Interim Results 2019/20
07 November 2019
First half trading in line with expectations and full year outlook unchanged
- Solid first half trading in line with expectations
- Good performance in core Commercial Division, with revenue up 5% and underlying EBIT1 up 13% on a like for like basis
- Good progress in Hazardous Waste Division as ATM scales up capacity for manufacture of new building materials and awaits final regulatory approval having successfully completed testing of thermally treated soil stocks
- Initial deleveraging actions delivered, with strategic disposals of Canada Municipal and Reym for aggregate cash proceeds of up to €118m
- Planning for next phase of business simplification and efficiency improvements, Renewi 2.0, well underway for implementation following successful delivery of €40m integration synergies by March 2020
- Executive Committee of Renewi strengthened with four key hires
- Revenue from total operations up 3% to €926.5m1
- Underlying EBIT from total operations up 3% to €46.3m1
- Underlying profit before tax from total operations down 8% to €31.2m1
- Underlying EPS from total operations down 7% to 2.9 cents per share1
- Total exceptional items of €60m1, of which 90% (€54m) relates to the strategic disposals mostly non-cash, resulting in a statutory loss of €35.4m for the period
- On a continuing operations reported basis, revenue up 3% to €916m, loss before tax of €18.8m (2018: €19.3m profit) and basic loss per share of 2.4 cents (2018: earnings 2.4 cents)
- Strong cash flow performance with underlying free cash flow conversion of 129%
- Core net debt* reduced to €514m, representing net debt to EBITDA of 2.88x against a covenant of 3.5x which has been extended to December 2021; IFRS 16 debt impact of €165m
- Interim dividend of 0.45p per share (2018: 0.95p), reflecting previously announced intention for a maintained total dividend of 1.45p for FY20
1Numbers quoted on a total operations basis (including both continuing and discontinued operations) and are stated on an IAS 17 basis, excluding the positive impact of the implementation of IFRS 16 the new lease accounting standard to enable meaningful comparisons *Core net debt excludes the impact of IFRS 16 leases and net debt relating to the UK PFI/PPP contracts
Commenting on the results, Otto de Bont, Chief Executive Officer, said:
“The Group traded well in the first six months. We delivered a good performance in our core Commercial Division and made good progress at ATM in both scaling up capacity for the manufacture of new building materials and in completing the testing for TGG, which now awaits regulatory approval. In addition, we have strengthened the Group’s capital structure through the disposals of Canada Municipal and Reym.
“Looking forward, our outlook for the current year is unchanged. We remain focused on cash generation and driving down leverage over time, and we are increasingly confident that ATM will increase production in 2020. While the near-term macroeconomic environment has weakened, the growing circular economy is expected to generate significant opportunities for sustainable growth over the long term.”
IFRS 16 is a new reporting standard that has had a material impact on our reported results and the application of the modified retrospective approach has meant that comparative information has not been restated. For the purpose of like for like comparatives, the 2019 results have also been presented in accordance with the previous leasing standard, IAS 17, and all variance analysis shown is on the IAS 17 basis.
|TOTAL OPERATIONS (including discontinued operations and assets held for sale)|
|Underlying profit before tax+||€33.0m||€31.2m||€33.9m||-8%|
|Underlying EPS+(cents per share)||3.1c||2.9c||3.1c||-7%|
|Underlying free cash flow+||€51.8m||€59.9m||€28.2m|
|Exceptional and non-trading items including tax||€(60.2)m||€(60.2)m||€(4.9)m|
|Core net debt (excluding asset held for sale and IFRS 16)||€514m||€496m|
|Core net debt to EBITDA||2.88x||2.99x|
|Revenue from continuing operations||€915.7m||€890.6m|
|Operating profit from continuing operations||€1.0m||€32.7m|
|(Loss) profit before tax from continuing operations||€(17.8)m||€21.8m|
|(Loss) profit from discontinued operations||€(16.6)m||€1.2m|
|Basic (loss) earnings per share from continuing operations (cents)||(2.4)c||2.4c|
|Cash flow from operating activities||€85.4m||€68.0m|
|Interim Dividend (pence per share)||0.45p||0.95p|
+The definition and rationale for the use of non-IFRS measures are included in note 21. Total Operations as presented above include the financial results for the Canada Municipal business which was sold on 30 September 2019 and the Reym business which as a result of the sale process is presented as held for sale at 30 September as the criteria set out in IFRS 5 has been met. In addition, the Canada Municipal segment meets the definition of a discontinued operation and is recorded as such with a restatement of the prior year comparatives as appropriate.
- The interim dividend of 0.45 pence per share will be paid on 10 January 2020 to shareholders on the register at close of business on 29 November 2019.
- Management will be holding an analyst presentation at 09:30 GMT today, 7 November in the Entrust Room on the fifth floor at etc Venues, Bishopsgate Court, 4-12 Norton Folgate, London E1 6DQ.
- Webcast details for the presentation at 09:30 GMT.
- Webcast: www.renewiplc.com
- Telephone conference:
Participant dial-in numbers
Belgium (Local): 078 48 16 83
Netherlands (Local): 085 888 7233
United Kingdom (Local): 020 3936 2999
All other locations: +44 20 3936 2999
Participant Access Code: 215081
- A copy of this announcement is available on the Company’s website, (www.renewiplc.com). A copy of the presentation being made today to financial institutions will also be available.
For further information contact:
|+44 (0)1908 650580|
|+44 (0)20 3727 1340|
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’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 undertakes no obligation to revise or update such forward-looking statements.