旅途中的亮点，无浪费且前路清晰

Equity ResearchJune 4, 2025 Highlights From the Road, Nothing Wasted andPath Forward Clear We hosted RSG senior management to meet with investors. Overall, we'rebullish on (1) RSG's positioning in a rebounding industrial/manufacturingbackdrop, (2) its ongoing margin expansion opportunity, particularly from routeand pricing optimization, and (3) its long runway for M&A, across both MSW/recycling & ES. Reit Buy, PT to $290. More Than Just a Defensive Play; Poised to Benefit When Manf PMI Rebounds:While we continueto view the waste sector as defensive in this uncertain macro (strong pricing & FCF, necessaryservice), we think RSG is also poised to benefit in a more constructive macro backdrop withaccelerating industrial activity. Further, we see industrial tailwinds related to nearshoring/onshoringas long-term benefits. RSG offers the broadest set of offerings in the Environmental Services space- spanning MSW, recycling, and hazardous waste, enabling the company to serve as a "one-stopshop" which creates greater pricing power. We note that it has direct exposure to the industrialeconomy through its ES business (~12% of revenue), as well as ~$1.5bn of revenue within MSWand recycling tied to industrial/manufacturing.continued on pg. 3 Margin Story Has Legs:We remain confident in RSG's ongoing margin expansion story as itbenefits from favorable price-cost spread (price at least 100bps ahead of inflation), further techimplementation (route optimization, dynamic pricing, resi fee capture), and RNG/polymer centercontribution. On the technology front, while the company has successfully rolled out its RISEplatform across its network/throughout its fleet, it has just scratched the surface in terms ofharvesting and analyzing the data associated with running its routes and serving 13mm customers.Beyond just continued route optimization, we see the ability to analyze the data to make moreinformed pricing decisions at the customer level vs. a broad market pricing approach. All in we see,greater pricing power with the ability to improve stickiness and customer retention. M&A Environment Highly Attractive; Nice Upside Driver:RSG remains active in M&A acrossboth recycling & waste and Environmental Solutions, targeting opportunities that can deliver DDunlevered cash-on-cash returns. Given its healthy pipeline and large TAM ($100bn recycling & waste+ $35bn in ES), we would not be surprised to see the company exceed the $1bn target for 2025. Interms of deals completed YTD, we're bullish on its Shamrock Environmental deal as the businessis leading industrial waste and wastewater treatment provider. Specifically, the business camewith (1) critical, irreplicable infrastructure, (2) an accretive margin profile, & (3) PFAS treatment(here) technology. On the latter, we see this asset as critical in RSG's ability to benefit from PFAStreatment requirements going forward. Further, adding water and PFAS treatment to its suite ofservice offerings reinforces the RSG value proposition to its customers and creates cross-sellingopportunities for RSG. Stephanie Moore * | Equity Analyst(615) 934-1384 | smoore@jefferies.comHarold Antor * | Equity Associate(212) 778-8483 | hantor@jefferies.comPJ Sullivan * | Equity Associate+1 (646) 805-5461 | psullivan@jefferies.com The Long View: Republic Investment Thesis / Where We Differ •Landfill pricing remains structurally higher even as inflation moderates.•Landfill positioning advantageous,given building construction dataanalysis.•Industrial waste synergy capture and cross-sell potential post US Ecologydeal. Downside Scenario,$214, -17% Upside Scenario,$357, +39% Base Case,$290, +13% •Landfill pricing rolls over quickly, and companyreturns to the LSD historical range longer term.•US consumer market weakens.More UShousing exposure than peers (Sun Belt states~51% of total revenue base).•Volume growth continues to lag the sector.Recycling takes longer to restructure.•2021 acquisition spend high-water mark. 2023and beyond comes off materially (ex ECOLdeal).•$214 PT based on ~28x total FCF of $7.94(2025 base of 2028 RNG), discounted back •Incremental EBITDA margin 40%+ run rate, ifpricing holds up (organic growth ~5%+).•US Ecology synergies come in stronger thanexpected.•More conversion of the restricted CPI businessto higher fixed-priced contracts (currently 20%of CPI portfolio).•Volume growth catches up to WM levels if "non-regrettable losses" normalize.•$357 PT based on ~36x total FCF of $10.28(2025 base of 2028 RNG), discounted back •Expect 40bps of margin expansion in FY25.•Pricing sustainable on landfill site and shouldremain elevated in 2025.•No structural reason FCF conversion cannotreach high 40s.•Incremental upside from US Ecol synergies.•Recycling restructuring progressing well.•$290 PT based on ~32x total FCF of $9.34(2025 base of $8.93 + 2028 RNG of $0.41),discounted back Sustainability Matters Catalysts Top Material Issue(s): GHG emissions.As waste companies consider ways to low