Renewi plc Q3 trading update
30 January 2024
Renewi plc (“Renewi”, the “Company” or, together with its subsidiaries, the “Group”) (LSE: RWI.L: Euronext Amsterdam: RWI.AS), the leading European waste-to-product business, announces its results for the third quarter ended 31 December 2023 (“Q3”).
Overall, Q3 trading performance reflected a continuation of the challenging economic backdrop in several key markets which was offset, in part, by further good progress in the Group’s margin initiatives.
Within Commercial Waste Netherlands, volumes, particularly in the Construction and Demolition segment, continue to be subdued and reflective of wider weakness in regional construction activity.
Ongoing organisational rationalisation within the Simplify programme is partially mitigating the margin impact of lower volumes for FY24. The programme is on track with the majority of the of the 160 headcount reduction completed in December, representing an in-year cost reduction of ca EUR 5m. Recyclate prices have remained stable over the quarter and are around historic averages, with the exception of plastics, which showed continued weakness.
Mineralz & Water continued its positive momentum through Q3, with waterside operations in particular showing excellent performance over the quarter. On the soil side, the ramp-up initiated in Q2 continued to progress in line with expectations.
Specialities performed in line with expectations, with Maltha continuing its strong performance compensating for the somewhat lower performance of Coolrec, which has also been impacted by lower plastic prices. UK Municipal was stable, with a solid performance throughout the quarter.
Renewi had a number of operational highlights throughout the quarter, including new customer wins. The Group received the “Trends Impact Award” in the “Circular Economy” category, recognising Renewi's innovative sorting installations and compliance with VLAREMA 8 legislation. Furthermore, the Company celebrated its inclusion in the Euronext Amsterdam AScX® Index, highlighting the share's prominence in the European small cap segment.
In what remains a challenging trading environment, the Group’s strategic initiatives have driven improved performance and reduced cost in the business during Q3 and this is expected to continue through the remainder of the year. As such, the Board continues to expect the Group to deliver a stronger performance in the second half than the first, albeit the weaker regional economic environment means that the Group expects to deliver full year results below market expectations.
Longer term, the structural drivers of the Group’s end markets are compelling and the Board remains confident in Renewi’s ability to deliver on the medium term targets set out at the Capital Markets Day in October 2023.