Renewi plc (RWI) Renewi plc: Half-year report 09-Nov-2021 /
07:00 GMT/BST Dissemination of a Regulatory Announcement that
contains inside information according to REGULATION (EU) No
596/2014 (MAR), transmitted by EQS Group. The issuer is solely
responsible for the content of this announcement.
-----------------------------------------------------------------------------------------------------------------------
9 November 2021
STRONG FIRST HALF PERFORMANCE, WITH FURTHER INCREASE IN
MANAGEMENT'S EXPECTATIONS FOR YEARING 31 MARCH 2022
Renewi plc (LSE: RWI), the leading international
waste-to-product business, announces its results for the six months
ended 30 September 2021.
Financial Highlights
-- Revenue up 11% to EUR916m, driven by Covid recovery and
ongoing stronger recyclate prices
-- Underlying EBITDA1 up by 43% to EUR126.6m; underlying EBIT1
up by 125% to EUR63.8m driven by CommercialWaste; Commercial Waste
EBIT margin increased by 470bp to 9.6%
-- Statutory profit of EUR37.1m (2020: EUR3.5m)
-- Core net debt* reduced to EUR336m (March 2021: EUR344m),
representing net debt to EBITDA of 1.82x, within our2x leverage
target two years ahead of expectations
-- Management expectations for the full year ending 31 March
2022 further increased
Market and Strategic Highlights
-- Regulation continues to support our business model, including
increased incineration taxes in Belgianregions and the Vlarema 8
legislation in Flanders
-- Increased demand for recyclates, combined with shorter-term
supply constraints, has led to current higherrecyclate prices;
longer term outlook is for sustained value from secondary
materials
-- As detailed in the Group's recent Capital Markets Event, our
investments in circular innovations areexpected to deliver an
additional EUR20m of EBIT by the end of 2025. Further projects
remain under development
-- The Renewi 2.0 programme remains on track to deliver EUR20m
of savings by FY24 and is currently deliveringrun rate benefits of
EUR4.0m
-- ATM has shipped over 400k tonnes, representing 31% of legacy
TGG stocks, and outlets for secondaryconstruction materials are
developing. As previously indicated, low intake of inbound
contaminated soil will delaythe full ATM profit recovery
Sustainability
-- Our business enables a circular economy: sustainability is
core to our business strategy and Renewicontributes to the net
avoidance of over 3 million tonnes of CO2 per annum
-- Newly committed innovation projects expected to underpin our
target to increase the Group's recyclingrate by 10 percentage
points to 75% and avoidance of a further 0.5 million tonnes of CO2
per annum
1The definition and rationale for the use of non-IFRS measures
are included in note 17.
* 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 strong performance in the first half of
FY22, with underlying EBIT 125% above prior year and 69% above the
pre-Covid first half of FY20. We have successfully retained some of
the structural cost savings made in response to the Covid-19
pandemic and these, combined with volume recovery and ongoing
strong recyclate prices, have contributed to the significant
increase in margins and profits. Following this strong first half,
the Board is further increasing its full year expectations, which
assume a moderation of recyclate prices in the second half as well
as a reduced throughput at ATM.
"Our business model is essential to enable advanced circular
economies to achieve their carbon reduction targets. By recycling
more we reduce incineration and assist our customers in reducing
their carbon footprint as they replace virgin materials with our
high-quality secondary materials. We therefore expect to see
long-term accretive growth opportunities across our markets as we
add more value to the waste we collect and process."
Results
Sep 21 Sep 20 % change Sep 192
UNDERLYING NON-STATUTORY
Revenue EUR915.6m EUR821.4m +11% EUR850.7m
Underlying EBITDA1 EUR126.6m EUR88.5m +43% EUR91.2m
Underlying EBIT1 EUR63.8m EUR28.3m +125% EUR37.8m
Underlying profit before tax1 EUR50.4m EUR15.3m +229% EUR20.2m
Underlying EPS1 (cents per share) 47c 15c +213%
Adjusted free cash flow1 EUR25.9m EUR33.7m
Free cash flow1 EUR14.2m EUR77.9m
Core net debt* EUR336m EUR381m
STATUTORY
Revenue EUR915.6m EUR821.4m
Operating profit EUR58.2m EUR17.0m
Profit before tax EUR44.7m EUR4.4m
Profit for the period EUR37.1m EUR3.5m
Basic EPS (cents per share) 46c 5c
Cash flow from operating activities EUR75.5m EUR133.9m
Total net debt* EUR648m EUR684m
1 The definition and rationale for the use of non-IFRS measures
are included in note 17.
2 September 2019 values are for ongoing businesses only and
exclude the results for the Canada and Reym activities which were
sold during FY20.
* Core net debt used for banking leverage calculations excludes
the impact of IFRS 16 lease liabilities and UK PPP net debt.
The results for both this year and the prior years are reported
applying IFRS 16. Where appropriate, we also disclose certain
metrics on an IAS 17 basis as this is of particular relevance for
the calculation of leverage for the Group's banking covenants.
For further information:
Paternoster Communications Renewi plc
+44 20 3012 0241 +44 7976 321 540
Tom Buchanan Adam Richford, Head of Investor Relations
+44 20 3012 0241 +44 7773 813 180
Ben Honan Michelle James, Communications
Notes: 1. A copy of this announcement is available on the
Company's website, (www.renewi.com) 2. Renewi will hold an online
analyst presentation at 9.30 a.m. GMT / 10.30 a.m. CET today 3.
Webcast: https://live.sommedia.nl/renewic-ir-2021 4. Today's
results presentation will also be available on the website
Forward-looking statements
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 plc'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 plc undertakes no
obligation to revise or update such forward-looking statements.
Chief Executive Officer's Statement
Overview
Renewi delivered a strong performance in the first half of FY22,
with underlying EBIT 125% above prior year and 69% above the
pre-Covid first half of FY20. We have successfully retained some of
the structural cost savings made in response to the Covid-19
pandemic and these, combined with volume recovery and ongoing
strong recyclate prices, have contributed to the significant
increase in margins and profits. We are also particularly pleased
to have achieved our target of reducing leverage below 2x while at
the same time increasing our investment in growth projects.
We remain confident our three strategic value drivers - our
innovation pipeline, recovery of earnings at ATM, and the Renewi
2.0 programme - will deliver significant additional earnings over
the next years as well as the longer term. Our business model is
essential to enable advanced circular economies to achieve their
circularity and consequent carbon reduction targets. We continue to
see positive structural growth drivers as the Dutch and Belgian
regional governments progressively tax carbon emitters, incentivise
recycling over incineration, and promote the use of secondary
materials. We therefore expect to see long-term accretive growth
opportunities across our markets as we continue to assist our
customers to recycle more and to use our high-quality secondary
materials.
Group financial performance
Group Summary Revenue Underlying EBIT
Sep 21 Sep 20 Variance Sep 21 Sep 20 Variance
EURm EURm % EURm EURm %
Commercial Waste 670.6 595.0 13% 64.7 29.4 120%
Mineralz & Water 93.6 90.4 4% 4.0 2.3 74%
Specialities 168.0 149.4 12% 1.7 - N/A
Group central services - - (6.6) (3.4) -94%
Inter-segment revenue (16.6) (13.4) - -
Total 915.6 821.4 11% 63.8 28.3 125%
The underlying figures above are reconciled to statutory
measures in note 3 in the consolidated financial statements.
Group revenue was up by 11% to EUR916m and underlying EBIT
increased by 125% to EUR63.8m. Underlying profit before tax
increased by 229% to EUR50.4m. Underlying earnings per share
increased by 213% to 47 cents (2020: 15 cents).
The business delivered a positive adjusted free cash-flow of
EUR25.9m (2020: EUR33.7m). There was a net cash outflow of EUR1.9m
(2020: inflow of EUR67.7m, which included the EUR55m benefit of
deferred payroll and other taxes in the Netherlands). Core net
debt/EBITDA reduced to 1.82x at 30 September 2021, achieving the
Board's target of leverage below 2x two years ahead of
expectations.
The Board is keeping the dividend under review, taking into
account the Group's ongoing investments in growth projects, current
trading and longer-term outlook.
Commercial Waste Revenue Underlying EBITDA Underlying EBIT
Sep 21 Sep 20 Sep 21 Sep 20 Sep 21 Sep 20
Netherlands Commercial 442.3 396.8 71.1 50.3 43.2 21.1
Belgium Commercial 228.9 198.5 38.1 22.6 21.5 8.3
Intra-segment revenue (0.6) (0.3) - - - -
Total (EURm) 670.6 595.0 109.2 72.9 64.7 29.4
Period on period variance %
Netherlands Commercial 11% 41% 105%
Belgium Commercial 15% 69% 159%
Total 13% 50% 120%
Return on Underlying Underlying
operating assets EBITDA margin EBIT margin
Sep 21 Sep 20 Sep 21 Sep 20 Sep 21 Sep 20
Netherlands Commercial 22.6% 12.0% 16.1% 12.7% 9.8% 5.3%
Belgium Commercial 38.5% 21.3% 16.6% 11.4% 9.4% 4.2%
Total 26.0% 14.1% 16.3% 12.3% 9.6% 4.9%
The return on operating assets for Belgium excludes all landfill
related provisions. The underlying figures above are reconciled to
statutory measures in notes 3 and 17 in the consolidated financial
statements.
The Commercial Division increased revenues by 13% to EUR671m and
underlying EBIT by 120% to EUR64.7m, representing an EBIT margin of
9.6%. Return on operating assets increased to a strongly accretive
26%.
In the Netherlands, revenue increased by 11% to EUR442.3m and
underlying EBIT increased by 105% to EUR43.2m. Volumes were broadly
flat on the prior year and were around 3% below pre-Covid levels.
Compared to prior year, there was a small recovery in commercial
volumes offset by the expected contraction in construction and
bulky waste. Inbound revenues increased by 3% and outbound revenues
by 78%, reflecting the strength of recyclate prices and a
corresponding reduction in inbound revenue from our customers with
whom we have dynamically priced contracts. As reported at our last
results, paper/cardboard and ferrous metal prices have been
particularly strong; the outlook for recyclates is discussed later
in this review. Around two thirds of the uplift in earnings was
attributable to extra margin on recyclates, supported by continuing
tight control of costs.
In Belgium, revenue increased by 15% to EUR228.9m and underlying
EBIT by 159% to EUR21.5m. Core volumes increased by 13% compared to
the prior year and recyclates by 8%, although these volumes also
remain around 7% below pre-Covid levels. This strong volume
recovery reflected the very challenging first quarter drop in the
prior year. Volume recovery contributed the majority of the
increase in underlying EBIT, supported also by the strong recyclate
prices and ongoing operational cost savings.
Mineralz & Water Sep 21 Sep 20 Variance
EURm EURm %
Revenue 93.6 90.4 4%
Underlying EBITDA 11.0 10.0 10%
Underlying EBITDA margin 11.8% 11.1%
Underlying EBIT 4.0 2.3 74%
Underlying EBIT margin 4.3% 2.5%
Return on operating assets 4.6% 11.7%
The return on operating assets excludes all landfill related
provisions. Earnings recovery at ATM was more than offset by the
integration of a former joint venture which increased assets and
included significant one-off charges in the second half last year
which read through into the return on operating asset calculation.
The underlying figures above are reconciled to statutory measures
in notes 3 and 17 in the consolidated financial statements.
The Mineralz & Water Division made underlying progress and
saw revenues increase by 4% to EUR93.6m and underlying EBIT
increase by 74% to EUR4.0m. The contaminated soil processing line
successfully increased throughput to 55% of capacity with no impact
on product quality of the filler, sand and gravel. Over 0.4m tonnes
out of 1.3m tonnes of clean thermally treated soil ("TGG") stocks
have now been shipped, clearing space on the site and reducing
external storage costs. We anticipate shipping a further 250k
tonnes in the second half. Other activities in the Division
remained in line with expectations.
Specialities Sep 21 Sep 20 Variance
EURm EURm %
Revenue 168.0 149.4 12%
Underlying EBITDA 7.9 4.5 76%
Underlying EBITDA margin 4.7% 3.0%
Underlying EBIT 1.7 - N/A
Underlying EBIT margin 1.0% 0.0%
Return on operating assets 17.9% 1.8%
Underlying EBIT includes utilisation of EUR0.5m (2020: EUR6.1m)
from onerous contract provisions. The return on operating assets
excludes the UK Municipal business. The underlying figures above
are reconciled to statutory measures in notes 3 and 17 in the
consolidated financial statements.
The Specialities Division grew revenues by 12% to EUR168m and
delivered an underlying EBIT of EUR1.7m. Coolrec continued to
perform strongly, benefiting from operational improvements and
strong recyclate prices. Maltha recovered well from a Covid
impacted prior period. UK Municipal saw the benefits of high
recyclate prices offset by higher Council volumes, some of which
are loss-making, and an accounting adjustment in one contract.
Markets and strategy
Continuing positive developments in our end markets
COP26 is challenging the world to take the necessary steps to
avoid catastrophic increases in global temperatures by the end of
the century. Production of more secondary materials to reduce
virgin material use and the associated carbon emissions is a
requirement for success in meeting these goals. Becoming more
circular and cutting virgin materials use by 28% within nine years
could lead to a reduction in global greenhouse gas emissions by 39%
according to the Circularity Gap Report.
Recycling plays a key part in enabling a circular economy by
converting waste back into secondary materials and is therefore set
to be supported by fiscal and regulatory governmental policy.
Recycling, like most markets, needs balanced supply and demand.
Supply is stimulated by banning or taxing landfill and
incineration to create an environment in which sorting and
processing to produce recyclates is economically competitive. This
is already in place in the Benelux and has been further
strengthened in Flanders by the recent announcement to double the
incineration tax to EUR25 per tonne. Next generation stimulation of
supply is fundamental to Vlarema 8 legislation in Flanders which
comes into effect in January 2023. Vlarema 8 effectively introduces
the mandatory pre-sorting of waste to remove recyclates before
residues are incinerated, and this legislation is the key driver of
our decision to build three large state-of-the-art sorting lines in
Flanders.
Demand is stimulated by setting targets for minimum recycled
content for government tenders, or indeed simply mandating certain
levels of recycled content in all materials. For example, the
Netherlands has a longstanding policy commitment to be 50% circular
by 2030, and Belgium has very similar circularity ambitions in both
Flanders and Wallonia. This is further backed by trends in consumer
demand where a sustainable solution appeals to a growing segment of
the customer universe. These targets have led us to predict that
recyclates will over time become scarce materials and that prices
should consequently rise from the long-term lows that we saw in
March 2020, and that these prices may ultimately decouple from
trading at a discount to virgin materials. The last twelve months
have seen sustained increases in the selling prices for most key
recyclates, including paper, metals and plastics. In the shorter
term, we forecast some moderation of pricing towards the long-term
average levels, as temporary imbalances in supply and demand
attributable to Covid are resolved.
Looking forward, legislators are considering further action,
including carbon taxes, minimum recycled content levels and
producer responsibility for the management of closed loops. All
these measures will help to accelerate the transition to increased
recycling rates and, critically, increased demand for secondary
materials. While progress is being made, we believe that it will
have to accelerate significantly if governments wish to meet their
own recycling and circularity targets.
Our unchanged strategy for long-term profitable growth
Our purpose is to protect the world by giving new life to used
materials, and our vision is to be the leading waste-to-product
company in the world's most advanced circular economies. This
differentiates Renewi as a company that focuses on reuse: supplying
high-quality secondary materials, which we believe is the best way
to extract value from waste. We are a key player in the rapidly
emerging circular economy and a pioneer among companies that
collect our society's waste to find new uses for it.
To expand our position as a secondary raw material producer, our
strategy is based on three pillars: 1. Leader in recycling:
increase our recycling rate. Our ambitious goal, launched as
"Mission75", is toincrease our recycling rate by 10 percentage
points within five years to 75%. 2. Leader in secondary material
production: enhance value of the products we produce. To build a
circulareconomy, the usage of secondary raw materials must
increase. We aim to significantly increase the value of ourproducts
by investing in advanced processing of our materials. 3.
Selectively gain market share. Our primary focus in the Benelux is
on driving margin expansion fromexisting waste flows through the
first two pillars of our strategy. In addition, there are
consolidationopportunities in our sector, and we intend to
participate both in smaller acquisitions in our core markets
andpotentially to enter into new geographies with strong growth
potential for our waste-to-product model.
Positive progress with our three value drivers
We have three key value drivers, each expected to be worth
EUR20m EBIT in the coming years: our innovation pipeline, Renewi
2.0, and the return to full production at our ATM facility.
Capital committed to underpin the EUR20m EBIT target from the
innovation pipeline
Innovation is one of our core priorities and we are working on a
growing number of initiatives to deliver the first two pillars of
our growth strategy. Given that a number of these initiatives
relate to new products or technologies, we do not expect them all
to proceed to commercialisation. During the past six months we have
made significant progress and we have now committed EUR110m in
total to the programme to underpin our targeted EBIT increase, of
which EUR25m has been spent. Our programme was outlined in detail
in our recent virtual Capital Markets Event, which can be seen on
our website. The most significant of the investments is the EUR60m
project to build advanced sorting lines in Flanders to meet the
needs of the Vlarema 8 legislation. These sorting lines will
provide up to 400kT of capacity, generating attractive returns due
to increased pricing, reduced incineration costs and some extra
recyclate income. The Walloon government has indicated that it will
likely implement similar legislation to come into effect in 2025
and we expect pre-sorting of residual waste will become more common
across other advanced circular economies with time. Our investments
at ATM and at our organics facility in Amsterdam are largely
complete and will commission by the end of FY22. These Board
approved investments each meet the required return on operating
assets of 16%-20%.
Project Partner Opportunity Status
Advanced residual waste Stand-alone EUREUREUREUREUR Three lines approved, with the first to commission during 2022
sorting Flanders
ATM Gravel sand & filler Stand-alone EUREUREUR Filler capacity installed and product certifications progressing
well
Organics: bio-gas to Shell & EUREUR Opened by King Willem-Alexander on October 14 2021 and now
bio-LNG Nordsol commissioning
Organics: expanded Stand-alone EUR Construction complete and will commission in 2021
depackaging capacity
Expansion plastic Stand-alone EUREUR Ghent and Waalwijk investments complete. Acht to commission in
recycling 2023
Mattress recycling IKEA group EUREUREUR New facilities: fourth facility completed and fifth in planning.
Chemical recycling plant to be commissioned in early 2022
Feedstock for chemical Petro Chemical EUR - EUREUREUR Discussions ongoing concerning feedstock specification and sourcing
recycling of plastics
Polyurethane recycling Chemical EUR - EUREUREUR Technical feasibility studies underway
recycler
Wood flake for Arcelor-Mittal EUREUR - EUREUREUREUR Commercial discussions ongoing
low-carbon steel
EUR = cEUR2m of additional EBIT at full run rate
Renewi 2.0 programme
We are now eighteen months into our Renewi 2.0 programme: a
three-year programme to make the company simpler, more
customer-focused, more efficient and a better place to work. This
comprises multiple projects, orientated around two key themes:
digitisation of the business and the simplification and
harmonisation of processes.
As previously indicated, the programme is expected to deliver a
minimum of EUR20m of annual cost benefits on a run-rate basis after
completion of this three-year programme to 2023 for a total cash
cost of EUR40m, which will be split into an exceptional cost of
EUR33m and capital investment of EUR7m. Our current run-rate of
savings has increased to EUR4.0m. We remain confident that we will
achieve the targeted savings on schedule.
After the successful launch of the MyRenewi portal more than
140,000 customers have been invited to access the platform. The
current number of active customers is around 40,000 and adoption is
increasing each month. Around 2,700 orders and questions per week
are being processed over the platform, which has driven phone call
volumes down 5% year to date towards a target 20% reduction.
Our procure-to-pay process, PEAR, is now fully operational in
Belgium and is being extended to the Netherlands.
ATM profit recovery
ATM is our major site that cleans contaminated soil, water and
chemical waste, providing a unique range of services in the
Netherlands. The market for the thermal treatment of contaminated
soil and its reuse as TGG was disrupted from mid-2018 due to
environmental concerns, reducing earnings by around EUR20m. ATM's
TGG was cleared by IL&T, the national regulator, for use in
appropriate locations from late 2019.
We continue to make good progress with our recovery plan.
Certification projects for our filler, sand and gravel are
continuing at pace. Inbound deliveries of contaminated soil have
been lower than expected, as previously announced, due to
short-term reductions in active projects in the market as well as
delays in securing import permits from the authorities. As a
result, we have reduced our throughput back to 35% from 55% until
we see an upturn in inbound volumes. We remain confident in ongoing
progress and in delivery of the EUR20m EBIT target albeit with an
expected delay of up to two years.
Sustainability performance
In 2020 we launched Renewi's upgraded sustainability strategy
and our new sustainable development objectives for the next three
and five years. Using the UN Sustainable Development Goals, we are
focusing on three key themes: Enabling the circular economy;
Reducing carbon emissions and waste; and Caring for people. In
keeping with our purpose, our business and sustainability
strategies are inextricably linked and mutually supportive. By
delivering on one, we will help to deliver on the others.
During the last six months we have made good progress with our
strategy, including the following highlights:
-- Recycling rate increased from 65.8% at March 2021 to 66.5%
(+0.7% points), mainly driven by Specialitiesand Mineralz &
Water Divisions
-- Significantly improved H1 safety results: significant
incidents are down 77%, LTIs (lost time injuries)are down 26% and
major fires are down 47%
-- Established a Diversity & Inclusion committee, aimed at
making Renewi an even more rewarding andinclusive place to work
Outlook
Following the strong performance in the first half and previous
increased guidance expectations, the Board is further increasing
its FY22 expectations, which assume a moderation of recyclate
prices in the second half as well as a reduced throughput at
ATM.
We remain confident our three strategic growth initiatives - our
innovation pipeline, recovery of earnings at ATM, and the Renewi
2.0 programme - will deliver significant additional earnings over
the coming years as well as the longer term.
Our business model is essential to enable advanced circular
economies to achieve their carbon reduction targets. We continue to
see positive structural growth drivers as the Dutch and Belgian
regional governments progressively tax carbon emitters, incentivise
recycling over incineration, and promote the use of secondary
materials. We therefore expect to see long-term accretive growth
opportunities across our markets as we continue to assist our
customers to recycle more and to use our high-quality secondary
materials. FINANCE REVIEW
Financial Performance Sep 21 Sep 20 Variance
EURm EURm %
Revenue 915.6 821.4 11%
Underlying EBITDA 126.6 88.5 43%
Underlying EBIT 63.8 28.3 125%
Operating profit 58.2 17.0 242%
Underlying profit before tax 50.4 15.3 229%
Non-trading & exceptional items (5.7) (10.9)
Profit before tax 44.7 4.4
Total tax charge for the period (7.6) (0.9)
Profit for the period 37.1 3.5
The underlying figures above are reconciled to statutory
measures in notes 3 and 17 in the consolidated financial
statements.
Renewi delivered a strong performance in the first half of FY22,
with revenues and underlying EBIT 11% and 125% above prior year. We
have retained some of the structural cost savings made in response
to Covid and these, combined with ongoing strong recyclate prices,
have contributed to a significant increase in margins and profits.
Underlying EBIT was EUR35.5m higher than prior year, of which
EUR23.7m resulted from all-time high recyclate prices and EUR9.3m
from volume and mix changes, with the balance coming from net price
gains more than offsetting inflation, increased ATM throughput,
costs savings and others. Underlying EBITDA increased by 43%
whereas underlying EBIT increased by 125% as the level of
depreciation and amortisation remained fairly constant year on
year. The level of exceptional and non-trading items in the current
year was again significantly reduced to EUR5.7m resulting in a
statutory operating profit of EUR58.2m compared to EUR17.0m last
year. Interest charges and share of results from associates and
joint ventures were comparable to last year which has resulted in
an underlying profit before tax of EUR50.4m for this year compared
to EUR15.3m in the prior year.
Non-trading and exceptional items excluded from pre-tax
underlying profits
To enable a better understanding of underlying performance,
certain items are excluded from underlying EBIT and underlying
profit before tax due to their size, nature or incidence. Total
non-trading and exceptional items excluding tax were reduced by 48%
to EUR5.7m (2020: EUR10.9m), of which EUR1.6m was non-cash. Of the
total charge, EUR4.0m relates to the Renewi 2.0 programme.
Operating profit from continuing operations, after taking
account of all non-trading and exceptional items, was EUR58.2m
(2020: EUR17.0m).
Net finance costs
Net finance costs excluding exceptional items increased by
EUR0.2m to EUR13.7m (2020: EUR13.5m), with savings on main facility
interest due to lower borrowing levels net of increased costs for
leases which reflect an increase in new leases entered into during
the previous years. Further details are provided in note 6 to the
consolidated interim financial statements.
Taxation
Total taxation for the period was a charge of EUR7.6m (2020:
EUR0.9m). The effective tax rate on underlying profits at 25% is
based on the estimate of the full year effective tax rate. An
exceptional tax credit of EUR5.0m includes EUR1.3m attributable to
the non-trading and exceptional items of EUR5.7m and EUR3.7m as a
result of tax rates changes in the UK which were substantively
enacted during the first half.
The Group statutory profit after tax, including all non-trading
and exceptional items, was EUR37.1m (2020: EUR3.5m).
Earnings per share (EPS)
Following the one for ten share consolidation, EPS comparatives
have been restated to reflect the change in the number of shares.
Underlying EPS excluding non-trading and exceptional items was 47
cents per share, an increase of 32 cents. Basic EPS was 46 cents
per share compared to 5 cents per share in the prior year.
The Board has not declared an interim dividend.
CASH FLOW PERFORMANCE
The funds flow performance table is derived from the statutory
cash flow statement and reconciliations are included in note 17 in
the consolidated financial statements.
The table shows the cash flows from an adjusted free cash flow
to total cash flow. The adjusted free cash flow measure was
introduced last March and focuses on the cash generation excluding
the impact of Covid-19 tax deferrals, settlement of ATM soil
liabilities and spend relating to the UK PPP onerous contracts.
Adjusted free cash flow also includes lease repayments for IFRS 16
leases. The prior period comparatives have been restated to reflect
this new layout.
Funds flow performance Sep 21 Sep 20
EURm EURm
EBITDA 126.6 88.5
Working capital movement (36.0) 6.4
Movement in provisions and other (0.2) -
Net replacement capital expenditure (29.7) (23.7)
Repayment of obligations under lease liabilities (21.9) (19.9)
Interest, loan fees and tax (12.9) (17.6)
Adjusted free cash flow 25.9 33.7
Deferred Covid taxes (0.4) 55.0
Offtake of ATM soil (3.4) (2.6)
UK Municipal contracts (7.9) (8.2)
Free cash flow 14.2 77.9
Growth capital expenditure (7.5) (3.3)
Renewi 2.0 and other exceptional spend (6.0) (5.6)
Other (2.6) (1.3)
Total cash flow (1.9) 67.7
Free cash flow conversion 22% 275%
Free cash flow conversion is free cash flow as a percentage of
underlying EBIT. The non-IFRS measures above are reconciled to
statutory measures in note 17 in the consolidated financial
statements.
Adjusted free cash flow was lower at EUR25.9m despite the strong
EBITDA improvement. There was an outflow on working capital in the
period primarily driven by temporary delays in billing during a
process change and an underlying reduction in payables. Core days
sales outstanding (DSO) remain unimpacted by Covid-19.
Replacement capital spend at EUR29.7m was slightly ahead of last
year. In addition, EUR16.6m of new leases have been entered into
which are reported as right-of-use assets with a corresponding
lease liability. These leases include the continuation of the truck
replacement programme, property lease renewals or extensions and
other assets. Growth capital spend included further spend on the
EUR10m facility to process out-of-date food waste in Amsterdam.
Interest and tax payments were lower than the prior period due
to phasing of annual tax settlements which have fallen into the
second half this year along with lower interest payments given
reduced bank borrowings.
Looking at the three components that are shown below adjusted
free cash flow, there has been minimal repayment on Covid-19 tax
deferrals. The total tax deferrals were EUR60m at the end of March
and the Dutch elements will be settled in 36 monthly instalments
starting in October 2021. Initial cash spend for placement of TGG
soil stocks placed in the market in the first six months was
EUR3.4m. The balance of the liability of up to EUR20m is expected
to be placed in the market over the next 24 months. Cash outflow on
UK PPP contracts was EUR7.9m.
Spending on Renewi 2.0 and other exceptional costs was similar
to last year at EUR6.0m. Other cash flows include the funding for
the closed UK defined benefit scheme and the purchase of short-term
investments in the insurance captive net of sundry dividend income
from other investments.
Net cash generated from operating activities decreased from
EUR129.4m in the prior period to EUR74.1m in the current year. A
reconciliation to the underlying cash flow performance as referred
to above is included in note 17 in the consolidated interim
financial statements.
We continue to pay significant attention to cash, taking into
account the future investment needs of the business alongside the
ongoing replacement capital and the medium term repayment of the
Covid taxes.
INVESTMENT PROJECTS
Expenditure in FY22
The Group's long-term expectations for replacement capital
expenditure remain around 80% of depreciation. FY22 replacement
capital spend is expected to be up to EUR80m which includes some
catch-up from the prior two years and a second half investment in a
replacement LUVO emissions cleaning unit at the ATM TRI plant. In
addition, up to EUR40m of IFRS 16 lease investments are expected
for the full year, primarily in replacement trucks.
Growth capital expenditure will continue to increase as elements
of the innovation pipeline comes into the construction phase.
Growth investments in FY22 are estimated at EUR23m which includes
the first half expenditure on the out-of-date food waste facility
in Amsterdam, with the second half influenced by the exact timing
of expenditure on the advanced sorting investments in Belgium for
Vlarema 8 and other initiatives. The following table shows the
investments and returns expected for the circular innovation
projects shared at the recent Capital Markets Event.
FY21 &
Circular innovations Prior FY22 FY23 FY24 FY25 FY26 TOTAL
EURm EURm EURm EURm EURm EURm EURm
Capital Investment 19.0 23.0 42.0 19.0 7.0 - 110.0
EBIT (4.0) (2.0) 2.0 9.0 19.0 >20.0 >20.0
Return on assets
The Group return on operating assets excluding debt, tax and
goodwill increased to 36.0% at 30 September 2021 from 22.6% at 31
March 2021. The Group post-tax return on capital employed at
September 2021 was 9.5% up from 6.3% at 31 March 2021.
Treasury and cash management
Core net debt and leverage ratios
Core net debt excludes IFRS 16 lease liabilities and the net
debt relating to the UK PPP contracts which is non-recourse to the
Group and secured over the assets of the special purpose vehicles.
Core net debt was better than management expectations at EUR336.0m
(31 March 2021: EUR343.6m) which resulted in a net debt to EBITDA
ratio of 1.82x, comfortably within our covenant limit of 3.50x.
Liquidity headroom including core cash and undrawn facilities was
also strong at EUR492m up from EUR364m at March 2021.
Debt structure and strategy
Borrowings, excluding PPP non-recourse borrowings, are mainly
long-term. All our core borrowings of bonds and loans are green
financed. During the period all term loans and revolving credit
facilities denominated in Sterling were repaid and the related
cross-currency interest rate swaps were cancelled. On 23 July 2021
new Green retail bonds of EUR125m were issued at a gross coupon of
3.00% for a period of six years.
Debt Structure Sep 21 Sep 20 Variance
EURm EURm EURm
EUR100m Belgian Green retail bonds (100.0) (100.0) -
EUR75m Belgian Green retail bonds (75.0) (75.0) -
EUR125m Belgian Green retail bonds (125.0) - (125.0)
EUR495m Green RCF and term loan (82.5) (306.1) 223.6
Green EUPP (25.0) (25.0) -
Gross borrowings before lease liabilities (407.5) (506.1) 98.6
Historical IAS 17 lease liabilities and other (11.0) (15.6) 4.6
Loan fees 3.3 4.3 (1.0)
Core cash and money market funds 79.2 136.3 (57.1)
Core net debt (as per covenant definitions) (336.0) (381.1) 45.1
IFRS 16 lease liabilities (232.8) (219.1) (13.7)
Net debt excluding UK PPP net debt (568.8) (600.2) 31.4
UK PPP restricted cash balances 21.1 16.6 4.5
UK PPP non-recourse debt (100.7) (100.8) 0.1
Total net debt (648.4) (684.4) 36.0
As set out in note 2 in the consolidated financial statements
the comparatives for UK PPP balances and lease liabilities have
been restated.
The Group operates a committed invoice discounting programme.
The cash received for invoices sold at 30 September 2021 was
EUR83.7m (March 2021: EUR80.3m).
The introduction of IFRS 16 on 1 April 2019 brought additional
lease liabilities onto the balance sheet with an associated
increase in assets. Covenants on our main bank facilities remain on
a frozen GAAP basis and exclude IFRS 16 lease liabilities.
Debt borrowed in the special purpose vehicles (SPVs) created for
the financing of UK PPP programmes is separate from the Group core
debt and is secured over the assets of the SPVs with no recourse to
the Group as a whole. Interest rates on PPP borrowings were fixed
by means of interest rate swaps at contract inception. At 30
September 2021 this net debt amounted to EUR79.6m (31 March 2021:
EUR87.8m). As set out in note 2 in the consolidated financial
statements the presentation of cash held in the UK PPP entities is
now shown gross in cash and cash equivalents rather than netted off
the non-recourse debt balance.
PROVISIONS AND CONTINGENT LIABILITIES
Around 85% of the Group's provisions are long-term in nature,
with the onerous contract provisions against the PPP contracts
being utilised over 20 years and landfill provisions for many
decades longer. The provisions balance classified as due within one
year amounts to EUR35m, including EUR3m for restructuring, EUR10m
for onerous contracts, EUR8m for landfill related spend and EUR14m
for environmental, legal and others.
The position on the alleged Belgian State Aid claim remains
unchanged since March, with a gross potential liability of EUR63m
against which we have provided for EUR15m. We expect a ruling from
the European Commission during FY22 but no monies would likely
become payable until FY23. Details of contingent liabilities are
set out in note 15 of the financial statements and the Group does
not expect any of these to crystallise in the coming year.
Retirement benefits
The Group has a defined benefit pension scheme for certain UK
employees which has been closed to new entrants since September
2002 and was closed to future benefit accrual from 1 December 2019.
At 30 September 2021, the scheme had moved back to a surplus of
EUR5.9m from a deficit of EUR4.0m at 31 March 2021. The move in the
period was due to strong asset returns. There are also several
defined benefit pension schemes for employees in the Netherlands
and Belgium which had a retirement benefit deficit of EUR7.4m at 30
September 2021, unchanged from March.
PRINCIPAL RISKS AND UNCERTAINTIES
Renewi operates a risk management framework to identify, assess
and control the most serious risks facing the Group. The 2021
Annual Report (pages 80 to 83) provides a discussion of the Group's
principal risks and uncertainties. The Board believes that the key
risks and associated mitigation strategies have not changed in the
period.
Renewi continues to monitor for aftershocks from Covid-19,
including customer insolvencies, reduced volumes from ongoing
homeworking and the risks of further lockdowns. In common with the
broader market we observe inflationary pressures including energy
costs, and a shortage of labour in specific locations or
specialisms. The global post Covid-19 demand recovery has also
created positive pricing pressure on recyclates, which heightens
attention as to how to maximise the opportunity caused by this
volatility and to identify potentially heightened risks, such as
new entrants. Cyber crime is an increasing risk for all businesses
and we have been investing significantly to further strengthen our
capabilities. The floods in Europe this summer have highlighted the
risks of physical loss arising from climate change. While we
experienced no material impact from these floods, we continue to
appraise potential risks to our assets as well as ensuring we can
maintain continuity of service to our customers. All of these
potential risks are actively reviewed and managed at the Board and
in our executive management teams.
GOING CONCERN
The Directors have adopted the going concern basis in preparing
these consolidated interim financial statements after assessing the
Group's principal risks. Further details of the modelling and
scenarios prepared are set out in note 2 of the financial
statements. Having considered all the elements of the financial
projections and applying appropriate sensitivities, the Directors
confirm they have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future and to meet its covenants.
STATEMENT OF THE DIRECTORS' RESPONSIBILITIES
The Directors confirm that these condensed consolidated interim financial statements have been prepared in accordance
with International Accounting Standard 34 Interim Financial Reporting as adopted for use in the UK, and that the
interim management report includes a fair review of the information required by DTR 4.2.7 R and DTR 4.2.8 R, namely:
-- an indication of important events that have occurred during the first six months and their impact on the
condensed set of financial statements, and a description of the principal risks and uncertainties for the remaining
six months of the financial year; and
-- material related-party transactions in the first six months and any material changes in the related-party
transactions described in the last Annual Report.
A list of current Directors is maintained on the Renewi plc
website: www.renewi.com.
By order of the Board
O de Bont T Woolrych
Chief Executive Officer Chief Financial Officer
8 November 2021 8 November 2021
Consolidated Interim Income Statement (unaudited)
First half ended 30 September 2021
First half 2021/22 First half 2020/21
Non-trading Non-trading
& exceptional & exceptional
Note Underlying items Underlying items
Total Total
EURm EURm EURm EURm
EURm EURm
Revenue 3,4 915.6 - 915.6 821.4 - 821.4
Cost of sales 5 (740.0) (1.8) (741.8) (687.1) (7.7) (694.8)
Gross profit (loss) 175.6 (1.8) 173.8 134.3 (7.7) 126.6
Administrative expenses 5 (111.8) (3.8) (115.6) (106.0) (3.6) (109.6)
Operating profit (loss) 3 63.8 (5.6) 58.2 28.3 (11.3) 17.0
Finance income 5,6 4.7 - 4.7 5.6 0.4 6.0
Finance charges 5,6 (18.4) (0.1) (18.5) (19.1) - (19.1)
Share of results from associates and 0.3 - 0.3 0.5 - 0.5
joint ventures
Profit (loss) before taxation 3 50.4 (5.7) 44.7 15.3 (10.9) 4.4
Taxation 5,7 (12.6) 5.0 (7.6) (3.7) 2.8 (0.9)
Profit (loss) for the period 37.8 (0.7) 37.1 11.6 (8.1) 3.5
Attributable to:
Owners of the parent 37.3 (0.7) 36.6 11.9 (8.1) 3.8
Non-controlling interests 0.5 - 0.5 (0.3) - (0.3)
37.8 (0.7) 37.1 11.6 (8.1) 3.5
Restated*
First half
First half
Earnings per share Note 2021/22
2020/21
cents
cents
Basic 9 46 5
Diluted 9 46 5
Underlying basic 9 47 15
Underlying diluted 9 47 15
*The comparatives have been restated in accordance with the
requirements of IAS 33 Earnings per share following the share
consolidation as explained in note 2.
Consolidated Interim Statement of Comprehensive Income
(unaudited)
First half ended 30 September 2021
First half 2021/ First half 2020/
22 21
EURm EURm
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign subsidiaries 0.5 1.8
Fair value movement on cash flow hedges 5.3 2.0
Deferred tax on fair value movement on cash flow hedges (0.3) (0.6)
Share of other comprehensive income of investments accounted for using the equity 0.3 0.1
method
5.8 3.3
Items that will not be reclassified to profit or loss:
Actuarial gain (loss) on defined benefit pension schemes 8.0 (18.4)
Deferred tax on actuarial gain (loss) on defined benefit pension schemes (1.8) 3.5
6.2 (14.9)
Other comprehensive income (loss) for the period, net of tax 12.0 (11.6)
Profit for the period 37.1 3.5
Total comprehensive income (loss) for the period 49.1 (8.1)
Attributable to:
Owners of the parent 48.6 (7.8)
Non-controlling interests 0.5 (0.3)
Total comprehensive income (loss) for the period 49.1 (8.1)
Consolidated Interim Balance Sheet (unaudited)
As at 30 September 2021
Restated* Restated*
30 September
30 September 31 March
Note 2021
2020 2021
EURm
EURm EURm
Assets
Non-current assets
Goodwill and intangible assets 10 603.2 609.6 602.2
Property, plant and equipment 10 546.9 562.1 560.7
Right-of-use assets* 10 227.0 220.8 233.8
Investments 14.7 14.8 17.2
Financial assets relating to PPP contracts 137.3 135.7 142.4
Derivative financial instruments 14 0.2 - 7.9
Defined benefit pension scheme surplus 13 5.9 - -
Trade and other receivables 4.0 2.5 4.1
Deferred tax assets 46.3 39.7 49.5
1,585.5 1,585.2 1,617.8
Current assets
Inventories 22.5 20.6 20.6
Investments 11.5 8.5 9.3
Loans to associates and joint ventures 0.9 0.9 0.9
Financial assets relating to PPP contracts 7.1 6.2 6.7
Trade and other receivables 253.4 250.4 247.7
Derivative financial instruments 14 3.4 - 1.2
Current tax receivable 1.6 - 0.5
Cash and cash equivalents* 11 100.3 152.9 68.8
400.7 439.5 355.7
Total assets 1,986.2 2,024.7 1,973.5
Liabilities
Non-current liabilities
Borrowings* 11 (600.9) (793.0) (689.1)
Derivative financial instruments 14 (22.3) (35.5) (25.3)
Other non-current liabilities (44.4) (60.9) (54.4)
Defined benefit pension schemes deficit 13 (7.4) (8.3) (11.4)
Provisions 12 (254.4) (238.9) (252.6)
Deferred tax liabilities (48.6) (44.4) (50.9)
(978.0) (1,181.0) (1,083.7)
Current liabilities
Borrowings* 11 (147.8) (44.3) (47.8)
Derivative financial instruments 14 - (3.2) (0.2)
Trade and other payables (509.8) (509.7) (546.2)
Current tax payable (22.3) (14.5) (13.8)
Provisions 12 (34.9) (45.3) (38.7)
(714.8) (617.0) (646.7)
Total liabilities (1,692.8) (1,798.0) (1,730.4)
Net assets 293.4 226.7 243.1
Issued capital and reserves attributable to the owners of the parent
Share capital 99.5 99.5 99.5
Share premium 473.6 473.6 473.6
Exchange reserve (14.3) (9.9) (14.8)
Retained earnings (272.0) (337.6) (321.3)
286.8 225.6 237.0
Non-controlling interests 6.6 1.1 6.1
Total equity 293.4 226.7 243.1
*The comparatives for cash and cash equivalents and PPP
non-recourse debt within both current and non-current borrowings
have been restated at September 2020 and March 2021, additionally
the comparatives for right-of-use assets and lease liabilities
within both current and non-current borrowings at September 2020
have been restated. These are due to prior year adjustments which
are explained in note 2.
Consolidated Interim Statement of Changes in Equity
(unaudited)
First half ended 30 September 2021
Share Share Exchange Retained Non-controlling Total
reserve
capital premium earnings interests equity
EURm
EURm EURm EURm EURm EURm
Balance at 1 April 2021 99.5 473.6 (14.8) (321.3) 6.1 243.1
Profit for the period - - - 36.6 0.5 37.1
Other comprehensive income:
Exchange gain on translation of foreign subsidiaries - - 0.5 - - 0.5
Fair value movement on cash flow hedges - - - 5.3 - 5.3
Actuarial gain on defined benefit pension schemes - - - 8.0 - 8.0
Tax in respect of other comprehensive income items - - - (2.1) - (2.1)
Share of other comprehensive income of investments
accounted for using the equity method 0.3 - 0.3
- - -
Total comprehensive income for the period - - 0.5 48.1 0.5 49.1
Share-based compensation - - - 0.8 - 0.8
Movement on tax arising on share-based compensation - - - 0.4 - 0.4
Balance as at 30 September 2021 99.5 473.6 (14.3) (272.0) 6.6 293.4
Balance at 1 April 2020 99.5 473.6 (11.6) (327.6) 1.4 235.3
Profit (loss) for the year - - - 11.1 (0.1) 11.0
Other comprehensive (loss) income:
Exchange (loss) gain on translation of foreign subsidiaries - - (3.2) - 0.1 (3.1)
Fair value movement on cash flow hedges - - - 14.4 (0.1) 14.3
Actuarial loss on defined benefit pension schemes - - - (23.3) - (23.3)
Tax in respect of other comprehensive income items - - - 2.0 - 2.0
Share of other comprehensive income of investments - - - 0.3 - 0.3
accounted for using the equity method
Total comprehensive (loss) income for the year - - (3.2) 4.5 (0.1) 1.2
Share-based compensation - - - 1.4 - 1.4
Movement on tax arising on share-based compensation - - - 0.3 - 0.3
Disposal of non-controlling interest - - - 1.3 4.8 6.1
Own shares purchased by the Employee Share Trust - - - (1.2) - (1.2)
Balance as at 31 March 2021 99.5 473.6 (14.8) (321.3) 6.1 243.1
Balance at 1 April 2020 99.5 473.6 (11.6) (327.6) 1.4 235.3
Profit (loss) for the period - - - 3.8 (0.3) 3.5
Other comprehensive income (loss):
Exchange gain on translation of foreign subsidiaries - - 1.7 - 0.1 1.8
Fair value movement on cash flow hedges - - - 2.1 (0.1) 2.0
Actuarial loss on defined benefit pension schemes - - - (18.4) - (18.4)
Tax in respect of other comprehensive income items - - - 2.9 - 2.9
Share of other comprehensive income of investments - - - 0.1 - 0.1
accounted for using the equity method
Total comprehensive income (loss) for the period - - 1.7 (9.5) (0.3) (8.1)
Share-based compensation - - - 0.7 - 0.7
Own shares purchased by the Employee Share Trust - - - (1.2) - (1.2)
Balance as at 30 September 2020 99.5 473.6 (9.9) (337.6) 1.1 226.7
Consolidated Interim Statement of Cash Flows (unaudited)
First half ended 30 September 2021
Restated*
First half
First half
Note 2021/22
2020/21
EURm
EURm
Profit before tax 44.7 4.4
Finance income (4.7) (6.0)
Finance charges 18.5 19.1
Share of results from associates and joint ventures (0.3) (0.5)
Operating profit 58.2 17.0
Amortisation and impairment of intangible assets 10 4.8 5.0
Depreciation and impairment of property, plant and equipment 10 35.5 40.8
Depreciation and impairment of right-of-use assets 10 22.8 19.5
Impairment of investment in associate 1.9 -
Gain on disposal of property, plant and equipment (0.6) (0.4)
Net decrease in provisions (4.4) (6.1)
Payment related to committed funding of the defined benefit pension schemes (1.8) (1.7)
Share-based compensation 0.8 0.7
Operating cash flows before movement in working capital 117.2 74.8
Increase in inventories (1.9) -
(Increase) decrease in receivables (6.0) 21.3
(Decrease) increase in payables (33.8) 37.8
Cash flows from operating activities 75.5 133.9
Income tax paid (1.4) (4.5)
Net cash inflow from operating activities 74.1 129.4
Investing activities
Purchases of intangible assets (6.6) (4.5)
Purchases of property, plant and equipment (32.7) (24.6)
Proceeds from disposals of property, plant and equipment 2.1 2.1
Dividends received from associates and joint ventures 1.2 1.1
Receipt of deferred consideration 0.2 0.4
Purchase of other short-term investments (2.2) -
Outflows in respect of PPP arrangements under the financial asset model (0.2) (0.7)
Capital received in respect of PPP financial assets 3.0 2.5
Finance income 5.0 4.8
Net cash outflow from investing activities (30.2) (18.9)
Financing activities
Finance charges and loan fees paid (16.5) (18.0)
Investment in own shares by the Employee Share Trust - (1.2)
Proceeds from retail bonds 11 125.0 -
Proceeds from bank borrowings 11 126.6 9.0
Repayment of bank borrowings 11 (228.9) (134.7)
Settlement of cross currency interest rate swaps 6.4 -
Repayment of PPP debt 11 (3.5) (1.9)
Repayment of obligations under lease liabilities 11 (21.9) (19.9)
Net cash outflow from financing activities (12.8) (166.7)
Net increase (decrease) in cash and cash equivalents 31.1 (56.2)
Effect of foreign exchange rate changes 11 0.4 (0.7)
Cash and cash equivalents at the beginning of the period* 11 68.8 209.8
Cash and cash equivalents at the end of the period 11 100.3 152.9
*Cash and cash equivalents at the beginning and end of the
period for the first half 2020/21 and beginning of the period for
the first half 2021/22 along with the repayment of PPP debt and the
effect of foreign exchange rate changes have been restated due to a
prior year adjustment as explained in note 2.
Notes to the Consolidated Financial Statements
1. General information
Renewi plc is a public limited company listed on the London
Stock Exchange with a secondary listing on Euronext Amsterdam.
Renewi plc is incorporated and domiciled in Scotland under the
Companies Act 2006, registered number SC077438. The address of the
registered office is 16 Charlotte Square, Edinburgh, EH2 4DF. The
nature of the Group's operations and its principal activities are
set out in note 3.
2. Basis of preparation
This condensed set of consolidated interim financial statements
for the six months ended 30 September 2021 has been prepared in
accordance with the Disclosure and Transparency Rules of the United
Kingdom Financial Conduct Authority and with IAS 34 Interim
Financial Reporting as adopted for use in the UK. They should be
read in conjunction with the 2021 Annual Report and Accounts, which
have been prepared in accordance with international financial
reporting standards in conformity with the requirements of the
Companies Act 2006 and international financial reporting standards
adopted pursuant to Regulation (EC) No 1606/2002 as it applies in
the European Union. The 2021 Annual Report and Accounts are
available from the Company's website www.renewi.com.
These primary statements and selected notes comprise the
unaudited consolidated interim financial statements of the Group
for the six months ended 30 September 2021 and 2020, together with
the audited results for the year ended 31 March 2021. These interim
financial results do not comprise statutory accounts within the
meaning of Section 434 of the Companies Act 2006. The comparative
figures as at 31 March 2021 have been extracted from the Group's
statutory Annual Report and Accounts for that financial year, but
do not constitute those accounts. Those statutory accounts for the
year ended 31 March 2021 were approved by the Board of Directors on
27 May 2021 and delivered to the Registrar of Companies. The report
of the auditors on those accounts was unqualified, did not contain
an emphasis of matter paragraph and did not contain any statement
under Section 498 of the Companies Act 2006.
The Board of Directors approved, on 8 November 2021, these
consolidated interim financial statements which have been reviewed
by BDO LLP but not been audited.
Going concern
The Directors have adopted the going concern basis in preparing
these consolidated interim financial statements after assessing the
Group's principal risks including the ongoing risks arising from
the Covid-19 pandemic.
Given the economic uncertainty arising from the Covid-19
pandemic, the Directors have carried out a comprehensive assessment
of the Group's ability to continue as a going concern. This
assessment has involved the review of medium-term cash flow
modelling over an 18 month period to 31 March 2023 which includes
estimates of any further impact of Covid-19 on the Group's
operations together with other factors that may affect its
performance and financial position. These factors include actual
trading performance in the period, expectations on the future
economic environment, available liquidity, which includes repayment
of the EUR100m Belgian retail bond in June 2022, as well as other
principal risks associated with the Group's ongoing operations.
The assessment includes a base case scenario setting out the
Directors' current expectations of future trading and a plausible
downside scenario and without applying any mitigating actions to
assess the potential impact on the Group's future financial
performance. The key judgement in both scenarios is the level and
speed of economic recovery following the disruption caused by the
Covid-19 pandemic.
The downside scenario includes another, less severe, wave of
Covid-19 measures in the second half of the current financial year
to 31 March 2022, weaker macro-economic conditions leading to a
volume recovery rate at least 50% lower than the forecast economic
recoveries in all of our territories in FY23 and as well as other
downsides which are not linked to Covid-19, including a further
delay in the operational ramp up at the ATM site and a settlement
of the potential maximum claim in FY23 arising from the European
Commission investigation into alleged state aid in Belgium. These
factors reduce FY23 EBIT by 22% compared to the base case. No
mitigating cost and cash actions, such as deferral of uncommitted
capital expenditure and reduced discretionary spend, have been
applied to our downside modelling as these are not necessary to
preserve sufficient liquidity or to avoid a breach of
covenants.
In the base case and plausible downside scenarios the Group has
sufficient liquidity and headroom in its existing facilities and no
covenants are breached at any of the forecast testing dates.
In addition, a reverse stress test calculation has been
undertaken to consider the points at which the covenants may be
breached. Underlying EBIT in FY23 would need to reduce by 57%
compared to the base case without considering any mitigating
actions. In the opinion of the Directors there is no scenario or
combination of scenarios that we consider to be remotely likely
that would generate this result.
Having considered all the elements of the financial projections,
sensitivities and potential mitigating actions, the Directors
confirm they have a reasonable expectation that the Group has
adequate resources to continue in operational existence for the
foreseeable future and to meet all banking covenants as described
in note 11.
2. Basis of preparation - continued
Restatement due to prior year adjustments
Given that cash held in UK PPP entities is not available to the
Group, historically management determined that it was appropriate
to present these cash balances together with the gross non-recourse
debt as PPP non-recourse net debt. In preparing these financial
statements, management identified this presentation of cash and
cash equivalents and PPP non-recourse debt in the balance sheet as
an error and accordingly a prior year adjustment has been made.
Non-recourse debt in these UK PPP entities has always been excluded
from the calculation of the Group's covenants which remains
unchanged. It has been determined that the appropriate presentation
should be on a gross basis in line with the requirements of IAS 32
Financial Instruments. The impact of this change has led to gross
PPP non-recourse debt and PPP cash held at bank being presented
separately within borrowings and current assets respectively which
has resulted in an increase in non-current borrowings of EUR14.9m
at September 2020 and EUR15.2m at March 2021, an increase in
current borrowings of EUR1.7m at September 2020 and EUR2.1m at
March 2020 with a corresponding increase in cash and cash
equivalents of EUR16.6m at September 2020 and EUR17.3m at March
2021. There is no impact on the Income Statement, earnings per
share, Statement of comprehensive income, Group equity or the
alternative performance measure of core net debt. The Balance
Sheets and Statements of Cash flows together with related
disclosures have been restated to reflect this adjustment.
In preparing the financial statements for the year ended 31
March 2021, management identified an error relating to the prior
period and accordingly an adjustment was made for the year ended 31
March 2020 which also impacted the balance sheet of 30 September
2020. The error arose as a result of a lease being recorded
incorrectly in an entity in which the Group acquired the remaining
50% and took full control in November 2019. The term used on the
implementation of IFRS 16 was shorter than the term stated in the
lease contract. The impact at 30 September 2020 was to increase
right-of-use assets by EUR9.0m and increase lease liabilities by
EUR9.0m, with the latter split as a reduction of EUR0.4m in current
lease liabilities and an increase of EUR9.4m in non-current lease
liabilities. The impact to the Income Statement for the six months
ended 30 September 2020 was not material and therefore no
adjustment was made. There is no goodwill impact on the acquisition
accounting of the entity.
Restatement of earnings per share due to share capital
consolidation
At the Annual General Meeting of Renewi plc held on 15 July
2021, shareholders approved the consolidation of the Company's
share capital on the basis of one new ordinary share with a nominal
value of GBP1.00 each for every ten existing ordinary shares of 10
pence each held. As a result earnings per share disclosures have
been restated in these consolidated interim financial statements in
accordance with the requirements of IAS 33 Earnings per share.
Seasonality or cyclicality of operations
The Group is not subject to any significant seasonality or
cyclicality fluctuations.
Accounting policies
The results have been prepared applying the accounting policies
that were used in the preparation of the 2021 Annual Report and
Accounts except taxes on income in the interim periods are accrued
using the estimated tax rate that is expected for the full
financial year.
Standards and interpretations issued by the International
Accounting Standards Board (IASB) are only applicable if endorsed
by the UK Endorsement Board (UKEB). At the date of approval of
these financial statements there were no new IFRSs or IFRS IC
interpretations which were early adopted by the Group. The
following amendments are effective for the period beginning 1 April
2022 and the Group is currently assessing any potential impact:
-- Onerous Contracts - Costs of Fulfilling a Contract
(Amendments to IAS 37)
-- Property, plant and equipment: Proceeds before Intended Use
(Amendments to IAS 16)
-- Annual improvements to IFRS Standards 2018-2020 (Amendments
to IFRS 1, IFRS 9, IFRS 16 and IAS 41)
-- References to Conceptual Framework (Amendments to IFRS 3)
Exchange Rates
In addition to the Group's presentational currency of Euros, the
most significant currency for the Group is Sterling with the
closing rate on 30 September 2021 of EUR1:GBP0.859 (30 September
2020: EUR1:GBP0.907, 31 March 2021: EUR1:GBP0.852) and an average
rate for the period ended 30 September 2021 of EUR1:GBP0.858 (30
September 2020: EUR1:GBP0.891).
Critical accounting judgements and estimates
The preparation of consolidated interim financial statements in
accordance with IFRS requires management to make judgements,
estimates and assumptions that affect the application of policies
and reported amounts of assets and liabilities, income and
expenditure. Critical estimates are defined as those that have a
significant risk of resulting in a material adjustment to the
carrying amounts of assets and liabilities within the next
financial year. The estimates and associated assumptions are based
on factors including historical experience and expectations of
future events that are considered to be relevant and reasonable.
These estimates, assumptions and judgements are reviewed on an
ongoing basis. Actual results may differ from these estimates.
2. Basis of preparation - continued
In preparing these consolidated interim financial statements
management have reviewed the nature of the significant judgements
in applying the Group's accounting policies and the key sources of
estimation uncertainty, as set out on pages 145 to 147 of the 2021
Annual Report and Accounts. It has been determined that there have
been no significant changes in methodology in relation to these key
estimates with all key inputs considered and refreshed as
appropriate.
Defined benefit pension scheme surplus
As noted previously, management have concluded that the Group
has an unconditional right to a refund of any surplus in the UK
defined benefit pension scheme once the liabilities have been
discharged and the trustees of the scheme do not have the
unilateral right to wind up the scheme. Consequently the asset at
30 September 2021 has not been restricted and no additional
liability has been recognised.
Underlying business performance
The Group uses alternative performance measures as we believe
these measures provide additional useful information on the
underlying trends, performance and position of the Group. These
underlying measures are used by the Group for internal performance
analysis and incentive compensation arrangements for employees. The
term 'underlying' refers to the relevant measure being reported
excluding non-trading and exceptional items. These include
underlying earnings before interest and tax (underlying EBIT),
underlying profit before tax, underlying profit after tax,
underlying earnings per share and underlying EBITDA (earnings
before interest, tax, depreciation and amortisation). The terms
'EBIT', 'EBITDA', 'exceptional items', 'adjusted' and 'underlying'
are not defined terms under IFRS and may therefore not be
comparable with similarly titled profit measures reported by other
companies. These measures are not intended to be a substitute for,
or superior to, GAAP measurements of profit. A full list of
alternative performance measures and non-IFRS measures together
with reconciliations are set out in note 17.
Non-trading and exceptional items
In establishing which items are disclosed separately as
non-trading and exceptional to enable a better understanding of the
underlying financial performance of the Group, management exercise
judgement in assessing the size, nature or incidence of specific
items. There has been no change to that adopted in the March 2021
consolidated financial statements. The Group incurs costs each year
in maintaining intangible assets which include acquired customer
relationships, permits and licences and excludes amortisation of
these assets from underlying EBIT to avoid double counting such
costs within underlying results. A policy for non-trading and
exceptional items is followed consistently and is submitted to the
Audit Committee for annual review and full details are set out on
page 154 of the 2021 Annual Report and Accounts. See note 5 for
further details of the costs included within this category.
Impact of Covid-19
For the year ended March 2021 management considered the impact
of Covid-19 when assessing the future cash flows of cash generating
units in the impairment reviews and similarly the impact of
Covid-19 in the assessment of the recoverability of trade
receivables and deferred tax assets. Overall trading in the first
half has been ahead of our expectations and therefore no adverse
indicators have been identified to trigger an update to goodwill
impairment modelling.
Management have continued to use judgement to determine the
expected impact on financial instruments, principally how expected
credit loss could be impacted as a result of the Covid-19 pandemic.
There has not been a significant increase in losses to date as
government measures have provided support and financial aid
packages but as these come to end there is an expectation of
increased defaults and bankruptcies.
3. Segmental reporting
The Group's chief operating decision maker is considered to be
the Board of Directors. The Group's reportable segments, determined
with reference to the information provided to the Board of
Directors in order for it to allocate the Group's resources and to
monitor the performance of the Group are unchanged from March 2021
and are set out below.
Commercial Collection and treatment of commercial waste in the Netherlands and Belgium.
Waste
Mineralz & Decontamination, stabilisation and re-use of highly contaminated materials to produce certified
Waste secondary products for the construction industry in the Netherlands and Belgium.
Specialities Processing plants focusing on recycling and diverting specific waste streams. The operations are in the
UK, the Netherlands, Belgium, France, Portugal and Hungary.
Group central Head office corporate function.
services
The profit measure the Board of Directors uses to evaluate
performance is underlying EBIT. The Group accounts for
inter-segment trading on an arm's length basis.
The Commercial Waste reportable segment includes the Netherlands
Commercial Waste and Belgium Commercial Waste operating segments
which have been aggregated and reported as one reportable segment
as they operate in similar markets in relation to the nature of the
products, services, processes and type of customer.
First half
First half 2021/22
Revenue 2020/21
EURm
EURm
Netherlands Commercial Waste 442.3 396.8
Belgium Commercial Waste 228.9 198.5
Intra-segment (0.6) (0.3)
Commercial Waste 670.6 595.0
Mineralz & Water 93.6 90.4
Specialities 168.0 149.4
Inter-segment revenue (16.6) (13.4)
Revenue 915.6 821.4
First half
First half 2021/22
Results 2020/21
EURm
EURm
Netherlands Commercial Waste 43.2 21.1
Belgium Commercial Waste 21.5 8.3
Commercial Waste 64.7 29.4
Mineralz & Water 4.0 2.3
Specialities 1.7 -
Group central services (6.6) (3.4)
Underlying EBIT 63.8 28.3
Non-trading and exceptional items (note 5) (5.6) (11.3)
Operating profit 58.2 17.0
Finance income (note 6) 4.7 5.6
Finance charges (note 6) (18.4) (19.1)
Finance income - non trading and exceptional items (note 5) - 0.4
Finance charges - non trading and exceptional items (note 5) (0.1) -
Share of results from associates and joint ventures 0.3 0.5
Profit before taxation 44.7 4.4
3. Segmental reporting - continued
Restated*
Commercial Mineralz Restated*
Specialities Group central services Tax, net debt
Net assets Waste & Water Total
EURm EURm and derivatives
EURm EURm EURm
EURm
30 September 2021
Gross non-current assets 1,025.4 255.7 216.7 41.2 46.5 1,585.5
Gross current assets 195.8 32.2 66.1 1.3 105.3 400.7
Gross liabilities (386.4) (212.1) (167.8) (84.6) (841.9) (1,692.8)
Net assets (liabilities) 834.8 75.8 115.0 (42.1) (690.1) 293.4
31 March 2021
Gross non-current assets 1,042.6 258.2 225.7 33.9 57.4 1,617.8
Gross current assets 174.1 31.6 64.3 15.2 70.5 355.7
Gross liabilities (414.6) (224.3) (173.0) (91.4) (827.1) (1,730.4)
Net assets (liabilities) 802.1 65.5 117.0 (42.3) (699.2) 243.1
*The comparatives for cash and cash equivalents within gross
current assets and PPP non-recourse debt within gross liabilities
have been restated at March 2021 due to a prior year adjustment as
explained in note 2.
For the reportable segments there has been no material change in
net assets and liabilities from the prior period. As explained in
note 2, the gross current assets and gross liabilities at 31 March
2021 have been restated.
4. Revenue
The following tables show the Group's revenue by type of service
delivered and by primary geographic markets.
Commercial Mineralz &
Specialities Inter-segment Total
By type of service Waste Water
EURm EURm EURm
EURm EURm
30 September 2021
Inbound 535.6 70.0 111.8 (14.9) 702.5
Outbound 97.8 23.6 55.7 (1.6) 175.5
On-Site 25.7 - - (0.1) 25.6
Other 11.5 - 0.5 - 12.0
Total revenue 670.6 93.6 168.0 (16.6) 915.6
30 September 2020
Inbound 510.1 73.0 104.2 (11.3) 676.0
Outbound 53.9 17.4 43.1 (1.2) 113.2
On-Site 18.2 - - (0.1) 18.1
Other 12.8 - 2.1 (0.8) 14.1
Total revenue 595.0 90.4 149.4 (13.4) 821.4
Commercial Mineralz &
Specialities Inter-segment Total
By geographic market Waste Water
EURm EURm EURm
EURm EURm
30 September 2021
Netherlands 442.0 73.1 22.6 (15.7) 522.0
Belgium 228.6 20.5 16.2 (0.9) 264.4
UK - - 113.2 - 113.2
France - - 10.9 - 10.9
Other - - 5.1 - 5.1
Total revenue 670.6 93.6 168.0 (16.6) 915.6
30 September 2020
Netherlands 396.6 69.7 20.5 (12.7) 474.1
Belgium 198.4 20.7 13.0 (0.7) 231.4
UK - - 102.5 - 102.5
France - - 9.2 - 9.2
Other - - 4.2 - 4.2
Total revenue 595.0 90.4 149.4 (13.4) 821.4
Revenue recognised at a point in time amounted to EUR861.7m
(2020/21: EUR767.3m) with the remainder recognised over time. The
majority of the Commercial Waste and Specialities revenue is
recognised at a point in time, whereas for Mineralz & Water 61%
of revenue (2020/21: 49%) is recognised over time.
5. Non-trading and exceptional items
To improve the understanding of the Group's financial
performance, items which are not considered to reflect the
underlying performance are presented in non-trading and exceptional
items.
First half First half
2021/22 2020/21
EURm EURm
Renewi 2.0 improvement programme 4.0 3.6
Other items:
Restructuring charges - non-cash impairments - 3.2
Restructuring charges - cash - 2.8
- 6.0
Ineffectiveness on cash flow hedges - (0.4)
Termination of cash flow hedges 0.1 -
Amortisation of acquisition intangibles 1.6 1.7
Non-trading and exceptional items in profit before tax 5.7 10.9
Tax on non-trading and exceptional items (1.3) (2.8)
Exceptional tax credit (3.7) -
Total non-trading and exceptional items in profit after tax 0.7 8.1
Renewi 2.0 improvement programme
Renewi 2.0 improvement programme is a significant one-off
business improvement project with expected capital and one-off
costs of EUR40m over a three-year period and as a result is
considered to be exceptional. Following the transformational merger
in February 2017, the goal of the Renewi 2.0 programme is to make
the Group more streamlined and more efficient and improve customer
experience and increase employee engagement. The programme also
includes around EUR4m of IT integration costs carried over from the
original integration programme and now merged with the Renewi 2.0
digitisation plans. This is the second year of the programme which
is on track. Of the total cost of EUR4.0m (2020/21: EUR3.6m),
EUR0.2m (2020/21: EURnil) was recorded in cost of sales and EUR3.8m
(2020/21: EUR3.6m) was recorded in administrative expenses.
Other items
The restructuring charges in the prior year related to a
Covid-19 cost action programme to address the challenges of the
pandemic. These costs were considered to be exceptional due to the
total cost of the programme and the one-off nature of the
circumstances. The costs of EUR6.0m were reflected following the
decision to close two processing lines in Belgium and some sites
and business activities in the Netherlands. Of the total costs
EUR3.2m were non-cash asset impairments. The total charge of
EUR6.0m was recorded in cost of sales.
Items recorded in finance charges and finance income
The EUR0.1m charge in the current year related to the
termination of cross-currency interest rate cash flow hedges. The
prior year credit of EUR0.4m related to the Cumbria PPP project
interest rate swap cash flow hedges as a result of a revised
repayment programme for the PPP non-recourse debt.
Amortisation of acquisition intangibles
Amortisation of intangible assets acquired in business
combinations of EUR1.6m (2020/21: EUR1.7m) was all recorded in cost
of sales.
Exceptional tax credit
The EUR3.7m exceptional tax credit related to changes in UK tax
rates as explained in note 7.
6. Net finance charges
First half First half
2021/22 2020/21
EURm EURm
Finance charges
Interest payable on borrowings 6.5 7.6
Interest payable on PPP non-recourse net debt 3.7 3.7
Lease liabilities interest 3.6 3.2
Unwinding of discount on provisions (note 12) 3.2 3.1
Interest charge on the retirement benefit schemes 0.1 -
Amortisation of loan fees 0.8 0.7
Other finance costs 0.5 0.8
Total finance charges before non-trading and exceptional items 18.4 19.1
Non-trading and exceptional finance charges:
Charge as a result of the termination of cash flow hedges 0.1 -
Total finance charges 18.5 19.1
Finance income
Interest receivable on financial assets relating to PPP contracts (4.5) (4.5)
Unwinding of discount on deferred consideration receivable (0.1) (0.1)
Interest income on the retirement benefit schemes - (0.2)
Other finance income (0.1) (0.8)
Total finance income before non-trading and exceptional items (4.7) (5.6)
Non-trading and exceptional finance income:
Ineffectiveness income on cash flow hedges - (0.4)
Total finance income (4.7) (6.0)
Net finance charges 13.8 13.1
7. Taxation
First half First half
2021/22 2020/21
EURm EURm
Current tax
UK corporation tax
Current tax 0.7 0.7
Overseas tax
Current year 7.8 2.6
Adjustment in respect of the prior year 0.2 -
Total current tax 8.7 3.3
Deferred tax
Origination and reversal of temporary differences in the current period 2.6 (2.4)
Exceptional tax credit (3.7) -
Total deferred tax (1.1) (2.4)
Total tax charge for the period 7.6 0.9
Tax expense is recognised based on management's best estimate of
the full year effective tax rate on expected full year profits to
March 2022. The estimated average underlying annual tax rate for
the year to 31 March 2022 is 25.0% (2020/21: 24.5%).
Exceptional credit relating to change in UK tax rate
In the UK Chancellor's Budget of 3 March 2021 it was announced
that the UK corporation tax rate will increase to 25% with effect
from 1 April 2023. This measure was substantively enacted on 24 May
2021. As a result, the UK deferred tax position has been calculated
based on the substantively enacted rates of 19% and 25% (2021: 19%)
based on the timing of the utilisation of the deferred tax. This
resulted in an exceptional tax credit of EUR3.7m in the current
period.
7. Taxation - continued
Amendments to Dutch tax rules
In September 2020 the Dutch government announced some amendments
to the loss utilisation rules. Under the new rules, losses may be
carried forward indefinitely, instead of the previous time limit of
between 6 and 9 years (depending on the date of origin of the
losses) with the offset of tax losses against taxable income in
excess of EUR1m limited to a maximum of 50%. On 4 June 2021 a Royal
Decree was published confirming that the new rules will enter into
force for accounting periods beginning on or after 1 January 2022.
Consequently the deferred tax asset position at 30 September 2021
in respect of Dutch tax losses has been calculated based on these
enacted changes. Furthermore on 15 October 2021 the Dutch
government published proposals to increase the Dutch corporate
income tax rate from 25.0% to 25.8% for accounting periods
beginning on or after 1 January 2022. At the same time, an
amendment to the general interest deduction rule was announced,
which if enacted would lower the EBITDA threshold from 30% to 20%
for financial years starting on or after 1 January 2022.
8. Dividends
The Directors did not recommend an interim dividend for the
current year (2020/21: nil per share). The Directors did not
recommend a final dividend for the year ended March 2021 (2020: nil
per share).
9. Earnings per share
Underlying basic and diluted earnings per share excludes
non-trading and exceptional items, amortisation of acquisition
intangibles and the change in fair value of derivatives, net of
related tax. Non-trading and exceptional items are those items that
are disclosed separately on the face of the Income Statement,
because of their size or incidence, to enable a better
understanding of performance as more fully explained in the
accounting policy in the 31 March 2021 Annual Report and Accounts.
The Directors believe that adjusting earnings per share in this way
enables comparison with historical data calculated on the same
basis to reflect the business performance in a consistent manner
and reflect how the business is managed and measured on a day to
day basis.
In May 2021 95,204 ordinary shares were allotted following the
exercise of share options under the Savings Related Share Options
Schemes for an aggregate consideration of EUR25,104.
At the Annual General Meeting of Renewi plc held on 15 July
2021, shareholders approved the consolidation of the Company's
share capital on the basis of one new ordinary share with a nominal
value of GBP1.00 each for every ten existing ordinary shares of 10
pence each held. This was subsequently completed on 19 July 2021
when the issued share capital of 800,236,740 10 pence shares were
replaced with 80,023,674 GBP1 shares. As a result earnings per
share comparatives have been restated below as required by IAS 33
Earnings per share.
First half 2021/22 First half 2020/21 restated
Basic Dilutions Diluted Basic Dilutions Diluted
Weighted average number of shares (million) 79.7 0.3 80.0 79.5 - 79.5
Profit after tax (EURm) 37.1 - 37.1 3.5 - 3.5
Non-controlling interests (EURm) (0.5) - (0.5) 0.3 - 0.3
Profit after tax attributable to ordinary shareholders (EURm) 36.6 - 36.6 3.8 - 3.8
Earnings per share (cents) 46 - 46 5 - 5
The reconciliation between underlying earnings per share and
basic earnings per share is as follows:
First half First half 2020/21
2021/22 restated
Cents EURm Cents EURm
Underlying earnings per share/Underlying profit after tax attributable to 47 37.3 15 11.9
ordinary shareholders
Adjustments:
Non-trading and exceptional items (7) (5.7) (14) (10.9)
Tax on non-trading and exceptional items 1 1.3 4 2.8
Exceptional tax 5 3.7 - -
Basic earnings per share/Earnings after tax attributable to ordinary shareholders 46 36.6 5 3.8
Diluted underlying earnings per share/Underlying profit after tax attributable to 47 37.3 15 11.9
ordinary shareholders
Diluted basic earnings per share/Earnings after tax attributable to ordinary 46 36.6 5 3.8
shareholders
10. Goodwill, intangible assets, property, plant and equipment
and right-of-use assets
Intangible Property, Right-of-use
Goodwill plant Total
assets assets
EURm and equipment EURm
EURm EURm
EURm
Net book value at 31 March 2020 561.1 49.0 584.0 215.9 1,410.0
Additions/modifications - 11.3 61.1 60.9 133.3
Disposals - (0.2) (4.0) (0.1) (4.3)
Derecognition of a right-of-use assets into a finance - - - (0.4) (0.4)
sub-lease
Amortisation and depreciation charge - (9.6) (74.2) (40.7) (124.5)
Impairment charge (9.5) - (6.2) (1.8) (17.5)
Exchange rate changes - 0.1 - - 0.1
Net book value at 31 March 2021 551.6 50.6 560.7 233.8 1,396.7
Additions/modifications - 5.8 23.2 16.6 45.6
Disposals - - (1.5) (0.6) (2.1)
Amortisation and depreciation charge - (4.8) (33.7) (22.5) (61.0)
Impairment charge - - (1.8) (0.3) (2.1)
Net book value at 30 September 2021 551.6 51.6 546.9 227.0 1,377.1
At 30 September 2021, the Group had property, plant and
equipment commitments of EUR25.7m (2020/21: EUR16.6m), right-of-use
asset commitments of EUR15.0m (2020/21: EUR23.3m) and intangible
asset commitments of EUR2.0m (2020/21: EUR2.4m).
The impairment charge of EUR1.8m in property plant and equipment
and EUR0.3m in right-of-use assets relates to specific assets in
the Commercial Division in both Belgium and Netherlands following a
detailed review principally in relation to the Vlarema-8 project in
Belgium where assets will be replaced.
Goodwill impairment
Goodwill is tested for impairment annually or more frequently if
there is any indication of impairment with the last annual test
being undertaken at 31 March 2021. The Group has performed an
assessment across all cash generating units to identify whether any
indicators of impairment existed and no indicators were identified
in the period. As a result no impairment testing was carried out in
the period and a full detailed review will be conducted at 31 March
2022.
11. Cash and borrowings
Cash and cash equivalents are analysed as follows:
Restated* Restated*
30 September
30 September 31 March
2021
2020 2021
EURm
EURm EURm
Cash at bank and in hand 49.8 75.5 51.5
Money market funds 29.4 60.8 -
Total core cash 79.2 136.3 51.5
Cash at bank - restricted relating to PPP contracts 21.1 16.6 17.3
Total cash and cash equivalents 100.3 152.9 68.8
*The comparatives for cash and cash equivalents have been
restated to include cash at bank relating to PPP contracts due to a
prior year adjustment as explained in note 2.
Of the total cash and cash equivalents, EUR2.4m was held by
joint operations which is only available in consultation with all
other partners in the joint operations.
11. Cash and borrowings continued
Borrowings are analysed as follows:
Restated* Restated*
30 September
30 September 31 March
2021
2020 2021
EURm
EURm EURm
Non-current borrowings
Retail bonds 199.2 174.4 174.5
European private placements 24.8 24.6 24.7
Term loans and Revolving credit facility 80.4 302.8 182.3
Lease liabilities 200.1 192.7 205.7
Other loans 0.6 1.9 1.3
PPP non-recourse debt 95.8 96.6 100.6
600.9 793.0 689.1
Current borrowings
Retail bonds 99.9 - -
Bank overdrafts 0.3 0.7 -
Lease liabilities 41.5 38.2 42.1
Other loans 1.2 1.2 1.2
PPP non-recourse debt 4.9 4.2 4.5
147.8 44.3 47.8
*The comparatives for current and non-current PPP non-recourse
debt have been restated at September 2020 and March 2021,
additionally the comparatives for current and non-current lease
liabilities at 30 September 2020 have been restated. Further
details for these prior year adjustments are explained in note
2.
On 23 July 2021 the Group successfully issued new Green retail
bonds for EUR125m at a gross coupon of 3.00% for a period of 6
years maturing on 23 July 2027.
During the six months to 30 September 2021 the Group repaid all
term loans and revolving credit facilities denominated in Sterling
and the related cross-currency interest rate swaps were cancelled.
The Group's Euro denominated multicurrency green finance facility
agreement has covenants including adjusted net debt to comparable
adjusted EBITDA and interest cover in accordance with a frozen GAAP
concept. The Group has complied with its banking covenants during
the period.
Movement in total net debt
Restated* 30
Cash Other non-cash Exchange September
1 April flows changes
movements 2021
2021 EURm EURm
EURm EURm
EURm
Bank loans and overdrafts (184.8) 102.3 (0.6) 0.6 (82.5)
European private placements (24.7) - (0.1) - (24.8)
Retail bonds (174.5) (125.0) 0.4 - (299.1)
Lease liabilities (247.8) 21.9 (15.9) 0.2 (241.6)
Debt excluding PPP non-recourse debt (631.8) (0.8) (16.2) 0.8 (648.0)
PPP non-recourse debt (105.1) 3.5 - 0.9 (100.7)
Total debt (736.9) 2.7 (16.2) 1.7 (748.7)
Cash and cash equivalents - core 51.5 27.2 - 0.5 79.2
Cash and cash equivalents - restricted relating to PPP 17.3 3.9 - (0.1) 21.1
contracts
Total net debt (668.1) 33.8 (16.2) 2.1 (648.4)
Analysis of total net debt:
Net debt excluding PPP non-recourse net debt (580.3) 26.4 (16.2) 1.3 (568.8)
PPP non-recourse net debt (87.8) 7.4 - 0.8 (79.6)
Total net debt (668.1) 33.8 (16.2) 2.1 (648.4)
*The comparatives for cash and cash equivalents relating to PPP
contracts and PPP non-recourse debt have been restated as explained
in note 2.
11. Cash and borrowings continued
Analysis of movement in total net debt
Restated* Restated*
First half
First half Full year
2021/22
2020/21 2020/21
EURm
EURm EURm
Net increase (decrease) in cash and cash equivalents 31.1 (56.2) (141.2)
Net decrease in borrowings and lease liabilities 2.7 147.5 304.5
Total cash flows in net debt 33.8 91.3 163.3
Lease liabilities entered into during the period (15.9) (24.7) (60.9)
Capitalisation of loan fees 0.5 0.2 0.2
Amortisation of loan fees (0.8) (0.7) (1.5)
Exchange gain (loss) 2.1 8.4 (10.3)
Movement in net debt 19.7 74.5 90.8
Total net debt at beginning of period (668.1) (758.9) (758.9)
Total net debt at end of period (648.4) (684.4) (668.1)
*The net debt at the beginning and end of the period of the
first half 2020/2021 has been restated. The total cash flows in net
debt in both prior periods are unchanged, however the split of
movements between cash and cash equivalents and borrowings and
lease liabilities has been restated. Further details of these
restatements are explained in note 2.
12. Provisions
Site restoration Onerous Legal and
Restructuring Other Total
and aftercare contracts warranty
EURm EURm EURm
EURm EURm EURm
At 31 March 2020 152.8 89.7 25.2 4.3 18.1 290.1
Provided in the year 5.7 17.4 3.2 5.9 7.2 39.4
Released in the year (1.1) (15.8) (2.4) (1.0) (0.8) (21.1)
Finance charges - unwinding of discount 3.7 2.4 - - 0.2 6.3
Utilised in the year (3.7) (15.6) (0.3) (5.4) (1.6) (26.6)
Exchange rate changes 0.2 2.8 - - 0.2 3.2
At 31 March 2021 157.6 80.9 25.7 3.8 23.3 291.3
Provided in the period - 0.5 - 1.8 0.8 3.1
Released in the period - (0.2) (0.1) - - (0.3)
Finance charges - unwinding of discount 2.0 1.1 - - 0.1 3.2
Utilised in the period (1.6) (1.6) (0.7) (2.7) (0.6) (7.2)
Exchange rate changes - (0.7) (0.1) - - (0.8)
At 30 September 2021 158.0 80.0 24.8 2.9 23.6 289.3
Current 8.6 9.5 6.3 2.9 7.6 34.9
Non-current 149.4 70.5 18.5 - 16.0 254.4
At 30 September 2021 158.0 80.0 24.8 2.9 23.6 289.3
Current 8.4 11.0 7.3 3.8 8.2 38.7
Non-current 149.2 69.9 18.4 - 15.1 252.6
At 31 March 2021 157.6 80.9 25.7 3.8 23.3 291.3
Current 6.3 20.6 8.2 6.6 3.6 45.3
Non-current 146.7 60.9 16.9 - 14.4 238.9
At 30 September 2020 153.0 81.5 25.1 6.6 18.0 284.2
Site restoration and aftercare
The site restoration provisions at 30 September 2021 relate to
the cost of final capping and covering of the landfill and mineral
extraction sites. These site restoration costs are expected to be
paid over a period of up to 31 years from the balance sheet date.
However, the timing of the payments is not certain and has been
estimated based on management's latest expectations. Aftercare
provisions cover post-closure costs of landfill sites which include
such items as monitoring, gas and leachate management and
licensing. The dates of payments of these aftercare costs are
uncertain but are anticipated to be over a period of at least 30
years from closure of the relevant landfill site. All site
restoration and aftercare costs have been estimated by management
based on current best practice and technology available and may be
impacted by a number of factors including changes in legislation
and technology.
12. Provisions - continued
Onerous contracts
Onerous contract provisions arise when the unavoidable costs of
meeting contractual obligations exceed the cash flows expected.
Onerous contracts are provided for at the lower of the net present
value of either exiting the contracts or fulfilling our obligations
under the contracts. The provisions have been calculated on the
best estimate of likely future cash flows over the contract term
based on the latest budget and five year plan projections,
including assumptions on tonnage inputs, plant performance with
efficiency improvements, off-take availability and recyclates
pricing. The provisions are to be utilised over the period of the
contracts to which they relate with the latest date being 2040.
Legal and warranty
Legal and warranty provisions relate to legal claims, warranties
and indemnities. Under the terms of the agreements for the disposal
of certain businesses, the Group has given a number of warranties
and indemnities to the purchasers which may give rise to payments.
The Group has a liability until the end of the contractual terms in
the agreements. The Group considers each warranty provision based
on the nature of the business disposed of and the type of
warranties provided with judgement used to determine the most
likely obligation.
On 6 February 2020 the European Commission announced its
decision to initiate a formal investigation in which it alleges
that the Walloon Region of Belgium provided state aid to the Group
in relation to the Cetem landfill. An adverse judgement would
require the Walloon Region to seek repayment from the Group and a
provision of EUR15.1m has been recognised in both the current year
and prior years as non-current as timing of any cash flow is
expected to be after 12 months from the balance sheet date. The
matter remains ongoing and based on legal advice management
consider this value to be their best estimate of the potential
exposure based on the most likely outcome. Further contingent
liability information is provided in note 16.
Restructuring
The restructuring provision primarily relates to redundancy and
related costs incurred as a result of restructuring initiatives and
is expected to be spent in the following twelve months as affected
employees leave the business.
Other
Other provisions includes dilapidations EUR8.7m (March 2021:
EUR8.7m, September 2020: EUR7.3m), long-service employee awards
EUR6.3m (March 2021: EUR6.0m, September 2020: EUR5.7m) and other
environmental liabilities EUR8.6m (March 2021: EUR8.6m, September
2021: EUR5.0m). The dilapidations provisions are determined on a
site by site basis using internal expertise and experience and are
calculated as the most likely cash outflow at the end of the
contracted obligation. The provisions will be utilised over the
period up to 2070.
13. Retirement benefit schemes
The UK defined benefit scheme (called the Shanks Group Scheme)
provides pension benefits for pensioners, deferred members and
eligible UK employees and is closed to both new entrants and future
benefit accrual. In addition there are a number of defined benefit
schemes in both the Netherlands and Belgium for certain eligible
employees.
The amounts recognised in the Income Statement were as
follows:
First half First half
2021/22 2020/21
EURm EURm
Current service cost 0.7 0.7
Interest expense (income) on scheme net liabilities 0.1 (0.2)
Net retirement benefit charge before tax 0.8 0.5
The amounts recognised in the balance sheet were as follows:
30 September 31 March
30 September 2021
2020 2021
EURm
EURm EURm
Present value of funded obligations (296.6) (292.2) (296.6)
Fair value of plan assets 295.1 283.9 285.2
Pension schemes net deficit (1.5) (8.3) (11.4)
Related deferred tax asset 0.4 1.8 2.7
Net pension liability (1.1) (6.5) (8.7)
Classified as:
Defined benefit scheme surplus - included in non-current assets 5.9 - -
Defined benefit pension schemes deficit - included in non-current liabilities (7.4) (8.3) (11.4)
Pension schemes net deficit (1.5) (8.3) (11.4)
Following updated actuarial assumptions at 30 September 2021,
the legacy Shanks UK defined benefit scheme moved by EUR9.9m from a
deficit of EUR4.0m at 31 March 2021 to a surplus of EUR5.9m at 30
September 2021. This was principally due to asset returns being
significantly better than the impact on scheme liabilities of a
small increase in the discount rate from 2.05% at 31 March 2021 to
2.10% at 30 September 2021. The deficit for the overseas defined
benefit schemes remained unchanged at EUR7.4m.
14. Financial instruments at fair value
The Group uses the following hierarchy of valuation techniques
to determine the fair value of financial instruments:
-- Level 1: quoted (unadjusted) prices in active markets for
identical assets or liabilities
-- Level 2: other techniques for which all inputs which have a
significant effect on the recorded fair valueare observable, either
directly or indirectly
-- Level 3: techniques which use inputs which have a significant
effect on the recorded fair value that arenot based on observable
market data
During the period or preceding periods there were no transfers
between level 1 and level 2 fair value measurements and no
transfers into or out of level 3.
Valuation techniques used to derive level 2 fair values:
-- Unlisted non-current investments comprise unconsolidated
companies where the fair value approximates thebook value
-- Short term investments valuations are provided by the fund
manager
-- Derivative financial instruments are determined by
discounting the future cash flows using the applicableperiod-end
yield curve
-- The fair value of the European private placements are
determined by discounting the future cash flowsusing the applicable
period-end yield curve
-- The fair value of retail bonds is based on indicative market
pricing
The table below presents the Group's assets and liabilities
measured at fair values. The Group considers that the fair value of
all other financial assets and financial liabilities are not
materially different to their carrying value.
30 September 2021 30 September 2020 31 March 2021
Level 1 Level 2 Level 1 Level 2 Level 1 Level 2
EURm EURm EURm EURm EURm EURm
Assets
Money market funds 29.4 - 60.8 - - -
Unlisted non-current investments - 4.6 - 4.7 - 4.6
Short term investments - 11.5 - 8.5 - 9.3
Derivative financial instruments - 3.6 - - - 9.1
29.4 19.7 60.8 13.2 - 23.0
Liabilities
Derivative financial instruments - 22.3 - 38.7 - 25.5
European private placements - 26.4 - 26.9 - 26.6
Retail bonds - 307.9 - 176.2 - 179.1
- 356.6 - 241.8 - 231.2
15. Contingent liabilities
There is an ongoing investigation by the European Commission in
which it alleges the Walloon region of Belgium provided state aid
to the Group in relation to the Cetem landfill. An adverse
judgement would require the Walloon region to seek repayment from
the Group. Both the Walloon Region and Renewi believe that no state
aid was offered and will defend their conduct vigorously. Renewi
has provided EUR15m based on legal advice which represents
management's best estimate of the most likely outcome. It is noted
that the potential maximum claim is EUR58m (excluding compound
interest currently amounting to EUR5m), and therefore there is a
potential further liability should the Group be wholly unsuccessful
in its defence. A ruling from the European Commission is expected
during FY22 but no monies would likely become payable until
FY23.
There is an ongoing criminal investigation into the production
of thermally cleaned soil at ATM. This may or may not result in a
prosecution and if so, we expect such a process will likely take
many years, should it proceed. ATM will defend its conduct strongly
in such an event. Given that it is not even clear whether or what
charges might be brought in the criminal case and the charge is
expected to be lower than EUR1m we do not consider it appropriate
at this stage to provide for this. Given these uncertainties, it
cannot be ruled out that the outcome of the criminal investigation
or the topic it concerns could result in liability for damages
resulting from third party claims in the future.
Due to the nature of the industry in which the business
operates, from time to time the Group is made aware of claims or
litigation arising in the ordinary course of the Group's business.
Provision is made for the Directors' best estimate of all known
claims and all such legal actions in progress. The Group takes
legal advice as to the likelihood of success of claims and actions
and no provision is made where the Directors consider, based on
that advice, that the action is unlikely to succeed or a
sufficiently reliable estimate of the potential obligation cannot
be made. None of these other matters are expected to have a
material impact.
Under the terms of sale agreements, the Group has given a number
of indemnities and warranties relating to businesses sold in prior
periods. Different warranty periods are in existence and it is
assumed that these will expire within 10 years. Based on
management's assessment of the most likely outcome appropriate
warranty provisions are held.
16. Related party transactions
The Group's significant related parties remain as disclosed in
note 8.2 of the 2021 Annual Report and Accounts. There were no
material differences in related parties or related party
transactions in the period compared to the prior year.
17. Explanation of non-IFRS measures and reconciliations
The Directors use alternative performance measures as they
believe these measures provide additional useful information on the
underlying trends, performance and position of the Group. These
measures are used for internal performance analysis. These terms
are not defined terms under IFRS and may therefore not be
comparable with similarly titled measures used by other companies.
These measures are not intended to be a substitute for, or superior
to, IFRS measurements. The alternative performance measures used
are set out below.
Financial How we define it Why we use it
Measure
Operating profit excluding non-trading and exceptional items,
amortisation of intangible assets arising on acquisition and fair
Underlying value remeasurements. Amortisation on acquisition intangibles is Provides insight into profit
EBIT excluded to avoid double counting of costs in underlying EBIT as generation and trends
the Group incurs costs each year in maintaining intangible assets
which include acquired customer relationships, permits and
licences.
Underlying
EBIT margin Underlying EBIT as a percentage of revenue Provides insight into margin
development and trends
Underlying Underlying EBIT before depreciation, amortisation, impairment and Measure of earnings and cash
EBITDA profit or loss on disposal of plant, property and equipment generation to assess operational
performance
Underlying Underlying EBITDA as a percentage of revenue Provides insight into margin
EBITDA margin development and trends
Underlying Profit before tax excluding non-trading and exceptional items, Facilitates underlying performance
profit before amortisation of intangible assets arising on acquisition and fair evaluation
tax value remeasurements
Underlying Earnings per share excluding non-trading and exceptional items, Facilitates underlying performance
EPS amortisation of intangible assets arising on acquisition and the evaluation
change in fair value of derivatives
Underlying Provides a more comparable basis to
effective tax The effective tax rate on underlying profit before tax analyse our tax rate
rate
Return on Last 12 months underlying EBIT divided by a 13-month average of Provides a measure of the return on
operating net assets excluding core net debt, IFRS 16 lease liabilities, assets across the Divisions and the
assets derivatives, tax balances, goodwill and acquisition intangibles Group excluding goodwill and
acquisition intangible balances
Post-tax Last 12 months underlying EBIT as adjusted by the Group effective Provides a measure of the Group return
return on tax rate divided by a 13-month average of net assets excluding on assets taking into account the
capital core net debt, IFRS 16 lease liabilities and derivatives goodwill and acquisition intangible
employed balances
Net cash generated from operating activities including interest,
tax and replacement capital spend and excluding cash flows from
non-trading and exceptional items, Covid-19 tax deferral payments Measure of cash generation in the
or receipts, settlement of ATM soil liabilities and cash flows underlying business, including regular
relating to the UK PPP contracts. Payments to fund defined benefit replacement capital expenditure and
Adjusted free pension schemes are also excluded as these schemes are now closed excluding items of a historical
cash flow to both new members and ongoing accrual and as such relate to nature, available to fund growth
historic liabilities. The Municipal contract cash flows are capital projects and invest in
excluded because they principally relate to onerous contracts as acquisitions
reported in exceptional charges in the past and caused by adverse
market conditions not identified at the inception of the
contracts.
Measure of cash available after
Free cash Net cash generated from operating activities principally excluding regular replacement capital
flow non-trading and exceptional items and including interest, tax and expenditure to pay dividends, fund
replacement capital spend growth capital projects and invest in
acquisitions
Free cash Provides an understanding of how our
flow The ratio of free cash flow to underlying EBIT profits convert into cash
conversion
Total cash flow is net debt excluding loan fee capitalisation and
Total cash amortisation, exchange movements, settlement of cross currency Provides an understanding of total
flow interest rate swaps, movement in PPP cash and PPP non-recourse cash flow of the Group
debt and additions to IFRS 16 lease liabilities
17. Explanation of non-IFRS measures and reconciliations -
continued
Financial How we define it Why we use it
Measure
Non-trading Renewi 2.0 and other exceptional related cash
and flows are presented in cash flows from Provides useful information on non-trading and exceptional
exceptional operating activities and are included in the cash flow spend
cash flow categories in note 5, net of opening and
items closing Balance Sheet positions
The borrowings relating to the UK PPP contracts are
Core net debt includes core cash but excludes non-recourse to the Group and excluding these gives a
Core net debt net debt relating to the UK PPP contracts and suitable measure of indebtedness for the Group and IFRS 16
lease liabilities as a result of IFRS 16 lease liabilities are excluded as financial covenants on
the main multicurrency green finance facility remain on a
frozen GAAP basis
The cash relating to UK PPP contracts is not available to
Core cash excludes cash and cash equivalents the Group and is excluded from financial covenant
Core cash relating to UK PPP contracts calculations of the main multicurrency green finance
facility therefore excluding this gives a suitable measure
of cash for the Group
Liquidity headroom includes core cash, money Provides an understanding of available headroom to the
Liquidity market funds and undrawn committed amounts on Group
the multicurrency green finance facility
Net debt to Core net debt divided by an annualised
EBITDA/ underlying EBITDA with a net debt value based Commonly used measure of financial leverage and consistent
leverage on the terminology of financing arrangements with covenant definition
ratio and translated at an average rate of exchange
for the period
Reconciliation of operating profit (loss) to underlying
EBITDA
Group
Netherlands Belgium Mineralz
Commercial Waste Commercial & Water Specialities Central Total
First half 2021/22 Waste
EURm EURm EURm services EURm
EURm
EURm
Operating profit (loss) 40.2 20.2 4.0 1.2 (7.4) 58.2
Non-trading and exceptional items (excluding 3.0 1.3 - 0.5 0.8 5.6
finance items)
Underlying EBIT 43.2 21.5 4.0 1.7 (6.6) 63.8
Depreciation and impairment of property, plant 28.2 16.3 6.7 4.3 2.8 58.3
and equipment and right-of-use assets
Amortisation of intangible assets (excluding 0.4 - 0.3 0.2 2.3 3.2
acquisition intangibles)
Impairment of investment in associate - - - 1.9 - 1.9
Non-exceptional (gain) loss on disposal of (0.7) 0.3 - (0.2) - (0.6)
property, plant and equipment
Underlying EBITDA 71.1 38.1 11.0 7.9 (1.5) 126.6
Group
Netherlands Belgium Mineralz
Commercial Waste Commercial & Water Specialities Central Total
First half 2020/21 Waste
EURm EURm EURm services EURm
EURm
EURm
Operating profit (loss) 18.3 1.4 1.7 (0.3) (4.1) 17.0
Non-trading and exceptional items (excluding 2.8 6.9 0.6 0.3 0.7 11.3
finance items)
Underlying EBIT 21.1 8.3 2.3 - (3.4) 28.3
Depreciation and impairment of property, plant 28.9 14.3 7.4 4.4 2.3 57.3
and equipment and right-of-use assets
Amortisation of intangible assets (excluding 0.6 0.1 0.3 0.1 2.2 3.3
acquisition intangibles)
Non-exceptional gain on disposal of property, (0.3) (0.1) - - - (0.4)
plant and equipment
Underlying EBITDA 50.3 22.6 10.0 4.5 1.1 88.5
17. Explanation of non-IFRS measures and reconciliations -
continued
Reconciliation of statutory profit before tax to underlying
profit before tax
First half First half
2021/22 2020/21
EURm EURm
Statutory profit before tax 44.7 4.4
Non-trading and exceptional items in operating profit 5.6 11.3
Non-trading and exceptional finance charges (income) 0.1 (0.4)
Underlying profit before tax 50.4 15.3
Reconciliation of adjusted free cash flow as presented in the
Finance Review
First half First half
2021/22 2020/21
EURm EURm
Net cash generated from operating activities 74.1 129.4
Exclude non-trading and exceptional provisions and working capital 6.0 5.5
Exclude payments to fund defined benefit pension schemes 1.8 1.7
Exclude payments (receipts) relating to deferred Covid taxes 0.4 (55.0)
Exclude offtake payments for ATM soil 3.4 2.6
Exclude spend related to UK Municipal contracts 7.9 8.2
Include finance charges and loan fees paid (16.5) (18.0)
Include finance income received 5.0 4.8
Include repayment of obligations under lease liabilities (21.9) (19.9)
Include purchases of replacement items of intangible assets (6.6) (4.5)
Include purchases of replacement items of property, plant and equipment (25.2) (21.3)
Include proceeds from disposals of property, plant & equipment 2.1 2.1
Include repayment of UK Municipal contracts PPP debt (3.5) (1.9)
Include capital received in respect of PPP financial asset net of outflows 2.8 1.8
Include movement in UK Municipal contracts PPP cash (3.9) (1.8)
Adjusted free cash flow 25.9 33.7
Reconciliation of net capital spend in the Finance Review to
purchases and disposal proceeds of property, plant and equipment
and intangible assets within Investing activities in the
consolidated Statement of Cash Flows
First half First half
2021/22 2020/21
EURm EURm
Purchases of intangible assets (6.6) (4.5)
Purchases of replacement property, plant and equipment (25.2) (21.3)
Proceeds from disposals of property, plant & equipment 2.1 2.1
Net replacement capital expenditure (29.7) (23.7)
Growth capital expenditure (7.5) (3.3)
Total capital spend as shown in the cash flow in the Finance Review (37.2) (27.0)
First First
half half
2021/22 2020/21
EURm EURm
Purchases of intangible assets (6.6) (4.5)
Purchases of property, plant and equipment (replacement and growth) (32.7) (24.6)
Proceeds from disposals of property, plant & equipment 2.1 2.1
Purchases and disposal proceeds of property, plant and equipment and intangible assets within Investing (37.2) (27.0)
activities in the consolidated Statement of Cash Flows
Reconciliation of property, plant and equipment additions to
replacement capital expenditure as presented in the Finance
Review
First half First half
2021/22 2020/21
EURm EURm
Property, plant and equipment additions (note 10) (23.2) (20.5)
Intangible asset additions (note 10) (5.8) (4.5)
Exclude growth capital expenditure - as disclosed in the Finance Review 7.5 3.3
Movement in capital creditors (included in trade and other payables) (9.0) (4.1)
Proceeds from disposals of property, plant and equipment 2.1 2.1
Government grant received in a prior period transferred to property, plant and equipment (1.3) -
Replacement capital expenditure per the Finance Review (29.7) (23.7)
17. Explanation of non-IFRS measures and reconciliations -
continued
Reconciliation of total cash flow as presented in the Finance
Review
Restated*
First half
First half
2021/22
2020/21
EURm
EURm
Total cash flow (1.9) 67.7
Additions to lease liabilities (15.9) (24.7)
Repayment of obligations under lease liabilities 21.9 19.9
Movement in PPP non-recourse debt 3.5 4.5
Movement in PPP cash and cash equivalents 3.9 1.3
Capitalisation of loan fees net of amortisation (0.3) (0.5)
Exchange movements 2.1 6.3
Settlement of cross currency interest rate swaps 6.4 -
Movement in total net debt (note 11) 19.7 74.5
*The prior period comparatives for total cash flow, movement in
PPP non-recourse debt, movement in PPP cash and cash equivalents
and repayments of obligations under lease liabilities have been
restated as explained in note 2.
Reconciliation of total net debt to net debt under covenant
definition
Restated* Restated*
30 September
30 September 31 March
2021
2020 2021
EURm
EURm EURm
Total net debt (648.4) (684.4) (668.1)
Less PPP non-recourse debt 100.7 100.8 105.1
Less PPP cash and cash equivalents (21.1) (16.6) (17.3)
Less IFRS 16 lease liabilities 232.8 219.1 236.7
Net debt under covenant definition (336.0) (381.1) (343.6)
*The comparatives for PPP non-recourse debt and PPP cash at
September 2020 and March 2021 and total net debt and IFRS 16 lease
liabilities at September 2020 have been restated due to prior year
adjustments as explained in note 2.
INDEPENDENT REVIEW REPORT TO RENEWI PLC
Introduction
We have been engaged by the Company to review the condensed set
of financial statements in the half-yearly financial report for the
six months ended 30 September 2021 which comprises Consolidated
Interim Income Statement, Consolidated Interim Statement of
Comprehensive Income, Consolidated Interim Balance Sheet,
Consolidated Statement of Changes in Equity and Consolidated
Interim Statement of Cash Flows.
We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent
misstatements or material inconsistencies with the information in
the condensed set of financial statements.
Directors' responsibilities
The half-yearly financial report is the responsibility of and
has been approved by the directors. The directors are responsible
for preparing the half-yearly financial report in accordance with
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
As disclosed in note 2, the annual financial statements of the
group will be prepared in accordance with UK adopted international
accounting standards. The condensed set of financial statements
included in this interim financial report has been prepared in
accordance with UK adopted International Accounting Standard 34,
Interim Financial Reporting.
Our responsibility
Our responsibility is to express to the Company a conclusion on
the condensed set of financial statements in the half-yearly
financial report based on our review.
Scope of review
We conducted our review in accordance with International
Standard on Review Engagements (UK and Ireland) 2410, "Review of
Interim Financial Information Performed by the Independent Auditor
of the Entity", issued by the Financial Reporting Council for use
in the United Kingdom. A review of interim financial information
consists of making enquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other
review procedures. A review is substantially less in scope than an
audit conducted in accordance with International Standards on
Auditing (UK) and consequently does not enable us to obtain
assurance that we would become aware of all significant matters
that might be identified in an audit. Accordingly, we do not
express an audit opinion.
Conclusion
Based on our review, nothing has come to our attention that
causes us to believe that the condensed set of financial statements
in the half-yearly financial report for the six months ended 30
September 2021 is not prepared, in all material respects, in
accordance with UK adopted International Accounting Standard 34 and
the Disclosure Guidance and Transparency Rules of the United
Kingdom's Financial Conduct Authority.
Use of our report
Our report has been prepared in accordance with the terms of our
engagement to assist the Company in meeting its responsibilities in
respect of half-yearly financial reporting in accordance with the
Disclosure Guidance and Transparency Rules of the United Kingdom's
Financial Conduct Authority and for no other purpose. No person is
entitled to rely on this report unless such a person is a person
entitled to rely upon this report by virtue of and for the purpose
of our terms of engagement or has been expressly authorised to do
so by our prior written consent. Save as above, we do not accept
responsibility for this report to any other person or for any other
purpose and we hereby expressly disclaim any and all such
liability.
BDO LLP
Chartered Accountants
London, UK
8 November 2021
BDO LLP is a limited liability partnership registered in England
and Wales (with registered number OC305127).
-----------------------------------------------------------------------------------------------------------------------
ISIN: GB00BNR4T868
Category Code: IR
TIDM: RWI
LEI Code: 213800CNEIDZBL17KU22
OAM Categories: 1.2. Half yearly financial reports and audit reports/limited reviews
Sequence No.: 126307
EQS News ID: 1247180
End of Announcement EQS News Service
=------------------------------------------------------------------------------------
Image link:
https://eqs-cockpit.com/cgi-bin/fncls.ssp?fn=show_t_gif&application_id=1247180&application_name=news
(END) Dow Jones Newswires
November 09, 2021 02:00 ET (07:00 GMT)
Renewi (LSE:RWI)
Gráfica de Acción Histórica
De Feb 2024 a Mar 2024
Renewi (LSE:RWI)
Gráfica de Acción Histórica
De Mar 2023 a Mar 2024