Renewi plc (LSE: RWI), the leading European waste-to-product business, announces its results for the year ended 31 March 2022.

Financial Highlights

• Revenue up 10% to €1,869m
• Underlying EBIT¹ up 83% to €133.6m, with net impact of customer pricing, recyclate pricing and cost inflation delivering a year-on-year benefit of €45m
• Commercial Division increased underlying EBIT¹ margins by 380bps to 10.0%, with the return on operating assets increasing to 31.6%
• Underlying EBIT¹ up 77% compared with the pre-Covid FY20 reference period
• Underlying EPS¹ up 118% to 98 cents, basic EPS increased from 7 cents to 93 cents
• Statutory profit of €75.4m (FY21: €5.5m^#)
• Core net debt* reduced to €303m (FY21: €344m) and net debt to EBITDA reduced to 1.4x from 2.2x

Strategic and Operational Highlights

• Group’s end markets continue to grow, driven by positive legislative changes which promote recycling and increased demand for high quality secondary materials
• Commercial business performed very strongly, managing Covid shutdowns and inflationary pressures with ongoing tight control of costs
• Good progress made on our key strategic initiatives to deliver €60m of additional EBIT in FY26, with €10m delivered in FY22:
  • Over €100m of capital investment now committed to increasing the Group’s recycling capacity at attractive rates of return
  • Mineralz & Water recovery underway, with further improvements to follow over the next 3 years
  • Renewi 2.0 programme on track to conclude next year and deliver full benefits from FY24
• 8.4m tonnes of materials put back into reuse up 5% on the prior year, with a recycling rate of over 67%, up 1.4pps
• Although recyclate prices are expected to moderate in FY23, we expect prices to stabiliseabove pre-Covid levels for the medium term, reflecting the structural growth of the circular economy
• Conditional agreement to acquire “Paro”, an Amsterdam based commercial waste and recycling business, for an enterprise value of €67m, announced separately today.
• The Board now anticipates the Group’s performance in FY23 to be ahead of its previous expectations

¹ The definition and rationale for the use of non-IFRS measures are included in note 16.
^# The statutory profit for March 2021 has been restated to reflect a prior year adjustment set out in note 1.
* Core net debt used for banking leverage calculations excludes the impact of IFRS 16 lease liabilities and UK PPP net debt.

Otto de Bont, Chief Executive Officer, said:

“Renewi delivered a record performance in the year, with revenues, profits and returns all significantly ahead of the prior year. This is thanks to the tremendous commitment of our employees, who continued to service our customers in challenging conditions. Our end markets have continued to grow, with climate-driven legislation and corporate strategies supporting increased recycling and demand for high quality secondary materials which, in turn, is driving a sustained increase in recyclate prices.  Our Commercial Division, which represents over 70% of Group revenues, has therefore been able to accelerate its journey towards double digit margins, supported by tight control of costs and appropriate price increases reflecting wider inflationary pressures.     

We made good progress on our key strategic initiatives and have committed over €100m of capital into our innovation portfolio. We remain on track to deliver the full €60m of EBIT we targeted for FY26 across our three value drivers: our innovation pipeline, the recovery of earnings at Mineralz and Water and the Renewi 2.0 programme.

“There is no doubt the transition to circular economies in our end markets will continue to increase demand for recycling and higher quality secondary materials, supporting our business model in the short and long term. The sustainability agenda pursued by the EU and national governments will also present increasing opportunities for Renewi to convert waste into a wider range of high-quality secondary materials.

“Looking ahead, whilst recyclate prices are expected to remain strong but moderate in FY23, the Board now anticipates the Group’s performance in FY23 to be ahead of its previous expectations.”

Results

¹The definition and rationale for the use of non-IFRS measures are included in note 16.
^# Certain March 2021 values have adjusted to reflect prior year adjustments as referred to in note 2.
* Core net debt used for banking leverage calculations excludes the impact of IFRS 16 lease liabilities and UK PPP net debt.

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