Renewi is a leading waste-to-product company in some of the world’s most advanced circular economies, with operations primarily in the Netherlands, Belgium and the UK. Its activities span the collection, processing and resale of industrial, hazardous and municipal waste.
Post its initial approach, Macquarie decided not to make an offer for the group, while the Renewi board’s view was that the 810p proposed offer significantly undervalued the group. At the capital markets day in October, management set targets for ‘at least’ 5% organic sales growth, high single-digit operating margins, free cash flow generation of at least 40% of EBITDA and a return on capital of over 15%, offering an attractive set of financials if fully achieved.
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Annemieke den Otter
CFO
Ben Verwaayen
Chairman
Otto de Bont
CEO
Forecast net debt (€m)
412.9
Forecast gearing ratio (%)
113
% | 1M | 3M | 12M |
---|---|---|---|
Actual | 2.4 | (5.8) | 1.0 |
Relative | 0.7 | (11.5) | (1.3) |
52 week high/low | 734.0p/450.0p |
Renewi’s FY24 trading update was in line with management’s expectations and its improved cash generation is reassuring for investors. Attention is now likely to turn the strategic review of the UK Municipals with management stating that they remain on track to update markets by the end of June. This could lead to an exit of key liabilities and leave Renewi as an attractive circular economy investment with strong market positions and organic growth plans, which should assist in generating value, including a potential re-rating of the shares.
Y/E Mar | Revenue (€m) | EBITDA (€m) | PBT (€m) | EPS (fd) (c) | P/E (x) | P/CF (x) |
---|---|---|---|---|---|---|
2022A | 1869.2 | 261.5 | 105.3 | 98.0 | 7.0 | N/A |
2023A | 1892.3 | 257.0 | 103.7 | 89.0 | 7.7 | N/A |
2024E | 1843.3 | 232.2 | 69.9 | 60.0 | 11.4 | N/A |
2025E | 1891.5 | 248.2 | 83.1 | 71.0 | 9.6 | N/A |
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