REG-Renewi plc Renewi plc: Half Year Trading Update

RenewiAnnouncement

04/10/2021 07:05

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   Renewi plc (RWI)
   Renewi plc: Half Year Trading Update

   04-Oct-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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   4 October 2021

                                         

                                    Renewi plc

                                         

    ("Renewi", the "Company" or, together with its subsidiaries, the "Group")

                                         

                             Half Year Trading Update

                                         

       Performance and outlook materially ahead of the Board's expectations

                                         

   Renewi plc (LSE: RWI),  the leading international waste-to-product  company,
   announces its trading update for the six months ended 30 September 2021  and
   materially upgrades its expectations for the year ending 31 March 2022.

    

   Renewi has performed  strongly in  the first six  months of  the year,  with
   increased volumes,  improved recyclate  prices and  ongoing cost  management
   continuing  to  support  better  than   expected  trading.  Revenues  on   a
   like-for-like basis in the first five  months have been more than 10%  above
   the Covid-affected prior year  and 7% ahead of  the pre-Covid year ended  31
   March 2020.

    

   The Commercial Division  has performed  particularly well.  Core volumes  in
   Belgium have increased  by 15%  in the  five months  to the  end of  August,
   recovering from a severe Covid lockdown  in the prior year. Core volumes  in
   the Netherlands have  increased by  2% in  the same  period, reflecting  the
   lesser Covid-related reduction in the prior year. While the hospitality  and
   retail sectors  have partly  recovered, we  have not  experienced  predicted
   negative effects in the after-Covid period including a significant  slowdown
   in late cycle sectors such as construction or an  increase in  insolvencies.
   However, bulky waste  has reduced  as forecast. Recyclate  prices have  also
   remained at high  levels throughout  the first  half in  most major  product
   categories, supporting  a  strong increase  in  operating margin.  As  these
   prices are expected to moderate in the future, the Division will continue to
   generate attractive returns,  benefiting from dynamic  contract pricing  and
   the structural improvements to the cost base over the last 18 months.

    

   The Mineralz & Water Division has experienced a mixed first half. At ATM  we
   have increased our soil throughput and  over 350,000 tonnes of TGG have  now
   been placed  in the  market, creating  space on  the site  and beginning  to
   reduce external storage  costs. The waterside  business was slightly  softer
   than expected.  While we continue  to participate in increasing tenders  for
   future  business  for  ATM,  we   are  seeing  some  weakness  in   incoming
   contaminated soil due  to a slow  industry-wide recovery post  Covid with  a
   delay in  large remediation  projects  and delays  in securing  permits  for
   imported waste. Although we expect a full recovery as earlier  communicated,
   this will take longer than anticipated.

    

   The Specialities  Division has  performed well  in the  first half,  with  a
   particularly strong performance by Coolrec.

    

   Good  progress  continues  to  be  made  with  our  three  strategic  growth
   initiatives: 

     • our innovation  pipeline -  which  will deliver  significant  additional
       revenues  and  earnings  over  the  next  three  years  and  beyond.  In
       particular, we have committed  over €80m of  capital that will  underpin
       the targeted €20m improvement in EBIT from this initiative by the end of
       FY25;
     • recovery of earnings at ATM (albeit slower than planned); and
     • the Renewi 2.0 programme to digitise and streamline our business.

    

   Cash performance in  the first  half continued  to be  strong, with  tightly
   controlled working  capital and  replacement capital  expenditure.  Leverage
   will remain below 2.0x net debt to EBITDA at the half year.

    

   The strong performance in the first  half and positive trading outlook  have
   led the Board  to materially  increase its  expectations for  the full  year
   ending 31 March 2022.   Longer term, the  transition to increased  recycling
   will continue to support our  business model. The sustainability agenda  and
   the potential  for a  "green  recovery" supported  by  the EU  and  national
   governments will  present further  attractive  opportunities for  Renewi  to
   convert waste into a wider range of high-quality secondary materials. 

    

   The Group  announces  a  virtual  Capital Markets  Event  for  analysts  and
   investors on 12 October  2021 at 1400  CET / 1300  BST. The Capital  Markets
   Event will  focus on  how we  intend  to grow  our business  organically  by
   commercialising new and innovative technologies from our innovation pipeline
   and how Renewi will  continue to be  a market leader  and beneficiary in  an
   increasingly circular economy.   We will  explore in  depth Board  committed
   projects  in  Organics,  Plastics,   Construction  Materials  and   Advanced
   Sorting.   Please see the  Group's website,  1 www.renewi.com,  for  further
   details.

    

   The Group's  results for  the six  months ended  30 September  2021 will  be
   announced on 9 November 2021.

    

    

   For further information:
                                                                  
    
                                                                  
    
                                                                  
    
                                                                 Renewi plc
   Paternoster Communications
                                                                 Adam Richford,
   Tom Buchanan                                                  Head of IR

   +44 (0)20 3012 0241                                           +44 7976 321
                                                                 540
    
                                                                  
   Ben
   Honan                                                         Michelle
                                                                 James, Head of
   +44 (0)20 3012 0241                                           Communications

                                                                 +44 7773 813
                                                                 180
    2 www.renewi.com                                              

                                                                  
                                                                  
                                                                  

    

   About Renewi

     

   Renewi is a  pure-play recycling company  with a focus  on extracting  value
   from waste and used materials  rather than disposal through incineration  or
   landfill. The company also  plays a key role  in limiting resource  scarcity
   through the creation of secondary materials, and by so doing addresses  both
   social and regulatory trends and contributes to creating a cleaner,  greener
   world.

    

   Renewi's vision is to be the leading waste-to-product company in the world's
   most advanced circular economies. By  opting to recycle, the company  avoids
   emissions of more than 3 million tonnes of CO2 and as a result plays a  part
   in contributing  to  a  sustainable society,  transitioning  to  a  circular
   economy and driving the progress needed to halt climate change.

    

   Renewi, which draws on innovation and the latest technology to turn waste
   into useful materials - paper, metals, plastics, glass, wood, building
   materials, compost and energy - employs over 6 500 people who work on 165
   operating sites in 6 countries across Europe and the UK. Renewi is
   recognised as a market leader in Benelux and a regional European leader in
   recycling.

    

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   ISIN:           GB00BNR4T868
   Category Code:  TST
   TIDM:           RWI
   LEI Code:       213800CNEIDZBL17KU22
   OAM Categories: 3.1. Additional regulated information required to be
                   disclosed under the laws of a Member State
                   3.1. Additional regulated information required to be
                   disclosed under the laws of a Member State
   Sequence No.:   123445
   EQS News ID:    1237651


    
   End of Announcement EQS News Service

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