By the numbers
Adjusted Q4 EBITDA: $70M
Down 9.1% year over year
2024 revenue: $2.34B
Down just under 1% year over year
- Financial picture: Executives on Thursday’s earnings call described Q4 as “solid” as Harsco segments met key objectives and Clean Earth continued to grow. Enviri achieved its highest adjusted earnings before income, taxes, depreciation and amortization in 10 years in 2024, $319 million, driven by Clean Earth. That performance occurred despite economic headwinds in the global steel industry and the continued drag of some unfavorable contracts in Enviri's Harsco Rail business. The company also logged negative revenue impact from divestitures in 2024, notably of Reed Minerals in the third quarter.
- Board changes: Two people will retire from Enviri's board of directors, the company announced. David Everitt was a former Deere & Co. executive who has been a director since 2010 and Enviri's independent lead director since 2018; he served as interim president and CEO of the company for a stint in 2014. Phillip Widman has been a director on Enviri's board since 2014 and was previously CFO of global manufacturer Terex. The board nominated Nicholas Fanandakis, former CFO of DuPont, to join.
- Debt: The company reported a credit agreement net leverage ratio of 4.07x at the end of 2024, an improvement from where the company stood at the end of 2023. In the third quarter of 2024, the company amended its existing credit facilities to "provide additional cushion" for its finances, CFO Tom Vadaketh said on the call. "We expect to continue to be proactive and opportunistic in addressing future maturities."
- Clean Earth: This business segment delivered its second consecutive year of free cash flow over $100 million, per Vadaketh. Its adjusted EBITDA was $36 million in Q4, up 24.1% year-over-year, with revenue and margin improvements. Since 2021, Clean Earth’s contributions to Enviri's consolidated EBITDA have grown from 25% to over 50%, CEO Nick Grasberger said. The company plans to invest significant capital in Clean Earth next year to drive growth. "Clean Earth has become a very valuable business in an attractive and consolidated industry," Grasberger said.
- Harsco Rail: The company is making progress on wrapping up a trio of unfavorable European engineered-to-order rail contracts. Revenue for the segment increased 8.5% year-over-year to $77 million in Q4. The company described the segment as a drag on free cash flow for 2024 due to increased capital expenditures for certain contracts. That dynamic is projected to flip in 2025. By 2027, the company projects free cash flow from the segment to be $150 million.
- Harsco Environmental: The business segment has been beset with "the biggest challenges the global steel industry has seen in 20 years," as cheap Chinese steel has flooded global markets, Grasberger said. Harsco Environmental has also suffered from the strengthening U.S. dollar in recent years, affecting foreign currency translation. Still, Grasberger assured investors the company has weathered downturns before and can manage current conditions. Harsco Environmental logged adjusted EBITDA of $41 million in Q4, down 26.8% year over year.
- PFAS: Grasberger declined to name new opportunities for management of per- and polyfluoroalkyl substances after previously touting PFAS treatment as a growth area for the company. He said no substantial revenue from PFAS has been built into the company's three-year plan. That said, the company continues to treat wastewater for PFAS at a facility in Detroit and is actively testing products with the U.S. Department of Defense, Grasberger said. "We're quite active, but we don't have anything of substance built into 2025 for PFAS."
- 2025 outlook: Enviri tempered expectations for 2025 performance due to steel prices. It projects adjusted EBITDA of between $305 million and $325 million, comparable to 2024. Still, the company projects improved free cash flow as Harsco Rail executes on certain contracts. It expects between $130 million and $140 million on capital expenditures in 2025 as well.
