REG-Renewi plc Q1 Trading Update

RenewiAnnouncement

07/07/2020 07:05

============

   Renewi plc (RWI)
   Q1 Trading Update

   07-Jul-2020 / 07:00 GMT/BST
   Dissemination of a Regulatory Announcement that contains inside
   information according to REGULATION (EU) No 596/2014 (MAR), transmitted by
   EQS Group.
   The issuer is solely responsible for the content of this announcement.

   ══════════════════════════════════════════════════════════════════════════

   This announcement contains inside information

    

    

    

    

   07 July 2020

                                        

                                   Renewi plc

                                        

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

                                        

                                Q1 Trading Update

                                        

   Renewi  plc  (LSE:  RWI),   the  leading  international   waste-to-product
   business, announces its first quarter trading update for the three  months
   ended 30 June 2020.

    

   Trading

    

   Trading in the  first quarter  of FY21 was  ahead of  the Board's  initial
   Covid-19 adjusted expectations, with the  total impact on earnings  during
   the  period  being  €12m  compared  with  the  €20m  previously  forecast,
   supporting a  strong  cash performance  with  no net  outflow  during  the
   lockdown.

    

   Commercial  Waste  Netherlands  volumes  improved  steadily  through   the
   quarter.  Core volumes for the quarter were 6% down on prior year.   Bulky
   waste and  construction  volumes  continued to  be  resilient,  offsetting
   reduced roller bin collections which improved from 30% down on prior  year
   in April  to 15%  down in  June.  Commercial  Waste Belgium  volumes  also
   improved through the quarter from 35%  down compared to the prior year  in
   April to 21% down in  May and 15% down  in June.  Further volume  recovery
   during the second quarter and the remainder of the financial year  remains
   dependent upon the successful  easing of lockdown restrictions,  including
   in specific  sectors such  as hospitality,  and the  speed and  extent  of
   economic recovery.

    

   Recycled paper  prices  rose briefly  in  April  and May  but  have  since
   reduced, metal prices dropped sharply in May.  We were pleased to announce
   a signed agreement  with Shell  and Nordsol to  convert out  of date  food
   waste into bio-LNG, an important first  step in creating a new market  for
   low carbon fuel in the Netherlands.

    

   The  new  Mineralz  &  Water  Division  performed  slightly  better   than
   expected.  Intake at ATM has slowed slightly, especially for the waterside
   and pyro.  Soil processing volumes have increased to 35% of capacity, with
   further  increases  likely  in  the   second  half  as  new  capacity   is
   commissioned for filler, sand and gravel processing and storage.   Volumes
   at Mineralz fell sharply in April but recovered well in May and June. 

    

   Specialities has performed  in line  with our  expectations.  Coolrec  has
   reopened Belgian and French  facilities that had to  close due to lack  of
   inbound waste in April.  For Maltha,  demand for glass cullet is  expected
   to remain  at reduced  levels, particularly  in France  and Portugal.   As
   previously indicated, Municipal saw  reduced income while Household  Waste
   Recycling Centres  were closed  in April  and May;  these reopened  during
   June.

    

   Cost plans put in place across all businesses have delivered as  expected,
   with over  €10m  saved  in  the quarter  through  swift  cost  action.  As
   previously announced,  measures  to  reduce operating  costs  and  capital
   expenditure and to optimise cash flow  will save over €60m of cash  during
   the current financial year.

    

   Cash and Leverage

    

   Core net debt as at 30 June 2020 was €413m, a €44m improvement from  €457m
   at 31 March 2020.  Adjusting for the  €50m benefit (€6m at March 2020)  of
   government measures to delay VAT and payroll taxes into the next  quarter,
   this still represented an underlying cash neutral performance,  reflecting
   strong control of working capital and capital expenditure.  The  resulting
   quarter end  leverage was  below  3.0x (3.2x  adjusting for  the  taxation
   deferrals), with significant  headroom against the  Group's adjusted  bank
   covenants of 5.5x to September 2020  which then increase to 6.0x to  March
   2021.  

    

   Outlook

    

   Notwithstanding the encouraging start  to the year,  the outlook for  FY21
   remains dependent on  the nature and  timing of the  lifting of  remaining
   lockdown restrictions and the speed of economic recovery.  We remain alert
   to  the  potential  for  a  decline  in  late  cycle  activities  such  as
   construction.  We are  also developing  plans to  accelerate further  cost
   reduction measures if volumes fail to recover to anticipated levels. 

    

   Longer term, waste volumes are typically resilient through economic cycles
   and the  transition  to increased  recycling  remains a  strong  long-term
   structural growth driver for the Group.   The recovery of earnings at  ATM
   and our Renewi  2.0 programme  are expected to  further support  sustained
   future earnings growth. 

    

    

    

    

   For further information:
                             
    
   FTI Consulting           Renewi plc
   +44 20 3727 1340          1 www.renewiplc.com
   Richard Mountain          
    

    

    

   About Renewi

    

   Renewi is a leading waste to product  company that gives new life to  used
   materials every  day.  We  have  around 7,000  employees  working  at  162
   operating sites across Europe. Our extensive operational network means  we
   are always close to our customers.

    

   For Renewi, waste is a state of  mind, and an opportunity. Our many  years
   of knowledge  and experience,  combined with  a broad  range of  services,
   allow us  to  offer sustainable,  practical  recycling solutions.  We  use
   innovation and the latest technology  to turn waste into useful  materials
   such as paper,  metal, plastic, glass,  wood, building materials,  compost
   and energy. In  other words,  we turn  today's waste  into tomorrow's  raw
   materials.  The result  of our  work is  less waste  and contamination,  a
   smarter use of scarce raw materials, and a reduction in carbon  emissions.
   This means that we are contributing  towards a cleaner, circular world  in
   which we "waste no more".

    

   Visit our website for more information:  2 www.renewiplc.com.

   ══════════════════════════════════════════════════════════════════════════

   ISIN:          GB0007995243
   Category Code: TST
   TIDM:          RWI
   LEI Code:      213800CNEIDZBL17KU22
   Sequence No.:  74069
   EQS News ID:   1087481


    
   End of Announcement EQS News Service

   ══════════════════════════════════════════════════════════════════════════

    3 fncls.ssp?fn=show_t_gif&application_id=1087481&application_name=news&site_id=refinitiv2

References

   Visible links
   1. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=caa057cac0544bda64727351f4424754&application_id=1087481&site_id=refinitiv2&application_name=news
   2. https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=redirect&url=583ebea518fb4aa6b96981bec649405f&application_id=1087481&site_id=refinitiv2&application_name=news


============