Gravel fractions are sieved and washed for reuse at Renewi’s ATM site.

ROBUST PROGRESS DURING FY20; ACTIONS TAKEN TO MITIGATE IMPACT OF Covid-19; ENHANCED STRATEGY TO deliver sustained long-term growth

Otto de Bont, Chief Executive Officer, said:

“We made robust progress during the year, delivering financial results in line with our expectations and a number of strategic and financial objectives including: raising €107m through strategic disposals, receiving permission to resume TGG shipments at ATM, delivering our cost synergies and other restructuring projects, and we made good progress with a growing pipeline of circular solutions and partnerships.

“Renewi provides an essential service in the front line of maintaining vital services to hospitals, businesses and communities and our dedicated employees have been able to keep serving our customers whilst we have innovated to ensure a safe working environment. Our specific actions on cost and cash will preserve our liquidity even in an extended crisis and we have secured amendments to our banking covenants until September 2021.  As a result of these actions, we are well placed to mitigate the impact of Covid-19. 

“Looking forward, the momentum towards a circular economy is unstoppable.  Today, we announce our enhanced strategy, which will enable us to capture the growth opportunities from the circular economy, and our Renewi 2.0 programme, which will deliver improved customer service as well as €20m of cost benefits through digitisation and optimised internal processes. Aligned with our enhanced strategy, we have defined our ambitious sustainable development goals.”

Financial Summary

• Financial performance in line with expectations
• Revenue from ongoing businesses up 2% to €1.70bn¹
• Underlying EBIT from ongoing businesses down 10% to €72.0m¹
• Underlying profit before tax from ongoing businesses down 23% to €44.5m¹
• Underlying EPS from ongoing businesses down 25% to 4.1 cents per share¹
• Core net debt* of €457m (2019: €552m), representing 2.98x EBITDA and below bank covenant of 3.5x
• As previously announced, total non-trading and exceptional items of €120m, €35m of which were cash, resulting in a statutory loss after tax of €77.1m for the year and a basic loss per share of 7.7 cents per share (2019: loss per share 9.0 cents)
• As previously announced, no final dividend to be paid due to Covid-19, resulting in a total dividend for the year of 0.45p per share

¹Numbers quoted on an ongoing businesses basis (excluding the results of the businesses sold during the year) and are stated on an IAS 17 basis, excluding the positive impact of the implementation of IFRS 16 the new lease accounting standard to enable meaningful comparisons. The definition and rationale for the use of non-IFRS measures are included in note 18.

*Core net debt excludes the impact of IFRS 16 leases and net debt relating to the UK PFI/PPP contracts.

Operational and Strategic Highlights

• Continued growth in core Commercial Division despite weaker markets and Covid-19
• Restrictions lifted on TGG soil shipments at ATM and first shipment made; initial capacity installed to make construction materials from TGG
• Good performance in Monostreams and Municipal Divisions, with operational improvements and restructuring delivering benefits; lower profits in Municipal as expected
• Enhanced strategy announced to capture profitable growth in the circular economy by being the leader in recycling and in secondary materials production
• €40m integration cost synergies delivered.New €20m Renewi 2.0 programme to create a simpler, more efficient and more digital business with higher margins and improved cash flows
• Divisional structure simplified from five to four, creating commercial synergy and reducing cost and risk
• Ambitious new sustainability strategy, closely aligned with core business strategy
• Successful secondary listing on Euronext Amsterdam exchange

Covid-19 Update

• As previously announced on 29 May 2020, significant actions taken to mitigate the impact of Covid-19 on our people, customers and operations
• €252m of liquidity at 31 March 2020 and appropriate bank covenant amendments secured to September 2021
• Swift and decisive action taken to reduce operating costs and preserve cash flows, saving €60m during FY21
• Executive Directors and Board elected to take a voluntary 20% cut in remuneration during the period of lockdown and the Executive Committee has taken a voluntary 10% cut, executive bonuses for last year will be paid in shares, preserving cash and the bonus scheme for the current year is suspended
• Volume reductions during lockdown slightly lower than originally expected, remaining cautious as to shape of economic recovery

Outlook

Based on our experience since the second half of March, we expect Covid-19 to result in a potential reduction in EBIT and cash of up to €20m in the first quarter compared with our previous expectations.  This outflow is comfortably contained within our €252m of liquidity as at 31 March 2020 and our revised banking covenants.  The outlook for the remainder of the year will be dependent on the nature and timing of the lifting of lockdown restrictions and the speed of economic recovery.  Longer term, waste volumes are resilient through cycles and the transition to increased recycling remains a strong long-term structural growth driver for the Group.  The recovery of earnings at ATM and our Renewi 2.0 programme are expected to further support sustained future earnings growth. 

⁺The definition and rationale for the use of non-IFRS measures are included in note 18. Ongoing businesses as presented exclude the financial results for the Canada Municipal business which was sold on 30 September 2019 and the Reym business which was sold on 31 October 2019. In addition, the Canada Municipal segment meets the definition of a discontinued operation and is recorded as such.