GFL Environmental Inc.

Environmental Services Operating Segment

Revenue increased by $42.7 million to $371.2 million for the three months ended December 31, 2023, compared to the three months ended December 31, 2022. Acquisitions completed since October 1, 2022 contributed approximately $38.1 million in increased revenue. In addition to the contribution from acquisitions, revenue organically grew by $4.8 million as a result of increased industrial collection and processing activity and the impact of higher UMO selling prices, partially offset by a lower level of emergency response activity and lower soil volumes processed at our facilities. Revenue increased by $0.2 million for the three months ended December 31, 2023, compared to the three months ended December 31, 2022, as a result of changes in the foreign exchange rate.

Revenue increased by $214.0 million to $1,462.9 million for the year ended December 31, 2023, compared to the year ended December 31, 2022. The change in revenue was impacted by $39.5 million contributed from divestitures and an outsized amount of sub-contracting revenue in the prior year. Excluding this impact, revenue increased by $253.5 million. Acquisitions completed since January 1, 2022 contributed approximately $124.2 million in increased revenue. In addition to the contribution from acquisitions, revenue grew organically by $119.7 million as a result of increased industrial collection and processing activity, an increased level of emergency response activity and the impact of higher UMO selling prices, partially offset by lower soil volumes processed at our facilities due to one time volumes in the prior year. Revenue increased by $9.7 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, as a result of changes in the foreign exchange rate.

Adjusted EBITDA increased by $16.2 million to $89.2 million for the three months ended December 31, 2023, compared to the three months ended December 31, 2022, predominantly attributable to the previously described change in revenue. Adjusted EBITDA margin was 24.0% for the three months ended December 31, 2023, an increase of 180 basis points as compared to the three months ended December 31, 2022. Pricing strategies, variable cost controls, higher UMO selling prices and the reduction in the price of fuel favourably impacted Adjusted EBITDA margin for the three months ended December 31, 2023. The increase was predominantly offset by increased labour costs from tight labour markets which drove up wage rates, training costs and overtime, as well as increased transfer and disposal costs driven by inflationary cost pressures and delays associated with supply chain constraints. A fire at one of our facilities resulted in incremental repair and clean up costs. The incremental revenue from acquisitions contributed Adjusted EBITDA margin lower than the existing base business, negatively impacting the overall Adjusted EBITDA margin.

Adjusted EBITDA increased by $75.4 million to $382.8 million for the year ended December 31, 2023, compared to the year ended December 31, 2022, predominantly attributable to the previously described change in revenue. Adjusted EBITDA margin was 26.2% for the year ended December 31, 2023, an increase of 160 basis points as compared to the year ended December 31, 2022. Pricing strategies, variable cost controls, higher UMO selling prices, the reduction in the price of fuel and the operating leverage associated with volume recovery favourably impacted Adjusted EBITDA margin for the year ended December 31, 2023. The increase was predominantly offset by increased labour costs from tight labour markets which drove up wage rates, training costs and overtime, as well as increased transfer, disposal and maintenance and repairs costs driven by inflationary cost pressures and delays associated with supply chain constraints. A fire at one of our facilities resulted in incremental repair and clean up costs. The incremental revenue from acquisitions contributed Adjusted EBITDA margins lower than the existing base business, negatively impacting the overall Adjusted EBITDA margin.