REG-Renewi plc Renewi plc: Third Quarter Trading update

RenewiAnnouncement

01/02/2021 07:05

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   Renewi plc (RWI)
   Renewi plc: Third Quarter Trading update

   01-Feb-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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   This announcement contains inside information

    

    

   1 February 2021

                                        

                                   Renewi plc

                                        

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

                                        

                          Third Quarter Trading update

                                        

   Renewi  plc  (LSE:  RWI),   the  leading  international   waste-to-product
   business, announces its trading update for the period from 1 October  2020
   to 31 December 2020 ("third quarter" or the "period").

    

   Highlights

    

     • Overall trading for the Group in the period was robust and the Board's
       expectations for the year ending 31 March 2021 remain unchanged
     • Continuing resilient trading in our Commercial Waste Division, despite
       further lockdowns across Benelux,  offset temporary delays to  ramp-up
       of ATM volumes
     • Strong cash  performance, ahead  of  our expectations,  with  leverage
       reduced to 2.2x at 31 December 2020, from 2.7x at 30 September 2020
     • Key value driving initiatives progressing well
     • Long-term drivers for sustained future earnings growth remain positive

    

   Trading and cash performance

    

   The Commercial Waste Division maintained full operational capacity in  the
   period. Volumes fell back marginally  as new lockdowns were introduced  in
   November, with the overall impact on volumes in December less than half of
   that seen  in the  first  lockdown in  March/April  2020. Volumes  in  the
   Netherlands were 98%  of prior year  in the  third quarter vs  97% in  the
   second quarter and 94% in the first quarter.  Ongoing strong  construction
   and bulky waste activity offset  the expected weakness in hospitality  and
   retail.  Volumes in Belgium were 92% of prior year in the third quarter vs
   91% in  the second  quarter and  76% in  the first  quarter. Cost  actions
   remain ongoing and recyclate  prices were higher  than anticipated in  the
   third quarter, particularly paper.

    

   Mineralz &  Water  Division performed  as  expected across  most  business
   lines. The ramp-up of production of treatment of thermal soil in the final
   quarter will likely  be lower than  originally planned as  we still  await
   final sign-off of anticipated outlets for thermally cleaned soil (TGG) and
   as the new storage silos for filler are installed and commissioned  during
   February. This is not expected to have a material impact on the three-year
   recovery plan for ATM, including  the accelerating transition to the  sale
   of upcycled filler, sand and gravel, in place of TGG.

    

   Specialities Division performed in line with expectations.

    

   Cash performance continued to be  strong, benefitting from robust  working
   capital management which is  expected to unwind partly  at the year  end. 
   Core net debt (excluding IFRS 16 lease liabilities) at the end of December
   was €323m, representing a  reduction of €58m since  30 September 2020  and
   leverage has  reduced  to  2.2x, with  significant  headroom  against  the
   Covid-adjusted covenant  of 6.0x.  Days sales  outstanding (DSO)  remained
   unchanged on prior year and levels of customer insolvency continued to  be
   low, reflecting ongoing government support for affected business sectors. 
   We continue to expect a  working capital outflow going forward,  including
   placement of ATM TGG and an increase in DSO.

    

    

    

   Outlook

    

   Overall trading for  the Group in  the period was  robust and the  Board's
   expectations for the year ending 31 March 2021 remain unchanged.

    

   Longer term,  whilst  the  speed  and extent  of  economic  recovery  will
   influence our performance, waste volumes have historically been  resilient
   through cycles and 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  are
   expected to present 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.

    

    

    

    

   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
                             
                             

    

    1 www.renewiplc.com

   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  174
   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.

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   ISIN:           GB0007995243
   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
   Sequence No.:   92607
   EQS News ID:    1164483


    
   End of Announcement EQS News Service

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