美股-环境服务业-北美环境服务业：与WM的CEO和CFO谈话纪要

www.ubs.com/investmentresearch This report has been prepared by UBS Securities LLC. ANALYST CERTIFICATION AND REQUIRED DISCLOSURES BEGIN ON PAGE 27. UBS does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.  Global Research 23 January 2020 North America Environmental Services Management call with WM CEO & CFO; Takeaways & transcript We hosted a call with Waste Management We hosted a call with Waste Management CEO Jim Fish & CFO Devina Rankin. On the call we discussed WM's People First focus. The call was part of our ongoing UBS Management Call Series which aims to enhance clients understanding of public company operations through deep-dive discussions with senior management teams. If you would like to schedule a call with Jon to discuss this or any other topic of interest, please click here: https://bit.ly/341MYYt. Key takeaways from the presentation The views expressed below are those of the speaker and do not necessarily reflect those of UBS.  WM's People First focus is based on the idea that by putting employees first, they will in turn put customers first, which in turn will drive shareholder returns. ROIC is a top priority of management when making People First investments.  Driving down employee turnover is a key focus for WM, with the majority of turnover occurring in year 1 of employment. After year 2, retention rates dramatically increase. Turnover cost is ~$12k per employee. For WM's 17-18k drivers this implies an annual cost of turnover of ~$45mn based on a 22% turnover rate. WM has decreased the rate of driver turnover to ~20% in 2019 implying a $3-4mn annual savings.  Employee movement across roles historically was not encouraged. WM is now sending all drivers and technicians to its new training center in Phoenix, which has improved new driver safety and customer records, increasing retention. WM is working to identify traits that make good managers. WM believes that good leadership is more important than pay or benefits in driving retention.  Average age of WM's heavy equipment operators is ~52. Average age of all employees is ~45. An aging workforce presents a financial risk to WM, including increased healthcare costs. WM's partnership programs with high schools is designed to help recruit a younger workforce.  WM is piloting a remote heavy equipment operations program with Caterpillar. Management anticipates an easier recruitment process for remote operator roles rather than on-site operators, which is likely to be targeted at Millennials. Turnover substantially better for remote-type roles. Existing equipment life and age of operators will dictate pace of transition to remote operations. Equities Global General Industrial Services Jon Windham, CFA Anal