste Connections

Palko Environmental /

Gibson Energy

Energy Products of Ida ho /

Outotec

WCA Waste Corporation /

Macqua rie Infrastructure Partners

ECS Refining /

All Metals

Thermo Fluids /

Nuverra

Veolia ES Solid Waste, US Opera tions /

Advanced Disposal Services

Badlands Energy /

Nuverra

R3 Treatment /

Waste Connections

Choice Environmental Services /


Covanta Delaware Valley /

Covanta

EnergySolutions /

Energy Capital Partners

EnviroWaste Services / Cheung Kong

Infrastructure H oldings

Greenstar / Waste Mana gement

Caraustar I ndustries /

H.I.G. Capital

Befesa Medio Ambiente /

Abengoa

Met-Pro / CECO Environmenta l

May Gurney / Kier Group

Synagro Technologies /

EQT Partners

Proactiva Medio Ambiente /

Veolia Environnement

AVR /

Cheung Kong (Holdings)

Evergreen Oil / Clean Harbors

ecoATM / Outerwall

Oilfield Water Lines /

NGL Energy Pa rtners

Terra Renewal Services /

Darling In ternational

Rothsay /

Maple Leaf Foods

Siemens Water Technologies, Two Oil Waste

Treatment Units / FCC

Metal Management /

Sims Metal Mana gement

Waste Indu stries USA /

Goldman Sachs

Oakleaf Waste Management /

New Mount ain Capita l

PSC Metals /

Icahn Enterprises

Evergreen Tan k Solutions /

Odyssey Investment Partners

Allied Wa ste Industries Inc., Solid Waste Land fill

an d Collection Assets / Veolia ES Solid Wa ste

Rizzo Environmenta l / Kinderhook Industries

Teleplan I nternational /

Gilde Buy Out Partners

JWC Environmental / Windjammer Cap ital

RiverRoad Wa ste Solutions / Charterhouse Equity

Clover Technologies Group /

Golden Gate Capital

Summit Energy & Liquid

Logistics / Waste Man agement

Liberty Tire Services /

American SecuritiesGFL Environmental / Roark Cap ital Group

Waste Pro USA /

Roark Cap ital Group

Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14

Key M&A Activity

The waste management and recycling sector has seen significant investment activity from bothstrategic and financial buyers over the last several years.

Notes:

(1) Size of circle represents relative transaction value.

(2) Includes WMR acquisitions between 2007 and YTD 2013 with reported and estimated transaction values above $50 million.

(3) Proactiva Medio Ambiente / Veolia Environnement is a pending transaction.

Strategic Deals Private Equity Deals Enterprise Value N/A

0 Transactions1-2 Transactions

3-4 Transactions

4+ Transactions

Quarterly

Heat Map


9/21

8

Sub-Sector Overview

Sub-Sector Key ObservationsSentiment

Rising population and increased manufacturing due to the economic recovery have

pushed waste generation in the U.S., growing at a 1.9% CAGR from 243.6 million tons

in 2009 to 262.7 million tons in 2013E.

MSW generation per person has steadily increased from 2.68 pounds per person per

day in 1960 to 4.4 pounds per person per day in 2011.

Waste collection services revenue is expected to increase at a 2.3% CAGR from $47.1billion in 2012 to $51.6 billion in 2016P.

Positive momentum marks the trajectory of the waste management and recycling sub-sectors.

Solid Waste

Collection

Recycling

Solid Waste

Disposal

Despite the increase of waste generated in the U.S., the increase in recycling rates has

lead to the steady decline in the number of landfills from 7,924 in 1988 to 1,908 in

2010, but recent trends show an increase in size of landfills as older, less efficient

landfills are replaced by larger, more efficient facilities.

Disposal of waste to a landfill has decreased from 90% of the amount generated in

1980 to under 65% of MSW in 2011.

Waste treatment and disposal services revenue in the U.S. is estimated to grow at a

3.3% CAGR from $16.0 billion in 2012 to $18.3 billion in 2016P.

Alongside evolving consumer preferences and regulatory changes, technological

advancements like single-stream recycling and all-in-one mixed-waste processing

have helped grow recycling and material recovery rates.

The recycling rate in the U.S. has increased from less than 10% of MSW generated in

1980 to close to 35% in 2011, indicating an increase in infrastructure and market

demand for recycling.

U.S. recycling facilities revenue is estimated to grow at a 4.0% CAGR from $5.6billion in 2012 to $6.5 billion in 2016P.


10/21

9

Sub-Sector Overview (cont.)


Large waste management businesses have begun to diversify their traditional business

models by acquiring companies in specialized waste services industries, including oil

and gas.

Global industrial waste recycling and services market is expected to grow at a 10%

CAGR from 2012 to 2016P.

Oil and gas companies are expected to increase environmental, health, and safety

(EHS) spending by 60% from $35 billion in 2011 to $56 billion in 2030P, drivingdemand for industrial waste solutions.

Specialty

Waste

Industrial

Specialty

Waste

Hazardous

Hazardous waste generation trends have fluctuated between 2001 and 2009, but the

amount generated has roughly stayed constant while the portion of waste that was

disposed of increased by 2.1 million tons.

The oil & gas, petrochemical, and manufacturing renaissance is driving increased

demand for hazardous waste services.

The growth of new industries like e-waste recovery and solar energy will also help to

grow hazardous waste collections in the U.S. as new types of waste are classified ashazardous.

E-Waste

More than half of the United States has some form of e-waste regulation or disposal

ban enacted, with many still considering laws.

Due to the growing adoption and shorter lifecycles of electronics, the Consumer

Electronics Association estimates Americans own approximately 24 electronic products

per household.

The global e-waste recycling market is expected to grow from $10.0 billion in 2012 to

$18.0 billion in 2017P, representing a 12.5% CAGR.


11/21

10

Sub-Sector Overview (cont.)


Specialty

Waste

Medical

Proper disposal of medical waste is imperative to reduce the risk of cross contamination

and the spread of infection currently over 90% of medical waste in incinerated to aid

this effort.

U.S. EPA regulates the air emissions for medical waste incinerators and in May passed

amendments aimed at further minimizing emissions.

The U.S. medical waste management market is expected to grow at a 5.4% CAGR from

$3.1 billion in 2013E to $4.0 billion in 2018P, driven by the growing demand of thepharmaceutical industry and the aging population.

Recycled

Content

Nearly 170 million tons of annual building construction, renovation, and demolition

derived wastes account for nearly 60% of the nations non-industrial, non-hazardous

solid waste generation.

The sustainable building materials industry is expected to grow at a 17.6% CAGR from

$21.0 billion in 2012 to $40.0 billion in 2016P, driven in part by the implementation of

LEED v4.

Demand for post-consumer plastic is expected to rise 6.5% per year to 3.5 billionpounds in 2016P.

Waste-to-

Energy

Current challenges in waste management, including unsustainable landfilling, methane

gas emissions, growing waste volumes, and lack of space, are fueling the growth in the

WtE market, which is expected to reach $7.4 billion in 2013.

While the U.S. is making strides in growing its WtE market, in 2011 only 11.7% of

municipal solid waste was used to create energy as opposed to the E.U. where 22.0%

went to create energy.

The global WtE market is expected to grow from $6.2 billion in 2012 to $29.2 billionin 2022P, representing a 16.8% CAGR.


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11

Sub-Sector Review

Solid Waste Collection

Solid Waste Collection News Rising population and increased manufacturing due to the economicrecovery have pushed waste generation in the U.S., growing at a

1.9% CAGR from 243.6 million tons in 2009 to 262.7 million tons

in 2013E.

MSW generation per person has steadily increased from 2.68 pounds

per person per day in 1960 to 4.4 pounds per person per day in 2011.

Organic materials continue to be the largest component of MSW

with paper and paperboard accounting for 28% and yard trimmings

and food waste combined accounting for 28%.

Recent technological advancements like single-stream recycling and

all-in-onemixed-waste processing have catered towards consumer

preferences and helped grow collection rates.

Waste coll ection services revenue is expected to increase at a 2.3%

CAGR fr om $47.1 billi on in 2012 to $51.6 billi on in 2016P.

$41.7

$44.5

$47.1$48.3

$49.6$50.6

$51.6

$30

$35

$40

$45

$50

$55

2010 2011 2012 2013E 2014P 2015P 2016P

U.S. Waste Collection Services Revenue

20102016P

($ in billions)

Source: IBIS World.

Bloomberg is leading New Yorksmove into separated food waste

collection, and just announced it

will reach up to 100,000 households

by 2014.

GreenBiz

NYCs Business Integrity Commission

has proposed a 15% increase in the

citys rate cap for commercial waste

haulers, which would be the first rate

increase since 2008. Waste Age

2012-2016P

CAGR: 2.3%

Sentiment

247.3249.7

254.6 255.4

251.3

243.6

249.9

255.5

258.2

262.7

230

235

240

245

250

255

260

265

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E

Historical U.S. Solid Waste Generation

20042013E

(Million Metric Tons)2009-2013E

CAGR: 1.9%

Source: IBIS World.

In its efforts to privatize waste

collection services, Detroit is looking

to establish a five-year agreement to

expand single-stream recycling

collection across the city. Waste &

Recycling News


13/21

12

$15.2$15.6

$16.0$16.4

$17.0

$17.7

$18.3

$13

$14

$15

$16

$17

$18

$19

2010 2011 2012 2013E 2014P 2015P 2016P

7,924

6,326

5,386

3,558

3,091

2,3141,967 1,767 1,767 1,754 1,812 1,908

0

2,000

4,000

6,000

8,000

10,000

1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010

Sub-Sector Review

Solid Waste Disposal

Solid Waste Disposal News Despite the increase of waste generated in the U.S., the increase inrecycling rates has lead to the steady decline in the number of

landfills from 7,924 in 1988 to 1,908 in 2010, but recent trends show

an increase in size of landfills as older, less efficient landfills are

replaced by larger, more efficient facilities.

Disposal of waste to a landfill has decreased from 90% of the

amount generated in 1980 to under 65% of MSW in 2011.

Food waste, which accounted for approximately 15% of MSW in

2011, represents a significant opportunity in the solid waste market

as its applications for waste-to-energy fuel and composting materials

are further utilized.

Waste treatment and di sposal services revenue is estimated to grow

at a 3.3% CAGR from $16.0 billi on in 2012 to $18.3 bill ion i n

2016P as the population ri ses, manuf acturin g rebounds from the

economi c recovery, and the WtE market conti nues to grow.

U.S. Waste Treatment & Disposal Services Revenue

20102016P

($ in billions)

Source: IBIS World.

Tipping fees at America's

landfills are inching higher, butonly enough to keep pace with

inflation, according to a new

survey from Waste & Recycling

News.

Waste & Recycling News

The amount of out-of-state solid waste that

ended up in Virginia one of the top states

for importing waste fell about 3.4% in

2012. Waste & Recycling News

North Carolinas governor signed a bill

that loosens environmental regulations

for landfills and an executive order

allowing local officials to protect against

any leaks from waste trucks. Waste

Age

2012-2016P

CAGR: 3.3%

Sentiment

Number of U.S. Landfills

19882011

19882011

CAGR: -6.0%

Source: U.S. EPA.

Landfill emissions of methane fell

30.3% from 1990 to 2011, partially

attributed to a 21% decrease in the

disposal of compostable materials

and an increase in the amount of

landfill gas that's being collected.



14/21

13

$5.1$5.4

$5.6

$5.9$6.2 $6.2

$6.5

$3

$4

$5

$6

$7

2010 2011 2012 2013E 2014P 2015P 2016P

Sub-Sector Review

Recycling

Historical U.S. Waste Stream Trends

20102016P

($ in billions)

U.S. Recycling Facilities Revenue

Recycling News While the amount of municipal solid waste has steadily increasedsince 1960, Americans have shifted to recycling their waste.

An example of this shifting consumer preference is the increase in

curbside recycling programs from 8,875 in 2002 to 9,800 in 2011.

The recycling rate in the U.S. has increased from less than 10% of

MSW generated in 1980 to close to 35% in 2011, indicating an

increase in infrastructure and market demand for recycling.

U.S. recycli ng facil iti es revenue is estimated to grow at a 4.0%

CAGR fr om $5.6 bill ion i n 2012 to $6.5 bil li on in 2016P.

Alongside evolving consumer preferences and regulatory changes,

technological advancements like single-stream recycling and all-in-

one mixed-waste processing have helped grow recycling and

material recovery rates.

19602011

94% 93% 90%84%

71%65%

6% 7%10%

16%

29%35%

0%

20%

40%

60%

80%

100%

0

50

100

150

200

250

300

1960 1970 1980 1990 2000 2011

MSW Wa ste Genera ted % Disca rded t o La ndf ill % Recycled

The overall recycling rate for

steel was 88% in 2012 with

nearly 84 million tons of steel

recycled, the Steel RecyclingInstitute announced. Waste

& Recycling NewsOn course to double its recycling

rate to 30% by 2017 and save at least

$60 million annually, New York City

Mayor Mike Bloomberg unveiled anew public information campaign

"Recycle Everything" to remind

everyone how easy it can be to make

a measurable difference. Waste &

Recycling News

In 2005, 20% of recycling communities

used single-stream, but by 2010, that had

grown to 64%. The Huffington Post

2012-2016P

CAGR: 4.0%

Source: U.S. EPA. Source: IBIS World.

Sentiment


15/21

14

Historical E-Waste Generation and Recycling Trends E-Waste Laws

E-Waste News More than half of the United States has some form of e-wasteregulation or disposal ban enacted, with many still considering laws.

Due to the growing adoption and shorter lifecycles of electronics,

the Consumer Electronics Association estimates Americans own

approximately 24 electronic products per household.

Consumers and businesses now have more options to recycle their e-

waste local community recycling events or pickups, online

buyback websites, and new technologies such as ATM-like machines

located in shopping centers.

Data security is an important consideration for consumers andbusinesses when disposing of their electronic devices this service

is a valuable competitive advantage for certain e-waste businesses.

The global e-waste recycling market is expected to grow at a 13.2%

CAGR fr om $9.8 bill ion i n 2012 to $18.3 bill ion i n 2017P.1

Sub-Sector Review

E-Waste

U.S. General Services Administration

announces new guidelines banning allfederal agencies from disposing of e-

waste in landfills.

U.S. General Services Administration

Study finds that 25% of all e-waste

handlers directly engage in exporting

and 41% reported being reasonablycertain some portion of their materials

was later exported by another

organization.

U.S. International Trade

Commission

E-Waste Law Proposed E-Waste Law No E-Waste LawSource: National Center for Electronics Recycling.

10.0%

13.7%

18.3%18.8% 19.6%

24.9%

0%

5%

10%

15%

20%

25%

30%

0

1,000

2,000

3,000

4,000

2000 2005 2007 2009 2010 2011

Tota l E-Wa ste Genera ted E-Wa ste Tra shedE-Waste Recycled Percent Recycled

The U.S. House introduced an

electronic waste recycling bill

prohibiting the exporting of some

e-waste to avoid improper

disposal. Waste360

The EU recently adopted new rules on

e-waste, which requires all member

states to enact collection targets of45% of electronic equipment sold

starting in 2016, and a target of 65%

of equipment sold or 85% of

electronic waste generated by 2019.

GreenBiz

20002011

(Thousands of Tons)

Source: U.S. EPA.

(1) Transparency Market Research.

Sentiment


16/21

15

Sub-Sector Review

Specialty Waste Industrial

Industrial Specialty Waste News

More than 860 trillion cubic feet of

shale gas sit under American soil,

which means more waste. In the tri-

state region of PA, OH, and WV,

the waste from shale gas drilling has

gone from 0% in 2008 to 6% in

2012.


Large waste management businesses have begun to diversify theirtraditional business models by acquiring companies in specialized

waste services industries, including oil and gas.

As regulations continue to become more specific towards certain

industries, the industrial specialty waste sector will continue to grow

and see investment from larger waste management firms looking to

enter this attractive niche.

Global industri al waste recycli ng and services market is expected

to grow at a 10% CAGR fr om 2012 to 2016P, partiall y driven by

the incr ease in sources of industrial waste generati on.1

Oil and gas companies are expected to increase envir onmental ,

health, and safety (EHS) spending by 60% fr om $35 billi on in

2011 to $56 billi on in 2030P, dri ving demand for industri al waste

solutions.

Its no secret that those in the solid

waste management business are

increasingly viewing oil and natural

gas field wastes as a business growth

opportunity. Casella Waste Systems

is one of those companies looking to

expand their traditional business

model. Waste & Recycling News

Global EHS Spending by Oil & Gas CompaniesN.A. E&P Waste Treatment, Recycle, and Disposal Expansion

10% 50%

90%

50%

0%

20%

40%

60%

80%

100%

N.A. E&P Ca pital

Budgets

N.A. E&P Waste

Management

N.A. Future E&P

Waste Management

Other

E&P

CapEx

E&P Waste

Management

Liquid

Waste

Management

Solid

Waste

Management

Future

Solid / Liquid

Waste

Management

Size $190 - $200bn $15 - $20bn TBD

20112030P

($ in billions)

$35

$56

$0

$10

$20

$30

$40

$50

$60

2011 2030P

2011-2030PGrowth: 60%

The drilling waste management market

is estimated to grow from over $4

billion in 2013 to nearly $8 billion by

2018, at a CAGR of over 10%.

Markets and Markets

Source: Equity Research.

(1) TechNavio.Source: Lux Research.

Sentiment

Waste Management is acquiring twoenergy services companies in a push to

expand its environmental service

offerings to oil and gas industry

customers in the Bakken shale formation.



17/21

16

Sub-Sector Review

Specialty Waste Hazardous

Hazardous Specialty Waste News

California is embarking on a newpush to cut hazardous waste landfill

disposal in half by 2025, but also

wants to allow expansion of one

such hazardous waste site.


U.S. Hazardous Waste Generation Management

Hazardous waste generation trends have fluctuated between 2001and 2009, but the amount generated has roughly stayed constant

while the portion of waste that was disposed of increased by 2.1

million tons.

The oil & gas, petrochemical, and manu factur ing renaissance is

dri ving in creased demand for hazardous waste services.

Of the disposal methods, underground injection is the most popular,

increasing from 90.7% of hazardous waste produced in 2001 to

91.2% of hazardous waste produced in 2009.

Other methods include landfill, land treatment, and incineration in

the U.S., no new landfills have been permitted in the past 18 years

and no new incinerators have been constructed in the past 16 years.

The growth of new industries like e-waste recovery and solar

energy wi ll also help to grow hazardous waste coll ections in the

U.S. as new types of waste are classif ied as hazardous.

U.S. Hazardous Waste Disposal by Practice

While solar power is a far less

polluting energy source than coalor natural gas, many panel

makers are nevertheless

grappling with a hazardous waste

problem.

Associated Press

ChinasGreenFenceaims to avoid

receiving hazardous waste or medical

waste, which would reject the whole

shipment received. Waste &

Recycling News

24.6

20.1

28.827.6

24.8

19.5

16.1

23.7 24.321.6

0

5

10

15

20

25

30

35

2001 2003 2005 2007 2009

Genera ted Disposed

20012009

(millions of tons)20012009

(millions of tons)

Source: Environmental Business Journal. Source: U.S. EPA.

Sentiment

17.6814.48

21.75 22.44 19.67

1.78

1.60

1.92 1.85

1.90

0.02

0.02

0.00 0.00

0.01

0

5

10

15

20

25

30

2001 2003 2005 2007 2009Underground Injection La ndfill/Surfa ce Im poundmentLand Treatment/Land Application


18/21

17

Sub-Sector Review

Specialty Waste Medical

Medical Specialty Waste News

Global Medical Waste Market Competitive Landscape

Proper disposal of medical waste is imperative to reduce the risk ofcross contamination and the spread of infection currently over

90% of medical waste in incinerated to aid this effort.

U.S. EPA regulates the air emissions for medical waste incinerators

and in May passed amendments aimed at further minimizing

emissions.

The U.S. medical waste management market is expected to grow at

a 5.4% CAGR fr om $3.1 bill ion i n 2013E to $4.0 billi on in 2018P,

dri ven by the growing demand of the pharmaceuti cal industry and

the aging population.

Global ly, the medical waste management market is expected to

reach $10.3 bil li on in 2018P, representing a 4.9% CAGR f rom $8.1

billi on in 2013E.

Stericycle is one of the largest competitors in the medical waste

management industry with approximately 14% global market share.

U.S. Medical Waste Management Revenue

Hospitals in two Australian

states have recycled 33,000pounds of PVC waste, turning

it into industrial hoses and

non-slip floor mats.

Environmental Leader

Citing growing community concern, Utah

Gov. Gary Herbert has ordered the stateDepartment of Health to conduct a detailed

study of a medical waste incinerator in North

Salt Lake City. The Republic

GlaxoSmithKline hopes to collect 100,000 used

respiratory inhalers through a new collectionprogram being offered to community-based

retail pharmacies in 31 U.S. markets. Currently,

inhalers may not be recycled by curbside

recyclers, and therefore likely go to landfills,

GSK said. Environmental Leader

Government shutdown halts

EPA hazardous waste and

medical waste investigation at

site of warehouse fire in

Detroit.MLive.com

As of Q2 20132013E 2018P

($ in billions)

Source: Markets and Markets. Sources: Frost & Sullivan, Stericycle.

Sentiment

$3.1

$4.0

$0

$1

$2

$3

$4

$5

2013E 2018P

2013E-2018P

CAGR: 5.4%

Stericycle, 14%

Onsite

Managementand Other

Competitors,

86%


19/21

18

2.4 2.5

3.5

0.0

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

2006 2011 2016P

Sub-Sector Review

Recycled Content

Recycled Content Waste News

U.K. project to turn business waste

from tenants including a food grade

plastic recycling business, a

gasification plant, and an anaerobic

digestion plant into green roof

material. GreenBiz.com

As pressure builds from special interests

for the federal government to ditch its

preference for LEED certification of

buildings, the latest version of LEED has

been approved, making it more powerful

than ever. Members of the US Green

Building Council voted overwhelmingly

(85%) to include Cradle to Cradle

certification in LEED V4.

Sustainable Business News

China's "Green Fence" crackdown

on dirty scrap materials has reduced

imports of plastic waste by 5.5% inthe first four months of the year, a

significant change for a country

long-used to double-digit increases

in recycled materials flowing in.


U.S. Post-Consumer Plastic Demand

The explosive demand for recycled content is driven by changingconsumer preferences and the growing amount of waste.

The supply of post-consumer plastic has proven challenging for

businesses but recent changes in regulation, the emergence of

public-private and business-to-business partnerships, and improving

technology and waste stream management are helping to mitigate

roadblocks in the supply chain.

I n additi on, demand for post-consumer plastic is expected to ri se

6.5% per year to 3.5 bill ion pounds in 2016P.

Nearly 170 million tons of annual building construction, renovation,

and demolition derived wastes account for nearly 60% of the

nationsnon-industrial, non-hazardous solid waste generation.

The sustainable buil ding material s industry is expected to grow at

a 17.6% CAGR fr om $21.0 bil li on in 2012 to $40.0 bil li on in

2016P, dri ven i n part by the implementation of L EED v4.

U.S. Sustainable Building Materials Manufacturing Revenue

$13.1$16.2

$21.0

$25.0

$31.3

$36.1

$40.0

$0

$10

$20

$30

$40

$50

2010 2011 2012 2013E 2014P 2015P 2016P

20102016P

($ in billions)

2012-2016P

CAGR: 17.6%

100% recycled plastic vehicle bridge, made

from 80% post consumer plastic and 20%

recycled car bumpers and dashboards,

holds strong in Ohio. Earth Techling

20062016P

(Billion of Pounds)

2011-2016PCAGR: 6.5%

Source: IBISWorld. Source: Freedonia.

Sentiment


20/21


21/21

20

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