Results centre
Preliminary Results FY23
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- Revenue of €1,892m and underlying EBIT# of €132.9m similar to prior year (FY22: €1,869m and €133.6m respectively)
- Effectively mitigated lower recyclate prices, lower volumes and high inflation through ongoing cost control and customer price increases
- Basic EPS reduced from 93 cents to 79 cents
- Group underlying EBIT margin of 7.0% (FY22: 7.1%) with Commercial, Maltha and Coolrec all operating close to 10% margin
- Statutory profit after tax of €66.6m (FY22: €75.4m)
- Core net debt* increased to €370.6m (FY22: €303.0m) due to the acquisition of Renewi Westpoort (Paro) during the year. Net debt to EBITDA increased to 1.8x (FY22:1.4x)
# The definition and rationale for the use of non-IFRS measures are included in note 17.
* Core net debt used for banking leverage calculations excludes the impact of IFRS 16 lease liabilities and UK PPP net debt.
1 Consensus expectations are for underlying Group FY24 Revenue of €1.96bn, EBITDA of €258m and EBIT of €128m. See Analysts & Coverage section of the Renewi investor relations website for more details -
- Good progress made on our key strategic initiatives to deliver €60m of additional EBIT by FY26, with €20m delivered so far, Renewi 2.0 largely completed, €60m of the investment pipeline deployed and Mineralz & Water recovery ongoing
- Customer net promoter score increased from 3 to 18, supported by digitisation and process improvements
- Volumes lower due to reduced activity in certain market segments in the Netherlands, increased pressure from secondary disposers and focus on margin accretive volumes
- Recycling rate (rebased) increased to 63.6%, resulting in 7mT of secondary materials being put back into reuse
- Scope 1, 2 and 3 emissions methodology externally validated and application for SBTi underway
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- The Group continues to trade in line with market expectations for FY241
- Recycled metal, paper, and plastics prices expected be more stable around current levels in FY24, except wood which remains strong
- Price increases and tailwinds generated by Renewi 2.0, Mineralz & Water recovery and investments are expected to cover cost inflation including energy and wages
- Ambition to accelerate revenue growth targeting €3bn in five years at high single digit margins as a minimum. Growth will be achieved through market share gains, by extracting more value from waste by deploying advanced recycling and by targeted acquisitions. EBIT improvement is expected to grow even faster, driven by growth and cost reduction through digitisation
- Cash generation expected to improve consistently over time with Covid tax deferrals and shipment of Mineralz & Water TGG coming to an end
- Recommencement of a dividend for FY24 alongside a continued programme to invest capital in our core businesses and potential further acquisitions to drive growth
# The definition and rationale for the use of non-IFRS measures are included in note 17.
* Core net debt used for banking leverage calculations excludes the impact of IFRS 16 lease liabilities and UK PPP net debt.
1 Consensus expectations are for underlying Group FY24 Revenue of €1.96bn, EBITDA of €258m and EBIT of €128m. See Analysts & Coverage section of the Renewi investor relations website for more details
Financial Highlights
- Underlying EBIT1 increased 16% to €75.2m (2021: €64.7m), on revenue up 4% to €952m (2021: €916m)
- EBIT margin increased to 7.9% (2021: 7.1%) supported by good margins in the Commercial and Specialities divisions
- Underlying EBITDA1 increased to €131.9m (2021: €126.6m)
- Statutory profit of €53.4m (2021: €36.5m) as a result of increased EBIT and a net exceptional profit* of €10m
- Core net debt# increased to €388m (March 2022: €303m), reflecting the initial debt impact of €66m for the Paro acquisition and €16m of innovation capital investments. Net debt to EBITDA of 1.7x (March 2022: 1.4x) in line with expectationsMain drivers of first half result included strong operational performance, balancing volume pressure with cost control, and margin management by passing inflation through to customers. Higher recyclate prices in Q1 and certain favourable one-off items supported the performance
Strategic Highlights
- Commercial Netherlands completed the acquisition of the Paro C&D business in Amsterdam in August. Site rationalisation and integration are now underway
- Renewi’s first advanced sorting line in Ghent has been built and is expected to be commissioned in H2 FY23, to allow our customers to be compliant with Vlarema 8 legislation which bans recyclable materials from being incinerated
- Good progress on committed €100m+ circular innovation investments with €45m deployed to date
- Both regulation and societal pressure continue to increase demand for recycled materials and to divert more waste from landfill and incineration to recycling
- Recycling rate increased to 68.4% (March 2022: 67.2%)
- Renewi 2.0 programme and Mineralz & Water recovery plan remain on track
Outlook
- We are mindful of the current challenging macroeconomic outlook with continuing inflationary cost pressures, the movement of recyclate prices to normalised levels and ongoing pressure on volumes in the near-term. Accordingly, management’s expectations for the full year are unchanged despite a stronger than anticipated first half performance
- In the medium-term we are committed to protecting our margins, offsetting inflation with price, countering volume pressure with strong cost control and benefitting from the Group’s proven resilience. We remain on track to deliver the remaining €40m+ from the identified value drivers
- In the longer-term we remain confident that, with regulation driving increasing demand for recycled materials, Renewi is well positioned for growth in its markets and to serve customers profitably as the circular economy develops and the market for low carbon secondary materials evolves
1The definition and rationale for the use of non-IFRS measures are included in note 18.
*Including discount rate changes following central bank rate increases and inflationary impacts on long-term contracts.
#Core net debt used for banking leverage calculations excludes the impact of IFRS 16 lease liabilities and UK PPP net debt.