Renewi plc (RWI)
Renewi plc: Final results
04-Jun-2020 / 07:00 GMT/BST
Dissemination of a Regulatory Announcement that contains inside information according
to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group.
The issuer is solely responsible for the content of this announcement.
4 June 2020
Renewi plc
Renewi plc (LSE: RWI), the leading international waste-to-product business, announces
its results for the year ended 31 March 2020.
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
EUR 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 EUR 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 EUR 1.70bn1
· Underlying EBIT from ongoing businesses down 10% to EUR 72.0m1
· Underlying profit before tax from ongoing businesses down 23% to EUR 44.5m1
· Underlying EPS from ongoing businesses down 25% to 4.1 cents per share1
· Core net debt* of EUR 457m (2019: EUR 552m), representing 2.98x EBITDA and below
bank covenant of 3.5x
· As previously announced, total non-trading and exceptional items of EUR 120m,
EUR 35m of which were cash, resulting in a statutory loss after tax of EUR 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
· EUR 40m integration cost synergies delivered. New EUR 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
· EUR 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 EUR 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 EUR 20m in the first quarter
compared with our previous expectations. This outflow is comfortably contained within
our EUR 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.
March 2020 March 2020 March 2019 %
change
(IFRS16 basis) (IAS17 basis) (IAS17 basis)
(IAS17
basis)
Revenue+ EUR 1,697.0m EUR 1,697.0m EUR 1,670.9m 2%
ongoing
businesses
EBITDA+ EUR 187.6m EUR 157.5m EUR 165.5m -5%
ongoing
businesses
Underlying EUR 75.5m EUR 72.0m EUR 80.2m -10%
EBIT+
ongoing
businesses
Underlying EUR 42.5m EUR 44.5m EUR 57.5m -23%
profit
before tax+
ongoing
businesses
Underlying 3.9c 4.1c 5.5c -25%
EPS+ ongoing
businesses
(cents per
share)
Underlying EUR 119.9m EUR 93.0m EUR 30.3m
free cash
flow+
Exceptional EUR (120.2)m EUR (120.2)m EUR (146.0)m
and
non-trading
items
including
tax
Core net EUR 457.2m EUR 552.0m
debt
(excluding
asset held
for sale and
IFRS 16)
Core net 2.98x 3.06x
debt to
EBITDA
STATUTORY
Revenue from EUR 1,775.4m EUR 1,780.7m
continuing
operations
Operating EUR (28.1)m EUR (56.6)m
loss from
continuing
operations
Loss before EUR (59.4)m EUR (89.0)m
tax from
continuing
operations
Loss from EUR (16.6)m EUR (21.1)m
discontinued
operations
Basic loss (7.7)c (9.0)c
per share
from
continuing
operations
(cents)
Cash flow EUR 167.8m EUR 86.8m
from
operating
activities
Final - 0.5p
Dividend
(pence per
share)
+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.
For further information contact:
Renewi plc
Otto de Bont - Chief Executive Officer +44 (0)1908 650580
Toby Woolrych - Chief Financial Officer
FTI Consulting
Richard Mountain / Susanne Yule +44 (0)20 3727 1340
Notes:
1) Renewi will be holding an online analyst presentation at 10.30 a.m. today.
Webcast: https://channel.royalcast.com/webcast/renewi/20200604_1/ [1]
2) A copy of this announcement is available on the Company's website,
(www.renewiplc.com [2]). A copy of the presentation being made today to financial
institutions will also be available.
Forward-looking statements
**************************
Certain statements in this announcement constitute "forward-looking statements".
Forward-looking statements may sometimes, but not always, be identified by words such
as "will", "may", "should", "continue", "believes", "expects", "intends" or similar
expressions. These forward-looking statements are subject to risks, uncertainties and
other factors which, as a result, could cause Renewi plc's actual future financial
condition, performance and results to differ materially from the plans, goals and
expectations set out in the forward-looking statements. Such statements are made only
as at the date of this announcement and, except to the extent legally required, Renewi
plc undertakes no obligation to revise or update such forward-looking statements.
Chief Executive Officer's Statement
Overview
In this review we will:
· Review a successful FY20, with trading in line with expectations and delivery of
our key strategic goals;
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