Year in Review 2021/22
Renewing Earth
Highlights
€133.6m
Underlying EBIT
(FY21: €73.0m)
67.2%
Recycling Rate
FY21: 65.8%%
€75m
Statutory profit
(FY21: €5m)
8.88
Lost Time Incident rate
(FY21: 13.97)
Chairman statement
Ben Verwaayen
I am pleased to report that Renewi has performed very well in the past year, in terms of both a robust financial performance and a step change in its safety record, alongside the further development of its long-term strategy for accelerated growth. Renewi is a purpose-led organisation, with each of us deeply inspired by our goal to protect the planet by giving new life to used materials. This purpose is supported by our six values, which define what we are and how we act. These values are used in a practical way daily, and in this report I would like to illustrate how we turn them into real core drivers of our success.
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CEO Review
Otto de Bont
Renewi delivered a record performance in FY22, with revenues, profits and returns all increasing significantly ahead of the previous year. Our end markets continue to grow, with legislation and corporate strategies supporting increased recycling and demand for high-quality secondary materials. This contributed to the increase in recyclate prices over the past 18 months. We have also managed the aftershocks of the crisis with ongoing tight control of costs and an ability to cover inflationary pressures from recyclate prices and customer pricing.
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Finance review
Renewi delivered a strong performance, with revenues and underlying EBIT up 10% and 83% respectively. We have retained some of the structural cost savings made in response to Covid and these, combined with a strong prices benefit, have contributed to a significant increase in margins and profits. Underlying EBIT was €60.6m higher than the prior year, of which €44.6m resulted from the net impact of increased waste producer pricing, recyclate prices, less cost indexation and €9.2m from volume and mix changes, €8.7m from cost savings with balancing €1.9m from others.Underlying EBIT increased by 83% and underlying EBITDA increased by 34% as the level of non-cash items of depreciation, amortisation and impairment charges only increased by 6% year-on-year.
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Our enhanced strategy
We have enhanced our business strategy – strengthening our vision to be the leading waste-to-product company in the world’s most advanced circular economies
Market-facing strategies
1. Leader in recycling
Recycling is central to our waste-to-product mission, and also answers market demand.
2. Leader in secondary material production
Improving the quality and ‘spread’ of the products we produce increases the value of what we recycle.
3. Selectively gain market share
This strategy helps us grow the total volume of waste treated.
Internal Improvement Strategies
Our internal improvement strategy – delivered through a programme called Renewi 2.0 – is expected to make our company leaner and more efficient. Over the next 3 years, we will introduce simplicity, strengthen our customer focus and create a better place to work through:
- Digitisation of sales and services to improve the customer experience.
- Simplification of processes across Renewi’s Divisions to boost efficiency and reduce costs and errors.
Our new sustainability strategy
Renewi’s future-facing plan addresses the climate crisis and makes everything we do sustainable – from helping to drive the circular economy to minimising carbon emissions
Enable the circular economy
We want to be a driving force in the transition towards a circular economy, in which waste is no more and instead is turned into new products and materials.
- Turn our customers’ waste into new products
Reduce carbon emissions
We understand the need not only to reduce our own carbon footprint, but also to decrease the negative impact of carbon emissions and waste on wider society.
- Be a leader in clean and green waste collection
- Reduce the carbon impact of our operations
Care for people
We have a responsibility to deliver our employees home safe and well, to create a rewarding, equal and inclusive working environment, and to have a positive effect on our communities.
- Positively impact our communities
- Deliver people home safe and well, every day
- Make Renewi a rewarding, diverse and inclusive working environment
Stakeholders
From customers to communities, lenders to lawmakers, and of course our employees, we constantly strive to create value for stakeholders by understanding and addressing their priorities and concerns.
Local communities:
Proactive management of known issues such as flies, odour, noise, truck movements and fire risks, among others. We are responsive to concerns raised by local communities, and our policy is always to track these through to resolution.
Our product customers:
We are investing in further refinement of waste, in order to produce higher-specification recyclates and secondary materials to meet the needs of these customers. We also partner directly with product customers, such as Shell, in relation to bio-LNG.
Our waste-producing customers:
We provide support and advice for waste segregation and separate collections. We communicate market changes such as recyclate pricing and other general inflation factors, for example those driven by the war in Ukraine.
Our suppliers:
We seek to understand the impacts on supply chains of the ongoing market disruptions caused by Covid-19, supply chain delays and rapidly evolving market prices. This can affect delivery patterns, product availability and pricing and bring about a need to substitute materials.
Our innovation partners:
We are delivering incremental waste processing innovations to enable recycling where this previously wasn’t possible. Examples include mattresses, citrus peels, asbestos-contaminated steel, advanced sorting, building materials, electrostatic separation processing, creation of bio-LNG at a commercial scale, gas to grid, separation of thermally treated soil into gravel, sand and filler, plus many others.
Government:
We deliver on climate change and the circular economy. We support progressive legislation in the creation of a circular economy, reduction of incineration and stimulation of demand for secondary materials.
Regulators:
We are ensuring operational compliance against permits and quality standards and meeting high environmental standards. We are also applying best practices and are responsive to any investigations or compliance concerns raised.
Our employees:
We are fostering a positive connection to our corporate purpose. We are improving our safety culture and fostering diverse and inclusive teams which feel invested in. We strive for ever-stronger employee satisfaction, improved welfare conditions for our operations teams and resolution of detractors to employee engagement.
Global community:
Encouraging society to recognise its role as a driver for the changes required to achieve true circularity, placing pressure on governments, influencing policies, creating new markets and demanding greater ESG credentials from the products and services they use.
Investors:
Our recent Capital Markets Day was an opportunity for us to communicate our future plans in more detail. The markets have responded positively and are starting to reflect the higher growth expectations. We are fostering an understanding of the market-wide tailwinds that are supporting our market positioning and strategy.
Lenders:
This approach assures our continued access to the lending markets, including the recent incremental bond issuance. We achieve optimised liquidity and conditions such as the extension of the main banking facility.
