Half Year Results for the six months ended 30 September 2024
12 November 2024
Renewi plc
Half Year Results for
the six months ended 30 September 2024
Renewi plc (“Renewi”, the “Company” or, together
with its subsidiaries, the “Group”) (LSE: RWI, AMS: RWI), the
leading European waste-to-product business, announces its results
for the six months ended 30 September 2024 (“HY25” or the
“Period”).
Financial
Highlights1
- Revenue from
continuing operations up 4% to €874.5m (HY24: €844.3m), mainly
driven by pricing in Commercial Waste and strong growth in
Specialities
- Underlying EBIT
from continuing operations up 9% to €53.2m (HY24: €49.0m), driven
by successful turn-around in Mineralz & Water (“M&W”) and
benefits from Group margin improvement programmes. Underlying EBIT
margin increased to 6.1% from 5.8% last year
- Statutory profit after
tax of €10.2m (HY24: €35.3m) due to non-cash impact of
changes in discount rates for long-term provisions and the loss for
the period from discontinued operations
- Free cash flow
improved to €20.3m including UK Municipal largely driven
by underlying EBITDA growth and working capital improvements
- Core net
debt2 to EBITDA of 2.04x, down
from 2.14x in March 2024, with core net debt reducing to €357.7m
(March 2024: €368.1m). Following the UK Municipal sale on 10
October 2024, proforma net debt would be 2.85x. The Group continues
to expect to deleverage by 0.4-0.5x per annum to 2x.
Strategic & Operational
Highlights
- Portfolio
restructuring executed: Fundamentally
improved risk and cash generation profile. UK Municipal divestment
completed on 10 October 2024, which will improve margins and free
cashflow generation, and the M&W turn-around is on schedule
realising double digit underlying EBIT margin
- Successful cost and
efficiency measures: Reduced SG&A costs by €15M in
FY24 and further incremental savings identified. Measures are being
implemented to simplify our organisational structure, standardise
and digitise our operations to drive efficiency, asset utilisation
and customer satisfaction
- Organic growth: 4%
revenue growth achieved driven by pricing in Commercial Waste and
strong growth in Specialities despite a challenging market
backdrop
- Commercial Waste:
Realised 3% revenue growth in Commercial Waste despite continuing
subdued volumes across certain market segments, reflecting the
economic backdrop. Inbound price increases were implemented to
offset additional handling cost of inbound waste due to previously
outlined incinerator capacity issues
- Mineralz
& Water: Strong performance, resulting in double digit
underlying EBIT margins driven by higher year on year volume in
soil and water treatment activities as well as lower utility costs
and secondary building materials gaining momentum
1 UK Municipal business is shown
throughout as an asset held for sale and a discontinued operation.
Numbers are presented on a continuing basis and comparatives for
HY24 have been restated.
2 Core net debt used for banking leverage calculations
excludes the impact of IFRS 16 lease liabilities and UK PPP net
debt.
- Specialities:
Continued strong performance, with revenues increasing 19% and
underlying EBIT growing 10%, benefiting from previous operational
enhancements, pricing and strong volume intake at Coolrec
- Recyclate prices:
Generally stable in the Period, with paper price increases and wood
prices decreasing
-
Recycling rate from continuing
operations: Improved slightly over the Period to
66.2% (63.8% including UK Municipal) from 65.4% at FY24 (63.2%
including UK Municipal).
Outlook
- Expectations for FY25 underlying
EBIT from continuing operations unchanged
- FY25 dividend to be proposed after
full year results in line with dividend policy
- Medium-term
targets of high single digit underlying EBIT margins, Free Cash
Flow/EBITDA conversion >40%, ROCE of >15% and >5% organic
revenue growth are unchanged and on track.
Strengthened platform capable of
accelerating strategic delivery
During the Period we have reached an important
milestone in the transformation of the Group, as we are
demonstrating delivery across the key enablers of our longer term
strategic objectives:
-
Structurally underperforming business units now exited or
remediated;
-
Ongoing net margin enhancement programmes embedded in the
businesses; and
-
Return to free cash flow generation.
Our strengthened platform supports the
commitments made at the 2023 Capital Markets Day.
Portfolio optimisation
On 10 October 2024, shortly after the Period
end, Renewi completed the sale of its UK Municipal activities to
Biffa. The completion of this divestment de-risks Renewi's balance
sheet and immediately improves both cash flow and underlying EBIT
margin.
The focus on producing secondary building
materials has paid off and resulted in strong financial performance
of the M&W division realising an underlying EBIT of €8.8
million, a 5x increase versus last year.
Stronger platform
The Group launched and completed a cost-cutting
programme in FY24 to streamline staff functions and reduce overhead
costs, which is now generating annual SG&A savings of €15
million. Further initiatives have been launched and are to be
implemented during the second half of FY25, focusing on building
logistics, processing and engineering capabilities as well as
standardisation in preparation for the Future Fit digitisation
programme.
Renewi is committed to creating a more efficient
operating model. To this end, Renewi has conducted initial site
reviews, categorising locations into Processing and Logistics
sites. Over the period, the Company has closed low-yielding sites,
including Tisselt and Mijdrecht, and streamlined operations by
reducing its fleet of trucks by approximately 50 vehicles or 3.2%
of our total fleet.
The Company is also making significant strides
in improving working capital management, particularly in data
cleaning, unbilled revenue, and accounts receivable, resulting in a
€47 million trade receivables improvement versus March 2024.
Initial steps towards working capital management standardisation
and process enhancement have been initiated, which will be embedded
in the subsequent digitisation programme.
Organic Growth
The Group launched a refreshed commercial
strategy with a clear focus on specific sectors and segment
requirements, as well as circular materials to ensure alignment of
inbound and outbound commercial efforts. This approach allows us to
offer better recycling solutions for our customers within strategic
sectors and secure end-to-end profitability by aligning attractive
inbound and outbound streams.
Against the backdrop of growing momentum around
CSRD and the energy transition, Renewi has started projects through
partnerships in the area of chemical recycling of soft plastics,
alternative fuels and circular products for the cement industry.
Renewi is the first in the sector to offer customers a CSRD product
based on third-party validated calculations for reporting along
with related consulting services. This offering was launched in the
Netherlands in early November and will be rolled out in Belgium
over the next 12 months.
During the period, Renewi joined a project of
VeenIX. This consortium, with FCC as main contractor, executes the
expansion and deepening of the Dutch A9 motorway between
Badhoevedorp and Holendrecht on behalf of the government
organization for Infrastructure and Water Management in the
Netherlands. Within the project, called A9BAHO, the demolition of
two viaducts will generate 40.000 tons of rubble concrete, which
will be recycled by Renewi. This recycled material will serve as a
high-quality substitute for gravel and sand in various
Rijkswaterstaat construction projects. Additionally, Renewi will
supply 130,000 tons of recycled granulate for the foundation of new
roads within this project.
Otto de Bont, Chief Executive Officer,
said:
Our half year results show tangible progress on our commitment
to build a strong platform.
The successful divestment of UK Municipal on
10 October 2024 and the strong performance of M&W, supported by
strategic investments and actions over the last two years, have
allowed us to move beyond our legacy challenges, positioning us for
future growth.
We have made significant progress in
strengthening our business. The completion of our SG&A
efficiency program is generating annual savings of €15 million.
Ongoing initiatives are on track to standardise and digitise our
operations, further enhancing our competitive edge and the strength
of our growth platform.
Our pricing strategies for inbound services
coupled with generally stable outbound recyclate prices have
partially mitigated the impact of the slightly lower volumes due to
subdued economic and industrial activity. Organic growth drivers
include the successful launch of our customer CSRD reporting tool
in The Netherlands, upgrades in our M&W operations with a new
jetty commissioned in early November increasing degasification
capacity, and customer wins underlining our material-focused sales
strategy such as the partnership with VeenIX and Rijkswaterstaat
for construction material recycling.
Looking ahead, whilst the near term macro
environment is not without challenges, we expect our full year
results to be in line with market expectations and we remain
confident progressing towards our medium term targets, supported by
regulatory tailwinds and a strengthened platform for growth, all
delivered by a dedicated team.
Virtual presentation
Renewi will host a virtual analyst presentation today at 10:30am
CET if you would like to join the presentation, please sign-up
here:
https://api.screen9.com/preview/ob9dFT42frlZz8SjVcKlhhaRmc16lzuClOc4N7TWjxm0bCx63vWr9EL1YzbY4skD
Today’s presentation will also be available on
the website once the webcast has concluded
https://www.renewi.com/en/investors.
HY25 Results
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Financial Performance |
HY25 |
HY24* |
Variance |
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€m |
€m |
% |
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Continuing operations |
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Revenue |
874.5 |
844.3 |
4% |
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Underlying EBIT |
53.2 |
49.0 |
9% |
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Operating profit |
42.9 |
55.3 |
-22% |
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Underlying profit before tax |
31.8 |
30.7 |
4% |
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Non-trading & exceptional items |
(10.3) |
6.3 |
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Profit before tax from continuing operations |
21.5 |
37.0 |
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Total tax charge for the period |
(6.2) |
(10.2) |
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Profit for the period from continuing
operations |
15.3 |
26.8 |
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Discontinued operations |
(5.1) |
8.5 |
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Profit for the period |
10.2 |
35.3 |
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Organic annual revenue growth |
4% |
0% |
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Underlying EBIT margin |
6.1% |
5.8% |
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Free Cash Flow/EBITDA conversion |
17.1% |
-1.4% |
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Return on capital employed |
7.9% |
8.1% |
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The underlying figures above are reconciled
to statutory measures in notes 3 and 19 in the consolidated interim
financial statements.
* The FY24 numbers have been reclassified to reflect
discontinued operations as set out in note 2 in the consolidated
interim financial statements.
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Funds flow performance |
HY25 |
HY24 |
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€m |
€m |
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Underlying EBITDA |
118.8 |
113.6 |
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Working capital movement |
23.5 |
5.2 |
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Movement in provisions and other |
(1.2) |
(4.2) |
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Net replacement capital expenditure |
(34.7) |
(41.4) |
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Repayments of obligations under lease liabilities |
(26.3) |
(25.4) |
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Interest and loan fees |
(20.2) |
(17.8) |
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Tax |
(1.7) |
(5.9) |
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Adjusted free cash flow |
58.2 |
24.1 |
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Deferred Covid taxes |
(8.2) |
(9.7) |
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Offtake of ATM soil |
(3.6) |
(1.0) |
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UK Municipal contracts |
(18.5) |
(9.8) |
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Restructuring and other exceptional spend |
(6.1) |
(1.6) |
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Other |
(1.5) |
(3.6) |
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Free cash flow |
20.3 |
(1.6) |
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Growth capital expenditure |
(8.3) |
(15.9) |
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Acquisitions net of disposals |
(0.1) |
1.6 |
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Dividends paid |
(4.7) |
- |
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Total cash flow |
7.2 |
(15.9) |
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Free cash flow/EBITDA conversion |
17.1% |
-1.4% |
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All numbers above contain both continued and
discontinued operations. Free cash flow conversion is free cash
flow as a percentage of underlying EBITDA. The non-IFRS measures
above are reconciled to statutory measures in note 19 in the
consolidated interim financial statements.
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Debt Structure |
Sep 24 |
Mar 24 |
Variance |
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€m |
€m |
€m |
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Belgian Green retail bonds |
(125.0) |
(200.0) |
75.0 |
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Green RCF |
(110.0) |
(155.0) |
45.0 |
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Bridge loan |
(77.6) |
- |
(77.6) |
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Other Green loans |
(90.0) |
(90.0) |
- |
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Gross borrowings before lease liabilities |
(402.6) |
(445.0) |
42.4 |
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IAS 17 lease liabilities and other |
(3.9) |
(5.2) |
1.3 |
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Loan fees |
3.2 |
3.1 |
0.1 |
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Core cash |
45.6 |
79.0 |
(33.4) |
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Core net debt |
(357.7) |
(368.1) |
10.4 |
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IFRS 16 lease liabilities |
(236.8) |
(247.9) |
11.1 |
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Net debt continuing operations |
(594.5) |
(616.0) |
21.5 |
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For further information: |
|
FTI Consulting
+44 203 727 1340
renewi@fticonsulting.com
Alex Le May / Richard Mountain / Ben Fletcher |
Renewi plc
Anne Metz, Director of Investor Relations
+31 6 4167 9233
investor.relations@renewi.com |
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About Renewi
Renewi is a pure-play recycling company that
focuses on extracting value from waste and used materials rather
than disposing of them through incineration or landfill. The
Company plays an important role in combating resource scarcity by
creating circular materials. In giving new life to used materials,
Renewi addresses both social and regulatory trends, contributing to
a cleaner and greener world.
Our vision is to be the leading waste-to-product
company in the world's most advanced circular economies, reflected
in a recycling rate of continuing operations of 66.2%, one of the
highest in Europe. In FY24, Renewi puts 6.6 million tonnes of
low-carbon circular materials back into use each year. This
contributes to mitigating climate change and promotes the circular
economy. Our recycling efforts help to protect natural resources
and prevent more than 2.5 million tonnes of CO2 emissions
annually.
Renewi leverages innovation and the latest
technology to turn waste into circular materials such as paper,
metals, plastics, glass, wood, building materials, compost, and
water. We employ over 6,000 people across 151 operational sites in
five countries in Europe. Renewi is recognised as a leading
waste-to-product company in the Benelux region and a European
leader in advanced recycling.
Visit our website for more information:
www.renewi.com.
Chief Executive Officer’s Statement
Overview
Year on year Group revenue and underlying EBIT
increased as a result of a strong performance in our Specialities
and Mineralz & Water divisions. Commercial Waste inbound
volumes were slightly lower than the same period last year.
Operating cost pressure due to inflation was offset by price
increases on our inbound commercial volumes. Recyclate prices in
aggregate were stable, with paper price increasing and wood price
decreasing.
In Commercial Waste, inbound volumes declined in
both the Netherlands and Belgium during the first half, primarily
due to ongoing demand weakness. Pricing actions and overhead cost
savings partially offset the impact of lower volumes and cost
inflation in the Netherlands. Belgium’s lower EBIT contribution was
a result of one-off benefits in the previous period, higher year on
year production and logistics costs as well as a time lag in the
implementation of cost actions.
M&W had a very strong first half
performance, with higher throughput in both soil and water
treatment activities. Within Specialities, glass recycling business
Maltha, as well as electric household appliance recycling business,
Coolrec, continued to deliver solid performance, benefiting from
previously made operational enhancements and strong volume
intake.
The Group's Simplify programme, launched in FY24
to streamline staff functions and reduce overhead costs, has been
successfully completed and is now generating annual savings of €15
million for FY25. The One Renewi initiative, which focuses on both
further building on our logistics and processing capabilities as
well as standardisation across the organisation, is expected to be
implemented during the second half of FY25.
Group Financial Performance
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Group Summary |
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Revenue |
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Underlying EBIT |
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HY25 |
HY24* |
Variance |
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HY25 |
HY24* |
Variance |
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€m |
€m |
% |
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€m |
€m |
% |
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Commercial Waste |
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710.7 |
693.3 |
3% |
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46.2 |
50.3 |
-8% |
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Mineralz & Water |
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87.9 |
88.4 |
-1% |
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8.8 |
1.5 |
n/a |
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Specialities |
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102.0 |
85.9 |
19% |
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9.5 |
8.6 |
10% |
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Group central services |
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- |
- |
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(11.3) |
(11.4) |
1% |
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Inter-segment revenue |
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(26.1) |
(23.3) |
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- |
- |
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Continuing Operations |
|
874.5 |
844.3 |
4% |
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53.2 |
49.0 |
9% |
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Discontinued Operations |
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99.2 |
92.8 |
7% |
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2.4 |
1.7 |
41% |
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Total |
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973.7 |
937.1 |
4% |
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55.6 |
50.7 |
10% |
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*The HY24 numbers have been reclassified to
reflect discontinued operations as set out in note 2 and 12 in the
consolidated interim financial statements.
The underlying figures above are reconciled to statutory
measures in note 3 and 19 in the consolidated interim financial
statements.
On a continuing basis, total revenues were up 4%
to €874.5m and underlying EBIT was up 9% to €53.2m. Underlying
profit before tax increased by 4% to €31.8m. Profit before tax
decreased by €15.5m, to €21.5m, driven by exceptional charges
related to non-cash impact of changes in the discount rate on long
term provisions, as well as charges related to our cost improvement
programmes Simplify and OneRenewi.
Outbound revenue from the sale of recycled
materials increased to €168.0m (HY24: €164.6m) driven by higher
volumes in Coolrec , and higher glass cullet price levels and
volume in Maltha, partly offset by the closure of the loss making
activities in Tisselt.
Cash and cash equivalents at €75.8m at the end
of the period were slightly up from prior period, of which €45.6m
relating to continuing operations and €30.2m in assets held for
sale. Free cash flow of €20.3m (HY24: €(1.6)m) including €18.5m
cash outflow on UK Municipal contracts, reflects working capital
improvement and lower capital expenditure. Total cash inflow was
€7.2m after the growth capex project for the extension of landfill
rights in Mineralz & Water and dividend paid to our
shareholders of €4.7m. Core net debt to EBITDA decreased to 2.04x
at 30 September 2024 from 2.14x at the end of March 2024. The
Board’s long-term target remains 2.0x. Liquidity headroom less
ancillary usage including core cash and undrawn facilities remained
strong at €345m.
One of Renewi’s strategic priorities is to
maximise CO2 avoidance throughout the supply chain. Renewi’s low
carbon secondary materials help our customers to avoid higher CO2
virgin materials, helping both our customers and Renewi to realise
carbon avoidance ambitions.
Our recycling rate over the period was 66.2%
excluding UK Municipal (63.8% including UK Municipal), up slightly
from year end FY24 at 65.4% excluding UK Municipal (63.2% including
UK Municipal), driven by extra tonnages and process improvements in
Maltha and Coolrec.
Divisional performance
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Commercial Waste |
Revenue |
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Underlying EBIT |
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Operating profit |
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HY25 |
HY24 |
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HY25 |
HY24 |
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HY25 |
HY24 |
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Netherlands Commercial |
466.5 |
457.3 |
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26.5 |
25.8 |
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22.9 |
25.7 |
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Belgium Commercial |
245.7 |
237.5 |
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19.7 |
24.5 |
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18.3 |
24.1 |
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Intra-segment revenue |
(1.5) |
(1.5) |
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- |
- |
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- |
- |
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Total (€m) |
710.7 |
693.3 |
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46.2 |
50.3 |
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41.2 |
49.8 |
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Year on year variance % |
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Netherlands Commercial |
2% |
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3% |
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-11% |
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Belgium Commercial |
3% |
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-20% |
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-24% |
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Total |
3% |
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-8% |
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-17% |
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Underlying |
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Return on |
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EBIT margin |
|
operating assets |
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|
HY25 |
HY24 |
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HY25 |
HY24 |
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Netherlands Commercial |
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5.7% |
5.6% |
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12.4% |
14.4% |
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Belgium Commercial |
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8.0% |
10.3% |
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23.6% |
34.4% |
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Total |
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6.5% |
7.3% |
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15.6% |
19.4% |
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The return on operating assets excludes all
landfill related provisions. The underlying figures above are
reconciled to statutory measures in notes 3 and 19 in the
consolidated interim financial statements.
Against a backdrop of sluggish regional economic
growth, the Commercial Waste division performance was impacted by
lower volumes and mix effects, partially mitigated by inbound price
increases. Our operating costs increased year on year due to the
inflationary environment and costs related to diminished
incineration capacity in the wake of the year long closure of the
AVR incinerator in the Netherlands in September 2023 as well as
other short-term closures in the region due to damage from nitrous
oxide tanks. Several incinerators now require shredding of waste
prior to the acceptance of waste for incineration to avoid further
outages caused by these tanks, leading to additional processing
cost. Price increases were effected across the inbound customer
base on 1st January 2024 and again on 1st October 2024.
CWNL revenue was €466.5m up 2% year on year, of
which €400.6m (HY24: €391.8m) was Inbound & Other revenue and
€65.9m (HY24: €65.5m) Outbound revenue. Operating costs were higher
primarily due to inflation. The execution of the final elements of
Simplify over the period resulted in lower SG&A, partially
offsetting margin impact. Underlying EBIT was €26.5m (HY24: €25.8m)
up 3% year on year.
CWBE revenue was €245.7m up 3% year on year, of
which €222.8m (HY24: €215.1m) is Inbound & Other revenue and
€22.8m (HY24: €22.4m) Outbound revenue. Inbound price increases
partially mitigated the impact of decreased volumes. Positive
non-recurring items in the prior year, higher year on year
production and logistics costs due to restricted incinerator
capacity as well as lagging cost-cutting measures, led to lower
underlying EBIT. Underlying EBIT was €19.7m (HY24: €24.5m) down
19.8% year on year.
Mineralz & Water
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Mineralz & Water |
HY25 |
HY24 |
Variance |
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€m |
€m |
% |
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Revenue |
87.9 |
88.4 |
-1% |
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Underlying EBIT |
8.8 |
1.5 |
n/a |
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Underlying EBIT margin |
10.0% |
1.7% |
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Operating profit |
6.0 |
9.5 |
n/a |
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Return on operating assets |
29.7% |
-0.9% |
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|
|
The return on operating assets excludes all
landfill related provisions. The underlying figures above are
reconciled to statutory measures in notes 3 and 19 in the
consolidated interim financial statements.
M&W continued to deliver on its recovery
roadmap. Revenues were €87.9m, 1% lower year on year due to the
closure of the loss-making activities in Tisselt and Zweekhorst.
Underlying EBIT results showed a 5x increase year on year, reaching
€8.8m in FY25 versus €1.5m over the same period last year.
Production of secondary building materials continued at 50T/per
hour throughput, and offtake of the products was in line with
expectations. With stocks of thermally treated soil (TGG) at 351
kilotonnes by the end of the period and further offtake proceeding
as anticipated, TGG inventory levels no longer constrain throughput
capacity. The end of waste status for sand is pending, while filler
and gravel have obtained end of waste status. As announced in
October 2024, a new jetty was installed on the waterside at M&W
and is expected to positively impact the results moving
forward.
Specialities
|
|
|
|
|
|
|
Specialities |
HY25 |
HY24* |
Variance |
|
|
|
€m |
€m |
% |
|
|
|
|
|
|
|
|
Revenue |
102.0 |
85.9 |
19% |
|
|
Underlying EBIT |
9.5 |
8.6 |
10% |
|
|
Underlying EBIT margin |
9.3% |
10.0% |
|
|
|
Operating profit |
9.1 |
8.2 |
11% |
|
|
Return on operating assets |
27.4% |
31.5% |
|
|
|
|
|
|
|
|
*The FY24 numbers have been reclassified to
reflect discontinued operations as set out in note 2 in the
consolidated interim financial statements.
The underlying figures above are reconciled to statutory
measures in note 3 and 19 in the consolidated interim financial
statements.
On a continuing basis, Specialities revenue was
€102.0m, up €16.1m year on year, mainly driven by higher volumes at
Coolrec and price increases at Maltha. Underlying EBIT was €9.5m,
up 10% year on year. Maltha was impacted by lower demand combined
with higher sourcing costs. Coolrec was impacted by lower outbound
material prices, partly compensated by strong incoming volumes and
improved productivity.
Coolrec
Coolrec revenues were €55.4m, up 23% year on
year due to higher volumes but impacted by challenging commodity
markets. Volumes were 21% higher year on year and processed at
higher productivity levels. Underlying EBIT was up 24% to €3.6m
year on year, reflecting higher volumes and productivity gains but
impacted by outlet mix.
Preparations for the construction of the new
boiler line on one of our sites in France are progressing well and
delivery remains on schedule for Q1 2025. Coolrec has started
expanding in large household appliances in the Netherlands by
reconfiguring an existing line to increase throughput and cost
competitiveness.
Maltha
Maltha revenues were €46.6m, up 14% year on year
due to improved pricing and better volumes. Underlying EBIT was
€6.1m, up 2% year on year primarily driven by inbound sourcing
price pressure. Maltha is executing several projects for further
revenue and underlying EBIT growth including a new, innovative
automatic sorting pilot which has been successful, resulting in
improved yield, safety and a reduction of waste. This technology
will be rolled out across all sites in the near future.
UK Municipal sale
The sale of UK Municipal activities to Biffa was
completed ahead of schedule on 10 October 2024 and broadly in line
with previously guided capitalisation costs and transaction costs,
for a total cash impact of €160m (£125m capitalisation costs + £8m
transaction costs, at GBP/EUR 1:0.832).
After the completion of the sale on
10th October 2024, Renewi's pro-forma leverage ratio,
based on its HY25 balance sheet, was 2.85x. The company expects to
reduce this leverage ratio by 0.4 to 0.5 turns per year, aiming for
a target ratio of 2.0x. As a result of the divestment, Renewi
anticipates an improvement in cash flow of €15-20 million per year
starting 1st June 2024. Additionally, the underlying
EBIT margin is expected to increase by 50 basis points due to the
elimination of revenues with no contribution to underlying EBIT and
recycling rate is set to improve by 2.4% annually as low-recycling
rate volumes are removed from the Group’s portfolio. With the
transaction completed, management can now fully focus on
strengthening the core business and expansion of the most promising
activities.
Outlook
While we are mindful of the current challenging
macroeconomic environment, our full year expected underlying EBIT
from continuing business remains in line with market expectations.
Targeted commercial initiatives and structural drivers, including
Belgian VLAREMA 8 legislation, are expected to benefit volumes in
the second half across the Group. In addition we expect continued
M&W earnings recovery, pricing actions and the benefits from
our margin initiatives to contribute to a stronger underlying EBIT
performance in the second half.
We will propose a dividend over the full year
FY25 results in line with our dividend policy.
We remain confident that over the medium-term,
with regulatory tailwinds increasing demand for our products and
services and our competitive advantages, Renewi is well-positioned
for growth in its markets and to serve customers profitably as the
circular economy develops and the market for low carbon secondary
materials evolves. Medium-term targets of high single digit
underlying EBIT margins, Free Cash Flow/EBITDA conversion >40%,
ROCE of >15% and >5% organic revenue growth are unchanged and
on track.
FINANCE REVIEW
|
|
|
|
|
|
|
Financial Performance |
HY25 |
HY24* |
Variance |
|
|
|
€m |
€m |
% |
|
|
|
|
|
|
|
|
Continuing operations |
|
|
|
|
|
Revenue |
874.5 |
844.3 |
4% |
|
|
Underlying EBIT |
53.2 |
49.0 |
9% |
|
|
Operating profit |
42.9 |
55.3 |
-22% |
|
|
|
|
|
|
|
|
Underlying profit before tax |
31.8 |
30.7 |
4% |
|
|
Non-trading & exceptional items |
(10.3) |
6.3 |
|
|
|
Profit before tax from continuing operations |
21.5 |
37.0 |
|
|
|
Total tax charge for the period |
(6.2) |
(10.2) |
|
|
|
Profit for the period from continuing
operations |
15.3 |
26.8 |
|
|
|
Discontinued operations |
(5.1) |
8.5 |
|
|
|
Profit for the period |
10.2 |
35.3 |
|
|
|
|
|
|
|
|
|
Organic annual revenue growth |
4% |
0% |
|
|
|
Underlying EBIT margin |
6.1% |
5.8% |
|
|
|
Free Cash Flow/EBITDA conversion |
17.1% |
-1.4% |
|
|
|
Return on capital employed |
7.9% |
8.1% |
|
|
|
|
|
|
|
|
* The FY24 numbers have been reclassified to
reflect discontinued operations as set out in note 2 of the
consolidated interim financial statements.
The underlying figures above are reconciled to statutory
measures in notes 3 and 19 in the consolidated interim financial
statements.
HY25 revenues were 4% higher year-on-year, with
strong growth from the Specialities division and price-driven
growth contributed by the Commercial Waste division despite subdued
volumes. Underlying EBIT was up 9% due to the ongoing recovery at
Mineralz & Water and Specialities where volume, price increases
and overhead cost discipline contributed to the growth, offsetting
the impact of volume pressure and higher operating costs related to
temporary incinerator capacity issues in Commercial Waste.
Operating Profit year-on-year was impacted by an
adverse movement in non-trading and exceptional expenses.
Depreciation charges were similar to last year. Interest charges
were higher given the impact from additional borrowings and
increased interest. The level of exceptional and non-trading items
in the current year was a cost of €10.3m versus a €6.3m credit in
prior period, significantly impacted by the changes in discount
rates related to long-term provisions as referenced below,
resulting in a statutory profit from continuing operations for the
period of €15.3m compared to €26.8m last 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 in continuing operations
were a cost of €10.3m (HY24: €6.3m credit) and include costs of
portfolio management activity, changes in long-term provisions and
restructuring activity. Discount rates on long-term provisions are
coupled with Government bond yields which decreased from March
2024, resulting in non-cash cost of €4.1m (HY24: €10.0m credit,
with a further €7.1m credit as part of discontinued operations). In
line with our policy, this item is recorded as non-trading and
exceptional due to its nature. The Group's charges related to cost
saving and restructuring programmes (Simplify & OneRenewi) are
considered non-trading & exceptional items due to their size
and nature, and included a spend of €2.1m in the six months to
September 2024. The Simplify programme has been successfully
completed and is generating annual savings of €15 million for
FY25.
Further details of other items are provided in
note 5 to the consolidated interim financial statements.
Operating profit from continuing operations
after taking account of all non-trading and exceptional items was
€42.9m (HY24: €55.3m).
Net finance costs
Net finance costs from continuing operations
increased by €2.8m to €21.2m (HY24: €18.4m), as a result of the
level of borrowing on the revolving credit facility, the new bridge
loan, increased interest rates, increases in leases (Westpoort
acquisition).
Further details are provided in note 6 to the
consolidated interim financial statements.
Profit before tax
Profit before tax from continuing operations on
a statutory basis, including the impact of non-trading and
exceptional items, was €21.5m (HY24: €37.0m).
Taxation
Total taxation for the period from continuing
operations was a charge of €6.2m (HY24: €10.2m). The effective tax
rate on underlying profits at 27% (HY24: 27.1%) is based on the
estimate of the full year effective tax rate. A tax credit of €2.4m
is attributable to the non-trading and exceptional items of
€10.3m.
Looking forward, we anticipate the underlying
tax rate to remain approximately 27%. Due to items disallowed for
tax in both the Netherlands and Belgium, our effective tax rate is
higher than the nominal rates in the countries where we
operate.
The Group statutory profit for the period from
continuing operations, including all non-trading and exceptional
items, was €15.3m (HY24: €26.8m).
Discontinued operations
The loss for the period from discontinued operations was €(5.1)m
(HY24: €8.5m). Further details on the performance of the UK
Municipal business and the implications of the transaction are
provided in note 12 and note 20 to the consolidated interim
financial statements.
Earnings per share (EPS)
Underlying EPS from continuing operations
excluding non-trading and exceptional items was 27 cents per share
(HY24: 26 cents per share). Basic EPS from total operations dropped
to 11 cents per share (HY24: 42 cents per share) given the €20.5m
year on year impact from changes in discount rate on long-term
provisions.
CASH FLOW PERFORMANCE
The funds flow performance table is derived from
the statutory cash flow statement and reconciliations are included
in note 19 in the consolidated interim financial statements. The
table shows the cash flows from an adjusted free cash flow to total
cash flow. The adjusted free cash flow measure focuses on the cash
generation excluding the impact of historical liabilities relating
to Covid-19 tax deferrals, settlement of ATM soil liabilities,
spend relating to the UK PPP onerous contracts and other items
including exceptional cash spend. Free cash flow represents the
cash available to fund growth capital projects, pay dividends and
invest in acquisitions.
|
|
|
|
|
|
Funds flow performance |
HY25 |
HY24 |
|
|
|
€m |
€m |
|
|
|
|
|
|
|
Underlying EBITDA |
118.8 |
113.6 |
|
|
Working capital movement |
23.5 |
5.2 |
|
|
Movement in provisions and other |
(1.2) |
(4.2) |
|
|
Net replacement capital expenditure |
(34.7) |
(41.4) |
|
|
Repayments of obligations under lease liabilities |
(26.3) |
(25.4) |
|
|
Interest and loan fees |
(20.2) |
(17.8) |
|
|
Tax |
(1.7) |
(5.9) |
|
|
Adjusted free cash flow |
58.2 |
24.1 |
|
|
Deferred Covid taxes |
(8.2) |
(9.7) |
|
|
Offtake of ATM soil |
(3.6) |
(1.0) |
|
|
UK Municipal contracts |
(18.5) |
(9.8) |
|
|
Restructuring and other exceptional spend |
(6.1) |
(1.6) |
|
|
Other |
(1.5) |
(3.6) |
|
|
Free cash flow |
20.3 |
(1.6) |
|
|
Growth capital expenditure |
(8.3) |
(15.9) |
|
|
Acquisitions net of disposals |
(0.1) |
1.6 |
|
|
Dividends paid |
(4.7) |
- |
|
|
Total cash flow |
7.2 |
(15.9) |
|
|
|
|
|
|
|
Free cash flow/EBITDA conversion |
17.1% |
-1.4% |
|
|
|
|
|
|
All numbers above contain both continued and
discontinued operations. Free cash flow conversion is free cash
flow as a percentage of underlying EBITDA. The non-IFRS measures
above are reconciled to statutory measures in note 19 in the
consolidated interim financial statements.
Adjusted free cash flow was €58.2m (HY24:
€24.1m) based on a slightly higher underlying EBITDA, working
capital, lower replacement capex, slightly lower provision
movements and tax payments, offset by slightly higher interest
payments. Working capital movement at €23.5m includes a €47m
reduction in trade receivables, of which €16m driven by increased
utilisation of the invoice discounting program and €18m reduction
of accrued income, offset by €20m reduction in trade payables.
Replacement capital spend at €34.7m was lower
than last year due to the timing of projects that will be
implemented in second half. In addition, €14.1m (HY24: €18.7m) of
new leases or modifications 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. Repayments of obligations under lease liabilities for
the period were €26.3m (HY24: €25.4m). Growth capital spend of
€8.3m includes M&W landfills rights, sand sorting sieve and a
portion of the new degasification jetty.
The higher cash outflow relating to interest
includes higher use of the RCF, the new bridge loan along with the
effect of increased interest rates. Tax payments were slightly
lower in the current period given the timing of settlements in the
prior year.
Looking at the three legacy components that are
shown below adjusted free cash flow, there has been a further €8.2m
repayment on Dutch Covid-19 tax deferrals as expected. The
remaining balance of €1m will be settled in October 2024. Cash
spend for placement of TGG soil stocks has been €3.6m in the period
due to increased disposal of these historical balances. Cash
outflow on UK Municipal contracts was €18.5m consisting of €12.6m
related to onerous contracts and €5.9m related to PFI financing,
the increase to prior year of €8.7m primarily driven by adverse
working capital movements on onerous contracts.
The restructuring and other exceptional spend of
€6.1m includes €3.3m related to Simplify and €2.4m transaction
costs relating to the sale of the UK Municipal activities.
Other cash flows include funding for the closed
UK defined benefit scheme, and the acquisitions net of disposals
inflow of €1.6m in prior year included the sale of a small non-core
advisory business.
Net cash inflow from operating activities
increased from €88.8m in the prior period to €106.6m in the current
year. A reconciliation to the underlying cash flow performance as
referred to above is included in note 19 in the consolidated
interim financial statements.
INVESTMENT PROJECTS
Expenditure in FY25
The Group’s long-term expectations for
replacement capital expenditure remain around 80-90% of
depreciation.
Return on assets
The Group return on operating assets on a
continuing basis, excluding debt, tax and goodwill was 20.1% at 30
September 2024 slightly down from 21.9% with slightly higher
underlying EBIT offset by higher operating assets. The Group
post-tax return on capital employed on a total operations basis at
30 September 2024 was 7.9% (HY24: 8.1%).
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. Given the UK Municipal exit and
classification as asset held for sale all cash and borrowings
relating to the disposal group at 30 September 2024 are shown in
assets and liabilities held for sale. Core net debt at 30 September
2024, excluding any core cash held in UK Municipal, was in line
with management expectations at €357.7m (March 2024: €368.1m) which
resulted in a net debt to EBITDA ratio of 2.04x, comfortably within
our covenant limit of 3.5x.
Liquidity headroom less ancillary usage
including core cash and undrawn facilities remains strong at €345m,
a slight improvement from March as a result of the decrease in net
debt.
Debt structure and strategy
All our core borrowings of bonds and loans are
green financed. As of 30 September 2024, 83% of our net debt was on
a fixed rate. Most borrowings are long term with the exception of
the bridge loan.
In July 2024, the Group entered into a new €120m
bridge facility with three of its existing lenders. The facility is
available for drawdown as and when required to July 2025 with a 6
month extension option to January 2026, was priced in line with the
RCF and is planned to be refinanced by another permanent funding
instrument in advance of the bridge maturity. Discussions with
financing parties have already commenced. As of 30 September 2024,
€77.6m had been drawn down from the bridge facility.
The existing €400m RCF and the new bridge facility were used to
finance the UK Municipal capitalisation prior to its transfer to
Biffa on 10 October, as well as refinance the €75m Belgian Retail
Bond which expired in June 2024.
|
|
|
|
|
|
|
Debt Structure |
Sep 24 |
Mar 24 |
Variance |
|
|
|
€m |
€m |
€m |
|
|
|
|
|
|
|
|
Belgian Green retail bonds |
(125.0) |
(200.0) |
75.0 |
|
|
Green RCF |
(110.0) |
(155.0) |
45.0 |
|
|
Bridge loan |
(77.6) |
- |
(77.6) |
|
|
Other Green loans |
(90.0) |
(90.0) |
- |
|
|
Gross borrowings before lease liabilities |
(402.6) |
(445.0) |
42.4 |
|
|
IAS 17 lease liabilities and other |
(3.9) |
(5.2) |
1.3 |
|
|
Loan fees |
3.2 |
3.1 |
0.1 |
|
|
Core cash |
45.6 |
79.0 |
(33.4) |
|
|
Core net debt |
(357.7) |
(368.1) |
10.4 |
|
|
IFRS 16 lease liabilities |
(236.8) |
(247.9) |
11.1 |
|
|
Net debt continuing operations |
(594.5) |
(616.0) |
21.5 |
|
|
|
|
|
|
|
In August 2023 the Group completed the renewal
of its revolving credit facility, part of its Euro denominated
multicurrency green finance facility. The size of the revolving
credit facility (“RCF”) remains unchanged at €400m and is for an
initial five-year term to 2028 with two one-year extension options
to 2030 together with a €150m accordion option to increase the
facility subject to lender approval at that time. Interest remains
based on Euribor plus a margin grid based on leverage and green
sustainability metrics performance. Financial covenants remained
unchanged and will be tested semi-annually at September and
March.
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. The Group has complied with its banking covenants
during the period. The Group operates an invoice discounting
programme. The cash received for invoices sold at September 2024
was €126.6m (March 2024: €116.4m).
PROVISIONS AND CONTINGENT
LIABILITIES
Further to the recognition of the UK Municipal
business as asset held for sale all associated long-term onerous
contracts are included in the liabilities for disposal group held
for sale and outside of the total provisions value in the balance
sheet.
Looking at provisions in continuing operations, around 91% of the
Group’s provisions are long-term in nature of which 86% relating to
landfill provisions. The provisions balance classified as due
within one year amounts to €18m, including €2m for restructuring,
€10m for landfill related spend and €6m for onerous contracts,
environmental, legal and others. Further details are provided in
note 14 to the consolidated interim financial statements.
Retirement benefits
The Group has a closed UK defined benefit
pension scheme at 30 September 2024, the scheme had an accounting
deficit of €1.7m (March 2024: €7.6m). The change in the year was
due to an increase in the discount rate assumption on scheme
liabilities which was partly offset by lower returns on pension
scheme assets. The latest triennial actuarial valuation of the
scheme was completed at 5 April 2021 and the future funding plan
has been maintained at the current level of €3.5m per annum until
December 2024. There are also several defined benefit pension
schemes for employees in the Netherlands and Belgium which had a
retirement benefit deficit of €5.3m at 30 September 2024 (March
2024: €5.3m).
PRINCIPAL RISKS AND
UNCERTAINTIES
Renewi operates a risk management framework to
identify, assess and control the most serious risks facing the
Group. The 2024 Annual Report (pages 66 to 89) 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 the impact of the
ongoing high inflationary environment pressures, fluctuations in
recyclate prices and the economic uncertainty arising from
geopolitical events. Cybercrime is an increasing risk for all
businesses, and we have been investing to further strengthen our
capabilities. 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.
Otto de
Bont Annemieke
den Otter
Chief Executive
Officer Chief
Financial Officer
11 November 2024 11
November 2024
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.
Consolidated Interim Income Statement
(unaudited)
First half ended 30 September 2024
|
|
|
|
First half 2024/25 |
|
Restated*
First half 2023/24 |
|
|
Note |
|
Underlying
€m |
Non-trading
& exceptional items
€m |
Total
€m |
|
Underlying
€m |
Non-trading
& exceptional items
€m |
Total
€m |
|
|
|
|
|
|
|
|
|
|
|
|
Revenue |
3,4 |
|
874.5 |
- |
874.5 |
|
844.3 |
- |
844.3 |
|
Cost of sales |
5 |
|
(706.7) |
(7.2) |
(713.9) |
|
(676.4) |
7.0 |
(669.4) |
|
Gross profit (loss) |
|
|
167.8 |
(7.2) |
160.6 |
|
167.9 |
7.0 |
174.9 |
|
Administrative expenses |
5 |
|
(114.6) |
(3.1) |
(117.7) |
|
(118.9) |
(0.7) |
(119.6) |
|
Operating profit (loss) |
3 |
|
53.2 |
(10.3) |
42.9 |
|
49.0 |
6.3 |
55.3 |
|
Finance income |
6 |
|
0.5 |
- |
0.5 |
|
0.6 |
- |
0.6 |
|
Finance charges |
6 |
|
(21.7) |
- |
(21.7) |
|
(19.0) |
- |
(19.0) |
|
Share of results from associates and joint ventures |
|
|
(0.2) |
- |
(0.2) |
|
0.1 |
- |
0.1 |
|
Profit (loss) before taxation |
3 |
|
31.8 |
(10.3) |
21.5 |
|
30.7 |
6.3 |
37.0 |
|
Taxation |
5,7 |
|
(8.6) |
2.4 |
(6.2) |
|
(8.7) |
(1.5) |
(10.2) |
|
Profit (loss) for the period from continuing
operations |
5 |
|
23.2 |
(7.9) |
15.3 |
|
22.0 |
4.8 |
26.8 |
|
Discontinued Operations |
|
|
|
|
|
|
|
|
|
|
Profit (loss) for the period from discontinued operations |
5,12 |
|
1.2 |
(6.3) |
(5.1) |
|
0.8 |
7.7 |
8.5 |
|
Profit (loss) for the period |
|
|
24.4 |
(14.2) |
10.2 |
|
22.8 |
12.5 |
35.3 |
|
Attributable to: |
|
|
|
|
|
|
|
|
|
|
Owners of the parent |
|
|
22.8 |
(14.2) |
8.6 |
|
21.3 |
12.5 |
33.8 |
|
Non-controlling interests |
|
|
1.6 |
- |
1.6 |
|
1.5 |
- |
1.5 |
|
|
|
|
24.4 |
(14.2) |
10.2 |
|
22.8 |
12.5 |
35.3 |
|
Earnings per share |
Note |
First half
2024/25
cents |
First half
2023/24
cents |
|
Earnings per share – total profit attributable to owners of
the parent |
|
|
|
|
Basic and diluted |
8 |
11 |
42 |
| Underlying basic
and diluted |
8 |
28 |
27 |
| |
|
|
|
| Earnings
per share – profit from continuing operations attributable to
owners of the parent |
|
|
|
| Basic and
diluted |
8 |
17 |
32 |
|
Underlying basic and diluted |
8 |
27 |
26 |
*The 2023/24 comparatives have been restated to reclassify
discontinued operations and details are given in note 2 Basis of
preparation and note 12.
Consolidated Interim Statement of Comprehensive Income
(unaudited)
First half ended 30 September 2024
|
|
First half 2024/25
€m |
Restated*
First half 2023/24
€m |
|
Items that may be reclassified subsequently to profit or
loss: |
|
|
|
Exchange differences on translation of foreign subsidiaries |
5.0 |
2.7 |
|
Exchange differences on translation of discontinued operations |
(8.7) |
(3.8) |
|
Fair value movement on cash flow hedges |
(2.2) |
4.3 |
|
Fair value movement on cash flow hedges of discontinued
operations |
(0.3) |
3.9 |
|
Deferred tax on fair value movement on cash flow hedges |
0.5 |
(1.1) |
|
Deferred tax on fair value movement on cash flow hedges of
discontinued operations |
0.1 |
(1.0) |
|
Share of other comprehensive income of investments of discontinued
operations accounted for using the equity method |
- |
0.1 |
|
|
(5.6) |
5.1 |
|
|
|
|
|
Items that will not be reclassified to profit or
loss: |
|
|
|
Actuarial loss on defined benefit pension schemes |
4.6 |
(4.1) |
|
Deferred tax on actuarial loss on defined benefit pension
schemes |
(1.1) |
1.0 |
|
Fair value movement on unlisted investments through other
comprehensive income |
(1.0) |
- |
|
|
2.5 |
(3.1) |
|
|
|
|
|
Other comprehensive (loss) income for the period, net of
tax |
(3.1) |
2.0 |
|
Profit for the period |
10.2 |
35.3 |
|
Total comprehensive income for the period |
7.1 |
37.3 |
|
|
|
|
|
Attributable to: |
|
|
|
Owners of the parent |
5.5 |
35.8 |
|
Non-controlling interests |
1.6 |
1.5 |
|
Total comprehensive income for the period |
7.1 |
37.3 |
|
|
|
|
|
Total comprehensive income (loss) attributable to owners of
the parent arising from: |
|
|
|
Continuing operations |
19.5 |
28.1 |
|
Discontinued operations |
(14.0) |
7.7 |
|
|
5.5 |
35.8 |
*The 2023/24 comparatives have been restated to reclassify
discontinued operations and details are given in note 2 Basis of
preparation and note 12.
Consolidated Interim Balance Sheet (unaudited)
As at 30 September 2024
| |
|
Note |
30 September
2024
€m |
30 September
2023
€m |
31 March
2024
€m |
|
Assets |
|
|
|
|
|
|
Non-current assets |
|
|
|
|
|
|
Goodwill and intangible assets |
|
10 |
635.0 |
638.6 |
633.5 |
|
Property, plant and equipment |
|
10 |
617.1 |
620.1 |
618.7 |
|
Right-of-use assets |
|
10 |
240.0 |
245.2 |
253.9 |
|
Investments in joint ventures and associates (restated*) |
|
|
8.7 |
11.0 |
9.0 |
|
Other investments (restated*) |
|
|
16.9 |
15.5 |
17.7 |
|
Loans to associates and joint ventures |
|
|
0.4 |
0.2 |
0.4 |
|
Financial assets relating to PPP contracts |
|
|
- |
122.2 |
- |
|
Derivative financial instruments |
|
16 |
- |
4.3 |
0.1 |
|
Other receivables |
|
|
0.9 |
3.7 |
1.1 |
|
Deferred tax assets |
|
|
27.6 |
35.3 |
28.0 |
|
|
|
|
1,546.6 |
1,696.1 |
1,562.4 |
|
Current assets |
|
|
|
|
|
|
Inventories |
|
|
25.7 |
25.9 |
23.4 |
|
Loans to associates and joint ventures |
|
|
0.4 |
0.9 |
0.6 |
|
Financial assets relating to PPP contracts |
|
|
- |
7.4 |
- |
|
Trade and other receivables |
|
|
201.3 |
273.2 |
245.6 |
|
Derivative financial instruments |
|
16 |
3.8 |
2.2 |
1.3 |
|
Current tax receivable |
|
|
2.3 |
1.5 |
6.2 |
|
Cash and cash equivalents – including restricted cash |
|
11 |
45.6 |
74.4 |
79.0 |
|
|
|
|
279.1 |
385.5 |
356.1 |
|
Assets classified as held for sale |
|
12 |
133.3 |
0.6 |
137.7 |
|
|
|
|
412.4 |
386.1 |
493.8 |
|
Total assets |
|
|
1,959.0 |
2,082.2 |
2,056.2 |
|
Liabilities |
|
|
|
|
|
|
Non-current liabilities |
|
|
|
|
|
|
Borrowings |
|
11 |
(521.8) |
(620.0) |
(574.4) |
|
Derivative financial instruments |
|
16 |
- |
(0.5) |
- |
|
Other non-current liabilities |
|
|
(10.9) |
(22.0) |
(11.0) |
|
Defined benefit pension schemes deficit |
|
15 |
(7.0) |
(11.9) |
(12.9) |
|
Provisions |
|
14 |
(181.1) |
(280.1) |
(177.5) |
|
Deferred tax liabilities |
|
|
(42.4) |
(46.7) |
(44.9) |
|
|
|
|
(763.2) |
(981.2) |
(820.7) |
|
Current liabilities |
|
|
|
|
|
|
Borrowings |
|
11 |
(118.3) |
(142.3) |
(120.6) |
|
Derivative financial instruments |
|
|
(0.8) |
- |
- |
|
Trade and other payables |
|
|
(434.9) |
(500.6) |
(473.9) |
|
Current tax payable |
|
|
(23.6) |
(35.9) |
(20.5) |
|
Provisions |
|
14 |
(18.3) |
(38.3) |
(21.5) |
|
|
|
|
(595.9) |
(717.1) |
(636.5) |
|
Liabilities of disposal group classified as held for sale |
|
12 |
(282.2) |
- |
(285.0) |
|
|
|
|
(878.1) |
(717.1) |
(921.5) |
|
Total liabilities |
|
|
(1,641.3) |
(1,698.3) |
(1,742.2) |
|
Net assets |
|
|
317.7 |
383.9 |
314.0 |
|
|
|
|
|
|
|
| Issued
capital and reserves attributable to the owners of the
parent |
|
|
|
|
|
|
Share capital |
|
|
100.1 |
99.8 |
100.1 |
|
Share premium |
|
|
474.5 |
474.1 |
474.5 |
|
Exchange reserve |
|
|
(18.1) |
(13.3) |
(14.4) |
|
Retained earnings |
|
|
(253.4) |
(188.3) |
(259.2) |
|
|
|
|
303.1 |
372.3 |
301.0 |
|
Non-controlling interests |
|
|
14.6 |
11.6 |
13.0 |
|
Total equity |
|
|
317.7 |
383.9 |
314.0 |
*Restated to show investments in joint ventures and associates
separately with details given in note 2 Basis of preparation.
Consolidated Interim Statement of Changes in Equity
(unaudited)
First half ended 30 September 2024
|
|
Share
capital
€m |
Share
premium
€m |
Exchange reserve
€m |
Retained
earnings
€m |
Non-controlling
interests
€m |
Total
equity
€m |
|
|
|
|
|
|
|
|
| Balance
at 1 April 2024 |
100.1 |
474.5 |
(14.4) |
(259.2) |
13.0 |
314.0 |
| Profit for the
period |
- |
- |
- |
8.6 |
1.6 |
10.2 |
| Other
comprehensive (loss) income: |
|
|
|
|
|
|
| Exchange loss
on translation of foreign subsidiaries |
- |
- |
(3.7) |
- |
- |
(3.7) |
| Fair value
movement on cash flow hedges |
- |
- |
- |
(2.5) |
- |
(2.5) |
| Actuarial
profit on defined benefit pension schemes |
- |
- |
- |
4.6 |
- |
4.6 |
| Fair value
movement on unlisted investments |
- |
- |
- |
(1.0) |
- |
(1.0) |
| Tax in respect
of other comprehensive income items |
- |
- |
- |
(0.5) |
- |
(0.5) |
|
Total comprehensive (loss) income for the
period |
- |
- |
(3.7) |
9.2 |
1.6 |
7.1 |
| Share-based
compensation |
- |
- |
- |
1.3 |
- |
1.3 |
|
Dividends |
- |
- |
- |
(4.7) |
- |
(4.7) |
|
Balance as at 30 September 2024 |
100.1 |
474.5 |
(18.1) |
(253.4) |
14.6 |
317.7 |
|
|
|
|
|
|
|
|
| Balance at 1
April 2023 |
99.8 |
474.1 |
(12.2) |
(224.5) |
10.1 |
347.3 |
| (Loss) profit
for the year |
- |
- |
- |
(34.1) |
3.2 |
(30.9) |
| Other
comprehensive (loss) income: |
|
|
|
|
|
|
| Exchange loss
on translation of foreign subsidiaries |
- |
- |
(2.2) |
- |
- |
(2.2) |
| Fair value
movement on cash flow hedges |
- |
- |
- |
4.2 |
- |
4.2 |
| Actuarial loss
on defined benefit pension schemes |
- |
- |
- |
(6.7) |
- |
(6.7) |
| Fair value
movement on unlisted investments |
- |
- |
- |
1.8 |
- |
1.8 |
| Tax in respect
of other comprehensive income items |
- |
- |
- |
0.5 |
- |
0.5 |
|
Share of other comprehensive income of investments accounted for
using the equity method |
- |
- |
- |
0.1 |
- |
0.1 |
|
Total comprehensive (loss) income for the year |
- |
- |
(2.2) |
(34.2) |
3.2 |
(33.2) |
| Dividend paid
to non-controlling interests |
- |
- |
- |
- |
(0.3) |
(0.3) |
| Share-based
compensation |
- |
- |
- |
1.2 |
- |
1.2 |
| Proceeds from
exercise of employee options |
0.3 |
0.4 |
- |
- |
- |
0.7 |
|
Own shares purchased by the Employee Share Trust |
- |
- |
- |
(1.7) |
- |
(1.7) |
|
Balance as at 31 March 2024 |
100.1 |
474.5 |
(14.4) |
(259.2) |
13.0 |
314.0 |
|
|
|
|
|
|
|
|
| Balance at 1
April 2023 |
99.8 |
474.1 |
(12.2) |
(224.5) |
10.1 |
347.3 |
| Profit for the
period |
- |
- |
- |
33.8 |
1.5 |
35.3 |
| Other
comprehensive (loss) income: |
|
|
|
|
|
|
| Exchange loss
on translation of foreign subsidiaries |
- |
- |
(1.1) |
- |
- |
(1.1) |
| Fair value
movement on cash flow hedges |
- |
- |
- |
8.2 |
- |
8.2 |
| Actuarial loss
on defined benefit pension schemes |
- |
- |
- |
(4.1) |
- |
(4.1) |
| Tax in respect
of other comprehensive income items |
- |
- |
- |
(1.1) |
- |
(1.1) |
|
Share of other comprehensive income of investments accounted for
using the equity method |
- |
- |
- |
0.1 |
- |
0.1 |
|
Total comprehensive (loss) income for the period |
- |
- |
(1.1) |
36.9 |
1.5 |
37.3 |
| Share-based
compensation |
- |
- |
- |
1.2 |
- |
1.2 |
| Movement on tax
arising on share-based compensation |
- |
- |
- |
(0.2) |
- |
(0.2) |
|
Own shares purchased by the Employee Share Trust |
- |
- |
- |
(1.7) |
- |
(1.7) |
|
Balance as at 30 September 2023 |
99.8 |
474.1 |
(13.3) |
(188.3) |
11.6 |
383.9 |
Consolidated Interim Statement of Cash Flows
(unaudited)
First half ended 30 September 2024
|
|
Note |
First half
2024/25
€m |
Restated*
First half
2023/24
€m |
|
Profit before tax from continuing operations |
3 |
21.5 |
37.0 |
| Finance income |
6 |
(0.5) |
(0.6) |
| Finance
charges |
6 |
21.7 |
19.0 |
|
Share of results from associates and joint ventures |
|
0.2 |
(0.1) |
|
Operating profit from continuing operations |
3 |
42.9 |
55.3 |
| Operating (loss)
profit from discontinued operations |
12 |
(7.8) |
8.8 |
| Impairment of
non-current assets within disposal group |
12 |
7.7 |
- |
| Amortisation and
impairment of intangible assets |
10 |
6.4 |
6.3 |
| Depreciation and
impairment of property, plant and equipment |
10 |
35.7 |
34.8 |
| Depreciation and
impairment of right-of-use assets |
|
25.5 |
25.7 |
| Net gain on
disposal of property, plant and equipment and intangible
assets |
|
(0.9) |
(0.9) |
| Portfolio
management and provision movements in non-trading and exceptional
items |
|
5.2 |
(18.2) |
| Net decrease in
provisions |
|
(14.1) |
(11.8) |
| Payment related to
committed funding of the defined benefit pension schemes |
|
(1.8) |
(1.8) |
| Share-based
compensation |
|
1.3 |
1.2 |
|
Operating cash flows before movement in working
capital |
|
100.1 |
99.4 |
| Increase in
inventories |
|
(2.3) |
(0.6) |
| Decrease in
receivables |
|
43.9 |
13.0 |
|
Decrease in payables |
|
(33.4) |
(17.1) |
|
Cash flows from operating activities |
|
108.3 |
94.7 |
|
Income tax paid |
|
(1.7) |
(5.9) |
|
Net cash inflow from operating activities |
|
106.6 |
88.8 |
|
Investing activities |
|
|
|
|
Purchases of intangible assets |
|
(8.1) |
(10.3) |
|
Purchases of property, plant and equipment |
|
(36.6) |
(50.3) |
|
Proceeds from disposals of property, plant and equipment |
|
1.7 |
3.3 |
|
Disposals of subsidiary and business assets net of acquisition of
business assets |
13 |
- |
1.6 |
|
Net movements in associates, joint ventures and other short-term
investments |
|
0.7 |
(0.1) |
|
Outflows in respect of PPP arrangements under the financial asset
model net of capital received |
|
3.4 |
2.7 |
| Finance
income |
|
5.6 |
5.5 |
|
Net cash outflow from investing activities |
|
(33.3) |
(47.6) |
|
Financing activities |
|
|
|
|
Finance charges and loan fees paid |
|
(25.8) |
(23.3) |
|
Investment in own shares by the Employee Share Trust |
|
- |
(1.7) |
|
Dividends paid |
|
(4.7) |
- |
|
Repayment of retail bonds |
|
(75.0) |
- |
|
Proceeds from bank borrowings |
11 |
302.5 |
189.7 |
|
Repayment of bank borrowings |
11 |
(270.0) |
(166.6) |
|
Repayment of PPP debt |
|
(2.9) |
(2.7) |
|
Repayment of obligations under lease liabilities |
|
(26.3) |
(25.4) |
|
Net cash outflow from financing activities |
|
(102.2) |
(30.0) |
|
Net (decrease) increase in cash and cash
equivalents |
|
(28.9) |
11.2 |
|
Effect of foreign exchange rate changes |
|
1.2 |
0.5 |
|
Cash and cash equivalents at the beginning of the
period |
11 |
103.5 |
62.7 |
|
Cash and cash equivalents at the end of the
period |
11 |
75.8 |
74.4 |
|
|
|
|
|
|
Cash and cash equivalents at the end of the
period |
|
|
|
|
Cash and cash equivalents – relating to continuing operations |
11 |
45.6 |
74.4 |
|
Cash and cash equivalents – within assets held for sale |
12 |
30.2 |
- |
|
|
|
75.8 |
74.4 |
*The 2023/24 comparatives have been restated to reclassify
discontinued operations and details are given in note 2 Basis of
preparation and note 12.
Notes to the Consolidated Interim 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 2024 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 2024 Annual Report and
Accounts, which have been prepared in accordance with UK adopted
international accounting standards in conformity with the
requirements of the Companies Act 2006. The 2024 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 2024 and 2023,
together with the audited results for the year ended 31 March 2024.
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 2024 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 2024 were approved by the
Board of Directors on 30 May 2024 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 11 November
2024, 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 condensed financial statements after
assessing the Group’s principal risks including an assessment of
the impact of adverse macroeconomic conditions and the funding
required for the UK Municipal divestment.
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
and covenant modelling over an 18-month period to 31 March 2026.
This includes expectations on the future economic environment as
well as other principal risks associated with the Group’s ongoing
operations including the expected cash outflow including
transaction costs of €149m in October 2024 for the completion of
the UK Municipal divestment and the repayment of a €120m bridging
facility by January 2026 and a €10m EUPP repayment in December
2025. The assessment includes a base case scenario setting out the
Directors’ current expectations of future trading and a downside
scenario to assess the potential impact on the Group’s future
financial performance.
The key judgement in both scenarios is the
possibility of weaker macroeconomic conditions, impacting on
financial performance and delay in the delivery of the year-on-year
profit enhancements, together with the Group’s ability to repay the
€120m bridging facility by January 2026 and settling all other
funding repayments as they fall due. The repayment of the €120m
bridging facility by January 2026 will be refinanced by another
permanent funding instrument in advance of the bridge maturity.
Discussions with financing parties have already commenced. As at 30
September 2024, the Group had unutilised committed borrowings of
€345m at 30 September 2024, available for drawdown subject to the
financial covenants. The key financial covenants are leverage
ratio, which is based on net debt to covenant defined EBITDA (<
3.5x) and interest cover which is the ratio of covenant defined
interest to covenant defined EBIT (> 3.0x). The Group will
continue to utilise its invoice discounting facility whereby
certain of its trade receivables are sold for an upfront cash
payment on a regular basis. In the base case the Group has
sufficient liquidity and headroom in its banking facilities and no
covenants are breached at any of the forecast testing dates.
The downside scenario includes significantly
weaker macroeconomic conditions leading to volume declines below
the forecast economic outlook in all our territories in the current
year and into FY26. Other downsides include a decline in recyclate
prices from the current levels to below long-term averages along
with operational downtime in some of our plants and reduced
delivery of additional cost savings and operational improvements.
These adverse factors before any mitigating actions reduce FY25 and
FY26 underlying EBIT by 19% and 31% respectively compared to the
base case. A number of mitigating actions have been applied to our
downside modelling reducing the underlying EBIT shortfall in FY25
to 10% lower than the base case. These include the postponement of
growth capital expenditure, reduction of certain replacement
capital expenditure, reduction in certain SG&A costs and
central contingencies and the rephasing of certain project costs.
In this downside scenario the Group retains sufficient liquidity
headroom in its banking facilities. The leverage covenant is not
breached at any of the forecast testing dates. The interest cover
covenant falls close to its covenant level at March 2025 and then
starts to increase throughout FY26. There are other possible
restructuring programmes under consideration that could be
instigated which have not been included in this downside
scenario.
Given that the interest cover covenant ends up
close to its covenant level in the downside scenario a reverse
stress test calculation has not been performed.
Having considered all the key judgements around
the financial projections, including the availability of financing
and the achievability of mitigating actions included and other
levers not included, 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.
Changes in presentation
Discontinued operations
On 28 September 2023 the Group announced that a comprehensive
review of the UK Municipal business was being undertaken, and it
was exploring a range of options to achieve an exit from this
segment. Towards the end of March 2024, the Board decided to pursue
a conclusion with the preferred party and as a result, on 30 May
2024, the Group has entered into a binding agreement to sell UK
Municipal to Biffa Limited, a leading UK-wide integrated waste
management business. The criteria for asset held for sale have been
met after the Board meeting in March 2024 and therefore the UK
Municipal assets and liabilities were presented as held for sale at
31 March 2024 year end.
During the interim period the disposal
progressed, but had not completed before 30 September 2024,
therefore there were no changes to the original assessment and it
continued to be appropriate for the UK Municipal assets and
liabilities to be presented as held for sale as at 30 September
2024.
The UK Municipal disposal (previously reported
within the Specialities division) meets the definition of a
discontinued operation as stated in IFRS 5 Non-current assets held
for sale and discontinued operations, therefore the net results are
presented as discontinued operations in the Income Statement and
the prior period Income Statement, Statement of Comprehensive
Income, Statement of Cash Flows and related notes have been
restated.
Investments in joint ventures and associates
In the period ended 30 September 2023 the investments in joint
ventures and associates were combined with other unlisted
investments on the face of the balance sheet under the heading
‘Investments.’ In the year ended 31 March 2024 management improved
the disclosure by showing investments in joint ventures and
associates separately on the face of the balance sheet, therefore
the 30 September 2023 comparatives have been restated to show the
balances separately.
Adoption of new and revised accounting
standards
No accounting standards, amendments or revisions
to existing standards or interpretations have been effective which
had a significant impact on the Group’s condensed consolidated
interim financial statements.
The following amendments became effective during
the period:
- IAS 7/IFRS 7 (Amendment -
Disclosure of Supplier Finance Arrangements)
- IFRS 16 (Amendment – Lease
Liability in a Sale and Leaseback)
- IAS 1 Presentation of Financial
Statements (Amendment – Classification of Liabilities as Current or
Non-current)
- IAS 1 Presentation of Financial
Statements (Amendment – Non-current Liabilities with
Covenants)
New standards and interpretations not
yet adopted
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 Interpretation Committee interpretations which were early
adopted by the Group.
The following amendments are effective for the
period beginning 1 April 2025:
- IAS 21 The Effects of Changes in
Foreign Exchange Rates (Amendment – Lack of Exchangeability)
The Group does not expect a significant impact
from any of the new accounting standards and amendments.
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 2024 of €1:£0.832
(30 September 2023: €1:£0.867) and an average rate for the period
ended 30 September 2024 of €1:£0.851 (30 September 2023:
€1:£0.867).
Critical accounting judgements and
estimates
The preparation of 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. In preparing these condensed consolidated interim
financial statements, management have reviewed the nature of the
significant judgements in applying the Group’s accounting policies,
the key sources of estimation uncertainty and other areas of focus,
as set out on pages 173 to 175 of the 2024 Annual Report and
Accounts. It has been determined that there have been no
significant changes in methodology in relation to these key
estimates and other areas of focus.
3. Segmental
reporting
The Group’s chief operating decision maker is
considered to be the Board of Directors. The Group’s reportable
segments are 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. These
segments are unchanged from March 2024 and are set out below:
| Commercial
Waste |
Collection and
treatment of commercial waste in the Netherlands and Belgium. |
| Mineralz &
Water |
Decontamination,
stabilisation and re-use of highly contaminated materials to
produce certified secondary products for the construction industry
in the Netherlands and Belgium. |
| Specialities |
Processing plants
focusing on recycling and diverting specific waste streams. The
continuing operations are in the Netherlands, Belgium, France,
Portugal and the UK with the UK Municipal operations classified as
discontinued (as explained in note 2). |
| Group central
services |
Head office
corporate function. |
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.
|
Revenue |
|
First half
2024/25
€m |
Restated*
First half
2023/24
€m |
|
Netherlands Commercial Waste |
|
466.5 |
457.3 |
|
Belgium Commercial Waste |
|
245.7 |
237.5 |
|
Intra-segment |
|
(1.5) |
(1.5) |
|
Commercial Waste |
|
710.7 |
693.3 |
|
|
|
|
|
|
Mineralz & Water |
|
87.9 |
88.4 |
|
|
|
|
|
|
Specialities |
|
102.0 |
85.9 |
|
|
|
|
|
|
Inter-segment revenue |
|
(26.1) |
(23.3) |
|
Total revenue from continuing operations |
|
874.5 |
844.3 |
* The comparatives have been restated to classify the UK
Municipal segment (previously reported within the Specialities
segment) as a discontinued operation.
|
Results |
|
First half
2024/25
€m |
Restated*
First half
2023/24
€m |
|
Netherlands Commercial Waste |
|
26.5 |
25.8 |
|
Belgium Commercial Waste |
|
19.7 |
24.5 |
|
Commercial Waste |
|
46.2 |
50.3 |
|
|
|
|
|
|
Mineralz & Water |
|
8.8 |
1.5 |
|
|
|
|
|
|
Specialities |
|
9.5 |
8.6 |
|
|
|
|
|
|
Group central services |
|
(11.3) |
(11.4) |
|
|
|
|
|
|
Underlying EBIT from continuing operations |
|
53.2 |
49.0 |
|
Non-trading and exceptional items (note 5) |
|
(10.3) |
6.3 |
|
Operating profit from continuing operations |
|
42.9 |
55.3 |
|
Finance income |
|
0.5 |
0.6 |
|
Finance charges |
|
(21.7) |
(19.0) |
|
Share of results from associates and joint ventures |
|
(0.2) |
0.1 |
|
Profit before taxation and discontinued
operations |
|
21.5 |
37.0 |
* The comparatives have been restated to classify the UK
Municipal segment (previously reported within the Specialities
segment) as a discontinued operation.
Net assets |
Commercial Waste
€m |
Mineralz & Water
€m |
Specialities
€m |
Group central services
€m |
Tax, net debt and derivatives
€m |
Total continuing operations
€m |
Discontinued operations
€m |
Total
€m |
|
30 September 2024 |
|
|
|
|
|
|
|
|
|
Gross non-current assets |
1,125.6 |
266.6 |
86.7 |
40.1 |
27.6 |
1,546.6 |
- |
1,546.6 |
|
Gross current assets |
167.9 |
15.8 |
42.9 |
4.7 |
51.7 |
283.0 |
129.4 |
412.4 |
|
Gross liabilities |
(369.2) |
(207.7) |
(41.5) |
(33.8) |
(706.9) |
(1,359.1) |
(282.2) |
(1,641.3) |
|
Net assets (liabilities) |
924.3 |
74.7 |
88.1 |
11.0 |
(627.6) |
470.5 |
(152.8) |
317.7 |
|
31 March 2024 |
|
|
|
|
|
|
|
|
|
Gross non-current assets |
1,148.0 |
257.7 |
84.6 |
44.0 |
28.1 |
1,562.4 |
- |
1,562.4 |
|
Gross current assets |
200.7 |
26.5 |
39.6 |
8.2 |
86.5 |
361.5 |
132.3 |
493.8 |
|
Gross liabilities |
(392.2) |
(212.7) |
(42.9) |
(49.0) |
(760.4) |
(1,457.2) |
(285.0) |
(1,742.2) |
|
Net assets (liabilities) |
956.5 |
71.5 |
81.3 |
3.2 |
(645.8) |
466.7 |
(152.7) |
314.0 |
4. Revenue
The following
tables show the Group’s revenue by type of service delivered and by
primary geographical market.
|
By type of service |
Commercial Waste
€m |
Mineralz &
Water
€m |
Specialities*
€m |
Inter-segment
€m |
Total*
€m |
|
First half 2024/25 |
|
|
|
|
|
|
Inbound |
579.9 |
84.2 |
21.9 |
(22.3) |
663.7 |
|
Outbound |
88.1 |
3.7 |
79.9 |
(3.7) |
168.0 |
|
On-site |
32.0 |
- |
- |
(0.1) |
31.9 |
|
Other |
10.7 |
- |
0.2 |
- |
10.9 |
|
Total revenue |
710.7 |
87.9 |
102.0 |
(26.1) |
874.5 |
|
First half 2023/24 restated* |
|
|
|
|
|
|
Inbound |
562.2 |
77.7 |
17.0 |
(21.2) |
635.7 |
|
Outbound |
87.1 |
10.7 |
68.7 |
(1.9) |
164.6 |
|
On-site |
32.3 |
- |
- |
(0.2) |
32.1 |
|
Other |
11.7 |
- |
0.2 |
- |
11.9 |
|
Total revenue |
693.3 |
88.4 |
85.9 |
(23.3) |
844.3 |
* The comparatives have been restated to classify the UK
Municipal segment (previously reported within the Specialities
segment) as a discontinued operation.
|
By geographical market |
Commercial Waste
€m |
Mineralz &
Water
€m |
Specialities*
€m |
Inter-segment
€m |
Total*
€m |
|
First half 2024/25 |
|
|
|
|
|
|
Netherlands |
465.9 |
85.0 |
45.3 |
(24.9) |
571.3 |
|
Belgium |
244.8 |
2.9 |
27.9 |
(1.2) |
274.4 |
|
France |
- |
- |
16.3 |
- |
16.3 |
|
Other |
- |
- |
12.5 |
- |
12.5 |
|
Total revenue |
710.7 |
87.9 |
102.0 |
(26.1) |
874.5 |
|
First half 2023/24 restated* |
|
|
|
|
|
|
Netherlands |
456.7 |
77.5 |
38.1 |
(22.1) |
550.2 |
|
Belgium |
236.6 |
10.9 |
22.1 |
(1.2) |
268.4 |
|
France |
- |
- |
14.4 |
- |
14.4 |
|
Other |
- |
- |
11.3 |
- |
11.3 |
|
Total revenue |
693.3 |
88.4 |
85.9 |
(23.3) |
844.3 |
* The comparatives have been restated to classify the UK
Municipal segment (previously reported within the Specialities
segment) as a discontinued operation.
Revenue recognised at a point in time amounted
to €754.5m (2023/24 restated: €732.8m) with the remainder
recognised over time. The majority of the Commercial Waste revenue
is recognised at a point in time, whereas for Mineralz & Water
74% of revenue (2023/24: 67%) 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. These include, but are not limited to,
significant impairments, significant restructuring of the
activities of an entity including employee associated severance
costs, acquisition and disposal related transaction costs,
significant fires, onerous contracts arising from restructuring
activities or if significant in size, profit or loss on disposal of
properties or subsidiaries as these are irregular, the impact of
terminating hedge derivatives, ineffectiveness of derivative
financial instruments, the impact of changing the discount rate on
provisions, amortisation of acquisition related intangibles and
one-off tax credits or charges. The amortisation charge on
acquisition related intangible assets is excluded from underlying
results due to its non-trading nature in the same way as other
significant items from M&A activity are excluded. The
performance of the acquired business is assessed as part of the
Group’s underlying revenue and EBIT. By excluding this amortisation
charge there is comparability across divisions and reporting
periods.
|
|
First half
2024/25
€m |
Restated*
First half 2023/24
€m |
|
Renewi 2.0 improvement programme |
- |
1.0 |
|
|
|
|
|
Portfolio management activity: |
|
|
|
Merger and acquisition related activity |
1.0 |
0.8 |
|
Prior years disposals |
- |
(1.1) |
|
|
1.0 |
(0.3) |
|
|
|
|
|
Changes in long-term provisions: |
|
|
|
Changes in discount rates |
3.4 |
(10.0) |
|
Other changes in long term provisions |
0.7 |
- |
|
|
4.1 |
(10.0) |
|
|
|
|
|
Other items: |
|
|
|
Restructuring activity |
2.1 |
- |
|
|
2.1 |
- |
|
Amortisation of acquisition related
intangibles |
3.1 |
3.0 |
|
Non-trading and exceptional items in profit before
tax |
10.3 |
(6.3) |
|
Tax on non-trading and exceptional items |
(2.4) |
1.5 |
|
Total non-trading and exceptional items in profit after tax
(continuing operations) |
7.9 |
(4.8) |
|
|
|
|
|
Discontinued operations: |
|
|
|
Changes in discount rates |
- |
(7.1) |
|
Impairment of non-current assets within disposal group & other
related expenses |
10.2 |
- |
|
Impact of deal contingent foreign exchange hedges relating to
disposal group |
(3.8) |
- |
|
Ineffectiveness and impact of termination of cash flow hedges |
(0.1) |
(0.7) |
|
Non-trading and exceptional items in profit before
tax |
6.3 |
(7.8) |
|
Tax on non-trading and exceptional items |
- |
0.1 |
|
Total non-trading and exceptional items in profit after tax
(discontinued operations) |
6.3 |
(7.7) |
|
Total non-trading and exceptional items in profit after
tax |
14.2 |
(12.5) |
* The comparatives have been restated to classify the UK
Municipal segment as a discontinued operation.
Renewi 2.0 improvement programme
As noted in the year to March 2024 financial statements, the
programme is now completed with final costs coming through and the
€20m run rate of savings have now been delivered. The costs in the
period of €nil (2023/24: €1.0m) were recorded in administrative
expenses.
Portfolio management activity
The current year M&A related activity costs of €1.0m relate to
strategic initiatives (2023/24: €0.8m ).
The prior year’s disposals credit in the prior
period of €1.1m related to the release of a provision for a
previous business disposal following a reassessment at 30 September
2023.
The overall €1.0m debit (2023/24: €0.3m credit)
was all recorded in administrative expenses.
Changes in long-term provisions
The debit for changes in discount rates of €3.4m (2023/24: €10.0m
credit) relates to the half yearly assessment of risk free rates
which has impacted all long term provisions.
The debit of €0.7m (2023/24: €nil) for other
changes in long-term provisions relates to additional aftercare
funding requirements.
The total debit of €4.1m (2023/24: €10.0m
credit) has been recorded in cost of sales.
Other items
The €2.1m restructuring activity relates to an ongoing cost saving
programme and is all recorded in administrative expenses..
Amortisation of acquisition related
intangibles
Amortisation of intangible assets acquired in business combinations
of €3.1m (2023/24: €3.0m) is all recorded in cost of sales.
Tax on non-trading and exceptional items
The tax charge for non-trading and exceptional items is €2.4m
(2023/24: €1.5m credit).
Included within discontinued operations (note
12)
The credit for changes in discount rate of €nil (2023/24: €7.1m) is
a result of the annual reassessment of risk free rates which have
impacted all long-term provisions.
The carrying value of the disposal group has
been reassessed against the anticipated capitalisation as well as
the disposal costs and this has resulted in a pre-tax loss on
remeasurement of €7.7m plus disposal costs already incurred of
€2.5m.
The impact of deal contingent foreign exchange
hedges relates to contracts taken out to manage the foreign
exchange risk of the final capitalisation payment for the disposal.
The valuation of these contracts at the period end resulted in a
gain of €3.8m.
The €0.1m credit (2023/24: €0.7m) relates to the
ineffectiveness of the Cumbria PPP project interest rate swaps as a
result of a revised repayment programme for the PPP non-recourse
debt.
6. Net finance
charges
|
|
First half
2024/25
€m |
Restated*
First half
2023/24
€m |
|
Finance charges |
|
|
|
Interest on borrowings |
10.8 |
10.2 |
|
Lease liabilities interest |
4.9 |
4.3 |
|
Unwinding of discount on provisions (note 14) |
2.1 |
2.0 |
|
Interest charge on the retirement pension scheme |
0.2 |
- |
|
Other finance costs |
3.7 |
2.5 |
|
Total finance charges |
21.7 |
19.0 |
|
|
|
|
|
Finance income |
|
|
|
Other finance income |
(0.5) |
(0.6) |
|
Total finance income |
(0.5) |
(0.6) |
|
|
|
|
|
Net finance charges |
21.2 |
18.4 |
* The comparatives have been restated to classify the UK
Municipal segment as a discontinued operation.
Other finance costs include non-recourse fees of
€3.0m (2023/24: €2.2m) and other finance charges of €0.7m (2023/24:
€0.3m).
7. Taxation
The tax charge based on the profit for the
period is made up as follows:
|
|
First half 2024/25
€m |
Restated*
First half 2023/24
€m |
|
Current tax |
|
|
|
UK corporation tax |
|
|
|
- Current period |
0.5 |
0.4 |
|
Overseas tax |
|
|
|
- Current period |
8.2 |
10.2 |
|
Total current tax charge |
8.7 |
10.6 |
|
Deferred tax |
|
|
|
- Origination and reversal of temporary differences in the current
period |
(2.5) |
(0.4) |
|
Total deferred tax credit |
(2.5) |
(0.4) |
|
Total tax charge for the period |
6.2 |
10.2 |
* The comparatives have been restated to
classify the UK Municipal segment as a discontinued operation. The
current tax charge remained unchanged and deferred tax credit
reduced by €0.1m.
The tax charge is recognised based on
management’s best estimate of the full year effective tax rate on
expected full year profits to March 2025. The estimated average
underlying annual tax rate for the year to 31 March 2025 is 27.0%
(2023/24: 27.0%).
Uncertain tax positions
As referenced in the March 2024 financial statements, the Dutch Tax
Authorities have issued assessments adjusting the interest rate
applied for tax purposes on some intra group loans from the UK to
the Netherlands. The assessments have been appealed by the Group
given that the interest rate charged of 5.9% is based on a detailed
transfer pricing study and the Group intends to file an application
under a Mutual Agreement Procedure (“MAP”). No net provision
(2023/24: €1.4m) is included in the accounts, with the prior year
provision being released, as the potential adjustment in the
Netherlands is now expected to be offset by a compensating
adjustment in the UK. At the expected outcome, there is a potential
benefit of an additional deferred tax asset of €3.5m in the UK
which will not be recognised until the MAP process is completed and
the outcome is certain. It is noted that the maximum exposure in
respect of this topic is calculated to be €6.1m (current tax charge
€2.1m, deferred tax charge €4.0m) should the Group be wholly
unsuccessful in its defence, which is reduced from the prior year
amount of €11.6m (current tax charge €2.1m, deferred tax charge
€9.5m) due to additional compensating adjustments in the UK.
Amendments to IAS 12 Income Taxes – International Tax Reform –
Pillar Two Model Rules
Pillar Two legislation has been enacted or
substantively enacted in certain jurisdictions that the Group
operates, with effect from 1 January 2024. An assessment of the
potential exposure to Pillar Two income taxes has been performed,
and based on this assessment, the Group primarily operates in
jurisdictions where Pillar Two effective tax rates are higher than
15%. There may be a limited number of jurisdictions where the
transitional safe harbour relief may not be available, however, the
Group does not expect a significant exposure to Pillar Two income
taxes in respect of these jurisdictions.
Amendments to IAS 12 Income Taxes – Deferred Tax
related to Assets and Liabilities arising from a Single
Transaction
In May 2021, amendments were issued to IAS 12, which narrow the
scope of the initial recognition exemption under IAS 12, so that it
no longer applies to transactions that give rise to equal taxable
and deductible temporary differences. The amendments are effective
from 1 January 2023 and have no material impact on the Group, in
particular since the Group did not apply the initial recognition
exemption in the context of leases under IFRS 16.
8. Earnings per
share
Underlying basic and diluted earnings per share
exclude non-trading and exceptional items 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. 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.
| |
First half 2024/25 |
Restated* First half 2023/24 |
| |
Basic |
Dilutions |
Diluted |
Basic |
Dilutions |
Diluted |
|
Weighted average number of shares (million) |
80.1 |
0.1 |
80.2 |
79.5 |
0.2 |
79.7 |
|
|
|
|
|
|
|
|
| Profit after tax
(€m) |
10.2 |
- |
10.2 |
35.3 |
- |
35.3 |
|
Non-controlling interests (€m) |
(1.6) |
- |
(1.6) |
(1.5) |
- |
(1.5) |
|
Profit after tax attributable to ordinary shareholders (€m) |
8.6 |
- |
8.6 |
33.8 |
- |
33.8 |
|
Basic earnings per share (cents) |
11 |
- |
11 |
42 |
- |
42 |
|
Profit after tax attributable to ordinary shareholders (€m) |
8.6 |
- |
8.6 |
33.8 |
- |
33.8 |
|
Add back loss/(profit) from discontinued operations (€m) |
5.1 |
- |
5.1 |
(8.5) |
- |
(8.5) |
|
Profit after tax attributable to ordinary shareholders from
continuing operations (€m) |
13.7 |
- |
13.7 |
25.3 |
- |
25.3 |
|
Basic earnings per share (cents) – continuing
operations |
17 |
- |
17 |
32 |
- |
32 |
The reconciliation between underlying earnings
per share and basic earnings per share is as follows:
| |
First half 2024/25 |
Restated*
First half 2023/24 |
|
|
Cents |
€m |
Cents |
€m |
|
Underlying basic & diluted earnings per share/Underlying profit
after tax attributable to ordinary shareholders |
28 |
22.8 |
27 |
21.3 |
| Adjustments: |
|
|
|
|
| Non-trading and
exceptional items (continuing & discontinued) |
(20) |
(16.6) |
17 |
14.1 |
|
Tax on non-trading and exceptional items (continuing &
discontinued) |
3 |
2.4 |
(2) |
(1.6) |
|
Basic & diluted earnings per share/ Earnings after tax
attributable to ordinary shareholders |
11 |
8.6 |
42 |
33.8 |
|
Underlying basic & diluted earnings per share/Underlying profit
after tax attributable to ordinary shareholders from continuing
operations |
27 |
21.6 |
26 |
20.5 |
| Adjustments: |
|
|
|
|
| Non-trading and
exceptional items from continuing operations |
(13) |
(10.3) |
8 |
6.3 |
|
Tax on non-trading and exceptional items from continuing
operations |
3 |
2.4 |
(2) |
(1.5) |
|
Basic & diluted earnings per share/Earnings after tax
attributable to ordinary shareholders from continuing
operations |
17 |
13.7 |
32 |
25.3 |
|
Underlying basic & diluted earnings per share/Underlying profit
after tax attributable to ordinary shareholders from discontinued
operations |
1 |
1.2 |
1 |
0.8 |
| Adjustments: |
|
|
|
|
| Non-trading and
exceptional items from discontinued operations |
(7) |
(6.3) |
9 |
7.8 |
|
Tax on non-trading and exceptional items from discontinued
operations |
- |
- |
- |
(0.1) |
|
Basic & diluted earnings per share/ Earnings after tax
attributable to ordinary shareholders from discontinued
operations |
(6) |
(5.1) |
10 |
8.5 |
* The comparatives have been restated to classify the UK
Municipal segment as a discontinued operation.
The weighted average number of shares takes into
account the movements in the Renewi Employee Share Trust. The Trust
owns 347,057 (2023/24: 600,326) £1 shares of the issued share
capital of the Company in trust for the benefit of employees of the
Group. During the period no £1 shares were purchased by the Trust
at a cost of €nil and 253,269 £1 shares were transferred to
individuals under the Long-Term Incentive Plan and Deferred Annual
Bonus schemes.
9. Dividends
The final dividend for the year ended March 2024 was €4.7m
(2023:nil) being 5.0 pence per share and was paid on 31 July
2024.
10. Goodwill,
intangible assets, property, plant and equipment and right-of-use
assets
|
|
Goodwill
€m |
Intangible Assets
€m |
Property, plant
and equipment
€m |
Right-of-use
assets
€m |
Total
€m |
|
Net book value at 1 April 2023 |
569.0 |
67.3 |
617.9 |
253.1 |
1,507.3 |
|
Additions/modifications |
- |
11.7 |
82.6 |
66.6 |
160.9 |
| Acquisitions
through business combinations |
0.7 |
0.9 |
- |
0.1 |
1.7 |
| Disposals |
(1.4) |
(1.5) |
(10.0) |
(6.4) |
(19.3) |
| Transferred to
Assets held for sale |
- |
- |
(5.4) |
- |
(5.4) |
| Transfer from
right-of-use assets to property, plant and equipment |
- |
- |
5.0 |
(5.0) |
- |
|
Amortisation and depreciation charge |
- |
(12.4) |
(69.3) |
(52.1) |
(133.8) |
|
Impairment charge |
- |
- |
(2.8) |
(1.1) |
(3.9) |
|
Reversal of a prior year’s impairment charge |
- |
- |
0.8 |
- |
0.8 |
|
Transferred to disposal group classified as held for sale |
- |
(0.9) |
(0.1) |
(1.4) |
(2.4) |
|
Exchange rate changes |
- |
0.1 |
- |
0.1 |
0.2 |
|
Net book value at 31 March 2024 |
568.3 |
65.2 |
618.7 |
253.9 |
1,506.1 |
|
Additions/modifications |
- |
7.9 |
33.2 |
14.1 |
55.2 |
|
Disposals |
- |
- |
(1.1) |
(0.9) |
(2.0) |
| Transfer from
right-of-use assets to property, plant and equipment |
- |
- |
2.0 |
(2.0) |
- |
|
Amortisation and depreciation charge |
- |
(6.4) |
(35.8) |
(25.1) |
(67.3) |
|
Impairment charge |
- |
- |
0.1 |
- |
0.1 |
|
Net book value at 30 September 2024 |
568.3 |
66.7 |
617.1 |
240.0 |
1,492.1 |
At 30 September 2024, the Group had property,
plant and equipment commitments of €26.7m (31 March 2024: €28.1m),
right-of-use asset commitments of €29.6m (31 March 2024: €21.9m)
and intangible asset commitments of €0.7m (31 March 2024:
€7.8m).
11. Cash
and borrowings
Cash and cash equivalents are analysed as follows:
|
|
30 September 2024
€m |
30 September 2023
€m |
31 March
2024
€m |
|
Cash at bank and in hand - core |
45.6 |
51.2 |
79.0 |
| Cash at bank -
restricted relating to PPP contracts* |
- |
23.2 |
- |
|
Total cash and cash equivalents |
45.6 |
74.4 |
79.0 |
* The current year balance of €30.1m (31 March
2024: €22.9m) has been transferred to assets held for sale as part
of the UK Municipal disposal group, so is no longer part of the
above disclosure – see note 12.
Borrowings are analysed as follows:
| |
30 September
2024
€m |
30 September
2023
€m |
31 March
2024
€m |
|
Non-current borrowings |
|
|
|
| Retail bonds –
fixed interest rates |
124.7 |
124.7 |
124.7 |
| Bank loans and
private placements – fixed interest rates |
89.6 |
89.6 |
89.6 |
| Revolving credit
facility – floating interest rates |
107.9 |
122.9 |
152.6 |
| Lease
liabilities |
199.6 |
201.4 |
207.5 |
|
PPP non-recourse debt |
- |
81.4 |
- |
|
|
521.8 |
620.0 |
574.4 |
|
Current borrowings |
|
|
|
| Retail bonds –
fixed interest rates |
- |
74.9 |
75.0 |
| Bank loans and
private placements – floating interest rates |
77.2 |
- |
- |
| Bank loans and
private placements – fixed interest rates |
- |
15.0 |
- |
| Bank overdrafts –
floating interest rates |
- |
0.3 |
0.1 |
| Lease
liabilities |
41.1 |
46.7 |
45.5 |
|
PPP non-recourse debt |
- |
5.4 |
- |
|
|
118.3 |
142.3 |
120.6 |
PPP non-recourse debt was transferred during the
year to 31 March 2024 to a disposal group classified as held for
sale (see note 12).
In July 2024, the Group entered into a €120m
bridge facility with three of its existing lenders. The facility is
available for drawdown as and when required to July 2025 with a 6
month extension option to January 2026. As of 30 September 2024
€77m had been drawn down.
In August 2023, the Group completed the renewal
of its revolving credit facility, part of its Euro denominated
multicurrency green finance facility. The size of the revolving
credit facility remains unchanged at €400m and is for an initial
five-year term to 2028 with two one-year extension options to 2030
together with a €150m accordion option to increase the facility
subject to lender approval at that time. Financial covenants
remained unchanged and will be tested semi-annually at September
and March. The interest margin is adjusted based on the prevailing
leverage ratio together with performance against three green
sustainability metrics. As required by IFRS 9 Financial
Instruments, we have undertaken a detailed assessment and
determined that the terms of the new facility are substantially
different from the facility being replaced. As a result there was
an extinguishment of the previous facility which has resulted in
€1.1m of unamortised loan fees being charged to the Income
Statement in the period.
Movement in total net debt
|
|
At 1
April
2024
€m |
Cash flows
€m |
Other
non-cash changes
€m |
Exchange movements
€m |
Disposed of
€m |
At 30 September
2024
€m |
|
RCF, bank loans & private placements and overdrafts – floating
interest rates |
(152.7) |
(32.5) |
- |
0.1 |
- |
(185.1) |
| Bank loans and
private placements – fixed interest rates |
(89.6) |
- |
- |
- |
- |
(89.6) |
|
Retail bonds |
(199.7) |
75.0 |
- |
- |
- |
(124.7) |
|
Lease liabilities |
(253.0) |
25.5 |
(13.2) |
- |
- |
(240.7) |
|
Total gross debt |
(695.0) |
68.0 |
(13.2) |
0.1 |
- |
(640.1) |
|
Cash and cash equivalents – core |
79.0 |
(33.9) |
- |
0.5 |
- |
45.6 |
|
Total net debt |
(616.0) |
34.1 |
(13.2) |
0.6 |
- |
(594.5) |
At 30 September 2024, the balance of interest
accrued relating to borrowings was €3.6m (2023/24: €3.8m) and was
included in trade and other payables. This balance was after
finance charges of €19.1m (2023/24: €18.6m) net of a cash outflow
of €22.2m (2023/24: €23.4m) (excluding €0.5m (2023/24: €2.6m) of
loan fees) and € (0.1)m (2023/24: € (0.1)m) relating to exchange
rate changes.
Analysis of movement in total net
debt
| |
First half 2024/25
€m |
First half 2023/24
€m |
Full year
2023/24
€m |
|
Net (decrease) increase in cash and cash equivalents |
(33.9) |
11.2 |
39.8 |
| Net increase in
borrowings and lease liabilities |
68.0 |
5.1 |
23.2 |
|
Cash flows in total net debt |
34.1 |
16.3 |
63.0 |
| Bank loans and
lease liabilities acquired through a business combination |
- |
- |
- |
| Lease liabilities
entered into during the period |
(14.1) |
(18.7) |
(60.0) |
| Lease liabilities
cancelled during the period |
0.9 |
- |
- |
| Capitalisation of
loan fees |
0.5 |
2.6 |
2.8 |
| Amortisation of
loan fees |
(0.5) |
(1.6) |
(2.1) |
| Transferred to
disposal group classified as held for sale (note 12) |
- |
- |
67.7 |
| Exchange gain
(loss) |
0.6 |
(0.8) |
(1.7) |
|
Movement in net debt |
21.5 |
(2.2) |
69.7 |
|
Total net debt at beginning of period |
(616.0) |
(685.7) |
(685.7) |
|
Total net debt at end of period |
(594.5) |
(687.9) |
(616.0) |
12. Assets
classified as held for sale, discontinued operations and disposal
group
The Group had €133.3m (31 March 2024: €137.7m)
of assets classified as held for sale at 30 September 2024, €129.4m
(31 March 2024: €132.3m) relates to assets classified as held for
sale within the UK Municipal disposal group and €3.9m (31 March
2024: €5.4m) relates to land and buildings in the Mineralz &
Water Division which are expected to be sold within the next 12
months.
The intended UK Municipal disposal meets the
definition of a discontinued operation as stated in IFRS 5
Non-current assets held for sale and discontinued operations,
therefore the net results and the loss on remeasurement to fair
value less cost of sale are presented as discontinued operations in
the Income Statement and the prior year Income Statement and
Statement of Cash Flows have been restated. The UK Municipal
business was previously reported within the Specialities segment,
as disclosed in note 3.
Income statement in relation to the discontinued
operations:
|
|
First half 2024/25 |
|
First half 2023/24 |
|
|
Underlying
€m |
Non-trading
& exceptional items
€m |
Total
€m |
|
Underlying
€m |
Non-trading
& exceptional items
€m |
Total
€m |
|
Revenue |
99.2 |
- |
99.2 |
|
92.8 |
- |
92.8 |
|
Cost of sales |
(94.1) |
- |
(94.1) |
|
(87.7) |
7.1 |
(80.6) |
|
Gross profit |
5.1 |
- |
5.1 |
|
5.1 |
7.1 |
12.2 |
| Administrative
expenses |
(2.7) |
(10.2) |
(12.9) |
|
(3.4) |
- |
(3.4) |
|
Operating profit |
2.4 |
(10.2) |
(7.8) |
|
1.7 |
7.1 |
8.8 |
| Finance
income |
4.4 |
0.1 |
4.5 |
|
4.5 |
0.7 |
5.2 |
| Finance
charges |
(5.9) |
- |
(5.9) |
|
(5.9) |
- |
(5.9) |
|
Share of results from associates and joint ventures |
0.3 |
- |
0.3 |
|
0.3 |
- |
0.3 |
|
Profit before taxation |
1.2 |
(10.1) |
(8.9) |
|
0.6 |
7.8 |
8.4 |
|
Taxation |
- |
- |
- |
|
0.2 |
(0.1) |
0.1 |
|
Profit for the period of the discontinued
operation |
1.2 |
(10.1) |
(8.9) |
|
0.8 |
7.7 |
8.5 |
|
Fair value movement of the deal contingent forward contracts |
- |
3.8 |
3.8 |
|
- |
- |
- |
|
Profit for the period from discontinued
operations |
1.2 |
(6.3) |
(5.1) |
|
0.8 |
7.7 |
8.5 |
Details of the non-trading & exceptional
items are set out in note 5. Finance income line above includes
€4.0m (2023/24: €4.1m) of interest receivable on financial assets
relating to PPP contracts.
| |
|
First half
2024/25
€m |
First half
2023/24
€m |
|
Other comprehensive income from discontinued
operations |
|
|
|
| Exchange
differences on translation of discontinued operations |
|
(8.7) |
(3.8) |
| Fair value movement
on cash flow hedges of discontinued operations |
|
(0.3) |
3.9 |
| Deferred tax on
fair value movement on cash flow hedges of discontinued
operations |
|
0.1 |
(1.0) |
|
Share of Other Comprehensive Income of investments of discontinued
operations accounted for using the equity method |
|
- |
0.1 |
|
Total other comprehensive loss income from discontinued
operations |
|
(8.9) |
(0.8) |
|
|
|
|
|
| Cash flow
information in relation to the discontinued
operations |
|
|
|
| Net cash outflow
from operating activities |
|
(7.0) |
(4.1) |
| Net cash inflow
from investing activities |
|
8.3 |
7.6 |
| Net cash outflow
from financing activities |
|
(7.3) |
(6.8) |
|
Net movement in cash |
|
(6.0) |
(3.3) |
On 28 September 2023, the Group announced that a
comprehensive review of the UK Municipal business, part of the
Specialities operating segment, was being undertaken and it was
exploring a range of options to achieve an exit from this segment.
Towards the end of March 2024, the Board decided to pursue a
conclusion with the preferred party and as a result, on 30 May
2024, the Group entered into a binding agreement to sell UK
Municipal to Biffa Limited, a leading UK-wide integrated waste
management business. A nominal cash consideration will be received
for the divestment and UK Municipal will be transferred with the
appropriate assets and capitalisation to ensure fulfilment of its
contractual obligations. Capitalisation is expected to require a
cash injection of £125m (equivalent to €146m as at 31 March 2024)
into the disposal group on completion. The criteria for asset held
for sale were met after the Board meeting in March 2024 and
therefore the UK Municipal assets and liabilities were presented as
held for sale in the financial statement for the year ended 31
March 2024.
During the period ended 30 September 2024 the
disposal progressed, but had not completed before 30 September
2024, therefore there were no changes to the original assessment
and it continued to be appropriate for the UK Municipal assets and
liabilities to be presented as held for sale as at 30 September
2024.
Since the period end the disposal has completed on 10 October
2024, please see note 20 for further details.
Assets classified as held for sale and related
liabilities are as follows:
| |
Amounts included within Disposal Group
€m |
Remeasurement under IFRS 5
€m |
Disposal Group at 30 September 2024
€m |
|
Assets classified as held for sale |
|
|
|
| Intangible assets
(note 10) |
0.8 |
(0.8) |
- |
| Property, plant
and equipment (note 10) |
0.1 |
(0.1) |
- |
| Right-of-use
assets (note 10) |
1.1 |
(1.1) |
- |
| Investments in
joint ventures and associates |
2.7 |
(2.7) |
- |
| Financial assets
relating to PPP contracts |
127.3 |
(68.2) |
59.1 |
| Trade and other
receivables |
32.4 |
- |
32.4 |
| Inventories |
3.2 |
- |
3.2 |
| Cash – core |
0.1 |
- |
0.1 |
| Cash –
restricted |
30.1 |
- |
30.1 |
| Derivative
financial instruments |
1.4 |
- |
1.4 |
| Deferred tax
assets |
1.0 |
- |
1.0 |
| Current tax
receivable |
2.1 |
- |
2.1 |
|
Total assets of disposal group held for sale |
202.3 |
(72.9) |
129.4 |
|
|
|
|
|
|
Liabilities directly associated with assets classified as
held for sale |
|
|
|
| External
borrowings – Lease liabilities |
(6.4) |
- |
(6.4) |
| External
borrowings – PPP debt |
(84.9) |
- |
(84.9) |
| Provisions: OCPs
& Others |
(126.9) |
- |
(126.9) |
| Deferred tax
liabilities |
(2.2) |
- |
(2.2) |
| Current tax
payable |
(0.6) |
- |
(0.6) |
| Derivative
financial instruments |
(1.8) |
- |
(1.8) |
|
Trade and other payables |
(59.4) |
- |
(59.4) |
|
Total liabilities of disposal group held for
sale |
(282.2) |
- |
(282.2) |
|
|
|
|
|
|
Net liabilities held for sale/Carrying value |
(79.9) |
(72.9) |
(152.8) |
The carrying value of the disposal group has
been reassessed, as at 30 September 2024, against the anticipated
capitalisation as well as the disposal costs and this has resulted
in a revised remeasurement of the assets held for sale of €72.9m
(31 March 2024: €63.5m). The movement of €9.4m to the IFRS 5
remeasurement comprises: an increased pre-tax loss on remeasurement
of €7.7m, recognised within the non-trading and exceptional items
column in the loss for the year from discontinued operations line
in the Income Statement, as outlined in note 5; plus a foreign
exchange loss of 1.7m recognised within Other Comprehensive
Income.
As was the case as at 31 March 2024, the
remeasurement is first allocated to all in IFRS 5 scope non-current
assets. As outlined in the critical judgements and estimates
section of the basis of preparation, a policy has been adopted
where the excess impairment is allocated to the non-current
financial assets relating to PPP contracts.
The UK Municipal disposal group has recognised cumulative
exchange differences on translation through other comprehensive
income totalling a loss of €11.6m and cumulative fair value
movements on cash flow hedges of a loss of €1.1m at 30 September
2024, which will be recognised in the final loss on sale on
completion of the transaction.
The deal contingent foreign exchange hedges, which relate to
contracts taken out to manage the foreign exchange risk of the
final capitalisation payment for the disposal, are not included
within the disposal group as they do not form part of the assets
being transferred to Biffa. The valuation of these contracts at the
period end resulted in an asset of €3.8m, with corresponding gain
recognised within the income statement, as disclosed within note
5.
13. Acquisitions
and Disposals
Acquisitions
There are no current or prior period
acquisitions.
Disposals
There are no current period disposals.
In the prior period, the Netherlands Commercial
division disposed of 100% of the share capital of Buro ontwerp
& omgeving B.V. to GMP Groep B.V. for a cash consideration of
€2.3m. The net assets of the entity sold totalled €2.3m including
€1.4m of goodwill, €0.7m cash and €0.1m of lease liabilities
resulting in no profit or loss on disposal.
14. Provisions
|
|
|
Site restoration and aftercare
€m |
Legal and warranty
€m |
Restructuring
€m |
Other
€m |
Total
€m |
|
At 1 April 2024 |
|
161.9 |
4.8 |
5.2 |
27.1 |
199.0 |
| Provided in the
period |
|
0.2 |
- |
1.8 |
0.7 |
2.7 |
| Released in the
period |
|
- |
- |
- |
(0.2) |
(0.2) |
| Finance charges
– unwinding of discount |
|
2.0 |
- |
- |
0.1 |
2.1 |
| Utilised in the
period |
|
(2.3) |
- |
(4.6) |
(0.8) |
(7.7) |
| Exceptional
impact of increase in discount rates (note 5) |
|
3.4 |
- |
- |
- |
3.4 |
|
Exchange rate changes |
|
0.1 |
- |
- |
- |
0.1 |
|
At 30 September 2024 |
|
165.3 |
4.8 |
2.4 |
26.9 |
199.4 |
|
Within one year |
|
10.2 |
1.1 |
2.4 |
4.6 |
18.3 |
| Between
one and five years |
|
66.5 |
0.7 |
- |
7.4 |
74.6 |
| Between
five and ten years |
|
36.3 |
0.4 |
- |
3.7 |
40.4 |
|
Over ten years |
|
52.3 |
2.6 |
- |
11.2 |
66.1 |
|
At 30 September 2024 |
|
165.3 |
4.8 |
2.4 |
26.9 |
199.4 |
|
Within one year |
|
10.3 |
1.1 |
5.2 |
4.9 |
21.5 |
| Between one and
five years |
|
51.6 |
0.7 |
- |
7.4 |
59.7 |
| Between five and
ten years |
|
48.0 |
0.4 |
- |
4.4 |
52.8 |
|
Over ten years |
|
52.0 |
2.6 |
- |
10.4 |
65.0 |
|
At 31 March 2024 |
|
161.9 |
4.8 |
5.2 |
27.1 |
199.0 |
Discount rates
The landfill provisions are principally located in the Netherlands
and Belgium. The discount rate is calculated with reference to
German Government bond yields as an appropriate Eurozone country
primarily due to their higher degree of liquidity compared to Dutch
and Belgian Government bonds. In determining the discount rate,
consideration is also given to the timing of future cash flows. The
cash flows used to determine the outstanding provision are risk
adjusted and include annual inflation so there is no risk
adjustment included within the nominal discount rate. In all cases,
the final determination of rates used has taken into consideration
average bond yields over the last 10 and 20 years and the market
bond yields at 30 September 2024.
The table below sets out the range of nominal discount rates
used for the significant provisions:
|
|
|
|
At 30 September 2024
% |
At 31
March
2024
% |
At 30 September 2023
% |
|
Landfill provisions in the Netherlands and Belgium |
|
|
1.80 to 2.35 |
2.25 to 2.45 |
2.75 to 3.00 |
| Landfill provisions
in the UK |
|
|
4.25 to 4.35 |
4.05 to 4.15 |
4.45 to 5.00 |
Site restoration and aftercare
The Group’s unavoidable costs have been reassessed at the year end
and the NPV fully provided for. The site restoration provisions at
30 September 2024 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 27
years from the balance sheet date. Aftercare provisions cover post
closure costs of landfill sites which include such items as
monitoring, gas and leachate management and licensing. For
aftercare provisions relating to Dutch landfill sites where the
province administers and controls the aftercare fund, payments are
made to the province at predetermined dates over a period of up to
10 years. Where the Group is responsible for the aftercare 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.
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.
Restructuring
The restructuring provision primarily relates to redundancy and
related costs incurred as a result of restructuring initiatives.
The provision is expected to be spent in the following twelve
months as affected employees leave the business.
Other
Other provisions includes dilapidations of €10.6m (March 2024:
€10.0m), long-service employee awards of €6.5m (March 2024: €6.2m),
onerous contracts of €1.5m (March 2024: €1.6m) and other
environmental liabilities of €8.3m (March 2024: €9.3m). 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 2072.
15. Defined
benefit pension schemes
The Group has the legacy Shanks UK defined
benefit scheme which provides pension benefits for pensioners,
deferred members and eligible UK employees which is closed to new
entrants and to future benefit accrual. In addition, there are a
number of defined benefit pension schemes eligible for certain
employees in both the Netherlands and Belgium.
The amounts recognised in the Income Statement
were as follows:
|
|
|
First half 2024/25
€m |
First half 2023/24
€m |
|
Current service cost |
|
0.8 |
0.7 |
|
Interest charge on scheme net liabilities |
|
0.2 |
0.1 |
|
Net defined benefit pension schemes charge before
tax |
|
1.0 |
0.8 |
The amounts recognised in the balance sheet were as follows:
|
|
30 September
2024
€m |
30 September
2023
€m |
31 March
2024
€m |
|
Present value of defined benefit obligations |
(204.7) |
(187.1) |
(211.4) |
|
Fair value of plan assets |
197.7 |
175.2 |
198.5 |
|
Defined benefit pension schemes net deficit |
(7.0) |
(11.9) |
(12.9) |
|
Related deferred tax asset |
1.7 |
3.0 |
3.2 |
|
Net defined pension schemes liability |
(5.3) |
(8.9) |
(9.7) |
|
|
|
|
|
|
Classified as: |
|
|
|
|
Defined benefit scheme surplus - included in non-current
assets |
- |
- |
- |
|
Defined benefit pension schemes deficit - included in non-current
liabilities |
(7.0) |
(11.9) |
(12.9) |
|
Defined benefit pension schemes net deficit |
(7.0) |
(11.9) |
(12.9) |
The legacy Shanks UK defined benefit scheme
deficit decreased by €5.9m from €7.6m at 31 March 2024 to €1.7m at
30 September 2024. The scheme liabilities reduced due to an
increase in the discount rate assumption from 4.8% at 31 March 2024
to 5.1% at 30 September 2024 however asset values decreased as a
result of lower than anticipated returns. The deficit for the
overseas defined benefit schemes was unchanged from a liability of
€5.3m at 31 March 2024.
16. 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
value are observable, either directly or indirectly
- Level 3: techniques which use
inputs which have a significant effect on the recorded fair value
that are not based on observable market data
During the period ended 30 September 2024, 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:
- In the prior year, other unlisted
non-current investments comprise unconsolidated companies where the
fair value approximates the book value.
- Valuations for investment funds are
provided by the fund manager.
- Derivative financial instruments
are determined by discounting the future cash flows using the
applicable period-end yield curve.
- The fair values of the fixed
interest rate bank loans and private placements are determined by
discounting the future cash flows using the applicable period-end
yield curve.
- The fair value of retail bonds is
based on indicative market pricing.
Valuation techniques used to derive level 3 fair values:
- In the current year, the unlisted
non-current investments, comprising unconsolidated companies, have
been fair valued by discounting the expected future cash flows from
dividend income streams using a pre-tax expected market rate of
return.
- The deal contingent forward foreign
exchange contracts have been fair valued by reference to
contractual and observable foreign exchange rates and an estimate
of the likelihood of the disposal transaction completing as at the
period end.
The significant unobservable inputs used in the
level 3 fair value measurement of unlisted non-current investments
were the risk adjusted discount rate (being the related cost of
equity) and the expected cash inflows from dividends. The risk
adjusted discount rate of 12.15% (31 March 2024: 12.19%) has been
used in the fair value measurement. Increasing either the discount
rate or cash inflows by +/- 5% leads to changes in fair values that
are less than €1.0m, and it is concluded that no reasonably
possible change to either of these assumptions would result in a
material change to the fair value of the investment.
The significant unobservable input used in the
level 3 fair value measurement of derivative financial instruments,
being the deal contingent forward foreign exchange contracts
related to the disposal of the UK Municipal business, was the
estimate of the likelihood of the disposal transaction completing,
with a probability assessment of 85% used in the fair value
measurement. Increasing the probability assessment by +/- 5% leads
to changes in fair values that are less than €1.0m, and it is
concluded that no reasonably possible change to this assumption
would result in a material change to the fair value of the
derivative financial instruments.
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.
|
|
Level 2 |
Level 3 |
Total |
|
|
30 September 2024
€m |
30 September 2023
€m |
31 March
2024
€m |
30 September 2024
€m |
30 September 2023
€m |
31 March
2024
€m |
30 September 2024
€m |
30 September 2023
€m |
31 March
2024
€m |
|
Assets |
|
|
|
|
|
|
|
|
|
|
Unlisted non-current investments |
- |
- |
- |
5.4 |
4.6 |
6.4 |
5.4 |
4.6 |
6.4 |
|
Investment funds |
11.5 |
10.9 |
11.3 |
- |
- |
- |
11.5 |
10.9 |
11.3 |
|
Derivative financial instruments |
- |
6.5 |
1.4 |
3.8 |
- |
- |
3.8 |
6.5 |
1.4 |
|
|
11.5 |
17.4 |
12.7 |
9.2 |
4.6 |
6.4 |
20.7 |
22.0 |
19.1 |
|
Liabilities |
|
|
|
|
|
|
|
|
|
|
Derivative financial instruments |
0.8 |
0.5 |
- |
- |
- |
- |
0.8 |
0.5 |
- |
|
Bank loans and private placements – fixed interest rates |
96.6 |
109.4 |
95.0 |
- |
- |
- |
96.6 |
109.4 |
95.0 |
|
Retail bonds |
123.6 |
194.5 |
195.4 |
- |
- |
- |
123.6 |
194.5 |
195.4 |
|
|
221.0 |
304.4 |
290.4 |
- |
- |
- |
221.0 |
304.4 |
290.4 |
17. Contingent
liabilities
Since 2017 ATM has faced challenges in the
offtake of thermally treated soil. There are discussions ongoing on
the application of thermally treated soil in certain areas in the
Netherlands and it cannot be ruled out that this could result in
liability for damages resulting from third-party claims in the
future.
All sites need to operate in alignment with the
related permits and when new regulatory requirements come into
force, the Group may need to undertake additional expenditure to
align to new standards. No account is taken of any potential
changes until the new obligations are fully defined and
enforceable.
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 15 years.
Based on management’s assessment of the most likely outcome
appropriate warranty provisions are held.
18. Related
party transactions
The Group’s significant related party
transactions remain as disclosed in note 8.2 of the 2024 Annual
Report and Accounts. There were no material differences in related
parties or related party transactions in the interim period
compared to the prior year.
19. Alternative
performance measures (APMs) and reconciliations
In accordance with the Guidelines on APMs issued
by the European Securities and Markets Authority, and considering
the thematic reviews undertaken by AFM (MarketWatch – February
2024) and the Financial Reporting Council (October 2021),
additional information is provided on the APMs used by the Group
below. The Directors use APMs 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.
|
Financial Measure |
Closest GAAP measure or equivalent
calculation |
How we define it |
Why we use it |
|
Underlying EBIT |
Operating profit |
Operating profit excluding non trading and exceptional items which
are defined in note 5. The adjustments made between underlying and
statutory figures can also be seen on the face of the Consolidated
Income Statement |
Provides insight into profit generation and is the measure used by
management to make decisions as it provides consistency and
comparability of the ongoing performance between periods |
|
Underlying EBIT margin |
Operating profit margin |
Underlying EBIT as a percentage of revenue |
Provides insight into margin development and trends |
|
Underlying EBITDA |
Operating profit |
Underlying EBIT before depreciation, amortisation and impairment of
property, plant and equipment, right-of-use assets, intangible
assets and investments, profit or loss on disposal of property,
plant and equipment, intangible assets and subsidiaries |
Measure of earnings and cash generation to assess operational
performance |
|
Underlying profit before tax |
Profit before tax |
Profit before tax excluding non trading and exceptional items |
Facilitates underlying performance evaluation |
|
Underlying EPS |
EPS |
Earnings per share excluding non-trading and exceptional items |
Facilitates underlying performance evaluation |
|
Underlying effective tax rate |
Effective tax rate on profit before tax |
The effective tax rate on underlying profit before tax |
Provides a more comparable basis to analyse the tax rate |
|
Return on operating assets |
Operating profit divided by net assets |
Last 12 months underlying EBIT divided by a 13-month average of net
assets excluding core net debt, IFRS 16 lease liabilities,
derivatives, tax balances, goodwill and acquisition related
intangibles |
Provides a measure of the return on assets across the Divisions and
the Group excluding goodwill and acquisition related intangible
balances |
|
Underlying post-tax return on capital
employed |
Profit after tax divided by net assets |
Last 12 months underlying EBIT as adjusted by the Group effective
tax rate divided by a 13-month average of net assets excluding core
net debt, IFRS 16 lease liabilities and derivatives |
Provides a measure of the Group return on assets taking into
account the goodwill and acquisition related intangible
balances |
|
Adjusted free cash flow |
Total of net cash inflow from operating activities plus net outflow
from investing activities |
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,
settlement of historic ATM soil liabilities and cash flows relating
to the UK PPP contracts. Payments to fund defined benefit pension
schemes are also excluded as these schemes are now closed to both
new members and ongoing accrual and as such relate to historic
liabilities. The Municipal contract cash flows are excluded because
they principally relate to onerous contracts as reported in
exceptional charges in the past and caused by adverse market
conditions not identified at the inception of the contract |
Measure of cash generation in the underlying business available to
fund growth capital projects and invest in acquisition. We classify
our capital spend into general replacement expenditure and growth
capital projects. |
Non-trading and exceptional
cash flow items |
N/A |
Renewi 2.0 and other exceptional cash flows are presented in cash
flows from operating activities and are included in the categories
in note 5, net of opening and closing Balance Sheet positions |
Provides useful information on non-trading and exceptional cash
flow spend |
|
Free cash flow |
Total of net cash inflow from operating activities plus net cash
outflow from investing activities |
Net cash generated from operating activities, including interest,
tax and replacement capital spend |
Measure of cash available after regular replacement capital
expenditure and historic liabilities to pay dividends, fund growth
capital projects and invest in acquisitions |
|
Free cash flow/EBITDA conversion |
Total of net cash inflow from operating activities plus net cash
outflow from investing activities Total of net cash inflow from
operating activities plus net cash outflow from investing
activities divided by operating profit |
The ratio of free cash flow to underlying EBITDA |
Provides an understanding of how profits convert into cash |
Growth capital
expenditure |
N/A |
Growth capital projects which include the innovation portfolio and
other large strategic investments |
Provides an understanding of how cash is being spent to grow the
business |
|
Total cash flow |
Net movement in cash and cash equivalents |
Total cash flow is the movement in net debt excluding loan fee
capitalisation and amortisation, exchange movements, movement in
PPP cash and PPP non-recourse debt, additions to IFRS 16 lease
liabilities and lease liabilities acquired through a business
combination |
Provides an understanding of total cash flow of the Group |
|
Core cash |
Cash and cash equivalents |
Core cash excludes cash and cash equivalents relating to UK PPP
contracts |
The cash relating to UK PPP contracts is not freely available to
the Group and is excluded from financial covenant calculations of
the main multicurrency green finance facility therefore excluding
this gives a suitable measure of cash for the Group |
|
Core net debt |
Borrowings |
Core net debt includes core cash excludes debt relating to the UK
PPP contracts and lease liabilities as a result of IFRS 16 |
The borrowings relating to the UK PPP contracts are non-recourse to
the Group and excluding these gives a suitable measure of
indebtedness for the Group and IFRS 16 lease liabilities are
excluded as financial covenants on the main multicurrency green
finance facility remain on a frozen GAAP basis |
|
Liquidity |
N/A |
Liquidity headroom includes core cash and undrawn committed amounts
on the multicurrency green finance facility and the European
Investment Bank facility. |
Provides an understanding of available headroom to the Group |
|
Net debt to covenant defined EBITDA/leverage
ratio |
Net debt and operating profit |
This is the key covenant of the Group’s banking facilities which is
calculated following an agreed methodology to protect the Group
from potential volatility caused by accounting standard changes,
sudden movements in exchange rates and exceptional items. Net debt
and EBITDA are measured on a frozen GAAP basis with the main impact
of this being the exclusion of IFRS 16 Lease Liabilities.
Exceptional items are excluded from EBITDA and cash and debt
relating to UK PPP contracts is excluded from net debt. Net debt
and EBITDA are translated to Euros using average exchange rates for
the period. Covenant ratios are measured semi-annually on a rolling
12-month basis at March and September. |
Commonly used measure of financial leverage and consistent with
covenant definition |
Reconciliation of operating profit
(loss) to underlying EBITDA from continuing operations
| First
half 2024/25 |
Netherlands Commercial Waste
€m |
Belgium Commercial Waste
€m |
Mineralz & Water
€m |
Specialities
€m |
Group central services
€m |
Total
€m |
|
Operating profit (loss) from continuing
operations |
22.9 |
18.3 |
6.0 |
9.1 |
(13.4) |
42.9 |
|
Non-trading and exceptional items (excluding finance items) |
3.6 |
1.4 |
2.8 |
0.4 |
2.1 |
10.3 |
|
Underlying EBIT from continuing operations |
26.5 |
19.7 |
8.8 |
9.5 |
(11.3) |
53.2 |
| Depreciation and
impairment of property, plant and equipment and right-of-use
assets* |
28.0 |
17.6 |
7.9 |
4.1 |
3.2 |
60.8 |
| Amortisation of
intangible assets (excluding acquisition intangibles &
discontinued operations) |
0.5 |
- |
0.4 |
- |
2.5 |
3.4 |
|
Non-exceptional gain on disposal of property, plant and equipment,
intangible assets and subsidiaries |
(0.6) |
(0.3) |
- |
- |
- |
(0.9) |
|
Underlying EBITDA from continuing operations |
54.4 |
37.0 |
17.1 |
13.6 |
(5.6) |
116.5 |
* Includes depreciation charges, impairment charges and
impairment releases relating to continuing operations, but excludes
any such items recorded within non-trading and exceptional items,
as these are already accounted for within underlying EBIT.
Additional analysis by segment is shown in note 3.
|
First half 2023/24 |
Netherlands Commercial Waste
€m |
Belgium Commercial Waste
€m |
Mineralz & Water
€m |
Restated*
Specialities
€m |
Group
central services
€m |
Restated*
Total
€m |
|
Operating profit (loss) from continuing
operations |
25.7 |
24.1 |
9.5 |
8.2 |
(12.2) |
55.3 |
|
Non-trading and exceptional items (excluding finance items) |
0.1 |
0.4 |
(8.0) |
0.4 |
0.8 |
(6.3) |
|
Underlying EBIT from continuing operations |
25.8 |
24.5 |
1.5 |
8.6 |
(11.4) |
49.0 |
|
Depreciation and impairment of property, plant and equipment and
right-of-use assets** |
29.0 |
15.7 |
8.3 |
3.9 |
3.2 |
60.1 |
|
Amortisation of intangible assets (excluding acquisition
intangibles & discontinued operations) |
0.5 |
- |
0.4 |
- |
2.3 |
3.2 |
|
Non-exceptional gain on disposal of property, plant and equipment,
intangible assets and subsidiaries |
(0.6) |
(0.4) |
- |
0.1 |
- |
(0.9) |
|
Underlying EBITDA from continuing operations |
54.7 |
39.8 |
10.2 |
12.6 |
(5.9) |
111.4 |
* The comparatives have been restated to classify the UK
Municipal segment as a discontinued operation.
** Includes depreciation charges, impairment
charges and impairment releases relating to continuing operations,
but excludes any such items recorded within non-trading and
exceptional items, as these are already accounted for within
underlying EBIT.
Calculation of return on operating
assets from continuing operations
|
First half 2024/25 |
|
Netherlands Commercial Waste
€m |
Belgium Commercial Waste
€m |
Mineralz & Water
€m |
Specialities excluding UK Municipal
€m |
Group
€m |
Underlying EBIT from continuing operations
(12 months to 30 September 2024) |
|
53.6 |
40.8 |
16.9 |
17.2 |
109.7 |
|
13 month average of operating assets |
|
433.0 |
172.6 |
56.8 |
62.9 |
547.0 |
|
Return on operating assets from continuing
operations |
|
12.4% |
23.6% |
29.7% |
27.4% |
20.1% |
|
First half 2023/24 Restated* |
|
|
|
|
|
|
Underlying EBIT from continuing operations
(12 months to 30 September 2023) |
|
62.4 |
48.8 |
(0.6) |
16.2 |
108.5 |
|
13 month average of operating assets |
|
432.7 |
141.7 |
64.1 |
51.3 |
494.9 |
|
Return on operating assets from continuing operations |
|
14.4% |
34.4% |
-0.9% |
31.5% |
21.9% |
* The comparatives have been restated to classify the UK
Municipal segment as a discontinued operation.
Calculation of underlying post-tax
return on capital employed
|
|
September 2024
€m |
September
2023
€m |
|
Operating profit (from continuing and discontinued operations) for
12 months to September |
8.6 |
101.9 |
|
Non-trading and exceptional items in operating profit (from
continuing and discontinued operations) for 12 months to
September |
103.1 |
6.5 |
|
Underlying EBIT (from continuing and discontinued operations) for
12 months to September |
111.7 |
108.4 |
|
Tax at effective rate (2024/25: 27.0%, 2023/24: 27.0%) |
(30.2) |
(29.4) |
|
Post tax underlying EBIT (from continuing and discontinued
operations) for 12 months to September |
81.5 |
79.0 |
|
|
|
|
|
13 month average of capital employed |
1,035.9 |
975.5 |
|
|
|
|
|
Underlying post-tax return on capital
employed |
7.9% |
8.1% |
Reconciliation of statutory profit
before tax to underlying profit before tax
|
|
First half 2024/25
€m |
Restated*
First half 2023/24
€m |
|
Statutory profit before tax |
21.5 |
37.0 |
|
Non-trading and exceptional items in operating profit |
10.3 |
(6.3) |
|
Underlying profit before tax |
31.8 |
30.7 |
* The comparatives have been restated to
classify the UK Municipal segment as a discontinued operation.
Reconciliation of adjusted free cash
flow and free cash flow as presented in the Finance
review
|
|
First half 2024/25
€m |
First half 2023/24
€m |
|
Net cash generated from operating activities |
106.6 |
88.8 |
|
Include finance charges and loan fees paid |
(25.8) |
(23.3) |
|
Include finance income received |
5.6 |
5.5 |
|
Include repayment of obligations under lease liabilities |
(26.3) |
(25.4) |
|
Include purchases of replacement items of intangible assets |
(8.1) |
(10.3) |
|
Include purchases of replacement items of property, plant and
equipment |
(28.3) |
(34.4) |
|
Include proceeds from disposals of property, plant &
equipment |
1.7 |
3.3 |
|
Include capital received in respect of PPP financial asset net of
outflows |
3.4 |
2.7 |
|
Include repayment of UK Municipal contracts PPP debt |
(2.9) |
(2.7) |
|
Include movement in UK Municipal contracts PPP cash |
(6.4) |
(4.0) |
|
Include investment in own shares by the Employee Share Trust |
- |
(1.7) |
|
Include net movements in associates and joint ventures |
0.8 |
(0.1) |
|
Free cash flow |
20.3 |
(1.6) |
|
Exclude deferred Covid taxes paid |
8.2 |
9.7 |
|
Exclude offtake of ATM soil |
3.6 |
1.0 |
|
Exclude UK Municipal contracts |
18.5 |
9.8 |
|
Exclude non-trading and exceptional provisions and working
capital |
6.6 |
1.6 |
|
Exclude payments to fund defined benefit pension schemes |
1.8 |
1.8 |
|
Exclude investment in own shares by the Employee Share Trust |
- |
1.7 |
|
Exclude net movements in associates and joint ventures |
(0.8) |
0.1 |
|
Adjusted free cash flow |
58.2 |
24.1 |
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 2024/25
€m |
First half 2023/24
€m |
|
Purchases of intangible assets |
(8.1) |
(10.3) |
|
Purchases of replacement property, plant and equipment |
(28.3) |
(34.4) |
|
Proceed from disposals of property, plant and equipment |
1.7 |
3.3 |
|
Net replacement capital expenditure |
(34.7) |
(41.4) |
|
Growth capital expenditure |
(8.3) |
(15.9) |
|
Total capital spend as shown in the cash flow in the
Finance review |
(43.0) |
(57.3) |
|
|
First half 2024/25
€m |
First half 2023/24
€m |
|
Purchases of intangible assets |
(8.1) |
(10.3) |
|
Purchases of property, plant and equipment (replacement and
growth) |
(36.6) |
(50.3) |
|
Proceed from disposals of property, plant and equipment |
1.7 |
3.3 |
|
Purchases and disposal proceeds of property, plant and
equipment and intangible assets within Investing activities in the
consolidated Statement of Cash Flows |
(43.0) |
(57.3) |
Reconciliation of property, plant and
equipment additions to replacement capital expenditure as presented
in the Finance review
|
|
First half 2024/25
€m |
First half 2023/24
€m |
|
Property, plant and equipment additions (note 10) |
(33.2) |
(38.5) |
|
Intangible asset additions (note 10) |
(7.9) |
(10.0) |
|
Proceeds from disposals of property, plant and equipment |
1.7 |
3.3 |
|
Movement in capital creditors (included in trade and other
payables) |
(3.6) |
(12.1) |
|
Growth capital expenditure – as disclosed in the Finance
review |
8.3 |
15.9 |
|
Replacement capital expenditure per Finance
review |
(34.7) |
(41.4) |
Reconciliation of total cash flow as presented in the
Finance review to the movement in total net debt
|
|
First half 2024/25
€m |
First half 2023/24
€m |
|
Total cash flow |
7.2 |
(15.9) |
|
Additions to lease liabilities net of cancelled lease
liabilities |
(13.2) |
(18.7) |
|
Repayment of obligations under lease liabilities |
25.5 |
25.4 |
|
Lease liabilities disposed of |
- |
0.1 |
|
Remove movements in discontinued core cash |
1.4 |
- |
|
Movement in PPP non-recourse debt |
- |
2.7 |
|
Movement in PPP cash and cash equivalents |
- |
4.0 |
|
Capitalisation of loan fees net of amortisation |
- |
1.0 |
|
Exchange movements |
0.6 |
(0.8) |
|
Movement in total net debt (note 11) |
21.5 |
(2.2) |
Reconciliation of total cash flow as
presented in the Finance review to the movement in
cash
|
|
First half 2024/25
€m |
First half 2023/24
€m |
|
Total cash flow |
7.2 |
(15.9) |
|
Repayment of retail bonds |
(75.0) |
- |
|
Proceeds from bank borrowings |
302.5 |
189.7 |
|
Repayment of bank borrowings |
(270.0) |
(166.6) |
|
Bank loan acquired through business combination |
- |
- |
|
Movement in PPP cash and cash equivalents |
6.4 |
4.0 |
|
Exchange movements |
1.2 |
0.5 |
|
Movement in total cash including effect of foreign
exchange |
(27.7) |
11.7 |
Reconciliation of total net debt to net debt under
covenant definition
|
|
30 September 2024
€m |
30 September 2023
€m |
31 March
2024
€m |
|
Total net debt |
(594.5) |
(687.9) |
(616.0) |
|
Exclude PPP non-recourse debt |
- |
86.8 |
- |
|
Exclude PPP cash and cash equivalents |
- |
(23.2) |
- |
|
Exclude IFRS 16 lease liabilities |
236.8 |
241.1 |
247.9 |
|
Net debt aligned with covenant definition |
(357.7) |
(383.2) |
(368.1) |
20. Events after
the balance sheet date
On 10 October 2024 the Group completed the sale
of its UK Municipal business to Biffa Limited. The divestment
already met the criteria for asset held for sale in the financial
statements for the year ended 31 March 2024 and was presented as
such. The conditions of the sale were unchanged as at 30 September
2024 therefore the assets and liabilities continued to be presented
in this way.
The majority of the financial impacts relating
to the post period end disposal have been reflected within the
updated remeasurement under IFRS 5, performed as at 30 September
2024 and as disclosed within note 12. The remaining items to be
recognised through to the disposal as at 10 October 2024 are: the
immaterial trading for the 10 days between period end and
completion; a small fall in value on the deal contingent foreign
exchange contracts that were settled on 8 October 2024; and the
recycling through the income statement of the related cumulative
exchange reserve and cumulative movement in cash flow hedges net of
deferred tax, outlined in more detail below, which occurs at the
date of completion.
The UK Municipal disposal group has recognised cumulative
exchange differences on translation through other comprehensive
income totalling a loss of €11.6m and cumulative fair value
movements on cash flow hedges of a loss of €1.1m at 30 September
2024, which will be recognised in the final loss on sale on
completion of the transaction, along with related movements from
the period end to 10 October 2024.
INDEPENDENT REVIEW REPORT TO
RENEWI PLC
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 2024 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.
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 2024 which
comprises the Consolidated Interim Income Statement, the
Consolidated Interim Statement of Comprehensive Income, the
Consolidated Interim Balance Sheet, the Consolidated Statement of
Changes in Equity and the Consolidated Interim Statement of Cash
Flows and the related notes 1 to 20.
Basis for conclusion
We conducted our review in accordance with
Revised International Standard on Review Engagements (UK) 2410,
“Review of Interim Financial Information Performed by the
Independent Auditor of the Entity” (“ISRE (UK) 2410 (Revised)”). 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.
As disclosed in note 2, the annual financial
statements of the group are prepared in accordance with UK adopted
international accounting standards. The condensed set of financial
statements included in this half-yearly financial report has been
prepared in accordance with UK adopted International Accounting
Standard 34, “Interim Financial Reporting.
Conclusions relating to going
concern
Based on our review procedures, which are less
extensive than those performed in an audit as described in the
Basis for conclusion section of this report, nothing has come to
our attention to suggest that the directors have inappropriately
adopted the going concern basis of accounting or that the directors
have identified material uncertainties relating to going concern
that are not appropriately disclosed.
This conclusion is based on the review
procedures performed in accordance with ISRE (UK) 2410 (Revised),
however future events or conditions may cause the group to cease to
continue as a going concern.
Responsibilities of
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.
In preparing the half-yearly financial report,
the directors are responsible for assessing the company’s ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of
accounting unless the directors either intend to liquidate the
company or to cease operations, or have no realistic alternative
but to do so.
Auditor’s responsibilities for the
review of the financial information
In reviewing the half-yearly report, we are
responsible for expressing to the Company a conclusion on the
condensed set of financial statement in the half-yearly financial
report. Our conclusion, including our Conclusions Relating to Going
Concern, are based on procedures that are less extensive than audit
procedures, as described in the Basis for Conclusion paragraph of
this report.
Use of our report
Our report has been prepared in accordance with
the terms of our engagement to assist the Company in meeting the
requirements of 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
11 November 2024
BDO LLP is a limited liability partnership
registered in England and Wales (with registered number
OC305127).
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