Q1 Trading update
15 July 2021
Renewi plc (LSE: RWI), the leading international waste-to-product company, announces its trading update for the three months ended 30 June 2021.
Renewi has started the year well, in line with our recently upgraded expectations for FY22. Trading in all the Group’s Divisions is significantly ahead of the first quarter last year, which was particularly impacted by the first lockdown.
The Commercial Division has performed well. As expected, we are seeing recovery in sectors such as hospitality, offset by a reduction in bulky waste which saw a significant increase in volumes during the lockdowns last year. Strong recycled paper and ferrous metal prices have continued, as forecast.
The Mineralz & Water Division has increased throughput on the soil treatment line to around 75 tonnes per hour (55% of capacity) from 50 tonnes per hour last year, with all the output converted to building materials, sand, gravel and filler. Volume shipments of older stock of thermally cleaned soil (TGG) to two locations have begun on schedule.
The Specialities Division has also started the year well, with all business units performing as expected.
Good progress continues to be made with our three strategic growth initiatives – recovery of earnings at ATM, the Renewi 2.0 programme and our innovation pipeline – which will deliver significant additional revenues over the next three years and beyond. In particular, we are continuing to gain traction with our innovation pipeline. The Board has approved the investment of €70m over the next 2-3 years in state-of-the-art sorting lines in Flanders, to meet the requirements of Vlarema 8 legislation, and in a new hard plastics sorting line in the Netherlands.
Cash performance in the first quarter was strong, with tightly controlled working capital. Core net debt as at 30 June 2021 decreased by over €20m in the quarter to €321m, with leverage falling to below 2.0x net debt to EBITDA. The Green bonds issuance of €125m at 3.0% to July 2027 is now fully subscribed and will replace the existing €100m Green bonds which are maturing in 2022.
The Board remains confident in the Group’s prospects for the financial 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 attractive opportunities for Renewi to convert waste into a wider range of high-quality secondary materials.