Renewi PLC - Trading update and Coronavirus
This announcement contains inside information
Trading update and Coronavirus
The Company announces its trading update for the year ending
The Board remains confident that
ATM is making encouraging progress and expects to increase production progressively during the next financial year. We have developed our capacity to produce building materials (gravel, sand, filler) made from thermally treated soil (TGG) and have produced 175KT this year. Following the
Year-end core net debt, excluding IFRS16 liabilities, is expected to be below
The health and wellbeing of our people is our key priority. We have initiated a full range of measures based on national government advice to mitigate the impact of coronavirus on our people, customers and operations.
· Relevant national governments have introduced significant measures to reduce the spread of coronavirus and to support companies affected. They have defined waste management as an essential service, which helps us to maintain a full service. Significant additional government measures such as wage and VAT tax payment deferrals as well as additional support to maintain employment levels are being put in place which will have a material positive impact in offsetting the impact of reduced volumes.
· We are tracking incoming volumes and other leading indicators daily. Volumes have only just begun to reduce and so there is expected to be little impact on our March results.
· We do expect a negative impact next year: the extent will depend on the duration and severity of the measures.
· We have prepared cost reduction and cash preservation plans for progressive implementation. These include reductions in discretionary expenditure and capital expenditure, placing employees on temporary leave using schemes available in
· These initial actions are expected to save over
· Further information will be provided with our full year results on
We are monitoring the potential impact of coronavirus on the Group. We expect a negative impact in the next financial year on waste volumes in the Benelux, but it is too early to assess the potential operational and financial consequences.
Faced with coronavirus uncertainties and a potential resultant slowdown in the macro economy for the medium term, the Board is adopting a prudent approach to planning and investment. Long-term fundamental market drivers remain positive. We see increasing opportunities to expand margins through further diversion away from incineration and through the manufacture and sale of high-quality secondary materials. We expect a sustained recovery at ATM. The Board is confident that the
Year end items
Both items will be recorded as non-trading items in the accounts for the current year ending
Simplified organisation structure and reallocation of central costs
We aim to simplify our strategy, portfolio, organisation and processes. From
· Orgaworld will become part of Commercial Waste Netherlands where it will be merged with Semler, to create a vertically integrated Renewi Organics business.
· Mineralz will be merged with ATM to create a new Mineralz and Water Division. Mineralz has been producing building materials from bottom ashes for many years and has synergies and expertise to share with ATM as it converts from TGG to building materials manufacture.
· Coolrec and Maltha will join with Municipal to create the Specialities Division. All three units are focusing on business transformation and continuous improvement to deliver enhanced performance.
To provide a clearer picture of divisional margins, we will increase the allocation of central costs that directly support the businesses. These include IT, product sales, SHEQ, and HR. Around
Financial schedules showing the historic impact of these changes for each of the past two financial years will be available on the Group's website shortly (www.renewi.com).
Capital Markets Webcast
With the markets understandably focused overwhelmingly on coronavirus and the shorter term, we have decided to postpone our capital markets webcast, scheduled for
For further information:
+44 20 3727 1340
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The result of our work is less waste and contamination, a smarter use of scarce raw materials, and a reduction in carbon emissions. This means that we are contributing towards a cleaner, circular world in which we "waste no more".
Visit our website for more information: www.renewiplc.com.
This information is provided by RNS, the news service of the
Quick facts: Renewi
Market Cap: £146.11 m
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