Renewi - Strong FY22, raising guidance for FY23
Renewi’s FY22 results reflect a strong performance across the group. The results came in ahead of FY21 comparatives and our FY22 forecasts. Management guided that it expects FY23 to be ahead of previous guidance. Driving this performance were price increases that outpaced inflation in waste and recyclates, coupled with volume gains (which are still below pre-COVID levels) and cost savings. There was a shift in tone, with the group now transitioning its focus on margin recovery to growth. Growth is expected to come from both organic and acquisitions. The group is targeting €60m in additional EBIT from circular innovations, continued recovery at ATM and the Renewi 2.0 programme. A further €100m in investment is planned to support this growth, and yesterday the acquisition of Paro, an Amsterdam-based commercial waste and recycling business, was announced for an enterprise value of €67m, funded from existing group facilities. The focus on the circular economy to meet net zero targets is a key investment theme for the years ahead, and Renewi is an example of the growth and improving financial results being achieved from the circular economy tailwinds. We are reviewing our forecasts in light of the strong FY22 results.
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