Renewi

Investment summary

Reporting in euros for the first time, Renewi’s H119 results showed a strong turnaround in Municipal performance, a similar Commercial EBIT outturn y-o-y offset by flagged permit issues at ATM in the Hazardous division and mixed trading among Monostreams operating companies. The cash flow and period end net debt position were better than earlier management expectations and the interim dividend was maintained. In terms of outlook, there are some uncertainties (eg ATM’s trading position, the commissioning of a new UK Municipal facility and possible Brexit-related cross-border flows), but an intended disposal of two businesses (Reym and Municipal – Canada) will simplify the organisational structure. We reduced our earnings estimates by 23%, 16% and 13% for FY19 to FY21 inclusive, respectively. Otto de Bont, previously MD at Netherlands Commercial is to step up into the group CEO role in April 2019 following the intended departure of Peter Dilnot.