Tobey Sommer: And last thing for me. Any regulatory proceedings that you’re tracking that could create new opportunities but also require some new investments?
Patrick Dovigi: No. I mean from that perspective, I think, again, we’re pretty selective, like I said earlier, about markets where we’re going to go and for acquisitions that we think are sort of relevant for us and looking at the sort of dynamic of what exists in the market today. So I mean, other than PFOS, I would say the landfill is nothing that sort of jumps out at me. But I think from a DOJ perspective, our perspective, nothing that comes to mind. We’re just focused on, again, going into markets where we know we can be through the DOJ and the HSR process in a relatively short order which, again, money is not everything in some of these acquisitions. I think some of the sellers don’t want to take 12 and 18 months to go through a process through HSR, et cetera.
So I think that’s our focus. And I think when you have a limited number of dollars you’re going to deploy in any given year, particularly like this year, gives us the luxury of being very selective about what we want to do and where we want to do it and how we want to do it.
Operator: Our next question comes from Chris Murray from ATB Capital Markets.
Chris Murray: Maybe going back to the Environmental Services reclass. Just a couple of questions on this. First of all, I guess, it moved in aggregate, the margin on ES by about 90 basis points. So a couple of questions on this. First of all, what actually did move between segments? And is this more of a financial thing or an operating thing? The other question is, down the road, when you think about how you’re operating the businesses, is ES going to continue to operate part of kind of a regional approach or is it separate management teams, things like that? Just wondering, just as we think about this reclass, how the business is organized on a go-forward basis.
Luke Pelosi: Yes, Chris, it’s Luke speaking. We did put an appendix in the deck. I think it’s on Page 17 of the deck, showing the details of the reclass. But really, what it is, if you go back, we bought a business called Sprint Waste Services, I believe, was in 2022 and that business, vertically integrated solid waste collection business, primarily in the Houston market, also had some environmental services type work and you think about just the refineries and the activity that happened down in that geography. Originally, we had this recorded in all Solid Waste. But in reality, the plant services type component of it very much fits within what we do with Environmental Services. So the reclass is primarily about taking that business line and putting it into our environmental services, just to be more consistent with that work that we do elsewhere.
We took the opportunity. There was a few other similar instances from acquisitions that have been completed and solid that had some ancillary services to move those over as well. But it really was the Sprint and Houston, the majority of that. The driving was operationally, I mean, we run the business with what makes sense in the field and our Environmental Services management team and professionals are best suited to do that work and we wanted to put that where we think we have the best opportunity and it’s with that team. The business is regionally run just like our Solid Waste business. Ed Glavina, who runs it as a whole has individual area VP. They’re responsible for each of their respective markets and we don’t see that changing. That’s the structure that’s worked very well for us in solid waste and we’re going to continue to employ it in environmental services and execute the same playbook of giving them the sort of freedom and capability to run their respective markets as we do believe waste, whether it’s environmental services or solid, is a regionally focused business and continue to use the corporate function to support them in every way that we can.
They are highly successful in solid and we expect for continued success in Environmental Services.
Chris Murray: The other question I had for you is something about, you talked a little bit about this with your 2024 outlook is about looking to improve turnover and health and safety metrics. Can you give us some color about where you’re sitting today, feels like employee turnover should be settling down. But when you think about longer-term goals on both those metrics, where do you want to get to? I mean, obviously, probably zero injury zero incidents would be the target. But where are you today and where do you think you need to go? And what’s involved in getting there?
Patrick Dovigi: Well, I mean, from a turnover perspective — from a turnover perspective, I think we want to be in a place where you’re sort of in the high teens, right? I think that’s where we’ve sat for a long period of time and I think that’s where we generally want to go today, that low 20s but materially down from the peak which was high 20s, approaching 30 in sort of some markets. I think from where we sort of sit today, that makes us feel very good about where that trajectory is going and where that’s sort of trending. And obviously, from a PR [ph], I think where we’re sitting, we will sort of want to be in the two’s [ph]. And I think this year was the best year we’ve had and we moved to a place in 2020 with roughly sort of 4.4 to just over sort of 3 this year.
So we think we’re going to generally move that to sort of mid-two’s in that sort of best-in-class and sort of world class for our industry. So again, we’re almost there, a little bit of work to do but we feel really good about where that’s going.
Operator: Our next question comes from John Mazzoni from Wells Fargo.
John Mazzoni: Maybe just a quick one on the solid waste volumes. Obviously, the intentional shedding color was very helpful. But could you just frame the kind of delay as well as the lag impacts and how we should think about these contracts rolling through? Are they going to be kind of an item in the next few years as well as ’24 or are there any other kind of clips or timing items we should be aware of?
Luke Pelosi: Hello, John, it’s Luke speaking here. So as we articulated through 2023, I think the lion’s share of the effort is sort of behind us for what was easily actionable. Now you raised a great point that some of the contracts are not at our ability to get out of as and when we want. And so you have to wait until the anniversary. So Patrick had alluded to Southeast Michigan being a pocket where we see some of that opportunity coming off as those contracts reset. And certainly, there’s other pockets throughout our book as well. So we’re going to continue to evaluate. I do think you’ve seen the majority of it with our existing book of business. You could have another sort of 100, 125 basis points over the next ’24, ’25 additionally. But certainly, the wholesale exiting of our sort of noncore offerings, we think sort of behind us and it’s probably now around the edges a little bit more.
Operator: Our final question comes from James Schumm from TD Cowen.
James Schumm: My call dropped earlier, so apologies if you already covered this. But can you update us on your truck deliveries given the supply chain challenges?
Patrick Dovigi: Yes. I mean I think where we — it’s certainly getting better. We received sort of last year 70% of what we wanted and we think this year that will be closer to 90%. And it would be 100% if we didn’t have to augment some trucks in for — we’ve had to switch for new residential contract wins, et cetera but certainly getting better. And we think by 2025, we’ll be back to exactly where we ended pre-pandemic.
James Schumm: Okay, great. Thanks. All my other questions have been answered. Thank you.
Patrick Dovigi: Thank you. Well, thank you everyone for joining the call. We look forward to speaking to you after Q1. Thank you for joining.
Operator: That concludes today’s GFL Environmental fourth quarter 2023 earnings call. You may now disconnect your lines.
