Renewi plc: Final results

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  [phone] 
 
Toby Woolrych - Chief Financial Officer 
 
FTI Consulting 
 
Richard Mountain / Susanne Yule [phone] 
 
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; 
 

(MORE TO FOLLOW) Dow Jones Newswires

June 04, 2020 02:00 ET (06:00 GMT)