REG-Renewi plc Renewi plc: Final Results
27/05/2021 07:05
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Renewi plc (RWI)
Renewi plc: Final Results
27-May-2021 / 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.
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27 May 2021
Robust PERFORMANCE AND GOOD PROGRESS on GROWTH INITIATIVES
improved OUTLOOK FOR fy22
Renewi plc (LSE: RWI), the leading international waste-to-product business, announces its results
for the year ended 31 March 2021.
Financial Highlights
• Robust results reflect resilient business model, swift Covid-19 cost and cash action, and a
significant improvement in the second half
• Revenue from ongoing businesses flat and revenue from continuing operations down 5% to
€1,694m1
• Underlying EBIT from ongoing businesses 3% below prior year and above previous guidance at
€73.0m1
• Statutory profit of €11.0m compared to a loss of €77.1m in the prior year
• Core net debt* reduced to €344m from €457m last year, representing net debt to EBITDA of 2.2x
• Material upgrade to our expectations for FY22
Strategic Highlights
• Good progress with innovation pipeline with projects commissioned and in construction,
including ATM new products, BioLNG facility, and a further RetourMatras facility
• Renewi 2.0 programme on track and delivered benefits ahead of plan of €2.2m in FY21
• ATM results impacted by delays in approvals to ship TGG, however good progress made, capacity
to make new construction materials commissioned, and three year recovery plan remains on
track
• Proposed 1 for 10 share capital consolidation to be included at forthcoming Annual General
Meeting
Sustainability
• Our business enables a circular economy: sustainability is our business strategy
• Ambitious "Mission75" launched to increase our recycling rate from 65.8% to an
industry-leading 75% over five years, equivalent to an extra 1.3m tonnes per annum
• A leading ESG model; new ESG evaluation of 83 issued by S&P (up from 75 in 2020)
1The definition and rationale for the use of non-IFRS measures are included in note 17. Ongoing
businesses as presented for the prior year exclude the financial results for the Canada Municipal
business sold on 30 September 2019 and the Reym business sold on 31 October 2019.
* Core net debt used for banking leverage calculations excludes the impact of IFRS 16 lease
liabilities and UK PPP net debt.
Otto de Bont, Chief Executive Officer, said:
"Our performance improved as the year progressed, despite the pandemic, and I am pleased to
report final results which are significantly better than we had anticipated in early 2020. This
is due to the determined efforts of our people, as they delivered seamless service to our
customers and communities in the most challenging environment. These results also reflect our
swift actions on cost and cash, our resilient business model and the strengthening recyclate
prices in the second half.
"We also made good progress on our key strategic initiatives to deliver sustained growth for
Renewi.
"Looking ahead, the Board now expects the Group's performance in FY22 to be materially ahead of
its previous expectations given the Group's strong results in FY21, particularly in the second
half, and the prevailing high recyclate prices.
"The transition to a circular economy will increase demand for recycling and higher quality
recyclates, which supports our business model. The sustainability agenda and the potential for a
"green recovery" driven by the EU and national governments are expected to present more
attractive opportunities for Renewi to convert waste into a wider range of high-quality secondary
materials. We remain confident our three strategic growth initiatives - recovery of earnings at
ATM, the Renewi 2.0 programme and our innovation pipeline - will deliver significant additional
earnings over the next three years and beyond."
Results
FY21 FY20 % change
UNDERLYING NON STATUTORY
Revenue1 ongoing businesses €1,693.6m €1,697.0m 0%
Underlying EBITDA1 ongoing businesses €195.7m €187.6m 4%
Underlying EBIT1 ongoing businesses €73.0m €75.5m -3%
Underlying profit before tax1 ongoing businesses €47.4m €42.5m +11%
Underlying EPS1 ongoing businesses (cents per share) 4.5c 3.9c +15%
Free cash flow1 €141.0m €57.8m +144%
Core net debt* €344m €457m
Core net debt plus IFRS 16 lease liabilities €580m €669m
STATUTORY
Revenue from continuing operations €1,693.6m €1,775.4m
Operating profit (loss) from continuing operations €43.4m €(28.1)m
Profit (loss) before tax from continuing operations €18.2m €(59.4)m
Loss from discontinued operations - €(16.6)m
Profit (loss) for the year €11.0m €(77.1)m
Basic EPS from continuing operations (cents) 1.4c (7.7)c
Cash flow from operating activities €258.2m €167.8m
1The definition and rationale for the use of non-IFRS measures are included in note 17. Ongoing
businesses as presented for the prior year exclude the financial results for the Canada Municipal
business sold on 30 September 2019 and the Reym business sold on 31 October 2019. The Canada
Municipal segment met the definition of a discontinued operation and is recorded as such.
* Core net debt used for banking leverage calculations excludes the impact of IFRS 16 lease
liabilities and UK PPP net debt.
The results for both this year and the prior year are reported applying IFRS 16. Where
appropriate, we also disclose certain metrics on an IAS 17 basis as this is relevant particularly
for the calculation of leverage for the Group's banking covenants.
For further information:
FTI Consulting Renewi plc
+44 20 3727 1545 +44 7976 321 540
Susanne Yule Adam Richford, Head of IR
+44 20 3727 1340 +44 7773 813 180
Richard Mountain Michelle James, Communications
Notes:
1. Renewi will hold an online analyst presentation at 10.30 a.m. BST today. Webcast:
1 https://channel.royalcast.com/landingpage/renewi/20210527_1/
2. A copy of this announcement is available on the Company's website, ( 2 www.renewiplc.com).
The presentation made to analysts today will also be available on the website.
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
The financial performance in the year ended 31 March 2021 was significantly better than we had
originally expected at the start of the Covid-19 pandemic. This was driven by our swift actions
on cost and cash, our resilient business model and by stronger recyclate prices in the second
half. As a result, underlying EBIT from ongoing businesses fell by only 3% to €73.0m. With a
significant reduction in exceptional items, statutory profit increased to €11.0m (FY20: loss of
€77.1m). Core net debt reduced by €113m to €344m and our leverage ratio reduced to 2.2x (FY20:
3.0x).
Sustainability is at the heart of our business model. Our purpose of giving new life to used
materials enables the circular economy, which is essential if society is to meet its carbon
reduction goals. We have therefore maintained our focus on the longer-term strategic drivers for
Renewi: increasing our recycling rate; increasing the quantity and quality of the secondary
materials we supply; expanding our market share and improving both efficiency and customer
service through our Renewi 2.0 programme. Good progress has been made with the strategy and we
remain well positioned to benefit from the continuing drive towards circularity of the European
economies.
Group financial performance
Renewi made two strategic disposals in the prior year, generating €107m gross cash proceeds. The
table below includes the results from Reym in the last year prior to its disposal. The Canada
Municipal segment is not included as it was reported as a discontinued operation. Renewi
subsequently changed the divisional and reporting structure from 1 April 2020 and the prior year
comparatives for the ongoing businesses have been restated. Excluding businesses sold in the
prior year provides a more representative view of performance in the year. These results
therefore focus on ongoing businesses as we believe that this gives a clearer comparator.
Group Summary Revenue Underlying EBIT
FY21 FY20 Variance FY21 FY20 Variance
€m €m % €m €m %
Commercial Waste 1,240.6 1,250.2 -1% 76.8 78.6 -2%
Mineralz & Water 182.8 151.6 21% 0.3 5.6 -95%
Specialities 300.8 323.2 -7% 2.4 (1.3) N/A
Group central services - - (6.5) (7.4) 12%
Inter-segment revenue (30.6) (28.0) - -
Ongoing Businesses 1,693.6 1,697.0 0% 73.0 75.5 -3%
Reym - 78.4 - 12.1
Continuing Operations 1,693.6 1,775.4 -5% 73.0 87.6 -17%
The underlying figures above are reconciled to statutory measures in note 3 in the consolidated
financial statements. Ongoing businesses as presented for the prior year 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.
Revenue from continuing operations was down 5% to €1,694m and underlying EBIT was down 17% to
€73.0m. Excluding businesses sold in the prior year revenue was flat and underlying EBIT
decreased by just 3%. Underlying profit before tax from ongoing businesses increased by 11% to
€47.4m, reflecting primarily lower borrowing costs as a result of reduced debt and leverage
ratios. Underlying earnings per share from ongoing businesses increased by 15% to 4.5c (FY20:
3.9c).
The Commercial Division saw revenues fall by 1% and underlying EBIT by 2%. This was a highly
resilient performance, particularly in the Netherlands and in the second half, with volumes
recovering well from the first lockdown and certain recyclate prices increasing sharply back to
levels last seen in 2017.
The Mineralz & Water Division made underlying progress and saw revenues increase by 21%, due to
the transfer in of a facility from Specialities. Underlying earnings fell to €0.3m with
additional offsite soil storage costs of €4.1m, as previously announced, now included in ordinary
trading, having previously been accounted for as exceptional. We also made a further accrual of
€5m to allow ATM to ship legacy inventories of TGG and related materials at worse prices. Other
activities in the division were slightly ahead of expectations.
The Specialities Division generated an underlying EBIT of €2.4m compared to a loss of €1.3m in
the prior year. Coolrec recovered particularly well after a difficult first quarter, and Maltha
and the UK Municipal contracts performed in line with expectations despite significant ongoing
challenges arising from Covid.
The business delivered a positive operational cash performance of €117.5m in the year (193% free
cash flow conversion), including a €54m impact in the year from tax deferrals in the Netherlands
as a result of Covid-19. This strong performance also reflected a determined focus on working
capital, reduction of cash outflows in Municipal, reduced exceptional cash outflows and a 14%
reduction in replacement capital expenditure. Our core net debt at 31 March 2021 was €344m, a
25% reduction on the previous year and a 38% reduction from the peak two years ago. Leverage
fell to 2.2x (FY20: 3.0x), well within our covenant. Liquidity headroom including cash and
undrawn facilities was also strong at €364m (FY20: €252m).
The Board has decided not to pay a dividend this year while the full impacts of Covid-19 and the
shape of the recovery remain uncertain. The Board will keep the future resumption of dividends
under review during FY22.
Managing the impact of Covid-19
The last year has demonstrated the resilience of the Renewi business model. As market leader,
our scale means that we serve most segments of the Dutch and Belgian economies. Therefore, as
some segments contracted, such as hospitality, others increased, such as bulky waste. In
addition, our dynamic pricing model protects us when recyclate prices fall, as they did in the
first half before recovering strongly in the second half.
Our virus response team coordinated a decisive action plan from the outset to prepare for and
then to manage Covid-19. We are an essential service and we were able to maintain all services
to our customers throughout the year. Rapid changes were made to some collection processes, such
as digitising collection notes, and to our operating facilities in order to protect our people.
Total confirmed infections over the year were relatively low at 443 given that our drivers travel
extensively within communities every day. We are deeply appreciative of the commitment and
flexibility of all our colleagues who enabled this seamless maintenance of an essential service
to the community. We recognised the exceptional effort of over 6,000 essential frontline and
operational support team members with a one-off ex gratia cash bonus of €200 each.
We took prompt action to reduce costs and preserve cash and were able to exceed both targets. We
reduced operational costs (beyond the variable costs) by €19m and secured cash savings of €77m
against targets of €15m and €60m respectively. We deployed €3m of these savings to reward our
frontline and operational support teams. We have additionally taken steps to rationalise our
footprint in certain locations and activities, recognising that the economic impact of the
pandemic will be longer lasting. Our Covid-19 cost action plan has resulted in the closure or
planned closure of six processing lines or sites with a cash cost of €3m and an annual benefit of
circa €2m from next year.
Well positioned in a market focused on increasing circularity
The Covid-19 pandemic has strengthened the resolve of Western European leaders to "build back
better" and to focus on a "green recovery". This recognises the urgent need for action to
address global warming and resource depletion, including water.
Our purpose is to protect our planet by giving new life to used materials, and our vision is to
be the leading waste-to-product company in the world's most advanced circular economies. This
differentiates Renewi as a company that focuses on reuse: supplying high-quality secondary
materials, which we believe is the best way to extract value from waste. We are a key player in
the rapidly emerging circular economy and a pioneer among companies that collect our society's
waste to find new uses for it.
Regulatory changes within the last year include the passing into law of Vlarema 8 in Flanders
that effectively bans the incineration of any recyclable waste. This will require a further step
change in source segregation by waste producers by 2023 and a significant investment by the
recycling industry to offer a capability to sort waste streams that cannot be segregated at
source. The Netherlands is pressing ahead with a progressive carbon tax that will ramp up over
the next decade, while the UK Government has promised a significant strategy for waste in 2023.
We believe that Renewi is well placed to meet the needs of these regulatory developments.
Looking forward, legislators are considering further action, including further carbon taxes,
minimum recycled content levels and producer responsibility for the management of closed loops.
All these measures will help to accelerate the transition to increased recycling rates and,
critically, increased demand for secondary materials. While progress is being made, we believe
that it will have to accelerate significantly if governments wish to meet their own recycling and
circularity targets.
Last year we launched Renewi's upgraded sustainability strategy and our new sustainable
development objectives for the next three and five years. Starting from the UN Sustainable
Development Goals, we focus on three key themes: Enable the circular economy; Reduce carbon
emissions and waste; and Care for people. In keeping with our purpose, our business and
sustainability strategies are inextricably linked and mutually supportive. By delivering on one,
we deliver on the other.
During the last year we have made good progress with our strategy, including the following
highlights:
• Increased recycling rate from 64.7% to 65.8% (+1.1% points), mainly driven by a decrease in
volumes to incineration in Commercial Belgium, and an improved recycling performance in
Mineralz & Water
• 3.1m tonnes of carbon avoidance, up 1.5% year on year per tonne of waste processed
• Additional 7 solar roofs installed, and permit for the largest Belgium on-land wind turbine
in Ghent obtained
• Employee NPS (net promoter score) improved by 50%, as a result of active management follow-up
on employee feedback
Progress against each of our specific targets is detailed in full in both our forthcoming Annual
Report and our Sustainability Review.
Our strategy for long-term profitable growth
To expand our position as a secondary raw material producer, our strategy is based on three
pillars:
1. Leader in recycling: increase our recycling rate. We will invest to start or expand
production of secondary raw materials out of waste streams currently going to incineration or
landfill. Our ambitious goal, launched as "Mission75", is to increase our recycling rate
within five years to 75% from the current 65.8%, which we believe is already the highest in
the industry.
2. Leader in secondary material production: Enhance value of the products we produce. To build
a circular economy, the usage of secondary raw materials must increase. For production
companies currently using primary raw materials, the easiest way to convert is by using high
quality secondary raw materials that they can "drop-in". We aim to significantly increase
the value of our products by investing in advanced processing of our materials.
3. Selectively gain market share. Our primary focus in the Benelux is on driving margin
expansion from existing waste flows through the first two pillars of our strategy. In
addition, there are consolidation opportunities in our sector, and we intend to participate
both in smaller acquisitions in our core markets and potentially to enter into new
geographies with strong growth potential for our waste-to-product model.
This strategy is further underpinned by our modernisation of Renewi in the Renewi 2.0 programme.
Good progress with our innovation portfolio
Innovation is one of our core priorities and we are working on a growing number of initiatives to
deliver the first two pillars of our growth strategy with a view to delivering an additional EBIT
of €20m by FY26. Given that a number of these initiatives relate to new products or
technologies, we do not expect them all to proceed to commercialisation.
Project Partner Opportunity Status
ATM Gravel sand & filler Stand-alone €€€€€ Filler capacity installed and product
certifications progressing well
Organics: bio-gas Stand-alone € Construction underway for commissioning
production in late 2021
Organics: bio-gas to Shell & Nordsol €€ Construction underway for commissioning
bio-LNG in late 2021
New facilities: third complete, fourth to
Mattress recycling IKEA group €€€ open in summer 2021 and fifth in
planning. New investment to chemically
recycle polyurethane
New sorting lines in Ghent, Acht and
NEW: Expansion plastic Stand-alone €€ Waalwijk to convert up to 100kt of hard
recycling plastic to high quality plastic
recyclates
Feedstock for chemical SABIC € - €€€ Discussions ongoing concerning feedstock
recycling of plastics specification and sourcing
Polyurethane recycling Chemical recycler € - €€€ Technical feasibility studies underway
Wood flake for low-carbon Arcelor-Mittal €€ - €€€€ Commercial discussions ongoing
steel
NEW: Advanced residual Stand-alone €€€€€ To meet the stringent requirements of
waste sorting Vlarema 8 legislation in Belgium per 2023
Cellulose recovery and bottom ash treatments have been returned to earlier stage-gates in the
innovation pipeline following detailed evaluations.
Renewi 2.0 programme
We announced last year our Renewi 2.0 programme: a three-year programme to make the company
simpler, more customer-focused, more efficient and a better place to work. This comprises
multiple projects, orientated around two key themes:
• Digitisation of the business. We are developing a new front-end interface for customers that
will allow them to place and amend orders, have full visibility on our services and related
cost as well as on the circular benefits their waste is creating. This digitisation will
deliver a better 24/7 customer experience, while reducing our cost to serve.
• Simplification and harmonisation of processes. Our core processes can be simplified and
standardised across our divisions to reduce cost, reduce errors, and improve customer,
supplier and employee experiences. We are implementing global process owners for our core
processes and centres of excellence to simplify our product offering, improve our core data
and eliminate wasted activity.
As previously indicated, the programme is expected to deliver a minimum of €20m of annual cost
benefits on a run-rate basis after completion of this three year programme to 2023 for a total
cash cost of €40m, which will be split into an exceptional cost of €33m and capital investment of
€7m. €2.2m of net benefit was reported in FY21 against a target of €1.0m. We remain confident
that we will achieve the targeted savings in the coming years.
Key progress during FY21 included the initial go-live of MyRenewi, our customer portal. Around
15,000 customers now have access to MyRenewi and feedback is positive. Further modules are in
development and we will progressively transition more of our customers onto MyRenewi during
FY22. We also went live with the invoice-to-pay module of Coupa, our source-to-pay system. The
procure-to-pay modules will be introduced, by division, starting from the summer of 2021. The
restructuring of four divisions into three delivered the expected €2m benefit. We have also
invested in new "centres of excellence" for global process management, product and service
pricing, record to report and data management that are expected to drive significant benefits
going forward.
ATM profit recovery
ATM is our major site that cleans contaminated soil, water and chemical waste, providing a unique
range of services in the Netherlands. The market for the thermal treatment of contaminated soil
and its reuse as thermally treated soil ("TGG") was disrupted from mid-2018 due to environmental
concerns, reducing earnings by around €20m. ATM's TGG was cleared by IL&T, the national
regulator, for use in appropriate locations from late 2019.
Good underlying progress was made in FY21, with growth in the inbound soil pipeline, installation
of capacity to separate and store the new filler product, and increasing quality certification of
the new building products; sand, gravel and filler. However, it has taken longer than expected
to secure local permits for outlets for accumulated TGG, which slowed the operational ramp up of
manufacture of new products in FY21. Recently new contracts have been signed to ship over 0.5MT
of TGG. This will in turn allow us to increase the production of the new building materials as
space becomes available. We remain confident that our three-year recovery will be delivered as
expected.
Divisional and Group Outlook
The Commercial Division has started the year strongly, supported by positive volumes and ongoing
strong recyclate prices. We expect several sectors within Commercial to recover to pre-Covid-19
volumes in the coming months, particularly in hospitality and retail. At the same time, we
remain alert to a potential weakening of the construction sector in the Netherlands, a softening
of recyclate prices and the risk of increased insolvencies and credit issues as government
support is withdrawn.
We expect to see the Mineralz & Water Division's results improve through the year as TGG is
cleared from the ATM site and certification of the new secondary materials can complete.
Selective investment, both in the more efficient production of the secondary construction
materials and in improved capacity on the waterside, will support the return towards the €20m
EBIT target by the end of FY23.
In the Specialities Division, we expect a recovery in Maltha and ongoing progress in Coolrec
during FY22. UK Municipal is expected to perform as previously forecast, with the cash losses
from contracts reducing further to around €10m in FY22 (FY21: €15m).
Looking ahead, the Board now expects the Group's performance in FY22 to be materially ahead of
its previous expectations, given the Group's strong results in FY21, particularly in the second
half, and the prevailing high recyclate prices.
The transition to a circular economy will increase demand for recycling and higher quality
recyclates, which supports our business model. The sustainability agenda and the potential for a
"green recovery" driven by the EU and national governments are expected to present more
attractive opportunities for Renewi to convert waste into a wider range of high-quality secondary
materials. We remain confident our three strategic growth initiatives - recovery of earnings at
ATM, the Renewi 2.0 programme and our innovation pipeline - will deliver significant additional
earnings over the next three years and beyond.
Operating Review for the year ended 31 March 2021
Commercial Waste
Financial performance
The Commercial Division performed strongly in FY21 despite the loss of volumes due to Covid-19.
A strong second half performance completely offset weakness in the first half which was impacted
by the first lockdown and the Netherlands exceeded its FY20 performance. Revenues fell by just
1% to €1,240.6m, while underlying EBIT fell by 2% to €76.8m. EBIT margins reduced by 10bps to
6.2% and the return on operating assets increased by 170bps to 17.6%. The Division delivered €15m
of Covid-19 cost savings during the year, with 56% in the second half, amidst second lock downs
and despite recovering volumes.
Commercial Waste Revenue Underlying EBITDA Underlying EBIT
FY21 FY20 FY21 FY20 FY21 FY20
Netherlands Commercial 828.4 812.6 113.9 104.4 53.7 49.4
Belgium Commercial 412.9 439.1 52.5 56.1 23.1 29.2
Intra-segment revenue (0.7) (1.5) - - - -
Total (€m) 1,240.6 1,250.2 166.4 160.5 76.8 78.6
Year on year variance %
Netherlands Commercial 2% 9% 9%
Belgium Commercial -6% -6% -21%
Total -1% 4% -2%
Return on Underlying Underlying
operating assets EBITDA margin EBIT margin
FY21 FY20 FY21 FY20 FY21 FY20
Netherlands Commercial 15.7% 13.1% 13.7% 12.8% 6.5% 6.1%
Belgium Commercial 24.2% 25.4% 12.7% 12.8% 5.6% 6.6%
Total 17.6% 15.9% 13.4% 12.8% 6.2% 6.3%
Following the change in the composition of the reporting segments from 1 April 2020, Netherlands
Commercial now includes Orgaworld, previously in Monostreams, and includes a proportion of group
central costs. All prior year comparatives have been restated. The return on operating assets
for Belgium excludes all landfill related provisions. The underlying figures above are reconciled
to statutory measures in notes 3 and 17 in the consolidated financial statements.
Revenues in the Netherlands grew by 2% to €828.4m and underlying EBIT increased by 9% to €53.7m.
Underlying EBIT margins increased by 40bps to 6.5% and return on operating assets increased by
260bps to 15.7%. The performance was driven by improved inbound prices, cost actions and higher
recyclate prices.
Volumes in the Netherlands were less impacted by Covid-19 than in Belgium and the UK, with fewer
segments badly affected, combined with some market share gain. Volumes were 94% of the prior
year in the first quarter, strengthening to 97% and 98% in the second and third quarters before
slipping back to 95% with the fourth quarter lockdown. Core volumes were down by 1.4% on the
prior year: Commercial waste volumes, which include hospitality, were 11% lower than the prior
year, but this was significantly offset by a 4% growth in construction & demolition volumes, and
an 18% increase in bulky waste volumes. Recyclate volumes reduced by 2.5%, with 5% falls in paper
and plastics offset by a 7% increase in wood. Food waste volumes fell by 21%, reflecting the
near closure of the hospitality sector. Inbound pricing has remained relatively unaffected to
date, with a small net margin increase driven by the price increases introduced before Covid-19
in January 2020.
Recyclate prices increased in the fourth quarter, most notably for paper and ferrous metal. This
represented an expected recovery from the very low prices seen in 2018-19 supported by specific
near-term supply/demand changes caused by Covid-19. For example, European demand for cardboard
has been strong, reflecting increased online deliveries following lockdown restrictions. At the
same time generation of wastepaper in offices contracted due to remote working. The full year
impact of recyclate volumes and prices was €3m versus prior year.
Belgium experienced a significantly greater impact from Covid-19 than the Netherlands. Revenues
fell by 6% to €412.9m and EBIT by 21% to €23.1m. Underlying EBIT margins contracted by 100bps to
5.6% and return on operating assets by 120bps to 24.2%.
Belgian volumes in the first quarter reduced to 76% of prior year in a very sharp lockdown which
closed large parts of the economy. This recovered to 91% in the second quarter, 92% in the third
quarter and 97% in the fourth quarter, noting that this last data point compares to a sharp
initial lockdown in the prior year. Core volumes were down by 12%, with commercial down 14%, and
recyclate volumes by 5%. Belgian cost actions amounting to €8m were delivered, which partially
offset the lost profit from lower volumes. EBIT in the second half was broadly flat on the prior
year, reflecting positive progress compared to the first half.
Operational review
Our Commercial Division was clearly primarily focused, at least in the first half, on managing
Covid-19. Nevertheless, good progress was also made with its longer-term strategic projects.
Covid-19 operational response
Our rapid response to the crisis required agility and innovation from our teams on the ground.
We implemented innovations such as digital collection notes which reduced physical contact to
avoid transmission and to protect our customers. Our back-office staff quickly transitioned to
working from home with no loss of productivity. We extended our activities supporting the
healthcare sector with additional collection services and new PPE and medical equipment recycling
partnerships.
Our cost controls began with reductions in discretionary costs such as marketing and travel, but
also extended to finding ways to operate with reduced overtime and temporary labour. We expect
to retain the benefit of some of these changes when volumes fully return. Four sites or
processing lines in the Netherlands and two in Belgium have been closed or are expected to close
during FY22 as we further optimise our footprint to meet new demand patterns.
Increasing diversion of waste and adding value to our secondary materials production
Long-term waste volumes are expected to be broadly flat, with some growth for Renewi from
customer share gain. We expect to continue to drive our margin expansion from these volumes by
increasing the diversion of waste we collect away from landfill and incineration. Having diverted
waste from landfill and incineration, our next priority is to increase the value we add from the
products we make through increased quality. We call this "spread expansion".
We made good progress with a number of key projects to deliver our longer term growth strategy
during the year:
• Our RetourMatras joint venture with the IKEA Group continues to expand rapidly. During the
last year we commissioned the third facility with a fourth expected to be on stream this
summer, thereby giving us complete coverage of the Netherlands and an ability to recycle over
one million Dutch mattresses. We also welcomed IKEA's partner IKANO as a shareholder. IKANO
has technology to recycle the recovered foam back into polyurethane that can be used to make
new mattresses, therefore closing the loop. We are exploring international expansion
opportunities with our fellow shareholders, starting in Belgium;
• Construction is underway of a €10m dedicated facility to process out-of-date food waste and
provide feedstock to our anaerobic digester in Amsterdam. Construction will complete and the
site fully commissioned in late 2021;
• We signed an agreement with Shell and Nordsol to build and operate a new facility at our
Amsterdam anaerobic digester site to take bio-methane and convert it to bio-LNG for zero
carbon transport fuel. Construction is underway for this innovative unit and commissioning is
planned for late 2021;
• The new €6m stone crusher at Wateringen has demonstrated its enhanced product quality in its
first year of operation, allowing us to sign our first 12KT contract to supply the recycled
stones back into the concrete industry;
• We have completed a €1.2m dockside loading installation at our Vlaardingen facility, allowing
us to ship wood chips to customers abroad;
• We generated record product sales at our Hoek van Holland green waste treatment facility,
entering into more closed loop agreements with local horticultural customers;
• We commissioned our new €2.5m plastics sorting line at Ghent. The new facility produces much
higher quality plastic granulates, allowing us to significantly increase the spread on the
products we sell; and
• We have started our investment of €2.4m to install a new sand washing line in
Mont-St-Guibert. The new line will improve sand capacity and quality and will reduce our
environmental impact by using 80% less water.
Clean and green collection
The efficient collection of waste provides an essential service to customers and provides us with
the raw materials from which to create new products. However, we seek to minimise pollution and
traffic impacts to become cleaner, greener and more efficient, in support of our primary focus to
increase diversion and close the loop in the circular economy. We therefore seek to optimise our
capital-intensive logistical activity while preserving our customer intimacy and service.
We continue to reduce pollution by investing in the latest technologies. During the past year we
invested €39m in purchasing 272 Euro VI trucks with the lowest emissions. These trucks reduce
pollutants by over 90% compared to the older trucks they are replacing, significantly improving
the air quality of the cities in which they operate. Over 60% of our fleet is now Euro VI and we
are on track for 100% by 2025.
Over the next decade, we expect a step change in the reduction of carbon emissions from waste
collection through two approaches. The most significant will be a transition to use of zero
emission vehicles (ZEV), likely electric or hydrogen powered, in response to zero emissions zones
in major cities. The second is an opportunity for waste companies to combine to collect waste in
single "white label" truck fleet operation per town, increasing route efficiency and reducing the
number of vehicles. During the last year we ordered the first electric rear end loaders produced
by both Volvo and DAF. The Volvo is commissioned and on operational trials with us and the DAF
will follow later in FY22. We have also purchased a vehicle to collect organic waste from Albert
Heijn supermarkets that runs on bio-LNG in a closed loop solution.
To support the transition to cleaner and safer inner cities we will reduce heavy goods movements
through a new joint venture, the "Green Collective". Together with other major Dutch waste
operators we aim to jointly collect waste within thirty municipal regions by 2025, to increase
route density and reduce CO2 emissions from collections.
Leadership changes
In addition to the previous appointment of Marc den Hartog, who joined us as Managing Director,
Commercial Waste Netherlands from 1 April 2021, we are also now pleased to announce the
appointment of Mark Thys as Managing Director, Commercial Waste Belgium, with effect from 1 June
2021. Mark joins from Eurofins Scientific where he led global transformations and prior to this,
he was a regional Managing Director at Goodyear Dunlop. Mark succeeds Wim Geens who has been part
of Renewi and predecessors for 15 years and we wish him every future success.
Mineralz & Water
Financial performance
Mineralz & Water FY21 FY20 Variance
€m €m %
Revenue 182.8 151.6 21%
Underlying EBITDA 15.0 18.7 -20%
Underlying EBITDA margin 8.2% 12.3%
Underlying EBIT 0.3 5.6 -95%
Underlying EBIT margin 0.2% 3.7%
Return on operating assets 0.8% 13.9%
Following the change in the composition of the reporting segments from 1 April 2020, this
Division includes the previous Hazardous Waste division and Mineralz, previously in Monostreams,
and includes a proportion of group central costs. All prior year comparatives have been
restated. The return on operating assets excludes all landfill related provisions. The
underlying figures above are reconciled to statutory measures in notes 3 and 17 in the
consolidated financial statements.
Revenues increased by 21% to €182.8m, primarily as a result of the transfer into the division of
a metal extraction facility. Revenue on a like for like basis was up 2% year on year.
Underlying EBIT fell by €5.3m compared to the prior year to €0.3m. This included €5.0m of
additional provisions to reflect higher expected costs of disposal of TGG and related materials
and €4.1m in external storage costs of these inventories that were previously reported as
exceptional charges: excluding these items EBIT increased by €3.8m in the year. This was lower
than initially planned for the year, primarily due to delays in clearing the Moerdijk site of
cleaned TGG.
Operational review
The recovery of full soil treatment production requires progress in three interlinked areas:
revitalisation of the inbound soil pipeline, placement of historic cleaned TGG stocks in the
market, and the installation of capacity to produce sand, gravel and filler as certified products
for the construction markets.
Good progress has been made with the revitalisation of the inbound pipeline. The volume of
contaminated soil and asphalt under negotiation for future supply increased by more than 0.5MT
and, combined with existing inventories, we are confident we have sufficient input for FY22. The
ability to bid for new soil contracts is linked to our being able to prove there are suitable
outlets for the cleaned soil or products: hence an increase in certainty of outlets will improve
the success rate for new soil contracts. Covid-19 had a negative effect on the broader European
soil remediation market during the past year, which is expected to steadily recover going
forward. Volumes processed through the kiln increased by 28% vs the prior year, to 30% of
processing capacity.
The placement of historic cleaned TGG stocks has been slower than originally expected, driven by
caution among local regulators in providing permits. 140KT of TGG was placed during FY21 and we
have signed contracts for FY22 to ship a minimum of 0.5MT of thermally treated soil in the
Netherlands, with shipments starting in May. Further discussions are taking place regarding
outlets of up to 1MT, enough to place all of our remaining TGG stocks. We have increased our
provision for some of the cleaned products by €3.5m to allow for the logistics required for
export outlets.
The preferred applications for cleaned soil are as separated and refined filler, sand and gravel
which are each secondary construction materials. New transport systems and silos to store up to
5KT of filler were installed and commissioned during the last year. Further investments are
planned to improve the sand quality, upgrade the sieve capacity and improve logistics. In
parallel we are making progress with certifications for the new products which will, over time,
open new outlet markets and improve prices. Our commercial pipeline for each product is growing
and we are confident that our fully certified secondary materials will have long-term outlet
markets and customers.
The remainder of the division performed well following the initial Covid-19 lockdown. At ATM we
saw a strong increase in contribution from the Pyro unit with production volumes up 8% vs prior
year following investments to improve production capability and despite a weak first quarter due
to Covid-19. The waterside at ATM was more severely affected by Covid-19 in the first half and
volumes fell by 6% vs the prior year. The Mineralz business saw lower profits in the landfill
segment, as forecast, including the scheduled closure of the Braine landfill from 1 January which
will reduce annualised profits by circa €2m. The soil washing and metals extraction facilities
saw growth on the prior year, despite Covid-19, partly due to increases in metal prices. New
divisional management were able to deliver significant reductions in operational and SG&A costs
as synergies were realised from the creation of the new division.
Specialities
Financial performance
Specialities FY21 FY20 Variance
€m €m %
Revenue 300.8 323.2 -7%
Underlying EBITDA 12.0 8.1 48%
Underlying EBITDA margin 4.0% 2.5%
Underlying EBIT 2.4 (1.3) N/A
Underlying EBIT margin 0.8% -0.4%
Return on operating assets 5.4% 4.6%
Following the change in the composition of the reporting segments from 1 April 2020, this
Division includes the previous UK Municipal business together with Coolrec and Maltha, previously
in Monostreams, and includes a proportion of group central costs. All prior year comparatives
have been restated. Underlying EBIT includes utilisation of €11.4m (FY20: €12.2m). The return
on operating assets excludes the UK Municipal business. The underlying figures above are
reconciled to statutory measures in notes 3 and 17 in the consolidated financial statements.
Revenue fell by 7% to €300.8m, primarily as a result of the transfer of a metal recovery facility
to Mineralz & Water. Underlying EBIT moved from a loss of €1.3m to a profit of €2.4m despite
negative Covid-19 impacts. The ongoing recovery at Coolrec was particularly positive, with EBIT
up by over 100% despite a very tough first quarter when the French and Belgian sites were closed
for lack of inbound fridges. In contrast, Maltha saw earnings fall by 96% as it was particularly
hard hit by the closure of the hospitality sector and the postponement of major events, which
resulted in a furnace closure in France and generally lower demand for cullet. Municipal
performance was helped by the first full year of the new short-term Derby contracts. Underlying
performance, including the contracts reported as onerous, deteriorated as much higher black bag
waste volumes and lower recyclate volumes in the household waste recycling centres led to
increased losses relative to prior year.
Operational review
Coolrec has now restructured successfully to operate from three main facilities in the
Netherlands, Belgium and a smaller site in France. Each of these is a national leader in the
recycling of fridges and white goods, and also depollutes and recycles small domestic appliances
to recover valuable metals and hard plastics. Despite a very difficult first quarter, in which
volumes fell to 70% of prior year, volume recovery for the remainder of the year was very strong
with total volumes ending 5% down. Having completed the initial restructuring, management has
invested over the past year to significantly upgrade the core sites, improving the recycling
content, carbon footprint and capacity. This was rewarded, just after year end, by the renewal
of a key contract in Belgium to secure volumes for another six to nine years.
As reported above, Maltha experienced a significant impact from Covid-19 as one of few businesses
in Renewi that is dependent on the glass bottle manufacturers who are exposed to the hospitality
sector. The business has a high fixed cost base and so the lower volumes fed through to reduced
profits. As a result a goodwill impairment of €9.5m was taken.
UK Municipal also experienced a challenging year as Covid-19 reduced recyclates and increased
black bag waste. Nevertheless, good underlying progress was made in a number of areas. The
underperforming Derby contract that impacted FY20 was replaced in August 2019 by an improved
contract to manage the Councils' waste and to maintain the Sinfin Lane site, until the Councils
have sufficient time to determine its long-term plan. ELWA also saw some significant underlying
improvements and we are confident that incinerator gate fees have peaked and that improved
outlets can be secured going forward. Overall we continue to operate the loss-making contracts
within the aggregate provisions taken in previous years. Composition of the provisions has been
updated with reductions in ELWA offset by an increase in Wakefield. We have not yet reached
agreement with Wakefield Council to improve operations with the aim to save money and reduce the
contract's environmental footprint. Continuous improvement initiatives delivered a further €1.3m
of annualised savings.
FINANCIAL REVIEW
As noted earlier excluding businesses sold in the prior year provides a more representative view
of performance in the year. On a comparable ongoing businesses basis with last year, revenue was
flat, underlying EBITDA increased by 4% and underlying EBIT fell by 3% to €73.0m. A lower level
of interest and exceptional charges in the current year has resulted in a statutory profit before
tax of €18.2m compared to a loss of €59.4m in the prior year.
Financial Performance FY21 FY20 Variance
€m €m %
Revenue
Ongoing businesses 1,693.6 1,697.0 0%
Reym - 78.4
Total: continuing operations 1,693.6 1,775.4 -5%
Underlying EBITDA
Ongoing businesses 195.7 187.6 4%
Reym - 12.1
Total: continuing operations 195.7 199.7 -2%
Underlying EBIT
Ongoing businesses 73.0 75.5 -3%
Reym - 12.1
Total: continuing operations 73.0 87.6 -17%
Underlying profit before tax
Ongoing businesses 47.4 42.5 11%
Reym - 11.6
Total: continuing operations 47.4 54.1 -12%
Non-trading & exceptional items (29.2) (113.5)
Profit (loss) before tax 18.2 (59.4)
Total tax charge for the year (7.2) (1.1)
Profit (loss) for the year from continuing operations 11.0 (60.5)
Loss for the year from discontinued operations - (16.6)
Profit (loss) for the year 11.0 (77.1)
The underlying figures above are reconciled to statutory measures in notes 3 and 17 in the
consolidated financial statements.
Overall, the Group saw a significant strengthening of performance in the second half of FY21,
with underlying EBIT outperforming the prior year by 19% in the second half, having been 25%
below the prior year in the first half. This included a benefit of around €6m from recyclate
pricing in the second half.
H1 vs H2 variance H1 H2 Full Year
€m % €m % €m %
NL Commercial Waste (5.0) -19% 9.3 40% 4.3 9%
BE Commercial Waste (6.3) -43% 0.2 1% (6.1) -21%
Commercial Waste (11.3) -28% 9.5 25% (1.8) -2%
Mineralz & Water (0.2) -8% (5.1) -165% (5.3) -95%
Specialities 0.2 N/A 3.5 N/A 3.7 N/A
GCS 1.8 35% (0.9) 41% 0.9 12%
Underlying EBIT (9.5) -25% 7.0 19% (2.5) -3%
Non-trading and exceptional items excluded from underlying profits
To enable a better understanding of underlying performance, certain items are excluded from
underlying EBIT and underlying profit before tax due to their size, nature or incidence. Total
non-trading and exceptional items including tax were reduced by 79% to €24.8m (FY20: €101.3m plus
€18.9m from discontinued operations), of which €14.8m was non-cash. As previously reported, we
have accounted for the costs of two important programmes as exceptional due to their size and
nature; Renewi 2.0 and the Covid-19 cost action plan.
The Renewi 2.0 programme will deliver cost benefits at an annualised run rate of €20m by March
2023 as previously forecast. The cost of the programme is still expected to be €40m, split
between capital and an exceptional charge. Benefits of €2.2m were secured in the year slightly
ahead of plan, with cash spend of €12.5m in line with expectations. The table below sets out the
expected costs and benefits over later periods.
Renewi 2.0: expected costs and benefits FY21 FY22 FY23 FY24
€m €m €m €m
Annual net benefit 2 5 12 20
Exceptional costs (7) (11) (12) -
Capital spend (5) (2) - -
Net cash flow (10) (8) - 20
The total €40m programme costs include the exceptional cost and capital spend of €37m plus
non-cash impairments of circa €3m
In light of Covid-19 and ongoing lower economic activity we took action to structurally reduce
capacity. Cash costs of €3.1m and €5.3m of asset impairments have been reflected following the
decision to close two processing lines in Belgium and some sites and business activity in the
Netherlands. Further details are provided in note 5 to the consolidated financial statements.
EBIT from continuing operations, after taking account of all non-trading and exceptional items,
was a profit of €43.4m (FY20: €28.1m loss).
Net finance costs
Net finance costs, excluding exceptional items, decreased by €7.2m to €27.2m (FY20: €34.4m). The
key drivers relate to changes in borrowings levels which benefit from lower debt following the
cash preservation actions taken in the first few months of the year as a result of the pandemic,
Covid-19 deferral schemes for tax payments in the Netherlands, a lower rate secured by new cross
currency swaps and the impact of the 123bps lower coupon on the retail bonds taken out in July
2019 compared to the previous bonds. The reduction of rates for discount unwind of provisions as
reflected in March 2020 has resulted in the charge for the current year being €1.4m lower.
Adjusting for the disposal of Reym, lease interest costs have increased by €1.2m as a result of
new IFRS 16 lease contracts entered into. Further details are provided in note 6 to the
consolidated financial statements.
Profit (loss) before tax
Profit before tax from continuing operations on a statutory basis, including the impact of
non-trading and exceptional items, was €18.2m (FY20: loss of €59.4m).
Taxation
Total taxation for the year was a charge of €7.2m (FY20: €1.1m). The effective tax rate on
underlying profits was 24.5% at €11.6m, unchanged from the prior year. A tax credit of only
€5.4m is attributable to the non-trading and exceptional items of €29.2m given a proportion of
these are non-taxable. Recent changes to the Dutch corporate income tax rate were enacted in
December 2020 to revoke the originally planned reductions and retain the rate at 25% for the
foreseeable future. This has resulted in an increase in deferred tax liabilities which is
recorded as an exceptional tax charge of €1.0m in the year. Recently announced UK corporate tax
increases from 19% to 25% from April 2023 have not yet been enacted and as such this potential
circa €3m credit is not reflected in the UK deferred tax balances at March 2021.
Looking forward, we anticipate the underlying tax rate to remain around 25% given the recent
changes in the Netherlands and the UK.
The Group statutory profit after tax, including all discontinued and exceptional items, was
€11.0m (FY20: loss of €77.1m).
Earnings per share (EPS)
Underlying EPS from ongoing businesses, excluding non-trading and exceptional items, was 4.5
cents per share, an increase of 15%. Basic EPS from continuing operations was 1.4 cents compared
to a loss of 7.7 cents per share in the prior year.
Dividend
The Board has decided not to pay a dividend this year while the full impacts of Covid-19 and the
shape of the recovery remain uncertain. The Board will keep the future resumption of dividends
under review during FY22.
CASH FLOW PERFORMANCE
The funds flow performance table is derived from the statutory cash flow statement and
reconciliations are included in note 17 in the consolidated financial statements.
The table shows the cash flows from an adjusted free cash flow to total cash flow. Adjusted free
cash flow is a new measure that focuses on the cash generation excluding the impact of Covid-19
tax deferrals, settlement of ATM soil liabilities and spend relating to the UK PPP onerous
contracts. Adjusted free cash flow also includes lease repayments for IFRS 16 leases. The prior
period comparatives have been restated to reflect this new layout.
Funds flow performance FY21 FY20
€m €m
EBITDA 195.7 202.8
Working capital movement 35.4 16.9
Movement in provisions and other 8.9 (4.5)
Net replacement capital expenditure (55.4) (64.2)
Repayment of obligations under lease liabilities (40.4) (38.5)
Interest, loan fees and tax (35.4) (37.1)
Adjusted free cash flow 108.8 75.4
Deferred Covid taxes 54.1 6.0
Offtake of ATM soil (2.6) -
UK Municipal contracts (19.3) (23.6)
Free cash flow 141.0 57.8
Growth capital expenditure (6.9) (10.1)
Synergy, integration & restructuring spend (12.7) (24.3)
Other (3.9) (8.4)
Disposals net of acquisitions - 95.7
Dividends paid - (8.6)
Total cash flow 117.5 102.1
Free cash flow conversion 193% 64%
The numbers for the prior year include both continuing and discontinued operations. Free cash
flow conversion is free cash flow as a percentage of underlying EBIT. The non-IFRS measures above
are reconciled to statutory measures in note 17 in the consolidated financial statements.
Adjusted free cash flow was strong at €108.8m, an increase of €33.4m from last year, boosted by a
strong working capital performance. Customer collections have remained strong throughout the
year with Covid-19 having a minimal impact on days sales outstanding. We continue to expect a
deterioration in this area in the new financial year once governmental support reduces.
Replacement capital spend was well controlled at €55.4m (FY20: €64.2m). In addition, €60.9m of
new leases have been entered into which are now reported as right-of-use assets with a
corresponding lease liability. These leases include the continuation of the truck replacement
programme, property lease renewals or extensions and other assets. Growth capital spend included
the new silos and infrastructure for construction materials at ATM, and initial spend on the €10m
facility to process out-of-date food waste in Amsterdam.
The three components that we have shown below the adjusted free cash flow will have a reducing
impact over the next three or more years. The Dutch Covid-19 tax deferral, which amounted to
€60m at the end of March, will be settled in 36 monthly instalments starting in October 2021.
TGG soil stocks with a cumulative liability of up to €25m are expected to be placed in the market
in the coming year or so. Spend on UK PPP contracts was €19.3m, €4.3m better than prior year and
expected to reduce further in FY22.
Synergy, integration and restructuring spend of €12.7m related to the Renewi 2.0 programme
together with carry forward costs from the original integration programme.
Other cash flows include the funding for the closed UK defined benefit scheme and the purchase of
short-term investments in the insurance captive net of sundry dividend income from other
investments.
Net cash generated from operating activities increased from €157.7m in the prior period to
€243.4m in the current year. A reconciliation to the underlying cash flow performance as
referred to above is included in note 17 in the consolidated financial statements.
INVESTMENT PROJECTS
Expenditure in FY22
The Group's long-term expectations for replacement capital expenditure remain around 80% of
depreciation. FY22 replacement capital spend is expected to be around €95m which includes some
catch-up from the prior two years and investment in a replacement LUVO emissions cleaning unit at
the ATM TRI plant. In addition up to €45m of IFRS 16 lease investments are expected.
Growth capital expenditure is expected to increase as some of the innovation pipeline comes into
the construction phase. Overall spend for FY22 is estimated at around €25m including the
completion of the out-of-date food waste facility in Amsterdam, and other initiatives.
Return on assets
The Group return on operating assets, excluding debt, tax and goodwill increased from 19.0% at 31
March 2020 to 22.6% at 31 March 2021. The Group post-tax return on capital employed was 6.3%
(FY20 ongoing businesses only: 6.0%).
TREASURY AND CASH MANAGEMENT
Core net debt and leverage ratios
Core net debt excludes IFRS 16 lease liabilities and the net debt relating to the UK PPP
contracts which is non-recourse to the Group and secured over the assets of the special purpose
vehicles. Core net debt was significantly better than management expectations at €343.6m (FY20:
€457.2m), with working capital and capital expenditure well controlled and the impact of Covid-19
related tax deferrals in the Netherlands. Net debt to EBITDA was 2.2x, comfortably within
covenant and below 3.5x which is the normal test level applied from September 2021. Liquidity
headroom including cash and undrawn facilities was also strong at €364m (FY20: €252m). Cash
balances were reduced in the year from a high of €194.5m at March 2020 and used to repay
borrowings.
Debt structure and strategy
Borrowings, excluding PPP non-recourse borrowings, are mainly long-term.
Debt Structure FY21 FY20 Variance
€m €m €m
€100m Belgian Green retail bonds (100.0) (100.0) -
€75m Belgian Green retail bonds (75.0) (75.0) -
€495m Green RCF and term loan (185.0) (437.1) 252.1
Green EUPP (25.0) (25.0) -
Gross borrowings before lease liabilities (385.0) (637.1) 252.1
Historical IAS 17 lease liabilities and other (13.6) (19.3) 5.7
Loan fees 3.5 4.7 (1.2)
Cash and money market funds 51.5 194.5 (143.0)
Core net debt (as per covenant definitions) (343.6) (457.2) 113.6
IFRS 16 lease liabilities (236.7) (211.7) (25.0)
Net debt excluding UK PPP net debt (580.3) (668.9) 88.6
All our core borrowings of bonds and loans are green financed. The main facility has been hedged
with four cross currency swaps totalling €168.4m at fixed Euro interest rates of between 1.27%
and 1.40% which expire between October 2022 and December 2022. The retail bonds of €100m
maturing in June 2022 have an annual gross coupon of 3.65% and the bonds of €75m maturing in July
2024 have an annual gross coupon of 3.00%. As at 31 March 2021, 98% of our core net debt was
fixed or hedged.
The Group operates a committed invoice discounting programme. The cash received for invoices sold
at 31 March 2021 was €80.3m (FY20: €88.0m).
The introduction of IFRS 16 in 2019 increased lease liabilities by €155.4m. Total right-of-use
assets at March 2021 include plant and machinery of €124.0m (FY20: €110.0m), incorporating
ongoing truck investments, and land and buildings of €109.8m (FY20: €105.9m). Bank facility
covenants exclude IFRS 16 leases.
Debt borrowed in the special purpose vehicles (SPVs) for the financing of UK PPP programmes is
separate from the Group core debt and is secured over the assets of the SPVs with no recourse to
the Group as a whole. Interest rates are fixed by means of interest rate swaps at contract
inception. At 31 March 2021 this debt amounted to €87.8m (FY20: €90.0m).
PROVISIONS AND CONTINGENT LIABILITIES
Around 85% of the Group's provisions are long-term in nature, with landfill provisions being
utilised over more than 20 years.
Onerous contract provisions were increased between 2017 and 2020 to a peak of €109.5m in 2018 and
have now reduced to €80.9m following a utilisation of €15.6m (FY20: €20.6m, FY19: €27.0m) during
the current year. Of the outstanding balance €11.0m is in current provisions and the remainder
will mainly be used for BDR and Wakefield over the remaining 15+ years of these contracts.
The total current element of provisions amounts to €39m, including onerous contracts, €4m for
restructuring, €8m for landfill related spend and €16m for environmental, legal and others.
The position on the alleged Belgian State Aid claim remains unchanged since last year, with a
gross potential liability of €63m as at 31 March, against which we have provided for €15m. We
expect a ruling from the European Commission during FY22 but no monies would likely become
payable until FY23. Details of contingent liabilities are set out in note 16 of the financial
statements and the Group does not expect any of these to crystallise in the coming year.
Retirement benefits
The Group operates a defined benefit pension scheme for certain UK employees which has been
closed to new entrants since September 2002 and was closed to future benefit accrual in November
2019. At 31 March 2021, the scheme had reverted back to an accounting deficit of €4.0m (FY20:
€16.0m surplus). The change in the year was due to a decrease in the discount rate assumption,
which was unusually high at March 2020, together with an increase in inflation, offset by a small
increase in asset returns. The next actuarial valuation of the scheme is due as at 5 April 2021
and the future funding plan has been maintained at the current level of €3.5m per annum until
February 2022.
There are also several defined benefit pension schemes for employees in the Netherlands and
Belgium which had a retirement benefit deficit of €7.4m at 31 March 2021, a €0.1m decrease from
31 March 2020.
SHARE CONSOLIDATION
We have been pleased with the response to our secondary listing on Euronext in Amsterdam in
January 2020 and the increased liquidity of our shares on both exchanges that followed. We have
received feedback from some investor groups, notably Dutch and Belgian retail investors, that
they prefer a share price in excess of €1. The Board therefore intends to seek approval to
consolidate our shares at the rate of one for ten and to put forward a resolution to be included
at the Annual General Meeting on 15 July 2021. The share consolidation will reduce the number of
ordinary shares in issue and is expected to result in a share price that the Board believes is
more appropriate for a company of its size. Further details will be set out in the notice of the
Annual General Meeting.
Consolidated Income Statement
For the year ended 31 March 2021
2021 2020
Non-trading Non-trading
& &
Note Underlying exceptional Underlying exceptional
items Total items Total
€m €m
€m €m €m €m
CONTINUING OPERATIONS
Revenue 3,4 1,693.6 - 1,693.6 1,775.4 - 1,775.4
Cost of sales 5 (1,408.5) (15.7) (1,424.2) (1,467.5) (72.2) (1,539.7)
Gross profit (loss) 285.1 (15.7) 269.4 307.9 (72.2) 235.7
Administrative 5 (212.1) (13.9) (226.0) (220.3) (43.5) (263.8)
expenses
Operating profit 3 73.0 (29.6) 43.4 87.6 (115.7) (28.1)
(loss)
Finance income 5,6 10.9 0.4 11.3 9.7 2.2 11.9
Finance charges 5,6 (38.1) - (38.1) (44.1) - (44.1)
Share of results from
associates and joint 1.6 - 1.6 0.9 - 0.9
ventures
Profit (loss) before 3 47.4 (29.2) 18.2 54.1 (113.5) (59.4)
taxation
Taxation 5,7 (11.6) 4.4 (7.2) (13.3) 12.2 (1.1)
Profit (loss) for the
year from continuing 35.8 (24.8) 11.0 40.8 (101.3) (60.5)
operations
DISCONTINUED
OPERATIONS
Profit (loss) for the
year from discontinued 15 - - - 2.3 (18.9) (16.6)
operations
Profit (loss) for the 35.8 (24.8) 11.0 43.1 (120.2) (77.1)
year
Attributable to:
Owners of the parent 35.9 (24.8) 11.1 43.0 (120.9) (77.9)
Non-controlling (0.1) - (0.1) 0.1 0.7 0.8
interests
35.8 (24.8) 11.0 43.1 (120.2) (77.1)
2021 2020
Earnings (loss) per share Note
cents cents
Continuing operations
Basic 8 1.4 (7.7)
Diluted 8 1.4 (7.7)
Underlying basic 8 4.5 5.1
Underlying diluted 8 4.5 5.1
Continuing and discontinued operations
Basic 8 1.4 (9.8)
Diluted 8 1.4 (9.8)
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2021
2021 2020
€m €m
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign subsidiaries (3.1) 6.3
Fair value movement on cash flow hedges 14.3 (12.2)
Deferred tax on fair value movement on cash flow hedges (2.4) 0.3
Share of other comprehensive income of investments accounted for using the equity 0.3 0.2
method
9.1 (5.4)
Items that will not be reclassified to profit or loss:
Actuarial (loss) gain on defined benefit pension schemes (23.3) 15.2
Deferred tax on actuarial (loss) gain on defined benefit pension schemes 4.4 (2.8)
(18.9) 12.4
Other comprehensive (loss) income for the year, net of tax (9.8) 7.0
Profit (loss) for the year 11.0 (77.1)
Total comprehensive income (loss) for the year 1.2 (70.1)
Attributable to:
Owners of the parent 1.3 (69.7)
Non-controlling interests (0.1) (0.4)
Total comprehensive income (loss) for the year 1.2 (70.1)
Total comprehensive income (loss) attributable to owners of the parent arising
from:
Continuing operations 1.3 (53.1)
Discontinued operations - (16.6)
1.3 (69.7)
Consolidated Balance Sheet
As at 31 March 2021
Restated*
31 March
31 March
Note 2021
2020
€m
€m
Assets
Non-current assets
Goodwill and intangible assets 10 602.2 610.1
Property, plant and equipment 10 560.7 584.0
Right-of-use assets 10 233.8 215.9
Investments 17.2 15.6
Financial assets relating to PPP contracts 142.4 141.8
Derivative financial instruments 14 7.9 2.1
Defined benefit pension scheme surplus 13 - 16.0
Trade and other receivables 4.1 3.1
Deferred tax assets 49.5 37.2
1,617.8 1,625.8
Current assets
Inventories 20.6 20.7
Investments 14 9.3 8.1
Loans to associates and joint ventures 0.9 0.9
Financial assets relating to PPP contracts 6.7 6.0
Trade and other receivables 247.7 272.4
Derivative financial instruments 14 1.2 -
Current tax receivable 0.5 0.7
Cash and cash equivalents 51.5 194.5
338.4 503.3
Total assets 1,956.2 2,129.1
Liabilities
Non-current liabilities
Borrowings 11 (673.9) (912.7)
Derivative financial instruments 14 (25.3) (32.4)
Other non-current liabilities (54.4) (7.1)
Defined benefit pension schemes deficit 13 (11.4) (7.5)
Provisions 12 (252.6) (252.4)
Deferred tax liabilities (50.9) (46.9)
(1,068.5) (1,259.0)
Current liabilities
Borrowings 11 (45.7) (40.7)
Derivative financial instruments 14 (0.2) (5.6)
Trade and other payables (546.2) (534.3)
Current tax payable (13.8) (16.5)
Provisions 12 (38.7) (37.7)
(644.6) (634.8)
Total liabilities (1,713.1) (1,893.8)
Net assets 243.1 235.3
Issued capital and reserves attributable to the owners of the parent
Share capital 99.5 99.5
Share premium 473.6 473.6
Exchange reserve (14.8) (11.6)
Retained earnings (321.3) (327.6)
237.0 233.9
Non-controlling interests 6.1 1.4
Total equity 243.1 235.3
* The comparatives for right-of-use assets and lease liabilities within borrowings have been
restated due to a prior year adjustment as explained in note 2.
Consolidated Statement of Changes in Equity
For the year ended 31 March 2021
Share Share Exchange Retained Non-controlling Total
capital premium reserve earnings interests equity
€m €m €m €m €m €m
Balance at 1 April 2020 99.5 473.6 (11.6) (327.6) 1.4 235.3
Profit (loss) for the year - - - 11.1 (0.1) 11.0
Other comprehensive (loss) income:
Exchange (loss) gain on translation of - - (3.2) - 0.1 (3.1)
foreign subsidiaries
Fair value movement on cash flow hedges - - - 14.4 (0.1) 14.3
Actuarial loss on defined benefit - - - (23.3) - (23.3)
pension schemes
Tax in respect of other comprehensive - - - 2.0 - 2.0
income items
Share of other comprehensive income of
investments accounted for using the - - - 0.3 - 0.3
equity method
Total comprehensive (loss) income for - - (3.2) 4.5 (0.1) 1.2
the year
Share-based compensation - - - 1.4 - 1.4
Movement on tax arising on share-based - - - 0.3 - 0.3
compensation
Disposal of non-controlling interest - - - 1.3 4.8 6.1
Own shares purchased by the Employee - - - (1.2) - (1.2)
Share Trust
Balance as at 31 March 2021 99.5 473.6 (14.8) (321.3) 6.1 243.1
Balance at 31 March 2019 99.5 473.6 (17.9) (236.7) 1.0 319.5
Change in accounting policy (IFRS 16 - - - (7.5) - (7.5)
transition)
Restated total equity at 1 April 2019 99.5 473.6 (17.9) (244.2) 1.0 312.0
(Loss) profit for the year - - - (77.9) 0.8 (77.1)
Other comprehensive income (loss):
Exchange gain on translation of foreign - - 6.3 - - 6.3
subsidiaries
Fair value movement on cash flow hedges - - - (11.5) (0.7) (12.2)
Actuarial gain on defined benefit - - - 15.2 - 15.2
pension schemes
Tax in respect of other comprehensive - - - (2.0) (0.5) (2.5)
income items
Share of other comprehensive income of
investments accounted for using the - - - 0.2 - 0.2
equity method
Total comprehensive income (loss) for - - 6.3 (76.0) (0.4) (70.1)
the year
Share-based compensation - - - 1.2 - 1.2
Non-controlling interest capital - - - - 0.8 0.8
injection
Dividends paid - - - (8.6) - (8.6)
Balance as at 31 March 2020 99.5 473.6 (11.6) (327.6) 1.4 235.3
The disposal of non-controlling interest of €4.8m is the value of the non-controlling interest at
the date of disposal which was transferred to retained earnings and includes the impact of the
Group no longer owing external subordinated debt to a third party.
Consolidated Statement of Cash Flows
For the year ended 31 March 2021
2021 2020
€m €m
Profit (loss) before tax 18.2 (59.4)
Finance income (11.3) (11.9)
Finance charges 38.1 44.1
Share of results from associates and joint ventures (1.6) (0.9)
Operating profit (loss) from continuing operations 43.4 (28.1)
Operating loss from discontinued operations - (15.8)
Amortisation and impairment of intangible assets 19.1 12.8
Depreciation and impairment of property, plant and equipment 80.4 74.8
Depreciation and impairment of right-of-use assets 42.5 42.8
Exceptional loss on disposal of subsidiaries/remeasurement of assets held for - 56.2
sale
Gain on disposal of property, plant and equipment (0.1) (1.7)
Exceptional gain on disposal of joint venture - (1.4)
Net outflows in respect of PPP arrangements under the financial asset model - (0.1)
Exceptional charge on long term provisions 3.7 17.9
Net decrease in provisions (11.0) (2.8)
Exceptional past service cost in relation to defined benefit pension scheme - (1.4)
Payment related to committed funding of the defined benefit pension scheme (3.6) (3.5)
Other non-cash items - (0.1)
Share-based compensation 1.4 1.2
Operating cash flows before movement in working capital 175.8 150.8
Decrease in inventories 0.2 5.0
Decrease (increase) in receivables 25.1 (5.7)
Increase in payables 57.1 17.7
Cash flows from operating activities 258.2 167.8
Income tax paid (14.8) (10.1)
Net cash inflow from operating activities 243.4 157.7
Investing activities
Purchases of intangible assets (8.8) (6.7)
Purchases of property, plant and equipment (58.0) (77.8)
Proceeds from disposals of property, plant and equipment 4.5 11.1
Acquisition of subsidiary, net of cash acquired - (3.8)
Acquisition of business assets - (2.6)
Proceeds from disposal of subsidiaries, net of cash disposed of and disposal - 88.2
costs paid
Investments in associates and joint ventures (1.1) (1.7)
Dividends received from associates and joint ventures 1.6 0.6
Receipt of deferred consideration 0.6 0.3
Purchase of other short-term investments (0.8) (2.4)
Outflows in respect of PPP arrangements under the financial asset model (1.9) (1.7)
Capital received in respect of PPP financial assets 5.1 4.7
Finance income 10.2 10.9
Net cash (outflow) inflow from investing activities (48.6) 19.1
Financing activities
Finance charges and loan fees paid (30.8) (37.9)
Investment in own shares by the Employee Share Trust (1.2) -
Loan from non-controlling interest/Capital injection from non-controlling 0.5 0.8
interest
Dividends paid - (8.6)
Proceeds from retail bonds - 75.0
Repayment of retail bonds - (100.0)
Proceeds from bank borrowings 9.0 853.1
Repayment of bank borrowings (269.0) (774.8)
Repayment of PPP net debt (5.4) (2.9)
Repayment of obligations under lease liabilities (40.4) (38.5)
Net cash outflow from financing activities (337.3) (33.8)
Net (decrease) increase in cash and cash equivalents (142.5) 143.0
Effect of foreign exchange rate changes (0.5) 1.1
Cash and cash equivalents at the beginning of the year 194.5 50.4
Cash and cash equivalents at the end of the year 51.5 194.5
Notes to the Consolidated Financial Statements
1. General information
Renewi plc is a public limited company listed on the London Stock Exchange with a secondary
listing on Euronext Amsterdam. Renewi plc is incorporated and domiciled in Scotland under the
Companies Act 2006, registered number SC077438. The address of the registered office is 16
Charlotte Square, Edinburgh, EH2 4DF. The nature of the Group's operations and its principal
activities are set out in note 3.
2. Basis of preparation
The figures and financial information for the year ended 31 March 2021 are extracted from but do
not constitute the statutory financial statements for that year. The figures and financial
information are audited. The Consolidated Income Statement, Consolidated Statement of
Comprehensive Income, Consolidated Statement of Changes in Equity and Consolidated Statement of
Cash Flows for the year ended 31 March 2020 and the Consolidated Balance Sheet as at 31 March
2020 have been derived from the full Group accounts published in the Annual Report and Accounts
2020 with a restatement as explained below. These have been delivered to the Registrar of
Companies and on which the report of the independent auditors was unqualified and did not contain
a statement under section 498 of the Companies Act 2006. The statutory accounts for the year
ended 31 March 2021 will be filed with the Registrar of Companies in due course.
The consolidated financial statements are prepared in accordance with international accounting
standards in conformity with the Companies Act 2006 and with the international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it applies in the
European Union. The Group has applied all accounting standards and interpretations issued
relevant to its operations and effective for accounting periods beginning on 1 April 2020. The
IFRS accounting policies have been applied consistently to all periods presented and throughout
the Group for the purpose of the consolidated financial statements.
Going concern
The Directors have adopted the going concern basis in preparing these consolidated financial
statements after assessing the Group's principal risks including the risks arising from the
Covid-19 pandemic.
Given the economic uncertainty arising from the Covid-19 pandemic, the Directors have carried out
a comprehensive assessment of the Group's ability to continue as a going concern. This assessment
has involved the review of medium-term cash flow modelling over an 18-month period to 30
September 2022 which includes estimates of any further impact of Covid-19 on the Group's
operations together with other factors that may affect its performance and financial position.
These factors include actual trading performance in the period since the outbreak of Covid-19,
expectations on the future economic environment, the impact of mitigation actions, available
liquidity, which includes an assumption that the €100m Belgian retail bonds are repaid in June
2022 from the existing revolving credit facility, as well as other principal risks associated
with the Group's ongoing operations.
The assessment includes a base case scenario setting out the Directors' current expectations of
future trading and a plausible downside scenario applying mitigating actions where appropriate to
assess the potential impact on the Group's future financial performance. The key judgement in
both scenarios is the level and speed of economic recovery following the disruption caused by the
Covid-19 pandemic.
The downside scenario includes weaker macro-economic conditions throughout 2022 and 2023 and
another, less severe, wave of Covid-19 measures in the second half of the current financial year
to 31 March 2022, as well as other downsides which are not linked to Covid-19, including a delay
in the operational ramp up at the ATM site and a settlement of the potential maximum claim in
FY23 arising from the European Commission investigation into alleged state aid in Belgium.
Appropriate cost and cash mitigating actions, such as deferral of uncommitted capital expenditure
and reduced discretionary spend, have been applied to come up with a plausible and mitigated
downside position. In the downside modelling it has been assumed that volume recovery rate will
be at least 50% lower than the forecast economic recoveries in all of our territories which,
along with the other downside factors reduces underlying EBIT by 16% compared to the base case.
In both the base case and plausible downside scenarios the Group has sufficient liquidity and
headroom in its existing facilities and no covenants are breached at any of the forecast testing
dates.
In addition, the downside case has been used to perform a reverse stress test to consider the
points at which the covenants may be breached. This test follows the same basic principles as the
downside case but with the impact of each factor significantly more severe and beyond what is
considered likely, including no volume recovery in the review period, which reduces underlying
EBIT by 33% compared to the base case without taking into account any further mitigating actions.
The likelihood of this scenario is considered to be remote.
Having considered all the elements of the financial projections, sensitivities and mitigating
actions, the Directors confirm they have a reasonable expectation that the Group has adequate
resources to continue in operational existence for the foreseeable future and to meet its
covenants.
In accordance with Provision 31 of the UK Corporate Governance Code, the Directors have also
assessed the prospects and financial viability of the Company for a period longer than the 12
months required in the going concern assessment.
2. Basis of preparation - continued
Changes in presentation
The Group changed the composition of its reporting segments from 1 April 2020. The new structure
is a logical step following disposals and the reorganisation simplifies the Group's strategy,
portfolio, organisation and processes. The segment information presented in these financial
statements reflects the information now provided to the chief operating decision maker in order
to assess performance and to make decisions on allocation of resources. The following changes
have been made to the Group's segments as previously reported at 31 March 2020:
• The Commercial Waste reportable segment comprises Netherlands and Belgium Commercial Waste.
The Netherlands Commercial Waste operating segment now includes Orgaworld organic waste
processing activities previously included within the Monostreams reportable segment. There is
no change to Belgium Commercial Waste.
• The Mineralz & Water reportable segment comprises ATM previously included in the Hazardous
Waste reportable segment and Mineralz previously included within the Monostreams reportable
segment.
• The Specialities reportable segment comprises Municipal, Maltha and Coolrec business lines.
Maltha and Coolrec were previously included within the Monostreams reportable segment and
Municipal was a separate reportable segment.
• The Group central services reportable segment is unchanged however all costs except those
related to investors, the Board and strategy are now allocated to the divisions.
• As required under IFRS 8 Operating Segments, the Group has restated the corresponding segment
information for the prior period to enable comparison to the new structure.
Restatement due to prior year adjustment
In preparing these financial statements, management have identified an error relating to the
prior period and accordingly a prior year adjustment has been made. The error arose as a result
of a lease being recorded incorrectly in an entity in which the Group acquired the remaining 50%
and took full control in November 2019. The term used on the implementation of IFRS 16 was
shorter than the term stated in the lease contract. The impact is to increase right-of-use assets
by €9.0m and increase lease liabilities by €9.0m, with the latter split as a reduction of €0.4m
in current lease liabilities and an increase of €9.4m in non-current lease liabilities. The
impact to the Income Statement for the year ended 31 March 2020 was not material and therefore no
adjustment has been made. There is no goodwill impact on the acquisition accounting of the
entity. Earnings per share for the year ended 31 March 2020 are unaffected as a result of this
correction.
New standards and interpretations not yet adopted
Standards and interpretations issued by the International Accounting Standards Board (IASB) are
only applicable if endorsed by the UK Endorsement Board (UKEB). At the date of approval of these
financial statements there were no new IFRSs or IFRS IC interpretations which were early adopted
by the Group. The following amendments are effective for the period beginning 1 April 2022 and
the Group is currently assessing any potential impact:
• Onerous Contracts - Costs of Fulfilling a Contract (Amendments to IAS 37)
• Property, plant and equipment: Proceeds before Intended Use (Amendments to IAS 16)
• Annual improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and
IAS 41)
• References to Conceptual Framework (Amendments to IFRS 3)
Exchange Rates
In addition to the Group's presentational currency of Euros, the most significant currency for
the Group is Sterling with the closing rate on 31 March 2021 of €1:£0.852 (2020: €1:£0.884) and
an average rate for the year ended 31 March 2021 of €1:£0.885 (2020: €1:£0.872).
Critical accounting judgements and estimates
The preparation of financial statements in accordance with IFRS requires management to make
judgements, estimates and assumptions that affect the application of policies and reported
amounts of assets and liabilities, income and expenditure. The areas involving a higher degree
of judgement or complexity are set out below. Critical estimates are defined as those that have a
significant risk of resulting in a material adjustment to the carrying amounts of assets and
liabilities within the next financial year. The estimates and associated assumptions are based on
factors including historical experience and expectations of future events that are considered to
be relevant and reasonable. These estimates, assumptions and judgements are reviewed on an
ongoing basis.
2. Basis of preparation - continued
Judgements in applying the Group's accounting policies
Use of alternative performance measures
The Group uses alternative performance measures as we believe these measures provide additional
useful information on the underlying trends, performance and position of the Group. These
underlying measures are used by the Group for internal performance analysis and incentive
compensation arrangements for employees. The term 'underlying' refers to the relevant measure
being reported for continuing operations excluding non-trading and exceptional items. These
include underlying earnings before interest and tax (underlying EBIT), underlying profit before
tax, underlying profit after tax, underlying earnings per share and underlying EBITDA (earnings
before interest, tax, depreciation and amortisation). In addition as a result of the disposals in
the prior year the term 'ongoing' is used to reflect the operations which have not been disposed
of to enable comparisons to be made. The terms 'EBIT', 'EBITDA', 'exceptional items', 'ongoing',
'adjusted' and 'underlying' are not defined terms under IFRS and may therefore not be comparable
with similarly titled profit measures reported by other companies. These measures are not
intended to be a substitute for, or superior to, GAAP measurements of profit. A full list of
alternative performance measures and non-IFRS measures together with reconciliations are set out
in note 17.
Non-trading and exceptional items
In establishing which items are disclosed separately as non-trading and exceptional to enable a
better understanding of the underlying financial performance of the Group, management exercise
judgement in assessing the size, nature or incidence of specific items. A policy for non-trading
and exceptional items is followed consistently and is submitted to the Audit Committee for annual
review. See note 5 for further details of the costs included within this category.
Service concession arrangements
Management considered all relevant factors to determine that the Group acted as agent during the
construction phase of the UK Municipal contracts and that the consideration from local
authorities for the operations of waste management service concessions is treated as financial
assets relating to PPP contracts in accordance with IFRIC 12. Management determined that the cash
flows relating to the outflows and capital repayments in respect of PPP arrangements under the
financial asset model are investing activities in the statement of cash flows and not as
operating cash flows. At the balance sheet date, the Group has financial assets relating to PPP
contracts of €149.1m (2020: €147.8m). Consideration relating to financial assets is split between
a service element as revenue and a repayment element, split between capital and interest
receivable that is deducted from the financial asset.
Defined benefit pension scheme surplus
In relation to the 31 March 2020 position, management concluded that the Group had an
unconditional right to a refund from the UK defined benefit pension scheme once the liabilities
have been discharged and that the trustees of the scheme do not have the unilateral right to wind
up the scheme, therefore the asset was not restricted and no additional liability was recognised.
Taxation
The recognition of deferred tax assets, particularly in respect of tax losses, is based upon
management's judgement that it is probable that there will be taxable profits in the relevant
legal entity or tax group which will utilise the assets in the future. In respect of tax losses,
the time expiry period, if any, is also taken into account in the analysis. The Group assesses
the availability of future taxable profits using the five year projections as used for impairment
reviews, together with other available forecasts. The predictability of income streams is also
taken into consideration and where profits are highly predictable beyond the five year
projections, profits from subsequent periods are taken into account in the recognition of
deferred tax assets. The longest period of forecasts used to calculate deferred tax recovery is
nine years. Where there is some uncertainty around profits in five year projections and a period
of five years or less to the time expiry of the losses exists, the profits used to calculate a
deferred tax asset are amended to reflect management's judgement of the higher probability profit
streams within those forecasts. The intention is to avoid the recognition of a deferred tax asset
that is not ultimately recovered. Provisions have been recognised where necessary in respect of
any uncertain tax positions in the Group and are based upon management's assessment of the
potential outcomes of the relevant discussions with the tax authorities.
Impact of Covid-19
Management have used judgement to determine the expected impact on financial instruments,
principally how expected credit loss could be impacted as a result of the Covid-19 pandemic. In
addition as part of impairment reviews management have considered the ongoing impact of Covid-19
when assessing the future cash flows of cash generating units and similarly the impact of
Covid-19 in the assessment of the recoverability of deferred tax assets.
Alleged Belgium State Aid Claim
Management have used judgement in determining if a liability or contingent liability exists by
considering whether an outflow of economic benefit is possible as a result of past events. Legal
advice has been obtained to determine that the most likely outcome, the median case, results in a
€15m provision. It is noted that the potential maximum claim could be higher resulting in a
potential further liability. Further details are set out in notes 12 and 16.
Contingent liabilities
Management have used judgement in determining if a contingent liability exists by considering
whether an outflow of economic benefit is possible as a result of past events including seeking
legal advice where appropriate in order to determine the most likely outcome. Where it is
considered that there is a possible obligation but it is not probable that there will be an
outflow of economic benefit or the amount cannot be reliably estimated then a contingent
liability is disclosed in note 16.
2. Basis of preparation - continued
Estimates and assumptions
Impairment of goodwill
Impairment testing is carried out annually at a cash generating unit (CGU) level. The Group
estimates the recoverable amount of a CGU using a value in use model which involves an estimation
of future cash flows and applying appropriate discount and long-term growth rates. The future
cash flows are derived from approved forecasts which have taken into account the ongoing and
potential impact of Covid-19, specifically with regard to recovery of input volumes across
different waste streams which has resulted in a €9.5m impairment in the Specialities division.
Impairment of tangible assets, intangible assets and investments
The Group assesses the impairment of tangible assets, intangible assets and investments whenever
there is reason to believe that the carrying value may not exceed the fair value and where a
permanent impairment in value is anticipated. The determination of whether the impairment of
these assets is necessary involves the use of estimates that includes, but is not limited to, the
analysis of the cause of potential impairment in value, the timing of such potential impairment
and an estimate of the amount of the impairment. The impact of Covid-19 has been considered and
had led to €5.3m of impairments of tangible and intangible assets in the Commercial division in
the year. There has been no impairment of investment values.
Landfill related provisions
The Group has landfill related provisions of €157.6m (2020: €152.8m). These provisions are long
term in nature and are recognised at the net present value of the best estimate of the likely
future cash flows to settle the Group's obligations. The period of aftercare post-closure and the
level of costs expected are uncertain and could be impacted by changes in legislation and
technology and can vary significantly from site to site. A discount rate is applied to recognise
the time value of money and is unwound over the life of the provision.
Onerous contract provisions
Onerous contract provisions arise when the unavoidable costs of meeting contractual obligations
exceed the cash flows expected. The Group has onerous contract provisions of €80.9m (2020:
€89.7m) which have been provided for at the lower of the net present value of either exiting the
contract or fulfilling our obligations under the contract. The most significant component of
these provisions relates to UK Municipal PPP contracts which amount to €78.9m (2020: €89.0m). The
provisions have been based on the best estimate of likely future cash flows including assumptions
on tonnage inputs, plant performance and recyclates pricing. A discount rate is applied to
recognise the time value of money and is unwound over the life of the provision.
Right-of-use assets and lease liabilities
Estimates and assumptions are made in calculating the incremental borrowing rate used to measure
lease liabilities. For certain leases the determination of the lease liability is based on
assumptions of the term of the lease, whether purchase options are likely to be exercised and the
amount expected to be payable under any residual value guarantees.
Defined benefit pension schemes
The calculation of the present value of the defined benefit pension schemes is determined by
using actuarial valuations based on assumptions including discount rate, life expectancy and
inflation rates.
Taxation
The recognition of deferred tax assets, particularly in respect of tax losses, is based upon
management's calculation of expected taxable profits in the relevant legal entity or tax group
against which to utilise the assets in the future. In respect of tax losses, the time expiry
period, if any is also taken into account in the calculation. The Group assesses the availability
of future taxable profits using the five year projections as used for the value in use
calculations for impairment reviews together with other available long-term forecasts. The
predictability of income streams is also taken into consideration and where profits are highly
predictable beyond the five year projections, profit from subsequent periods are taken into
account in the recognition of deferred tax assets. The longest period of forecasts used to
calculate deferred tax recovery is nine years. Where there is some uncertainty around profits in
five year projections and a period of five years or less to the time expiry of the losses exists,
the profits used to calculate a deferred tax asset will be amended to reflect management's
estimate of the higher probability profit streams within those forecasts. The intention is to
avoid the recognition of a deferred tax asset that is not ultimately recovered. Provisions have
been recognised where necessary in respect of any uncertain tax positions in the Group and are
based upon management's evaluation of the potential outcomes of the relevant discussions with the
tax authorities.
Contingent liabilities
Contingent liabilities are possible obligations whose existence will be confirmed only on the
occurrence or non-occurrence of uncertain future events outside of the Group's control, or
present obligations that are not recognised because it is not probable that a settlement will be
required or the value of such a payment cannot be reliably estimated. The Group does not
recognise contingent liabilities but discloses them in note 16.
Waste disposal cost accruals
Management have used judgement in determining the value of disposal cost accruals specifically in
relation to processed soil accruals. The value is determined by management's best assessment of
the cost per tonne to dispose of the waste based on historical transactions, discussions with
potential customers and knowledge of the market as in some cases due to the nature of some of
these accruals there is no observable market data. The carrying amount included in accruals and
other payables is €54.3m (2020: €48.4m) which is based on management's best estimate after
carrying out sensitivity analysis on a range of potential outcomes. It is anticipated that the
majority of the waste with the most judgemental values should be disposed of during the next 12
months and as such is recorded as a current liability.
3. Segmental reporting
The Group's chief operating decision maker is considered to be the Board of Directors. The
Group's reportable segments are determined with reference to the information provided to the
Board of Directors, in order for it to allocate the Group's resources and to monitor the
performance of the Group.
Following the implementation of the new divisional structure on 1 April 2020 the Group's
reportable segments are:
Commercial Waste Collection and treatment of commercial waste in the Netherlands and
Belgium.
Decontamination, stabilisation and re-use of highly contaminated materials
Mineralz & Waste to produce certified secondary products for the construction industry in
the Netherlands and Belgium.
Processing plants focusing on recycling and diverting specific waste
Specialities streams. The operations are in the UK, the Netherlands, Belgium, France,
Portugal and Hungary.
Group central services Head office corporate function.
The segmental information under the new structure at 31 March 2021 is set out below. The 2020
numbers are presented on a consistent basis with the 2021 numbers as explained in Changes in
presentation in note 2.
The profit measure the Board of Directors uses to evaluate performance is underlying EBIT. The
Group accounts for inter-segment trading on an arm's length basis.
The Commercial Waste reportable segment includes the Netherlands Commercial Waste and Belgium
Commercial Waste operating segments which have been aggregated and reported as one reportable
segment as they operate in similar markets in relation to the nature of the products, services,
processes and type of customer.
2021 2020
Revenue
€m €m
Netherlands Commercial Waste 828.4 812.6
Belgium Commercial Waste 412.9 439.1
Intra-segment (0.7) (1.5)
Commercial Waste 1,240.6 1,250.2
Mineralz & Water 182.8 151.6
Specialities 300.8 323.2
Inter-segment revenue (30.6) (28.0)
Revenue from ongoing businesses 1,693.6 1,697.0
Operations disposed of in the prior year - 78.4
Revenue from continuing operations 1,693.6 1,775.4
2021 2020
Results
€m €m
Netherlands Commercial Waste 53.7 49.4
Belgium Commercial Waste 23.1 29.2
Commercial Waste 76.8 78.6
Mineralz & Water 0.3 5.6
Specialities 2.4 (1.3)
Group central services (6.5) (7.4)
Underlying EBIT from ongoing businesses 73.0 75.5
Operations disposed of in the prior year - 12.1
Underlying EBIT from continuing operations 73.0 87.6
Non-trading and exceptional items (note 5) (29.6) (115.7)
Operating profit (loss) from continuing operations 43.4 (28.1)
Finance income 10.9 9.7
Finance charges (38.1) (44.1)
Finance income - non trading and exceptional items 0.4 2.2
Share of results from associates and joint ventures 1.6 0.9
Profit (loss) before taxation and discontinued operations 18.2 (59.4)
3. Segmental reporting - continued
Commercial Mineralz Group Tax, net debt and
Waste Specialities central derivatives Total
Net assets & Water services
€m €m €m €m
€m €m
31 March 2021
Gross non-current 1,042.6 258.2 225.7 33.9 57.4 1,617.8
assets
Gross current 174.1 31.6 64.3 15.2 53.2 338.4
assets
Gross liabilities (414.6) (224.3) (173.0) (91.4) (809.8) (1,713.1)
Net assets 802.1 65.5 117.0 (42.3) (699.2) 243.1
(liabilities)
31 March 2020 -
restated*
Gross non-current 1,040.6 261.3 243.4 41.2 39.3 1,625.8
assets
Gross current 190.2 32.7 73.0 12.2 195.2 503.3
assets
Gross liabilities (379.8) (209.4) (191.7) (58.1) (1,054.8) (1,893.8)
Net assets 851.0 84.6 124.7 (4.7) (820.3) 235.3
(liabilities)
* The comparatives for right-of-use assets and lease liabilities within borrowings have been
restated due to a prior year adjustment as explained in note 2.
4. Revenue
The following tables show the Group's revenue from continuing operations by type of service
delivered and by primary geographic markets. Following the change in composition of reporting
segments from 1 April 2020, the 2020 numbers are presented on a consistent basis with 2021 as
explained in Changes in presentation in note 2.
Commercial Mineralz & Specialities Inter-segment Sub total Prior year Total
By type of Waste Water disposals
service €m €m €m €m
€m €m €m
2021
Inbound 1,032.2 136.3 210.1 (26.3) 1,352.3 - 1,352.3
Outbound 130.4 46.5 89.7 (2.6) 264.0 - 264.0
On-Site 41.3 - - (0.1) 41.2 - 41.2
Other 36.7 - 1.0 (1.6) 36.1 - 36.1
Total 1,240.6 182.8 300.8 (30.6) 1,693.6 - 1,693.6
revenue
2020
Inbound 1,055.1 135.1 197.0 (23.8) 1,363.4 5.5 1,368.9
Outbound 125.5 16.4 116.9 (2.4) 256.4 - 256.4
On-Site 39.2 - - (0.2) 39.0 72.9 111.9
Other 30.4 0.1 9.3 (1.6) 38.2 - 38.2
Total 1,250.2 151.6 323.2 (28.0) 1,697.0 78.4 1,775.4
revenue
Commercial Mineralz & Specialities Inter-segment Sub Prior year Total
By geographic Waste Water total disposals
market €m €m €m
€m €m €m €m
2021
Netherlands 827.9 140.8 40.7 (29.0) 980.4 - 980.4
Belgium 412.7 42.0 28.1 (1.6) 481.2 - 481.2
UK - - 205.5 - 205.5 - 205.5
France - - 18.9 - 18.9 - 18.9
Other - - 7.6 - 7.6 - 7.6
Total revenue 1,240.6 182.8 300.8 (30.6) 1,693.6 - 1,693.6
2020
Netherlands 811.7 138.2 41.8 (26.2) 965.5 78.4 1,043.9
Belgium 438.5 13.4 51.3 (1.8) 501.4 - 501.4
UK - - 197.2 - 197.2 - 197.2
France - - 22.7 - 22.7 - 22.7
Other - - 10.2 - 10.2 - 10.2
Total revenue 1,250.2 151.6 323.2 (28.0) 1,697.0 78.4 1,775.4
Revenue recognised at a point in time amounted to €1,580.3m (2020: €1,611.8m) with the remainder
recognised over time. The majority of the Commercial Waste and Specialities revenue is recognised
at a point in time, whereas for Mineralz & Water 55% of revenue (2020: 55%) is recognised over
time.
5. Non-trading and exceptional items
To improve the understanding of the Group's financial performance, items which are not considered
to reflect the underlying performance are presented in non-trading and exceptional items.
2021 2020
€m €m
Renewi 2.0 improvement programme 7.3 -
Merger related costs - 16.3
Portfolio management activity:
Prior year disposals (2.6) (2.2)
Loss on disposal of subsidiaries/remeasurement of assets held for sale - 37.3
Acquisition of 100% of shares in a joint venture - (1.4)
2017 merger related - (3.9)
(2.6) 29.8
UK Municipal contract issues - 25.9
Other changes in long-term provisions 3.7 33.0
Other items:
Goodwill impairment 9.5 -
Restructuring charges - non-cash impairments 5.3 -
Restructuring charges - cash 3.1 2.7
ATM soil issues - 3.1
Income relating to fires - (0.1)
IAS 19 Employee benefits pension credit - (1.4)
17.9 4.3
Ineffectiveness on cash flow hedges (0.4) (2.2)
Amortisation of acquisition intangibles 3.3 6.4
Non-trading and exceptional items in profit before tax (continuing operations) 29.2 113.5
Tax on non-trading and exceptional items (5.4) (9.8)
Exceptional tax charge (credit) 1.0 (2.4)
Non-trading and exceptional items in profit after tax (continuing operations) 24.8 101.3
Discontinued operations - 18.9
Total non-trading and exceptional items in profit after tax 24.8 120.2
The non-trading and exceptional items include the following:
Renewi 2.0 improvement programme
Renewi 2.0 improvement programme is a new significant one-off business improvement project with
expected capital and one-off costs of €40m over a three-year period as a result is considered to
be exceptional. Following the transformational merger three years ago, the goal of the Renewi 2.0
programme is to make the Group more streamlined and more efficient and improve customer
experience and increase employee engagement. The programme also includes around €4m of IT
integration costs carried over from the original integration programme and now merged with the
Renewi 2.0 digitisation plans. This is the first year of the programme with total costs of €7.3m
of which €0.3m are recorded in cost of sales and €7.0m are recorded in administrative expenses.
Merger related costs
The prior year costs of €16.3m related to the merger of Shanks Group and Van Gansewinkel Groep in
2017 and the associated synergy delivery projects. The total cost of €16.3m was split €4.0m in
cost of sales and €12.3m in administrative expenses.
Portfolio management activity
The credit of €2.6m for the prior year disposals relates to a release of a warranty provision in
relation to a prior year disposal. The prior year costs related to the Reym disposal completed in
October 2019, the acquisition of the 50% holding in AP4 Terra B.V. from the joint venture partner
in November 2019, the release of a warranty provision in relation to a prior year disposal and a
warranty settlement related to the 2017 merger. The total credit of €2.6m (2020: €29.8m charge)
was all recorded in administrative expenses.
5. Non-trading and exceptional items - continued
UK Municipal contract issues
During the year there has been a release of certain onerous contract provisions and increases in
others with a net €nil Income Statement impact. Further details are provided in note 12. The
prior year charge of €25.9m related to the ELWA contract which became onerous on 1 January 2020
as a result of a new Dutch tax on the import of burnable waste together with the anticipated
impact of Brexit. The charge was split between an onerous contract provision of €15.5m and an
impairment of €10.4m of right-of-use assets and was all charged to cost of sales.
Other changes in long-term provisions
Other changes in long-term provisions of €3.7m in the current year relates to an increase in
future cashflows in a Dutch landfill as a result of a change in the discount on the long-term
aftercare funds. The prior year charge of €33.0m included an increase in provisions of €17.9m due
to the reduction in discount rates, principally landfill related and onerous contracts, as a
result of the fall in Government bond yields. In February 2020 the European Commission announced
its decision to initiate a formal investigation in which it alleges that the Walloon Region of
Belgium provided state aid to the Group in relation to the Cetem landfill. An adverse judgement
would require the Walloon Region to seek repayment from the Group and it was considered
appropriate in March 2020 to recognise a provision of €15.1m which was based on the most likely
outcome from our legal advisers. Further details are set out in note 12 and note 16. The charge
of €3.7m (2020: €33.0m) is all recorded in cost of sales.
Other items
The goodwill impairment of €9.5m (2020: €nil) relates to the Maltha business as a result of a
reduction in the expected future cash flows due to difficult market conditions.
The restructuring charges in the current year relate to a Covid-19 cost action programme started
in the first half to address the challenges of the pandemic. These costs are considered to be
exceptional due to the total cost of the programme and the one-off nature of the circumstances.
The costs of €8.4m have been reflected following the decision to close two processing lines in
Belgium and some sites and business activities in the Netherlands. Of the total costs €5.3m are
non-cash asset impairments.
Prior year charges included the ATM soil offset market issue, restructuring advisor fees relating
to setting up the Renewi 2.0 programme, and a net credit relating to prior year fires. Following
the reopening of the end market for ATM soil no further charges for logistics or storage are
recorded as exceptional. The prior year IAS 19 Employee benefits credit of €1.4m related to a
past service credit for the UK defined benefit pension scheme which was closed to future benefit
accrual during the year together with a reduction in liabilities as a result of pension increase
exchange exercises.
The total charge of €17.9m (2020: €4.3m) was split €8.4m (2020: €2.9m) in cost of sales and €9.5m
(2020: €1.4m) in administrative expenses.
Items recorded in finance charges and finance income
The €0.4m credit (2020: €2.2m) for ineffectiveness on cash flow hedges is in relation to the
cross-currency interest rate swaps and the Cumbria PPP project interest rate swaps as a result of
a revised repayment programme for the PPP non-recourse debt.
Amortisation of acquisition intangibles
Amortisation of intangible assets acquired in business combinations of €3.3m (2020: €6.4m) is all
recorded in cost of sales.
Exceptional tax charge (credit)
The exceptional tax charge of €1.0m related to changes in tax rates in the Netherlands. The prior
year credit of €2.4m related to a release of provisions in relation to pre-merger tax issues in
Belgium and the Netherlands and changes in tax rates in the UK and the Netherlands. Where one-off
tax credits or charges are deemed significant they are classified as exceptional and outside of
normal tax charges.
Discontinued operations
The sale of the Canadian business was completed on 30 September 2019 and resulted in a loss on
disposal of €18.9m in the prior year and further details are set out in note 15.
6. Net finance charges
2021 2020
€m €m
Finance charges
Interest payable on borrowings 14.0 18.5
Interest payable on PPP non-recourse net debt 7.4 7.8
Lease liabilities interest 7.2 6.4
Unwinding of discount on provisions (note 12) 6.3 7.7
Interest charge on the retirement benefit schemes - 0.2
Amortisation of loan fees 1.5 1.3
Other finance costs 1.7 2.2
Total finance charges 38.1 44.1
Finance income
Interest receivable on financial assets relating to PPP contracts (9.0) (9.5)
Unwinding of discount on deferred consideration receivable (0.1) (0.2)
Interest income on the retirement benefit schemes (0.3) -
Other finance income (1.5) -
Total finance income before non-trading and exceptional items (10.9) (9.7)
Non-trading and exceptional finance income:
Ineffectiveness on cash flow hedges (0.4) (2.2)
Total non-trading and exceptional finance income (0.4) (2.2)
Total finance income (11.3) (11.9)
Net finance charges 26.8 32.2
7. Taxation
The tax charge based on the profit (loss) for the year from continuing operations is made up as
follows:
2021 2020
€m €m
Current tax
UK corporation tax
- Current year 1.4 1.5
Overseas tax
- Current year 10.3 11.4
- Adjustment in respect of the prior year 0.7 (1.0)
- Exceptional tax credit - (2.5)
Total current tax charge 12.4 9.4
Deferred tax
- Origination and reversal of temporary differences in the current year (4.7) (8.3)
- Adjustment in respect of the prior year (0.5) -
Total deferred tax credit (5.2) (8.3)
Total tax charge for the year 7.2 1.1
The standard Netherlands corporate income tax rate was 25% (2020: 25%). Under the corporate tax
reform enacted by the Dutch government on 18 December 2018, it was stated that the rate would
reduce to 22.55% for the period ending 31 March 2021 and 20.50% for the period ending 31 March
2022 and subsequent periods. However, in September 2019 the Dutch government announced amendments
to the rates so that the rate will remain at 25% for the period ending 31 March 2021 and 21.7%
for the period ending 31 March 2022 and subsequent periods. These amendments were enacted by the
Dutch government on 17 December 2019. Furthermore, in September 2020 the Dutch government
announced a further amendment to the rate so that the reduction to 21.7% for the period ending 31
March 2022 and subsequent periods is cancelled and the rate will remain at 25% going forward.
These amendments were enacted by the Dutch government on 15 December 2020. As a result,
Netherlands deferred tax has been calculated at the substantively enacted rates depending on when
the timing differences are expected to reverse. This resulted in an exceptional tax charge of
€1.0m (2020: €1.6m).
The rate of UK corporation tax rate changed from 20% to 19% on 1 April 2017 and legislation was
included in Finance Act 2016 to reduce the rate to 17% on 1 April 2020. However, it was announced
in the Chancellor's Budget of 11 March 2020 that the rate will remain at 19% and this was
substantively enacted on 17 March 2020 which resulted in an exceptional tax credit of €1.5m in
the prior year. Furthermore, in the Chancellor's Budget of 3 March 2021 it was announced that the
rate will increase to 25% with effect from 1 April 2023. This measure had not been substantively
enacted at the balance sheet date. As a result, the UK deferred tax for the year has been
calculated based on the substantively enacted rate of 19% in both the current and prior year.
7. Taxation - continued
The other exceptional tax credit of €2.5m in the prior year relates to a release of provisions in
relation to pre-merger tax issues in Belgium and the Netherlands.
In September 2020 the Dutch government announced some amendments to the loss utilisation rules.
It is envisaged that losses may be carried forward indefinitely, instead of the current time
limit of between 6 and 9 years (depending on the date of origin of the losses). However, the
offset of tax losses against taxable income in excess of €1m is intended to be limited to a
maximum of 50%. These new rules were not enacted at the balance sheet date. If enacted, these
rules are not expected to materially impact the recognised portion of the deferred tax asset in
relation to losses.
8. Earnings per share
Underlying basic and diluted earnings per share excludes non-trading and exceptional items,
amortisation of acquisition intangibles and the change in fair value of derivatives, net of
related tax. Non-trading and exceptional items are those items that need to be disclosed
separately on the face of the Income Statement, because of their size or incidence, to enable a
better understanding of performance. The Directors believe that adjusting earnings per share in
this way enables comparison with historical data calculated on the same basis to reflect the
business performance in a consistent manner and reflect how the business is managed and measured
on a day to day basis.
Continuing operations 2021 2020
Basic Dilutions Diluted Basic Dilutions Diluted
Weighted average number of shares (million) 795.5 0.7 796.2 794.9 0.9 795.8
Profit (loss) after tax (€m) 11.0 - 11.0 (60.5) - (60.5)
Non-controlling interests (€m) 0.1 - 0.1 (0.8) - (0.8)
Profit (loss) after tax attributable to ordinary 11.1 - 11.1 (61.3) - (61.3)
shareholders (€m)
Basic earnings (loss) per share (cents) 1.4 - 1.4 (7.7) - (7.7)
The reconciliation between underlying earnings per share and basic earnings (loss) per share is
as follows:
2021 2020
Cents €m Cents €m
Underlying earnings per share/Underlying profit after tax 4.5 35.9 5.1 40.7
attributable to ordinary shareholders
Adjustments:
Non-trading and exceptional items (3.7) (29.2) (14.3) (114.2)
Tax on non-trading and exceptional items 0.7 5.4 1.2 9.8
Exceptional tax (0.1) (1.0) 0.3 2.4
Basic earnings (loss) per share/Earnings (loss) after tax 1.4 11.1 (7.7) (61.3)
attributable to ordinary shareholders
Diluted underlying earnings per share/Underlying profit after tax 4.5 35.9 5.1 40.7
attributable to ordinary shareholders
Diluted basic earnings (loss) per share/Earnings (loss) after tax 1.4 11.1 (7.7) (61.3)
attributable to ordinary shareholders
Discontinued operations 2021 2020
Cents €m Cents €m
Underlying earnings per share/Underlying profit after tax attributable to - - 0.3 2.3
ordinary shareholders
Basic loss per share/Loss after tax attributable to ordinary shareholders - - (2.1) (16.6)
9. Dividends
The Directors have not recommended a final dividend for the year ended March 2021 (2020: nil per
share).
10. Goodwill, intangible assets, property, plant and equipment and right-of-use assets
Intangible Property, plant Right-of-use
Goodwill Total
assets and equipment Assets*
€m €m
€m €m €m
Net book value at 31 March 2019 552.7 52.9 629.1 - 1,234.7
IFRS 16 transition accounting policy - - (35.5) 35.5 -
change
Right-of-use assets on transition - - - 139.8 139.8
Net book value at 1 April 2019 - 552.7 52.9 593.6 175.3 1,374.5
restated
Additions/modifications - 8.5 65.6 61.8 135.9
Acquisition through business
combinations - restated* 8.4 0.7 40.5
8.9 22.5
Disposals - - (9.3) (0.9) (10.2)
Amortisation and depreciation charge - (12.8) (73.1) (32.4) (118.3)
Impairment charge - - (1.7) (10.4) (12.1)
Exchange rate changes - (0.3) - - (0.3)
Net book value at 31 March 2020 - 561.1 49.0 584.0 215.9 1,410.0
restated*
Additions/modifications - 11.3 61.1 60.9 133.3
Disposals - (0.2) (4.0) (0.1) (4.3)
Derecognition of a right-of-use assets
into a finance sub-lease - (0.4)
- - (0.4)
Amortisation and depreciation charge - (9.6) (74.2) (40.7) (124.5)
Impairment charge (9.5) - (6.2) (1.8) (17.5)
Exchange rate changes - 0.1 - - 0.1
Net book value at 31 March 2021 551.6 50.6 560.7 233.8 1,396.7
*The right-of-use asset comparatives have been restated due to a prior year adjustment relating
to an acquisition through business combination as explained in note 2.
At 31 March 2021, the Group had property, plant and equipment commitments of €15.0m (2020:
€12.0m), right-of-use asset commitments of €8.2m (2020: €12.3m) and intangible asset commitments
of €4.1m (2020: €3.5m).
11. Borrowings
Borrowings are analysed as follows:
Restated*
2021
2020
€m
€m
Non-current borrowings
Retail bonds 174.5 174.3
European private placements 24.7 24.6
Term loans 85.2 81.5
Revolving credit facility 97.1 352.0
Lease liabilities 205.7 190.6
Other loans 1.3 2.5
PPP non-recourse net debt 85.4 87.2
673.9 912.7
Current borrowings
Bank overdrafts - 0.7
Lease liabilities 42.1 36.0
Other loans 1.2 1.2
PPP non-recourse net debt 2.4 2.8
45.7 40.7
*The comparatives for lease liabilities have been restated due to a prior year adjustment as
explained in note 2.
Movement in total net debt
Restated*
Other non-cash Exchange At 31 March
At 1 April Cash flows changes movements
2021
2020 €m €m €m
€m
€m
Bank loans and overdrafts (437.9) 260.0 (1.0) (5.9) (184.8)
European private (24.6) - (0.1) - (24.7)
placements
Retail bonds (174.3) - (0.2) - (174.5)
Lease liabilities (226.6) 40.4 (60.9) (0.7) (247.8)
Debt excluding PPP (863.4) 300.4 (62.2) (6.6) (631.8)
non-recourse debt
PPP non-recourse net debt (90.0) 5.4 - (3.2) (87.8)
Total debt (953.4) 305.8 (62.2) (9.8) (719.6)
Cash and cash equivalents 194.5 (142.5) - (0.5) 51.5
Total net debt (758.9) 163.3 (62.2) (10.3) (668.1)
*The comparatives for lease liabilities have been restated due to a prior year adjustment as
explained in note 2.
Analysis of movement in total net debt
Restated*
2021
2020
€m
€m
Net (decrease) increase in cash and cash equivalents excluding cash relating (142.5) 156.0
to acquisitions and disposals
Cash sold as part of business disposals, net of cash acquired as part of - (13.0)
acquisitions
Net (decrease) increase in cash and cash equivalents (142.5) 143.0
Net decrease (increase) in borrowings and lease liabilities 305.8 (14.2)
Lease liabilities acquired as part of acquisitions - (22.7)
Total cash flows in net debt 163.3 106.1
Adjustment for change in accounting policy (IFRS 16 transition) - (155.4)
Leases liabilities entered into during the year (60.9) (61.8)
Capitalisation of loan fees 0.2 2.2
Amortisation of loan fees (1.5) (1.3)
Exchange loss (10.3) (1.3)
Movement in net debt 90.8 (111.5)
Total net debt at beginning of year (758.9) (647.4)
Total net debt at end of year (668.1) (758.9)
*The comparatives for lease liabilities acquired as part of acquisitions have been restated due
to a prior year adjustment as explained in note 2.
12. Provisions
Site restoration Onerous Legal and
Restructuring Other Total
and aftercare contracts warranty
€m €m €m
€m €m €m
At 31 March 2019 138.9 94.9 - 7.6 29.9 271.3
IFRS 16 transition accounting - (6.0) - - - (6.0)
policy change
At 1 April 2019 - restated 138.9 88.9 - 7.6 29.9 265.3
Provided in the year 0.3 16.1 19.8 3.4 3.3 42.9
Released in the year - (0.1) (4.3) (0.7) (2.9) (8.0)
Adjustment as a result of the 11.6 5.1 - - 1.2 17.9
change in discount rate
Finance charges - unwinding of 4.4 3.2 - - 0.1 7.7
discount
Utilised in the year (2.4) (20.6) (0.6) (6.0) (3.0) (32.6)
Reclassifications - - 10.4 - (10.4) -
Exchange rate changes - (2.9) (0.1) - (0.1) (3.1)
At 31 March 2020 152.8 89.7 25.2 4.3 18.1 290.1
Provided in the year 5.7 17.4 3.2 5.9 7.2 39.4
Released in the year (1.1) (15.8) (2.4) (1.0) (0.8) (21.1)
Finance charges - unwinding of 3.7 2.4 - - 0.2 6.3
discount
Utilised in the year (3.7) (15.6) (0.3) (5.4) (1.6) (26.6)
Exchange rate changes 0.2 2.8 - - 0.2 3.2
At 31 March 2021 157.6 80.9 25.7 3.8 23.3 291.3
Current 8.4 11.0 7.3 3.8 8.2 38.7
Non-current 149.2 69.9 18.4 - 15.1 252.6
At 31 March 2021 157.6 80.9 25.7 3.8 23.3 291.3
Current 5.1 16.5 8.0 4.3 3.8 37.7
Non-current 147.7 73.2 17.2 - 14.3 252.4
At 31 March 2020 152.8 89.7 25.2 4.3 18.1 290.1
During the year for UK Municipal onerous contracts, strong operational execution and improvements
in recyclate and offtake outlooks have resulted in a significant reduction in the onerous
contract provision for ELWA. On the other hand it has been necessary to increase the Wakefield
provision, where the Council has not yet given approval to our proposals to reduce or reconfigure
certain operations so as to save money for both parties and to improve the environmental
footprint of the South Kirby facility.
Site restoration and aftercare
The Group's minimum unavoidable costs have been reassessed at the year end and the net present
value fully provided for. The site restoration provisions at 31 March 2021 relate to the cost of
final capping and covering of the landfill and mineral extraction sites. These site restoration
costs are expected to be paid over a period of up to 31 years from the balance sheet date.
However, the timing of the payments is not certain and has been estimated based on management's
latest expectations. Aftercare provisions cover post-closure costs of landfill sites which
include such items as monitoring, gas and leachate management and licensing. The dates of
payments of these aftercare costs are uncertain but are anticipated to be over a period of at
least 30 years from closure of the relevant landfill site. All site restoration and aftercare
costs have been estimated by management based on current best practice and technology available
and may be impacted by a number of factors including changes in legislation and technology.
Onerous contracts
Onerous contract provisions arise when the unavoidable costs of meeting contractual obligations
exceed the cash flows expected. Onerous contracts are provided for at the lower of the NPV of
either exiting the contracts or fulfilling our obligations under the contracts. The provisions
have been calculated on the best estimate of likely future cash flows over the contract term
based on the latest budget and five year plan projections, including assumptions on tonnage
inputs, plant performance with efficiency improvements, off-take availability and recyclates
pricing. The provisions are to be utilised over the period of the contracts to which they relate
with the latest date being 2040.
12. Provisions - continued
Legal and warranty
Legal and warranty provisions relate to legal claims, warranties and indemnities. Under the terms
of the agreements for the disposal of certain businesses, the Group has given a number of
warranties and indemnities to the purchasers which may give rise to payments. The Group has a
liability until the end of the contractual terms in the agreements. The Group considers each
warranty provision based on the nature of the business disposed of and the type of warranties
provided with judgement used to determine the most likely obligation.
On 6 February 2020 the European Commission announced its decision to initiate a formal
investigation in which it alleges that the Walloon Region of Belgium provided state aid to the
Group in relation to the Cetem landfill. An adverse judgement would require the Walloon Region
to seek repayment from the Group and a provision of €15.1m has been recognised in both the
current year and the prior year as non-current as timing of any cash flow is expected to be after
12 months from the balance sheet date. The matter remains ongoing and based on legal advice
management consider this value to be their best estimate of the potential exposure based on the
most likely outcome. Further contingent liability information is provided in note 16.
Restructuring
The restructuring provision primarily relates to redundancy and related costs incurred as a
result of restructuring initiatives including the Covid-19 cost action programme. As at 31 March
2021 the provision is expected to be spent in the following twelve months as affected employees
leave the business.
Other
Other provisions includes dilapidations €8.7m (2020: €7.4m), long-service employee awards €6.0m
(2020: €5.6m) and other environmental liabilities €8.6m (2020: €5.1m). The dilapidations
provisions are determined on a site by site basis using internal expertise and experience and are
calculated as the most likely cash outflow at the end of the contracted obligation. The
provisions will be utilised over the period up to 2070.
13. Retirement benefit schemes
The Group has the legacy Shanks UK defined benefit scheme which provides pension benefits for
pensioners, deferred members and eligible UK employees which is closed to new entrants and to
future benefit accrual. A bulk pension increase exchange exercise and an at retirement pension
increase exchange were introduced in the prior year. In addition there are a number of defined
benefit schemes eligible for certain employees in both the Netherlands and Belgium.
The amounts recognised in the Income Statement were as follows:
2021 2020
€m €m
Current service cost 1.1 1.2
Past service credit - (1.4)
Interest (income) expense on scheme net liabilities (0.3) 0.2
Net retirement benefit charge before tax 0.8 -
The amounts recognised in the balance sheet were as follows:
2021 2020
€m €m
Present value of funded obligations (296.6) (266.3)
Fair value of plan assets 285.2 274.8
Pension schemes (deficit) asset (11.4) 8.5
Related deferred tax asset 2.7 (1.4)
Net pension (liability) asset (8.7) 7.1
Classified as:
Defined benefit scheme surplus - included in non-current assets - 16.0
Defined benefit pension schemes deficit - included in non-current liabilities (11.4) (7.5)
Pension schemes (deficit) asset (11.4) 8.5
The legacy Shanks UK defined benefit scheme reduced by €20.0m from an asset of €16.0m at 31 March
2020 to a deficit of €4.0m. This was due to a decrease in the discount rate assumption on scheme
liabilities from 2.4% at 31 March 2020 to 2.1% at 31 March 2021 together with an increase in RPI
inflation which was only partly offset by an increase in asset returns. The overseas defined
benefit schemes deficit reduced by €0.1m to €7.4m.
14. Financial instruments at fair value
The Group uses the following hierarchy of valuation techniques to determine the fair value of
financial instruments:
• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
• Level 2: other techniques for which all inputs which have a significant effect on the
recorded fair value are observable, either directly or indirectly
• Level 3: techniques which use inputs which have a significant effect on the recorded fair
value that are not based on observable market data
During the year ended 31 March 2021, there were no transfers between level 1 and level 2 fair
value measurements and no transfers into or out of level 3.
Valuation techniques used to derive level 2 fair values:
• Unlisted non-current investments comprise unconsolidated companies where the fair value
approximates the book value
• Short term investment valuations are provided by the fund manager
• Derivative financial instruments are determined by discounting the future cash flows using
the applicable period-end yield curve
• The fair value of the European private placements are determined by discounting the future
cash flows using the applicable period-end yield curve
• The fair value of retail bonds is based on indicative market pricing
The table below presents the Group's assets and liabilities measured at fair values. The Group
considers that the fair value of all other financial assets and financial liabilities are not
materially different to their carrying value.
2021 2020
Level 1 Level 2 Level 1 Level 2
€m €m €m €m
Assets
Money market funds - - 100.0 -
Unlisted non-current investments - 4.6 - 4.7
Short term investments - 9.3 - 8.1
Derivative financial instruments - 9.1 - 2.1
- 23.0 100.0 14.9
Liabilities
Derivative financial instruments - 25.5 - 38.0
European private placements - 26.6 - 26.8
Retail bonds - 179.1 - 174.7
- 231.2 - 239.5
15. Discontinued operations
The Municipal Canada disposal completed on 30 September 2019 met the definition of a discontinued
operation as stated in IFRS 5 Non-current assets held for sale and discontinued operations,
therefore the net results for the year ended 31 March 2020 were presented as discontinued
operations in the Income Statement.
Income Statement in relation to the discontinued operations:
2020
€m
Revenue 10.8
Cost of sales (6.8)
Gross profit 4.0
Administrative expenses (0.9)
Operating profit before non-trading and exceptional items 3.1
Non-trading and exceptional items (18.9)
Operating loss (15.8)
Finance income 0.6
Finance charges (0.5)
Loss before tax on discontinued operations (15.7)
Taxation (0.9)
Loss after tax on discontinued operations (16.6)
Cash flow information in relation to the discontinued operations:
2020
€m
Net cash inflow from operating activities 38.6
Net cash outflow from investing activities (5.5)
Net cash outflow from financing activities (36.3)
Net movement in cash (3.2)
16. Contingent liabilities
There is an ongoing investigation by the European Commission in which it alleges the Walloon
region of Belgium provided state aid to the Group in relation to the Cetem landfill. An adverse
judgement would require the Walloon region to seek repayment from the Group. Both the Walloon
Region and Renewi believe that no state aid was offered and will defend their conduct vigorously.
Renewi has provided €15m based on legal advice which represents management's best estimate of the
most likely outcome. It is noted that the potential maximum claim is €58m (excluding compound
interest currently amounting to €5m), and therefore there is a potential further liability should
the Group be wholly unsuccessful in its defence. A ruling from the European Commission is
expected during FY22 but no monies would likely become payable until FY23.
There is an ongoing criminal investigation into the production of thermally cleaned soil at ATM.
This may or may not result in a prosecution and if so, we expect such a process will likely take
many years, should it proceed. ATM will defend its conduct strongly in such an event. Given that
it is not even clear whether or what charges might be brought in the criminal case and the charge
is expected to be lower than €1m we do not consider it appropriate at this stage to provide for
this. Given these uncertainties, it cannot be ruled out that the outcome of the criminal
investigation or the topic it concerns could result in liability for damages resulting from third
party claims in the future.
Due to the nature of the industry in which the business operates, from time to time the Group is
made aware of claims or litigation arising in the ordinary course of the Group's business.
Provision is made for the Directors' best estimate of all known claims and all such legal actions
in progress. The Group takes legal advice as to the likelihood of success of claims and actions
and no provision is made where the Directors consider, based on that advice, that the action is
unlikely to succeed or a sufficiently reliable estimate of the potential obligation cannot be
made. None of these other matters are expected to have a material impact.
Under the terms of sale agreements, the Group has given a number of indemnities and warranties
relating to businesses sold in prior periods. Different warranty periods are in existence and it
is assumed that these will expire within 10 years. Based on management's assessment of the most
likely outcome appropriate warranty provisions are held.
In respect of contractual liabilities the Group and its subsidiaries have given guarantees and
entered into counter indemnities of bonds and guarantees given on their behalf by sureties and
banks totalling €219.8m (2020: €222.3m).
17. Explanation of non-IFRS measures and reconciliations
The Directors use alternative performance measures as they believe these measures provide
additional useful information on the underlying trends, performance and position of the Group.
These measures are used for internal performance analysis. These terms are not defined terms
under IFRS and may therefore not be comparable with similarly titled measures used by other
companies. These measures are not intended to be a substitute for, or superior to, IFRS
measurements. The alternative performance measures used are set out below.
Financial Measure How we define it Why we use it
Ongoing businesses exclude the results of the Provides insight into
Ongoing businesses Canada Municipal business which was sold on 30 current performance
September 2019 and the Reym business which was excluding the impact of
sold on 31 October 2019 disposed activities
Revenue from ongoing Revenue from continuing operations which Provides insight into
businesses excludes businesses that have been disposed of ongoing revenue development
and trends
Operating profit from either continuing
operations or ongoing businesses excluding
non-trading and exceptional items, amortisation
of intangible assets arising on acquisition Provides insight into
Underlying EBIT and fair value remeasurements. Amortisation on ongoing profit generation
acquisition intangibles is excluded to avoid and trends
double counting of costs in underlying EBIT as
the Group incurs costs each year in maintaining
intangible assets which include acquired
customer relationships, permits and licences
Underlying EBIT Provides insight into
margin Underlying EBIT as a percentage of revenue ongoing margin development
and trends
Underlying EBIT before depreciation, Measure of earnings and cash
Underlying EBITDA amortisation, impairment and profit or loss on generation to assess
disposal of plant, property and equipment operational performance
Underlying EBITDA Provides insight into
margin Underlying EBITDA as a percentage of revenue ongoing margin development
and trends
Profit before tax from either continuing
Underlying profit operations or ongoing businesses excluding Facilitates underlying
before tax non-trading and exceptional items, amortisation performance evaluation
of intangible assets arising on acquisition
and fair value remeasurements
Earnings per share from either continuing
operations or ongoing businesses excluding Facilitates underlying
Underlying EPS non-trading and exceptional items, amortisation performance evaluation
of intangible assets arising on acquisition
and fair value remeasurements
Underlying effective The effective tax rate on underlying profit Provides a more comparable
tax rate before tax basis to analyse our tax
rate
Last 12 months underlying EBIT divided by a Provides a measure of the
13-month average of net assets excluding core return on assets across the
Return on operating net debt, IFRS 16 lease liabilities, Divisions and the Group
assets derivatives, tax balances, goodwill and excluding goodwill and
acquisition intangibles acquisition intangible
balances
Last 12 months underlying EBIT as adjusted by Provides a measure of the
Post-tax return on the Group effective tax rate divided by a Group return on assets
capital employed 13-month average of net assets excluding core taking into account the
net debt, IFRS 16 lease liabilities goodwill and acquisition
and derivatives intangible balances
Net cash generated from operating activities Measure of cash generation
including interest, tax and replacement capital in the underlying business
Adjusted free cash spend activities and excluding non-trading and available after regular
flow exceptional items, Covid-19 tax deferral replacement capital
receipts, settlement of ATM soil liabilities expenditure to fund growth
and spend relating to the UK PPP contracts capital projects and invest
in acquisitions
Measure of cash available
Net cash generated from operating activities after regular replacement
Free cash flow principally excluding non-trading and capital expenditure to pay
exceptional items and including interest, tax dividends, fund growth
and replacement capital spend capital projects and invest
in acquisitions
Free cash flow The ratio of free cash flow to underlying EBIT Provides an understanding of
conversion from continuing and discontinued operations how our profits convert into
cash
Total cash flow is net debt excluding loan fee
capitalisation and amortisation, exchange Provides an understanding of
Total cash flow movements, movement in PPP non-recourse net total cash flow of the Group
debt, movements in IFRS 16 lease liabilities
and acquired/disposed of cash
17. Explanation of non-IFRS measures and reconciliations - continued
Financial Measure How we define it Why we use it
Renewi 2.0, synergy delivery,
integration and restructuring
Non-trading and cash flows are presented in cash Provides useful information on
exceptional flows from operating activities non-trading and exceptional cash flow
cash flow items and are included in the spend
categories in note 5, net of
opening and closing Balance Sheet
positions
The borrowings relating to the UK PPP
Core net debt includes cash and contracts are non-recourse to the Group
cash equivalents but excludes the and excluding these gives a suitable
Core net debt net debt relating to the UK PPP measure of indebtedness for the Group and
contracts and lease liabilities IFRS 16 lease liabilities are excluded as
as a result of IFRS 16 financial covenants on the main multi
currency green finance facility remain on
a frozen GAAP basis
Liquidity headroom includes cash,
money market funds and undrawn Provides an understanding of available
Liquidity committed amounts on the headroom to the Group
multicurrency green finance
facility
Core net debt divided by an
annualised underlying EBITDA with
Net debt to a net debt value based on the Commonly used measure of financial
EBITDA/leverage ratio terminology of financing leverage and consistent with covenant
arrangements and translated at an definition
average rate of exchange for the
period
Reconciliation of operating profit (loss) to underlying EBITDA
Netherlands Belgium Mineralz & Group
Commercial Waste Commercial Water Specialities central Total
2021 Waste services
€m €m €m €m
€m €m
Operating profit (loss) 46.3 14.4 (4.5) (7.9) (4.9) 43.4
Non-trading and exceptional
items (excluding finance 7.4 8.7 4.8 10.3 (1.6) 29.6
items)
Underlying EBIT from 53.7 23.1 0.3 2.4 (6.5) 73.0
continuing operations
Depreciation and impairment of
property, plant and equipment 59.8 29.1 14.0 8.7 4.9 116.5
and right-of-use assets
Amortisation of intangible
assets (excluding acquisition 1.2 0.1 0.6 0.6 3.8 6.3
intangibles)
Non-exceptional gain on
disposal of property, plant (0.8) 0.2 0.1 0.3 0.1 (0.1)
and equipment
Total underlying EBITDA 113.9 52.5 15.0 12.0 2.3 195.7
Netherlands Belgium Mineralz Group Total
Commercial Commercial & Water Specialities central ongoing Disposals Total
2020 Waste Waste services businesses
€m €m €m €m
€m €m €m €m
Operating 13.7 29.2 (7.4) (31.5) (6.9) (2.9) (25.2) (28.1)
profit (loss)
Non-trading and
exceptional
items 35.7 - 13.0 30.2 (0.5) 78.4 37.3 115.7
(excluding
finance items)
Underlying EBIT
from continuing 49.4 29.2 5.6 (1.3) (7.4) 75.5 12.1 87.6
operations
Depreciation
and impairment
of property,
plant and 54.1 27.0 12.6 9.0 3.8 106.5 - 106.5
equipment and
right-of-use
assets
Amortisation of
intangible
assets 1.4 0.2 0.6 0.3 3.9 6.4 - 6.4
(excluding
acquisition
intangibles)
Non-exceptional
gain on
disposal of (0.5) (0.3) (0.1) 0.1 - (0.8) - (0.8)
property, plant
and equipment
Underlying
EBITDA from 104.4 56.1 18.7 8.1 0.3 187.6 12.1 199.7
continuing
operations
Underlying
EBITDA from - - - - - - 3.1 3.1
discontinued
operations
Total
underlying 104.4 56.1 18.7 8.1 0.3 187.6 15.2 202.8
EBITDA
17. Explanation of non-IFRS measures and reconciliations - continued
Reconciliation of underlying profit before tax to underlying profit before tax ongoing businesses
2021 2020
€m €m
Underlying profit before tax 47.4 54.1
Underlying EBIT from operations disposed of in the prior year - (12.1)
Underlying finance costs from operations disposed of in the prior year - 0.5
Underlying profit before tax ongoing businesses 47.4 42.5
Reconciliation of basic underlying earnings per share from ongoing businesses
2021 2020
€m €m
Earnings (loss) after tax attributable to ordinary shareholders (€m) (note 8) 11.1 (61.3)
Non-trading and exceptional items, including tax (€m) (note 8) 24.8 102.0
Underlying profit after tax attributable to ordinary shareholders (€m) (note 8) 35.9 40.7
Underlying profit after tax attributable to ordinary shareholders on operations - (9.3)
disposed of in the prior year (€m)
Ongoing underlying profit after tax attributable to ordinary shareholders (€m) 35.9 31.4
Basic weighted average number of shares (million) (note 8) 795.5 794.9
Basic underlying earnings per share from ongoing businesses (cents) 4.5 3.9
Reconciliation of adjusted free cash flow as presented in the Financial Review
2021 2020
€m €m
Net cash generated from operating activities 243.4 157.7
Exclude non-trading and exceptional provisions and working capital 12.6 25.3
Exclude payments to fund defined benefit pension schemes 3.6 3.5
Exclude deferred Covid taxes (54.1) (6.0)
Exclude offtake of ATM soil 2.6 -
Exclude UK Municipal contracts 19.3 23.6
Exclude exceptional proceeds from disposal of property, plant and equipment - 0.8
Exclude increase in Municipal Canada PPP financial asset - 0.1
Include finance charges and loan fees paid (excluding exceptional finance charges) (30.8) (37.9)
Include finance income received 10.2 10.9
Include repayment of obligations under lease liabilities (40.4) (38.5)
Include purchases of replacement items of intangible assets (8.8) (6.7)
Include purchases of replacement items of property, plant and equipment (51.1) (67.7)
Include proceeds from disposals of property, plant & equipment 4.5 10.2
Include UK Municipal contracts PPP net debt and financial asset movements (2.2) 0.1
Adjusted free cash flow 108.8 75.4
The Group splits purchases of property, plant and equipment between replacement and growth as
shown in the cash flow in the Financial Review. The 2021 replacement spend shown above totalling
€59.9m (2020: €74.4m) (being €8.8m (2020: €6.7m) intangible assets and €51.1m (2020: €67.7m)
property, plant and equipment) plus the growth capital expenditure of €6.9m (2020: €10.1m) as
shown in the Financial Review reconciles to the purchases of property, plant and equipment and
intangible assets cash outflow of €66.8m (2020: €84.5m) within investing activities in the
consolidated Statement of Cash Flows.
Reconciliation of property, plant and equipment additions to replacement capital expenditure as
presented in the Financial Review
2021 2020
€m €m
Property, plant and equipment additions (note 10) 61.1 65.6
Intangible asset additions (note 10) 11.3 8.5
Asset held for sale additions - 4.9
Proceeds from disposals of property, plant and equipment (4.5) (11.1)
Movement in capital creditors (included in trade and other payables) (5.6) 6.4
Growth capital expenditure - as disclosed in the Financial Review (6.9) (10.1)
Replacement capital expenditure per the Financial Review 55.4 64.2
17. Explanation of non-IFRS measures and reconciliations - continued
Reconciliation of total net core cash flow as presented in the Financial Review
2021 2020
€m €m
Total cash flow 117.5 102.1
Movement in PPP non-recourse net debt 5.4 5.4
Additions to lease liabilities (60.9) (61.8)
Repayment of obligations under lease liabilities 40.4 38.5
Capitalisation of loan fees net of amortisation (1.3) 0.9
Exchange movements (10.3) (3.8)
Exchange movements - discontinued - (0.1)
Cash sold as part of business disposals, net of cash acquired as part of - (13.0)
acquisitions
Lease liabilities acquired as part of acquisitions - (22.7)
IFRS 16 transition additions - excluding assets held for sale - (155.4)
IFRS 16 transition additions - assets held for sale - (21.9)
IFRS 16 lease liabilities sold as part of business disposal - assets held for sale - 20.1
IFRS 16 lease liabilities - previously IAS 17 finance leases sold as part of - 0.2
business disposal
Movement in total net debt (note 11) 90.8 (111.5)
Reconciliation of total net debt to net debt under covenant definition
Restated*
2021
2020
€m
€m
Total net debt (668.1) (758.9)
Less PPP non-recourse net debt 87.8 90.0
Less IFRS 16 lease liabilities 236.7 211.7
Net debt under covenant definition (343.6) (457.2)
*The comparatives for lease liabilities have been restated due to a prior year adjustment as
explained in note 2.
APPENDIX
The following additional information, summarised from the Renewi plc Annual Report and Accounts
2021, is disclosed in accordance with Disclosure and Transparency Rule 6.3.5.
1. Principal Risks and Uncertainties affecting the Group
Product pricing, demand and quality - That the value we receive for recycled product falls, the
markets contract, reducing demand for our product, or we become unable to produce to the required
quality.
Residue pricing, capacity and specification - Lack of capacity at outlets and/or inability to
produce in specification, resulting in increased price of disposal of burnable waste and other
residues.
Input volumes - That incoming waste volumes in the market may fall.
Changes in law and policy - Adverse impacts from changes in law and policy, including
environmental, tax and similar legal and policy regimes. Including changes in regulatory attitude
and behaviours as a result of shifts in public opinion.
Disruptive event - That a disruptive event such as a pandemic or force of nature has severe
consequences for our incoming waste streams and workforce, causing business interruption or loss.
Health and safety - Injury or loss of life. That we incur reputational loss, or civil and
criminal costs.
Digitalisation - That a disruptive technology or business model deployed by a competitor or new
entrant impacts our ability to compete.
Labour availability and cost - That there are shortages of certain labour types, leading to
unavailability or severe wage inflation.
Major plant failure or fire - Operational failure and/or fire at a key facility leading to
business interruption and other costs.
Unsustainable debt - That funding is not available or that funding sources are available, but
that cash generation is insufficient to allow access to funding.
Environmental compliance - That we fail to comply with environmental permits and/or environmental
laws and regulations.
Talent development, leadership and diversity - That we fail to develop the required management
capabilities for future needs.
Long-term contracts - That we enter into long-term contracts at disadvantageous terms or we rely
on a small number of large contracts.
Input pricing - That market pricing may put pressure on our margins.
ICT failure and cyber threat - That ICT failure and/or cyber crime causes business interruption
or loss.
2. Directors' Responsibility, financial information and posting of accounts
The 2021 Annual Report which will be published in June 2021 contains a responsibility statement
in compliance with DTR 4.1.12. This states that on 26 May 2021, the date of the approval of the
Annual Report, the Directors confirm that to the best of their knowledge:
• the Group financial statements, which have been prepared in accordance with IFRSs as adopted
pursuant to Regulation (EC) No 1606/2002 as it applies in the European Union, give a true and
fair view of the assets, liabilities, financial position and profit of the Group: and
• the Strategic Report in the Annual Report includes a fair review of the development and
performance of the business and the position of the Group, together with a description of the
principal risks and uncertainties that it faces.
The financial information set out above does not constitute the Company's full statutory accounts
for the year ended 31 March 2020 or 2021, but is derived from those accounts. Statutory accounts
for 2019/20 have been delivered to the Registrar of Companies and those for 2020/21 will be
delivered following the Company's Annual General Meeting on 15 July 2021. The auditors have
reported on those accounts; their reports were unqualified and did not contain statements under
Section 498(2) or (3) of the Companies Act 2006.
The have been no changes to the Board of Directors of Renewi plc since the 2020 Annual Report.
A list of current directors is maintained on the Renewi plc website: www.renewiplc.com.
═════════════════════════════════════════════════════════════════════════════════════════════════
ISIN: GB0007995243
Category Code: FR
TIDM: RWI
LEI Code: 213800CNEIDZBL17KU22
OAM Categories: 1.1. Annual financial and audit reports
Sequence No.: 107638
EQS News ID: 1201066
End of Announcement EQS News Service
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