Renewing Earth
Renewi plc Annual Report and Accounts 2022
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Renewi plc Dunedin House, Auckland Park, Mount Farm, Milton Keynes, Buckinghamshire MK1 1BU
“ The climate emergency is leading to unprecedented
changes in our markets, which are evolving fast.
Renewi is responding with major investment and fast-
paced innovations, in collaboration with key partners,
to create a cleaner, more circular world.”
Otto de Bont, Chief Executive Officer
Strategy
Leader in
recycling
Leading
waste-to-
product
company
Selectively grow
market share
Leader in
secondary
materials
production
Our purpose
To protect the world
by giving new life
to used materials
Value drivers
Our vision
To be the leading
waste-to-product
company in the world’s
most advanced circular
economies
Contents
Strategic report
6 Why what we do matters
10
12
14
How our markets are changing
Our market position
Our unique waste-to-product
strategy
16 Our Divisions
18
20
24
28
34
46 Finance Review
52 Operating Review
Business model
Engaging with stakeholders
A message from the Chairman
A message from the CEO
Business strategy
66
Climate-Related Financial
Disclosures (TCFD)
Sustainability strategy focus
74
90 Risk management
Governance report
104 Governance at a glance
The Board of Directors
106
The Executive Committee
108
110
Corporate Governance Report
127 SHE Committee Report
129
135
138
Audit Committee Report
Nomination Committee Report
Directors’ Remuneration Report
156
159
Other disclosures
Directors’ Responsibilities
Statement
Financial statements
Auditor’s Report
162
Financial statements
170
Other information
260
261
262
Shareholder information
Company information
Glossary
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Circular innovations
ATM recovery
Renewi 2.0
2.0
Sustainability themes
Enable the circular
economy
Reduce carbon
emissions
Care for people
Our values
Innovative Sustainable
Safe
Accountable Customer-
Together
focused
Key figures
€133.6m
Underlying EBIT*
(FY21: €73.0m)
67.2%
Recycling rate
(FY21: 65.8%)
€75m
Statutory profit
(FY21: €5m)
8.88
Lost Time Incident rate
(FY21: 13.97)
The definition and rationale for the use of non-International Financial Reporting Standards (IFRS) measures are on page 240.
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STRATEGIC REPORT
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Renewi plc
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Why what we
do matters
1Climate emergency
2Circular economies
The world is facing a climate
emergency. Without an urgent and
concerted effort, this will prove
catastrophic for future generations. By
the year 2100, temperatures could
increase by four degrees. This is more
than double the Paris Climate
Agreement.
Circular economies are a vital solution
to the climate emergency. Energy
transition alone is not enough to meet
the challenges we face. Climate
mitigation and resource preservation
will help deliver a cleaner, more
sustainable world for future
generations.
3Society
4Stakeholders
What we do matters to society. Our
children, grandchildren and
generations to come will face the
consequences of inaction today. We
must act now to secure their future by
transforming our planet into one which
is sustainable.
Creating a circular economy matters to
our many stakeholders: our customers,
employees and partners, consumers
and governments.
The climate
emergency is
leading to
unprecedented
changes in our
markets.
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Governance reportFinancial statementsOther informationStrategic report
For more information
on our sustainability
strategy, see our
Sustainability Review
at renewi.com
The Netherlands
50%
circular by 2030
The world is
evolving in
response...
Advanced circular economies
The Netherlands and Belgium are two of
the world’s most advanced circular economies,
currently leading the way in climate change
mitigation, carving a path towards a
circular economy.
This has growing international relevance as
many countries look to adopt the same
technologies and solutions against a
backdrop of mounting political pressure
and increasing consumer demand. This
gives Renewi the opportunity to scale
solutions beyond the countries in
which it currently operates.
Advanced circular
economies
Key
Very low
Low
Low–Medium
Medium
Medium–High
High
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How our
markets
are changing
Global consensus
An increasing shift by
governments towards a
sustainable future can be
seen through various new
targets: for example, those
agreed at the UN’s COP26
gathering in November 2021
and the EU’s Fit for 55 plan
to reduce greenhouse gas
(GHG) emissions by 55%
by 2030.
Consumers
Consumers demand a viable
future for the generations to
come and these attitudes
are driving governments and
corporations to do what’s
best for the climate.
Consumers increasingly
demand responsible
production from the
businesses they use.
EU and national
government policies
Increasingly, regulation is
being introduced to
eliminate landfill and
reduce incineration.
These rules also aim to
increase recycling and
re-use, demand secondary
materials, cleaner cities,
foster responsible
production and encourage
circularity throughout
the economy.
Corporates
There is an increased focus
on environmental, social
and governance (ESG)
criteria throughout major
economies, and many
corporations are
implementing more
responsible production.
At the same time, they
need to weave secondary
material feedstocks into
their processes to meet
these targets.
Increasing demand
for recyclates
There will be a sustained increase
in demand for recyclates, and
they will become a scarce and
valuable product.
Currently, only 11% of minerals
in the construction market
are recycled.
Material use in the EU (in mT)
190
2,100
58
114
75
21
72%
37
Upside
potential
10
Recycled
content
73%
41
64%
1,860
41
29%
11%
183
4%
Wood
Mineral Plastic Metals
Paper,
Cardboard
Glass
Upside potential
Recycled content
Recycling, waste to
product and production
of secondary materials
are experiencing
long-term
structural support
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Our market
position
Renewi holds a
strong position within its
markets. The broader European
landscape is dynamic: there
have been significant mergers,
acquisitions and disposals in the
sector. Against this backdrop,
Renewi is evolving through
investment and innovation.
Manufacturing
We collaborate with
manufacturers to source and
design feedstocks to make
secondary products.
Refine
secondary
materials
At our specialist facilities
we refine products to exacting
customer specifications.
1
Waste
producer
Renewi experts advise
companies on how they can
generate less residual waste.
The circular
economy
drives our
business
model
Sorting
and processing
We use technology such
as optical sorting lines to
segregate specific recycling
materials for further use.
The typical
focus of
most waste
companies
Incineration
Landfill
Collection
Our fleet comprises zero-
and low-emission trucks.
We optimise routes to reduce
emissions and fuel use.
Avoid
disposal
We seek to avoid
sending waste to
landfill.
Pure-play waste-to-product
recycling company
Operating for over
100 years
Listed on London Stock
Exchange since 1988, and on
Euronext Amsterdam since
2020
Renewi was created five years
ago, by combining Shanks
and Van Gansewinkel
Benelux market leader
Operating in the Netherlands,
Belgium, UK, France, Portugal
and Hungary
162 operating sites
6,641 employees
at year end
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Our unique
waste-to-
product
strategy
Mission75
75%
Increase recycling rate
from 65% in 2020 to 75%
by end of 2025
Capital investment
>€100m
Board-approved capex for innovation
investments to deliver
€20m of EBIT by 2025
We focus on secondary material
production through innovation,
technology and partnering.
We don’t have installed incineration
capacity and therefore benefit from
diverting waste to avoid this cost.
five-year focus is on growth drivers:
circular innovations investments,
Renewi 2.0 and recovery at ATM.
This focus is leading to increased quality
secondary materials, for example,
advanced plastics processing from
previously non-recycled streams. We
also have new processes to recycle
mattresses, asbestos-contaminated
steel and orange peel, and to deliver
higher-value solutions, for example
bio-LNG and gas to grid rather than
electricity generation.
At 67.2%, our recycling rates are leading
internationally and we aim to further
increase this leadership position to 75%.
More recycling means less CO2
Our activities avoid 3.1mT CO2 each year
by putting 8.4mT of materials back into
re-use. We are a leader in recycling and
secondary materials, and are selectively
growing our market share. Our three-to-
Our market position
We own the waste. We have the
number one position in our markets
handling: 12.44mT of waste, a fleet of
over 2,000 trucks and around 0.5
million bins and containers across
162 sites.
We are specialists in converting waste
into secondary materials at our major
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Value drivers
€60m
EBIT in FY26
Operating
sites
162
Volume of
materials
recycled
8.4mT
Employees
6,641
processing sites for glass, WEEE
(Waste from Electrical and Electronic
Equipment), wood, construction and
demolition, bulky waste, organics,
paper, plastics, soil, packed chemical
waste and mattresses.
We don’t have any incinerators
installed, which means we have no
disincentives to recycling and
secondary material production. We
are the partner of choice for large
companies to source secondary
materials, including global
companies and large businesses
from most European industrial
sectors.
We have a dense collection network
across the region.
A long track record as
a recycling innovator
For years, Renewi has worked with
innovative customers and partners
to provide new closed-loop and
circular solutions. We work with
universities, entrepreneurs and
other corporates. We have multiple
innovation models: direct investment,
co-investment in joint ventures, and
logistics support.
We have an established innovation
process to continually generate
new ideas.
For innovation examples please
see pages 26 to 27 and 44 to 45.
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Our Divisions
Renewi operates across three Divisions:
Commercial Waste, Mineralz & Water and
Specialities
Commercial Waste
Comprises waste collecting,
processing and secondary
materials production across both
the Netherlands and Belgium. Key
activities include the processing of
wood, aggregates, plastics, paper
products and organic waste.
Mineralz & Water (M&W)
Comprises our Mineralz activities,
processing and cleaning bottom
ash, fly ash and other soils. It also
includes our gravel, sand, filler and
clean water production process at
ATM, which thermally cleans soil and
contaminated water and processes
packed chemical waste
via pyrolysis.
Specialities
Comprises three business
elements: UK Municipal public
private partnership (PPP)
contracts, Maltha glass recycling
and Coolrec – our specialist
WEEE recycling business.
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Processing
12.4mT
of waste handled each year,
of which 8.4mT
are recycled
Carbon avoidance
3.1mT
of carbon avoided
through our various recycling
technologies and solutions
What makes us
different
1
We are recognised
as a waste-to-product leader
in sustainability at the heart of
the circular economy.
2
As a pure-play recycling
company, we exclusively
focus on extracting value
from waste rather than its
disposal through incineration
or landfill.
3
Our waste-to-product
approach addresses social
and regulatory trends, and
offers the most efficient
solution for recycling used
materials.
4
We have been recognised for
our strong ESG performance.
For example, S&P Global
Ratings has scored Renewi 83
out of 100.
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Business model:
creating
value for
stakeholders
We consider our stakeholders
in every decision we make.
Our purpose and vision lead
our strategy. Our ultimate
aim is to benefit our
stakeholders and wider
society.
Driven by
Our strategy
Value drivers
Circular
innovations
Page 36
Leader in
recycling
Leading
waste-to-
product
company
Selectively
gain market
share
Leader in
secondary
material
production
2.0
ATM recovery
Renewi 2.0
Our sustainability themes
Led by
Our purpose
To protect the world
by giving new life
to used materials
Our vision
To be the leading
waste-to-product
company in the
world’s most advanced
circular economies
Taking into account
Why what we do matters
Climate change is the key issue
of our times; the circular economy
is a key part of the solution
Page 6
Our divisions
Our people, investments,
innovation and technology are
all essential to our business
Page 16
Engaging with our
stakeholders
We encourage feedback from
all our stakeholders, so that
we can continue to grow and
strengthen our business
Page 20
Reduce carbon
emissions
Care for
people
Enable the
circular
economy
Page 42
Page 6
Underpinned
by our values
Safe
Safety above all else
Innovative
Do it better every day
Sustainable
Make a daily difference
to our planet
Creating value
at the heart of the
circular economy
What we do
We generate revenue from collecting
and processing waste and by selling
the recyclates and secondary materials
we produce. Our focus is shifting
towards the downstream end of the
value chain in line with market value
– from collection to processing. We
plan to deliver more and higher-quality
secondary raw materials and biofuels.
This focus on creating products from
waste differentiates us from many
large competitors, who typically draw
revenues from incineration activities.
Together
Always open
and respectful
Accountable
Do what we say we’ll do
Customer-focused
Add value for
our customers
For all stakeholders
We regularly engage with our
stakeholders, responsive to their
feedback so that we can continually
address key issues, add value
and resolve any problems:
Local communities
Waste-producing customers
Product customers
Suppliers
Innovation partners
Government
Regulators
Employees
Global communities
Lenders
Investors
Pages 20 to 23
Aligned
to the
UN SDGs
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Engaging with
stakeholders
From customers to partners, lenders to
governments and employees to
communities, we constantly seek to create
value for stakeholders by understanding
and addressing their priorities and concerns
Local communities
Why we engage
Our business is better positioned to succeed if
we are part of a community that recognises the
need for our services and appreciates the value
Renewi brings to local and neighbouring
communities. We recognise our sites can bring
some disruption.
What we are delivering
Proactive management of known issues such as
flies, odour, noise, truck movements and fire
risks, among others. We are responsive to
concerns raised by local communities, and
our policy is always to track these through
to resolution.
Our product customers
Why we engage
We work collaboratively with customer design
teams to create materials of sufficiently high
quality for either re-use or secondary materials
production. We align to gain a deeper
understanding of product customers’
purchasing needs.
What we are delivering
We are investing in further refinement of waste,
in order to produce higher-specification
recyclates and secondary materials to meet the
needs of these customers. We also partner
directly with product customers, such as Shell,
in relation to bio-LNG.
Our waste-producing customers
Why we engage
Close co-operation with our customers is vital if
we are to best meet their needs. We focus on
finding solutions to manage their waste and
encourage source segregation of recyclate waste.
Furthermore, we help them achieve their
sustainability targets and we collaborate to
address emerging market trends. We continually
seek their feedback so we can identify ways to
enhance the service we provide.
What we are delivering
We provide support and advice for waste
segregation and separate collections. We
communicate market changes such as recyclate
pricing and other general inflation factors, for
example those driven by the war in Ukraine.
For more information
on how we connect
with our stakeholders,
see page 119
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Our suppliers
Why we engage
Working with a trusted supplier enables us to
optimise our customer service. Our teams
translate internal requirements for goods and
services and external market circumstances.
These can include the impact of Covid-19, supply
chain disruptions, rapidly evolving energy prices
and other factors. In this way we develop
long-term and effective supplier relationships.
We focus on safety and on high ethical standards
in our supply chain.
What we are delivering
We seek to understand the impacts on supply
chains of the ongoing market disruptions caused
by Covid-19, supply chain delays and rapidly
evolving market prices.
This can affect delivery patterns, product
availability and pricing and bring about
a need to substitute materials.
Our innovation partners
Why we engage
Renewi recognises cooperation is crucial if we
are to succeed in the circular economy, so we
partner with technology providers and
manufacturers to develop circular innovations.
We use our collective expertise to create
innovations for a broad range of materials
and processes to meet our manufacturing
customers’ needs.
What we are delivering
We are delivering incremental waste processing
innovations to enable recycling where this
previously wasn’t possible. Examples include
mattresses, citrus peels, asbestos-contaminated
steel, advanced sorting, building materials,
electrostatic separation processing, creation of
bio-LNG at a commercial scale, gas to grid,
separation of thermally treated soil into gravel,
sand and filler, plus many others.
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Engaging with stakeholders continued
Government
Why we engage
To bring about meaningful change by positively
impacting regulatory changes. We share our
intentions, educate governments about new
possibilities and seek to understand their
concerns and priorities to find mutually
beneficial solutions.
What we are delivering
We deliver on climate change and the circular
economy. We support progressive legislation in
the creation of a circular economy, reduction of
incineration and stimulation of demand for
secondary materials.
Regulators
Why we engage
We engage with a wide range of regulators to
interpret and understand European Commission
regulations and national legislation and to
ensure the best possible compliance with
existing and prospective regulations.
What we are delivering
We are ensuring operational compliance against
permits and quality standards and meeting high
environmental standards. We are also applying
best practices and are responsive to any
investigations or compliance concerns raised.
Our employees
Why we engage
We engage with our employees to create a
satisfying and enjoyable working experience as
we unite to deliver our purpose. Living our values
daily with our employees is also a priority. Our
first value, Safety is our key priority as we seek to
reduce the number of accidents, ensuring
everyone arrives home safely every day. We are
also increasing our focus on improving diversity
and inclusiveness across the organisation.
What we are delivering
We are fostering a positive connection to our
corporate purpose. We are improving our safety
culture and fostering diverse and inclusive teams
which feel invested in. We strive for ever-stronger
employee satisfaction, improved welfare
conditions for our operations teams
and resolution of detractors to
employee engagement.
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Global community
Why we engage
Renewi’s business model helps address the
climate emergency. We recognise that the global
community is the beneficiary of the work we do.
We are contributing to the ongoing debate
around climate change, joining conversations
and influencing dialogue, both in the media and
on our social networks.
What we are delivering
Encouraging society to recognise its role as a
driver for the changes required to achieve true
circularity, placing pressure on governments,
influencing policies, creating new markets and
demanding greater ESG credentials from the
products and services they use.
Lenders
Why we engage
We build relationships with debt investors and
banks as key providers of capital to the Group, to
ensure we optimise the availability and terms of
the facilities that support the capital investments
– in particular those that relate to our innovation
pipeline. This way, we selectively increase
market share.
What we are delivering
This approach assures our continued access to
the lending markets, including the recent
incremental bond issuance. We achieve
optimised liquidity and conditions such as the
extension of the main banking facility.
Investors
Why we engage
We actively and regularly engage with our
investors and analysts to inform them of our
business strategy, future growth and recent
performance. We maintain a deep and engaged
dialogue on our outlook and on their
requirements. We use this to refine our strategy
and to shape our communications.
What we are delivering
Our recent Capital Markets Day was an
opportunity for us to communicate our future
plans in more detail. The markets have
responded positively and are starting to reflect
the higher growth expectations. We are fostering
an understanding of the market-wide tailwinds
that are supporting our market positioning
and strategy.
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A message
from
the Chairman
I am pleased to report that Renewi has performed very well
in the past year, in terms of both a robust financial
performance and a step change in its safety record,
alongside the further development of its long-term strategy
for accelerated growth.
Renewi is a purpose-led organisation, with each of us deeply
inspired by our goal to protect the planet by giving new life to
used materials. This purpose is supported by our six values,
which define what we are and how we act. These values are used
in a practical way daily, and in this report I would like to illustrate
how we turn them into real core drivers of our success.
Success built on living our values
Safety. Safety is the first of our six values and, as I outlined last
year, the Company’s Board and Executive leadership wanted to
see a step-change improvement in our safety culture and
performance. During the past year we have appointed a new
Safety, Health, Environmental and Quality (SHEQ) Director,
Jeanine Peppink-Van der Sterren, who is part of the Excom. We
have also started to implement the International Sustainability
Rating System (ISRS) to provide structure and better data for all
our safety and compliance activities. We continued to embed our
Lifesaving Rules (LSR) and promote better incident reporting.
While we can never be complacent or satisfied with safety, we are
pleased to report a 36% reduction in lost time accidents in the
year, with no fatalities or near-fatal incidents. Despite this
improvement, we remain vigilant to risks and continually
focused on improvements.
Sustainability. Sustainability is fundamental to everything we do
and is considered by the Board in every major decision we make. I
am pleased to report a further increase in our recycling rate during
the year to 67.2%, another step towards our Mission75. This year
we report according to the requirements of the Taskforce for
Climate-Related Financial Disclosures (TCFD) for the first time.
During 2022 we will lay out further ambitious plans to reduce our
own carbon footprint alongside our ongoing success in avoiding
3mT of carbon annually for our customers.
Innovation. Innovation underpins our ability to deliver our
purpose. We continually seek to invest in new technologies
to increase our recycling rates and in new processes to digitise
our activities. This year, our Board has committed over €100m to
projects, such as advanced sorting installations in Flanders,
to deliver €20m additional EBIT by FY26. Our Innovations Team
continues to build our innovation pipeline, originate prospects,
and validate their potential for further investment.
Our people have again worked with
passion and dedication through another
year of lockdowns and change
Corporate governance
The Board continues to aim for the highest standards of
corporate governance. Details of our policies and procedures,
including those relating to the role and effectiveness of the Board
and compliance with the UK Corporate Governance Code, are set
out in the Governance section on pages 102 to 159.
Passion and dedication
Our people have again worked with passion and dedication
through another year of lockdowns and change. We have met
our objectives, served our customers and worked tirelessly to
keep each other safe. I would like to thank them all for their
energy, skill, determination and togetherness. I would also like
to thank our customers, suppliers, investors and other key
stakeholders who together make Renewi the leading waste-to-
product company that it is.
Ben Verwaayen
Chairman
Customer focus. Our customers are responding to changes
driven by Covid-19, Ukraine and climate change, to name a few.
We have supported them throughout as an essential service. We
have enhanced our customer offering to improve customer
experience. Under the Renewi 2.0 programme, we have observed
a strong uptick in usage of our new My Renewi digital customer
portal and a fall in customer complaints.
Accountability. Accountability is about meeting our
commitments and doing so with complete integrity. This year
we have delivered a very strong increase in profitability, margins
and returns, and we have reduced leverage ratio below our
long-term target of 2x. We continue to focus on excellent
governance, and we were pleased to note this contributed to our
increased score of 83 in our ESG rating by S&P.
Together. We can only achieve our purpose and our values
if we work together as a team, in a respectful and diverse
environment. This year we have created a Diversity & Inclusion
board to foster greater diversity in our organisation, with an
initial goal of increasing the number of women in our business.
Refining our strategy for the long term
During the year we have worked extensively with the executive
management team to review and deepen the strategy and the
2030 vision for Renewi. While the core strategy remains
unchanged, we are building plans to achieve our ambitious
objectives. Our markets are evolving rapidly, and we are attuned
to the associated opportunities and challenges. We are now
increasingly focused on inorganic opportunities in addition to
our existing organic growth.
EPS and dividend
FY22 was marked by a modest recovery of volumes and an
ongoing and sustained increase in most recyclate prices. We are
pleased to report a 118% increase in underlying earnings per
share to 98 cents (FY21: 45 cents). Exceptional items remained
modest, meaning Renewi reported a statutory net profit of
€75.4m (FY21: €5.5m).
Recognising the Group’s significant growth investment
programme and the resultant cash flow profile in the short term,
the Board is not recommending a dividend for FY22; however, it
will keep the Group’s dividend policy under review for FY23.
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in action
Working together to create
a cleaner, circular world
WHAT OUR CUSTOMER HAS TO
SAY ABOUT THIS INNOVATION
“We see the use of bio-LNG as one of
the important sustainable fuels on the
menu. In addition to electricity and
possibly hydrogen, the renewable fuel
bio-LNG is also of great importance and
allows us to take the steps needed to
reduce carbon dioxide emissions.”
Peter Leegstraten, Manager Transport Expertise
at Albert Heijn, the largest supermarket chain in
the Netherlands.
BIO-LNG
With fossil fuels depleting fast, the world needs to
decarbonise. Transport is one of the world’s most
polluting sectors and clean fuel alternatives for
long-haul trucks are not yet available at the scale
they should be.
Ever focused on solutions, we have accelerated
our decarbonisation journey. Alongside our
technology partner Nordsol and our end
customer Shell, we have built the first commercial
bio-LNG plant in Europe.
Renewi has yet again demonstrated it’s a front-
runner in organic waste valorisation. At our
pre-treatment facility in Amsterdam, we take
out-of-date food waste from supermarkets, such
as Albert Heijn, and turn it into biogas. Part of the
biogas is converted into green gas and supplied
to the grid. The rest is used to produce bio-LNG at
our processing installation in Amsterdam.
Bio-LNG is a low-emission fuel that replaces
fossil fuels. Therefore, it is the perfect solution to
decarbonise the heavy-duty transport sector in
the short term. Our renewable fuel is developed
and delivered to consumers. We currently
produce 3.5 kilotonnes of bio-LNG per year, and
it’s our mission to upscale it in the next two years.
Our Renewi bio-LNG truck is frequently seen at
our site in Amsterdam, bringing organic food
waste to our pre-treatment facility. It is a vehicle
powered by climate-friendly energy, which is
derived from the very same waste it carries.
The truck is a superb example of our contribution
to the circular economy.
of bio-LNG, a truck can drive for
With 3.5 kilotonnes
13 million kilometres.
That’s 400 times
around the world.
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Renewi plc
Annual Report and Accounts 2022
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SUSTAINABILITY THEMES:
VALUE DRIVERS:
2.0
PLASTICS SORTING
The world changed when plastics were
introduced into society. Living standards were
enhanced, and hygiene improved. Plastics like
PE, PP and PET became widely used. At Renewi,
we understand the benefits of this durable
and functional material. However, the myriad
of plastic types and composites used creates
challenges when separating these streams for
re-use.
Plastic production from inexpensive virgin
materials continues to grow and, with it, a
corresponding increase in plastic waste. Around
85% of the plastics produced in Europe are
incinerated, added to landfills or lost to the
environment. There is growing societal awareness
that this is damaging the environment and is
unsustainable. Consumers, committed brand
owners and legislators are demanding cleaner
alternatives. This is encouraging and drives our
ambitions and appetite to collaborate to meet
this demand.
We make plastic waste available for recycling and
close the loop with circular plastics. As a leader
in recycling technology, we have invested in new
and innovative sorting lines and techniques to
increase purity.
An example is the processes we employ at our
facility in Waalwijk. We use density, electrostatic
and optical separators to segregate different
polymers. This means our sustainable raw
material has a quality equal to virgin plastics, and
we can offer clean and pure plastic granulates.
The granules are so clean that they are suitable to
be manufactured into children’s toys.
From our new sorting line in the port of Ghent,
hard plastic regrinds are supplied to the
packaging and automotive industries. To meet
increasing customer specification requirements,
we have invested in analytical capabilities at our
laboratory, where we extensively test composition
and quality. We also produce customised recycled
materials by including the required additives.
SUSTAINABILITY THEMES:
VALUE DRIVERS:
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2.0
WHAT OUR CUSTOMER HAS TO
SAY ABOUT THIS INNOVATION
“We use Renewi’s regrinds to produce
custom-made granules. The demand for post-
consumer plastics is increasing. Previously,
we only used post-production material to
create granules. We’re delighted to work with
Renewi to achieve our sustainability targets.
Several years ago, our customers were only
interested in granules based on the price
difference compared to virgin materials.
Today, there is a big change. Our customers
prefer granules made with post-consumer
plastics. It is crucial that the product can
be recycled and that it’s made with
recycled material.”
Caroline van der Perre, Managing Director
at RAFF Plastics, a Flemish specialist
in compounding, extruding, and
recycling plastic.
At our planned hard
plastic sorting line in Acht,
we will produce
14,000 tonnes of
recycled plastics per year.
We will avoid
6,200 tonnes of
CO2 emissions.
Our recycling rate
of these
plastics will rise from
50% to 75%.
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Governance reportFinancial statementsOther informationStrategic report
A message
from
the CEO
Overview
Renewi delivered a record performance in FY22, with revenues,
profits and returns all increasing significantly ahead of the
previous year. Our end markets continue to grow, with
legislation and corporate strategies supporting increased
recycling and demand for high-quality secondary materials.
This contributed to the increase in recyclate prices over the past
18 months. We have also managed the aftershocks of the Covid
crisis with ongoing tight control of costs and an ability to cover
inflationary pressures from recyclate prices and customer
pricing. We made good progress on our key strategic initiatives
to deliver sustained growth for Renewi, notably with the
commitment of over €100m of capital to build a new state-of-
the-art recycling capacity. Underlying EBIT increased by 83% to
€133.6m. Statutory profit increased by €69.9m to €75.4m. Core
net debt reduced by €41m to €303m, and our leverage ratio
reduced below the Board’s target to 1.4x (FY21: 2.2x).
Sustainability is at the heart of our business model. Our
purpose of giving new life to used materials enables us to
deliver secondary materials to our end customers with a lower
carbon footprint than the primary materials they replace. This
helps our customers get to their net-zero ambitions and
supports the development of a circular economy, which is
essential if society is to meet its carbon reduction goals. We
have therefore maintained our focus on the longer-term
strategic drivers for Renewi: increasing our recycling rate;
increasing the quantity and quality of the secondary materials
we supply; expanding our market share and improving both
efficiency and customer service through our Renewi 2.0
programme. We have continued to advance this strategy and
we remain well positioned to benefit from the adoption of
circularity by European economies, which ensures resources
such as products, materials and energy are reused for as long
as possible at the highest value.
Revenue was up 10% to €1,869m, and underlying EBIT was up
83% to €133.6m. Underlying profit before tax increased by
€57.8m to €105.2m. Underlying earnings per share increased by
118% to 98 cents (FY21: 45 cents).
The Commercial Waste Division, which represents over 70% of
Group revenues, increased revenues by 10% and underlying EBIT
by 77%. EBIT margin increased 380bps to 10.0%, driven by a
year-on-year benefit of €35m from the increased quality and
pricing of recyclates and ongoing cost control. EBIT was 73%
higher than the pre-Covid FY20 reference period.
The Mineralz & Water (M&W) Division saw revenues increase by
6%, and underlying earnings increase by €5.5m to €5.8m. The
Specialities Division increased revenues by 16%, and underlying
EBIT increased by €1.7m to €4.1m.
Group central services costs have increased in the year as a result
of investment in a number of areas and higher costs for
long-term incentive plans.
The business delivered adjusted free cash flow of €90.6m (FY21:
€113.5m), partly reflecting an underlying reduction in payables.
Free cash at €60.5m was lower than last year which included the
€55m benefit of deferred payroll and other taxes in the
Netherlands. Core net debt at 31 March 2022 was €303m (2021:
€344m). Leverage fell to 1.4x (FY21: 2.2x), comfortably below the
Board’s long-term target of 2.0x. Liquidity headroom including
cash and undrawn facilities was also strong at €428m (FY21:
€364m).
Recognising the Group’s significant growth investment
programme and the resultant cash flow profile in the short term,
the Board is not recommending a dividend for FY22; however, it
will keep the Group’s dividend policy under review for FY23.
Group summary
Commercial Waste
Mineralz & Water
Specialities
Group central services
Inter-segment revenue
Total
REVENUE
UNDERLYING EBIT
FY22
€m
1,360.5
193.9
350.1
–
(35.3)
1,869.2
FY21
€m
1,240.6
182.8
300.8
–
(30.6)
1,693.6
Variance
%
10%
6%
16%
–
–
10%
FY22
€m
135.7
5.8
4.1
(12.0)
–
133.6
FY21
€m
76.8
0.3
2.4
(6.5)
–
73.0
Variance
%
77%
N/A
71%
-85%
–
83%
The underlying figures above are reconciled to statutory measures in note 2 of the consolidated financial statements.
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Sustainability means a need for circularity
Our purpose is to protect our planet by giving new life to used
materials, and our vision is to be the leading waste-to-product
company in Europe’s most advanced circular economies. This
differentiates Renewi as a company that focuses on re-use:
supplying high-quality secondary materials, which we believe is
the best way to extract value from waste. We are a key player in
the rapidly emerging circular economy and a pioneer in
deploying innovative technologies that turn waste that would
have been incinerated or sent to landfill into high-quality
secondary materials.
In the past year we have seen the world’s governments,
companies and investors continue to advance the agenda to
reduce carbon emissions very significantly, with the EU playing a
leading role. In November 2021, COP26 set out the necessary
steps to avoid catastrophic increases in global temperatures by
the end of the century. Production of more secondary materials
to reduce virgin material use and the associated carbon
emissions is a key requirement to meet these goals. Becoming
more circular and cutting virgin materials use by 28% within nine
years could lead to a reduction in global GHG emissions by 39%
according to The Circularity Gap Report.
Our purpose of giving new life to used
materials enables the circular economy,
which is essential if society is to meet
its carbon reduction goals
keeping with our purpose, our business and sustainability
strategies are inextricably linked and mutually supportive.
Starting from the UN Sustainable Development Goals, we focus
on three key objectives: Enable the circular economy; Reduce
carbon emissions; and Care for people.
During the last year we have made good progress with our
strategy, including the following highlights:
Enable the circular economy
Increased recycling rate from 65.8% in March 2021 to 67.2%
(+1.4% points), with positive progress across all divisions
Total recyclate output amounted to 8.4mT, 5% higher than
prior year
Carbon avoidance of 3.1mT, similar to last year
Reduce carbon emissions
Recycling plays a key role in enabling a circular economy by
converting waste back into secondary materials and is therefore
increasingly supported by fiscal and regulatory governmental
policy. Recycling, like most markets, needs balanced supply and
demand.
Reduced our carbon intensity from processing 23% per tonne,
driven for example by our Commercial Waste Netherlands
Division having switched to 100% green electricity
Reduced total scope 1 and scope 2 emissions by 7% to 0.5mT
of CO2 equivalent.
Care for people
Significantly improved safety results: Lost time injuries (LTIs)
are down 36% and major fires are down 25%
Established a Diversity & Inclusion Board, aimed at making
Renewi an even more rewarding and inclusive
place to work
This year we report specifically about climate change risk
according to the guidelines of the TCFD. Within our climate
Supply is stimulated by disincentivising landfill and incineration
through taxations and prohibitions to create an environment in
which sorting and processing to produce recyclates is
economically competitive. This is already in place in the
Netherlands and Belgium and has been further strengthened in
Flanders by the government’s announcement to double the
incineration tax to €25 per tonne. Fundamental new legislation
in Flanders, which comes into effect in January 2023, will provide
further stimulation of recyling. The most recent amendment to
Vlarema 8 effectively introduces the mandatory pre-sorting of
waste to remove recyclates before residues are incinerated, and
this legislation is the key driver of our decision to invest in three
large state-of-the-art sorting lines in Flanders.
Demand is stimulated by setting targets for minimum recycled
content for government tenders, or indeed simply mandating
certain levels of recycled content in all materials. For example,
the Netherlands has a longstanding policy commitment to be
50% circular by 2030, and Belgium has similar circularity
ambitions in both Flanders and Wallonia. This is further backed
by trends in consumer demand, where a sustainable solution
appeals to a growing segment of customers.
Looking forward, legislators in Renewi’s end markets and beyond
are considering further action, including carbon taxes on
incineration, minimum recycled content levels and producer
responsibility for the management of closed loops. All these
measures will accelerate the transition to increased recycling
rates and, crucially, increase demand for secondary materials.
Putting sustainability at
the centre of our strategy
Sustainability is at the heart of what we do. Our purpose, our
vision and our business strategy are all about sustainability. In
roadmap we intend to strengthen our sustainability strategy
and will start building a net-zero carbon emissions roadmap
this year.
consumer demand for recycled plastics leading to major
plastics manufacturers looking for long-term supply
agreements to meet their growing need.
Progress against each of our specific targets is detailed in full
in our Sustainability Review.
Increased value for the high-quality
recyclate products that we make
A prominent feature of our strong performance since Covid has
been the recovery of recyclate prices from 10 year lows to their
current high levels, which have now been sustained for nearly
18 months.
Different recyclate streams are subject to specific supply and
demand factors. However, at a more fundamental level we
believe that environmental policies to stimulate the use of
secondary materials mean that recyclates will over time
become scarce materials. Furthermore, we believe prices may
ultimately increase to a sustainable premium, or a reduced
discount, to virgin materials. In addition to the supply and
demand factors, we are increasing the quality of our recyclates.
This allows our end customers to replace virgin materials with
our recyclates and allows us to demand higher prices.
Other factors that support the increased pricing for
recyclates include:
demand for paper and cardboard in Europe being driven by the
growth in e-commerce as well as the transition to cardboard as
the preferred packaging material including for example
replacing plastic inside delivery boxes. At the same time,
reduced office working as a result of Covid has resulted in lower
volumes of source segregated commercial paper for recycling;
high energy prices making the use of recycled metals, glass
and plastic cheaper compared to production from virgin
materials;
a strong increase in demand for waste wood for a range
of applications including conversion to wood products,
methanol and bio-fuels in addition to biomass; and
In the short-term recyclate prices may still fluctuate and, whilst
we expect that recyclate prices will moderate in FY23, we expect
prices to stabilise above pre-Covid levels for the medium term,
reflecting the structural growth of the circular economy.
Our strategy for long-term profitable growth
We have a clear and consistent business strategy to deliver
long-term growth in both margins and volumes. This strategy
has initially focused on margin expansion through increased
recycling rates and the production of higher-quality materials.
We are now focusing increasingly on how to expand our market
share both domestically and internationally. Our strategy is
based on three pillars:
1. Leader in recycling: increase our recycling rate. Our
ambitious goal, launched as Mission75, is to increase our
recycling rate within five years to 75% from the current 67.2%,
which we believe is already the highest in the industry.
2. Leader in secondary material production: Enhance the
quality and value of the products we produce. To build a
circular economy, the usage of secondary raw materials must
increase. For production companies currently using primary
raw materials, the easiest way to convert is by using high
quality secondary raw materials that they can ‘drop-in’.
Accordingly, we are investing in advanced processing facilities.
3. Selectively gain market share. Our primary focus in the
Netherlands and Belgium is on driving margin expansion from
existing waste flows through the first two pillars of our
strategy. In addition, there are consolidation opportunities in
our sector, and we intend to participate both in
complementary acquisitions in our core markets and, in due
course, to enter into new territories with strong growth
potential for our waste-to-product model.
This strategy is further underpinned by our Renewi 2.0
modernisation programme.
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Chief Executive Officer’s Review continued
Our innovation portfolio:
investing for higher returns
We are investing in innovative solutions to increase recycling rates
and product quality, the first two pillars of our growth strategy,
with a view to delivering an additional EBIT of €20m by FY26. In
FY22 we committed to invest over €100m over the next three years
in order to achieve our target and exceed our threshold for return
on assets of 16%. More details on the timing of investment and
returns are given in the Finance Review.
Innovation portfolio
PROJECT
PARTNER
OPPORTUNITY
STATUS
Advanced residual waste
sorting Flanders
Organics: expanded
depackaging capacity
Stand-alone
€€€€€
Three lines approved. Programme progressing in line
with expectations.
Stand-alone
€
Construction complete and plant operational.
Organics: bio-gas to bio-LNG
Shell & Nordsol
Mattress recycling
IKEA Group
€€
€€€
Plastic recycling
Stand-alone
€€
New plant commissioned and operational.
New facilities: fourth facility completed and fifth in
planning. Chemical recycling plant to be commissioned
mid-2022. Exploring opportunities to expand activities
outside NL.
Ghent and Waalwijk investments complete. Acht to be
commissioned in 2023.
Polyurethane recycling
Chemical recycler
€ – €€€
Technical and commercial feasibility studies ongoing.
ATM recovery
Stand-alone
€€€
Wood flake for low-carbon steel
Arcelor-Mittal
€€ – €€€€
Filler storage capacity installed, and product
certifications expected. Project to increase capacity at
waterside commenced.
Partner is preparing for industrial performance testing
early next year and subsequent commercial contracting
discussions.
We continue to have a dialogue with a number of plastics
recyclers concerning the provision of plastics streams for
chemical recycling. Other new innovation ideas have been
identified during the past year and are passing through our
disciplined investment process.
Renewi 2.0 programme
FY22 was the second year of our Renewi 2.0 programme: a
three-year programme to make the company simpler, more
customer-focused, more efficient and a better place to work.
This comprises multiple projects, based around two key themes:
Digitisation of the business. We have developed and
launched a new front-end interface for customers that
allows them to place and amend orders, have full visibility
of services and related costs and the circular benefits their
waste is creating. This digitisation is already delivering a
better 24/7 customer experience, while reducing our cost
to serve.
Simplification and harmonisation of processes. Our core
business processes are being simplified and standardised
across our Divisions to save costs, reduce errors, and improve
customer, supplier and employee experiences. We are
implementing global process owners for our core processes
and centres of excellence to simplify our service offering,
improve our master data and eliminate non-value add activity.
As previously indicated, the programme is expected to
deliver a minimum of €20m of annual cost benefits on a
run-rate basis after completion of this three-year
programme for a total cash cost of €40m. €5.0m of net
benefit was reported in FY22, in line with our plan. We
remain confident that we will achieve the targeted
savings on schedule.
More than 65,000 customers are logging into MyRenewi,
our customer platform, and we see adoption rates
increase every month. Our “scaled agile” framework
approach has allowed for faster time to market for new
developments and features for MyRenewi, delivery of our
broader commercial offering and in driving efficiency in
sales and back-office operations. A dedicated team is
working on a project called ‘Help Customer’ to further
improve our service delivery when customers have
queries. During the year we have seen call and complaint
volumes drop by 20% in some parts of our business
through these frictionless interactions.
The procurement application Coupa has been fully
implemented in our Commercial Waste Division as
well as for central functions, and use is increasing on
a daily basis.
For more information
on our innovation
portfolio, go to:
renewi.com
Mineralz & Water recovery
Profits at ATM, our major site that cleans contaminated soil and
water, are recovering well but slower than initially planned.
Ongoing uncertainty by regulators on the adequacy of the
current environmental regime has reduced intake of
contaminated soil and continues to hamper obtaining necessary
permits to dispose of TGG. This situation is expected to be
resolved when proposed amendments to current legislation are
brought forward and should bring much needed clarity to this
important part of our business.
Despite these challenges, good underlying progress was made
during FY22, with the production of secondary building materials
like gravel, sand and filler replacing TGG. There is a growing
interest in these secondary building materials from cement and
asphalt producers as the construction industry is converting to
circularity. ATM’s profit improvement is also supported by growth
in water treatment, where we plan to expand our treatment
capacity. We therefore anticipate that, as the regulatory
environment for soil becomes clearer, as our building materials
achieve their certification and as we expand our water treatment,
ATM will be able to restore EBITDA margins.
Potential for market share growth
Following the formation of Renewi in 2017, our focus was on
integration and successfully delivering the merger synergies
while maintaining market share. This has been achieved in full.
With leverage now reduced to comfortably below the Board’s
target of 2.0x, we have increased our pursuit of long-term top
line growth opportunities, both organic and through acquisition.
Accordingly, we have revisited our merger and aquisition (M&A)
pipeline activities, cultivating potential targets and reinvigorating
internal evaluation processes. We note that M&A activity within
the Netherlands and Belgium is picking up and Renewi intends
to participate in sector consolidation opportunities, providing
there are good strategic and sustainability synergies that offer
appropriate financial returns.
Within the Netherlands and Belgium we will continue to expand
our share organically, with an unmatched combination of
breadth of services and proven sustainable treatment of waste.
Renewi 2.0 will further improve our customer service and offer
customers convenient digital interaction.
Renewi also has a two-stage strategy for further international
expansion. In the immediate term there are opportunities to
expand in niche waste segments where collection is not a
required part of the business model: glass, white goods and
mattresses are good examples. Longer term, we believe our
model can be replicated in other advanced circular economies.
We have created the “Renewi Advanced Circular Economy”
(RACE) index of all European countries, assessing their suitability
for our services based on factors such as material recycling rate,
use of secondary materials, regulation, and taxonomy related to
material usage. The RACE index confirms the Netherlands and
Belgium as two of the most advanced circular economies. It
further allows us to focus on a number of countries, including
Denmark, Sweden, Germany, and the UK, where we see scope
for successful and profitable expansion in the long term.
Resilience in an uncertain world
The end of Covid has triggered significant inflation, supply chain
disruptions and a tightness in European labour markets,
exacerbated by geopolitical uncertainty arising from the war in
Ukraine and the potential for macroeconomic impact. In
response we have created teams to monitor and address
emerging issues. We are monitoring the situation closely and
while a significant and widespread economic slowdown could
eventually impact Renewi, we have experienced no material
adverse impact to our business since the war in Ukraine.
More broadly, Renewi has a resilient business model in that it:
provides an essential service across all sectors of the Dutch
and Belgian economies, with no material exposure to any
one sector;
has demonstrated an ability to pass inflationary costs through
to customers: price increases implemented on 1 January 2022
are expected to cover 2022 inflation;
hedged the majority of its energy and diesel requirements for
2022; and
has guidance for FY23 that anticipates a reduction in recyclate
prices from their current highs.
Group outlook
Recyclates strength has so far continued into FY23. Although a
reduction from the high prices is expected, a sustained benefit
from structural changes to recyclate quality and price is also
anticipated. Looking ahead, the Board now anticipates the
Group’s performance in FY23 to be ahead of its previous
expectations given the Group’s strong results in FY22 and
continuing recyclate price strength.
The transition to a circular economy will increase demand for
recycling and higher-quality recyclates, which supports our
business model. The sustainability agenda and the potential for
a “green recovery” driven by the EU and national governments
are expected to present further attractive opportunities for
Renewi to convert waste into a wider range of high-quality
secondary materials. We remain confident our three strategic
growth initiatives – our innovation pipeline, Mineralz & Water
recovery and Renewi 2.0 programme – will deliver significant
additional earnings over the next three years and beyond.
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strategy
Leader in recycling
Recycling is central to our
waste-to-product mission,
and also answers
market demand
Leading
waste-to-
product
company
Selectively gain
market share
This strategy helps us
grow the total volume
of waste treated
Leader in
secondary
material
production
Improving the quality
of the products we
produce increases
the value
of what we recycle
We launched our business
strategy two years ago
and we will continue
to set, refine and meet
targets to further
strengthen our position
as a waste-to-product
market leader
Renewi launched its enhanced
strategy two years ago, supporting its
vision to be the leading waste-to-
product company. This further
differentiates Renewi as a pure-play
recycler, extracting value from waste
and contributing to a solution to the
world’s climate problem.
The strategy is based on three market
facing priorities:
Internal improvement
strategies
These strategies, forming our Renewi 2.0
programme, are making Renewi leaner
and more efficient through digitisation
and simplification.
Digitisation of sales and services to
improve the customer experience.
Simplification of processes across
Renewi’s Divisions to boost efficiency
and reduce costs and errors.
To build our leadership position in the
circular economy
To selectively gain market share
To be the leading waste-to-product
company
See page 37 for further details
of the Renewi 2.0 improvement
programme.
r
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t
a
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T
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MEASURING PERFORMANCE
Renewi’s top-line financial results – from revenue to return on capital employed
Revenue (€m)
Underlying EBIT margin (%)
Underlying EBITDA margin (%)
FY22
FY21
FY20
1,869
FY22
1,693
1,697
FY21
FY20
7.1
4.3
4.4
FY22
FY21
FY20
14.0
11.6
11.1
Our performance
Overall revenues were up 10% in the year
as outbound revenues increased,
reflecting the strength of recyclate prices
and increase of recyclate quality.
Our performance
Significant year-on-year margin increase
driven by increased quality and pricing of
recyclates, retention of structural cost
savings made in response to Covid-19 and
ongoing cost control.
Our performance
Similarly, EBITDA margins increase on
prior years due to the strong EBIT
performance. The circular innovation
pipeline, Renewi 2.0 and ATM recovery
will contribute to an improvement in both
EBIT and EBITDA margins going forward.
Value drivers
Sustainability strategy
Value drivers
Sustainability strategy
Value drivers
Sustainability strategy
2.0
2.0
Return on capital employed (%)
Leverage ratio
FY22
FY21
FY20
11.6
FY22
FY21
FY20
6.3
6.0
1.44
2.24
2.98
Our performance
ROCE has increased year on year, driven
by the strong EBIT performance and
continued tight control of capital
expenditure in the year. Capital
expenditure on both replacement and
growth projects will increase in the
coming years as the large projects
progress through the construction
phases.
Our performance
Due to strong profits and cash
performance, core net debt reduced
further in the year, with leverage ending
well below the Board’s target. Payment of
Covid-19 tax deferrals has started in the
year and will continue for a further 30
months.
Value drivers
Sustainability strategy
Value drivers
Sustainability strategy
2.0
2.0
2.0
KEY
Link to value drivers
2.0
Renewi 2.0
ATM recovery
Circular innovations
Link to sustainability strategy
Enable the circular
economy
Reduce carbon
emissions
Care for people
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Value
drivers
2.0 RENEWI 2.0
120,000
orders were placed
through MyRenewi
Phone call
volumes dropped
20%
over the
course of the year
+67,000
customers use MyRenewi
We are making good progress towards the objective
of generating an additional €60m of EBIT from our
three initiatives of circular innovations investments,
the Renewi 2.0 digitisation programme and recovery
of earnings within our M&W Division.
The Board has approved over €100m of investments in
four key areas: advanced sorting to address Vlarema 8,
out-of-date organic food waste valorisation into
biogases; construction materials production; and
advanced plastics recycling. These projects were
explained in detail at our capital markets event in
October 2021, and are each featured within the annual
report. Collectively these projects deliver incremental
profits at attractive levels of return above our 16%
pre-tax threshold. They also contribute towards our
objective to reach a 75% recycling rate for the Group.
FY22 was also the second of the three-year programme
to create frictionless efficient processes and improve
customer interactions through increased digital
engagement. The programme is expected to complete
in FY23 and deliver lower selling, general and
administrative expenses (SG&A) through more efficient
digital customer engagement and improved accuracy
from touchless straight-through processes.
Within M&W the ATM site continues moving towards its
previous profitability before the regulatory intervention.
It is progressing certifications for the gravel, sand and
filler products to increase the range of customers and
the achievable price. The ability to scale this production
is also impacted by reduced availability of contaminated
soils and as a result the path to recover profitability
is taking longer than originally expected. Disposal of
historic production of TGG has progressed, with 0.7mT
sold in FY22 which reduces storage on site and at
third-party locations. The on-site storage is then
available to support testing of the cleaned materials
towards additional certifications. In addition to an
ongoing focus on soil processing, the site processes
over 1mT of water, and there are potential opportunities
to expand this further to support the recovery
of profitability.
Customer complaints
dropped
20%
over the
course of FY22
Online sales
grew over
30%
in FY22
Customers rated
MyRenewi
7.5/10
Our Renewi 2.0 programme is entering its
third and final year. The programme is
designed to streamline the business so it
is more customer focused, more efficient
and a better place to work. This
comprises multiple projects, based
around two key themes:
Digitisation of the business
We have developed and launched
MyRenewi, a new front-end interface for
customers that allows them to place and
amend orders, have full visibility of
services, related costs and the circular
benefits their waste is creating. This
digitisation is already delivering a better
24/7 customer experience, while reducing
our cost to serve our customers.
Simplification and
harmonisation of processes
Our core business processes are being
simplified and standardised across our
Divisions to save costs, reduce errors, and
improve customer, supplier and
employee experiences. This has included
the implementation of a Group-wide
procurement tool as part of our
PEAR project (Procurement made Easy
Across Renewi).
We see further digitisation opportunities
beyond the scope of Renewi 2.0.
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Governance reportFinancial statementsOther informationStrategic report Value Drivers continued
CIRCULAR INNOVATIONS
LOCATIONS ACROSS
THE REGION
>€100m
of investments
Amsterdam
Organics
Ghent
Advanced
sorting,
Plastics
Moerdijk
Building
materials
Puurs
(V8)
>€20m
EBIT
>2mT
of waste
Puurs
Advanced
sorting
Waalwijk
Plastics
Acht
Plastics
Beringen
Advanced
sorting
>16%
pre-tax returns
During FY22 we committed over €100m
of investments into the circular
economy from our innovations pipeline.
These are advanced sorting, building
materials, plastics and organics. Our
investments span the Netherlands and
Belgium, and in each case are focused on
the increased valorisation of waste to
generate more valuable outcomes for our
customers, for the planet and to increase
the Group’s profitability.
Individually these projects meet the
Group’s requirements for 16%+ returns,
and collectively they will generate over
€20m of additional profits.
As a result of Mission75, our focus to
achieve a 75% recycling rate, we consider
innovation as a process and are
generating new circular innovation
ideas for future investments.
You can read about each in
detail on pages 26,27,44 and 45
and we would encourage you to visit
our website at renewi.com/investors to
play back the virtual capital markets
event. This will provide an opportunity
to see footage from our sites, hear
from our business leaders, and hear
testimonials from our customers.
“ Let’s hear from our leaders. In the videos below,
they introduce some of our innovative processes,
collaborations and discuss market dynamics.”
Otto de Bont, Chief Executive Officer
Organics
Klaas explains the organic waste market, where we process
out-of-date food waste and green waste. As you can see, there’s a
lot happening at our site in Amsterdam, where a new
depackaging facility has been built, in addition to our bio-LNG
installation opened by His Majesty King Willem-Alexander in
October 2021. Work is under way to clean biogases to export to
the grid network. You can also see comments from one of our
large supermarket customers, Albert Heijn, and hear from our
partners Nordsol and Shell about our bio-LNG venture.
Plastics
Marc explains market dynamics. Dieter, Philip and Olaf will take
you to our sites at Waalwijk, Ghent and Acht, where we process
plastics. You can hear from our customer, Raff Plastics, about
how the post-consumer plastics materials are valuable
feedstocks to build new products.
Advanced sorting
Mark explains the waste-sorting requirements in Flanders,
Belgium and the latest Vlarema 8 legislation, which is driving a
fundamental change in the waste market, with less waste going
to incineration and more being recycling. This is great news for
the environment and Renewi is investing €60m at Ghent, Puurs
and Beringen to support this transition.
Building materials
Theo explains the building materials market and its drive
towards circularity. He discusses building materials with
Heijmans and Martens Beton, and looks to the future of
our markets for gravel, sand and filler recovered from
contaminated soils.
Innovation as a process
Bas explains how partnering and innovation are essential to
meeting the climate commitments in the region, for example
the Dutch commitment to be 50% circular by 2030. Renewi is a
connector for waste innovation and works with many partners
to develop solutions and products to provide secondary
materials for re-use.
38
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Renewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report Value Drivers continued
ATM RECOVERY
Soil and
sand
storage
Water
treatment
>0.8mT of water
decontamination.
Strong waterside
demand and
possible expansion
opportunities
Washing
and
sorting
Filler
storage
4kT created
in 2020
Capable of
processing over
2mT
of waste a year across
water, soil and packed
chemical waste
Within our M&W Division, ATM, pictured
here, is one of our largest and most
complicated sites. It is located in
Moerdijk, on the Holland Diep river with
great access for international deliveries
of soil and water. The site has been in
operation for 40 years and offers unique
circular solutions to customers, while
constantly evolving to meet market
demands.
For the past few years, ATM has been
reconfiguring the site to separate cleaned
soil into gravel, sand and filler, with
investments made in the gravel cleaning
facility, sieving capacity and filler storage
capacity. Work is ongoing to achieve
certifications for these materials and
to sell historic productions of thermally
cleaned soil.
The site also decontaminates 800kT of
contaminated water created by industrial
cleaning, and from ship-cleaning services
we provide at the jetty. There are
opportunities to invest and expand in
the water segment at ATM.
M&W aims to return to
€20m
EBIT
Rotary
kiln
Contaminated
soil storage
ATM Moerdijk covers an area of
180,000m2
Laboratory to
test soil and
water
contamination
levels
30,000 samples
tested per annum
Jetty for
cleaning ships
Extended to
4 berths in 2017
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Renewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report Progress
against our
sustainability
themes
Sustainability is at our very core. It is part of our
purpose and one of our six core company values.
Two years ago we fully refreshed our
sustainability strategy, which is linked to the six
United Nations SDGs which we have a significant
positive impact on. This is realised across three
themes: Enable the circular economy; Reduce
carbon emissions; and Care for people. These
themes split into different objectives, each
quantified with several performance metrics.
We’re pleased to report good progress across the
three themes, as per the table on the right.
Enable the circular economy. This is the core of
our business model, turning waste into high-value
secondary materials. We measure progress with our
recycling rate and the resulting carbon avoidance
achieved. Last year we launched, both internally and
externally, our ambitious Mission75 programme to
activate our journey to a 75% recycling rate.
Reduce carbon emissions. We realise that while
recycling is an inherently sustainable activity, both
our logistics and processing operations have a
significant carbon footprint. For that reason this
second theme aims to reduce the impact of
operations. We have made continued progress and
are currently working on a longer-term roadmap.
Care for people. We take a holistic approach to
sustainability, covering our employees and the
communities in which we operate. Our aim is to
positively impact these communities, tirelessly
working to improve the safety of our operations, and
want Renewi to be the most rewarding, diverse and
inclusive working environment possible.
THEMES
OBJECTIVES
KEY PERFORMANCE INDICATORS
EXPLANATORY COMMENTS
2025 TARGETS
Turn our customers’
waste into
new products.
Enable the
circular economy
We want to be a driving force in
the transition towards a circular
economy, one where all waste is
converted into new products.
Link to SDGs
Reduce carbon emissions
We understand the need not only
to reduce our footprint, but also
to decrease the negative impact
of carbon emissions on wider society.
Link to SDGs
Be a leader in
clean and green
waste collection.
Reduce the carbon
impact of our
operations.
Care for people
We have a responsibility to deliver
our employees home safe and
well, to create a rewarding, equal
and inclusive working environment
and to have a positive impact on
our communities.
Link to SDGs
Deliver people
home safe and well
every day.
Make Renewi a
rewarding, diverse
and inclusive working
environment.
Recycling rate (%)
64.7
66+
FY20
z 65+
FY21
65.8
z 67+
67.2
FY22
Carbon avoidance
(kg CO2 per tonne of waste handled)
FY20
257
FY21
261
FY22
252
kg CO2 per tonnes of waste collected
FY20
10.04
FY21
9.84
FY22
NA1
kg CO2 per tonne of waste handled
FY20
10.47
FY21
11.10
FY22
8.57
Lost time incidents (LTIs)
FY20
11.54
FY21
13.97
FY22
8.88
Employee engagement
+14
FY20
+21
+21
FY21
FY22
1 Metric being restated.
Good progress in the year with
an additional 0.2 mT diverted from
incineration and 0.1 mT diverted
from landfill.
Recycling rate
(% of total waste handled)
75.0%
An absolute total carbon avoidance
of 3.1mT, similar to FY21, and an
increase in total waste handled led
to a slight decrease.
Carbon avoidance
(kg CO2 per tonne of waste handled)
275
The percentage of Euro 6
trucks owned by Renewi rose
to 67% during the year. These trucks
are more fuel-efficient.
In addition, we focused on ongoing
route optimisation, and ‘white label’
truck projects have driven
improvements.
Carbon emissions in scope 1 & 2
went down thanks to continuous
effort to reduce our energy
consumption and a switch to 100%
green electricity by our Commercial
Waste Netherlands Divisions. Our
FY25 target is now met. As we will
be building a plan toward net zero
in the coming year, a more
ambitious target will be established
by next year.
The number of LTIs decreased by
36% within one year, shifting the LTI
frequency (LTIF) rate from 13.97 to
8.88. The goal for FY23 is LTIF of less
than 8. In addition to this, the
amount of significant events
decreased dramatically from 38 to
10 events.
It is our goal to position ourselves as
a leading company to work for in the
circular economy. We expect
employee engagement to improve
post-Covid–19.
Carbon intensity of collection
(kg CO2 per tonne of waste collected)
<9.00
Carbon intensity of our sites
(kg CO2 per tonne of waste handled)
<9.42
Target achieved
LTIF
Number of LTIs (lost time
incidents) x 1,000,000
<7.00
Employee engagement
(eNPS score in Pulse survey)
+30
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+
35
+
33
+
z
Innovation
in action
Working together to create
a cleaner, circular world
…DRIVEN BY FLANDERS’
PROGRESSIVE CLIMATE PLAN
Vlarema 8 is the most progressive recycling
legislation in Europe. It is a model we hope will
be replicated elsewhere, scaling up benefits for
both society and the planet.
Mark Thys, Managing Director CWBE, said: “This
is a major investment for Renewi and will help
towards our sustainability goals – to grow our
recycling rate to 75%, avoid carbon emissions and
preserve natural materials. Progressive legislation
like Vlarema 8 helps drive our waste-to-product
mission and we hope
it will be replicated across
the Benelux and internationally.”
We’ll reduce the
volume of RDF
incineration fuels from
waste by two-thirds – that’s
180,000
tonnes
ADVANCED SORTING
The Flanders government in Belgium is
progressing its climate plan by introducing
further waste-handling regulations. In January
2023, an amendment to the current ‘Vlarema’
legislation stipulates that 24 commercial waste
streams are separated at source. Vlarema 8 is
designed to reduce the volume of commercial
waste sent for incineration while substantially
increasing recycling rates.
This progressive move aligns with Renewi’s
waste-to-product mission. We are responding
by investing €60m in technologically advanced
sorting lines at three of our sites. The first will
be installed in Ghent this year, with Puurs and
Beringen due to follow in 2023. State-of-the-art
technology will enable us to produce greater
volumes of high-quality, clean raw materials
and ensure our customers go beyond Vlarema 8
compliance.
The new, sophisticated sorting lines will ensure
greater segregation of materials so more can
be brought back into the loop for further
recycling, producing quality end streams. These
will not only increase the number of recycled
monostreams like metal, paper and wood, but
will also generate new products for chemical or
biogenic recycling.
The new technology is totally unique to the sector
and looks set to become the new standard, not
just in Belgium but also in the rest of Europe.
BUILDING MATERIALS
Highlighted in The Circularity Gap Report 2022, the
construction sector is one of the five industries
with the highest resource use and GHG emissions.
Advanced economies continually invest in new
infrastructure projects to meet societal needs,
and housing alone accounts for almost 40% of
global gas emissions.
This huge level of demand, combined with a
shortage of raw materials, creates the strongest
possible case for a more circular construction
industry. The picture is one of rising prices
for virgin materials and growing demand for
qualitative and sustainable alternatives. There
has never been a more pressing need to use
existing resources such as coal fly ash or concrete
for housing and infrastructure – rather than fast-
diminishing raw materials.
Our M&W Division is perfectly placed to meet
the growing need for secondary construction
materials. We’re investing in cutting-edge
technology to process, test and clean
contaminated soil, enhancing the quality of
our circular materials. By decontamination, we
prevent pollution and make re-use possible,
contributing to the preservation of resources.
At the same time, we are focused on securing
product certification. Achieving end-of-waste
status is guaranteed to open growing markets
further too. We offer sought-after products at
attractive prices. The market is becoming more
significant and, brick by brick, we are moving
towards a more sustainable future.
WHAT OUR CUSTOMER HAS TO
SAY ABOUT THIS INNOVATION
“We have been working closely with
Renewi for several years to identify
opportunities to use circular materials in our
constructions to achieve our sustainability
goals. For example, we use concrete, asphalt
and sand for landscaping and foundations. We
have therefore been able to collaborate with
Renewi to identify usable materials from their
processing and turn these into construction-
grade products.”
Bas van de Pol, Project Manager Secondary
Materials at Heijmans, a leading European
construction services business based
in the Netherlands
We can produce up to:
We’ll process
375,000
tonnes
per year through our three
facilities and triple the volume
of waste we recycle, keeping more
valuable materials in the
circular economy
for concrete and asphalt
250,000 tonnes of gravel
100,000 tonnes of filler
500,000 tonnes of sand
for replacing coal fly ash in cement, and
for concrete and infrastructure purposes
SUSTAINABILITY THEMES:
VALUE DRIVERS:
a
h
t
l
a
M
2.0
SUSTAINABILITY THEMES:
VALUE DRIVERS:
2.0
,
n
e
g
n
n
i
j
i
e
H
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Renewi plc
Annual Report and Accounts 2022
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Governance reportFinancial statementsOther informationStrategic report
Finance
Review
Renewi delivered a strong performance, with revenues and
underlying EBIT up 10% and 83% respectively. We have
retained some of the structural cost savings made in
response to Covid-19 and these, combined with a strong
prices benefit, have contributed to a significant increase in
margins and profits. Underlying EBIT was €60.6m higher
than the prior year, of which €44.6m resulted from the net
impact of increased waste producer pricing, recyclate prices,
less cost indexation and €9.2m from volume and mix
changes, €8.7m from cost savings with balancing €1.9m from
others.Underlying EBIT increased by 83% and underlying
EBITDA increased by 34% as the level of non-cash items of
depreciation, amortisation and impairment charges only
increased by 6% year on year.
The level of exceptional and non-trading items in the current
year was again significantly reduced to €9.6m, resulting in a
statutory operating profit of €124.0m compared to €36.1m last
year. This was adjusted for the prior year restatement for the
change in cloud computing charges, as referred to below.
Following on from an IFRS clarification on the accounting
treatment of costs associated with the configuration and
customisation incurred in cloud computing or Software as a
Service (SaaS) arrangements, the Group has reviewed its
accounting policy. The revised policy, applied retrospectively,
aligns with the clarification, whereby configuration and
customisation costs are recognised as an expense as incurred,
except in the limited instances where these costs result in a
separately identifiable intangible asset. We have determined that
€3.9m of costs incurred and capitalised during the current
financial year and €7.3m of intangible assets held at 31 March
2021 no longer meet the criteria for recognition under IAS 38
Intangible Assets. The impact relating to the year ended March
2020 and prior was not material, and has therefore been
included in the 31 March 2021 comparative adjustment.
Accordingly, €3.9m (FY21: €7.3m) has been expensed and
disclosed as a non-trading and exceptional administrative
expenses item because it arises from the one-off introduction of
interpretations to accounting policy guidance and is material in
size. The prior year balance sheet has been adjusted with a
reduction of €7.3m of intangibles with an increase in deferred tax
assets of €1.8m and a reduction in retained earnings of €5.5m.
Non-trading and exceptional items
excluded from underlying profits
To enable a better understanding of underlying performance,
certain items are excluded from underlying EBIT and underlying
For more information
on our financial
performance, go to:
renewi.com
profit before tax due to their size, nature or incidence. Total
non-trading and exceptional items excluding tax were reduced
by 74% to €9.5m (FY21: €36.5m as adjusted for the change in
accounting policy restatement). As previously reported, we have
accounted for the cost of the Renewi 2.0 programme as
exceptional due to its size and nature. The programme is forecast
to deliver cost benefits at an annualised run rate of €20m in FY24.
The cost of the programme is still expected to be €40m, split
between capital and an exceptional charge. Benefits of €5.0m
were secured in the year, with cash spend of €6.6m, which was
lower than expected. As a result, we now expect €8m of the
programme costs to be incurred later, falling into FY24.
The table below sets out the expected costs and benefits over
later periods.
Financial performance
Revenue
Underlying EBITDA
Underlying EBIT
Operating profit
Underlying profit before tax
Non-trading and exceptional items
Profit before tax
Total tax charge for the year
Profit for the year
FY22
€m
FY21
€m
Variance
%
10%
34%
83%
243%
122%
1.869.2
1,693.6
262.6
133.6
124.0
105.2
(9.5)
95.7
(20.3)
75.4
195.7
73.0
36.1
47.4
(36.5)
10.9
(5.4)
5.5
The underlying figures above are reconciled to statutory measures in notes 2 and 8.3 in
the consolidated financial statements.
FY21 statutory profit and non-trading and exceptional items have been restated to
reflect the change in accounting for cloud computing costs as referenced in note 1.
.
Renewi 2.0: expected costs and benefits
e
t
s
a
W
l
a
i
c
r
e
m
m
o
C
,
t
n
e
h
G
Annual net benefit
Exceptional costs
Capital spend
Net cash flow
FY21
€m
FY22
€m
FY23
€m
FY24
€m
2
(7)
(5)
(10)
5
(7)
(2)
(4)
12
(8)
–
4
20
(8)
–
12
The capital spend of €7m includes €5m of items which are now classified as exceptional
charge as a result of the change in policy relating to cloud computing related spend.
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Our purpose of giving new life to used
materials enables the circular economy,
which is essential if society is to meet
its carbon-reduction goals
In the prior year, in response to Covid-19 and ongoing lower
economic activity, we took action to reduce capacity in the
Commercial Waste Division. Further details are provided in note
3.3 to the consolidated financial statements.
Operating profit, after taking account of all non-trading and
exceptional items, was €124.0m (FY21: €36.1m as adjusted for the
change in accounting policy restatement as referred to above).
Net finance costs
Net finance costs, excluding exceptional items, increased by
€1.7m to €28.9m (FY21: €27.2m) due to a lower level of finance
income. With regard to finance charges, the new Belgian retail
bond, launched in July 2021 increased costs by €2.7m offset by
lower borrowings on the RCF facility. Further details are provided
in note 5.4 to the consolidated financial statements.
Profit before tax
Profit before tax on a statutory basis, including the impact of
non-trading and exceptional items, was €95.7m (FY21: €10.9m as
adjusted for the change in accounting policy restatement).
Taxation
Total taxation for the year was a charge of €20.3m (FY21: €5.4m as
adjusted for the change in accounting policy restatement). The
effective tax rate on underlying profits was 25% at €26.4m,
unchanged from previous expectations and 24.5% in the prior
year. An exceptional tax credit of €6.1m includes €2.4m
attributable to the non-trading and exceptional items of €9.5m
and €3.7m as a result of tax rate changes in the UK, which were
enacted during the first half of the year.
Looking forward, we anticipate the underlying tax rate to remain
around 26% given the recent changes in the Netherlands and
the UK.
The Group statutory profit after tax, including all non-trading and
exceptional items, was €75.4m (FY21: €5.5m as adjusted for the
change in accounting policy).
Earnings per share (EPS)
Following the one for ten share consolidation in July 2021, EPS
comparatives have been restated to reflect the change in the
number of shares. Underlying EPS, excluding non-trading and
exceptional items, was 98 cents per share, an increase of 53
cents. Basic EPS was 93 cents per share compared to 7 cents per
share in the prior year as adjusted for the restatement of FY21 for
the change in accounting policy.
Dividend
Recognising the Group’s significant growth investment
programme and the resultant cash flow profile in the short term,
the Board is not recommending a dividend for FY22; however, it
will keep the Group’s dividend policy under review for FY23.
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Annual Report and Accounts 2022
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Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report
Funds flow performance
EBITDA
Working capital movement
Movement in provisions and other
Net replacement capital expenditure
Repayments of obligations under
lease liabilities
Interest, loan fees and tax
Adjusted free cash flow
Deferred Covid-19 taxes
Offtake of ATM soil
UK Municipal contracts
Free cash flow
Growth capital expenditure
Renewi 2.0 and other exceptional spend
Other
Total cash flow
Free cash flow conversion
FY22
€m
262.6
(38.0)
4.5
(68.2)
(44.2)
(26.1)
90.6
(10.6)
(10.3)
(9.2)
60.5
(13.1)
(11.0)
(7.0)
29.4
45%
FY21
€m
195.7
35.4
8.9
(50.7)
(40.4)
(35.4)
113.5
54.1
(2.6)
(19.3)
145.7
(6.9)
(17.4)
(3.9)
117.5
200%
Free cash flow conversion is free cash flow as a percentage of underlying EBIT. The
non-IFRS measures above are reconciled to statutory measures in note 8.3 in the
consolidated financial statements. The 2021 values for net replacement capital
expenditure and other exceptional spend have been adjusted by €4.7m to reflect the
element of SaaS related capital expenditure now restated as an exceptional item.
Cash flow performance
The funds flow performance table is derived from the statutory
cash flow statement and reconciliations are included in note 8.3
in the consolidated financial statements.
The table above shows the cash flows from an adjusted free cash
flow to total cash flow. The adjusted free cash flow measure was
introduced in March 2021 and focuses on the cash generation
excluding the impact of Covid-19 tax deferrals, settlement of ATM
soil liabilities and spend relating to the UK PPP onerous
contracts. Adjusted free cash flow includes lease repayments for
IFRS 16 leases.
Adjusted free cash flow was lower, at €90.6m, despite the strong
EBITDA improvement in the year. As noted with the Group’s
interim results, there has been an outflow on working capital in
the year driven by an underlying reduction in payables along
with increased outstanding receivables as a result of higher
revenues and delays in billing from recent process changes. Days
sales outstanding have remained unimpacted by Covid-19.
Replacement capital spend, at €68.2m, has remained well
controlled and ahead of last year due to catch-ups. In addition,
€27.1m of new leases 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. Growth capital spend included spend on the €10m facility
to process out-of-date food waste in Amsterdam and some initial
spend on the advanced residual waste-sorting projects in
Flanders, reflecting a slightly later cash phasing than originally
anticipated.
Interest payments were lower than last year given reduced bank
borrowings and the first interest payment on the new retail bond
being payable in July 2022. Tax payments were also lower
as a result of phasing as some payments have moved out to
April 2022.
Looking at the three components that are shown below adjusted
free cash flow, there has been an initial €10.6m repayment on
Covid-19 tax deferrals, as forecast. The total tax deferrals were
€60m at the end of March 2021 and the Dutch elements will be
settled in 36 monthly instalments as from October 2021. Cash
spend for placement of TGG soil stocks placed in the market was
€10.3m. The balance of the liability of up to €15m is expected to
be placed in the market over the next 12 to 24 months. Cash
outflow on UK PPP contracts was €9.2m due to an improved
operational performance driven by volumes and continuous
improvement initiatives, as well as benefits from higher
recyclate prices.
Renewi 2.0 and other exceptional spend includes €4m relating to
cloud computing arrangements in both years and €7m relating
to Renewi 2.0 (FY21: €8m). Other cash flows include the funding
for the closed UK defined benefit scheme and the purchase of
short-term investments in the insurance captive net of sundry
dividend income from other investments.
Net cash inflow from operating activities decreased from €238.7m
in the prior year to €180.4m in the current year. A reconciliation to
the underlying cash flow performance as referred to above is
included in note 8.3 in the consolidated financial statements.
Investment projects
Expenditure in FY23
The Group’s long-term expectations for replacement capital
expenditure remain around 80% of depreciation. FY23
replacement capital spend is expected to be around €80m which
represents a significant increase over recent years. It includes
some catch-up from the prior two years and some one-offs for fire
safety and office improvements in Commercial, the Green Gas
project and jetty works at ATM. In addition, up to €45m of IFRS 16
lease investments principally in replacement trucks are
anticipated, although some production delays are now expected
given supply chain issues caused by the war in Ukraine.
Expenditure on the circular innovation pipeline will increase as
elements of the advanced sorting investments in Belgium for
Vlarema 8 and expansion in plastics sorting at Acht in the
Netherlands progress through the construction phases. Timing
of the investment expenditure is now slightly later than originally
expected: €12m lower in FY22, correspondingly increasing
expectations for FY23 to €50m and for FY24 to €35m respectively.
The returns expected are still more than €20m by FY26. In
addition growth capital expenditure of around €14m is expected
for other large one-off projects.
Return on assets
The Group return on operating assets, excluding debt, tax and
goodwill, increased from 22.6% at 31 March 2021 to 42.6% at 31
March 2022. The Group post-tax return on capital employed was
11.6% (FY21: 6.3%).
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
Provisions and contingent liabilities
Around 90% of the Group’s provisions are long term in nature,
with landfill provisions being utilised over more than 20 years.
Onerous contract provisions were increased between 2017 and
2020 to a peak of €109.5m in 2018 and have now reduced to
€79.9m. Of the outstanding balance, €9.2m is in current
provisions and the remainder will mainly be used for BDR and
Wakefield over the remaining 15+ years of these contracts.
The total current element of provisions amounts to €31m,
including onerous contracts, €4m for restructuring, €6m for
landfill-related spend and €12m for environmental, legal and
others. Additional detail of the non-current element of provisions
is given in note 4.10 in the consolidated financial statements.
The position on the alleged Belgian State Aid claim remains
unchanged since last year, with a gross potential liability of €63m
as at 31 March, against which we have provided for €15m. We
expect a ruling from the European Commission during FY23, but
no monies would likely become payable until early in FY24.
Details of contingent liabilities are set out in note 8.4 of the
financial statements and the Group does not expect any of these
to crystallise in the coming year.
Retirement benefits
The Group has a closed UK defined benefit pension scheme and
at 31 March 2022, the scheme had an accounting surplus of
€8.6m (FY21: €4.0m deficit). The change in the year was due to an
increase in the discount rate assumption reduced by a decrease
in asset returns. 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 €3.6m 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 €6.3m at 31 March 2022, a €1.1m
decrease from 31 March 2021.
Changes to accounting standards
From 1 April 2022, the company will apply the Amendments to
IAS 37, ‘Onerous contracts - costs of fulfilling a contract.’
Consequently, all costs required for the fulfilment of a contract
should be included when assessing the onerous contract
provision, including an allocation of divisional central overheads.
The Group is in the process of finalising the impact which is
estimated to increase reported annual underlying EBIT from
1 April 2022 by c.€5m. An increase of approximately €53m will be
recorded in the onerous contract provisions, which have up to 18
years still to run. This increase is taken as an adjustment to
retained earnings on 1 April. There is no impact on cash and this
adjustment reflects no change in the underlying performance of
the contracts.
vehicles (SPVs). Core net debt was better than management
expectations at €303.0m (FY21: €343.6m), which resulted in a net
debt to EBITDA ratio of 1.4x. Liquidity headroom including cash
and undrawn facilities was also strong at €428m (FY21: €364m).
Debt structure and strategy
Borrowings, excluding PPP non-recourse borrowings, are mainly
long term with the exception of the €100m Belgian retail bond
maturing in July 2022. All our core borrowings of bonds and
loans are green financed. During the year, all term loans and
revolving credit facilities denominated in Sterling were repaid
and the related cross-currency interest rate swaps were
cancelled. We have extended the Group’s main banking facility,
with most commitments now maturing in May 2025. At the same
time, the size of the facility has been reduced to €400m from
€495m, removing excess liquidity following the Green Bond
issuance completed in 2021.
The Group operates a committed invoice discounting
programme. The cash received for invoices sold at 31 March 2022
was €80.5m (FY21: €80.3m).
The introduction of IFRS 16 in 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 leases.
Debt borrowed in the special purpose vehicles (SPVs) for the
financing of UK PPP programmes is separate from the Group
core debt and is secured over the assets of the SPVs with no
recourse to the Group as a whole. Interest rates on PPP
borrowings were fixed by means of interest rate swaps at
contract inception. At 31 March 2022 this net debt amounted
to €79.1m (FY21: €87.8m). As set out in note 1 in the consolidated
financial statements the presentation of cash held in the
UK PPP entities has been restated to show gross in cash
and cash equivalents rather than netted off the non-recourse
debt balance.
Debt structure
€100m Belgian Green retail bonds
€75m Belgian Green retail bonds
€125m Belgian Green retail bonds
€400m Green RCF
Green EUPP
Gross borrowings before leases
IAS 17 lease liabilities and other
Loan fees
Core cash and money market funds
Core net debt
(as per covenant definitions)
IFRS 16 lease liabilities
FY21
€m
Variance
€m
FY22
€m
(100.0)
(75.0)
(125.0)
(15.0)
(25.0)
(340.0)
(8.7)
3.2
42.5
(303.0)
(100.0)
(75.0)
–
(185.0)
(25.0)
(385.0)
(13.6)
3.5
51.5
(343.6)
–
–
(125.0)
170.0
–
45.0
4.9
(0.3)
(9.0)
40.6
14.8
55.4
3.8
4.9
64.1
(221.9)
(236.7)
Net debt excluding UK PPP
(524.9)
(580.3)
UK PPP restricted cash balances
UK PPP non-recourse debt
Total net debt
21.1
(100.2)
(604.0)
17.3
(105.1)
(668.1)
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Renewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report Operating
Review
COMMERCIAL
WASTE
RENEWING
METAL
GLASS
WOOD
PLASTIC
RESIDUAL WASTE
PAPER
Operating
sites
108
Marc den Hartog, MD,
Netherlands
Mark Thys, MD,
Belgium
Revenue
Volume of
materials recycled
4.7mT
Employees
4,965
€1,360m (FY21: €1,241m)
Underlying EBIT
€135.7m (FY21: €76.8m)
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The Commercial Waste Division, the
market leader in the Netherlands and
Belgium, provides a wide range of waste-
to-product solutions and represents
over 70% of Renewi’s revenue. The
Division collects, sorts and recycles waste
materials from a wide range of sources.
Over the past year, it has extended
its focus on sustainable innovation
by investing in improved production
capabilities and delivering greater
volumes of secondary materials. As a
result, Commercial Waste is playing a key
role in delivering on Renewi’s business
strategy – it is a market leader in recycling
and secondary materials production,
expected to outperform competitors.
While our focus is to provide cost-efficient waste-to-product
solutions for our customers, we create added value by
offering advisory services tailored to help them manage
waste more effectively, for example, optimised source
separation. Furthermore, we offer innovative recycling
technologies, ensuring waste recovered can be converted
into high-quality raw materials. We thereby actively help our
customers meet sustainability goals by supporting product
recycling, reducing materials getting wasted and minimising
the unnecessary use of virgin raw materials such as plastics
and wood.
Our market is divided into three segments: Industrial and
Commercial (I&C); Domestic; and Construction and Demolition
(C&D). In each, our unique business model allows us to focus on the
value we can recover from specific waste streams. Our process
begins with our collection fleet of predominantly modern, clean
Euro 6 trucks which collect inbound waste. Our customers
increasingly support re-use by segregating waste at source, buoyed
by favourable legislation, corporate sustainability targets and good
practice. This is then handled, sorted and processed through one of
our 108 sites, where we have dedicated capacity to separate and
process specific waste streams, including paper, cardboard,
organics, wood, plastics, metals and rubble. This enables us to
produce high-quality secondary materials and recyclates.
Where waste collected meets quality standards, we use our
technological solutions to optimise re-use. Only waste that
cannot be recycled is disposed of. This increases margins and
makes a significant environmental contribution by minimising
the depletion of virgin materials.
Sustainability
We believe our commercial businesses encapsulate best
practice, with an overall recycling rate of 62.6%.
This is clear evidence we are prioritising recycling, successfully
growing our business and investing in the latest technology to
increase recycling rates. Our current projects, such as the
recently opened state-of-the-art bio-LNG plant and our
gas-to-grid activities, as well as the key investment to be made
in building advanced sorting lines in Belgium (in line with new
recycling requirements from the upcoming Flemish Vlarema 8
regulations) and high-quality plastics sorting, will all directly
contribute to further growth. Also our RetourMatras venture,
where we partner with IKEA, shows continuation of growth and
opening of new mattress dismantling facilities and investment
in repolyol technology to allow recycling of mattress foam.
Our activities saved 1.5mT of CO2 emissions that would
otherwise be emitted if these materials were produced from
virgin sources (FY21: 1.5mT). This comes at a cost of
0.22mT (FY21: 0.24mT) of processing, transportation and energy
emissions from our operations. The recycling of 4.74mT (FY21:
4.5mT) of waste preserved a significant amount of finite virgin
resources. This equates to a carbon avoidance intensity ratio of
204kg CO2 per tonne of waste handled.
The most significant contribution to carbon avoidance is from
materials with high CO2 production costs due to mining,
refinement, global transportation, fabrication and installation,
such as ferrous and nonferrous metals. These account for 22%
of the Commercial Waste Division CO2 avoidance. Of the
remaining 78%, the most material waste streams are plastics,
wood, paper and rubble/aggregates.
During the past five years we have demonstrated our
commitment to reducing carbon emissions by upgrading our
fleet to low-emission Euro 6 vehicles, as well as introducing
zero-emission vehicles and electric cranes, loaders and shovels
that operate on our sites. Our Euro 6 or higher standard fleet now
accounts for 67% (FY21: 60%) of the Division’s vehicles. On-site
energy requirements are increasingly provided by solar roofs and
wind turbines, and the procurement of renewable electricity. We
are step by step prioritising the procurement of renewable
electricity in our Commercial Waste Divisions. Commercial Waste
Netherlands took a first step this year, by switching to 100%
green electricity (from wind farms). While having a significant
impact on the carbon footprint of the Commercial Waste
Divisions, this is also showing the way to the other Divisions.
Safety is paramount, with the use of machinery and vehicle
movements in close proximity to pedestrians near customer
sites and in the public domain. During the year, there has
been a strong focus on safety culture including ongoing
training and awareness around the HomeSafe agenda and our
10 LSRs. Our safety strategy continues to focus on our sites,
safety leadership, driving continuous improvement and raising
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Annual Report and Accounts 2022
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Operating Review continued
risk awareness. Our safety procedures – for example driver
induction, ongoing assessment and training – has been
standardised across the Division.
During the year we completed fire improvement upgrades
at many of our sites, focusing on fire prevention, detection
and suppression.
An enhanced fire standard has been cemented across the
organisation, plus enhanced and ongoing training. Graded
assessments have been completed for all applicable sites against
this standard, which were reviewed by the central Group SHEQ
Team. Resulting action plans have been developed to increase
performance. A fire risk register has been created to rate our sites
as low, medium or high risk, listing associated risk mitigations,
including the levels of fire prevention, detection, suppression and
water reserves available.
Markets
The I&C segment meets the needs of specific markets, sectors
and businesses covering the broader activities of the local
economy, including hospitals, factories, offices, shops and
restaurants. Waste streams, such as segregated paper or plastic,
food waste or glass, are preferably separated at source to retain
quality. However, within this sector there remains a significant
flow of mixed waste. The domestic segment provides clean and
efficient ‘hands and wheels’ services in door-to-door municipal
collection. Waste is then delivered as instructed by the authority,
which retains responsibility for sorting, treatment and disposal.
The C&D segment is at the core of Renewi’s activity in the
Netherlands and arises from infrastructure, commercial and
residential construction. The Commercial Waste Division also
operates several specific business lines, many of which are
complementary to the principal segments outlined above. These
include the collection, separation and aggregation for treatment
of small-packed hazardous waste, such as batteries, paint and
out-of-date pharmaceuticals. We also collect and treat organic
waste streams from restaurants, produce waste wood chips for
furniture, recycle mattresses, manage confidential paper
shredding and recycling, and have a leading position collecting
and processing medical waste from hospitals. The hazardous
segment in Belgium is a niche operation, focused on industrial
cleaning and hazardous waste collection and decontamination.
Many recyclate markets have improved during the year, notably
ferrous metal and paper prices, the latter driven by increased
demand for packaging required for home deliveries and lower
supply from segregated collections offices, which were below
pre-pandemic occupancy during the year.
The competitive landscape is dynamic, with a number of M&A
transactions in the sector. It is encouraging to see increased
capital deployment in the recycling and EfW sectors. None of the
transactions are expected to materially change the competitive
balance of our core markets.
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Divisional strategy
This Division creates value from its leading position in waste
collection and treatment in the Netherlands and Belgium. Its
national coverage, density, operational scale and advantaged
processing technologies mean it is strongly positioned in its
core markets.
The Division’s ambitious plans closely align with the Company’s
wider business strategy – organic growth, M&A, ground-
breaking innovation and major investment, technological
advancement and a rapidly evolving market, underpinned by
favourable legislation.
Organic growth will cement our position as the market leader in
recycling and secondary materials production. Investment in
new and innovative technologies which divert more waste from
incineration and landfill will deliver an accretive return on
investment and a growth in our profitable market share.
Rapidly changing and more stringent requirements to separate
waste at source and dispose of it in an ecologically friendly way
is creating M&A opportunities for market-leading companies
like Renewi, with many unwilling to make the necessary
investments to cope with the new regulations and circular
needs.
Renewi is perfectly placed to adapt and meet the demands of a
changing market, offering opportunities to increase the spread
of our processing margins by adding value to the products we
make, ie increased valorisation. Leaders embrace our internal
objective to deliver a 75% recycling rate (Mission75) and are
driven to go beyond. The third year of Renewi’s internal
efficiency programme (Renewi 2.0) is all set to deliver efficiency
gains that will result in a more efficient and agile response to
market opportunities.
Across all our processes we use the latest technological
solutions to optimise re-use, increasing margins while making a
significant environmental contribution by minimising the
depletion of virgin materials. We collaborate with our partners
to reduce the cost and the CO2 impact of our collection
activities, which are necessary to secure the waste as our raw
material input. This combines to help us reduce our carbon
footprint, driving us towards net zero.
Financial performance
The Commercial Waste Division increased revenues by 10% to
€1,360m and underlying EBIT by 77% to €135.7m, representing
an EBIT margin of 10.0%. EBIT margin increased 380bps driven
by a year-on-year benefit of €35m from increased quality and
pricing of recyclates and ongoing cost control. EBIT was 73%
higher than the pre-Covid FY20 reference period. Return on
operating assets increased from 17.6% to a strongly accretive
31.6%.
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Operating Review continued
Revenues in the Netherlands grew by 8% to €896.2m and
underlying EBIT increased by 73% to €93.1m. Underlying EBIT
margins increased by 390bps to 10.4% and return on operating
assets increased significantly to 27.6%. Volumes in the
Netherlands were less impacted by Covid-19 than in Belgium
and the UK. Volumes in FY22 were 5% lower than the prior year
and were around 10% below pre-Covid-19 levels. Compared to
the prior year, there was a small recovery in commercial
volumes offset by the expected contraction in construction
and bulky waste. Inbound revenues in the Netherlands
increased by 2% and outbound revenues by 64%, reflecting
the strength of recyclate prices and increase of recyclate
quality. As reported earlier, paper/cardboard and ferrous metal
prices have been particularly strong throughout the year.
Around €26m or 66% of the uplift in underlying EBIT was
attributable to extra margin on recyclates, supported by
continuing tight control of costs.
In Belgium, revenue increased by 13% to €466.9m and
underlying EBIT by 84% to €42.6m. Underlying EBIT margins
increased by 350bps to 9.1% and return on operating assets
increased significantly to 46.2%. Core volumes increased by
5% compared to the prior year and recyclates by 1%, although
these volumes also remain around 7% below pre-Covid levels.
The increase in underlying EBIT was a result of volume
recovery, strong recyclate prices, improved price mix and
ongoing operational cost savings. Around €9m or 46% of the
uplift in underlying EBIT was attributable to extra margin on
recyclates.
Operational review
Our Commercial Waste Division had a year of strong delivery
despite the impact of Covid-19 and, more recently, the war in
Ukraine. We have seen improvements in our commercial
effectiveness driven by operational efficiencies and dynamic
management of offtake markets. Safety performance has also
significantly improved, driven by several leadership and culture
initiatives, driver training and further investments in fire
detection and suppression systems.
Commercial contracting margins have improved through the
streamlining of our product offering. By removing less
profitable lines we have sharpened our focus on the remaining
core portfolio. This tailored portfolio is now more closely
aligned with industry requirements. In C&D, we have
responded to weaker volumes by improving our customer
offering. This has led to increased market share. Customer
service has been further improved via the Renewi 2.0
programme and MyRenewi platform which allows digital
engagement with customers in a more flexible, responsive and
interactive way. We gained momentum in our specialist
hazardous waste business in Belgium and secured more
out-of-date food waste offtake agreements with retailers in the
Netherlands. Building on our partnership with Greencycl, we
have become a leader in the medical sector, with new
contracts secured with several hospitals and medical centres.
Our commercial teams have also been able to optimise pricing
with our customers, reflecting dynamic offtake prices, and
create value for our services in tandem. For example, in
Belgium where we are preparing for Vlarema 8 legislation, we
are offering advanced sorting services that improve recycling
rates, and so helping our customers to avoid paying higher
taxes for waste that would otherwise go to incineration. This
has resulted in new commercial contracts in a competitive
market and a higher mass balance margin, while contributing
positively to society’s sustainability challenges.
We have seen demand shift from the front to the back end of
the business, with very high demand for our secondary
materials. We have observed an increasing trend of end-users
looking for long-term contracts which has enabled us to
establish secure partnerships with some of our main offtake
customers. We have established multi-year framework
agreements for several product categories including
combustible waste, paper, plastics and wood offtake. This shift
has also enabled us to extend the application of value-based
pricing to our commercial customers and partners, who are
increasingly looking to transition to longer-term contracts.
Within collections, we have focused on optimising existing
trucks, collection routes and site asset utilisation, improving
our efficiency and cost base. For our roller bin collections, we
continually focus on improving route density, eliminating
‘loose stops’ (where no bins are available), improving
customer performance and reducing miles driven, CO2
emissions, as well as our cost.
Organic investments
Significant growth investments in plastics recycling, organic
waste valorisation and advanced sorting in Flanders were
approved by the Board at attractive levels of return. Important
milestones were achieved on each of these and other projects
during the year:
good progress has been made preparing our €60m
investment in advanced sorting across three sites in
Flanders to meet the needs of the Vlarema 8 legislation. The
sites will process 375,000 tonnes of waste and triple the
volume of waste recycled and at the same time halve the
waste incinerated. At our first site in Ghent the building has
been prepared for the sorting line installation which will be
completed in FY23. Preparations for both Puurs and
Beringen are ongoing. These installations will begin during
2023 and are expected to be operational in late FY24;
supporting the Vlarema 8 pre-sorting and reporting
requirement an initial 80 trucks in Belgium have been
equipped with cameras using artificial intelligence to allow
identification of non-compliant waste at source. A total of
200 trucks will be equipped with these systems during the
course of the next year;
site preparations have begun and contractors have been
appointed for a €13m investment in Acht to recycle rigid
plastics. The site is expected to be commissioned in 2023;
construction of the €10.5m out-of-date food waste
de-packaging facility was completed in Amsterdam and has
been in operation since November 2021, providing feedstock
to our anaerobic digester;
construction of the bio-LNG facility in Amsterdam was
completed together with Shell and Nordsol and opened by
His Majesty King Willem-Alexander in October 2021. The
plant takes bio-gas from our anaerobic digester and
converts it to three million litres per year of bio-LNG for
zero-carbon transportation, and bio-CO2 for the agriculture
industry;
our RetourMatras joint venture with the IKEA Group
continues to expand rapidly. During the last year the fourth
facility was commissioned. The first site outside the
Netherlands is expected during FY23 as part of the
international expansion. A new closed-loop polyurethane
foam recycling processing facility is being constructed. In
the second half of 2023 it is expected to deliver the first
‘repolyol’ material to form new mattress foams;
at Mont-Saint-Guibert in Belgium we have invested €2.4m
to upgrade the sand-washing and water treatment facility
to a fully automated technology capable of producing
over 160,000 tonnes a year of clean sand using 25% less
water;
the Renewi Rockwool recycling initiative (‘Rockcycle’),
which creates an opportunity for unlimited recycling of
rockwool instead of landfill, has gained traction and is
being rolled out nationwide in the Netherlands; and
the partnership with Greencycl-Van Straten Medical was
extended to recycle stainless steel and plastic medical
instruments.
Clean and green collection
The efficient collection of waste provides an essential
service to customers and provides us with the raw materials
from which to create new products. We aim to optimise
our capital-intensive logistical activity while preserving our
customer relationships and service. Our approach seeks
to minimise pollution and traffic impact to become
cleaner, greener and more efficient, in support of our
primary focus to increase recycling and close the loop
in the circular economy.
We continue to reduce pollution by investing in the latest
technologies. During the year we placed orders for over 200
Euro 6 trucks with the lowest emissions and took delivery of
49 (FY21: 272). Our investment of €9m (FY21: €39m) was
lower than previous years reflecting supply chain delays.
These trucks reduce pollutants significantly compared to
the older trucks they are replacing, significantly improving
the air quality of the cities in which they operate. 67% of our
fleet is now Euro 6 and we are on track for 100% by 2025.
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Over the next decade, we expect a step-change in the reduction
of carbon emissions from waste collection through two
approaches. The most significant will be a transition to use of
zero-emission vehicles (ZEV) in response to zero-emission zones
in major cities. We have Volvo and DAF’s first production electric
rear-end loaders operating in our fleet and are monitoring
operational performance in conjunction with the manufacturers
as part of our roadmap to zero emissions. The second is an
opportunity for waste companies to co-operate to collect waste
in single ‘white label’ truck fleet in each town, increasing route
efficiency and reducing the number of vehicles. Our Green
Collective joint venture with PreZero is the first and leading white
label commercial waste collection initiative in the Netherlands. It
is now operational in 10 municipalities and is expected to grow
to over 30 cities in future years.
Commercial Waste financial performance
Netherlands Commercial
Belgium Commercial
Intra-segment revenue
Total (€m)
Period-on-period variance %
Netherlands Commercial
Belgium Commercial
Total
Netherlands Commercial
Belgium Commercial
Total
REVENUE
UNDERLYING EBITDA
UNDERLYING EBIT
FY22
896.2
466.9
(2.6)
FY21
828.4
412.9
(0.7)
1,360.5
1,240.6
8%
13%
10%
FY22
148.9
77.5
–
226.4
31%
48%
36%
FY21
113.9
52.5
–
166.4
FY21
53.7
23.1
–
76.8
FY22
93.1
42.6
–
135.7
73%
84%
77%
RETURN ON OPERATING ASSETS
UNDERLYING EBITDA MARGIN
UNDERLYING EBIT MARGIN
FY22
27.6%
46.2%
31.6%
FY21
15.7%
24.2%
17.6%
FY22
16.6%
16.6%
16.6%
FY21
13.7%
12.7%
13.4%
FY22
10.4%
9.1%
10.0%
FY21
6.5%
5.6%
6.2%
The return on operating assets for Belgium excludes all landfill related provisions. The underlying figures above are reconciled to statutory measures in notes 2 and 8.3 in the
consolidated financial statements.
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MINERALZ
& WATER
RENEWING
FLY ASH
SOIL
WATER
MINERALZ
CHEMICALS
Theo Olijve, MD,
Mineralz & Water
Revenue
€194m (FY21: €183m)
Underlying EBIT
€5.8m (FY21: €0.3m)
Operating
sites
11
Volume of
materials recycled
1.9mT
Employees
343
The Mineralz & Water (M&W) Division
includes our soil and water treatment
activities at ATM, and the Mineralz
business, with a total of 11 sites in
the Netherlands and Belgium.
M&W plays an essential role in the circular economy by
processing a significant volume of highly contaminated soils,
old road surfaces, industrial waters, sludges, chemical waste,
incinerator residues and packed hazardous waste.
These waste streams are decontaminated through separation
processes, biological, thermal extractive, and pyrolysis
treatments to make secondary materials available for the
building and construction industries. Often the solutions are in a
closed loop, such as gravel being put back into new tarmac. Our
flagship ATM site has a leading position because of its unique
combination of technologies, the cost advantages provided by
its integrated plant processes and its waterside location for the
ship-cleaning. It operates according to the extensive set of
environmental controls and permits required in the hazardous
waste processing market. Maasvlakte, near Rotterdam, is another
unique site. It is the only landfill site in the Netherlands capable
of the immobilisation of leaching hazardous waste, and the
disposal of naturally occurring radioactive materials.
Sustainability
M&W processed 2.3mT of waste in FY22 (FY21: 2.4mT), well below
the peak production capacity of 3mT as a result of the reduced
throughput of soil at ATM. The Division has a blended recycling
rate of 84% (FY21: 82%) and, within this, ATM has an exceptionally
high recycling rate of 95% (FY21: 92%). It is expected to increase
with soil processing volumes, as soil recycling rates are very high,
at circa 98%.
The principal purpose is the decontamination of materials that
would otherwise pollute our world and the re-use of materials,
which contributes to the preservation of virgin materials. The
Division has comparatively lower carbon avoidance than other
Divisions, at 0.71 million (FY21: 0.74 million) due to the lower
carbon cost of production for aggregates building materials from
virgin sources.
As specialist processing sites, M&W facilities operate to the
highest environmental standards, within multiple permits,
and are proud to meet leading standards and regulations.
Compliance is at the heart of the licence to operate.
The Division has exacting standards for the acceptance of waste,
testing of the clean products produced and all emissions arising
from operations.
Around 20 people work at ATM’s high-tech laboratory
carrying out over 35,000 tests per annum to ensure that
ATM not only complies every time with technical
standards, but can also develop new capabilities for issues
arising as a result of our industrialised economies. The
team ensures we meet the broader tests of our duty of care
as a responsible operator. As Seveso-controlled sites, our
ATM and CFS plants are strictly regulated and have high
safety standards in compliance with the Seveso guidelines.
Markets
The underlying market drivers for inbound waste to ATM are
industrial activity in the region. This includes the oil and gas
sectors that predominate in Rotterdam and Antwerp, as well
as construction and site remediation activity across Europe
which drives demand for inbound and outbound soil
materials. The market for inbound contaminated soil,
particularly internationally, has changed this year and
become more challenging. Project off-site remediation has
slowed, associated with shifting priorities due to Covid-19
and permits to import contaminated soil being restricted.
This has led to a lack of availability of inbound soil.
In November 2021, the Dutch National Institute for Public
Health and the Environment (RIVM) published a report to
evaluate the environmental standards for secondary
mineral products, including thermally cleaned soil (TGG)
and bottom ashes from incinerators, amongst others. It
concluded the current legislation is not effective and
amendments will be brought forward. We expect this to
bring much needed clarity to this important area of
secondary materials, facilitating import permits for
inbound materials and export permits for clean soil
or soil components.
Incineration activity and the Dutch Green Deal requirements
ensure responsible treatment of incinerator ashes is
undertaken domestically. Following the regulatory
shutdown of the TGG market in 2018–19, the market has
been slow to recover. Historic productions of TGG during
this period continue to be placed into the market.
ATM continues to focus on separation into three building
materials: gravel, sand and filler. Certifying each of these
new products, ideally to end-of-waste status and then
producing at scale to the required standards, is the core
focus of market development for M&W. We continue to see
strong customer demand for secondary materials as
showcased in our capital markets event with Martens Beton
and Heijmans. ATM’s materials can help these customers
meet their own ESG and secondary content targets towards
the government policy.
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Operating Review continued
Divisional strategy
The strategy is focused on restoring ATM to full production,
expanding activities in water treatment, bottom-ash treatment
and creating an integrated portfolio of secondary materials.
Progress is being made to restore ATM’s position in the market
for processing contaminated soils. Further investments are being
made in processing, storage and certification of these products
in order to build our capability to serve the higher-value building
materials market. This will continue to be the core focus of the
Division until the soil cleaning kiln is back to 100% of processing
capacity. Additional areas of focus include expanding the
contaminated water treatment, extending bottom-ash cleaning
processes and developing the synergies of an integrated
portfolio of secondary materials activities with a joint go-to-
market approach directed towards the construction market.
Financial performance
The M&W Division made underlying progress and saw revenues
increase by 6% to €193.9m and underlying EBIT increased by
€5.5m to €5.8m. Volumes at the waterside increased 6% to 811kT
showing recovery post-Covid-19 and accounting for an
additional €3m of contribution margin. Other activities in the
Division performed well with good volumes and the benefit of
higher values for metal recyclates.
Operational review
As previously indicated, the resumption of full soil treatment
production requires progress in three interlinked areas:
revitalisation of the inbound soil pipeline, placement of historic
cleaned TGG stocks in the market, and establishing sand, gravel
and filler as certified products for the construction markets.
Mineralz & Water financial performance
Revenue
Underlying EBITDA
Underlying EBITDA margin
Underlying EBIT
Underlying EBIT margin
Return on operating assets
FY22
€m
193.9
22.4
11.6%
5.8
3.0%
11.3%
FY21
€m
182.8
15.0
8.2%
0.3
0.2%
0.8%
Variance
%
6%
49%
–
–
N/A
–
The return on operating assets excludes all landfill related provisions.
The underlying figures above are reconciled to statutory measures in notes 2 and 8.3
in the consolidated financial statements.
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The revitalisation of the inbound soil pipeline has been delayed.
Inbound deliveries of contaminated soil have been lower than
expected due to short-term reductions in active projects in the
market as well as delays in securing import permits from the
authorities. As a result, we did not further increase our
throughput. We are working closely with IL&T to unlock the
international contaminated soil market.
Good progress was made reducing our TGG inventory by 54%,
with the shipment of 0.7mT during the year. We continue to
explore outlet opportunities for the remaining stock and have
taken an additional disposal cost charge of €2m.
As previously noted, the preferred applications for
decontaminated soils are as separated and refined filler, sand
and gravel which are each secondary construction materials.
We continue to experience strong interest in these secondary
building materials as the construction market seeks to become
more circular. We are working to obtain full certification and
end-of-waste status for the secondary building materials.
Testing of the products with customers in the infrastructure
and concrete industries is ongoing. Gravel certification and
end-of-waste status have been achieved. Certification for sand
and filler for concrete applications are expected as early as
2023. Our commercial pipeline for each product is growing and
once the regulatory environment becomes clearer our fully
certified secondary materials will have long-term outlet markets
and customers.
The remainder of the Division performed well. Our metals
extraction facilities saw growth on the prior year helped by
increases in metal prices. With sustained increased demand we
see good growth opportunities in the water treatment market.
We saw lower profits in the landfill segment, as expected
following the scheduled closure of the Braine landfill from
1 January 2021.
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Operating Review continued
SPECIALITIES
RENEWING
METAL
PLASTIC
GLASS
RESIDUAL WASTE
PAPER
Operating
sites
43
Volume of
materials recycled
1.7mT
Employees
892
James Priestley, MD,
Specialities
Revenue
€350m (FY21: €301m)
Underlying EBIT
€4.1m (FY21: €2.4m)
The Specialities Division includes the
specialist recycling businesses of Maltha
for glass and Coolrec for household
appliances, in addition to our UK
Municipal public private partnership
(PPP) operating contracts.
Carbon avoidance contributions come from the recovery of
usable materials and the fuels generated by these processes,
which collectively produce a positive CO2 avoidance of
0.87mT (FY21: 0.95mT). Given the majority of waste
is delivered to our facilities, transportation emissions are not
significant in Specialities. Site processing is important,
however, as we operate complex mechanical and biological
treatment facilities.
Coolrec has a strong position in the recycling of fridges,
freezers and other small domestic appliances. It produces
recycled plastics and both ferrous and non-ferrous metals
following decontamination. Inbound supply comes from
so-called producer schemes on long-term supply contracts,
and outbound products provide industry partners with
secondary materials to make closed-loop circular products.
Maltha is a European leader in glass recycling, focused primarily
on recycling flat and container glass into cullet and glass powder
for re-use in the glass industry. O-I, a world leader in packaging
glass, owns 33% of the Maltha group. Maltha has sites in the
Netherlands, Belgium, France, Portugal and Hungary.
Our UK Municipal business operates waste treatment facilities for
UK councils, typically under long-term PPP contracts and with a
significant residual waste component. The PPP contracts are
rigid in structure with an inflation-linked inbound fee and
market-based offtake cost of the disposal for sorted and treated
materials. This resulted in significant contract provisions
between FY18 and FY20.
Sustainability
Specialities processes 2.6mT of waste per year (FY21: 2.6 million),
51% within the UK Municipal contracts, 45% in Maltha and 4% in
Coolrec. Levels of recycling in the UK from the PPP contracts are
lower than those achieved in our Commercial Waste Division,
however the Renewi Municipal recycling rate of 39% is significantly
above the market average for residual waste. This is due to most of
the input being residual waste, which is what is left after other
streams have been separated for recycling. At the outset, the
contracts were established to facilitate diversion from landfill and
to boost the recycling and recovery rate of 94% (FY21: 93%). By
contrast, Maltha and Coolrec both have exceptionally high
recycling rates, and their purpose is to create secondary products.
This results in a divisional recycling rate of 66% (FY21: 63%).
As with all our Divisions, safety is a key area of focus for
Specialities. Particular challenges are the complexity of the
various technologies and processes deployed across the
Division. There has been a focus on HomeSafe and the 10
LSRs. In addition, the Specialities Division has the most
mature risk awareness culture, based on it having the largest
number of Health and Safety Tracking system entries (HITs)
reported each year and the number of people reporting them,
leading to progressive closure of the associated risks
identified by our teams.
Markets
Coolrec continues to win new business and we see positive
developments in the market for our recycled plastics.
The division has won several important tenders on the WEEE
waste market. Compliance schemes in the Netherlands,
Belgium and France granted us important volumes of
incoming electrical and electronic equipment waste. These
used materials allow us to produce high quality secondary
materials. The Coolrec team have extensive knowledge of
high-tech sorting technologies and the Division a recognised
supplier of these materials in the European market. In
addition to the production of metals (ferrous, non-ferrous,
precious metals), Coolrec is increasingly successful in
manufacturing high-end plastics (extremely close to virgin
quality). We are currently working on partnerships with
known A-brands.
Maltha is seeing attractive market growth, with an increase
seen across Europe in the demand for recycled cullet, which
uses 30% less energy. The division is seeing some pricing
changes from the market that influence our operations on
various levels directly or indirectly. Maltha is currently
preparing a strategy for growth in various destinations
with its clients.
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Operating Review continued
Specialities financial performance
Revenue
Underlying EBITDA
Underlying EBITDA margin
Underlying EBIT
Underlying EBIT margin
Return on operating assets
FY22
€m
350.1
14.5
4.1%
4.1
1.2%
28.9%
FY21
€m
300.8
12.0
4.0%
2.4
0.8%
5.4%
Variance
%
16%
21%
–
71%
–
–
Underlying EBIT includes utilisation of €7.0m (2021: €11.4m) from onerous contract
provisions. The return on operating assets excludes the UK Municipal business.
The underlying figures above are reconciled to statutory measures in notes 2 and 8.3
in the consolidated financial statements.
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Although we have no intention to invest further in PPP
contracts, the UK waste market remains an interesting one,
adjacent to our core Benelux-based operations. The market is
expected to transition towards more mature and higher
environmental standards for the treatment of waste, with an
inadequate supply of incineration capacity being addressed
and active migration away from comparatively high landfill
rates. To reach the same standards as the most advanced
European countries, such as Germany, the Netherlands and
Belgium, increased focus on recycling, circularity and
secondary materials production is required.
The UK Waste Strategy aims to halve the amount of waste going to
landfill and incineration in England by 2035 and increase the level
of waste going to recycling to 65%. Clearly the UK recycling
industry is destined to grow significantly as these ambitious
targets are delivered. As the industry grows in line with demand, it
will require significant investment, matched to attractive returns
that are underpinned by government legislation.
We also note with interest significant waste M&A activity and
further consolidation of the fragmented landscape.
Divisional strategy
The focus for Coolrec is to concentrate on product quality and
improving recycling through investment and innovation as a
basis to grow the business. For Maltha, the focus is the
operational performance of the sites, working in close co-
operation with our customers as the market grows. The core
focus for Municipal is on continuing to improve the operating
performance of the remaining assets to reduce cash losses and
create a platform for future growth. We watch with interest the
evolution of the UK waste market more broadly and hope to find
opportunities to participate in the transition to a circular
economy in due course.
Financial performance
The Specialities Division grew revenues by 16% to €350m and
underlying EBIT was up 71% to €4.1m. The recovery at Coolrec has
continued, benefiting from operational improvements, investments
and strong recyclate prices. Maltha volumes recovered during the
year to pre-Covid-19 levels and up on prior year, including good
volumes in both France and Portugal. UK Municipal saw the
benefits of high recyclate prices offset by higher council volumes,
an accounting adjustment in one contract as referenced with the
interim results and €2m costs relating to a fire at one of our facilities
in Cumbria with insurance recovery possible in FY23.
Operational review
Coolrec performed very well in the year and is the national
leader in recycling fridges in the Netherlands and Belgium as a
key partner to the national white goods collection schemes.
Volumes increased 4% benefiting from Belgium contracts and
achieving double digit underlying EBIT margin. A further
investment was completed at Waalwijk where electrostatic
separators now increase the purity of our PS and ABS post-
consumer plastic materials to >95% to achieve a significantly
better offtake price.
Maltha volumes recovered during the year to pre-Covid-19 levels,
up 15% on prior year. The business benefited from higher metal
prices and is assessing exit options for the small unprofitable
operation in Hungary.
In UK Municipal we continue to operate the loss-making
contracts within the aggregate provisions taken in previous
years. Continuous improvement initiatives delivered a further
€1.4m of annualised savings across the various contracts.
Underlying improvements have continued at the ELWA contract.
The ongoing activity at Derby to manage the council’s waste
remains in place through the second half of 2022 under
short-term contracts pending their long-term plans.
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The climate transition
and our pure-play
recycling go hand in
hand and reinforce
each other
Climate-related
Financial
Disclosures
(TCFD)
This is our first disclosure, and we will continue
developing our internal climate-related
processes and associated disclosures in the
coming years. We are in the process of
developing a TCFD roadmap, which will lay out
our plan for expanding each of the strands set
out here, and the processes that sit behind them.
Renewi recognises the recommendations of the Task Force
on Climate-related Financial Disclosures (TCFD). Areas in
which we continue to develop our climate-related
disclosures are described throughout this section, such that
we explain where we do not meet TCFD expectations. We are
not yet able to fully disclose Scope 3 greenhouse gas
emissions and as noted later we are currently embarking on
a project to improve and externally validate our greenhouse
gas emissions data including Scope 3.
Governance
As a waste-to-product company, Renewi is in the business of
sustainability. Waste management is an essential component
of climate change mitigation through the creation of circular
economies, with significant opportunities as well as risks
associated with climate change itself. Climate-related matters
are therefore considered at every level of the organisation
whenever key decisions are made, with the ultimate
responsibility residing with the Board.
Historically, we have considered and assessed the Group
to be in a ‘net positive’ carbon-avoidance position with
regards to the drivers and impacts of climate-related issues.
From a transition perspective, this is due to our position as a
leading waste-to-product company. We have not yet been
significantly impacted by physical climate change. Therefore,
until recently we have not considered climate-related risks and
opportunities in a systematic, comprehensive and consistent way.
However, with the continuing integration of the TCFD framework
into our processes, this has begun to change and will continue to
evolve over time to meet the increasing needs of these risks
themselves as well as the disclosure needs of all stakeholders
related to them.
Board oversight
The Board and Executive Committee review investment
decisions in light of climate-related risks and opportunities. Also,
they have approved the shortlist of risks and opportunities that
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TCFD disclosures continued
Transition risks
Category
Key risk/opportunity
Products &
Services
Increasing pricing of GHG
emissions
Risk/
opportunity
Opportunity
Commentary
If the Group can monetise the realised carbon
avoidance its services provide this could provide
a growing revenue stream.
Time horizon
To 2025
Potential financial
impact area
Scenario trend significance
Planned mitigation approaches
Revenues
Higher opportunity
Products &
Services
Development of waste stream
recycling activities that support
the low carbon transition
Opportunity
Producing valuable and highly sought-after transition
materials from waste benefits the Group by increasing
demand for their services and products.
Products &
Services
Enhanced climate change
regulation & reporting
Opportunity
Continuing development of climate change regulation
could increase competitiveness because the Group is
well prepared and lobbying for positive change.
2025 to 2030
Revenues
Higher opportunity
2025 to 2030
Revenues
Moderate opportunity
Markets
Increasing cost of materials
Opportunity Higher revenue, due to prices of recycled
2025 to 2030
Revenues
Moderate opportunity
Markets
Circular economy principles
Opportunity
materials becoming more competitive as cost
of raw materials rise.
Being a circular economy specialist allows for
expansion of our offerings.
Products &
Services
Increasing importance of scope
3 emissions
Opportunity
Increase in customers who may need to
reduce emissions, leads to higher revenue
and product/service opportunities.
To 2025
To 2025
Revenues
Lower opportunity
Revenues
Lower opportunity
Policy & Legal
Increasing pricing of GHG
emissions
Risk
Rising cost of carbon is a risk, due to the expansion of
EU/UK ETS scope to include Renewi.
To 2025
Operating costs
Higher risk
We aim to get broader recognition for the carbon avoidance we generate by
recycling as an offset for our customers’ emissions among legislators and
standard setting bodies.
We monitor the market for opportunities to recycle additional waste streams
and advancements in processing technologies to create the highest possible
product quality.
We aim to be a leader in sustainability, and push what is necessary in order
to be recognised as such by the (international) rating agencies.
In order to replace virgin materials as much as possible, we invest in recycling
technologies that come as close as possible to the virgin alternative in terms
of specification and price.
We aim to maintain a leadership position by continuously investing in
advanced recycling technologies and acquiring new technologies and
capabilities.
Investment in MyRenewi portal will create advanced customer
dashboards that provide insight for customers to show recycling
outcomes and associated emissions.
While assessing how to consider and apply carbon prices in our decisions, we
are building a carbon emission reduction plan as well as considering advanced
technologies for carbon capture.
Policy & Legal
Supply chain transparency
Risk
Lack of transparency could lead to key stakeholders
being disappointed and unsupportive.
2025 to 2030
Revenues
Lower risk
We will continue to improve as techniques develop further.
Policy & Legal
Lack of developing climate
policies
Markets
Changes in waste volume and
composition due to reduce and
reuse principles
Risk
Risk
Slowing climate action could have a negative
effect on growth.
Revenues impacted to the downside due to reduce
and reuse principles. Less materials or less high-value
materials in inbound stream.
2025 to 2030
Revenues
Lower risk
2025 to 2030
Revenues
Lower risk
We support and lobby for progressive climate-related policies of
governments in our markets.
We encourage re-use and will continue to actively monitor composition
of inbound streams for changes in customer behaviours.
Our key climate-related transition risks and opportunities, including planned or existing responses, which have been assessed using climate change scenarios. Scenario
trend significance of risk/opportunity accounts for the time horizons in which the issue is likely to occur.
were identified and assessed as potentially material by the
TCFD Steering Committee for the purpose of climate-related
financial disclosures.
In recognition of the importance of climate-related risk
disclosure to a broad range of stakeholders, the Board will
implement a TCFD roadmap of activities to review, assess,
model and report on these risks with increasing detail.
Management’s role
Within the Executive Committee, the CEO has responsibility for
communicating climate-related issues to the Board. The Chief
Financial Officer (CFO) is responsible for guiding climate risk
management, and the Strategy and Business Development
Director is accountable for driving climate-related strategies.
The Executive Committee review investment decisions
including climate-related risks and opportunities on an
ongoing basis.
In 2021, we formed an internal TCFD Steering Committee to
establish our TCFD reporting strategy and to begin embedding
climate-related risk management into our existing enterprise
risk management framework. The Committee includes experts
from all Divisions, Central Finance, Procurement, Risk and
Sustainability functions.
Our Sustainability function is responsible for climate-related
matters at the management level and for reporting progress
against our broad range of climate, ESG and sustainability
targets. The Sustainability Manager collects climate-related
information from the Divisions and updates the Executive
Committee on progress.
To view our corporate governance framework, see page 112.
Strategy
Our process for identifying and assessing climate-related
risks and opportunities
We have worked alongside a leading global sustainability
consultancy to identify relevant climate-related risks and
opportunities and assess the materiality of these issues.
To better understand the potential timing and future materiality
of key climate-related risks and opportunities, we have also
completed an initial, qualitative scenario analysis assessment.
We have employed globally recognised datasets which give
insight into the possible risk and/or opportunity trends
associated with low-and high-carbon futures. This supports better
planning and preparation for alternative outcomes. The following
time-frames and scenarios were used in the assessment:
Time-frame. Short term: to 2025
existing mitigation efforts against the future materiality and
time-frame of risk and opportunity trends. This is to further
enhance strategic resilience and position the business to capture
opportunity upsides.
Medium term: 2025 to 2030
Long term: 2030 to 2050
Transition risks and opportunities. Using a higher carbon
scenario aligned with the Stated Policies Scenario (STEPS) and
a lower carbon scenario aligned with the Net Zero Emissions
by 2050 Scenario (NZE) provided by the International Energy
Agency (IEA). The NZE is consistent with a 1.5°C temperature
outcome. Where required, for example for trends specific to
market or technology factors not provided in IEA data, data
from other equivalent sources was taken.
Physical risks. Using the Intergovernmental Panel on Climate
Change (IPCC) Representative Concentration Pathways (RCP)
4.5 (low emissions) and 8.5 (high emissions).
As part of the TCFD roadmap, after this initial qualitative scenario
analysis assessment, we will continue to develop our scenario
analysis capabilities to an extent that our next disclosures
will seek to quantify the business impacts of material climate-
related risks and opportunities. We also intend to stress-test
The impact of climate-related risks and
opportunities on our strategy
Our business and strategy are centred on goals and ambitions
relating to climate change and sustainability. These goals and
ambitions range from carbon emissions avoidance by recycling
and supporting the circular economy, to investing in the
commercialisation of innovative recycling techniques to reduce
waste and increase the quantity and quality of secondary
materials produced. We are also investing in decarbonising our
operations, to help us better align with the global effort to limit
global warming to 1.5°C. In addition, Renewi is entirely
green-financed for its core debt. These instruments are issued
under the Renewi Green Finance Framework aligned with the
Green Bond and Loan taxonomy and principles.
We have identified three sustainability themes in our
sustainability strategy of which two are directly linked to climate
change and the opportunities and risks assessed in our scenario
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analysis: Enable the circular economy and Reduce carbon
emissions and waste. These are outlined in detail on pages 42
and 43.
At its core, Renewi is focused on creating products from waste by
recycling to help avoid unnecessary raw material manufacture and
associated resource depletion where possible, reducing millions of
tonnes GHG emissions in value chains every year through the reuse
of materials. This trend reflects the growing demand for recycled
products and the rising importance of scope 3 emissions, which
increases demand for our services from companies looking to
reduce supply chain emissions. Our role in the circular economy
allows us to avoid more GHG emissions than we generate in our
scope 1 & 2, as well as preserving scarce natural resources by
recirculating materials.
successive processes. Increasingly these more sophisticated
techniques increase energy consumption and hence our own
GHG emissions for a greater benefit in the full value chain.
Despite this increasing intensity, we continue to decarbonise our
operations. In addition to the renewable energy produced at our
anaerobic digestion and compost plant sites, we are investing in
renewable energy such as solar and wind production at sites and
increasing the procurement of green electricity.
As well as our site-based emissions, our collection activities are
also energy-intensive. The associated GHG emissions intensity
has been reduced over the past few years by route optimisation,
increased route density, shared collections, transition to Euro 6
trucks, and first steps towards migration towards a zero-emission
vehicle fleet.
However, some recycling activities, and particularly the
increased valorisation of those materials to high-quality
secondary materials, require energy to sort and treat through
In response to increased temperatures and in anticipation of
further increases, we are continually investing to avoid and
mitigate the impact of fires as one of the greatest operational
Transition risk and opportunities
High
Medium
Low
Low
Medium
High
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Key
2025
2030
2040
2050
Max Risk
Max Opportunity
Average Risk/ Opportunity
risks in the waste industry. These investments are in processes
and systems of fire prevention, detection, and suppression.
Smart technology such as cameras supported by artificial
intelligence plays an important role and is being deployed
on sites.
With this information in mind, and following the findings from
the scenario analysis exercise, we consider our current business
model and strategy to be resilient to the transition to a lower
carbon economy. This is because, on balance, this transition
presents more opportunities for Renewi than risks. Physical
climate change poses risks to our operations and supply chain.
However, mitigation measures are either already in place, or are
in the process of being further developed.
The two tables on pages 68 and 72 provide details on the key
risks and opportunities that were included in the scenario
analysis assessment. For transition risks and opportunities, we
are in the early stages of assessing current mitigation measures,
in light of the scenario analysis findings, to understand whether
they are sufficient or not. Therefore, only planned mitigation
approaches are listed. For physical climate risks, our risk
management process already considers some mitigation
measures in relation to those identified and assessed. These are
therefore listed as current mitigation approaches.
Risk management
Our process for identifying and
assessing climate-related risks
In assessing climate-related risks and opportunities, we have
followed the categories outlined by the TCFD. We conducted
a high-level assessment of climate-related risks. In a first step,
we identified a long list of physical and transition risks and
opportunities that the business is potentially exposed to.
The TCFD Steering Committee guided the development of this
long list. This exercise prioritised the risk analysis on our top 40
sites. It did not include an initial assessment with regard to the
impact on all open and closed landfill sites which will be
developed further in the coming period.
Risks are evaluated along three dimensions: time-frame,
likelihood, and impact. The time-frame dimension considers
the time horizon along which a risk may materialise in the
short, medium, or long term. For now, time-frame is separated
from likelihood due to the long-term nature of some climate
issues, which goes beyond the typical timeframe for enterprise
risk management. The likelihood score is based on a
qualitative assessment on whether a risk trend is already in
occurrence, or whether it is made increasingly likely by the
low-carbon transition (for transition risks) or physical climate
hazards (for physical risks). Impact is assessed qualitatively,
based on relative financial significance to Renewi of a risk
materialising. Likelihood has been scored on a scale of 1–5,
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TCFD disclosures continued
Physical risks
Category
Key risk
Key impacted geographies Commentary – business disruption caused by:
Time horizon
Potential financial
impact area
Scenario trend
significance
Current mitigation approach
Acute & Chronic
Extreme heat
Across all
Main foreseen occurrences
To 2025
Operating costs
Higher risk
Emergency response and contingency plans to ensure business continuity
Increased likelihood of fires at sites due to spontaneous
combustion of waste interruption
Minor foreseen occurrences
Heat-related illnesses, such as heat stroke
Lower efficiency, intermittent operation or failure, of equipment
used for sorting and recycling processes. Biological processes
could be disrupted or halted
Additional energy to cool equipment processes, and sites
Chronic
Water stress &
drought
Netherlands
Lower river levels disrupt barge shipments of products to
destination sites
Reduced water supplies may halt processing. Water supplies may
become more expensive to procure
Lower river levels during water stressed periods may impact water
discharge rates for waste processing sites, resulting in reduced
operational capacity
Investment in additional water storage facilities
Capital
expenditure
Revenues
Procedures for controlling temperatures at some sites
Fire detection and extinguishing systems
2025 to 2030
Operating costs
Revenues
Capital
expenditure
Moderate
– higher risk
Some sites are already used to managing flow of raw materials (woods for
example) even when low river levels
A map of priority sites will be drafted in the coming year to assess where new
mitigation plans need to be created
Acute
Flooding
Netherlands, Belgium, UK
Damages to site equipment and infrastructure
2025 to 2050
Operating costs
Acute
Storms & wind
UK
Contamination of water due to mixing with waste materials
Impact water discharge rates
Investment in additional wastewater storage facilities
Coastal flooding could disrupt supply chains
Storms and extreme winds may carry debris and result in road
blockages disrupting supply chains
Could lead to increased repairs of infrastructure
Our key climate-related physical risks, including planned or existing responses, which have been assessed using climate change scenarios. Scenario trend significance of risk
accounts for the time horizons in which the issue is likely to occur. For physical risks, overall risk levels represent projected climate trends under a high-emissions scenario (RCP8.5)
and include a consideration of the proportion of our sites that may be exposed.
from highly unlikely to almost certain. Where possible, this
assessment has been aligned with our current enterprise risk
management framework.
Based on the assessment impact and likelihood of risks, an
inherent risk profile has been assigned to each item on the long
list. Based on this profile, the most significant risks and
opportunities were then assessed using scenario analysis. Risks
were assessed on an inherent risk basis to understand the baseline
risk Renewi may be exposed to. This means any mitigation efforts
already in place have not yet been fully considered, which would
result in a current risk profile. As a next step, we will take stock of
existing mitigation efforts for key risks and assess whether these
efforts are appropriate for the level of risk now and in the future,
informed by our scenario analysis exercise.
The outcomes of the scenario analysis were reviewed by the
TCFD Steering Committee. Findings were presented to the
Executive Committee and subsequently the Board to validate the
most significant risks and opportunities for our business.
Integration of climate-related risk factors
into risk management
In the assessment process, climate-related risks have been
considered up to 2050. This differs from our enterprise risk
management framework that we use to conduct risk
assessments for the wider business, where timeframes are
aligned to our five-year strategic planning. It is a future
priority item to integrate our climate-related risk management
into our existing risk management processes and to align
materiality assessments such that climate-related risk can be
compared to business risks. With time, climate-related risks
could be fully integrated – where appropriate – into other
risks we currently identify, to understand the additional risk
climate change presents. It is expected that this process will
take time, but our direction of travel is to aim for integration
where possible.
For our enterprise risk management framework, please see
pages 90 to 99.
Metrics and targets
Our climate-related metrics and targets
Renewi has an existing set of metrics to manage and
assess climate-related risks and opportunities. The
metrics consider a time-frame of five years, which
aligns with our strategic planning. The base year a
gainst which progress is measured is FY20. These
metrics are also aligned with our three sustainability
themes as shown on page 42.
When setting climate-related targets, we analysed government
targets and pledges in countries where our sites are located.
We have also looked at our past performance and drivers of
Capital
expenditure
Revenues
Moderate
– higher risk
Emergency response and contingency plans to ensure business continuity
Flood barriers at some sites located near water courses (eg, Jenkins Lane, UK)
Investment in extra water storage capacity at some processing sites
Drainage systems at some sites designed to manage storm water flows, with
reference to forward-looking scenarios
2025 to 2030
Operating costs
Moderate risk
Emergency response and contingency plans to ensure business continuity
Capital
expenditure
Revenues
Drainage systems at some sites designed to manage storm water flows, with
reference to forward-looking scenarios
In addition to the existing metrics and targets we intend to
develop and monitor signpost indicators for material climate-
related risk and opportunity issues, which will help us monitor
our business environment and determine when risk or strategic
management measures should be taken.
GHG emissions
We recalculated our baseline data in FY20 and therefore do not
provide comparative data prior to FY20. In future annual reports,
we will include data from 2020 onwards, which will allow for
trend analysis. We are currently embarking on a project to
improve and externally validate our GHG data, develop a scope 3
footprint and set emissions targets aligned with the Science-
Based Targets initiative (SBTi). The outcomes from this project
will be included in our subsequent disclosures.
performance improvements. Based on projected volumes of
waste streams and secondary materials we have set targets.
These were approved by the Executive Committee and the
Board.
Our commitment to achieve our climate-related targets is also
reflected in the way we evaluate performance. To motivate
senior executives and managers to increase climate-related
performance, we have an annual bonus plan and long-term
incentive plan (LTIP) in place. The measures used in both the
annual bonus and LTIP are selected annually to reflect the
Group’s main business and strategic priorities for the year and
capture both financial and non-financial objectives. Within the
non-financial objectives, we use a climate-related ESG metric of
the Group’s recycling rate in our LTIP awards. Together with the
financial metrics, these measures are transparent, visible and
motivational to participants, balance growth and returns, and
provide good line-of-sight for executives and alignment with
shareholders.
We consider the legislation of carbon pricing in operating
countries but currently we do not have an internal carbon
price in place. Due to the nature of our business, some
climate-related opportunity metrics are already reported, for
example recycling rate, carbon emissions avoided, and
secondary materials produced. We also engage in lobbying
for regulation around avoided emissions.
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strategy focus
1
Enable the
circular
economy
Today’s waste is the raw
material for tomorrow.
Renewi contributes to
a circular economy and
protects the world by
giving new life to used
materials
Objectives
Turn our customers’ waste
into new products
SDG links
Circularity is our business, vision
and mission. We produce secondary
raw materials from our clients’ waste
streams for all kinds of applications.
In this way, we prevent the extraction
of new materials and associated
emissions that contribute to
global warming.
Climate change and weather-related
hazards have life-changing and
devastating impacts on communities on
every single continent. Floods, droughts,
intense heat waves and wildfires are
increasing, with a devastating impact
on, among other things, agricultural
production, health, the economy and
biodiversity. Europe itself faced heavy
floods in July 2021, resulting in damage
to villages, infrastructure and
agricultural lands.
Correlation between material
use and global warming
Globally, 2021 was one of the hottest
years on record. The cause is increased
concentrations of GHGs in the
atmosphere, mainly due to human
activities like burning fossil fuels and the
extraction and processing of materials.
According to The Circularity Gap Report
2022, published by Circle Economy, 70%
of all global GHG emissions are related
to material handling and use.
The world population is increasing
and with it, growing levels of
consumption. but natural resources
are being depleted. Over the past six
years, since the United Nations Climate
Change Conference in Paris, we have
consumed more than half a trillion
tonnes of raw materials, the equivalent
weight of 14 elephants for every person
in the world. This is too much.
We are consuming an average of 1.6
planets each year: well beyond what
our planet can naturally replenish.
This is unsustainable.
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For more information
on our sustainability
strategy, see our
Sustainability Review
at renewi.com
It’s urgent that we act now. There are
solutions which will limit further climate
change, a key one being circularity. The
amount of virgin materials extracted can be
minimised by driving the circular economy,
which results in fewer GHGs and less
residual waste. In this way, we harness
sufficient resources for future generations
and bequeath them a safe a healthy world
to inhabit.
A circular economy explained
The circular economy is an economic
system geared towards eliminating all
waste by finding continual uses for recycled
materials, creating a more sustainable
society. A linear economy stands for taking,
making and wasting.
A circular economy represents a closed-
loop system where new resources are not
needed. Instead, all products and materials
are reused, shared, repaired, refurbished,
remanufactured, or recycled.
Becoming circular: Europe’s role
Europe is taking essential steps to stimulate
the circular economy and reduce global
warming, by introducing new legislation
and supportive initiatives. Both countries
and individual cities are taking important
steps towards becoming carbon neutral
and more circular, paving the way for others
to follow.
Legislative tailwinds
A new version of existing legislation is
Vlarema 8, which demands increased
commercial waste recycling in Flanders
(Belgium). Regulations require 24 waste
streams are sorted at source, with an
onus on waste collectors to
ensure this is carried out correctly.
Vlarema 8 complements and reinforces
Renewi’s position as the market leader in
collecting and processing commercial
waste in Flanders. Read more on this
legislative tailwind on page 44.
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Sustainability strategy focus continued
Breakdown of our 3.1mT of carbon avoidance by major category
79%
29%
88%
66%
44%
22%
0%
-22%
1%
0%
-9%
Recyling-based
potential
‘avoidance’
Waste-derived
fuels produced
and sold or
used on site
Anaerobic
digestion
power
generation
Landfill
gas power
generation
R1 incineration
emissions
(negative)
The European Union wants to be net-zero
by 2050. The Netherlands, Belgium and
the UK have also committed to this goal.
According to the Paris Agreement, we
need to limit the global temperature rise
to 1.5°C in this century. By reducing GHG
emissions, we contribute to reducing
climate change.
Only 8.6% of the global economy is now
circular and unfortunately, this figure is
decreasing. The Circularity Gap Report
2022 states that with their roadmap of 21
circular solutions, businesses, cities and
nations can reduce resource extraction
and use by 28%, therefore cutting
greenhouse gas emissions by 39%. So by
closing the worldwide circularity gap, we
would be on a 1.5-degree pathway.
Our waste sector plays a central role in
these aspirations because we provide
secondary raw materials derived from
public and commercial waste. The growth
potential of the circular economy lies in
the ability to recycle products. By
recycling, we’re playing our part to close
the gap. A significant amount is already
recycled in Western Europe, but there are
still some challenging material flows,
which are difficult to recycle and therefore
need innovation.
Potential of the European
waste industry
A durable transition to circularity is
reachable with a combination of multiple
actions: reducing the use of primary raw
material, eco-design, product lifespan
extension, repairability, recycling, the
recovery of secondary raw materials from
waste streams and the use of recyclates in
products.
Recycling is not the final destination for a
product. The demand for products made
of recyclates and those that can be
recycled is on the increase. Therefore,
people and businesses should consider
recycling as a starting point and naturally
integrate recycling in the design,
production, distribution, and
consumption of all goods and services.
There is potential to reach higher
recycling rates and simultaneously
avoid more carbon emissions. For
example, Europe aims to recycle at least
65% of household waste by 2035 and
dispose of a maximum of 10% in landfills.
If the UK and the European member
states achieve this target, annual CO2
emissions would be reduced by 150mT,
shown in a study from the European
Waste Management Association FEAD
and market research agencies CE
Delft and Prognos. This amount equals
the total emissions of a country like
the Netherlands.
These CO2 savings result from more
extensive recycling and reuse of the
recovered raw materials.
By recycling and recovering secondary
raw materials, we avoid the carbon
emissions from extracting, transporting
and processing virgin raw materials. In
addition, carbon emissions are saved by
recovering energy from non-recyclable
materials in waste-to-energy plants and
by producing fuels from waste.
Considering all this, the European waste
sector would make a very significant
Our goals and targets
OBJECTIVE
METRIC
Turn our customers’
waste into new
products
Recycling rate
(% of total waste handled)
FY21
65.8%
Carbon avoidance
(kg CO2 per tonne of waste handled)
261
FY22
67.2%
252
Innovative secondary
materials produced
(tonnes)
353,500
282,400
FY25 TARGET
75.0%
(+10% point)
275
(+15%)
1M
Our role at the heart of the circular economy
3.1M
avoided carbon
emissions
1.3mT
more recycling over
five years, equivalent to
10% points increase
As a leading waste-to-product
company, we play a vital role in
enabling the circular economy.
Circularity is essential to meet
climate targets
Globally, we consume 100 billion tonnes
of raw materials per year, and we reuse
only 8.6%.
Our overuse of new ‘virgin’ materials
creates emission levels incompatible with
the Paris Agreement. We need to act now
to overcome the current circularity gap
and become more circular.
At Renewi, we keep valuable materials in
the product value cycle by diverting waste
from landfills and incineration. In this way,
we prevent the extraction of new
materials and associated emissions that
cause global warming. Today’s waste
materials are the resources for tomorrow
– and for the future. Keeping materials in
the loop by linking product chains at the
end and beginning is the answer to
worldwide climate questions.
Giving life to used materials
Our current take–make–waste economy
wastes over 90%. This huge circularity gap
offers remarkable opportunities to reduce
CO2 in the short term by recycling and
giving new life to used materials. This
is precisely what we do at Renewi.
From our key position, we can make
a genuine impact by recycling more
and better. We face many challenges,
including the difficulty in achieving
the purity of virgin materials due to
mixed inputs, and competing with their
lower cost.
due to non-homogeneous inputs.
However, we are proud of our innovations
which enable us to create high-quality
secondary materials that can be used
repeatedly.
RENEWIng Earth
Earth Overshoot Day marks the date
when humanity’s demand for ecological
resources and services in a given year
exceeds what Earth can regenerate in
that year. In 2021, Earth Overshoot Day fell
on 29 July. By recycling more and using
fewer natural resources, we try to
postpone this date.
Renewi protects the environment and
resources by taking waste and creating
something new. Recycling and
recovering help retain the world’s natural
resources and preserve the planet for
future generations.
Temperature impact of doubling global circularity
The current policies and
national climate pledges of
governments are only 15%
of the path to a world where
climate change remains well
below 2°C. The other 85%
could be delivered by the
circular economy.
Over the next 11 years, if
we doubled the level of
circularity globally from
8.6% to 17%, we would
return to a below 2°C
world. By doing so, we
would partially close the
circularity gap and also
limit global warming.
5°C
4°C
3°C
2°C
1°C
0°C
COP21 ambition
Business
as usual
4–5°C
warming
Doubling
circularity
to 17% by
2032
1.8°C
warming
1900
2020 2032
2100
Source Based on The Circularity Gap Report 2021 by Circle Economy, and global temperature time series by NOAA.
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Sustainability strategy focus continued
contribution to Europe’s climate
ambitions. This is without the carbon
reduction from these companies through,
for example, multimodal transport,
greener mobility in the sector, transition
to renewable energy sources and less
carbon-intensive operations.
Our goals and metrics for 2025
Our objective is to turn our customers’
waste into new products by focusing on
three metrics: recycling rate, carbon
avoidance and innovative secondary
materials produced. We have set very
clear and ambitious – and attainable –
goals to stay focused.
Transforming waste into
new products
We contribute to more circularity and
a smaller circularity gap by transforming
our customers’ waste into new materials
and products. This year Renewi has a
recycling rate of 67.2%. By 2025, we intend
to divert 75% of all the waste we receive
towards recycling, saving more than
10mT of materials from incineration
and landfill. For our entire organisation
to work towards this goal, we launched
the ‘Mission75’ programme, allowing
every employee to contribute.
Accomplishing a recycling rate of 75% is
based on our belief that our customers’
waste is an excellent resource for
secondary material use. To achieve this
uplift, we must continue doing what we do
best and introduce and develop innovative
solutions to extract as much value as
possible from waste and recycled
materials.
Together with our partners, we made
notable progress in optimised sorting,
exploring new destinations for our
secondary materials and producing
high-quality circular materials and
products. Last year we produced
353,500 tonnes of innovative
secondary materials, and this year
282,400 tonnes. This is a small
reduction linked to the discontinuation
of one of the two innovative secondary
materials produced by our Mineralz &
Water (M&W) Division. Our internal
innovation pipeline still gives us
confidence in reaching our FY25 target
of 1mT per year.
To successfully close the circularity
gap means we and our customers are
responsible for a higher recycling rate.
That is why we guide and advise our
customers about circularity, from
inspiration on circular purchases to
eco-design and from developing their
circular business models to more
possibilities to sort waste better at
the source.
Carbon avoidance from
recycling and recovery
Our goal for 2025 is to enable a total of
4.2mT of CO2 avoidance in the supply
chain annually. More circularity and a
higher recycling rate are commensurate
with avoided carbon emissions. When
secondary raw materials are used
instead of primary raw materials, it leads
to substantial carbon savings from
avoiding energy for extraction, handling,
use and disposal. This accounts for 2.5mT
of avoided CO2 emissions per year.
Our target for 2025 is to avoid 275 kg CO2
per tonne of waste handled. This year we
avoided 252 kg CO2 per tonne of waste
handled.
Renewi avoids carbon emissions through
its activities. In order to do so, our
activities consume energy and generate
CO2 emissions.
Of course, our energy use also increases
with our increasing effort to recycle more
and produce more secondary materials.
We are working on reducing our own
carbon emissions, eg by switching to
green alternatives if possible and by
creating our own energy via solar and
wind. Read more at Reduce carbon
emissions on page 80.
Looking at our impact at a different scale,
Renewi contributes to a great ‘carbon
benefit’ for the planet. The amount of
carbon avoidance in the supply chain is
six times higher than our own (scope 1 &
2) footprint.
Performance
Renewi is positioned in the middle of our
society and is subject to external
influences. Covid-19 also had its effects in
FY22. We noted high raw material prices
due to high demand during the
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Delivering a carbon avoidance six times greater
than our scope 1 & 2 carbon footprint
Renewi prevents carbon emissions in value chains. Production
of virgin materials consumes vast amounts of energy, as well as
depleting natural resources. We expend far less energy to sort and
process waste. This enables these materials to recirculate which
delivers a net saving of over 3mT of CO2 emissions every year. Most
of our recycled and secondary materials therefore have a better
carbon impact than virgin materials.
mT
3.0
2.0
1.0
0.0
(1.0)
3.1
(0.5)
Emissions in
scope 1 & 2
Avoidance
Recycling performance
Volumes (mT)
Total waste handled at sites
Materials recycled1,2
Materials recovered for energy production
from waste1,2
Total materials recycled and recovered
for energy production
Recycling rate
(% of total waste handled)
FY21
12.05
7.94
3.16
FY22
12.44
8.36
3.19
11.11
11.54
65.8%
67.2%
1. Recycling is material given a ‘second life’ for reprocessing into new goods/
materials. Recovery is waste used for energy production, such as production of
waste-derived fuels, biomass and similar.
2. Includes water recovery and moisture loss during treatment for some
technologies employed.
Carbon avoidance in the supply chain
as a result of our activities
Volumes (’000 tonnes)
Materials separated for re-use/recycling
Waste-derived fuels produced and sold
Landfill gas/anaerobic digestion
electricity production
Waste-derived fuel used at ATM
Total avoided emissions
Carbon avoidance
(kg CO2 per tonne of waste handled)
FY21
2,425
865
44
206
3,148
261
FY22
2,476
712
41
200
3,134
252
pandemic. Therefore, we experienced
more need for recyclates, which led to
higher yields and worked out as a boost
for circularity.
Due to the lockdowns, we collected less
waste. Despite this, levels of waste
recycled remained stable, following a
higher recycling rate. The recycling rate
rose 1.4 percentage points to 67.2%.
This outcome is driven by significant
investments in post-sorting techniques,
and we know that regulation like Vlarema
8 in Belgium, will also contribute in the
coming year to give a boost to our
recycling rate in the Commercial Waste
Divisions.Our total carbon avoidance this
year remains almost equal to last year.
This can be explained with the fact that,
on one side, our recycling volumes and
our recycling rate did increase. However,
on the other side, the three other
contributors to our total carbon
avoidance did not increase and more
actual carbon emissions were emitted
from the emissions from incinerators with
energy recovery, with a negative effect on
our total carbon avoidance.
Taking care in health care
Hospitals generate a lot of medical waste,
resulting in a tremendous impact on the
environment. To Renewi, medical waste
means recycling opportunities. Together
with GreenCycl in the Netherlands and a
pilot project with partners in Belgium,
VinylPlus® Med, we started to make
medical plastics more circular.
Outlook
The numbers show a positive trend and
slight increases. We are still on track to
meet our 2025 targets.
We are optimistic about the progress of a
circular economy, especially when
regulations that require better sorting at
source, like Vlarema 8, become more
uniform. In addition, achieving the CO2
reduction potential will require efforts
across Europe to further boost recycling
capacity, including public support for
more systems allowing separate
collection of more waste streams.
Companies should also focus more on
the ecological design and recyclability
of the products they put on the market.
The government can do its part by
introducing new regulations that, for
example, impose a minimum use of
recycled materials in new products.
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Sustainability strategy focus continued
2
Reduce carbon
emissions
Waste collection, recycling
and producing secondary
materials all use energy,
which generates carbon
emissions. Renewi is
focused on increased
valorisation of waste to
produce products, and
often these additional
processing steps add to
energy consumption.
Notwithstanding this
backdrop, which has a net
benefit, we also actively
seek ways to reduce our
carbon footprint for each
of these processes
Objectives
Be a leader in clean and
green waste collection
Reduce the impact of our
carbon operations
SDG links
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Renewi’s purpose is to protect the
world by giving new life to used
materials. Each year we recycle and
reuse millions of tonnes of valuable
resources. However, directly or
indirectly, our activities generate CO2
emissions and we continually search
for solutions and innovations to
reduce our carbon footprint.
Heat records are broken yearly, and
climate-related incidents are on the
increase across the world. According to
the IPCC, human activities are estimated
to have caused approximately 1.0°C of
global warming above pre-industrial
levels. Furthermore, the IPCC states
global warming is likely to reach 1.5°C
between 2030 and 2052 if it continues to
increase at the current rate.
High-carbon economy
Fossil fuels are generally inexpensive,
convenient and widely available. Their
widescale mining and exploitation are
key features of the developed world,
resulting in high-carbon economies.
The current levels of GHGs pumped into
the atmosphere are unsustainable. Fossil
fuels are depleting fast. If we don’t act
now, the impact of climate change on
future generations and global
ecosystems will be irreversible and
catastrophic.
Besides being more circular, energy
reduction and cleaner alternatives to
fossil fuels are the solution to reducing
carbon emissions. Generating energy via
green or renewable sources, such as
solar cells and wind, is what is needed to
turn the tide.
Responsibility of governments
and businesses
COP26 sent a clear reminder that each
government and every company should
comply and participate in order to meet
the Paris Climate Agreement by the end
of the century. The pressure is increasing,
as we are yet to see enough effort being
made to start reversing the trend.
Furthermore, disruptive solutions are still
too few to produce a game-changer
impact. We need to act NOW.
By the nature of our activities, we at
Renewi contribute to fight climate
change. By recycling waste, we avoid
carbon emissions and we enable the
circulation of recycled raw materials. We
do, and will continue doing, our part to
enable a lower-carbon economy.
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Sustainability strategy focus continued
While continuing to do what we do well,
we support governments and institutions
where we operate in building a regulatory
frame that should foster the ecological
transition.
Responsibility of Renewi
Renewi is evolving fast across all parts of
the business – not least by improving
support to our customers to help them
achieve the required sustainability goals
by 2023. We play a crucial role in lowering
carbon emissions, within both our own
and our customers’ value chain.
Consequently, we work hard to expand
our waste-to-product activities, reduce
CO2 emissions and find innovative
solutions that accelerate this journey.
Our goals and metrics for 2025
Our objectives are to be a leader in clean
and green waste collection and reduce
the carbon impact of our operations. We
aim to reduce our carbon intensity within
our scopes 1 & 2.
We work with a number of metrics for
our logistics, fleet, and direct site
operations.
Clean and green waste
collection: what we do
Within our two Commercial Divisions, our
efforts were mainly focused on: optimised
route plan, collaborations like Green
Collective (see below), less polluting
fuels and more clean-emission Euro 6
vehicles. Zero-emission vehicle usage
will play an increasing role over time as
we start to electrify our fleet.
Reducing our energy consumption,
eliminating unnecessary energy needs
and driving continuous improvement
initiatives. As a result, our total energy
consumption (gas, electricity and fuel)
decreased by 11% versus FY21.
We optimised our collection routes to
reduce the number of kilometres driven,
urban traffic and emissions. A part of this
optimisation is ‘Green Collective’, a joint
venture between Renewi and other large
waste collection companies. As a result,
we now jointly collect waste within 25
municipal regions in the Netherlands.
By driving with one collection vehicle
via one combined route, we reduced
collection traffic by up to 50%. Every
reduction in 100 kilometres driven
leads to a saving of 160kg of CO2. By
2025, we aim to reach 30 regions within
this project.
This year, we are on track to complete
67% of our transition to Euro 6 trucks.
Also, we put our first bio-LNG truck
into use.
Reduce carbon impact of our
operations: what we do
To reduce our carbon footprint in our
operations, several levers and solutions
are available and rolled out within
our operations:
Greening-up our energy mix. Our on-site
energy requirements are increasingly
provided by solar roofs and wind
turbines, and the procurement of
renewable electricity.
In Ghent, we will be installing panels and
the largest wind turbine on the Belgian
mainland in 2022. This turbine should
cover 75% of the electricity use at our
Ghent site and around 10% of total
electricity use within our Commercial
Waste Division in Belgium.
Step by step, we are prioritising the
procurement of renewable electricity.
Commercial Waste Netherlands took a
first step this year by switching to 100%
green electricity.
By doing so, the total share of renewable
energy used on site climbed up 32.7%,
which is already beyond our FY25 target
(25%). Furthermore, this had a significant
impact on the carbon intensity in our
operations: Renewi has also already met
the target of ‘well below 9kg CO2 emitted
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per tonne of waste collected’, with a
carbon intensity of 8.57 this year.
Carbon footprint1
Participating in carbon-capture
innovation projects. M&W has engaged
with multiple parties in the Moerdijk
region to investigate options for carbon-
capture. Specifically, the goal for M&W of
the exploration is to investigate the
options for capturing all of the emissions
of the ATM site in Moerdijk.
Reducing our carbon footprint in our
operations is aided by the awareness of
our employees. For those who have a
company car, we are working with our
fleet leasing partners to encourage hybrid
or electric cars. This year the percentage
of hybrid or electric cars out of our total
employee mobility fleet increased from
23.7% to 32%.
Outlook
We will continue our efforts to remain at
the forefront of clean and green waste
collection and reducing our operations’
carbon impact. As mentioned earlier in
this report, we are currently embarking
on a project to improve and externally
validate our GHG data, develop a
scope 3 footprint and set emissions
targets aligned with SBTi. The outcomes
from this project will be included in our
subsequent disclosures.
Volumes
(CO2 equivalent ’000 tonnes)2
FY21
ex UK
FY21
UK
FY21
Total
FY22
ex UK
Process-based emissions
(scope 1)
Transport-based emissions
(scope 1)
Site fuel use emissions (scope 1)
Site gas use emissions (scope 1)
Site electricity use emissions
(scope 2)
Total emissions from
significant sources
Carbon intensity
(kg CO2 equivalents per tonne
of waste handled)
255
105
31
18
73
482
42
4
3
1
12
62
FY22
UK
53
2
2
1
9
FY22
Total
297
103
33
19
54
297
109
34
19
85
244
101
31
18
45
544
439
67
506
11.10
8.57
1. This table is drafted in accordance with the Streamlined Energy and Carbon
Reporting (SECR) disclosure requirements. For a full methodology on numbers
used to calculate the information disclosed above, please see the Sustainability
section on our corporate website.
2. Figures rounded to nearest 1,000 tonnes – totals may reflect rounding. Some
data based on carbon ‘factors’. These vary from country to country and are
periodically updated, such as by government agencies.
Energy use1
Megawatt hours
FY21
ex UK
FY21
UK
FY21
Total
FY22
ex UK
FY22
UK
FY22
Total
Fuel use transport (scope 1) 356,740
101,217
Fuel use sites (scope 1)
95,156
Gas use sites (scope 1)
163,353
Electricity use (scope 2)
716,466
Total energy use from
significant sources
3,662 360,402
10,709 111,926
5,534 100,690
34,927 198,280
61,427 777,893
316,237
89,069
89,430
162,820
657,556
3,892 320,128
8,469
97,539
5,592
95,022
40,661 203,481
58,614 716,170
1. This table is drafted in accordance with the Streamlined Energy and Carbon Reporting
(SECR) disclosure requirements. For a full methodology on numbers used to calculate the
information disclosed above, please see the Sustainability section on our corporate website.
Our goals and targets
OBJECTIVE
METRIC
Be a leader in
clean and green
waste collection
Carbon intensity of collection
(kg CO2 per tonne of waste collected)
Share of clean-emission trucks
(% Euro 6 trucks of total fleet)
Zero-emission trucks
(number)
Reduce the carbon
impact of our
operations
Carbon intensity of our sites
(kg CO2 per tonne of waste handled)
Share of renewable energy used on site
(% renewable electricity out of total
electricity use)
FY21
9.84
FY22
NA1
60.9%
67%
2
8.57
2
11.10
15.8%
FY25 TARGET
<9.00
(−10%)
100%
65
<9.42
(−10%)
32.7% 25.0%
(+10% points)
Hybrid or electric lease cars
(% (PH)EV vehicles out of total fleet)
23.7%
32%
40.0%
(+27.5% points)
1. Metric being restated
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Sustainability strategy focus continued
3
Care for
people
Our people are the key to
the successful delivery of
our business objectives.
We strive for an engaged
and inclusive workforce.
Valued and well-supported
staff can fulfil their
potential and ambitions,
inspired by our compelling
purpose. Their safety,
health and wellbeing are
paramount
Objectives
Deliver people home safe
and well every day
Make Renewi a rewarding,
diverse and inclusive
working environment
Positively impact our
communities
SDG links
Small changes can have a big impact on
people’s day-to-day working lives. Pulse
surveys are just one way we can identify
and resolve issues to benefit our
employees and improve their day-to-day
working experience. Recent ‘you said, we
did’ examples include improved PPE for
adverse weather conditions, a café for our
drivers in Belgium, and improved signage
at one of our sites.
Health and wellbeing
This year, we launched a range of initiatives
to enhance wellbeing. Mental health
continues to be a priority. We increased
support through Covid-19 restrictions and
lockdowns and provided tailored guidance
for all our staff. The Mental Health
Committee, now in its third year, held a
Mental Health Awareness Week and
supported World Mental Health Day.
A cross-section of staff, including leaders,
shared their personal mental health
journeys via video. This resulted in a
series of powerful testimonies, which
generated much discussion and
engagement. In November, we focused on
men’s health, supported Movember and
published a series of blogs on various
aspects of men’s health awareness. Blogs
were also published in support of World
Menopause Day, Global Diversity Day and
International Women’s Day.
We have embedded a working from home
policy, allowing people to preserve a new
work–life balance. This includes
introducing a package of support to help
homeworkers to remain fit and well.
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Engaging our people
Our employees are Renewi ambassadors.
We strive to ensure they have a clear
understanding of our business purpose
and objectives. The culture of our
workforce will enable the company’s
long-term success and its pivotal role
in society.
Our ambition is to be a responsive
employer with an open, collaborative and
inclusive management structure, which
includes regular engagement with all staff.
This year, we implemented a range of
human resources and internal
communications initiatives to boost
employee engagement. We launched an
internal social media platform called
RenewiGO – this will transform the way we
communicate with our more than 6,500
staff across our 162 sites, 68% of whom
are operations-based.
The platform was chosen to encourage
bottom–up communication and improve
the way we interact with our frontline
staff. It facilitates tailored communication
to increase accessibility and encourages
feedback. This operates in addition to
text messages, screens and on-site notice
boards. Important communications are
also delivered via daily stand-up
meetings and team briefings.
Pulse
We listen to and respond to our people.
This year, we conducted three Pulse
surveys, with a response rate of 70%.
When employees were asked to rate
how they feel about working at Renewi,
a large proportion of staff responded
positively, returning a score of 7.3 out
of 10. We intend to further improve
both this score and the overall Pulse
response rate.
Health and safety performance
Indicator
Number fatal accidents
(Number)
>3-day accident rate
(Number of >3-day accidents/FTE x 100,000)
Lost time injuries/rate1
Number/((number LTI)/total number working hours) x 1,000,000
Severity rate
(Total number days lost as result of accidents/total number LTIs)
Concerns/close-out rate2
(Number/number concerns closed out/number concerns raised as
a %)
FY21
2
1,495
FY22
–
1,096
85/13.97
137/8.88
20.1
49,208/
73%
17.4
46,298/
96%
1. LTI: accident which results in a person being off work for a day or more.
2. Concern: an accident which nearly, but did not, happen. Also called risk reports, close calls, near-misses etc
Our Maltha business has launched an
improvement project called ‘Factory of
the Future’. This will look at everything
from safety and wellbeing of staff to
quality of inputs, process control,
organisational set-up and innovation.
This will enable the business to perform
at the highest levels in the industry.
Fit for the future
We aspire to be an inclusive and
respectful employer with the ambition
to create a progressive and
collaborative culture with a professional
leadership style. Our focus is on our
value, Together, acting with integrity
and authenticity to build long-term
relationships.
Nurturing talent and
developing our future leaders
Renewi is a leader in the markets it
operates in. To maintain this position,
we must develop and adapt to a rapidly
changing world. People are energised
when allowed the opportunity to
flourish and progress their careers, and
we work to nurture the best talent in
order to have the right people in the
right place at the right time, doing the
right things for Renewi.
LEAD is the Renewi leadership
development programme launched in
2019. It has been expanded to offer
training, development and support for
managers, with uniformity across
Divisions. In the leadership team itself,
4.5% of staff had previous non-
leadership roles within the company.
Our learning platform RenewiYou is now
available in all our Divisions across each
country we operate in. Our Learning
and Development Team has supported
our SHEQ, Legal and IT developments
with the rollout of mandatory
e-learnings on this platform, including
the Renewi Code of Conduct, 10
Lifesaving Rules and cyber security.
RUNewi
One of our popular initiatives focusing
on health and wellbeing is the RUNewi
challenge. We launched this in 2021 to
encourage staff to make exercise a part
of their everyday lives and to get out
and about in the darkest winter days.
They are supported to run or walk in
virtual teams during February, helping
boost physical and mental health, while
fostering togetherness and raising funds
for our chosen mental health charities.
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Sustainability strategy focus continued
Q&A with our
new SHEQ Director,
Jeanine Peppink-Van
der Sterren
Renewi has seen more than a 30% drop in LTIs in the last 12 months. What
do you attribute this to?
I’m very glad our efforts have resulted in such a significant drop in LTIs and zero
fatalities. We invested in creating a safer working environment with a range of
tactics, which included the introduction of the 10 Lifesaving
Rules by e-learning, laying the foundations for our SHEQ Excellence Campus,
and carrying out audits to improve good housekeeping and compliance with
fire standards.
What were the most impactful findings identified by the Homesafe and Fire
Safety Audits from the past 12 months?
The main findings relate to how we manage our assets safely, our awareness of
risk, how we can minimise it and how well we help our people cope with
change. That is the reason we are implementing the International Sustainability
Rating System (ISRS).
What is the target outcome of SHEQ and how will ISRS help to achieve this?
Our ambition is zero incidents, zero non-compliances with law, regulations,
standards and reduction of costs of non-quality. Implementation of ISRS
enables us to measure, therefore making the outcomes more visible and
transparent across all safety, environment and quality areas. Through more
structure and alignment our performance will improve further.
In an organisation with different Divisions and businesses, why is one way
of working important?
One way of working is equally important for safety, environmental compliance
and quality. With its implementation, benchmarking and sharing best practices,
we continuously improve our performance in an effective and efficient way.
How do you create an engaging safety culture?
Good safety performance is about winning employees' ‘hearts and minds’, by
getting everyone to work safely because they want to work in this way.
Improving the safety culture of the organisation is about making safety a fully
integrated part of working behaviour. Hearts and Minds is a toolkit to improve
safety culture. It is designed to facilitate cultural change within organisations.
World-class safety performance involves more than mechanically applying a
safety management system. It requires the involvement of everyone in the
organisation, from top to bottom, using knowledge at all levels and fully
integrating this into everyday behaviour.
86
Renewi pledged €15,000 for these
charities every time teams covered a
distance equivalent to circling the globe.
RUNewi has proved so popular, this year
830 people took part in 186 teams, a big
increase on last year. The teams clocked
up 127,832 kilometres – enough to
circumnavigate the world three times.
Their efforts raised a much-needed
donation of €45,000 for our charities.
RUNewi is now a yearly initiative and our
aim in 2023 is to encourage more of our
operations-based staff to participate.
Health and welfare
Our aim is to keep staff healthy and fit
for future employment. We have
modernised equipment to ease the
physical burden of many of our frontline
roles. We have purchased trucks with
lower access points and replaced heavy
and difficult-to-manipulate containers
with lighter alternatives. Our fire,
environmental and safety investments
have grown to promote a healthier and
safer working environment. Many of our
staff canteens on sites across the
Netherlands are currently being
upgraded and re-styled to give them a
better look and feel for staff to enjoy.
A journey of transformation
and digitisation
Renewi is on a journey of
transformation. As part of the Renewi
2.0 programme and ongoing investment
in people, we are investing in WorkDay,
an upgraded HR system. This is a
cloud-based human resource
management software system that
unifies a wide range of HR functionality
into a single dashboard.
The current labour market
The current labour market is
challenging. The economy is growing at
a faster pace than the available
workforce. Despite this, we are pleased
with our recruitment performance – our
Talent Team filled 501 vacancies, hired
165 new female colleagues and we
launched a variety of marketing
campaigns this year to strengthen our
employer brand.
The average staff turnover rate for 2021
is 11.8%, which we are satisfied with
given the current labour market.
National statistics for the Netherlands
show an average turnover rate of 18%.
The Benelux has been unaffected by the
acute truck driver shortages.
had multiple reward systems and
schemes across our countries and
Divisions. We have created a single,
common, clear and fair reward
structure across the entire business.
During 2021 we completed the
harmonisation and implementation.
Our goals and metrics for 2025
Our two primary objectives are: to deliver
people home safe and well every day,
and to make Renewi a rewarding, diverse
and inclusive working environment (see
table below).
A zero-tolerance approach
to modern slavery
Modern slavery is the illegal exploitation
of people for personal or commercial
gain, and is often hidden in plain sight.
Renewi has a zero-tolerance approach to
this heinous crime, which has no place in
our society.
We have a responsibility to raise
awareness across our workforce and
supply chains and we are committed to
ensuring our everyday procurement
practices are robust and cannot be
infiltrated by traffickers and
exploitative recruiters.
This year, Renewi has made significant
progress with anti-slavery prevention and
awareness-raising in the UK and Benelux.
This will continue next year, unifying the
work across the Group with the ambition
to have a single company-wide approach.
COMMUNITIES
Being a positive force in communities is a
fundamental part of our Care for People
pillar within the Sustainability Strategy.
We actively take part in community
engagement projects to educate and
inform people on the circular economy
and the importance of keeping materials
in use. We encourage our communities to
consider ways to ‘waste no more’. We also
work tirelessly to minimise the impact of
our operations on local communities.
Engaging with communities
Over many years, Renewi’s UK operation
has partnered with local councils to
educate children on what happens to
household waste thrown away, and how
they can play their part in giving new life to
used materials through recycling. Over the
past 12 months our educators have visited
primary schools with an interactive
workshop in which they playfully but
powerfully unite waste and science. The
students have learned about the need to
recycle, Renewi’s local waste processing
and our technology to convert waste into
secondary materials. We encourage these
children to make small changes, like
passing on toys instead of throwing them
away or being responsible for separating
rubbish and recycling at home.
Over and above engaging children in
person, Renewi communicators have
also informed parents by publishing
articles in local newspapers and posting
stories on social media channels about
home composting, food waste action,
the re-use revolution, upcycling and the
re-use of toys.
Ethics, compliance and people
Delivering our circular economy
ambitions can only be achieved if we
work together – this is one of our core
values. Working as one in a diverse and
inclusive environment is our ambition
and our commitment is to become an
ever more diverse organisation.
For many of our operations-based
staff, roles include manual labour and
shift patterns outside of office hours. We
are focused on diversity in operational
roles, building on this through awareness,
branding and targeting campaigns
internally and on social media. We would
particularly like to increase female truck
driver numbers and are running a targeted
campaign to encourage applicants.
We continue to adjust employee benefits,
such as parental leave, study leave,
enhanced maternity and paternity leave,
to facilitate a more diverse and inclusive
working environment.
As an equal opportunities employer,
Renewi is committed to nurturing a
culture of equality and fair treatment
throughout our processes, including
recruitment, training and development.
The gender pay gap is another priority
that we take very seriously. We are using
our UK disclosures, where disclosure is
mandatory, as a benchmark to build our
data in our other operating territories.
One reward
Following the merger between Shanks
and Van Gansewinkel Groep in 2017, we
Our goals and targets
OBJECTIVE
METRIC
Deliver people
home safe and well
every day
LTIF > 1 day
(number >1-day accidents/FTE x 1,000,000 hours)
Safety training
(% employees trained annually)
Employee mood
(‘mood’ score in Pulse)
Healthy at work rate
(% healthy employees)
Make Renewi a
rewarding, diverse
and inclusive
working
environment
Employee engagement
(eNPS score in Pulse survey)
Females in higher management
(% of all employees)
FY21
1,495
~25.0%
7.3
95.1%
+21
21%
FY22
FY25 TARGET
1,096
78%
7.3
600
(−60%)
100.0%
7.5
(+5%)
93.9% 96.0%
18%
22%
+30
(doubled)
30%
(+7% points)
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Simon Lee from
Renewi ELWA with his
daughter, learning
about recycling
through play
community members on the importance
of prioritising re-use, where possible,
and recycling.
Over the year under review we saw a 25%
drop in the number of major fires that
occurred on site, down from 24 in FY21 to
18 in FY22. We also saw a reduced number
of substantiated complaints from our
communities as compared with FY21
– down 56.4%.
Conclusion and outlook
We look forward to increasing our
community engagement now that the
economies are re-opened following
Covid-19. We will continue to take active
steps to keep the number of fires on site
at the lowest possible level, and further
reduce the number of complaints coming
from communities.
Renewi in the Netherlands and Belgium
has also undertaken a programme to
educate children, but in these countries
– among Europe’s most advanced circular
economies – this has also been extended
to university students.
Through this proactive approach, Renewi
is playing a part in helping community
members to solve a real-world problem:
to shift from today’s throw-away culture
towards one of re-use. According to The
Circularity Gap Report 2022, only 8.6% of
products manufactured and purchased
around the world are recycled. By
bringing understanding of the importance
of keeping materials in use for as long as
possible, Renewi is playing an active part
in enabling the circular economy.
Listening and acting
It goes without saying that processing
discarded items can have a significant
impact on neighbouring local
communities. Issues with odour, dust,
noise pollution and flies are real
challenges. Therefore, it is important that
site managers across our 162 sites in the
Netherlands, Belgium, the UK, France,
Portugal and Hungary have an open
dialogue with the local community to
identify and understand issues, and be
able to take action where required to
mitigate the impact.
We also remain committed to managing
and reducing emissions to air, land and
water, and pollution of any kind.
Keeping communities safe
Fires are a major issue in our industry.
It is impossible to entirely control the
composition of waste received on our
sites. Due to inappropriately discarded
combustible waste, notably lithium
batteries and gas cannisters, fires can
inevitably happen. For this reason, Renewi
has carried out measures to manage
these risks carefully. They include
improved waste storage protocols, new
thermal sensors to detect heat,
sophisticated intelligent camera
technology to identify dangerous items
and state of the art deluge systems to
fight fires quickly. We also collaborate
with innovators to constantly redefine and
maintain ‘best in class’ practices.
Renewi and the wider industry work with
regulators to improve dangerous waste
handling legislation and enforcement. We
also seek to engage and educate the
public around waste separation, to
minimise the risk of fires from waste
arriving on site.
Performance
Throughout the pandemic, which
impacted customers and communities
across all countries in which Renewi
operates, our teams maintained
the continuity of service.
We were, however, unable to connect
with our communities as much as we
would have liked. That said, we did our
best to educate, inform and train
Safety
Our priority is the
health and safety of our
employees, contractors,
customers and visitors
Safety is a core value at Renewi,
sitting at the heart of our
organisation. This commitment has
been translated to all levels of the
business, demonstrated by the
implementation of our 10 LSRs,
internal audits and multiple safety
campaigns. Performance in FY22 has
shown the benefit of several years of
intensive focus. We have seen an
important reduction in LTIs, fires and
environmental concerns. After several
difficult years, we are pleased to
report zero fatalities among our
employees.
Though our safety results have
improved significantly over the past
year, we are still focused on further
improvements and keeping our people
safe through continuous improvement.
Our most important responsibility is to
create the safest possible working
environment. Our ultimate goal is to
achieve an accident rate of zero. This is
a serious ambition that cannot be
achieved without investment.
Evolution of Safety,
Health, Environment
and Quality (SHEQ)
Renewi has made important steps
towards the evolution of the SHEQ
organisation, starting with the
appointment of a Group SHEQ
Director, Jeanine Peppink-Van der
Sterren. We have also increased the
prominence of SHEQ by promoting
Jeanine to be part of the Executive
Committee. This ensures the closest
co-operation between SHEQ and our
Divisions, helping to promote one way
of working company-wide. This
standardisation means we can learn
and perform better.
Implementation of the
International Sustainability
Rating System (ISRS)
We are committed to the
implementation of the ISRS. This
implementation is resulting in more
structure and alignment throughout
the entire organisation. The ISRS is an
internationally recognised system for
measuring, improving and making
safety, environmental and corporate
performance visible and transparent.
So far, assessments have been
conducted in each Division and
training has commenced for key
members of staff. The goal is to roll the
system out across the organisation
during FY23. This system also results in
improved environmental performance.
Renewi Safety Academy
The 10 LSRs continued as an area of
critical focus, reinforcing the training
present in prior years. We launched an
engaging and interactive LSR
e-learning requirement, which is the
first component for our SHEQ
Excellence Campus.
In the past year, the expertise of
Renewi’s SHEQ professionals has been
collected to create a learning
programme for the Excellence Campus.
This is the umbrella name for tailored
a
h
t
l
a
M
,
n
e
g
n
n
i
j
i
e
H
training where employees learn
interactively about safety leadership,
driver safety, plant and machinery
safety, incident and reporting,
working at height, environmental
compliance, process safety, fire safety
and HomeSafe. The training will be
rolled out during FY23 and onwards,
at entry, learner and expert levels.
The summer and winter season each
have their own safety challenges, and
we have campaigns linked to these
risks to target awareness.
SHEQ Awards
SHEQ Awards have been implemented
to recognise positive behaviour in
relation to safety. There has been a
significant increase in these awards
throughout the business. This also
applies to site and driver tours, which
more employees, including
management, are asked to undertake.
This helps to create a safety dialogue.
Audits
Audits are carried out to monitor and
improve our SHEQ performance. The
past year saw a continuation of the
execution and reporting of the
HomeSafe and Fire Safety audits, with
excellent co-operation and support
across the sites. Our top management
participated in some of these, which
was a positive demonstration of their
commitment to improving our safety
performance. In addition, there was
an increase in the HomeSafe audit
scores compared with last year,
meaning HomeSafe is becoming
embedded across our organisation.
Next year all internal audits will be
integrated according to the ISRS
methodology.
Our safety culture is evolving
Evidence shows Renewi’s safety
culture is evolving. We are fostering a
culture of continuous improvement
around safety awareness, and we are
confident that we are moving in the
right direction, with evidence of good
safety leadership and the use of
Hearts and Minds tools.
This is undoubtedly leading to
a positive shift in attitude across
the organisation.
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Risk
management
The successful execution of our strategy
is supported by our risk management and
internal audit frameworks. The overall
responsibility for risk management
resides with our Board. However, the
Executive Committee, our operating
divisions and all our employees have
an important role to play in the daily
management of risk
Integrated risk management
Risk is continually reviewed by the Board and the Executive
Committee, who recognise and prioritise their responsibility to
anticipate potential threats. These could impact our operational
activities – our working environment, customers and employees
– and by extension the company’s ability to deliver its strategy.
Our strategy and the risks that may impact it are therefore
interrelated and it is important we act quickly to mitigate
identified risks. Key risks and mitigations are cascaded into the
business and form the foundation for Renewi’s divisional risk
assessment and risk management processes.
As an organisation, we operate in a rapidly changing environment
and we face specific industry, commercial, regulatory and other
risks, some of which are beyond our control.
Our risk management strategy, risk and internal audit
frameworks are crucial to the delivery of our strategy and
objectives, and to the achievement of sustainable shareholder
value, the protection of our reputation, good corporate
governance and ethical conduct.
Over the past year, we have completed recurring risk
assessments across the Group. Our most significant risks are the
compliance and regulatory environment as well as the increased
risks on the labour market and the continued risks of disruptive
events such as the Covid-19 pandemic and the war in Ukraine.
Offtake market-related risks, such as recyclate pricing,
incinerator costs and capacity show a reduced risk profile.
Cyber threats are increasing in likelihood of occurrence, yet our
mitigations are improved and have reduced the potential impact
of a cyber attack.
Risk appetite
Renewi’s risk appetite is considered in relation to our key risks
and is assessed against the following impact dimensions:
Health and safety
Development and acquisition
Investors and shareholders
Reputation and media
Environment
Business continuity
Financial
Control environment
Renewi’s risk appetite for environmental, regulatory and health
and safety risks is low. The Executive Committee and senior
management have dedicated significant resources and attention
to these risk areas.
Other dimensions and risks are reviewed on an ongoing basis.
For each risk, controls and mitigations are applied with a view to
Renewi’s risk appetite.
Our risk framework
Our risk framework encompasses a systematic process for
evaluating and addressing the likelihood and impact of risks in a
structured and cost-effective way. Risk management is a
cornerstone of sound management practice and is a
fundamental part of our strategic decision-making. The core
elements of our risk management framework include:
our schedule of matters reserved for the Board and our strict
adherence to it. This ensures that all significant issues affecting
strategy, structure, viability and financing are appropriately
managed by the Directors;
our risk management framework. This ensures that each
business adopts the appropriate risk culture, identifies risks,
recognises the importance of them, designs and implements
effective mitigations to control those that are key and
monitors effectiveness. The output of this process is a
summary of all significant strategic, operational, financial and
compliance risks, our current mitigating controls and the
action plans necessary to reduce risks to a level aligned with
our risk appetite;
formal responsibility for risk management resides with
divisional management teams and is co-ordinated by
divisional Finance Directors. Risk registers, mitigations
and alignment with risk appetite are reviewed by divisional
management, the Risk Committee, Audit Committee and
the Board to ensure the appropriateness of the risks identified
and that controls and actions are reported effectively;
the management of change through project management and
approval processes, with embedded risk management in
project management activities;
risk management systems embedded in our day-to-day
operations. These underpin the effectiveness of our risk
management processes by involving a wide audience in risk
systems. These include divisional registers that ensure all risks
are considered and ranked appropriately and that mitigations
are effective and practical;
enhanced risk assessment for all major capital requests. These
follow a dedicated Investment Committee review and approval
procedure. This ensures we allocate funds in a risk-aware
manner to maximise the value of our investments and
minimise the risk of under-performance; and
key risk review undertaken at each divisional review meeting,
ensuring that key risks are monitored and mitigations taken at
an appropriate level. It also supports risk management as an
embedded feature of our decision-making process.
Our risk management framework
TOP-DOWN
Strategic risk management
OUR RISK MANAGEMENT
FRAMEWORK
BOTTOM-UP
Enterprise risk management
Approval and oversight of strategic objectives and actions
Put in place an appropriate policy for the
management of risk that is adequately resourced
Establish the risk appetite of the
Group and to review periodically
Assess key strategic risks
Board
Assess the effectiveness of risk management
Ensure that risk in excess of the risk appetite is insured
effectively
Oversight to ensure that the processes for management of
risk are effective, efficient and robust (delegated to the Audit
Committee)
Delivery of strategic actions in
line with risk appetite
Identify and manage key strategic risks
Monitor key risk developments
Drive a culture of risk awareness
Executive
Committee
Consider completeness of key strategic risks
Consider adequacy of mitigations
in line with risk appetite
Consider aggregation of risk exposures across the Divisions
Submit summary risk reports for the
Audit Committee and the Board
Ensure that the Board-approved Group risk management
framework is implemented and effective
Promote an appropriate risk culture in Renewi in which an
appropriate awareness and management of risk in all its forms
is considered by management in their daily activities
Support the Renewi risk culture through risk systems,
the delivery of risk training, sharing of learnings and
best practices, and review of risk failures
Provide access to expertise in managing risks, where
appropriate, from across Renewi or from outside specialists
Risk Committee
Review selected risks from risk registers, assess adherence to
the risk appetite and the mitigations in place
Review occurrences of risk management failure
to identify root cause, identify and share lessons
learned to mitigate risk of repetition
Drive consistency in approach, use of tools
and risk appetite across Renewi
Owners of the risks are responsible for delivering
mitigating actions in line with the risk appetite
and within a strong risk culture
Business Areas/
Divisions
Periodic and ongoing assessments of risks and risk trends
Reporting risk registers that include the inherent
key strategic risks for each Division, the mitigating
actions in place, current risk score, design and
execute future mitigation approaches and consider the
effects of such actions to the risks and risk profile
Review of the risk environment during FY22
In this section we review risk events and assess how well
our risk detection and mitigation processes worked.
Safety
Fire continues to be one of the greatest operational risks in
our industry. Certain waste streams can spontaneously
combust and flammable lithium-ion batteries in ordinary
waste streams pose a risk. We have one of the best
reputations on fire risk in the industry among insurers and
we continue to invest in new fire detection, fire prevention
and fire suppression technology, training our employees
and educating the public on the risks of fires within the
recycling industry.
Our strong safety performance in FY22 shows the
benefits of several years of intensive focus on safety.
We have seen an important reduction in LTIs, fires and
environmental concerns. We continue to focus on
further improvements. We decided not to reduce our
health and safety risk rating based on one year of strong
safety performance.
Disruptive events – Ukraine
We maintain a generic key risk of disruptive events – the event
itself of course often being very specific or novel. The war in
Ukraine is rapidly changing and initial consequences like
increased energy prices and general inflation are already reality.
These risks are offset by our diesel hedge, targeted price
increases and dynamic pricing, limiting our price risk.
Availability of energy (both fuels and electricity) and supply chain
could become a concern. Potential escalation scenarios are being
considered and mitigations are being designed and implemented.
Covid-19
Covid-19 continued to impact worldwide, including the
communities we operate in. Our established crisis protocols and
Virus Response Team worked well to address the risk and
co-ordinate our group-wide responses. The health and wellbeing
of our people remains our key priority, followed by ensuring we
continue to operate and securing the financial stability of the
company. We implemented with agility a full range of measures
to mitigate the impact of Covid-19 on our people, customers
and operations.
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Further Covid-19 lockdowns during FY22 meant reduced waste
volumes and rising inflation as well as increased secondary
material prices and pressure on sourcing in the supply chain.
Our effective mitigations ensured we passed on inflation to
customers and had no major issues with key investments,
although our truck plan projects in Acht and Vlarema are
currently experiencing delays in the supply chain.
Although the Covid-19 pandemic currently appears to be under
control, we continue to monitor developments closely and are
positioned to respond to potential changes in infections, new
variants and preventive governmental measures to ensure we
continue to keep our people safe, our operations running and
our fleets on the road.
Climate risks
In our current enterprise risk management process, we have
incorporated into our risk assessments and risk scores the effects
of climate-related physical and transitional risks, specifically with
regard to fire risk, volumes and pricing. The Financial Stability
Board established the TCFD to promote more effective climate
related disclosures. The TCFD section on page 66 gives more
details about our emerging risks relating to climate change.
Cyber
Increased numbers and activity of malicious actors in the cyber
domain results in a higher probability of becoming a victim of a
cyber attack. We encountered such attempts during FY22 and
expect this trend to continue. We have significantly strengthened
our systems and processes during the year. We have also
Objectives of our risk management framework
1 KNOW WHAT RISKS WE FACE
Identify and evaluate our universe of potential
risks to allow the creation and management of
registers of risks faced by the Group.
2
3
4
5
KNOW WHAT RISK WE WANT TO ACCEPT
Manage a risk strategy in which the tolerance
and appetite of the Group for differing levels and
types of risk is clearly understood.
MANAGE OR MITIGATE OUR RISKS
Ensure that all identified key risks are effectively
mitigated or, where appropriate, transfer risks
through insurance.
TRAIN OUR PEOPLE IN RISK MANAGEMENT
Ensure that management is trained in the
effective identification, assessment and
management of risk.
CONTROL SYSTEMIC RISK
Maintain and improve a system of internal controls
to manage risks in decision-making, contract
management and financial transactions.
Risk universe
Unchanged risks
Increased risks
Decreased risks
Low risk
Medium risk
High risk
Operational risk s
Input pricing
Health and safety
Input volumes
Product pricing,
demand and quality
P
e
o
p
l
e ri
s
k
s
Talent development,
leadership and diversity
Major plant failure or fire
Residue pricing, capacity
and specification
Disruptive
event
Labour
availability
and cost
Changes
in law and
policy
Regulatory
compliance
ICT failure and
cyber threat
Long-term contracts
F
i
n
a
n
c
i
a
l, l
e
g
a
l & c
o
m
Unsustainable debt
pliance risks
Digitisation
T e c h n ology risks
carried out online training for our employees about risks
in the digital environment.
Risk Committee
Our Risk Committee is an important component of our risk
management architecture. Activities undertaken by the
Committee include:
producing and proposing risk management processes and
policies for consideration and approval by our Audit
Committee and Board;
ensuring the Board-approved Group risk management
framework is implemented and effective;
promoting an awareness of the risk culture in Renewi and the
management of risk in all its forms through daily activities;
supporting the Renewi risk culture through the sharing of
learnings and best practices and review of risk failures;
reviewing selected risks from risk registers to ensure consistency
of risk appetite being borne and mitigations in place;
reviewing occurrences of risk events to understand root cause
and identify and share lessons learned to avoid future failures;
driving consistency in approach, use of tools and risk appetite
across Renewi; and
providing access to expertise in managing risks, where
appropriate, from across Renewi or from outside specialists.
Our Risk Committee continues to consist of senior people from
all major functions: operations, commercial, environmental
permitting, finance, legal and health and safety. This broad
composition ensures we capture all our potential risks and can
rank them effectively, no matter what risk area they fall into.
Our risk responsibilities and architecture
Our operating divisions and business unit management have
responsibility for the assessment and management of risk. Our
Risk Committee, working with the Group Risk Director, promotes
an appropriate risk culture in Renewi in which an awareness and
management of risk in all its forms is considered by management
in their daily activities and ensures that the Board-approved
Group risk management framework is implemented and
effective.
The Risk Committee supports how we manage risk through
information, frameworks, policy, strategy and processes.
Reporting through our Audit Committee and Executive
Committee ensures the identification and communication of
critical risks, and that these are brought to the attention of the
Board. The decisions of the Board and their risk appetite are
cascaded back through our risk architecture to ensure that the
approach to risk appetite and tolerance are aligned and
consistent across Renewi.
Baukje Dreimuller
Risk Committee Chair
Summary of key risks
PRINCIPAL RISKS
1 Product pricing, demand and quality
2 Residue pricing, capacity and specification
3 Input volumes
4 Changes in law and policy
5 Disruptive event
6 Health and safety
7 Digitisation
8 Labour availability and cost
9 Major plant failure or fire
10 Unsustainable debt
11 Regulatory compliance
12 Talent development, leadership and diversity
13 Long-term contracts
14 Input pricing
15 ICT failure and cyber threat
Risk trend
Inherent
risk
profile
Current
risk
profile
Current risk impact scores Previous year scores
Likelihood
Impact
Likelihood Impact
↓
↓
↓
↓
↑
—
↓
↑
—
↓
↑
—
—
↑
↑
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
l
4
3
4
5
5
3
3
5
3
2
4
3
3
3
4
3
3
3
3
3
4
3
4
3
3
4
3
3
3
4
4
4
4
5
3
3
4
4
3
2
2
3
3
2
5
4
4
4
4
5
4
3
3
3
4
4
3
3
3
3
Key
—
Unchanged risks
↑
Increased risks
↓
Decreased risks
l
Low risk
l
Medium risk
l
High risk
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Summary of key risks
Reference numbers are consistent with those used in the heat diagram.
KEY RISK
KEY MITIGATION
COMMENTARY
KEY RISK
KEY MITIGATION
COMMENTARY
The risk of product pricing has fallen, reflecting
higher recyclate prices, but remains high due to
the volatility (especially in paper and metals)
and its importance to our margins.
1. Product pricing, demand and quality
That the value we receive
for recycled product falls,
that markets contract,
reducing demand for our
product, or we become
unable to produce to
the required quality.
Risk direction
Strategic objectives
1
2
4
By focusing on improving product quality, we
optimise the value we receive for our products
Partnerships, innovation and investments in
cutting-edge technology that fit with market
needs for products
Sustainable technologies that are used to
align with market needs and international
and national policy
We apply dynamic pricing that links input
and output prices. This leads to more
stable margins
Renegotiation of long-term and fixed-price
offtake contracts where appropriate
We thoroughly understand and closely
monitor the capacity-driven markets to
mitigate risk and leverage opportunities that
are presented
We use multiple product offtakers to spread
the risk where appropriate
2. Residue pricing, capacity and specification
Lack of capacity at outlets
and/or inability to produce
in specification, resulting in
increased price or limitations
of disposal of burnable waste
and other residues.
Risk direction
Strategic objectives
1
5
3. Input volumes
That incoming waste
volumes in the market
may fall.
Risk direction
Strategic objectives
1
3
4
5
We have experienced employees dedicated to
burnable and residual waste offtake markets
A range of residue offtakers contracted to
spread the risk. Contract end dates are
carefully managed to avoid having to renew
contracts simultaneously, further reducing
the risks
Quality control systems are in place to
ensure specification of residues is at the
required level
Offtake strategy designed, implemented and
continuously improved
Taxation on importing waste reduces the input
volumes (also see risk 14). The continuing
pressure on recycling and our investments in
cutting-edge recycling technologies lead to
reduced residue volumes and overcapacity at
outlets. Improved output streams at ATM further
reduces this risk.
The calorific value of residues remains a focus
for incinerators.
Input volume drops due to Covid-19 and/or the
geopolitical situation in Ukraine may raise the
risk of a failure to meet or pay contract
commitments at certain incinerators.
Effective reporting of incoming waste volumes
across the Group for rapid response to market
changes
Rapid response to cut costs if input
volumes fall
Continued investment to secure new waste
streams and volumes
Market-facing, customer-focused organisation
Major capital deployed only if backed by
long-term contracts and appropriate margins
The likelihood of a lack of input volumes
remains stable but high, due to Covid-19 and the
geopolitical situation in Ukraine. The reduced
input volumes prove less impactful for Renewi
and are offset by higher recyclate prices.
Public opinion continues to shift towards
increased recycling rather than incineration,
which is favourable for Renewi given our assets
and partnerships.
Strategic objectives
1
4
Leader in recycling
Enable the circular economy
2
5
Leader in secondary material production
Reduce carbon emissions and waste
3
6
Selectively gain market share
Care for people
4. Changes in law and policy
Adverse impacts from
changes in law and policy,
including environmental, tax
and similar legal and policy
regimes, including changes
in regulatory attitude and
behaviours as a result of
shifts in public opinion.
Risk direction
Strategic objectives
1
6
5. Disruptive event
That a disruptive event such
as a pandemic or war has
severe consequences for our
incoming waste streams,
market prices, access to
energy and workforce,
causing business interruption
or loss.
Risk direction
Strategic objectives
1
6. Health and safety
Injury or loss of life. That
we incur reputational loss,
or civil and criminal costs.
Risk direction
Strategic objectives
6
Horizon-scanning by competent internal
specialists to ensure changes are planned
for and managed, and potential
opportunities captured
Alignment of business model with
national and international policy and
law towards more sustainable waste
management practices
Engagement with regulators and legislators to
discuss what is possible in treating waste and
to support tough but achievable sorting and
product quality targets
Our business model is in line with society’s
needs for sustainable waste management.
Changes in law and policy occur frequently and
this is expected to continue. The impact from
the changes is increasingly favourable as and
when enforced.
Most changes in law and policy provide
opportunities for Renewi. We see sustained
pressure on law and policymakers for new laws
and policies, and on regulatory bodies to
enforce existing laws and policies. Maintaining
good dialogue with governing bodies remains
crucially important. Potentially adverse changes
are planned for and managed.
Crisis protocols in place with principles
that can be applied to any crisis, whatever
the nature
Business continuity plans in place
Monitor changes in government and health
adviser advice within our operating countries
We identified the potential threats of Covid-19 at
an early stage and have a structured approach
to address the evolving situation: effective swift
actions to protect our people, ensure customer
service and cut cost. Should current trends
reverse, we are prepared and able to
manage effectively.
Escalation and impact scenarios for the
geopolitical situation in Ukraine being
designed and implemented
Corporate health and safety managers and
competent internal specialists in place
Safety is the top agenda item at all
management meetings
Defined and tracked health and safety
priorities plan under way and delivering
We actively and openly engage
with regulators
Safety leadership programme in place
Coherent targets in place for accident,
near-miss and other key safety performance
parameters
HomeSafe audits are performed by our
internal SHEQ audit team
The war in Ukraine is rapidly changing and initial
consequences, like increased energy and diesel
prices and general inflation, are a reality. These
risks are offset by our diesel hedge, targeted
price increases and dynamic pricing, limiting our
price risk.
Availability of energy (both fuels and
electricity) and supply chain is a concern.
Potential escalation scenarios are being
considered and mitigations are being designed
and implemented.
Safety is a core value at Renewi.
This commitment has been translated to all
levels of the business, demonstrated by the
implementation of our 10 LSRs, internal audits
and multiple safety campaigns.
The health and safety risk is kept stable until we
see the improved safety performance in FY22
repeated next year.
We have seen an important reduction in LTIs,
fires and environmental concerns. After several
difficult years, we are pleased to report zero
fatalities among our employees.
Please refer to the Safety section on page 89.
Risk direction key:
Increase
Stable
Decrease
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KEY MITIGATION
COMMENTARY
KEY RISK
KEY MITIGATION
COMMENTARY
Risks and uncertainties continued
Summary of key risks
Reference numbers are consistent with those used in the heat diagram.
KEY RISK
7. Digitisation
That a disruptive technology
or business model deployed
by a competitor or new
entrant impacts our ability to
compete.
Risk direction
Strategic objectives
1
2
4
5
6
This year we have reversed this risk trend
and see a declined risk in digitisation due
to our investments in our own digital
customer solutions.
Renewi 2.0 continues to optimise and digitise
as planned.
We continue to monitor competitor threats and
apply a fast-follower principle. We run numerous
digitisation pilots within Renewi to establish
their viability, value and disruptive capability.
We remain alert and proactive to changes seen
in the markets around us and those emerging in
the global waste-to-product markets.
The CIO, a member of the Executive
Committee, has a remit to identify future
opportunities and risks
Active monitoring across the Divisions and
Group of new digital entrants, technology or
services from competitors
Renewi takes a fast-follow approach to
emerging threats to keep expenditure
proportionate to threat
Diversification of business, core operational
services and products limits threat and
impact from disruptive business models
and technology
Renewi’s innovation programme identifies
opportunities ahead of competitive
threats and generates competitive
advantage proactively
Renewi has several digital developments
under investigation to retain a competitive
leading position and mitigate threats (AI, big
data, robotics, online/digital services,
platform services)
Increased integration across the Group to
align data and increased efficiency through
digital automation
Partnerships in place, which continue to
increase, and allow for collaboration on
industry innovations with key existing, as well
as new, players in the industry
Renewi 2.0 transformation programme
8. Labour availability and cost
That there are shortages
of certain labour types,
leading to unavailability
or severe wage inflation.
Risk direction
Strategic objectives
3
6
We measure employee engagement and
satisfaction through surveys
We offer competitive wages
Successful recruitment programmes for
drivers have continued
Strengthened learning and development and
diversity and inclusion leadership
Leadership development programmes
under way
The risks around labour availability and cost
have increased due to general economic
conditions and macro-economics, combined
with a relative unwillingness of the younger
generation to undertake certain forms of
physical labour, a lack of some core skills and an
ageing workforce.
9. Major plant failure or fire
Operational failure and/or
fire at a key facility leading
to business interruption
and other costs.
Risk direction
Strategic objectives
3
4
5
6
10. Unsustainable debt
That funding is not available
or that funding sources are
available, but that cash
generation is insufficient to
allow access to funding.
Risk direction
Strategic objectives
3
6
Improvements in fire control through stricter
fire control standards
Fire risk survey process in place including
engagement with insurers and with
competent external advisers
Business continuity planning in place at all
major sites
Mechanical breakdown insurance in place for
at-risk facilities and reviewed on a regular
basis for adequacy
Highly experienced operational teams with
in-depth knowledge of processes
Regular annual and other shutdowns at key
facilities to ensure they remain well invested
and maintained
Business continuity planning includes
breakdown risk and mitigation measures
Effective insurance programmes supported by
experienced brokers
Our financing structures reduce our
financing cost, continuously optimising
liquidity and headroom
Capital investment to meet strict return
requirements
Strong budget control on capital projects
Good balance of leased and owned assets
We have a diverse range of financing sources
and maturities
Supportive and flexible finance partners
Investment Committee in place to support
Divisions with mergers, acquisitions,
partnerships and investments from an
early stage
Our fire safety programme and audits as well as
on-site improvements in fire control processes
and investments have driven the number of fires
down this year.
In line with the health and safety risk, we will
reduce the risk rating once this stronger
performance is confirmed next year.
High-quality maintenance and life cycle
programmes are in place in order to ensure
resilience at major unique facilities. Across our
general recycling and recovery plants, our larger
company provides flexibility to divert waste and
retain value internally in the event of a
breakdown.
The risk of unsustainable debt continues to fall
along with our leverage.
We currently have significant covenant and
liquidity headroom on our main Group facility.
We have a balanced maturity profile supported
by the recent bond issuance and extension of
the banking facility maturity.
Strategic objectives
1
4
Leader in recycling
Enable the circular economy
2
5
Leader in secondary material production
Reduce carbon emissions and waste
3
6
Selectively gain market share
Care for people
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Risk direction key:
Increase
Stable
Decrease
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Risks and uncertainties continued
Summary of key risks
Reference numbers are consistent with those used in the heat diagram.
KEY RISK
KEY MITIGATION
COMMENTARY
KEY RISK
KEY MITIGATION
COMMENTARY
11. Regulatory compliance
That we fail to comply with
environmental permits and/
or environmental laws and
regulations.
Risk direction
Strategic objectives
1
5
6
Effective management of all environmental
and regulatory matters arising through
environment management systems and
regular inspections and audits
Monthly environmental issues reporting
across all levels of organisation with prompt
follow-up
Experienced and competent environmental
specialist employees in place
Community environmental engagement
performance in place as a key business
objective
Increasingly more difficult to comply as the
nature of compliance rules is often based
upon best available (measurement)
capabilities. When a compliance rule does not
change, but the ability to measure certain
substances improves, the threshold is lowered
accordingly. Our operational grip and
continuous improvements processes ensure
we can adapt rapidly
Despite Renewi’s expertise in the field,
remaining compliant is becoming increasingly
more difficult. Regulations are tightening,
analytical equipment can detect the smallest
real-time issues, and there is a less tolerant
attitude from regulators. As industry leader,
Renewi’s approach to regulatory compliance is
to be transparent, forward-looking and
proactive in collaboration with the regulators,
not just complying with the bare minimum
requirements when performing our business
activities.
Effective mitigations are in place with our
environment and regulatory management
systems, reporting, inspections and audits.
Internal management of compliance through
competent specialists is recognised as key.
12. Talent development, leadership and diversity
Key objectives set for employee development
Performance appraisal and talent
management processes are in place
Engagement surveys are conducted and
followed up
Leadership development programmes in
place
Our software solutions bring increased
structure and capabilities to learning and
development
We continue to invest significantly in our HR
teams and the supporting software solutions
Selective bidding on contracts, combined with
strict Board controls on entering any new
major contracts, are in place
Detailed risk assessments and due diligence
on contracts are conducted
That we fail to develop the
required management
capabilities for future needs.
Risk direction
Strategic objectives
1
6
13. Long-term contracts
That we enter into long-term
contracts at disadvantageous
terms or we rely on a small
number of large contracts.
Risk direction
Strategic objectives
1
The economy, as well as impacts of Covid-19,
means that talent remains in short supply,
which is offset by further driving retention and
optimisation of internal talent through
leadership development programmes and
improved external talent recruitment
capabilities.
The Board’s caution regarding complex
long-term contracts remains.
The risks mainly reside in municipal contracts
and renewal risks in Maltha and Coolrec, where
we are reliant on a small number of large
contracts.
Ongoing operational improvements for
remaining contracts continue.
Strategic objectives
1
4
Leader in recycling
Enable the circular economy
2
5
Leader in secondary material production
Reduce carbon emissions and waste
3
6
Selectively gain market share
Care for people
14. Input pricing
That market pricing may put
pressure on our margins.
Prices are constantly monitored and reported
on via operational systems
High inflation and output price levels increases
our risk of margin erosion.
Risk direction
Strategic objectives
1
3
To deliver cost leadership in core markets we
effectively manage our costs, both structurally
and operationally
Where appropriate, we use longer-term
contracts to limit exposure
Targeted price increases and dynamic pricing
are used to optimise margins
We are pricing new business for margin over
volume and with clear minimum returns targets.
15. ICT failure and cyber threat
That ICT failure and/or cyber
crime causes business
interruption or loss.
Risk direction
Strategic objectives
1
6
Business continuity planning and testing in
place for ICT
Continued investment in upgraded systems
and infrastructure
Regular external security tests and
improvements throughout the year
Security planned at design stage in all projects
and programmes
Cyber resilience software in place
Systems hardened with improved detection
and other mitigations
Awareness among employees raised through
ongoing cyber security awareness campaigns
The inherent risk cyber threat has increased,
reflecting the rising number of cyber attacks
globally. We encountered such attempts during
FY22 and expect this trend to continue. We have
significantly strengthened our systems and
processes during the year. We have also carried
out online training for our employees about
risks in the digital environment to ensure
consequences of successful attempts are
reduced.
The internal risk for ICT failure is limited due
to effective mitigations and general IT controls
in place.
Risk direction key:
Increase
Stable
Decrease
Financial risks
Renewi takes action to insure or hedge against the most material
financial risks. Details of our key policies for control of financial
risks are:
Interest rate risk
Renewi has continued to limit its exposure to interest rate risk on
core borrowings by using fixed-rate retail bonds and fixed-rate
finance leases. At the end of March 2022, circa 97% of core
borrowings were fixed. Additionally, the PPP non-recourse
floating rate borrowings are hedged for the duration of the
contracts using interest rate swaps entered into as part of
financial close of the project.
Foreign exchange risk
Renewi operates in the UK and is exposed to translation risk into
Euros on the value of assets denominated in Sterling. The Group
has limited transactional risk as the Group’s subsidiaries conduct
the majority of their business in their respective functional
currencies. Some risk arises in Euros on the export of processed
waste from the UK to Europe.
Commodity price risk
Renewi is exposed to diesel price changes, which are
managed using forward contracts. The Group manages other
exposures to prices of paper, plastics, metals, residual fuels
and other recyclates associated with offtake through
commercial contracting.
Credit risk
Credit risk is the risk of financial loss where counterparties are
not able to meet their obligations. The Group has implemented
the setting and monitoring of appropriate customer credit limits,
often supported by credit insurance. Credit limits and
outstanding receivables are reviewed monthly. The Group
has a policy to ensure that any surplus cash balances are
held by financial institutions meeting minimum acceptable
credit ratings.
Fraud risk
To mitigate the exposure to losses arising from fraud committed
on the Group or by its employees, robust internal controls and
financial procedures are reviewed and tested regularly.
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VIABILITY STATEMENT
In accordance with Provision 31 of the UK Corporate
Governance Code, the Board has assessed the
prospects of the Group over a period of more than
12 months and has adopted a period of three years
for the assessment. This assessment was considered
in the context of the Group’s five-year strategic
planning process; however, for this viability
assessment only the first three years are used. The
strategic planning process includes a five-year
forecast model which comprises a base case
business plan and a strategic growth plan. The
assessment of viability is modelled using the base
case business plan, within which the financials in the
past two years are largely extrapolations of key
assumptions used in the budgeting process. The first
three years of the plan represents the period over
which the Group’s risk would have the most adverse
impact and is the period that the Group gives most
focus to in the forecasting process. The strategic
growth plan represents the longer-term strategic
goals of the Group, including elements of our
innovation pipeline, which are expected to deliver
significant growth in the later years of the five-year
plan, but the benefits of any projects not yet formally
approved by the Board are not included in our
viability assessment modelling.
The key assumptions made in Renewi’s long-term
financial model are: economic growth following the
Covid-19 pandemic; continuing growth opportunities
leading to further margin improvements in the
Commercial Waste Division; long-term recovery at
ATM; and the delivery of the Renewi 2.0 programme.
The ATM recovery includes returning to higher soil
production levels along with the completion of
certification and ramp-up of production of higher-
value secondary raw materials. The Renewi 2.0
programme is forecast to deliver a minimum of €20m
of annual cost benefits in FY24. It has been assumed
for viability modelling that the €75m Retail Bonds
which mature in July 2024 will be replaced and the
existing €400m RCF facility will be replaced with a
facility of equivalent value in FY25.
The Board assessed the principal risks to the
business as set out in the preceding pages and
concluded that eight severe but plausible risk
scenarios should be tested separately. We have also
tested appropriate combinations of scenarios. The
risks selected for modelling are considered to be
those with the most significant, quantifiable potential
impact in the three-year period. The scenarios
modelled included up to 60% lower recyclate
product pricing due to challenges in the offtake
markets, a 2% decline in input volumes due to an
economic downturn, a further 12-month delay in the
operational ramp-up at ATM combined with
increased plant downtime, a 25% reduction in
long-term cost efficiencies from the Renewi 2.0
programme, an extended increase to diesel and
energy prices, a cyber attack which severely impacts
our ability to operate for a period of up to one month
and a settlement of the potential maximum claim of
€63m in FY24 arising from the European Commission
investigation into alleged state aid in Belgium. For
each scenario, the Group has also identified the
mitigation steps it would take to reduce the risk and
performed the scenario testing on that basis. These
mitigations include the deferral of capital
expenditure, working capital controls, pricing
increases commensurate with cost inflationary
changes and other discretionary cash flows.
The Group’s liquidity and financial headroom have
been assessed and incorporated within the risk-
scenario modelling. Based on the consolidated
financial impact of the sensitivity analysis and
associated mitigating actions that are either in place
or could be implemented, it has been demonstrated
that the Group maintained headroom in the event of
each of the separate scenarios and the combined
scenarios occurring.
Having considered all of the elements of the
assessment, the Directors confirm they have a
reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they
fall due for the period of assessment.
SECTION 172(1) STATEMENT
When making decisions, the Directors of Renewi plc
will always act in the way that they believe will best
promote the success of the Company for the benefit
of its members as a whole, while also considering the
broad range of stakeholders who interact with and
are impacted by our business.
Throughout the past year, the Board of Directors has
again acted to promote the long-term success of the
Company while also having due regard to the
matters set out in Section 172(1) of the UK
Companies Act 2006.
Directors have had regard to those specific factors as
listed below, as well as others that are relevant to
the particular decisions being made. The Board,
however, acknowledges that not every decision may
result in a positive outcome for all stakeholders. By
considering our purpose and values, together with
our strategic priorities, the Board aims to ensure
that decisions are consistent and intended to
promote the Company’s long-term success.
The Company continued its engagement with key
stakeholders throughout the year to deepen
understanding of the issues and factors that are
significant for them. Our key stakeholders are set
out in the Connecting with our Stakeholders section
on pages 119 to 124 of the Corporate Governance
Report. Here we identify the relevance of each
stakeholder to our business model, describe how
we engage and the key issues of discussion, list
metrics to measure stakeholder relationships and
summarise the outcomes of engagement. Further
details of how the Board discharged their Section
172(1) duties when making principal decisions
during FY22 are also set out on page 125 of the
Corporate Governance Report. Here we report the
considerations made for each stakeholder and
describe the strategic actions taken by the Board,
along with the outcomes of those principal
decisions.
Renewi is a waste-to-product company and, as such,
environmental and sustainability matters are at the
heart of what we do. The consideration and impact of
the Group’s operations on the environment and our
wider contribution to the circular economy are
evidenced throughout the Strategic Report section of
this Annual Report and also in our FY22 Sustainability
Review, which will be available on our website in late
June 2022.
Our Directors recognise the importance of
increasing engagement with the widest range of
stakeholders, taking decisions that will support the
circular economy and at the same time operating
in a way that helps secure the long-term success of
the business.
S.172 factor
Relevant disclosure
a. Likely consequences of any decisions in
the long term
A message from the Chairman (page 24)
A message from the CEO (page 28)
Finance Review (page 46)
Our key stakeholders (page 120 to 124)
Principal decisions in FY22 (page 125)
b. Interests of the Company’s employees
Employee engagement (page 84)
c. Need to foster the Company’s business
relationships with suppliers, customers and
others
d. Impact of the Company’s operations on
the community and environment
Diversity (page 87)
Care for people (page 84)
Connecting with our stakeholders (page 119)
Modern slavery statement (renewi.com/en/our-policies)
Sustainability Review (to be released late June)
TCFD (climate) disclosures (page 66)
Communities (page 87)
e. Desirability of the Company maintaining
a reputation for high standards of
business conduct
Care for people (page 84)
Values (page 36)
Risk management (page 90)
Audit Committee Report (page 129)
Code of Conduct (renewi.com/en/our-policies)
f. Need to act fairly between the members
of the company
Principal rights and obligations attaching to shares (page 157)
Annual General Meeting (page 158)
Shareholder engagement (page 115)
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GOVERNANCE REPORT
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Annual Report and Accounts 2022
103
Governance
at a glance
A snapshot guide to corporate
governance at Renewi – committee
reporting to the Board of Directors,
and Board membership, attendance
and meetings calendar during FY22.
1Principal decisions
Information about the decisions and
discussions that were material or
strategic to the Group and significant to
our stakeholder groups can be found on
page 125. These include investment in
innovation, safety and ISRS
(International Sustainability Rating
System) framework, and investment
in cyber security.
Our Board
As at 31 March 2022
75%
Board
independance
(FY21: 75%)
11
Number of
Board meetings
(FY21: 13)
25%
Female
representation
(FY21: 25%)
100%
Board meeting
attendance
(FY21: 100%)
2Introducing our new CFO
We have appointed Annemieke den Otter as
our new Chief Financial Officer. Anniemieke
joins us on 1 June 2022, succeeding Toby
Woolrych. To find out more about Annemieke
see our questions and answers on page 116,
where you can find out about what attracted
Annemieke to Renewi, the attributes she will
bring, and her leadership style.
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B
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3Connecting with our stakeholders
Our approach to workforce engagement, how
we engaged with our stakeholders over the
course of the year, and the outcomes of our
engagement can be found from page 119
onwards, where we look in detail at our key
stakeholder groups: waste-producing customers,
product customers, Innovation Partners,
Suppliers, Employees, Local communities,
Government, Regulators, Investors, Lenders and
the Global Community.
4Engaging with our workforce
Find out about our approach to workforce
engagement, and how our Board-designated
Non-Executive Director, Jolande Sap, assisted the
Board with workforce engagement, on page 126.
Director tenure
As at 31 March 2022
3
2–4 years
2
4–5 years
1
5–9 years
2
9+ years*
* Toby Woolrych left the Company
on 31 March 2022 and Marina Wyatt
steps down from the Board at the
conclusion of the AGM in July 2022
Board nationality
As at 31 March 2022
4
Dutch
3
British
1
Belgian
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The Board
of Directors
Renewi’s Board of Directors support the
Company with an impressive range of
skills and extensive experience across
many disciplines
Ben Verwaayen, MSC
Chairman
Allard Castelein, MD
Senior Independent Director
Marina Wyatt, MA, FCA
Non-Executive Director
Jolande Sap, MSC
Non-Executive Director
Luc Sterckx, MSc, PhD
Non-Executive Director
Neil Hartley, MA, MBA
Non-Executive Director
Otto de Bont, MSc
Chief Executive Officer
Appointed January 2017.
Skills and experience
Allard is currently President
and Chief Executive Officer of
the Port of Rotterdam, having
been appointed in 2014. He
qualified as a medical doctor
before pursuing an
international career in the
energy sector, holding a
number of senior positions at
Shell in various countries,
culminating in the post of Vice
President Environment of
Royal Dutch Shell in 2009. He
is a senior member of several
Dutch trade organisations
including the Economic Board
of Zuid Holland and the
Confederation of Netherlands
Industry and Employers.
Appointed April 2020.
Skills and experience
Ben has a breadth of
experience, having been the
CEO of several companies,
including Alcatel-Lucent SA
and BT plc. He held the
position of vice chairman and
chief operating officer of
Lucent Technologies Inc, was
president of KPN and a
non-executive director of
Bharti Airtel. He has also been
chairman of a number of
companies and industry
bodies including the CBI
Energy and Climate Change
Board in the UK. Ben currently
serves as a non-executive
director on the boards of
Ofcom and Akamai
Technologies Inc. He is a
Founding Partner at venture
capital company Keen Venture
Partners LLP. Ben graduated
from Utrecht University with a
master’s degree in Law and
International Politics.
Appointed April 2013.
Skills and experience
Marina currently holds the
position of Chief Financial
Officer of Associated British
Ports. She is a Chartered
Accountant, a Fellow of the
Institute of Chartered
Accountants and a graduate of
the University of Cambridge.
Marina spent the first part of
her career at Arthur Andersen
in the UK and on overseas
assignments before joining
Psion PLC, where she became
group finance director in 1996.
In 2002, she joined Colt
Telecom plc as chief financial
officer and then in 2005, ahead
of its IPO, she became chief
financial officer of TomTom NV
based in Amsterdam. In 2015
she was appointed chief
financial officer of UBM plc and
following UBM’s takeover she
moved to her current role at
ABP. Marina is a Member of the
Supervisory Board of Lucas
Bols N.V.
Appointed April 2018.
Skills and experience
Between 2008 and 2012,
Jolande represented the
Dutch Green Party,
GroenLinks, in the lower
house of the Dutch
parliament, leading the party
from 2010. Prior to that she
worked as an economist, and
between 1996 and 2003 at the
Dutch Ministry of Social Affairs
and Employment, where she
headed the Incomes Policy
Department, before being
appointed a director of
LEEFtijd, a consultancy for
sustainable employment
issues. Jolande is currently on
the Board of the Dutch
Emission Authority (NEA), a
member of the Supervisory
Boards of KPMG (Netherlands)
and Royal KPN N.V. and chairs
Fairfood International.
Jolande graduated from the
Tilburg University in
economics.
Key: Committee Membership:
Audit
Nomination
Remuneration
Safety, Health and Environment
Chair
Appointed April 2019.
Skills and experience
Otto was promoted to the role
of Chief Executive Officer in
April 2019. Prior to this, he was
the Managing Director of
Renewi’s Commercial Waste
Netherlands Division, playing
a central role in the integration
of Shanks Group plc with Van
Gansewinkel Groep B.V. Before
joining Renewi, Otto worked
for a number of blue-chip
companies including United
Technologies’ divisions Otis,
Carrier and Chubb and
General Electric’s Plastics and
Security divisions. During his
six years at United
Technologies, Otto spent time
in various managerial
positions culminating in his
role as president of Chubb
Continental Europe.
Appointed September 2017.
Skills and experience
Luc started his career at Exxon
Chemicals, before becoming
the CEO of Indaver and
subsequently joining the
executive committee of
PetroFina, where he served as
managing director of Fina
Holding Deutschland and as
group senior vice president for
SHEQ matters worldwide. He
was then appointed CEO of
Oleon where he led a
successful management
buyout. Luc was subsequently
appointed as CEO of
SPE-Luminus in 2005, the
second largest power and gas
company in Belgium, created
as a result of a multi-party
merger. Luc is an INSEAD
certified international director
and a specialist in internal
governance. He currently
holds a number of non-
executive and advisory
positions, specialising in the
fields of energy and chemicals,
renewables and corporate
governance.
Appointed January 2019.
Skills and experience
Neil is a Partner at Buckthorn
Partners, a private equity firm
that invests in businesses that
support the integration of
renewable energy, lowering
emissions, increasing energy
efficiency, decarbonisation of
industrial processes and other
improvements to existing
energy infrastructure. He has
an MBA from Harvard Business
School and is also a graduate
of Oxford University in
engineering, economics and
management. Neil has a total
of 16 years in private equity,
and prior to that, spent six
years in investment banking
with Simmons & Company
International, specialising in
corporate finance, M&A and
capital raising in the energy
sector. Neil has also been a
management consultant at
McKinsey & Company Inc and
spent seven years in technical
and line management roles
with Schlumberger as a field
service manager and field
engineer.
Annemieke den Otter,
MA, RC
Chief Financial Officer
(designate)
Appointed June 2022.
Skills and experience
Annemieke joins the Board on
1 June. Previously she held the
position of CFO of ERIKS, a €1.7
billion revenue global
engineering components and
service provider (privately owned
and part of SHV group). From
2016, she served for five years as
the CFO of Ordina, a Dutch
software company listed on the
Amsterdam Stock Exchange.
Earlier in her career she worked
for three years at VolkerWessels,
one of the large construction
companies in the Netherlands.
Prior to this she worked for ING
and Macquarie Bank and lived in
London for five years. Since 2020,
she has been a Supervisory
Board member of ForFarmers
N.V., an international
organisation offering feed
solutions for livestock farming.
Annemieke holds a master’s
degree in English and Literary
Science from the Vrije
Universiteit, Amsterdam and has
a post-masters degree in finance
and control from Erasmus
University, Rotterdam (Register
Controller in Dutch).
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The Executive
Committee
Committee members are a strong
combination of industry experts and
talented leaders from other sectors –
benefiting Renewi with extensive
knowledge and exciting new perspectives
Our CEO and CFO are
also members of the
Executive Committee.
See their biographies
on page 107
Marc den
Hartog
Managing Director,
Commercial Waste
Netherlands
Skills and
experience
Marc joined Renewi
in 2021 as Managing
Director, Commercial
Waste Netherlands.
He previously
worked for Corbion
N.V., a multinational
company where he
held a number of
senior management
positions. Prior to
this, he held senior
positions at Croklaan
and at Unilever. Marc
holds a master’s
degree in Chemistry
from the University
of Leiden.
Theo Olijve
Managing Director,
Mineralz & Water
Skills and
experience
Theo joined Renewi
in 2019. He worked in
senior management
positions in the
petrochemical
industry and liquid
bulk terminals for
more than 25 years.
Theo was divisional
vice president for
LyondellBasell,
where he was
responsible for
global
manufacturing.
He was also
managing director of
the Odfjell Terminal
Rotterdam, where he
was responsible for
restoring the
operation and
compliance after a
safety shutdown in
2012. Theo holds a
master’s degree in
Chemical
Engineering from the
University of
Groningen.
Mark Thys
Managing Director,
Commercial Waste
Belgium
Skills and
experience
Mark joined Renewi
in 2021 as Managing
Director, Commercial
Waste Belgium. He
previously worked
for Eurofins
Scientific, where,
since 2019, he held
the position of global
chief transformation
officer. Prior to that,
he built his career at
Goodyear Dunlop,
completing various
international
assignments and
holding a number of
senior positions.
Mark holds a
master’s degree in
Commercial
Engineering and an
Executive MBA in
Business
Management.
James Priestley
Managing Director,
Specialities
Skills and
experience
James was
appointed as
Managing Director of
the Municipal
Division in 2016. He
has a wide range of
experience running
and improving
businesses in Europe
and America. Prior to
joining he was
president Europe for
RGIS, an inventory
services company
owned by
Blackstone. After
starting his career at
ICI, he moved on to
gain extensive
management
experience at Ford,
British Airways and
Tesco and consulting
with Alix Partners. He
has a degree in
Chemical
Engineering and an
MBA.
Helen
Richardson
Human Resources
Director
Maarten
Buikhuisen
Chief Information
Officer
Skills and
experience
Helen joined Renewi
on 1 April 2019 as HR
Director. Helen has a
strong track record in
international HR
leadership roles. She
has worked across
various industries
including FMCG,
telecommunications,
real estate develop-
ment and retail. Most
recently, Helen held
various HR leader-
ship roles at Danone
Nutricia. During this
period, Helen played
a leading role in the
integration of several
businesses,
professionalising HR
by driving employee
engagement, putting
talent management
at the heart of the
organisation and
improving HR
services.
Skills and
experience
Maarten joined
Renewi in January
2020 with more than
20 years of IT
experience, having
worked in a number
of global IT leadership
roles. Prior to joining
Renewi, Maarten had
various international
business and IT roles
at Heineken, an
internet B2C start-up
and at Alcatel in
telecommunication.
During this period, he
delivered business
and IT transforma-
tions, global ERP
programmes, digital
innovations and
data-driven organisa-
tions. Maarten has a
bachelor’s degree in
Information
Technology and an
MBA from the
University of
Bradford.
While the Executive Committee does not have specific powers of its own delegated by the Board, the Chief Executive Officer is assisted in the
performance of his duties by the Executive Committee, which meets monthly and comprises the Chief Executive Officer, Chief Financial Officer,
Divisional Managing Directors and Corporate Function Directors.
108 Renewi plc
Annual Report and Accounts 2022
Daniël Post
Transformation
Director
Patrick Deprez
Product Sales
Director
Baukje
Dreimuller
General Counsel
Skills and
experience
Patrick has been a
member of the Group
since 1998. He has
held various roles
including Belgium
Regional Director,
Group SHEQ, and has
been a member of
the Executive
Committee since
2012.Before joining
the Group, he was the
head of the waste
division at B&P Sobry
NV for almost 10
years. Patrick has a
degree in environ-
mental management.
Skills and
experience
Daniël joined Renewi
in 2020 as Transfor-
mation Director.
Before joining
Renewi, Daniël spent
more than 23 years
in the energy and oil
and gas industries,
first working for
Schlumberger, where
he started his
international career,
and then at GE Oil &
Gas in operational
and commercial line
management roles.
Daniël holds an MSc
in Mining &
Petroleum Engineer-
ing from Delft
University of
Technology and an
MBA from IMD.
Skills and
experience
Baukje has extensive
experience from
leading legal firms
Simmons &
Simmons, Ashurst
and Houthoff. She
joined Renewi in
2017 from Houthoff,
where she held the
position of senior
lawyer within the
corporate transac-
tion (M&A) depart-
ment. In this
capacity, Baukje was
very closely involved
with the VGG-Shanks
merger having led
much of the
deal-related legal
activity. Baukje holds
master’s degrees in
both Dutch Law and
International and
European Law from
Radboud University
in Nijmegen.
Bas Van Ginkel
Strategy and
Business
Development
Director
Skills and
experience
Bas joined Renewi in
2018 as Strategy
Director and was
promoted to join
Renewi’s Executive
Committee on 1
February 2019. Prior
to joining Renewi,
Bas held senior
positions at Philips
Lighting and Bain &
Co. He holds an MBA
from Harvard
Business School in
the US, plus an MSc
in Business
Administration and a
BSc in Economics
from the University
of Groningen.
Jeanine
Peppink-Van
der Sterren
SHEQ
Skills and
experience
Jeanine joined
Renewi on 1 October
2021 as Group SHEQ
Director. Previously,
she was Group
SHEQ-CSR Director
for Royal IHC and
lead assessor and
environmental
verifier for Lloyd’s
Register. Other senior
positions involved
overall responsibility
for quality assurance
and control,
environment, health
and safety, security
and sustainability.
Jeanine holds a
master’s degree from
the University of
Technology of
Eindhoven in
Industrial Engineer-
ing & Management
Science and an MBA
from the Vlerick
University.
Key:
Divisional Manager
Functional leader
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Governance reportFinancial statementsOther informationStrategic report Corporate
Governance
Report
This report explains the structures, processes
and procedures employed by the Board to
ensure that Renewi’s high standards of
corporate governance are maintained
throughout the Group.
On behalf of the Board, I am pleased to present our
Corporate Governance Report and confirm our compliance
with the UK Corporate Governance Code published in July
2018, for the year ended 31 March 2022.
We believe that both the Board collectively and Directors
individually have a responsibility to set and demonstrate high
standards of corporate governance. The following pages outline
the structures, processes and procedures by which the Board
ensures that these high standards are maintained throughout
the Group.
As in FY21, the Covid-19 pandemic once again proved to be a test
for Renewi’s solid governance foundations. Although some
Directors were able to meet in person, due to international travel
restrictions the full Board was again unable to physically meet
during FY22. Despite these challenges, by making the best use of
technology, the Board and its Committees continued to meet
regularly, collaborate and maintain control of its governance
processes and activities in what has been a successful year, with
results ahead of expectations.
The Board recognises that over the duration of the pandemic, its
ability to engage with all stakeholders has been impacted to
varying degrees but is now looking forward to resuming a more
normal level of engagement over the coming year.
Over the course of the year, the Board has continued to
demonstrate compliance with the Companies (Miscellaneous
Reporting) Regulations 2018 and the revisions to the Corporate
Governance Code. The Report includes a statement disclosing its
compliance with the UK Corporate Governance Code 2018,
which can be found on pages 114 to 118, and a disclosure of how
the Company engages with its stakeholders, which can be found
on pages 119 to 124.
The Non-Executive Directors, all of whom the Company regards
as independent, bring considerable international experience to
the Board across a number of sectors. They play a full role in
constructively challenging and developing strategic proposals,
as well as chairing and being members of Board Committees.
The Executive Directors implement Board strategy to deliver
growth and returns by driving margin expansion, investing in
infrastructure and actively managing the portfolio of businesses.
In particular, the Board ensures that the Group as a whole
remains committed to achieving the highest standards of legal
compliance, environmental protection and safety.
Structure of the Governance section
Renewi’s governance framework
Renewi’s Board Committees
How Renewi has complied with
the UK Corporate Governance Code
Connecting with our stakeholders
Principal decisions in FY22
Engaging with our workforce
Safety, Health and Environment
Committee Report
Audit Committee Report
Nomination Committee Report
Director’s Remuneration Report
Other disclosures
page 112
page 113
page 114
page 119
page 125
page 126
page 127
page 129
page 135
page 138
page 156
Directors’ Responsibilities Statement
page 159
The Board is required to confirm that the Annual Report and
Accounts, taken as a whole, is fair, balanced and understandable,
and provides the information necessary for shareholders to
assess the Group’s performance, business model and strategy.
The Audit Committee has again assisted the Board in its
assessment of these matters, together with those of Going
Concern and Viability Statement disclosures. The full Audit
Committee Report is set out on pages 129 to 134.
We began FY22 with the consolidation of our share capital on the
basis of one new ordinary share with nominal value of £1.00 for
every 10 existing ordinary shares of 10 pence. I am pleased to
report a steady increase in share price since the completion of
the consolidation.
This year, the Board has paid particular attention to Renewi’s
investments and innovation pipeline, which you can read more
about on page 125.
The Safety, Health and Environmental Committee has continued
the implementation of International Sustainability Rating System
(ISRS), a structured framework for managing safety and
sustainability processes.
The Nomination Committee has had a particularly busy year,
continuing to work on succession planning, with CFO, Toby
Woolrych, leaving the Board on 31 March 2022, and Non-
Executive Director, Marina Wyatt, stepping down from the Board
at the conclusion of the 2022 AGM. We are pleased to welcome to
the Board, CFO designate, Annemieke den Otter, who will be
appointed on 1 June 2022. There has also been the creation of a
new role within the Executive Committee, Group SHEQ Director,
leading to the appointment of Jeanine Peppink-Van der Sterren
on 1 October 2021.
The Remuneration Committee was similarly focused on
considering Board composition and succession. The full
committee reports can be found on pages 127 to 155.
Ben Verwaayen
Chairman
24 May 2022
The Board fully supports the principles of
good corporate governance. The Corporate
Governance Report, together with the Directors’
Remuneration Report on pages 138 to 155,
explains how the Group has applied and
complied with the provisions of the
UK Corporate Governance Code 2018
for the year to 31 March 2022.
There was one item with which the Group did not comply during
the year, in relation to the legacy pension arrangement for the
CFO which remained at an above average workforce level up until
the date of his leaving the Group on 31 March 2022.
The Board
The Board comprises the Chairman, a further five independent
Non-Executive Directors, the Chief Executive Officer and the Chief
Financial Officer.
The Chairman, who is independent, has primary responsibility for
running the Board. The Chief Executive Officer is responsible for
the operations of the Group and for the development of strategic
plans and initiatives for consideration by the Board. The formal
division of responsibilities between the Chairman and the Chief
Executive Officer has been agreed by the Board and documented,
a copy of which is available on the Group’s website.
The Non-Executive Directors bring a wide range of experience to
the Group and are considered by the Board to be independent of
management and free from any business or other relationship
that could materially interfere with the exercise of their
independent judgement.
The Non-Executive Directors make a significant contribution to
the functioning of the Board, thereby ensuring that no individual
or group dominates the decision-making process.
Non-Executive Directors are not eligible to participate in any of
the Company’s share option or pension schemes. The Chairman
also meets and communicates regularly with the Non-Executive
Directors without the presence of the Executive Directors.
The Senior Independent Director is available to shareholders in
instances where the Chairman, Chief Executive Officer or Chief
Financial Officer have failed to resolve the concern, or where such
contact is inappropriate.
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111
Governance reportFinancial statementsOther informationStrategic report Corporate Governance Report continued
Board governance
There is a formal schedule of matters reserved specifically for the
Board’s decision. These include approval of financial statements,
strategic policy, acquisitions and disposals, capital projects over
defined limits, annual budgets and new borrowing facilities. The
Board meets regularly, having met 11 times during the year.
The Board is provided with appropriate information in a timely
manner to enable it to discharge its duties effectively. All
Directors have access to the Company Secretary, whose role
includes ensuring that Board procedures and regulations are
followed. In addition, Directors are entitled, if necessary, to seek
independent professional advice in connection with their duties
at the Company’s expense.
In recognition of the importance of their stewardship
responsibilities, the first standing item of business at every
scheduled Board meeting is the consideration of health and
safety and environmental matters. Other regular reports include
those from the Chief Executive Officer and Chief Financial Officer,
covering business performance, markets and competition,
investor and analyst updates, as well as progress against
strategic objectives and capital expenditure projects.
All Directors are required to notify the Company on an ongoing
basis of any other commitments. Through the Company
Secretary, there are procedures for ensuring that the Board’s
powers for authorising Directors’ conflicts of interest are
operated effectively.
Four formal Committees (Audit, Remuneration, Nomination, and
Safety, Health and Environment) further support the work of the
Board. In addition, while not a committee with specific powers of
its own delegated by the Board, the Executive Committee assists
the Chief Executive Officer in the performance of their duties.
This Committee meets monthly and comprises the Chief
Executive Officer and Chief Financial Officer, the Divisional
Managing Directors and Corporate Function Directors. In
addition, there are a number of specialist committees covering
Risk, Investment, Data and IT, and Sustainability matters.
In reviewing Renewi’s overall corporate governance
arrangements, the Board continues to give equal consideration
to balancing the interests of customers, shareholders, employees
and the wider communities in which Renewi operates.
Board induction and development
On appointment, Directors are given an introduction to the
Group’s operations, including visits to principal sites and
meetings with operational management. Specific training
requirements of Directors are met either directly or by the
Company through legal/regulatory updates. Unfortunately,
due to the Covid-19 pandemic, the Board has only just been
able to resume its usual programme of site visits to review
operations and safety.
Diversity
All Board appointments are based on merit and against objective
criteria, but within this context the Board believes that inclusion
and diversity, in its broadest sense, including gender and
ethnicity, should be promoted, as they are an important factor in
Board effectiveness. In particular, role profiles for any Board
vacancies will incorporate any necessary skills or strengths that
may be required, to either fill any gaps or complement existing
Board member competencies.
The Board recognises both the Lord Davies and Hampton-
Alexander Reviews on female representation, including the
recommendation that 33% of FTSE 350 board positions should
be held by women by 2020. In response to these reports, Renewi,
which sits outside the FTSE 350 currently, has set a target of 25%
female representation within the Company and senior
leadership team by 2025. The Board also acknowledges that the
Parker Review recommends that each FTSE 250 board has at
least one director from an ethnic minority background by 2024.
The Board comprises individuals from diverse professional
backgrounds and a number of European nationalities, reflecting
the range of countries in which Renewi operates. You can read
more about our approach to Board diversity in the Nomination
Committee Report on page 135.
Gender diversity
Female
Male
Number % Number %
Total
Board
Executive Committee
Senior managers
Group
2
3
80
1,328
25
23
22
20
6
10
281
5,310
75
77
78
80
8
13
361
6,638
Data as at 31 March 2022. Female representation on the Board will increase to 37.5% in
June 2022 upon Annemieke den Otter joining as Chief Financial Officer.
Board balance
Executive Directors
Non-Executive Directors
Female
Male
0
2
2
4
The Nomination Committee and the Board continue to closely
monitor all aspects of diversity in recruitment and promotions
across the workforce. To assist in the process, a Diversity and
Inclusion Board has been appointed to help advise the Board on
how to embed diversity and inclusivity within the organisation.
Statistical employment data for the Group can be found in the
Sustainability Review, which is available on the Renewi website.
Further summary details, in addition to those shown below
including those on gender pay gap reporting, can also be found
in the Care for People section from page 84.
Audit Committee
The Audit Committee met three times during the year and is
formally constituted with written terms of reference, which are
available on the Group’s website. The Committee is made up
solely of Non-Executive Directors: Marina Wyatt who chairs the
Committee, Neil Hartley, Luc Sterckx and Jolande Sap.
As required under the UK Corporate Governance Code, Marina
Wyatt has current and relevant financial experience. She is a
Chartered Accountant and currently holds the position of Chief
Financial Officer of the Associated British Ports Group. The
Nomination Committee is in the process of finding a new
Non-Executive Director to replace the chair, Marina Wyatt, as she
will not be seeking re-election at the AGM.
The Board considers that the Audit Committee as a whole has
competence relevant to the waste-to-product sector.
The Executive Directors and representatives from the external
auditors are regularly invited to attend meetings. The Committee
also has access to the external auditors without the presence of
the Executive Directors.
The Audit Committee Report on pages 129 to 134 sets out the role
of the Committee and its main activities during the year.
Remuneration Committee
The Remuneration Committee met four times during the year
and is formally constituted with written terms of reference, which
are available on the Group’s website. The Committee is made up
solely of Non-Executive Directors: Neil Hartley, who chairs the
Committee, Allard Castelein and Luc Sterckx. The Committee
formulates the Company’s Remuneration Policy and the
individual remuneration packages for Executive Directors. The
Committee also determines the remuneration of the Group’s
senior management and that of the Chairman.
The Committee recommends the remuneration of the Non-
Executive Directors for determination by the Board. In exercising
its responsibilities, the Committee has access to professional
advice, both internally and externally, and may consult the
Chief Executive Officer about its proposals. The Directors’
Remuneration Report on pages 138 to 155 contains particulars
of Directors’ remuneration and their interests in the
Company’s shares.
Renewi’s Governance Framework
Board meetings and attendance in FY22
AUDIT COMMITTEE
SHE (SAFETY, HEALTH
AND ENVIRONMENT
COMMITTEE)
REMUNERATION
COMMITTEE
NOMINATION COMMITTEE
Number of meetings held
BOARD OF DIRECTORS
d
r
a
o
B
l
a
p
i
c
n
i
r
P
s
e
e
t
t
i
m
m
o
C
t
s
i
l
a
i
c
e
p
S
s
e
e
t
t
i
m
m
o
C
See pages 129-134
See pages 127-128
See pages 138-155
See pages 135-137
EXECUTIVE COMMITTEE
RISK COMMITTEE
INVESTMENT
COMMITTEE
DATA AND
IT BOARD
SUSTAINABILITY
COMMITTEE
GREEN FINANCE
COMMITTEE
DIVERSITY &
INCLUSION BOARD
Ben Verwaayen
Allard Castelein
Marina Wyatt
Jolande Sap
Luc Sterckx
Neil Hartley
Otto de Bont
Toby Woolrych
OPERATING DIVISIONS
112 Renewi plc
Annual Report and Accounts 2022
Board
Audit
Committee
Remuneration
Committee
Nomination
Committee
3
3/3
3/3
3/3
3/3
4
4/4
4/4
4/4
4
4/4
4/4
4/4
4/4
4/4
4/4
11
11/11
11/11
11/11
11/11
11/11
11/11
11/11
11/11
Safety,
Health and
Environment
Committee
4
4/4
4/4
4/4
113
Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report
Corporate Governance Report continued
Nomination Committee
The Nomination Committee met four times during the year and
is formally constituted with written terms of reference, which are
available on the Group’s website. The Committee is made up
solely of Non-Executive Directors: Ben Verwaayen, who chairs
the Committee, Allard Castelein, Marina Wyatt, Jolande Sap, Neil
Hartley and Luc Sterckx.
The Committee is responsible for making recommendations to
the Board on the appointment of Directors and succession
planning. It also reviews organisation and resourcing plans for
the purpose of providing assurance that appropriate processes
are in place to ensure a sufficient supply of competent executive
and senior management.
The Nomination Committee Report on pages 135 to 137 sets out
the role of the Committee in further detail and its main activities
during the year.
Safety, Health and Environment Committee
The Safety, Health and Environment Committee, met four times
during the year and is formally constituted with written terms
of reference, which are available on the Group’s website.
The Committee is made up solely of Non-Executive Directors:
Luc Sterckx, who chairs the Committee, Allard Castelein and
Neil Hartley.
The Committee is responsible for making recommendations
to the Board over safety, health and environmental matters.
It reviews safety, health and environmental performance,
providing guidance on the implementation of appropriate
measures to protect the environment and keep people safe.
The Safety, Health and Environment Committee Report on page
127 sets out the role of the Committee in further detail and its
main activities during the year.
Other information
Other information, necessary to fulfil the requirements of the
Corporate Governance Statement, relating to the Company’s
share capital structure and the appointment and powers of the
Directors, can be found in the Other Disclosures section on pages
156 to 158.
HOW RENEWI HAS COMPLIED WITH THE UK
CORPORATE GOVERNANCE CODE
Renewi’s statement of compliance, together with the wider
Corporate Governance Report and other sections of this Annual
Report, describes how the Company has applied the main
principles of good governance in the UK Corporate Governance
Code, published by the UK Financial Reporting Council (FRC) in
July 2018, a copy of which is available on its website, frc.org.uk.
BOARD LEADERSHIP AND COMPANY PURPOSE
A The Board’s role
The Board comprises Directors from a diverse range of
skills, nationalities and professional backgrounds, as set
out in their biographies on pages 106 to 107 and on pages 135 to
137 of the Nomination Committee Report. It is this diversity of
experience and ability to exercise independent and objective
judgement that helps the Board to operate effectively and
establish a governance framework to assist the Group in the
delivery of its strategy.
The Board discharges its responsibilities, as set out in the
Corporate Governance Report on pages 110 to 126, through a
programme of Board and Committee meetings that includes
reviews of financial performance, critical business issues, and
short and long-term planning and strategies.
B Renewi’s purpose, values and culture
Renewi’s purpose is to protect the world by giving new
life to used materials. The Group focuses on making
valuable products from waste, rather than on its disposal
through incineration or landfill. The Company meets the growing
need to deal with waste sustainably and cost-effectively and is
positioned higher up the value chain in the segments expected
to show the highest structural growth. Renewi’s values are the
foundation for everything that Renewi does and has helped the
Group build a culture of togetherness and One Renewi. They
illustrate that how Renewi acts is just as important as what
Renewi does. The Group uses its values as a guide for behaviours
and decision-making.
The Board has designated Non-Executive Director Jolande Sap
with responsibility for monitoring workforce culture and
employee engagement. Together with the Group HR Director,
Jolande also has responsibility for making regular reports to the
Board. For more information, see the Engaging with our
Workforce section on page 126.
The Audit Committee received regular updates on a range of risk
and compliance matters including reports and presentations on
whistle-blowing and integrity issues as well as the results of
internal audits, which provided insight into the risk and control
environment both within the Group and within individual areas
of the business. The Committee reviewed the steps taken by
senior management to address weaknesses identified. Where
concerns remained, the Committee ensured further action was
taken, including requesting further information monitoring and,
if required, follow-up audits. For more information, see pages 129
to 134.
As part of its considerations, the Remuneration Committee also
reviewed the Company’s approach to rewarding the workforce.
C Resources and controls
performance.
The Board ensures that necessary resources are in place
to help the Company to meet objectives and measure
The system of internal control is based on a continuous process
of identifying, evaluating, and managing risks, including the risk
management framework outlined on page 91. The Risk
Committee is a critical component of our risk management and
controls architecture. It provides direct assurance to the Audit
Committee on a number of matters, including the preparation
and review of risk registers and the promotion of risk awareness.
Complementing this, our internal key controls framework
ensures monthly execution and review of our (financial) key
controls. Our internal audit function aims to improve Renewi’s
overall control framework and evaluate and improve the design
and effectiveness of control processes, reporting the results of its
activities to the Audit Committee. The Risk Committee works
with the operating Divisions of our organisation to share
outcomes and to co-ordinate reporting on compliance matters.
The Board has a formal system in place for Directors to declare
any conflicts, or potential conflicts, of interest.
D Shareholder engagement
The Board aims to engage with shareholders and
understand their issues and concerns. Whether from
large institutional or smaller private shareholders, the Board
endeavours to respond to all queries and questions, although
responses may be facilitated through management. Renewi aims
to present a balanced and understandable assessment of our
strategy, financial position and prospects when reporting to
shareholders and other interested parties. The investors pages of
renewi.com contain a wide range of information of interest to
institutional and private investors. Board members are kept
informed of any issues and receive regular reports and
presentations from executive management and our advisers to
assist them in developing an understanding of our major
shareholders’ views about Renewi.
All Board members ordinarily attend the AGM to answer questions
raised by shareholders, including private investors. Details of proxy
voting by shareholders, including votes withheld, are given at the
AGM and are posted on our website following the AGM.
All resolutions were approved by shareholders at the Company’s
2021 AGM. The Company’s 2022 AGM will be held at the offices of
Ashurst LLP, London Fruit & Wool Exchange, 1 Duval Square,
London, E1 6PW on Thursday, 14 July 2022 at 11.00 a.m. A Notice
of AGM, setting out detailed arrangements, will be sent in
advance to all registered holders of ordinary shares and, where
requested, to the beneficial holders of shares, and will also be
available on our website at renewi.com.
Wider stakeholder engagement
The Directors recognise the fundamental importance of
promoting the long-term success of the Company. Clear
communication and proactive engagement to understand the
issues and factors that are most important to stakeholders are
fundamental to this.
A summary of our approach to stakeholder engagement and its
consideration in decision-making is set out on pages 119 to 124.
Our Section 172(1) statement is set out on page 101.
Renewi has an active investor relations programme to engage
with institutional investors, analysts, press and other interested
parties. The Company uses multiple channels to do this,
including its results presentations, capital markets day, reports,
regulatory news announcements, press releases, AGM, face-to-
face meetings including roadshows, videos, the corporate
website, LinkedIn and other social media channels.
Director roles and responsibilities
Chairman
Ben Verwaayen
Responsibility
Responsible for leading the Board,
ensuring its effectiveness in all aspects of
its role and developing the Group’s
culture with the Group Chief Executive.
Promotes high standards of integrity and
governance across the Group and
ensures effective communication and
understanding between the Board,
management, shareholders, and
wider stakeholders.
Chief Executive Officer (CEO)
Otto de Bont
Responsibility
Responsible for the management of all
aspects of Renewi’s businesses,
developing the strategy in conjunction
with the Chairman and the Board and
leading its implementation. The CEO
chairs the Executive Committee, which is
the vehicle through which the CEO’s
authority is exercised. The Executive
Committee meets monthly and
comprises the CEO, CFO, Divisional
Managing Directors and Corporate
Function Directors.
Senior Independent
Non-Executive Director (SID)
Allard Castelein
Responsibility
Provides a sounding board for the Group
Chairman and discusses concerns that
can’t be resolved through the normal
channels or where such contact would be
inappropriate with shareholders and
other stakeholders. Is available to
shareholders if they have concerns that
cannot be resolved through the normal
channels of Chairman, CEO or CFO, or
where such contact is inappropriate. Can
be contacted via the Company Secretary
at the UK corporate head office.
Chief Financial Officer (CFO)
Annemieke den Otter with effect
from 1 June 2022
Responsibility
Responsible for the management of
Renewi’s Finance, Corporate Treasury,
Strategy, Corporate Development and
Investor Relations.
Non-Executive Directors
Neil Hartley
Jolande Sap
Marina Wyatt
Luc Sterckx
Responsibility
Responsible for bringing an external
perspective, sound judgement and
objectivity to Board discussion and
decision-making, and to support and
constructively challenge the Executive
Directors using their broad range of
experience and expertise.
Company Secretary
Philip Griffin-Smith
Responsibility
Responsible to the Chairman for ensuring
that all Board and Board Committee
meetings are conducted properly, that
Directors receive appropriate information
prior to meetings to enable them to
make an effective contribution, and
that governance requirements are
considered and implemented. All
Directors have access to the advice of the
Company Secretary. Both the
appointment and removal of the
Company Secretary is a matter for the
whole Board.
The roles of the Board, Board Committees, Chairman and CEO, are documented in more detail on our website, as are those matters
reserved to the Board. They can be found at renewi.com/en/investors/corporate-governance.
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Introducing
our new CFO
Annemieke den Otter joins as Chief
Financial Officer on 1 June 2022,
succeeding Toby Woolrych.
During the year the Remuneration Committee continued to
monitor institutional investors’ and investor bodies’ updated
remuneration-related guidance.
Workforce engagement
Renewi relies on its workforce and their commitment to uphold
the Group’s values, deliver strategic priorities and make the
changes necessary to sustain performance. Engagement with
the workforce is key to ensuring that the Board understands the
employee voice.
In addition to the existing channels of communication via the
Group’s Works Council arrangements in the Netherlands and
Belgium, the Board has designated Non-Executive Director
Jolande Sap to assist the Board with workforce reporting.
E Our workforce policies
Renewi operates a Code of Conduct, based on our core
values, expected behaviours and key policy principles.
This includes creating a safe and healthy working environment,
diversity, equality, non-discrimination and accountability.
Renewi is an equal opportunities employer and publishes an
annual Modern Slavery Statement.
What attracted you to Renewi?
Renewi’s vision and purpose really inspired me.
Its position at the heart of sustainability means Renewi
is on a very exciting journey, one I want to be a part of.
There are huge opportunities for growth, and I believe
we are perfectly placed to take advantage of them,
supported by government, regulation and the drive for
lower carbon emissions.
How would you describe the organisation and team
based on your interactions so far?
They’re a highly professional, down-to-earth bunch! All
my interactions have shown me the workforce is
passionate about Renewi’s purpose and waste-to-product
mission. The staff have strong values and these shine
through. They are clearly committed to the Company and
passionate about what it stands for.
What are the key attributes you bring to executive
management?
It’s really important to be alive and attentive to all
strategic possibilities and to give close attention to their
execution. It’s crucial to partner closely with finance
leadership, while keeping a strong focus on customers
and people. I plan to help the Company maximise the
opportunities brought about by digitisation, mergers and
acquisitions – and to exploit the opportunities for growth
beyond the Benelux.
How would you describe your leadership style?
I’m a people person and that has obvious benefits when
you seek to create strong and positive relationships. I like
to think I’m down to earth, open and curious. As Renewi’s
CFO, I will strive for growth and development in both the
Company and its people.
DIVISION OF RESPONSIBILITIES
F The role of the Chairman
Ben Verwaayen, our Non-Executive Chairman, is
responsible for leadership of the Board and promoting a
culture of openness and constructive debate. He was and remains
independent since his appointment as Chairman on 1 April 2020.
G Composition of the Board
The Board comprises six Non-Executive Directors,
including the Chairman, and two Executive Directors.
The Board’s responsibilities are set out on page 111 of
the Corporate Governance Report and an overview of the
Board roles can be found on page 115 of the Corporate
Governance Report.
The roles of the Board, Board Committees, Chairman and CEO
are documented, as are those matters reserved to the Board.
They can be found on our website at renewi.com/en/investors/
corporate governance. The CEO is responsible to the Board for
the management, development and performance of our
business for those matters for which he has been delegated
authority by the Board. Although the CEO retains full
responsibility for the authority delegated to him by the Board he
has established and chairs, the Executive Committee, which is
the vehicle through which he exercises that authority in respect
of our business.
During the year, the Board considered the independence of each
Non-Executive Director for the purposes of the UK Corporate
Governance Code and finds that all the Non-Executive Directors
are independent.
The membership of the Board as at 31 March 2022 and
biographical information about individual Directors can be
found on pages 106 to 107.
H Role of the Non-Executive Directors
The role of the Non-Executive Directors is to provide
constructive challenge and strategic guidance, offer
specialist advice and hold management to account. The
Non-Executive Directors bring a wide range of experience to the
Group and are considered by the Board to be independent of
management and free from any business or other relationship
that could materially interfere with the exercise of their
independent judgement. The Non-Executive Directors make a
significant contribution to the functioning of the Board, thereby
ensuring that no individual or group dominates the decision-
making process. The Chairman also meets and communicates
regularly with the Non-Executive Directors without the
presence of the Executive Directors.
Time commitment
Generally, Non-Executive Directors commit 24 days a year to
the Group’s business. In practice, Board members’ time
commitment exceeds this minimum expectation when all the
work that they undertake for the Group is considered,
particularly in the case of the Chairman of the Board and the
Chairs of the Board Committees. As well as their work in
relation to formal Board and Board Committee meetings, the
Non-Executive Directors also commit time throughout the year
to meetings and conference calls with various levels of
executive management, visits to sites and, for new Non-
Executive Directors, induction sessions.
If a Director is unavoidably absent from a Board or Board
Committee meeting, they receive and review the papers for the
meeting and typically provide verbal or written input ahead of
the meeting, usually through the Chairman of the Board or the
Chair of the relevant Board Committee, so that their views are
made known and considered at the meeting.
COMPOSITION, SUCCESSION AND EVALUATION
J Appointments to the Board and succession planning
The Nomination Committee regularly reviews the
composition of the Board and the status of succession
for both senior executive management and Board-level
positions. Directors have regular contact with and access
to succession candidates for senior executive management
positions.
The Nomination Committee’s role is to recommend to the
Board any new Board appointments and to consider, more
broadly, succession plans for both senior executive
management and Board-level positions. As part of its
consideration, the Nomination Committee evaluates the
balance of skills, knowledge, experience and diversity of the
Board. Any decisions relating to the appointment of Directors
are made by the entire Board based on the merits of the
candidates and the relevance of their background and
experience, measured against objective criteria, with care taken
to ensure that appointees have enough time to devote to our
business.
During the year, the Nomination Committee has been working
with independent search consultants to fill two Board
vacancies. Toby Woolrych, Chief Financial Officer, retired from
the Board on 31 March 2022 and will be succeeded by
Annemieke den Otter, on 1 June 2022. Marina Wyatt, Non-
Executive Director and Chair of the Audit Committee will be
stepping down from the Board at the conclusion of the AGM,
and a search for her successor is under way.
Given the nature of the business to be conducted, some Board
meetings are convened at short notice, which can make it
difficult for some Directors to attend due to prior commitments.
For more information, please see the Nomination Committee
Report from page 135.
Subject to specific Board approval, Executive Directors and
other Executive Committee members may accept external
appointments as non-executive directors of other companies,
and retain any related fees paid to them, provided that such
appointments are not considered by the Board to prevent or
reduce the ability of the executive to perform his or her role
within the Group to the required standard.
Senior Independent Director
Allard Castelein, who joined the Board as a Non-Executive
Director in January 2017, was appointed Senior Independent
Director with effect from 1 September 2019. The role of the
Senior Independent Director is to serve as a sounding board for
the Chairman and as an intermediary for the other Directors
when necessary. The Senior Independent Director will be
available to shareholders should they have concerns that
contact through the normal channels of Chairman, Chief
Executive Officer or Chief Financial Officer has failed to resolve,
or where such contact is inappropriate.
I The Company Secretary
The Company Secretary is responsible to the Chairman
for ensuring that all Board and Board Committee meetings
are properly conducted, that the Directors receive appropriate
information prior to meetings to enable them to make an
effective contribution, and that governance requirements
are considered and implemented. Both the appointment
and removal of the Company Secretary is a matter for the
whole Board.
Re-election of Directors
In accordance with Article 94 of the Articles, all Directors retire at
each AGM and may offer themselves for re-election by
shareholders. Accordingly, all the Directors will retire at the AGM
in July 2022. The Notice of AGM will contain details of all
Directors seeking re-election.
For more information, see the ‘Other disclosures’ from page 156.
K Skills, experience and knowledge of the Board
As part of its role, the Nomination Committee is
responsible for reviewing the composition of the Board,
to ensure that it has the appropriate expertise while also
recognising the importance of diversity.
L Board evaluation
In FY22 the Board evaluation was carried out through
an externally facilitated structured online survey.
The findings are set out in the Nomination Committee Report
on page 136.
AUDIT, RISK AND INTERNAL CONTROL
M Internal and external audit
The Audit Committee reviews the Company’s
relationship with its external auditors, BDO LLP,
including the independence of the external auditors. BDO LLP
was first appointed to conduct the audit of the Company’s
and Group’s consolidated financial statements for the f
inancial year ending 31 March 2021 and will be put forward
for re-appointment at the 2022 AGM.
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Renewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report Corporate Governance Report continued
The Committee maintains a policy for the pre-approval of all
permitted non-audit services undertaken by the external auditor.
The principal purpose is to ensure that the independence of the
auditor is maintained. The Audit Committee also reviews the
independence and effectiveness of the Internal Audit function.
For more information, see the Audit Committee Report on pages
129 to 134.
Q Procedure for developing remuneration policy
Following consultation with institutional shareholders
and advisory bodies, the Directors’ Remuneration Policy
was approved at the 2020 AGM and will remain
in place until a new policy is put to shareholders for approval at
the 2023 AGM. Remuneration policy is designed to align with
corporate governance best practice, support the Company’s
ability to recruit and retain executive talent to deliver against its
strategy, and promote the delivery of the long-term strategy.
The Directors’ Remuneration Policy can be found in the
Directors’ Remuneration Report from page 138.
R Exercising independent judgement
The Remuneration Committee exercises independent
judgement when determining remuneration outcomes.
The Committee takes into account factors such as wider
business and individual performance during the year, including
health and safety performance and environmental, social and
governance (ESG) objectives.
For more information on FY22 performance, decisions and
reward outcomes, see the Directors’ Remuneration Report from
page 138.
N Fair, balanced and understandable assessment
The Board as a whole is responsible for the Company’s
financial and business reporting including reviewing the
Company’s financial results announcements.
The Board considers this Annual Report, taken as a whole, to be
fair, balanced and understandable, and provides the information
necessary for shareholders to assess Renewi’s position,
performance, business model and strategy.
O Risk management and internal controls
The Board has overall responsibility for our system of
internal controls and risk management policies and has
an ongoing responsibility for reviewing their effectiveness.
During FY22, the Directors continued to review the effectiveness
of our system of controls, risk management (including a robust
assessment of the emerging and principal risks, including those
that would affect the business model, future performance,
solvency or liquidity) and high-level internal control processes.
These reviews included an assessment of internal, financial,
operational and compliance controls, risk management and
their effectiveness. These were supported by management
assurance of the maintenance of controls reports from internal
audit, as well as the external auditor on matters identified in the
course of its statutory audit work.
The system of controls is designed to manage, rather than
eliminate, the risk of failure to achieve business objectives and
can only provide reasonable (not necessarily absolute)
assurance of effective operation and compliance with laws
and regulations.
The Directors believe that the Group maintains an effective,
embedded system of internal controls and complies with the
FRC’s guidance entitled Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting.
For more information about the ways in which Renewi manages
business risks, procedures for identifying emerging risks,
descriptions of principal risks and uncertainties, and the
Viability Statement, see the Risks Management section
from page 90.
REMUNERATION
P Policies and practices
The Remuneration Committee is responsible for
determining, approving and reviewing the Company’s
remuneration principles and frameworks, to ensure they support
the strategy of the Company and are designed to promote
long-term success.
Connecting with our stakeholders
Renewi’s approach to
stakeholder engagement
Considering the interests of our
stakeholders is fundamental to the way
we operate. Our values and Code of
Conduct empower employees to make
the best decisions in the interests of the
Group and our stakeholders, helping to
ensure these considerations are made not
only at Board level, but throughout our
organisation. The diagram below
illustrates our approach to
stakeholder engagement:
1. Engagement
Understanding stakeholder objectives,
needs, interests and concerns.
4. Measurement
Measuring performance of
stakeholder relationships.
2. Consideration
Considering alignment of stakeholder
needs, interests, concerns and objectives
with Renewi’s purpose, values, business
model, and strategic objectives.
Understanding risks and opportunities.
5. Outcomes
A virtuous circle of shared outcomes:
shared rewards, alignment of interests,
strong relationships, long-term value
creation, competitiveness, reputation,
investment attraction, innovation, and
achievement of purpose.
3. Decision-making
Balancing the needs of
different stakeholders.
5 . Outcomes
Shared
rewards
Alignment
of interests
4 . M easurement
D e c ision making
3 .
C o n sideration
. E n gagement
2 .
1
Achievement
of purpose
Innovation
Stakeholder
Governance
Strong
relationships
Long-term
value creation
Investment
attraction
Competitiveness
Reputation
For more information on the Remuneration Committee’s
work during FY22, see the Directors’ Remuneration Report
from page 138.
118 Renewi plc
Annual Report and Accounts 2022
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Annual Report and Accounts 2022
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Governance reportFinancial statementsOther informationStrategic report OUR KEY STAKEHOLDERS
Our waste-producing customers
Relevance to business model
By understanding the needs and concerns
of our waste-producing customers we can
innovate and find better solutions to
manage their waste, improve the
valorisation of waste, and increase
qualities and quantities of the secondary
materials produced. This in turn leads to
greater revenues and healthier margins
and enables us to adapt to and invest in
changing market trends, so we can be a
leader in recycling. We deliver value to our
customers by collaborating and
addressing the key issues.
How we engage
CEO reports to the Board
Meetings with members of the
Executive Committee
My Renewi digital portal and customer
call centres
Regular engagement through daily
interactions, knowledge-sharing
sessions and reports on sustainability
performance
Being part of coalitions that contribute
to sustainability and circularity
Sustainability and separation advice,
education and training programmes
Customer events
Key issues discussed
Commercial terms of engagement and
services provided
Quality of service – on time, every time,
responsiveness and flexibility
Responsible management of waste
Market developments and requirements
of legislation and regulations
How to deliver quality waste streams/
ensure the workforce is aligned behind
better sorting
How to support the circular economy
Measurement
Customer questionnaires and surveys
Net promoter scores
Churn rates, win rates
Customer complaints
Adoption rates of My Renewi
Outcomes of engagement
Customer service that retains our
customers and meets their needs
Support and advice for customers over
waste segregation and separate
collections, enabling greater
valorisation of waste
Communication of market changes
such as recyclate pricing and other
general inflation factors driven, for
example, by the invasion of Ukraine
Mission75 target to increase the
recycling rate from 65% to 75% by the
end of 2025
Renewi 2.0, an improvement
programme launched in FY21 to
harmonise business processes
and improve customer and
employee experiences
Corporate Governance Report continued
How our Board understands the
interests of our stakeholders
Over FY22, the Board received updates on
various engagement initiatives designed
to promote waste and recycling and an
understanding of sustainability goals
among stakeholders. This gave Directors a
grasp of the various initiatives that the
Group leads, and the relationship
between it and its stakeholders.
Over the course of the year, Directors
engaged with various stakeholders, to
understand the issues that concern and
impact them most. The CEO and CFO met
with investors throughout the year to
gauge their views on a range of issues.
The Board recognises the engagement
process has been more difficult due to the
Covid-19 pandemic and is looking forward
to resuming a more normal level of
engagement with all stakeholders in
FY23. Over the coming year we will be
reviewing our engagement processes to
ensure we best understand how the
Company’s interests align with those of
our shareholders.
How our Board considers
stakeholders’ interests in
decision-making
Throughout the year, Directors recognised
their responsibility to act in good faith to
promote the success of the Company for
the benefit of shareholders, whilst also
considering the impact of their decisions
on wider stakeholders and other factors
relevant to the decisions being made.
Clear communication and proactive
engagement to understand the issues and
factors that are most important to
stakeholders is fundamental to this.
The Board acknowledges that every
decision made will not necessarily result
in a positive outcome for all stakeholders.
By considering our purpose and values,
together with our strategic priorities, the
Board aims to ensure the decisions made
are consistent and intended to promote
the Company’s long-term success.
Wateringen,
Commercial Waste
Netherlands
120
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Annual Report and Accounts 2022
Our product customers
Our innovation partners
Our suppliers
Relevance to business model
It is strategically important for Renewi to
innovate and improve the valorisation of
waste, increasing the volume and quality
of the secondary materials we produce.
By extracting more value from waste,
Renewi will increase revenues and
margins, as well as market share, so we
can be a leader in recycling.
How we engage
CEO reports to the Board
Meetings with members of the
Executive Committee
Regular meetings with potential
manufacturers to explore and develop
new product possibilities
Work alongside network organisations
that provide a platform to meet
potential partners and to screen the
innovation potential of ideas/co-
operation opportunities
Key issues discussed
How to bring ideas to life. This may
include construction of a facility or
co-investing in a circular partner
Market expectations on use of
secondary materials and potential of
recycled content
Opportunity of waste-to-product
processes, improving the viability of
circular developments
Measurement
Capital investment in innovation
The number of projects within our
innovation pipeline
Outcomes of engagement
Renewi has a comprehensive
innovation pipeline delivering
incremental waste processing and
enabling recycling where this previously
wasn’t possible
In FY22 the Board committed €110m+ in
capital to bring new innovations to
the market
To see some examples of our latest
innovations, such as bio-LNG and
plastics sorting, see the Innovation in
action segment on page 26 of the
Strategic section
Relevance to business model
By understanding the needs and concerns
of our product customers we can innovate
and improve the valorisation of waste,
producing superior quality secondary
products, demanding higher prices, and in
turn increasing revenues and margins. It
also allows us to adapt to changing market
trends, so we can be a leader in recycling.
We deliver value to our customers by
collaborating and addressing the key issues.
How we engage
CEO reports to the Board
Meetings with members of the Executive
Committee
Regular strategic and operational
engagements
Customer meetings with the engineering
team to collaborate/conceptualise new
solutions
Marketing collateral, including factsheets
Industry and customer events
Questionnaires and satisfaction surveys
Key issues discussed
Certainty of supply – timeliness and
sufficient volumes
Technical feasibility and potential
commercialisation
Ways to minimise customers’ cost
through pricing reductions, while
delivering high product specifications
Innovative solutions
Requirements following changes in
legislation and regulations
Market developments
Measurement
Recycling rate and secondary
materials production
Innovation funnel and investments spend
Partnerships and collaborations agreed
Questionnaires and surveys
Net promoter scores
Outcomes of engagement
Customer service that retains our
customers and meets their needs
We are investing in further refinement of
waste in order to produce higher
specification recyclates and
secondary materials
Participation in setting industry
standards
Example: Renewi has collaborated
alongside innovation partner Nordsol
and end customer Shell, to build the first
commercial bio-LNG plant in Europe. To
find out more see page 26
Relevance to business model
Working with a trusted group of suppliers
is key to creating a reliable and effective
supply chain. Managing the inflation
pressures from the supply chain and
therefore the cost base of the Group is
essential to financial outcomes. Reliability
and ethics are key to upholding our
reputation and helps us win market share.
Increasing efficiency of interactions with
suppliers through Renewi 2.0 and the
implementation of procurement system
supports long-term relationships and
administrative savings.
How we engage
With our procurement team to ensure
transparency and engagement
CEO reports to the Board
Meetings with members of the
Executive Committee
Initial formal market tender
Definition of processes to support
suppliers to become embedded in our
Source-to-pay system and procurement
digital platform
Listening sessions to identify and
address supplier concerns
Annual audit to ensure compliance
Key issues discussed
Adding value by introducing new
sustainable technical innovations
Responsible sourcing
Enhanced safety of our products
Improvements on operational
processes eg our Source-to-pay system
Mitigating risks on quality and take
advantage of market developments
Measurement
Real-time supplier data
Divisional payment practices data
Supplier reporting and audit reviews
Outcomes of engagement
Long-term relationships with trusted
suppliers to enable efficient and
sustainable purchase decisions
Focus on safety and high ethical
standards
Collaboration over mutual concerns.
Example: To understand market
disruptions caused by Covid, and war in
Ukraine
Collaboration over technical
innovations. To find out more about our
investment in innovation see page 26
Investment in digital platforms, more
efficient processing and development
of preferred suppliers
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To find out more about
employee outcomes
see the Care for People
section on page 84
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Our employees
Relevance to business model
Our employees are a significant source of
value that drives our performance and
productivity and enables us to be a leader
in recycling. We retain and attract the best
employees by creating a great working
experience. Innovation is one of our value
drivers and helps us utilise the latest
methods of secondary material
production and satisfy the evolving needs
of our customers. To foster innovation, we
are co-creating with our employees a
culture that is diverse and inclusive.
How we engage
The Board’s workforce engagement
representative, Non-Executive Director,
Jolande Sap
CEO reports to the Board
Meetings with members of the
Executive Committee
Group-wide employee surveys (Pulse
survey) and leader-led feedback
Performance and development reviews
Monthly Group-wide leadership and
management team meetings
Employee relations through Works
Councils in Belgium and the
Netherlands
Toolbox training, safety stand-downs for
non-desk workers
Lifesaving Rules and safety reporting for
all employees
Group, divisional and business
newsletters, and news on screens,
noticeboards and intranet
Opening growth pathways through
training – leaders (LEAD) and
employees (online)
Key issues discussed
We constantly discuss an exhaustive
range of topics with our employees on a
daily basis covering every aspect of
working at Renewi and the Renewi
operations
Identification of key risk areas locally,
divisionally and at business level
through HIT reporting and listening
Measurement
Pulse surveys
Safety data and HIT reporting
Diversity data
Performance and Development Review
(PDR) assessment of performance and
Company values
Employee turnover and applications
received
Talent reviews
Outcomes of engagement
A motivated and aligned workforce
Retain and attract the best employees.
See employee engagement KPI on page
43
A positive safety culture. See Lost Time
Incidents (LTI) KPI on page 43
Creating diverse and inclusive teams
that foster innovation. To find out more
about our investment in innovation see
page 26
Talent development. For example,
during our talent reviews we identified
45 young high potentials across our
divisions who have the potential to fulfil
a leadership role (one or two levels up)
Renewi continued to maintain
productivity rates throughout the
duration of the Covid-19 pandemic
Improved employee experiences
through digitisation of the business,
including through Renewi 2.0
To find out more about employee
outcomes see the Care for People
section on page 84
Local communities
Relevance to business model
We maintain long-term relationships with
our local communities that uphold our
reputation. This is essential as we grow
our operations and become a leader in
recycling. The processing of waste is
critical for communities to continue to
operate. However, our purpose adds
greater value, increasing the production
of secondary material from waste,
avoiding the disposal of waste through
incineration or landfill, and enabling local
and global communities to meet their
sustainability ambitions.
How we engage
Continuous dialogue with our
neighbours and local legislators
Community events, open days and
education events
CEO reports to the Board
Meetings with members of the
Executive Committee
Meetings with special interest groups
Leafleting and newsletters
Key issues discussed
How we manage the environmental
impact of our activities
The benefits of recycling and secondary
material production
How we reduce the impact of climate
change through recycling
Ways to deliver essential services with
minimal impact to the local
environment
Measurement
Community engagement projects data
Carbon emissions and recycling data
Complaints data
Outcomes of engagement
Renewi’s contribution to community
projects
The Local Community contribution to
our overall carbon emissions and
recycling rates. See carbon emissions
and recycling KPIs on page 43 and the
Sustainability Review (to be released
late June)
Where there is an adverse event, we
actively engage with community
stakeholders.
Renewi works with communities and
local authorities on different initiatives
throughout the year, eg disposal of
batteries. We also visit primary schools
to discuss recycling and what happens
to waste.
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Government
Relevance to business model
There has been an increasing shift by
governments towards a sustainable
future, with new targets agreed such as at
the UN’s COP26 summit and the EU’s Fit
for 55 plans to reduce greenhouse gas
emissions. The impact of the climate
emergency has further led to
unprecedented changes within markets,
presenting an opportunity for Renewi to
meet growing and new demands for
secondary materials, whilst also
helping governments meet their
sustainability targets.
How we engage
Board and Executive Committee level
engagement over political and
regulatory matters
CEO reports to the Board
Meetings with members of the
Executive Committee
Face-to-face engagement with the
state secretary, politicians and
other local, regional and national
government officials
Lobbying on recycling, secondary
materials usage and climate transition
Engaging directly or through trade and
industry associations and lobby groups
Media coverage
Regulators
Relevance to business model
Increasingly, regulation is being
introduced to encourage recycling and
re-use, demand secondary materials use,
develop low emissions cities, foster
responsible production and encourage
circularity throughout the economy. As a
waste-to-product company this presents
a great opportunity for Renewi, but also
means we need to ensure our operations
remain compliant in a continuously
changing regulatory landscape.
How we engage
Board and Executive Committee level
engagement over political and
regulatory matters
CEO reports to the Board
Virtual meetings, site inspections,
testing and data submissions
Participate in investigations
Through trade and industry
associations
Join community advisory panels
Key issues discussed
EC-wide harmonisation and permitted
national differences
Enforcement policy
Operational compliance with permits
Meeting permitted environmental
standards
Quality requirements – best ways
to measure
Defining evolving standards and
addressing topical concerns
Applications of best practices and best
available techniques
Responding to compliance breaches
appropriately
Measurement
Operational permit management data
Safety data and HIT reporting
ISRS framework
Outcomes of engagement
Operational compliance with permits,
quality standards and meeting high
environmental standards
Application of best practices and
responsiveness to any investigations or
compliance concerns raised
Continuous improvements generated
from introduction of the ISRS
framework
A positive safety culture. Lost Time
Incident Rate on page 43
Key issues discussed
Ways to shape the legislation to
deliver on climate change and the
circular economy
How the industry can play its part in
helping to meet climate change targets
(including CO2 reduction, energy
transition and creating secondary raw
materials to lower CO2 emissions)
Regulatory compliance
Use of fiscal and monetary
incentives and regulation to encourage
desired outcomes
Sustainable and safe solutions for
Covid-19-related waste
Responses to Covid-19, Ukraine and the
general market
Measurement
General contact with government
representatives
Outcomes of engagement
Understanding of the risks and
opportunities within the waste-to-
product sector
An ongoing dialogue with governments
enables us to work together to deliver
on climate change and the circular
economy. We support progressive
legislation in the creation of a circular
economy, reduction in incineration
and stimulation of demand for
secondary materials
Renewi’s contribution to overall carbon
emissions and recycling rates. See
carbon emissions and recycling KPIs on
page 43 and the Sustainability Review
(to be released late June)
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Corporate Governance Report continued
Investors
Lenders
Global community
Relevance to business model
We use the capital from equity investors
to execute our business model. Surging
demand for sustainable and green
investments has made Renewi’s purpose
and business model more appealing for
investors, presenting an opportunity for
Renewi to attract further investment.
Increasingly, the way companies
approach Environmental, Social and
Governance (ESG) is a key topic for
investor stewardship and a major
influence in investment decisions.
How we engage
Meetings with the CEO, CFO, Chair and
Investor Relations
CEO reports to the Board
Meetings with members of the
Executive Committee
Capital Markets events and analyst
site visits
Roadshows, telephone calls and
other meetings
Regular trading updates on regulatory
platforms
Annual and interim results and Annual
Report
Annual General Meetings
Sustainability reports
Key issues discussed
Responses to Covid-19
Progress of the three strategic value
drivers: ATM, Renewi 2.0 and
Innovations
Progression of the circular economy
and the market in which we operate
Our strategy to increase the
performance of the Group
Our approach to ESG
Measurement
Financial performance
ESG performance
Changes in investor shareholdings
Share price
Outcomes of engagement
Our recent Capital Markets Event was an
opportunity for us to communicate our
future plans in more detail. The markets
have responded positively and are
starting to appreciate the higher growth
expectations. We are fostering an
understanding of the market wide
tailwinds that are supporting our
market positioning and strategy
Relevance to business model
We use the capital from debt investors
and banks to execute our business model.
Increasingly, lenders want to understand
our approach to ESG so they can satisfy
their own compliance obligations.
Relevance to business model
The climate emergency is a major concern
throughout the world. Our children,
grandchildren and generations to come
will face the consequences of inaction
today. Renewi’s business model helps
address the climate emergency.
Society is a driver for the changes
required to achieve true circularity,
placing pressure on governments,
influencing policies, creating new
markets, and demanding greater ESG
credentials from the products and
services they purchase.
How we engage
Contribution to ongoing debate around
climate change
Influencing communication channels
such as press and social media
Key issues discussed
How we can address the climate
emergency
Ways to deliver essential services with
minimal impact to the environment
Measurement
Carbon emissions and recycling data.
See carbon emissions and recycling
KPIs on page 43
TCFD reporting on pages 66 to 73
Outcomes of engagement
Greater expectations of society have
placed pressure on governments and
regulators to introduce legislation that
supports our business model
Greater expectations of society have
placed pressure on companies to
produce products that can be recycled,
leading to greater valorisation of waste
A culture of recycling has led to a
change in behaviour of society, such as
greater discipline to sort waste for
collection, leading to greater
valorisation of waste
How we engage
CEO reports to the Board
Meetings with members of the
Executive Committee
Meetings with CEO, CFO and Group
Treasury
Regular financial reporting and
covenant compliance reporting
documents
Close contact regarding the ongoing
performance of the Group
Discussions regarding the ongoing
facilities and utilisation
Consultation regarding alternative
financial products available
Regularly sharing insights
Key issues discussed
Our approach to ESG
Ways to optimise debt facilities,
including new issuance
Market changes, including Brexit and
benchmark rate reforms
Financial market insights
Experiences and expectations for the
local economies
How we can optimise liquidity, cash
management and other treasury
activities
Measurement
Financial performance data. See
Financial KPIs on page 35
ESG performance data. See carbon
emissions and recycling KPIs on page
43 and the Sustainability Review (to be
released late June)
Outcomes of engagement
Lenders understand our capital
requirements
Continued access to the lending
markets, including the recent
incremental bond issuance. We achieve
optimised liquidity and conditions such
as the extension of the main banking
facility
PRINCIPAL DECISIONS IN FY22
Renewi defines principal decisions as decisions and discussions
that are material or strategic to the Group, and also those that are
significant to any of our stakeholder groups. The following items
are considered to be examples of principal decisions made by the
Board during FY22.
Investment in innovation
Context
Renewi’s business model is to create valuable secondary products
from waste, avoiding the disposal of waste through incineration or
landfill. It is strategically important for Renewi to innovate and
increase the volume and quality of the secondary materials that it
produces from waste. By creating that added value, Renewi will
increase revenues and margins, as well as market share.
Stakeholder considerations
Product customers. Increased valorisation of waste can lead to
superior secondary products for customers, creating new
markets and providing secondary alternatives to virgin inputs
Government/regulators. Increasing the recycling rate is
essential to meet policy ambitions to address climate change
via the realisation of a circular economy
Innovation partners. Renewi embraces collaboration with its
innovation partners, universities, and commercial operators to
bring new ideas to life. It is important that Renewi finds new
ways of creating new products to satisfy the growing demand for
secondary materials
Global community. To protect the planet we must reduce
carbon emissions and preserve natural resources, both of which
are supported by increased recycling rates
Investors. Creating more value from the waste we process will
increase shareholder value
Waste-producing customers. Renewi can better meet
the needs of its customers by finding new methods of recycling
that enable customers to deliver on their own sustainability
ambitions
Strategic actions supported by the Board
The Board has set an ambitious Mission75 target, to increase the
recycling rate from 65% to 75% by the end of 2025. Investing in
innovation is one of the Board’s priorities as the Company works to
deliver the first two pillars of the growth strategy with a target of
achieving an additional EBIT of €20m by FY26. The Board has
decided to approach its investment in innovation by maximising the
number of initiatives in Renewi’s innovation pipeline. The Board does
not expect all of its innovation initiatives to reach commercialisation
but sees the importance of having a wide variety of initiatives to
provide more positive outcomes in the long term.
Outcomes
In FY22, the Renewi Board has committed more than €100m in
growth capital to bring new innovations to market over the next
few years.
Investments
Organics
Building materials
Plastics
Advanced sorting
Other innovations
Total investments
Capital commitment
€21m
€17m
€10m
€60m
€2m
€110m+
Renewi has collaborated with innovation partner Nordsol and
end customer Shell, to build the first commercial bio-LNG
plant in Europe. bio-LNG is a low-emission fuel that replaces
fossil fuels. Therefore, it is the perfect solution to decarbonise
the heavy-duty transport sector in the short term. To find out
more see page 26
The Mineralz & Water Division has invested in processing
equipment to process test and clean contaminated soil.
The investment has improved the quality and quantity of
output of secondary building materials that can be used as
a replacement for fast diminishing raw building materials.
To find out more see page 45
Within the Commercial Waste Division we have committed
€60m to address the legislation in Flanders, Vlarema 8. Our
advanced sorting investments at three sites in Belgium will
increase the recycling and reduce waste going to incineration.
To find out more see page 44
The Board has committed a further investment of €7m in
plastics recycling for a new facility in Acht, Netherlands. To find
out more see page 27
Safety and ISRS (international sustainability
rating system) framework
Context
In FY21, following a number of tragic accidents, a new Board
Committee was created, the Safety, Health and Environment
(SHE) Committee. The objective of the Committee was to make a
sustained improvement in safety and environmental
performance.
Stakeholder considerations
Employees. Safety is Renewi’s primary value, and we want our
staff to arrive home safely from their work. There is a strong
emphasis on training employees in good safety practices such
as the 10 Lifesaving Rules and reporting safety concerns
Regulators. All of the necessary environmental permits need
to be in place and regulations complied with. Renewi operates
within the limits set out in these regulations
Local communities. Our teams and vehicles are in close
contact with the members of the public, particularly in urban
collections. We take very seriously the safety of the public and
ensure that operatives are fully trained in carrying out their
duties safely. Also, residents who live in the locality of our sites
want assurance that Renewi is operating without causing
nuisance
Investors. Safety and sustainability are key factors of
Environmental, Social and Governance (ESG), which is a major
influence in investment decisions
Strategic actions supported by the Board
In the past year, the SHE Committee has initiated the
implementation of ISRS, a structured framework for managing
safety and sustainability processes. By implementing a tried and
tested framework the Board believes the necessary internal
controls and oversight will be in place to bring a sustained
improvement in safety and environmental performance for the
long term.
To facilitate the work of the SHE Committee, a new role was
created within the Executive Committee, Group SHEQ Director.
The Nomination Committee initiated a search for
suitable candidates.
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In 2019, in response to the provision in the 2018 UK Corporate
Governance Code prescribing certain methods that the Board
could use to engage with the workforce, the Board designated
Non-Executive Director Jolande Sap to assist the Board with
workforce engagement. Jolande, a former leader of the Dutch
Green Party, GroenLinks, is experienced in understanding
social-economic issues and is believed by the Board to have the
relevant skills required. Despite the challenges of Covid-19, over
the course of the year Jolande has been involved in a number of
workforce engagement activities:
Participated in the Article 24 meeting, a general consultation
meeting between management and the Dutch Works Council
to discuss Renewi’s operations
Participated in a general meeting held between Belgian Works
Council and Dutch Works Council
Held three meetings with the Chair of the Dutch
Works Council
In addition to direct engagement with the workforce, the Board
is able to receive updates from the Diversity and Inclusion Board
and Group HR Director to understand the workforce’s views on a
wide variety of topics. The Board also receives a number of
company-wide reports providing insight into the views of the
entire workforce, regardless of location and role, allowing for a
breadth of views to be understood when making key decisions.
CASE STUDY:
The Works Councils expressed an interest in discussing the
implementation of Renewi 2.0, an improvement programme
launched in FY21 to harmonise business processes and improve
customer and employee experiences. The matter was included
as an item on the agenda for a consultation meeting held
between the Dutch and Belgian Works Councils, attended by the
HR team, including participation from Non-Executive Director
Jolande Sap. The meeting identified a number of improvements
to digitised processes that were subsequently fed back to
management for implementation.
Investing in and rewarding our workforce
Although the Remuneration Committee does not consult directly
with employees, the Committee considers general basic salary
increases for our workforce, aiming to ensure the global total
reward offering is competitive, compelling and aligned to our
business performance; while supporting a culture where
everyone feels valued and included. For more information see
the Remuneration Report on page 138.
Employee Pulse surveys
Renewi conducts regular Pulse surveys to understand the mood
of employees and their attitude towards Renewi as an employer.
The data analysis includes the calculation of a net promoter
score estimating the likelihood of staff to recommend Renewi as
an employer. The results and analysis of Pulse surveys are
reported to the Board to allow it to monitor any changes in
attitudes. For more information about Pulse surveys, see the
Care for People section on pages 84 to 89.
Outcomes
In October 2021, Jeanine Peppink-Van der Sterren was
appointed Group SHEQ Director. Jeanine has significant
experience of SHEQ, including ISRS, that will be key in
facilitating the implementation of ISRS. To read more about
Jeanine see pages 86 and 109
To find out more about safety outcomes during FY22 see the
SHE Committee Report on page 127 and Care for People
section on page 84
Investment in cyber security
Context
Cyber attacks could cause breaches of our IT systems
environment. Increasingly, cyber aggressors are targeting
commercial organisations and there is heightened awareness
and risk of an attack. Breaches could result in computer
networks being paralysed, data leakages, regulatory fines and
parts of our operations being incapacitated. For that reason,
Renewi takes cyber security very seriously.
Stakeholder considerations
If Renewi fell victim to a serious cyber attack the Company may
be unable to operate for a period of time. It is in the interests
of Renewi and all of our stakeholders that the Company has
robust processes and procedures in place to mitigate the risk of
a cyber attack.
Strategic actions supported by the Board
To give the Board the necessary oversight the Audit Committee
received regular cyber security updates, detailing the cyber risks
and mitigating actions. Over the course of the year the Board has
received refresher training to assist in the formulation of a
revised Cyber Strategy. This has led to a review of the cyber
risks affecting the business and a revised plan of investment in
the IT infrastructure.
Outcomes:
Improved robustness of Business Continuity Management and
Disaster Recovery plans
Increased investments in cyber security up to €2.4m
Ongoing programme of activity to upgrade and replace old IT
systems, particularly where support has been withdrawn. This
results in investment in new IT systems and processes
Better protection of our accounts with the use of two-factor
authentication across key access points and systems
Over 2,000 staff received data security training. Ongoing
awareness campaigns educating staff about cyber threats
A Renewi-wide security monitoring and detection solution
providing us with capabilities to detect and respond to cyber
attacks 24/7
Implementation of an advanced next-generation protection
system on all Renewi endpoints to help prevent, detect,
investigate and respond to advanced threats
To find out more about Renewi’s key risks, see the Risk
Management section on page 90.
Engaging with our workforce
Renewi is committed to being a great place to work. Engagement
with employees is an important element in fostering a positive
environment in which all employees are respected, openness is
valued, diversity celebrated, and every voice heard. The Company
recognises and values people as an important asset in achieving
goals, upholding values and delivering strategic priorities.
Safety,
Health and
Environment
Committee
Report
Luc Sterckx
Chair of the Safety, Health
and Environment Committee
On behalf of the Board, I am pleased to present the Safety,
Health and Environment Committee Report for the year
ended 31 March 2022.
The Committee met four times during the year with all meetings
held virtually owing to the local and national restrictions
imposed as a result of Covid-19. By invitation, there were a
number of other regular attendees, including the Chief
Executive Officer, the Group SHEQ Director and Divisional
Managing Directors.
This is the first full year of the Committee’s work, following the
Board’s decision to create it in December 2020. The main
objective of the Committee has been to assist the Board in
driving and implementing a structural and sustained
improvement in safety, health and environmental performance.
In FY22, we have continued to implement the International
Sustainability Rating System (ISRS) and improve the Committee’s
oversight of safety, health and environmental risks.
In October 2021, Jeanine Peppink-Van der Sterren was appointed
Group SHEQ Director, a new position created within the
Executive Committee that will be key in facilitating the work of
the Safety, Health and Environment Committee. Jeanine has
significant experience of SHEQ, including ISRS, which will be a
great benefit as Renewi continues its implementation of ISRS. To
find out more about Jeanine go to pages 86 and 109.
“Always lock-off before you clear blockages, clean, or do maintenance.”
One of our 10 Lifesaving Rules
Committee membership:
Luc Sterckx (Chair)
Allard Castelein
Neil Hartley
FY22 Committee meeting attendance
Luc Sterckx
Allard Castelein
Neil Hartley
4 (4)
4 (4)
4 (4)
Bracketed figures indicate maximum potential attendance of
each Director.
Role of the Committee
Review and recommend appropriate policies related
to the protection of the environment, together with
the safety of employees, contractors, customers
and the public, and oversee the monitoring and
enforcement of these policies and related practices
and procedures
Review significant risks or exposures and assess
the steps management has taken to minimise
those risks
Assist in keeping Directors informed of their safety,
health and environmental responsibilities and
duties as necessary and relevant
Monitor regulatory changes in relation to safety,
health and environmental matters and the impact
such changes may have on the business of Renewi
Receive reports as to divisional safety and health
and environmental policies and arrangements,
compliance with and any proposed changes to those
policies and arrangements
Receive reports as to safety and health and
environmental performance and any major
incidents to ensure that management identifies
and implements any corrective action considered
appropriate to achieve compliance and raise
performance where required
For terms of reference go to renewi.com/sheco
SHE corporate governance framework
Renewi plc Board
SHE Committee
Executive
Committee
Safety and Compliance
Taskforce*
SHEQ Leads**
*The Safety and Compliance Taskforce meet monthly to review
performance and progress against the SHEQ Strategy Plan. Membership
includes Divisional MDs, the CEO and the Group SHEQ Director,
and divisional SHEQ Directors. The S&C Taskforce is focused on
accountability and ensuring the execution of the SHEQ Strategy Plan.
**The team of SHEQ Leads comprises the Group SHEQ Director,
divisional SHEQ Directors, and the Group SHEQ team.
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Safety, Health and Environment performance
Over the course of FY22, the Committee monitored performance
in mitigating safety, health and environmental risks, reviewing
the root cause of significant events. The Committee is pleased to
report solid improvements in performance over FY22.
Type of incident
FY2020/21 FY2021/22 % change
Medical Treatment Cases
Restricted Work Cases3
Lost Time Incidents
Fatalities
Total Recordable Incidents
125
68
208
2
403
Lost Time Injury Frequency Rate
(LTIF)1
13.97
109
69
137
0
318
9
-12.8%
+1.5%
-33.2%
-100%
-21.1%
-35.6%
Total Recordable Incident Rate
(TRIR)2
27.07
20.6
-23.9%
1. Lost Time Injury Frequency Rate (LTIF) is the number of lost time injuries occurring
per 1 million man hours worked.
2. Total Recordable Incident Rate (TRIR) is the total recordable incidents per 1 million
man hours worked.
3. Restricted Work Cases is number of cases when a person is so injured that they
cannot perform their normal duties.
Introduction of ISRS
In FY21, the Committee advised the Board to implement the
International Sustainability Rating System (ISRS), which has a
long-proven international record in adequately monitoring and
improving safety, health and environmental performance.
Independent assurance and risk management experts DNV
were appointed to advise on the start of the implementation.
The ISRS model of continuous performance improvement is
set out below.
The Committee is pleased to report further progress on the
implementation of ISRS over FY22, having supported the initial
elements and loss categories to be included within the ISRS
implementation plan. ISRS core teams have been installed
and trained, ready for continued application of the ISRS
implementation and for the conducting of ISRS assessments.
The Committee estimates that the ISRS framework will be fully
functional for the selected elements and scope by the end
of FY23.
Environmental permit controls
The Committee has been working closely with the Executive
Team to design reporting dashboards and improve oversight of
compliance information around environmental permits and of
any non-conformities. Enhanced reporting systems will be
implemented in FY23 and will align with the application of ISRS.
The intention is to be able to take additional preventive
measures where necessary in order to comply with actual and
future regulations.
Staff safety awareness
The Committee is pleased to confirm the successful rollout of
our Lifesaving Rules campaign, a staff training programme
designed to improve safety performance. The design of the
programme was bespoke for each individual, focusing on a level
of learning specific to roles and Divisions. Following the
introduction of the programme we are pleased to see there
has been a notable improvement in safety performance and
HIT reporting, indicating a greater awareness of safety across
the Group.
Strategy
and policy
Luc Sterckx
Chair of the Safety, Health and Environment Committee
24 May 2022
Management
review
Planning
Continual
improvement
Monitoring and
measurement
Implementation
and operation
Audit
Committee
Report
Marina Wyatt
Chair of the
Audit Committee
On behalf of the Board, I am pleased to present the Audit
Committee Report for the year ended 31 March 2022. The
Audit Committee assists the Board in fulfilling its
responsibilities relating to the Group’s corporate reporting,
risk management and financial controls and the internal and
external audit functions.
The report is intended to provide shareholders with an insight
into key areas considered, together with how the Committee has
discharged its responsibilities. This includes details of the
significant accounting matters and issues in relation to the
Group’s financial statements that the Committee has assessed
during the year and how these were addressed, and our process
for concluding that this Annual Report is fair, balanced and
understandable. The other primary responsibilities of the
Committee, including ensuring that the external auditor is
independent and effective, ensuring that the Group has an
effective internal control framework and reviewing the
effectiveness of the Group’s internal audit function, are also
detailed over the following pages.
The Committee met three times during the year with all
meetings held virtually owing to the local and national
Covid-19 restrictions. The timing of meetings coincides with key
intervals in the Group’s reporting and audit cycle. Regular
attendees at Audit Committee meetings include the Chief
Financial Officer, the Group Financial Controller, the Group
Tax Manager, the Director of Risk and Audit and the external
auditors. Other attendees who attend as required include the
Chief Executive Officer, the Chief Information Officer, other
members of the senior divisional finance teams, other senior
personnel and other advisers to the Company.
Marina Wyatt
Chair of the Audit Committee
24 May 2022
Committee membership:
Marina Wyatt (Chair)
Neil Hartley
Luc Sterckx
Jolande Sap
FY22 Committee meeting attendance
Marina Wyatt (Chair)
Neil Hartley
Luc Sterckx
Jolande Sap
3 (3)
3 (3)
3 (3)
3 (3)
Bracketed figures indicate maximum potential attendance
of each Director.
Role of the Committee
The primary objective of the Audit Committee is to
assist the Board in fulfilling its corporate governance
responsibilities relating to the Group’s corporate
reporting, risk management systems, internal controls
and any other matters referred to it by the Board.
This covers:
monitoring the integrity of the financial statements
including annual and half-yearly reports;
reviewing and challenging the consistency and
appropriateness of and changes to significant
accounting policies, the methods used to account for
significant or unusual transactions, and appropriate
estimates and judgements;
keeping under review the adequacy and
effectiveness of internal financial controls and
internal control and risk management systems;
reviewing the adequacy of procedures for detecting
fraud and ensuring that appropriate arrangements
are in place to allow for Company employees to raise
concerns, in confidence, about possible wrongdoing
in financial reporting or other matters;
monitoring and review of the effectiveness of the
internal audit function in the context of the overall
risk management system;
the appointment, terms of engagement,
effectiveness, objectivity and independence of the
external auditors and the nature and scope of the
audit; and
the development and implementation of policy on
the engagement of the external auditor to supply
non-audit services.
For terms of reference go to renewi.com/audit
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Committee activities during FY22
At its meeting in May 2021, the Committee considered corporate
governance compliance, taxation and the FY21 financial
statements. At this meeting there was continued focus on the
financial effects of the Covid-19 pandemic and the challenges it
posed to the preparation of the FY21 financial statements with
regard to additional disclosures and the forecast modelling for
going concern and viability statements. The November 2021
meeting was concerned primarily with the interim results,
strength of the finance organisation including a presentation
from one of the divisional Finance Directors, Group risk
management and internal control compliance, and internal
audit performance. The February 2022 meeting considered
preparation of the FY22 financial statements and all other
year-end accounting matters and treatments, review of the
external auditor’s plan and strategy, review of the non-trading
and exceptional items policy, year-end risk management
planning, scenarios for viability statement modelling and the
internal audit plan for the new financial year. A review of the
strength of the finance organisation continued in the year with
two further divisional Finance Directors presenting at the May
and November meetings. Advisers selected to work with us as
part of our first year of compliance with TCFD (Task Force for
Climate Related Financial Disclosures) gave an update on their
findings and recommendations to the February meeting.
Financial Statements and
significant accounting matters
During the year and prior to the publication of the Group’s results
for the half year and full year, the Committee assessed whether
suitable accounting policies had been adopted, that
management had made appropriate estimates and judgements
and disclosures were appropriate. The Committee reviewed the
main issues as noted below, challenging management at various
stages during the year.
After reviewing the reports from management, challenging the
key judgements and estimates and assessing the risks identified,
the Committee is satisfied that the Financial Statements address
these areas, both in respect of the amounts reported and the
disclosures made. The Committee has also reviewed the
significant assumptions used for determining the value of assets
and liabilities and provided appropriate challenge to ensure
these are sufficiently robust. The Committee has discussed these
issues with the external auditors during the audit planning
process and at the finalisation of the year-end audit.
The table is not a complete list of all the Group’s accounting
issues, judgements, estimates and policies but highlights the
most significant ones in the period. The accounting treatment of
all significant issues and judgements was subject to audit by the
external auditor as set out in their Independent Auditor’s Report.
Issue
Review
Onerous contracts in UK Municipal
These provisions are judgemental and based on
management’s best estimates including long-term forecasts
along with a number of assumptions given the long-term
nature of the contracts.
As referenced in the FY21 financial statements, the
amendment to IAS 37 Onerous Contracts – Costs of Fulfilling
a Contract is effective from 1 April 2022. This clarifies that
the costs that relate directly to a contract consist of both the
incremental costs of fulfilling that contract and an
allocation of other costs that relate directly to fulfilling the
contract.
Presentation of underlying performance and other
alternative performance measures
Management considered the latest FRC guidelines and
thematic review on alternative performance measures to
ensure that the Annual Report and Accounts have been
prepared in line with best practice.
PPP non-recourse net debt presentation
Given that cash held in the UK PPP entities is not freely
available to the Group it has historically been determined
that is was appropriate to present these cash balances
together with the gross non-recourse debt as PPP
non-recourse net debt.
Given the significant provisions reflected in earlier years, reviews of
expected future cash flows and assumptions on a contract-by-contract
basis are discussed with management with appropriate challenge as part
of the interim and year-end procedures. Following these discussions, the
Committee concluded that the total level of provisions and the associated
disclosures included in the financial statements were appropriate at
31 March 2022, noting that some provisions have been released and others
were increased.
With regard to the impact of the amendment to IAS 37, the Committee has
reviewed the work and assessment by management as to which additional
costs should be included in the costs to deliver the contracts which will
lead to an increase to the onerous contract provisions at 1 April 2022. The
Committee also considered the disclosure given to this matter in Section 1
Basis of preparation in the financial statements.
The Group’s performance measures continue to include some metrics
which are not defined or specified under IFRS reporting and the Group
discloses non-trading and exceptional items separately due to their size or
incidence to enable a better understanding of performance. Based on a
review of the supporting papers from management, the Committee
considers that these items have been appropriately classified and are in
line with the non-trading and exceptional items policy which is reviewed
annually by the Committee. The Committee also considered disclosure of
the Group’s alternative performance measures and noted that these are
set out in detail in note 8.3 in the financial statements together with
reconciliations of adjusted performance measures to statutory results.
In preparing the 2022 financial statements, management revisited this
presentation and concluded that the cash balances should be shown gross
in line with the requirements of IAS 32. This has resulted in a prior year
adjustment and the presentation of gross PPP non-recourse debt and PPP
cash being presently separately within borrowings and current assets
respectively. The Committee reviewed the adequacy of the disclosure
included in the financial statements.
Review
Impairment testing is inherently subjective as it includes assumptions
in calculating the recoverable amount of the cash generating unit being
tested. Cash flow projections include discount rates that reflect the
appropriate risk, long-term growth rates and future profitability.
The annual impairment review is submitted to the February meeting.
For the current period, the Committee has reviewed the papers prepared
by management which also include downside modelling and sensitivity
analysis and concluded that there is sufficient headroom across all
cash-generating units. An impairment charge was reflected in FY21 relating
to the Maltha cash generating unit and no further charge is required this
year. The goodwill note in the financial statements includes appropriate
disclosures for any reasonable possible changes in assumptions including
in the case of Maltha where the headroom is limited.
In addition, it was noted that there were a number of impairment charges
reflected in the current year relating to property, plant and equipment and
other intangibles driven by a number of factors. The Committee
challenged management on the appropriateness and completeness of
these charges.
The annual review of provisions in discussions with management has
considered the assumptions used including discount rates and the period
of liability and has confirmed these are reasonable and appropriate. The
Committee has also considered the adequacy of disclosures of the key
sensitivities as included in note 4.10 in the financial statements.
The Committee regularly monitors disputes and claims with a summary of
all open litigations and disputes a standing agenda item at all meetings. In
addition, independent legal advice has been received as appropriate and
reviewed in respect of the larger claims, such as the Belgian State Aid
matter. The Committee concurred with management’s assessment that
appropriate provisions are held and ensured that there was adequate
disclosure of this judgement in the contingent liability note in the Annual
Report and Accounts.
The Committee received verbal and written reports from senior
management that there have been no significant changes during the year
and the level of balances recognised at March 2022 remains appropriate.
The Committee reviewed the Group’s considerations on future profitability
to evaluate the judgement that it is appropriate to reflect deferred tax
assets with regard to the Dutch and UK businesses.
As a result of this clarification, the Group has revised its accounting policy,
assessed the impact of this change on the current and prior year and
accounted for this as a prior year adjustment as disclosed in Section 1 of
the financial statements. The Committee has reviewed the position and
considered the prior year adjustment and the disclosures as set out in the
financial statements.
Issue
Impairment considerations
The Group has goodwill and other intangible assets. As part
of the normal impairment testing the Group has sufficient
headroom on the carrying values of its goodwill and
therefore did not recognise any impairments.
Landfill related provisioning
Landfill provisions, due to their nature, are judgemental as
they are subject to a number of factors including changes in
legislation and uncertainty over timing of payments
Other provisions
The Group has a number of open legal and
environmental matters.
Accounting for various tax-related matters
The most significant judgements for tax relate to deferred
tax asset recognition and uncertain tax positions.
Adoption of new accounting standards in the year
In March 2021 the IFRS Interpretations Committee (IFRIC)
published its agenda decision that clarifies how
configuration and customisation costs in Cloud Computing
Arrangements (Software as a Service (SaaS)) should be
accounted for. This agenda decision is relevant to the
Group’s historical, ongoing and future technology
investments which include a number of SaaS related
items. The decision clarifies that implementation costs
that previously have been capitalised as intangibles are
now likely to be expensed immediately for SaaS
arrangements unless they meet the definition of separate
intangible assets.
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Going concern and viability
The Committee is required to make an assessment of the
going concern assumptions for the Group and the basis of the
Viability Statement before making a recommendation to the
Board. A comprehensive assessment has been presented to the
Committee which included a review of medium-term cash flow
modelling over an 18-month period to 30 September 2023.
As well as a base case scenario setting out current expectations
of future trading, a downside scenario has been prepared.
In addition, a reverse stress test calculation has been undertaken
to consider the point at which covenants may be breached.
The Committee has reviewed the detailed paper and cash flow
analysis and challenged management on the assumptions and
judgements of the continued cash generation of the Group and
the compliance with covenants. After careful consideration, the
Committee has confirmed to the Board that sufficient headroom
exists and that the adoption of the going concern principle
remains appropriate.
The Committee also considered a paper and financial model
prepared by management in respect of the longer-term Viability
Statement to be included in the Annual Report and Accounts.
The Committee discussed with management the risks,
sensitivities and mitigations for the modelled scenarios and
concluded that the longer-term viability statement was
appropriate and approved by the Committee for
recommendation to the Board.
Fair, balanced and understandable
As part of its review of the FY22 Annual Report and Accounts, the
Committee considered whether the report, taken as a whole, was
fair, balanced and understandable and that it provided the
information necessary for shareholders to assess the Company’s
position, performance, business model and strategy. To assist
with this assessment, the Committee reviews questions
completed by management to illustrate the fair, balanced and
understandable aspects of the Annual Report and Accounts and
a summary of the review and approval processes involved.
Following consideration of these items at the May 2022 meeting,
together with the Annual Report and Accounts, the Committee is
satisfied that the key events and issues, both positive and
negative, have been adequately reflected and referenced in the
Annual Report and Accounts.
Interaction with the Financial
Reporting Council (FRC)
As noted last year, a letter was received from the FRC in
December 2020 which gave advance notice of the selection of
our 2021 Annual Report and Accounts for the thematic review
into IAS 37 Provisions, Contingent Liabilities and Contingent
Assets. In September 2021, we received confirmation that the
review had been completed and that some extracts from our
March 2021 financial statements would be included as examples
of best practice in the thematic review. The Committee is
pleased to report that the FRC raised no questions or queries
and that there was no exchange of substantive correspondence
between the FRC and the Group. There are some improvements
that have been incorporated into the FY22 Annual Report and
Accounts based on the FRC’s observations.
External auditors
Following the competitive tender carried out in 2019 and the
shareholder approval at the 2020 AGM, BDO LLP was appointed
as the Company’s statutory external auditor for FY21. The
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Committee holds private meetings with the auditors in
the absence of management and the Audit Committee Chair
also maintained regular contact with the audit partner
throughout the year. Given the ongoing regulations with regard
to the pandemic, a proportion of the audit work has again been
carried out remotely, albeit less so than for the FY21 year end.
In order to ensure the effectiveness of the external audit
process, BDO LLP conducts an audit risk identification process
at the start of the audit cycle. This plan is presented to the Audit
Committee for its review and approval and for the FY22 audit,
the key risks and audit matters identified included revenue
recognition, impairment of goodwill and other assets, going
concern and covenant compliance, presentation of non-trading
and exceptional items, onerous contract provisions, landfill
provisions, compliance with laws and regulations, and tax.
The Committee reviews the performance and effectiveness
of the external auditors in performing the audit. Taking into
account feedback from the business and the Committee’s
own experiences of working with BDO during the year, the
Committee is satisfied that the external auditors are providing
an effective service.
For the Committee and the Board the objectivity of the Group’s
external auditors is key. The Committee reviews the
independence of the auditors on an annual basis. BDO LLP’s
rotation rules require the lead audit partner and key partners
involved in the audit to rotate every five years. BDO LLP is
required to confirm to the Committee that it has the
appropriate independence and no matters of concern were
identified by the Committee. The Committee’s responsibility
to monitor and review the objectivity and independence of
the external auditor is supported by a non-audit services
policy. Specified services may be provided by the external
auditor subject to a competitive bid process, other than in
situations where it is determined by the Committee that the
work is closely related to the audit or when a significant
benefit can be obtained from work previously conducted by
the external auditor. The approval process of any new
engagement remains in place, with the CFO able to approve
any new engagement up to the value of €25,000, with
anything in excess of that limit requiring Committee approval.
During the year €0.2m of non-audit services were provided by
BDO, which is comparable to the prior year. The total audit
fees, as disclosed in note 3.2 of the financial statements,
amounted to €1.7m (2021: €1.6m).
During the year, tax and other professional services have also
been provided to the Group by the audit firms Deloitte, KPMG
and PwC.
Internal audit
The internal audit function is an independent and objective
function which aims to improve Renewi’s overall control
framework and evaluate and improve the design and
effectiveness of control processes. Reviews of financial
processes and cycles are carried out and investigation
activities are performed on control failures to identify root
cause and provide recommendations for resolution and
prevention. The Committee monitors and reviews the
effectiveness of its work and approves its annual plan.
As a result of the Covid-19 pandemic, the internal audit
programme has again been impacted by restrictions on site
access and the reduced ability to travel, resulting in a number of
reviews being delivered remotely. The original plan for the year
was completed despite these challenges. During the year, the
key control framework was enhanced further across all Divisions,
shared services and central finance functions, with compliance
reporting consistently above 95%. Consistent with previous
years, internal audit services from suitably qualified external
providers were also engaged during the year.
The detailed findings from all reviews were presented to
and considered by the Committee. Any necessary actions,
including improvements, are acted upon by local divisional
teams with revisits from internal audit as required and regular
follow-up at monthly business review meetings. The Committee
is provided with updates on the implementation of agreed
management actions and overall control environment progress
at each meeting.
Accountability and audit
The responsibilities of the Directors and the auditors in relation
to the financial statements are set out on page 159.
Risk management
The Group Risk Management framework, major risks and the
steps taken to manage these risks are outlined on pages 90 to
99.
Internal control responsibility
The system of internal control is based on a continuous process
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of identifying, evaluating and managing risks, including the risk
management processes outlined on pages 90 to 93. The Board
of Directors has overall responsibility for the Group’s system of
internal control and for reviewing its effectiveness. The Board
recognises that internal control systems are designed to manage
rather than eliminate the risk of failure to achieve business
objectives and can therefore only provide reasonable and not
absolute assurance against material misstatements, losses, and
the breach of laws and regulations.
Effectiveness of the risk management and
internal control systems
In addition to the Board’s ongoing internal control monitoring
process, it has also conducted an annual effectiveness review of
the Group’s risk management and internal control systems in
compliance with Provision 29 of the UK Corporate Governance
Code. This covered risk management systems and all significant
material controls including financial, operational and
compliance controls.
Specifically, the Board’s review included consideration of
changes in the risk universe and the Group’s ability to respond to
these through its review of business risk register controls and
improvement action plans. It also reviewed the six-monthly
certification by divisional management to ensure that
appropriate internal controls are in place as well as reports by
internal audit and external auditors.
The main elements of the internal control and risk management
frameworks, which contribute towards continuous monitoring,
are as follows:
A defined schedule of matters for decision by the Board
Group manuals and guidance setting out financial and
accounting policies, minimum internal financial control
standards and the delegation of authority over items
such as capital expenditure, pricing strategy and
contract authorisation
A comprehensive planning and budgeting exercise
Performance is measured monthly against plan, prior year and
latest forecast results with explanations sought for significant
variances. Key performance indicators are also used to help
management of the business and to provide early warning of
potential additional risk factors
Monthly meetings with the divisional management teams to
discuss performance and plans
Appointment and retention of appropriately experienced and
qualified staff to help achieve business objectives
An annual risk-based internal audit plan approved by the
Committee. Summaries of audit findings and the status of
action plans to remedy significant failings are discussed at
Group Board and Committee meetings on a regular basis
A monthly key control framework is in operation in all Divisions
and a summary of compliance is reported to the Group Board
on a monthly basis
A range of quality assurance, safety and environmental
management systems are in use across the Group. Where
appropriate, these are independently certified to
internationally recognised standards and subject to regular
independent auditing
A minimum of three scheduled Risk Committee meetings each
year, to consider all key aspects of the risk management and
internal control systems
Prompt review by the Committee of any fraudulent activity or
whistle-blowing reports with appropriate action and follow up
Where weaknesses in the internal control system have been
identified through the monitoring processes outlined above,
plans for strengthening them are put in place and action plans
regularly monitored until complete. The Board confirms that no
material weaknesses were identified during the year and
therefore no remedial action is required in relation to them.
Financial reporting
In addition to the general risk management and internal control
processes described above, the Group has implemented internal
controls specific to the financial reporting process and the
preparation of the annual consolidated financial statements.
The main control aspects are as follows:
Formal written financial policies and procedures applicable to
all business units
A detailed reporting calendar including the submission of
detailed monthly accounts for each business unit, in addition
to the year-end and interim reporting process
Detailed management review to Board level of both monthly
management accounts and year-end and interim accounts
Consideration by the Board of whether the Annual Report is
fair, balanced and understandable
Biannual certification by divisional Managing and Finance
Directors and Executive Directors on compliance with
appropriate policies and accuracy of financial information
The Committee receives regular reports from the Group
Tax Manager on the Group’s tax policy, tax management
and compliance
Anti-bribery and corruption
The Renewi Code of Conduct and Reporting and Investigation
Protocol has operated throughout the year and integrity
reporting is a standing item at all committee meetings.
Nomination
Committee
Report
Ben Verwaayen
Chair of the
Nomination Committee
Committee membership:
Ben Verwaayen (Chair)
Allard Castelein
Marina Wyatt
Jolande Sap
Luc Sterckx
Neil Hartley
FY22 Committee meeting attendance
Ben Verwaayen
Allard Castelein
Marina Wyatt
Jolande Sap
Luc Sterckx
Neil Hartley
4 (4)
4 (4)
4 (4)
4 (4)
4 (4)
4 (4)
On behalf of the Board, I am pleased to present the
Nomination Committee Report for the year ended
31 March 2022.
The Committee met four times during the year and details of
members’ attendance are shown opposite. The Committee
was particularly focused on the recruitment of a new Chief
Financial Officer and of the new Executive Committee position
of Group SHEQ Director as well as senior management
succession planning.
Diversity and inclusion
Renewi is committed to offering a rewarding, diverse and inclusive
working environment. With regard to gender diversity, the target
set last year was to increase the percentage of women across
Renewi, including in the senior leadership team, to 25% by 2025.
Bracketed figures indicate maximum potential attendance
of each Director.
Role of the Committee
Review the structure, size and composition (including
the skills, knowledge, experience and diversity) of the
Board and make recommendations to the Board with
regard to any changes
Give full consideration to succession planning
for Directors and other senior executives and, in
particular, for the key roles of Chairman and Chief
Executive Officer
Keep under review the leadership needs of the
Company, both executive and non-executive,
with a view to ensuring the continued ability of
the organisation to compete effectively in the
marketplace
With the appointment of Annemeike den Otter to the position of
Chief Financial Officer this target at Board level will already have
been surpassed (37.5%) when she joins on 1 June this year.
Identify and nominate, for the approval of the Board,
candidates to fill Board vacancies as and when they
arise
Recommend the re-election by shareholders of
Directors under the annual re-election provisions,
having due regard to their performance and
contribution in light of the knowledge, skills and
experience required and the need for progressive
refreshing of the Board
Review the results of the annual Board performance
evaluation process
For terms of reference go to renewi.com/nomco
Renewi now has a Diversity and Inclusion (D&I) Board which
was formed in November 2021. It is chaired by the Chief Executive
Officer and comprises a diverse group of Renewi colleagues who
meet regularly to discuss D&I initiatives and plans, and monitor
progress against targets and objectives. Employee representatives
are invited to join the D&I Board to enable the contribution of
opinions and ideas from across the whole workforce.
The main aims of the D&I Board are:
Communication: ensuring everyone understands what D&I is,
what Renewi stands for and what Renewi is doing to become a
diverse and inclusive employer
Inclusion: making sure everyone feels included and heard
Achieving our target of 25% women working at Renewi
by 2025
Tackling our unconscious biases
Celebrate diversity and inclusivity within Renewi
Talent development
During talent reviews across the Group, 45 young people were
identified as having the potential to fulfil a leadership role.
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A programme has been designed to help them develop the
skills and qualities to position themselves as future leaders of
Renewi. In addition, the Renewi leadership programme, LEAD,
continued to offer training, development and support for
managers across all Divisions.
In FY22, Renewi hired 746 colleagues, of which 22% were
internal hires and 34% were female. This included a successful
recruitment campaign for drivers in both the Netherlands
and Belgium.
Many vacancies were filled despite tight labour markets, in part
due to the investment in employer branding, social media
campaigns, improved HR processes and insourcing of most
recruitment activities.
Further details are set out in the Care for People section on
pages 84 to 89.
Succession planning
No Board changes were made in the actual financial year with
the current Directors having been in post for the full financial
year. The departure of Toby Woolrych as Chief Financial Officer
was announced in January 2022, and he remained in post until
31 March 2022. Committee members worked closely with search
consultants, Heidrick and Struggles, with whom the Company
had no other connection, to recruit a successor. A
comprehensive and efficient process involved shortlisting of
candidates followed by interviews by Committee members, the
Chief Executive Officer and Group HR Director. Together with
input from the Remuneration Committee, a final
recommendation was made by the Committee to the Board
resulting in the announcement on 28 March that Annemieke den
Otter would join the Board as Chief Financial Officer on 1 June
2022. A short introductory question and answer interview with
Annemieke is set out on page 116.
Non-Executive Director and Chair of the Audit Committee,
Marina Wyatt, will be stepping down from the Board at the
conclusion of the forthcoming AGM. A search for a new Chair of
the Audit Committee is under way.
An important new addition was made at the Executive
Committee level, with the appointment of Jeanine Peppink-
Van der Sterren to the new position of Group SHEQ Director.
She has extensive safety audit experience and is skilled in
implementing and working with ISRS, the new safety and
sustainability framework being implemented across Renewi.
Biographical details of Annemieke den Otter and Jeanine
Peppink-Van der Sterren and the other members of the Board
and Executive Committee can be found on pages 106 to 109 and
are also available on the Company website.
Any new Director appointed to the Board is subject to election by
shareholders at the first opportunity after their appointment. All
Directors are also required under the Company’s Articles of
Association to stand for re-election at each AGM.
Succession plans were reviewed in the year and action plans
prioritised to ensure a potential pipeline of internal candidates
for senior positions within the Group.
Board evaluation
The FY21 review of Board and Committee effectiveness as
reported last year was undertaken with the use of an externally
facilitated structured questionnaire facilitated by the Company
Secretary. Key findings from the FY22 review and subsequent
actions are detailed below.
Finding
Action
Leverage a renewed focus
through the new SHE
Committee to drive and
improve safety
performance across
the Group.
Broader communication on
implementation and
realisation of long-term,
ambitious strategic goals.
Review of ongoing process
of Board evaluation and
monitoring of Directors’
performance throughout
the year.
Appointment of a new Executive
Committee level, Group SHEQ
Director to support the SHE
Committee with the
implementation of the
International Sustainability Rating
System (ISRS) across the Group.
See the Report of the SHE
Committee on pages 127 to 128.
Successful Circular Innovations
Capital Market Event in October
2021 (video still available at renewi.
com/en/investors/capital-markets-
event). Renewi’s increased social
media presence and wider
contribution to the circularity
debate.
Launch of Mission75 to generate
ideas and co-innovate.
Selection of similar Board
evaluation process, facilitated by
same external provider to monitor
development of Board views and
alignment on Group strategy and
outlook for Company’s prospects
as well as internal governance
arrangements and performance of
Audit, Remuneration, Nomination
and SHE Committees.
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FY22 evaluation
It was determined that the FY22 evaluation would again be
carried out via a structured questionnaire survey of the Directors
and the Company Secretary. After a shortlisting process
undertaken by the Chairman and Company Secretary it was
agreed that this be facilitated for a second year by Gould
Consulting, with whom the Group has no other commercial
relationship.
Gould Consulting is fully compliant with the Chartered
Governance Institute’s Code of Practice for Independent Board
Reviewers, published in January 2021.
Having considered the results and themes which had emerged
from the evaluation, the Board agreed specific FY22 action plans
across three main areas:
Clearer communications around primary strategic ESG focus
and purpose of the business
Development of closer engagement with all stakeholders to
drive the circular economy
Ongoing promotion of diversity and inclusion objectives
throughout the Group
Following the review, which was supplemented by individual
discussions with the Directors by the Chairman, the Board
concluded that, along with its committees, it had continued to
operate effectively during the year and that each Director had
continued to demonstrate commitment to their role and
performed capably. The Senior Independent Director led the
review of the Chairman’s performance with the other Directors.
The Board was therefore able to recommend the re-election of
all those Directors standing at the forthcoming AGM.
Ben Verwaayen
Chair of the Nomination Committee
24 May 2022
Board tenure
Background/experience of Non-Executive Directors
Nationalities
Male
Female
Total
Male
Female
Total
Nationality
Number
Board member
2–4 years
4–5 years
5–9 years
>9 years*
3
1
1
1
0
1
0
1
3
2
1
2
Energy/chemicals
Politics/socio-economics
Telecoms
Transport
Private equity/investment
1
0
1
1
1
0
1
0
1
0
1
1
1
2
1
*Toby Woolrych left the Company on 31 March 2022 and Marina Wyatt
steps down from the Board at the conclusion of the AGM in July 2022
As at 31 March 2022
Dutch
UK
Belgian
4
3
1
As at 31 March 2022
Ben Verwaayen, Allard Castelein,
Jolande Sap, Otto de Bont
Marina Wyatt, Neil Hartley, Toby Woolrych
Luc Sterckx
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Directors’
Remuneration
Report
Neil Hartley
Chair of the Remuneration Committee
Committee membership:
Neil Hartley (Chair)
Allard Castelein
Luc Sterckx
FY22 Committee meeting attendance
Neil Hartley (Chair)
Allard Castelein
Luc Sterckx
4 (4)
4 (4)
4 (4)
Bracketed figures indicate maximum potential attendance
of each Director.
Role of the Committee
Determines the Group’s policy on remuneration and
monitors its implementation
Reviews and sets performance targets for incentive
plans
Sets the remuneration of the Group’s senior
management
Approves the specific remuneration package for the
Chairman, each of the Executive Directors and below
Board members of the Executive Team
Determines the terms on which LTIP, Deferred Annual
Bonus and Sharesave awards are made to employees
Determines the policy for and scope of pension
arrangements for the Executive Directors and below
Board members of the Executive Team
For terms of reference go to renewi.com/Remco
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This report, prepared by the Remuneration Committee on
behalf of the Board, takes full account of the UK Corporate
Governance Code and the latest Investment Association (IA)
Principles of Remuneration and Institutional Shareholder
Services (ISS) UK and Ireland Proxy Voting Guidelines, and
has been prepared in accordance with the provisions of the
Companies Act 2006 (the Act), the Listing Rules of the
Financial Conduct Authority and the Large and Medium-
Sized Companies and Groups (Accounts and Reports)
(Amendment) Regulations 2013, the Companies
(Miscellaneous Reporting) Regulations 2018 and the
Companies (Directors’ Remuneration Policy and Directors’
Remuneration Report) Regulations 2019. The Act requires
the Auditor to report to the Group’s shareholders on the
audited information within this Report and to state whether
in their opinion those parts of the report have been prepared
in accordance with the Act. The Auditor’s opinion in this
regard is set out on page 162 and those aspects of the Report
that have been subject to audit are clearly marked.
Summary
The key elements of the Directors’ Remuneration Report are
outlined below.
Annual Statement. Summarises performance and reward in
the year ended 31 March 2022 and how the Remuneration
Policy will be operated for the year ending 31 March 2023.
Remuneration Policy. Sets out a summary of the
Remuneration Policy which was approved by shareholders at
the 2020 AGM.
Annual Report on Remuneration. Details how the
Remuneration Policy was implemented during the year ended
31 March 2022 and how the Committee intends the Policy to
apply for the year ending 31 March 2023.
Risk. Our Remuneration Policy is based on: (i) a combination
of both short- and long-term incentive plans based on
financial, non-financial and share price-linked targets; (ii) a
combination of cash and equity (in terms of both deferred
bonus and LTIP awards); and (iii) a number of shareholder
protections (ie bonus deferral, shareholding guidelines, malus/
clawback provisions) which have been designed to mitigate
the impact of inappropriate risk-taking.
Predictability. Our incentive plans are subject to individual
caps, with our share plans also subject to market standard
dilution limits. The scenario charts in the Remuneration Policy
illustrate how the rewards potentially receivable by our
Executive Directors vary based on performance and share
price growth.
Proportionality. There is a clear link between individual
awards, delivery of strategy and our long-term performance. In
addition, the structure of our short- and long-term incentives,
together with the structure of the Executive Directors’ service
contracts, ensures that poor performance is not rewarded.
Alignment to culture. Renewi’s focus on making valuable
products from waste, meeting the growing need to deal with
waste sustainably and cost-effectively, is fully supported
through the metrics in both the annual bonus and long-term
incentive which measure how we perform against main KPIs
that underpin the delivery of our strategy.
Work of the Committee during the year
The Committee met four times during FY22 and details of
members’ attendance at meetings are shown on the previous
page. The main Committee activities during the year (full details of
which are set out in the relevant sections of this Report) included:
agreeing the performance against the targets and payout for
the FY21 annual bonus awards;
setting the performance targets for the FY22 annual bonus;
agreeing the vesting levels for the 2018 LTIP awards which
vested in 2021;
agreeing the award levels and performance targets for the 2021
LTIP awards;
agreeing Executive Director base salary increases and the
Chairman’s fee from 1 April 2022;
considering regulatory/disclosure developments and
shareholder views during FY22;
reviewing the ongoing operation of the Remuneration Policy;
reviewing the ongoing impact of Covid-19; and
close liaison with the SHE Committee to ensure alignment on
ESG (safety) targets.
In addition, the Committee has considered how the
Remuneration Policy and practices are consistent with the six
factors set out in Provision 40 of the 2018 UK Corporate
Governance Code:
Clarity. Our policy is well understood by our senior team and
employees more generally and has been clearly articulated.
Simplicity. The Committee is mindful of the need to avoid
overly complex remuneration structures which can be
misunderstood and deliver unintended outcomes. As such,
our executive remuneration policies and practices are as
simple to communicate and operate as possible, while
ensuring that they are aligned to our strategy.
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DIRECTORS’ REMUNERATION POLICY
The following section of this report sets out a summary of the
Directors’ Remuneration Policy which was approved by
shareholders at the 2020 AGM. The full Policy as approved by
shareholders is set out in the Annual Report and Accounts 2020.
Policy scope
The Policy applies to the Chairman, Executive Directors and
Non-Executive Directors.
Policy duration
Following shareholder approval at the 2020 AGM, the Policy will
apply from that date for a maximum of three years.
Policy table
OPERATION
OPPORTUNITY
PERFORMANCE METRICS
BASE SALARY: To pay a competitive basic salary to attract, retain and motivate the talent required to operate and
develop the Group’s businesses
Base salaries are generally reviewed on an annual
basis or following a significant change in
responsibilities.
Salary levels are reviewed by reference to
FTSE-listed companies of similar size and
complexity. The Committee also has regard to
individual and Group performance and changes to
pay levels across the Group.
None.
For Executive Directors, it is
anticipated that salary increases
will normally be in line with those
of salaried employees as a whole.
In exceptional circumstances
(including, but not limited to, a
material increase in job size or
complexity or a material market
misalignment), the Committee
has discretion to make
appropriate adjustments to salary
levels to ensure they remain
market-competitive.
PENSION: To provide an opportunity for executives to build up a provision for income on retirement
None.
None.
Executive Directors may receive a pension
contribution or cash allowance in lieu of pension.
New Executive Directors:
In line with the local workforce
contribution rate (as a % of basic
salary).
Current Executive Directors:
CEO: 12.5% of basic salary
CFO designate: 12.5% of basic
salary from appointment
BENEFITS: To provide market-competitive benefits
Benefits include life assurance, medical insurance,
income protection and car/travel allowances.
Benefits may vary by role.
However, the total cost of taxable
benefits will not normally exceed
10% of salary.
The Committee retains discretion
to approve a higher cost in
exceptional circumstances (eg
relocation or expatriation) or in
circumstances where factors
outside the Group’s control have
changed (eg increases in market
insurance premia).
Implementing the Policy for FY22
In respect of the implementation of the Remuneration Policy
for FY22:
The Chief Executive Officer’s basic salary was increased by
4.1% with effect from 1 April 2022, in line with the general
workforce rate of increase
The new Chief Financial Officer was appointed on a broadly
similar remuneration package as their predecessor
The Executive Directors both now receive a cash supplement
in lieu of pension of 12.5% of salary
LTIP grants for Executive Directors will be set at levels no
greater than the equivalent value of 150% and 120% of the
base salaries of the Chief Executive Officer and Chief Financial
Officer respectively. Performance metrics will continue to be
based on EPS, ROCE, relative TSR and a key ESG measure (the
Group’s recycling rate)
Looking forward
At the 2021 AGM, the Annual Statement and Annual Report on
Remuneration received the support of more than 92.1% of votes
cast. The Committee would like to thank shareholders for their
continued support and asks that they similarly support the 2022
Directors’ Remuneration Report resolution.
Neil Hartley
Chair of the Remuneration Committee
24 May 2022
ALL-EMPLOYEE SHARE SCHEMES: To encourage Group-wide share ownership
Executive Directors may participate in all-employee
share arrangements on the same terms offered to
employees.
The maximum opportunity will
not exceed the relevant HMRC
limits, where applicable.
None.
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ANNUAL STATEMENT
On behalf of the Board, I am pleased to present the Directors’
Remuneration Report for the year ended 31 March 2022. I have
summarised below the key decisions the Committee has taken
during the year and provided an explanation of the context in
which they were made.
FY22 performance, decisions
and reward outcomes
FY22 annual bonus
Profit and net debt/leverage targets were exceeded, contributing
to the financial target element of the bonus measures.
Personal targets were also largely met. This resulted in bonus
awards of 150% and 138% of the base salaries of the Chief
Executive Officer and Chief Financial Officer respectively.
Further details are set out on pages 148 and 149.
2019 LTIP vesting in 2022
The Long-Term Incentive Plan (LTIP) granted in 2019 was
designed to incentivise and reward the achievement of financial
(EPS and ROCE) and share price performance over the three-year
performance period to 31 March 2022. All three targets were
exceeded, resulting in 100% vesting. Further details are set out
on page 150.
Use of Remuneration Committee discretion
As per the announcement issued on 5 January 2022, Toby
Woolrych stood down as Chief Financial Officer and from the
Board at the end of the financial year. As announced on
28 March 2022, his successor, Annemieke den Otter will be
appointed and join the Board on 1 June 2022. The Committee
used its discretion to determine the elements of Toby Woolrych’s
Settlement Agreement and composition of Annemieke’s
remuneration and benefits package, details of which are set out
on page 151.
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OPERATION
OPPORTUNITY
PERFORMANCE METRICS
ANNUAL BONUS: To motivate senior executives to maximise short-term
performance and help drive initiatives that support long-term value creation
150% of salary.
Performance measures, targets and weightings
are set at the start of the year. The maximum
bonus is payable only if all performance targets
are met in full.
50% of any bonus is awarded in shares, with half
vesting immediately and the other half deferred
into an award over Renewi plc ordinary shares
which vests after three years.
Dividend equivalents may accrue over the relevant
vesting period of deferred share awards to the
extent awards vest.
Malus & clawback:
The Committee may at its discretion not pay
bonuses/reduce deferred share awards and/or
recover bonuses which have been paid or shares
which have vested under deferred share awards in
the following circumstances: misstatement of the
Company’s financial results, an error in calculating
the vesting result, misconduct, material corporate
failure, material risk management failure, serious
reputational damage or material loss caused by the
participant’s actions.
Executive Director performance is
assessed by the Committee on an annual
basis by reference to Group financial
performance (eg profit or cash flow
measures) (majority weighting) and the
achievement of personal or strategic
objectives (minority weighting).
Bonus targets are generally calibrated
with reference to the Group’s budget for
the year.
The Committee has the discretion to
adjust the formulaic bonus outcomes
both upwards (within the plan limits) and
downwards, to ensure that payments are
a true reflection of performance over the
performance period, eg in the event of
unforeseen circumstances outside
management control.
LONG-TERM INCENTIVE PLAN (LTIP): To motivate and retain senior executives and managers to
deliver the Group’s strategy and long-term goals and to help align executive and shareholder interests
150% of salary.
Executive Directors and senior employees may be
granted awards annually, as determined by the
Committee. The vesting of these awards is subject
to the attainment of performance conditions.
Awards are in the form of Renewi plc ordinary
shares. Dividend equivalents may accrue over the
vesting period to the extent that awards vest.
Awards made under the LTIP have a performance
and vesting period of at least three years. If no
entitlement has been earned at the end of the
relevant performance period, then the awards will
lapse.
A two-year post-vesting holding period applies to
LTIP awards granted to Executive Directors since the
2017 AGM.
Malus & clawback:
The Committee may at its discretion decide that
LTIP awards are reduced and/or clawback vested
LTIP awards in the following circumstances:
misstatement of the Company’s financial results, an
error in calculating the vesting result, misconduct,
material corporate failure, material risk
management failure, serious reputational damage
or material loss caused by the participant’s actions.
Vesting of LTIP awards will be subject to
continued employment and financial,
strategic environmental and/or share
price-related performance targets
measured over a period of at least three
years.
In addition to the Group achieving the
financial/share price targets, the
Committee must satisfy itself that the
recorded outcome is a fair reflection of
the underlying performance of the Group.
Threshold performance will result in
vesting of no more than 25% of maximum
under each element.
The Committee has discretion (within the
limits of the scheme) to adjust the
formulaic performance outcomes to
ensure that payments fairly reflect
underlying performance over the period.
Adjustments may be upwards or
downwards.
SHAREHOLDING GUIDELINES: To align executive and shareholder interests
The Committee recognises the importance of
Executive Directors aligning their interests with
shareholders through building up significant
shareholdings in the Group.
Executive Directors are required to retain 100% (net
of tax) of any LTIP, annual bonus awarded in shares
which vest immediately and deferred bonus shares
acquired on vesting (net of tax) until they reach the
ownership guideline.
In employment:
200% of salary.
None.
Post employment:
200% of salary up until the
second anniversary of cessation.
Own shares purchased, shares
acquired through buyout awards
and share awards granted prior to
the 2020 AGM will be excluded
from the post-cessation guideline.
Notes to the policy table
Use of discretion
The Committee may apply discretion as detailed below.
Under each element of remuneration, a full description
of how discretion can be applied is set out in line with UK
reporting requirements.
To ensure fairness and align executive remuneration with
individual and underlying Company performance the Committee
may adjust up or down (including to zero) the outcome of the
annual bonus and LTIP or the performance measures of inflight
awards under either plan. Any adjustments in light of ‘non-
regular events’ (including, but not limited to, corporate events
(including Rights Issues), changes in the Group’s accounting
policies, minor or administrative matters, internal promotions,
external recruitment and terminations of employment) are
expected to be made on a ‘neutral’ basis – ie adjustments will be
designed so that the event is not expected to be to the benefit or
the detriment of participants. Adjustments to incentives to
ensure that outcomes reflect underlying performance may be
made in exceptional circumstances to help ensure outcomes are
fair to shareholders and participants.
Performance measurement selection
The measures used in the annual bonus are selected annually to
reflect the Group’s main business and strategic priorities for the
year and capture both financial and non-financial objectives.
Group financial performance targets relating to the annual
bonus plan are based around the Group’s annual budget, which
is reviewed and approved by the Board prior to the start of each
financial year. Underlying profit before tax and cash-related
targets are typically used as the key financial performance
measures in the annual bonus plan because they are clear and
well understood measures of Group performance.
Performance targets are reviewed annually and set to be
stretching and achievable, taking into account the Group’s
resources, strategic priorities and the economic environment in
which the Group operates. Targets are set taking into account a
range of internal and external reference points, including the
Group’s strategic plan and broker forecasts for both the Group
and sector peers. The Committee believes that the performance
targets are stretching, and that to achieve maximum outcomes
requires truly outstanding performance.
The Committee considers the combination of three-year EPS
growth, ROCE improvement, share price growth and ESG
(recycling rate) target to be key indicators of success for the
Group. These measures are transparent, visible and motivational
to participants, balance growth and returns, and provide good
line-of-sight for executives and alignment with shareholders.
Remuneration policy for our senior leaders
The Group’s approach to annual salary reviews is broadly
consistent across the Group, with consideration given to the
scope of the role, level of experience, responsibility, individual
performance and pay levels for comparable roles in comparable
companies. The broader Remuneration Policy across the Group
is also consistent with that set out in this report for the Executive
Directors. For example, remuneration is linked to Group and
individual performance in a way that is ultimately aimed at
reinforcing the delivery of shareholder value. Senior employees
generally participate in an annual bonus scheme with a similar
structure to that described for the Executive Directors.
Opportunities and specific performance conditions vary by
organisational level, with business area specific metrics
incorporated where appropriate. Members of the Executive
Committee and other senior managers may participate in the
LTIP on a similar basis to, but at lower levels than Executive
Directors. Such awards may be on the same terms as those
granted to Executive Directors or they may differ in respect of
vesting periods, holding periods and performance targets (ie the
targets used and/or whether performance targets apply for some
or all of the awards). All UK employees are eligible to participate
in the Sharesave Scheme on the same terms although other
all-employee share arrangements may be introduced if
considered appropriate.
Approach to recruitment remuneration
External appointments
In the cases of hiring or appointing a new Executive Director, the
Committee may make use of any of the existing components of
remuneration, as described in the Policy Table. The maximum
limits for variable pay (excluding buyouts) will be as for existing
Executive Directors.
In determining the appropriate remuneration for a new Executive
Director, the Committee will take into consideration all relevant
factors (including the overall quantum and nature of
remuneration, and the jurisdiction from which the candidate is
being recruited) to ensure that all such arrangements are in the
best interests of Renewi and its shareholders.
The Committee may also make an award in respect of a new
appointment to buy out incentive arrangements forgone on
leaving a previous employer on a like-for-like basis, in addition to
providing the normal remuneration elements. In constructing a
buy-out, the Committee will consider all relevant factors
including time to vesting, any performance conditions attached
to awards, and the likelihood of those conditions being met.
Any such buyout awards will typically be made under the
existing annual bonus and LTIP schemes, although the
Committee may exercise the discretion available under the FCA
Listing Rule 9.4.2 R to make awards using a different structure.
Any buy-out awards would have a fair value no higher than that
of the awards forgone.
Internal appointments
In cases of appointing a new Executive Director by way of
internal promotion, the Committee will determine remuneration
in line with the policy for external appointees. Where an
individual has contractual commitments made prior to
promotion to the Board, the Group will continue to honour
these. Incentive opportunities for below Board employees are
typically no higher than for Executive Directors, but measures
may vary to ensure they are relevant to the role.
Non-Executive Director recruitment
In recruiting a new Non-Executive Director, the Committee will
use the policy as described in the Policy Table. A base fee in line
with the prevailing rate for Board membership would be payable,
with additional fees payable for acting as Senior Independent
Director or Chair of a Committee, as appropriate.
Service contracts and exit payment policy
Executive Director service contracts, including arrangements for
early termination, are carefully considered by the Committee.
The Committee has agreed that the policy with regard to the
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SCENARIO
Annual Cash Bonus
TIMING OF VESTING
TREATMENT OF AWARDS
Ill-health, disability, death, retirement (with Group
consent) or any other reasons the Committee may
determine in its absolute discretion.
Normal payment date, although
the Committee has discretion to
accelerate.
Change of control.
Immediately.
Cash bonuses will only be paid to the
extent that Group and personal objectives
set at the beginning of the year have been
achieved. Any resulting bonus will
generally be pro-rated for time served
during the year.
Performance against targets will be
assessed at the point of change of control
and any resulting bonus will generally be
pro-rated for time served.
Any other reason.
Not applicable.
No bonus is paid.
Deferred Annual Bonus (DAB)
Ill-health, disability, death, retirement (with Group
consent) or any other reasons the Committee may
determine in its absolute discretion.
Normal payment date, although
the Committee has discretion to
accelerate.
Any outstanding DAB awards will
generally be pro-rated for time served.
Change of control.
Immediately.
Any outstanding DAB awards will
generally be pro-rated for time served. In
the event of a change of control, awards
may alternatively be exchanged for new
equivalent awards in the acquirer where
appropriate.
Any other reason.
Not applicable.
Awards normally lapse.
Long-Term Incentive Plan (LTIP)
Ill-health, disability, death, retirement (with Group
consent) or any other reasons the Committee may
determine in its absolute discretion.
Normal vesting date, although the
Committee has discretion to
accelerate.
Change of control.
Immediately.
Any outstanding LTIP awards will
generally be pro-rated for time served and
performance, subject to the Committee’s
discretion.
Any outstanding LTIP awards will
generally be pro-rated for time served and
performance, subject to the Committee’s
discretion. In the event of a change of
control, awards may alternatively be
exchanged for new equivalent awards in
the acquirer where appropriate.
Any other reason.
Not applicable.
Awards normally lapse.
Non-Executive Directors
The Non-Executive Directors do not have service contracts as
their terms of engagement are governed by letters of
appointment. These letters and the Company’s Articles of
Association make provision for annual renewal at each AGM.
Details of the Non-Executive Directors’ terms of appointment are
shown in the table opposite. The appointment and
re-appointment and the remuneration of Non-Executive
Directors are matters reserved for the full Board.
Non-Executive Director
Initial agreement date Renewal date
Ben Verwaayen (Chairman)
8 March 2020
1 August 2022
Allard Castelein
10 November 2016
1 August 2022
Jolande Sap
Luc Sterckx
Neil Hartley
Marina Wyatt1
13 March 2018
3 August 2017
1 August 2022
1 August 2022
17 January 2019
1 August 2022
2 April 2013
-
The Non-Executive Directors are not eligible to participate in the
Group’s performance-related incentive plans and do not receive
any pension contributions.
1 Marina Wyatt steps down from the Board at the conclusion of the 2022 AGM.
Non-Executive Directors’ fees are capped in the Company’s Articles of Association at an
aggregate of £750,000.
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notice period for Executive Directors is one year’s written notice
from the Group (or less if required by local employment law) and
one year’s notice from the individual (or less if required by local
employment law). The contracts provide for an obligation to pay
salary plus contractual benefits for any portion of the notice
period waived by the Group where permitted by local
employment law. The Group has the ability to pay such sums in
instalments, requiring the Director to mitigate loss (for example,
by gaining new employment) over the relevant period.
Executive
Director
Effective date
of service
contract
Notice period
(Company)
Notice period
(individual)
Otto de Bont
1 April 2019
12 months
6 months*
Annemieke den
Otter
1 June 2022
12 months
6 months*
*Both Executive Directors are Dutch residents and Dutch law limits the maximum
notice they can be required to provide.
If employment is terminated by the Group, the departing
Executive Director may have a legal entitlement (under statute or
otherwise) to certain payments, which would be met. In
addition, the Committee retains discretion to settle any other
amounts reasonably due to the Executive Director, for example
to meet the legal fees incurred by the Executive Director
in connection with the termination of employment, where
the Group wishes to enter into a settlement agreement (as
provided for below) and the individual must seek independent
legal advice.
In certain circumstances, the Committee may approve new
contractual arrangements with departing Executive Directors
including (but not limited to) settlement, confidentiality,
restrictive covenants and/or consultancy arrangements. These
will be used sparingly and only entered into where the
Committee believes that it is in the best interests of the Group
and its shareholders to do so.
When considering exit payments, the Committee reviews all
potential incentive outcomes to ensure they are fair to both
shareholders and participants. The table on the following page
summarises how the awards under the annual bonus and LTIP
are typically treated in different circumstances, with the final
treatment remaining subject to the Committee’s discretion.
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ANNUAL REPORT ON REMUNERATION
PERFORMANCE
METRICS
None.
The following section provides details of how our Remuneration
Policy will be implemented during the year ending 31 March 2023
and how it was implemented during the financial year ended
31 March 2022.
Implementation of
Remuneration Policy for FY23
Basic salary
The Chief Executive Officer’s basic salary was increased in line
with the general workforce rate of increase from 1 April 2022.
LTIP
LTIP awards for 2022 will be considered at the time of grant over
shares equal in value to no more than 150% of salary for the
Chief Executive Officer and 120% of salary for the new Chief
Financial Officer. The performance conditions will continue to be
based on EPS, ROCE, relative TSR and the Group’s recycling rate
as follows:
Performance metric Weighting
Performance targets
1 April 2021
1 April 2022
% increase
EPS
25%
Otto de Bont
€479,192
€498,839
Annemieke den Otter1
–
–
4.1%
–
ROCE
25%
1. Annemieke den Otter joins the Company as Chief Financial Officer on 1 June 2022 at
a starting base salary of €440,000. The former Chief Financial Officer, Toby Woolrych,
left the Company prior to the 1 April 2022 salary review date. His base annual salary
at time of leaving was £368,988.
Pension
The Chief Executive Officer will continue to receive a cash
supplement in lieu of pension of 12.5% of salary, as will the new
Chief Financial Officer.
Annual bonus
The maximum annual bonus for Executive Directors for FY23 will
remain unchanged at 150% of salary with 50% payable in shares,
with half of those vesting immediately and the other half after
three years. The majority of the bonus will be based by reference
to Group financial performance and the remainder on the
achievement of personal or strategic objectives including
ESG-related targets. The specific targets are deemed to be
commercially sensitive but will be disclosed retrospectively in
the FY23 Annual Report.
25% of this part of an award vests
for EPS growth of 5% p.a. increasing
pro-rata to 100% vesting for EPS
growth of 15% p.a. or more
25% of this part of an award vests
for an improvement in ROCE of 0.5%
increasing pro-rata to 100% vesting
for an improvement in ROCE of 2%
or more
25% of this part of an award vests
for TSR equal to median increasing
pro-rata to 100% vesting for TSR
equal to upper quartile or above
against the FTSE 250 (excluding
investment trusts)
25% of this part of an award
vests for a Recycling Rate of 70%
increasing pro-rata to 100% vesting
for a Recycling Rate of 73% or more
Relative TSR
25%
Recycling Rate
25%
For any shares to vest, the Committee will also need to satisfy
itself that the recorded outcome is a fair reflection of the overall
performance of the Group over the period. Awards will vest on
the third anniversary of grant and will be subject to a further
two-year holding period.
Chairman and Non-Executive Director fees
Non-Executive Director fees were also increased in line with the
general workforce rate of increase from 1 April 2022. No increase
was applied to the Chairman’s fee.
Base fees
Fee from
1 April
2021
Fee from
1 April
2022
%
Increase
Chairman
£160,429
£160,429
–
Non-Executive Director
£51,337
£53,442
Chair fee for Audit/
Remuneration/SHE Committees
£9,090
£9,463
4.1%
4.1%
Senior Independent Director
additional fee
£6,417
£6,680
4.1%
Details of policy on fees paid to Non-Executive Directors are set out in the table below:
OBJECTIVE
OPERATION
OPPORTUNITY
To attract and retain Non-
Executive Directors of the highest
calibre with broad commercial
and other experience relevant to
the Group.
Fee levels are reviewed annually,
with any adjustments effective 1 April
each year.
The fee paid to the Chairman is
determined by the Committee and fees
to Non-Executive Directors are
determined by the Board.
Additional fees are payable for
additional responsibilities – eg acting as
Senior Independent Director and as
Chair of the Board’s Committees and
subsidiary company Supervisory
Boards.
Fee levels are reviewed by reference to
FTSE-listed companies of similar size
and complexity. The required time
commitment and responsibilities are
taken into account when reviewing
fee levels.
Non-Executive Directors may receive
benefits (including travel and office
support, together with any associated
tax liability that may arise).
Non-Executive Director fee
increases are applied in line
with the outcome of the
review. Fees in respect of the
year under review, and for the
following year, are disclosed in
the Annual Report on
Remuneration.
It is expected that any
increases to Non-Executive
Director fees will normally be
in line with those for salaried
employees. However, in the
event that there is a material
misalignment with the market
or a change in the complexity,
responsibility or time
commitment required to fulfil a
Non-Executive Director role,
the Board has discretion to
make an appropriate
adjustment to the fee level.
External appointments
The Committee acknowledges that Executive Directors may be
invited to join Supervisory Boards or become Non-Executive
Directors of other quoted companies which have no business
relationship with the Group and that these duties can broaden
their experience and knowledge to the benefit of the Group.
Executive Directors are limited to holding one such position,
and the policy is that fees may be retained by the Director,
reflecting the personal risk assumed in such appointments.
The new Chief Financial Officer, Annemieke den Otter will
continue to hold one such position as disclosed in her
biographical details on page 107.
Consideration of conditions
elsewhere in the Group
Although the Committee does not consult directly with
employees on Executive Remuneration Policy, the Committee
does consider general basic salary increases across the Group,
remuneration arrangements and employment conditions for the
broader employee population when determining Remuneration
Policy for the Executive Directors. In compliance with the 2018
UK Corporate Governance Code, Jolande Sap is the designated
Non-Executive Director with the responsibility of assisting the
Board with workforce engagement and reporting.
Consideration of shareholder views
When determining executives’ remuneration, the Committee
takes into account views of shareholders and best practice
guidelines issued by institutional shareholder bodies. The
Committee seeks feedback from shareholders on Remuneration
Policy and arrangements and commits to undergoing
shareholder consultation in advance of any significant
Remuneration Policy changes. The Committee will continue to
monitor trends and developments in corporate governance and
market practice to ensure that the structure of the executive
remuneration remains appropriate. Further details of the votes
received in relation to last year’s remuneration-related
resolutions (not adjusted for the subsequent July 2021, 1 for 10
share consolidation) are provided below:
ANNUAL REPORT ON
REMUNERATION
2021 AGM
REMUNERATION POLICY
2020 AGM
Total number
Total number
of votes % of votes cast
of votes % of votes cast
For (including discretionary)
Against
403,491,196
34,639,310
Total votes cast (excluding withheld votes)
438,130,506
Votes withheld
108,082
92.09%
7.91%
100%
–
435,428,674
22,337,973
457,766,647
245,442
95.12%
4.88%
100%
–
146
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The table below sets out a single figure for the total remuneration received by each Executive Director for the year ended 31 March
2022 and the prior year.
OTTO DE BONT
TOBY WOOLRYCH
Basic salary1
Taxable benefits2
Pension3
Other4
Total fixed remuneration
Single-year variable5
Multiple-year variable6,7
Total variable remuneration
Total
FY21
€000
446
27
59
12
544
458
15
473
1,017
FY22
€000
479
20
60
12
571
719
959
1,678
2,249
FY21
€000
389
25
81
8
503
399
50
449
952
FY22
€000
443
27
87
7
564
300
323
623
1,187
1. Executive Directors took a 20% reduction in salaries for three months from 1 April 2020.
2. Taxable benefits comprise car allowance/lease and medical insurance.
3. Otto de Bont and Toby Woolrych received cash supplements in lieu of pension contribution of 12.5% and 20% of salary respectively.
4. Includes life assurance, accident insurance and income protection.
5. Payment for performance during the year under the annual bonus including any deferred annual bonus. (50% cash element only awarded to Toby Woolrych with no deferred
shares. See following sections for further details.)
6. Based on the estimated value of LTIPs granted in 2019 to Otto de Bont and to Toby Woolrych assuming 100% vesting, dividend equivalent shares and a three-month share
price to 31 March 2022 of £6.77. The value of LTIP awards for FY21 was based on 22.5% vesting and a three-month share price to 31 March 2022 of £6.77 and included dividend
equivalents. The actual value of the awards at vesting for Otto de Bont and Toby Woolrych were £56,450 and £16,962 respectively.
7. The impact of share price movements on the vesting of the LTIP awards, based on the average three-month share price to 31 March 2022 (£6.77) and the £3.45 (adjusted for
the 1 for 10 share consolidation) share price at grant and ignoring dividend equivalents, is as follows:
Otto de Bont
Shares granted
Value of awards expected to vest (116,710 shares granted x £6.77 x 100%
vesting)
Face value at grant of proportion of awards expected to vest (116,710
shares granted x £3.45 x 100% vesting)
Impact of share price movement on vesting value
116,710
£790,126
£402,650
£387,476
Toby Woolrych
Shares granted
Value of awards expected to vest (41,601 shares granted x £6.77 x 100%
vesting)
Face value at grant of proportion of awards expected to vest (41,601 shares
granted x £3.45 x 100% vesting)
Impact of share price movement on vesting value
41,601
£281,639
£143,523
£138,116
Single total figure of remuneration for Non-Executive Directors (audited)
The table below sets out a single figure for the total remuneration received by each Non-Executive Director for the year ended
31 March 2022 and the prior year.
Ben Verwaayen (Chairman)
Allard Castelein2
Luc Sterckx3
Marina Wyatt4
Jolande Sap
Neil Hartley5
BASE FEE
ADDITIONAL FEES
TOTAL FIXED REMUNERATION1
FY21
€000
168
54
54
54
54
54
FY22
£000
188
61
60
60
60
60
FY21
£000
–
7
1
9
–
9
FY22
£000
-
7
11
11
-
11
FY21
£000
168
61
55
63
54
63
FY22
£000
188
68
71
71
60
71
1. Non-Executive Directors receive fixed remuneration only (ie no variable remuneration is payable or has been paid).
2 Allard Castelein’s additional fee is in respect of his role as Senior Independent Director.
3. Luc Sterckx’s additional fee is in respect of his role as Chair of the SHE Committee.
4. Marina Wyatt’s additional fee is in respect of her role as the Chair of the Audit Committee.
5. Neil Hartley’s additional fee is in respect of his role as the Chair of the Remuneration Committee.
6. At an exchange rate of €1:£0.885 for FY21 and €1:£0.849 for FY22.
Incentive outcomes for the year ended 31 March 2022
Performance-related annual bonus in respect of FY22 performance
The annual bonus was measured against underlying profit before tax (40% weighting), net debt/EBITDA leverage ratio (20%
weighting), ESG (Safety) performance (15%) and the achievement of personal objectives (25% weighting). Actual performance against
the targets set for each of these elements is shown on the following page.
Financial element outcomes
The financial targets and corresponding potential outcomes for the Executive Directors’ FY22 annual bonus are shown below.
Measure
Underlying profit before tax
Leverage ratio
Weighting
40%
20%
FY22
final outcome
€104.7m
1.44x
Threshold
Maximum
€48.2 m
2.95x
€53.0m
<2.5x
Potential bonus
payout (% of max)
100%
100%
Underlying profit before tax is set based on the Group’s expected budget outcome for the year as adjusted for disposals and
acquisitions in the year. All non-Euro denominated entity values are converted to Euros at the budgeted rate of exchange and actual
performance is also measured at this constant exchange rate. The leverage ratio is based on the net debt to EBITDA covenant level as
determined in the main banking facilities.
ESG element outcomes
The safety performance targets and corresponding outcomes for the Executive Directors’ FY22 annual bonus are detailed below.
As safety is the Group’s first value and first priority, the Committee introduced a collective safety target. The goal is to reduce incidents
to 0, but for bonus purposes a maximum LTIF (Lost Time Incidents Frequency rate) target was set which was 15% lower than last year
for Renewi as a whole. For FY22 this meant that each percentage point improvement over the baseline, led to a percentage point
bonus realisation (with a maximum of 15%). The Group level LTIF target was 12 and the actual rate achieved was 9, resulting in a
maximum 15% award.
Personal element outcomes
The personal performance measures were based on individual objectives, as detailed below.
Executive Director
Target
Weighting
Score
Committee assessment of performance
Otto de Bont
1. Group safety
2. Strategy development
3. Talent management
Toby Woolrych
1. Simplify financial reporting
2. Develop financial tools for recyclates
3. Support Renewi 2.0
4. Strategy development
5. Engagement/talent development
8.3%
8.3%
8.3%
25%
5%
5%
5%
5%
5%
25%
8.3%
8.3%
8.3%
25%
2%
3.5%
4%
3.5%
4%
17%
Significant improvement
Strong progress
New appointments and succession
100% of max
Partially achieved
Progressed
Good implementation
Good progress
Partially achieved
68% of max
FY22 annual bonus
Financial targets were met with Group profit before tax achieving a maximum payout for a 100% performance. The leverage ratio at
1.44x resulted in a maximum payout. The ESG target was also exceeded. The personal targets were partially met, resulting in a bonus
award of 100% and 92% of the maximum for the Chief Executive Officer and Chief Financial Officer respectively.
Overall bonus outcomes
Executive Director
Otto de Bont
Toby Woolrych
Financial element bonus
outcome
(% of total)
Safety element bonus
outcome (% of total)
Personal element bonus
outcome
(% of total)
60%
60%
15%
15%
25%
17%
Overall bonus outcome
(% of salary/€)
150%/€718,788
138%/€599,769
Notwithstanding the bonus award as measured against the performance targets, the Remuneration Committee determined that the
50% of the award ordinarily payable to Toby Woolrych in deferred shares, be forfeited as a result of his departure from the Company
on 31 March 2022. His resulting bonus, payable in cash was therefore €299,885.
148
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Otto de Bont and Toby Woolrych hold LTIP awards over 116,710 and 41,601 shares respectively on 3 June 2019 which would vest in
2022 based on three-year performance to 31 March 2022. Vesting for both awards was dependent on three-year adjusted underlying
EPS, share price performance and ROCE. The vesting schedules, targets and the performance against targets are set out below.
Measure
EPS CAGR
Weighting
50%
Share price CAGR
25%
Improvement in ROCE
25%
Total vesting
Targets
0% vesting below 5% p.a.
25% vesting for 5% p.a.
50% vesting for 10% p.a.
100% vesting for 15% p.a.
Straight-line vesting between these points
0% vesting below 9% p.a.
25% vesting for 9% p.a.
50% vesting for 13% p.a.
100% vesting for 25% p.a.
Straight-line vesting between these points
0% vesting below +0.5%
25% vesting for +0.5%
100% vesting for +2.0%
Straight-line vesting between these points
Actual %
performance
>15%
Of this part of award
(% of maximum)
100%
(50%)
>25%
>2%
100%
(25%)
100%
(25%)
100%
Share price growth was calculated using three-month average share prices immediately prior to the start and end of the performance period.
Based on the above, the vesting of the 2019 LTIP in June 2022 for Otto de Bont and Toby Woolrych will be:
Executive Director
Awards granted1
Shares vesting based
on performance
Dividend equivalent
shares (estimated)
Total shares
expected to vest
Otto de Bont
Toby Woolrych
116,710
41,601
116,710
39,2902
3,525
1,186
120,235
40,476
Estimated value at
vesting (€’000)3
959
323
1. As adjusted for the 1:10 share capital consolidation following shareholder approval in July 2021.
2. Time pro-rating reduction by two months as determined by the Remuneration Committee.
3. Based on the average three-month share price to 31 March 2022 of £6.77 and at an exchange rate of €1:£0.849.
Share awards granted in FY21 (audited)
Long-Term Incentive Plan
The Executive Directors were granted LTIP awards on 23 July 2021 as follows:
Executive Director
Date of grant
Basis of award
Share price1
Face value2
Number of shares
Otto de Bont
Toby Woolrych
23 July 2021
23 July 2021
150% of salary
120% of salary
£5.24
£5.24
€729,101
€521,408
118,131
84,480
1. Based on the three-day average dealing price prior to the grant date.
2. At an exchange rate of €1:£0.849.
Performance targets are as follows:
Performance metric
Weighting
Performance targets
EPS
ROCE
Relative TSR
Recycling Rate
25%
25%
25%
25%
25% of this part of an award vests for EPS growth of 5% p.a. increasing pro-rata to
100% vesting for EPS growth of 15% p.a. or more
25% of this part of an award vests for an improvement in ROCE of 0.5% increasing
pro-rata to 100% vesting for an improvement in ROCE of 2% or more
25% of this part of an award vests for TSR equal to median increasing pro-rata to 100% vesting
for TSR equal to upper quartile or above against the FTSE 250 (excluding investment trusts)
25% of this part of an award vests for a Recycling Rate of 70% increasing pro-rata
to 100% vesting for a Recycling Rate of 73% or more
For any shares to vest, the Committee will also need to satisfy itself that the recorded outcome is a fair reflection of the overall
performance of the Group over the period. Awards will vest on the third anniversary of grant and will be subject to a further two-year
holding period.
Deferred annual bonus (DAB)
Otto de Bont and Toby Woolrych were granted awards under the Renewi plc Deferred Annual Bonus Plan on 23 July 2021 as follows:
Executive
Director
Date of
grant
2020/21
annual bonus
Basis of
award1
Share price2
Face value3
Number of shares
Otto de Bont
23 July 2021
€458k
Toby Woolrych
23 July 2021
€399k
25%
25%
25%
25%
£5.39
£5.39
£5.39
£5.39
€115,735
€115,729
€103,800
€103,800
18,230 shares vesting immediately
18,229 shares vesting after three years
16,350 shares vesting immediately
16,350 shares vesting after three years4
1. 50% of the bonus is awarded in shares, with half vesting immediately and the other half deferred into an award over Renewi plc shares which vest after three years.
2. Based on the three-day average dealing price prior to the grant date (adjusted for the 1 for 10 share consolidation).
3. At an exchange rate of €1:£0.849.
4. Subject to time pro-rating reduction as determined by the Remuneration Committee.
Board changes
As per the announcement issued on 5 January 2022, Toby Woolrych stood down as Chief Financial Officer and from the Board on
31 March 2022. In respect of his remuneration arrangements:
salary and contractual benefits were paid up to 1 April 2022;
untaken holiday entitlement, equating to £7,096, was paid in lieu;
annual bonus for the year ended 31 March 2022 of £254,602 to be paid on the normal payment date. No bonus was paid or is
payable in respect of the deferred share element which was forfeited;
outstanding Deferred Annual Bonus Plan awards will vest on the normal vesting dates, subject to time pro-rating;
outstanding/unvested LTIP awards granted in 2019, 2020 and 2021 will vest on the normal vesting dates, subject to performance
targets and time pro-rating;
all outstanding/unvested awards under the Company’s Sharesave Scheme lapsed on 1 April 2022; and
post cessation shareholding requirements will continue to apply in accordance with the prevailing Remuneration Policy, last
approved by shareholders at the 2020 AGM.
As per the announcement issued on 28 March 2022, Annemieke den Otter will be appointed as Chief Financial Officer and join the
Board with effect from 1 June 2022. In respect of her remuneration arrangements:
joining salary of €440,000;
maximum annual bonus potential of 150% of salary, with 50% delivered as Deferred Annual Bonus shares;
maximum LTIP opportunity of equivalent value of up to 120% of salary;
payment in lieu of pension of equivalent of 12.5% of basic salary; and
commensurate car allowance and life assurance benefits as per the CEO.
Payments made to past Directors made in the year (audited)
No termination payments were made to past Directors during the year.
Relative importance of spend on pay
The table shows the percentage change in total employee pay expenditure and shareholder distributions (ie dividends) from the
financial year ended 31 March 2022 to the financial year ended 31 March 2021.
Distribution to shareholders
Employee remuneration
FY21
€m
-
395.6
FY22
€m
-
402.5
% change
0%
1.7%
150
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Renewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic reportDirectors’ Remuneration Report continued Pay for performance
The graph shows the TSR of Renewi plc over the 10-year period to 31 March 2022. While there is no comparator index or group of
companies that truly reflects the activities of the Group, the FTSE Support Services sector has been selected as a comparator index as
it is the sector in which Renewi is classified and is an index against which the performance of the Group is judged. The FTSE All-Share
Index is also presented. The table below the graph details the Chief Executive Officer’s single figure remuneration and actual variable
pay outcomes over the same period.
Historical TSR performance
Growth in value over 10 years of a hypothetical £100 invested at 31 March 2012.
300
250
200
150
100
50
0
)
0
0
1
o
t
d
e
s
a
b
e
r
(
n
r
u
t
e
r
l
r
e
d
o
h
e
r
a
h
s
l
a
t
o
T
Renewi plc
FTSE All-Share Support
Services Index
FTSE All-Share Index
Source: Datastream
(Thomson Reuters)
31 MAR
2012
31 MAR
2013
31 MAR
2014
31 MAR
2015
31 MAR
2016
31 MAR
2017
31 MAR
2018
31 MAR
2019
31 MAR
2020
31 MAR
2021
31 MAR
2022
CEO single figure remuneration over the ten years to 31 March 2022
Executive Director
Chief Executive Officer single figure of
remuneration (€000)
Annual bonus outcome
(% of maximum)
LTIP vesting outcome
(% of maximum)
FY13
FY14
FY15
FY16
FY17
FY18
FY19
FY20
FY21
FY22
PETER DILNOT1
OTTO DE BONT3
808
1,015
1,155
1,456
1,100
1,685
753
1,244
1,017
2,249
19%
66%
47%
69%
48%
88%
0%
88%
65%
100%
0%
0%
0%
0%
0%
21.5%
0%2
43.3%
22.5%
100%
1. Peter Dilnot was appointed as Chief Executive Officer on 1 February 2012 and resigned on 31 March 2019.
2. Although 23% of the 2016 LTIP awards vested in 2019, Peter Dilnot’s LTIP awards lapsed upon his resignation.
3. Otto de Bont was appointed as Chief Executive Officer on 1 April 2019.
Percentage change in Chief Executive Officer’s remuneration
The table below shows the percentage change in Director remuneration (excluding pension and long-term incentives) from the prior
year compared to the average percentage change in remuneration for all UK-based employees. This group was selected because the
Committee believes it provides a sufficiently large comparator group to give a reasonable understanding of underlying increases that
are based on similar incentive structures, while on the other hand reducing any distortion arising from including all of the
geographies in which the Group operates, with their different economic conditions.
Base
salary
-3%
-4%
-5%
2%
-4%
-2%
-5%
3%
-3%
FY20–21
Benefits
Annual
bonus
Base
salary
FY21–22
Benefits
23%
4%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-24%
-24%
n/a
n/a
n/a
n/a
n/a
n/a
-8%
7%
7%
7%
7%
7%
6%
22%
7%
4%
-18%
3%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
Annual
bonus
57%
-25%
n/a
n/a
n/a
n/a
n/a
n/a
5%
Executive Directors
Otto de Bont
Toby Woolrych
Non-Executive Directors
Ben Verwaayen
Allard Castelein
Neil Hartley
Jolande Sap
Luc Sterckx
Marina Wyatt
UK employees
152
CEO pay ratio
The CEO pay ratio data for FY22 is presented below (with prior year data). The data shows how the CEO’s single figure remuneration
for FY22 (as taken from the single figure remuneration table) compares to equivalent single figure remuneration for full-time
equivalent UK employees ranked at the 25th, 50th and 75th percentile.
Year
FY22
FY21
FY20
Method
Option B
Option B
Option B
25th percentile pay ratio
Median pay ratio
75th percentile pay ratio
63 : 1
33 : 1
41 : 1
41 : 1
31 : 1
38 : 1
45 : 1
19 : 1
23 : 1
No components of pay and benefits have been omitted for the purpose of the above calculations. Option B (UK gender pay gap data)
was selected, given that this method of calculation was considered to be the most efficient and robust approach in respect of
gathering the required data. The respective quartile salary and total pay and benefits numbers are as follows:
SALARY
TOTAL PAY AND BENEFITS
Year
FY22
FY21
FY20
25th percentile
€33,869
€27,762
€28,175
Median
€53,642
€30,147
€30,596
75th percentile
25th percentile
€47,200
€47,918
€48,632
€35,945
€30,557
€31,013
Median
€55,083
€33,086
€33,579
75th percentile
€55,473
€53,052
€53,843
Directors’ interests (audited)
The interests of the Directors and persons closely associated in the ordinary shares of the Group during the year and as at 23 May
2022 were as shown below. Details of Directors’ interests in shares and options under the long-term share schemes are set out in the
sections below.
Ordinary shares at 1 April 20211
Otto de Bont
Allard Castelein
Neil Hartley
Jolande Sap
Luc Sterckx
Ben Verwaayen
Toby Woolrych
Marina Wyatt
101,321
–
–
–
28,500
–
124,815
1,160
Ordinary shares at 31 March 2022
and 23 May 2022
102,874
–
–
–
28,500
–
139,280
1,160
1. Restated to reflect the 1:10 share consolidation in July 2021.
Directors’ shareholdings (audited)
The table below shows the shareholding of each Executive Director, against their respective shareholding requirement
as at 31 March 2022:
Owned
outright
or vested
Unvested
but subject
to holding
period
Otto de Bont
102,874
Toby Woolrych 139,280
83,314
83,301
Unvested
and
subject to
performance
conditions
415,163
252,310
Vested
but not
exercised
Exercised
during
the year
–
–
–
–
Unvested
and
subject to
continuous
employment
–
8,100
Shareholding
requirement
(% of salary)
Current
shareholding1
(% of salary)
Requirement
met?
200%
200%
160%
249%
In progress
Achieved
1. Shareholdings were calculated using the number of outright shares, at £6.61, as percentage of salary as at 31 March 2022.
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Renewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic reportDirectors’ Remuneration Report continued
Directors’ interests in share awards
The Executive Directors have been made the following conditional awards under the Renewi Deferred Annual Bonus Plan:
Outstanding
awards at 31
March 20211
Awards
made during
the year2,3
Otto de Bont
650,868
–
Awards
lapsed
during the
year
–
Awards
vested
during the
year4
–
Outstanding
awards at 31
March 20225
Date of
award
65,085
–
–
Toby Woolrych
36,046
37,318
201,661
550,041
–
–
18,230
18,229
–
–
–
–
16,350
16,350
–
–
–
–
–
–
–
–
18,230
–
–
36,046
18,659
100,830
–
18,229
–
1,865
10,082
55,004
16,350
–
–
16,350
Share price
on date of
award5
(£)
2.78
5.24
5.24
9.35
9.32
7.81
2.78
5.24
5.24
Restricted
period end
22.06.256
23.07.213
23.07.04 3
23.11.216
01.06.226
01.06.236
22.06.256
23.07.213
23.07.24 3
22.06.20
23.07.21
23.07.21
23.11.16
01.06.17
01.06.18
22.06.20
23.07.21
23.07.21
1. Prior to the 1:10 share capital consolidation in July 2021.
2. Post the share consolidation.
3. 50% of awards vesting immediately and 50% vest after three years.
4. In addition to Toby Woolrych’s 36,046 awards which vested during the year, an additional 4,971 shares were awarded in respect of dividend equivalents, totalling 41,017 shares.
In addition to Toby Woolrych’s 18,659 awards which vested during the year, an additional 2,363 shares were awarded in respect of dividend equivalents, totalling 21,022 shares.
In addition to Toby Woolrych’s 100,830 awards which vested during the year, an additional 9,231 shares were awarded in respect of dividend equivalents, totalling 110,061
shares.
5. As adjusted for the 1:10 share capital consolidation.
6. 50% of awards are released three years after the date of award, 25% after four years and the remaining 25% after five years.
The Executive Directors have been made the following conditional awards of shares under the Renewi Long-Term Incentive Plan:
Outstanding
awards at 31
March 20211
Awards
made during
the year2
Otto de Bont
125,000
1,167,104
1,803,227
–
–
–
–
118,131
Toby Woolrych
416,012
416,012
1,262,294
–
–
–
–
84,480
Awards
lapsed
during the
year3
96,875
Awards
vested
during the
year4
28,125
Outstanding
awards at 31
March
20225,6
–
–
–
–
–
–
–
116,710
180,322
118,131
322,410
93,602
–
–
–
–
–
–
–
41,601
126,229
84,480
Date of
award
01.06.18
03.06.19
27.07.20
23.07.21
01.06.18
03.06.19
27.07.20
23.07.21
Share price
on date of
award5 (£)
Performance
period end
Restricted
period end7
7.81
3.45
2.58
5.24
7.81
3.45
2.58
5.24
31.03.21
31.03.22
31.03.23
31.03.24
31.03.21
31.03.22
31.03.23
31.03.24
01.06.23
03.06.22
27.07.23
23.07.24
01.06.23
03.06.22
27.07.23
23.07.24
1. Prior to the 1:10 share capital consolidation in July 2021.
2. Post the share consolidation.
3. Awards lapse to the extent the performance conditions are not met.
4. 22.5% of the 2018 LTIP award vested in 2021. In addition to the awards which vested, awards held by Otto de Bont and Toby Woolrych were increased by an additional 2,575
shares and 8,570 shares respectively in respect of dividend equivalents.
5. As adjusted for the share consolidation.
6. The performance conditions relating to the vesting of outstanding awards are shown on page 150.
7. For LTIP awards granted to Directors since the 2017 AGM, a two-year post-vesting holding period applies.
The Executive Directors held the following options to subscribe for ordinary shares under the Renewi Sharesave Scheme:
Date of
grant
13.09.17
Toby Woolrych
12.09.19
10.09.20
Normal
exercise
dates
from
01.11.20
01.11.22
01.11.23
Normal
exercise
dates
to
30.04.21
30.04.23
30.04.24
Option
price
(£)1,2
Number at
31 March
20213
Granted in
year
Lapsed in
year
Exercised
in year
0.76
2.50
2.00
11,842
36,000
45,000
–
–
–
11,842
–
–
–
–
–
Number at
31 March
20224,5
–
3,600
4,500
1. 2019 and 2020 prices adjusted for the 1:10 share capital consolidation in July 2021.
2. The option price is the price at which the option was granted. The price is set by the Remuneration Committee but is not less than 80% of the average market price of the shares
over the last three dealing days immediately preceding the date of the invitation to subscribe.
3. Prior to the 1:10 share capital consolidation in July 2021.
4. As adjusted for the share capital consolidation.
5. Outstanding options lapsed on 1 April 2022.
The highest closing mid-market price of the ordinary shares of Renewi plc during the year was £8.40 and the lowest closing mid-
market price during the year was £4.82. The mid-market price at the close of business on 31 March 2022 was £6.61.
Other interests
None of the Directors had an interest in the shares of any subsidiary undertaking of the Group or in any significant contracts
of the Group.
Advice provided to the Committee during the year
FIT Remuneration Consultants LLP (FIT) were appointed by the Remuneration Committee during 2016 to provide independent advice
on Committee matters. During FY22, FIT provided independent advice on executive remuneration. FIT reports directly to the Chair of
the Committee. Its total fees for the provision of remuneration services to the Committee in FY22 were €21,767 (£18,480) charged on a
time and materials basis. FIT provides no other services to the Group.
FIT is a member of the Remuneration Consultants Group and is a signatory to the Code of Conduct for Remuneration Committees
Consultants which can be found at remunerationconsultantsgroup.com.
The Committee periodically undertakes due diligence to ensure that the Remuneration Committee advisers remain independent of
the Group and that the advice provided is impartial and objective. The Committee is satisfied that the advice provided is
independent.
By order of the Board
Neil Hartley
Chair of the Remuneration Committee
24 May 2022
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disclosures
The Company’s Articles of Association
Many of the matters described below are governed by the
Company’s Articles of Association and also by current legislation
and regulations. The Articles can be viewed on the Company
website at renewi.com.
Strategic Report
The Strategic Report set out on pages 5 to 101 provides a fair
review of the Group’s business for the year ended 31 March 2022.
It also explains the objectives and strategy of the Group, its
competition and the markets in which it operates, the principal
risks and uncertainties it faces, the Group’s financial position,
key performance indicators and likely future developments of
the business.
The Strategic Report was approved by a duly authorised
committee of the Board on 23 May 2022 and signed on its behalf
by the Company Secretary.
Directors’ Report
The Directors’ Report comprises pages 103 to 159. The Directors’
Report was approved by a duly authorised committee of the Board
on 23 May 2022 and signed on its behalf by the Company Secretary.
Other information
Apart from the details of the Company’s Long-Term Incentive
Plan, as set out in the Directors’ Remuneration Report on pages
138 to 155, no further information requires disclosure for the
purposes of complying with the Financial Conduct Authority’s
Listing Rule 9.8.4C.
Directors
The composition of the Board at the date of this report can be
found on pages 106 to 107. Directors’ biographical details are
shown on pages 106 to 107. All Directors served on the Board
throughout the financial year under review.
Toby Woolrych, Chief Financial Officer, stepped down from the
Board on 31 March 2022. Annemieke den Otter, Chief Financial
Officer (designate), is to be appointed on 1 June 2022 and will be
seeking election by shareholders at the AGM. After nine years’
service, Non-Executive Director Marina Wyatt will be stepping
down from the Board at the conclusion of the AGM. All other
Directors will be seeking re-election at the AGM.
Appointment and replacement of Directors
The Company’s minimum requirement is to appoint at least two
Directors. The appointment and replacement of Directors may
be made as follows:
The Company’s members may, by ordinary resolution, appoint
any person who is willing to act to be a Director
The Board may appoint any person who is willing to act to be
a Director. Any Director so appointed shall hold office only
until the next AGM and shall then be eligible for election
Each Director shall retire from office at every AGM but may be
re-appointed by ordinary resolution if eligible and willing
The Company may, by special resolution, remove any Director
before the expiry of his or her period of office or may, by
ordinary resolution, remove a Director where special notice
has been given and the necessary statutory procedures are
complied with
A Director must vacate their office if any of the circumstances
in Article 100 of the Articles of the Company arise
Powers of Directors
The business of the Company is managed by the Board, which
may exercise all the powers of the Company, whether relating to
the management of the business of the Company or not. This
power is subject to any limitations imposed on the Company by
legislation. It is also limited by the provisions of the Articles and
by any directions given by special resolution of the members of
the Company. Specific provisions relevant to the exercise of
powers by the Directors include the following:
Pre-emptive rights and new issues of shares. Under the
Companies Act 2006 (the Act), the directors of a company are,
with certain exceptions, unable to allot any equity securities
without express authorisation, which may be contained in a
company’s Articles or given by its shareholders in a general
meeting. In addition, under the Act, the Company may not
allot shares for cash (otherwise than pursuant to an employee
share scheme) without first making an offer to existing
shareholders to allot such shares to them on the same or more
favourable terms in proportion to their respective
shareholdings, unless this requirement is waived by a special
resolution of the Company’s shareholders. The Company
received authority at the last AGM to allot shares for cash on a
non-pre-emptive basis up to a maximum nominal amount of
£4,001,183. This authority lasts until the earlier of the AGM in
2022 or 30 September 2022.
Repurchase of shares. Subject to authorisation by
shareholder resolution, the Company may purchase all or any
of its own shares in accordance with the Act and the Listing
Rules. Any shares that have been bought back may be held as
treasury shares or, if not so held, must be cancelled
immediately upon completion of the purchase, thereby
reducing the amount of the Company’s issued share capital.
The Company received authority at the last AGM to purchase
up to 8,002,367 ordinary shares. This authority lasts until the
earlier of the AGM in 2022 or 30 September 2022.
Borrowing powers. The Directors are empowered to exercise
all the powers of the Company to borrow money and to
mortgage or charge all or any part of the Company’s assets,
provided that the aggregate amount of borrowings of the
Group outstanding at any time does not exceed the limit set
out in the Articles, unless sanctioned by an ordinary resolution
of the Company’s shareholders.
Directors’ indemnities
As at the date of this report, the Company has granted indemnities
to the extent permitted by law, in respect of certain liabilities
incurred as a result of carrying out the role of a Director of the
Company. The indemnities are qualifying third-party indemnity
provisions for the purposes of the Companies Act 2006.
In respect of those liabilities for which the Directors may not be
indemnified, the Company maintained a Directors’ and Officers’
liability insurance policy throughout the financial year and has
renewed that policy.
Corporate governance
The Board is fully committed to high standards of corporate
governance. Details relating to the Company’s compliance with
the UK Corporate Governance Code for the financial year are
given in the Corporate Governance and Directors’ Remuneration
Reports on pages 110 to 155.
Sustainability
Renewi plc is a leading international waste-to-product company.
Information on sustainability matters, including those on
environment, social, community and employment policies, and
health and safety, are set out in the Sustainability Strategy Focus
section from page 74 of the Strategic Report.
Further information about the Company’s approach to carbon
avoidance and the benefits of sustainable waste management,
including disclosures on Streamlined Energy and Carbon
Reporting (SECR) and Task Force on Climate-related Financial
Disclosures (TCFD), can also be found in the Sustainability
Review, which is available on the Company’s website.
Task Force on Climate-related Financial
Disclosures (TCFD)
The Group’s TCFD disclosure is provided in a readily identifiable
and accessible format for all interested stakeholders and can be
found on pages 66 to 73 of the Strategic Report.
Results and dividends
The Group’s Consolidated Income Statement, which appears on
page 170 and note 2 to the financial statements, shows the
contribution to revenue and profits made by the different
segments of the Group’s business. The Group’s profit for the year
was €75.4m (2021: profit of €5.5m).
The Directors are not recommending a final dividend (2021:
0 pence) be paid. Having determined not to pay an interim
dividend (2021: 0 pence), the total dividend for the year is nil
pence per share (2021: 0 pence).
Going concern and viability
After making enquiries, including the impact of the proposed
Paro acquisition (see note 8.5) the Directors have formed the
view, at the time of approving the financial statements, that the
Company and Group have adequate resources to continue to
operate and that the Group’s business is a going concern. For
this reason, the Directors continue to adopt the going concern
basis in preparing the financial statements.
Renewi plc’s ordinary shares were admitted to trading on
Euronext Amsterdam on 30 January 2020. No new shares were
placed in connection with the application for that secondary
listing and the Company continues to remain listed on the
premium segment of the Official List in London.
Following shareholder approval at the 2021 AGM, on 19 July
2021 Renewi undertook a consolidation of its share capital on
the basis of 1 new ordinary share with nominal value of £1.00
for every 10 existing ordinary shares of 10 pence.
As at 31 March 2022 and as at the date of this report, there
were 80,059,937 ordinary £1.00 shares in issue.
Principal rights and obligations
attaching to shares
Dividend rights. The Company may, by ordinary resolution,
declare dividends but may not declare dividends in excess
of the amount recommended by the Directors. The Directors
may also pay interim dividends. No dividend may be paid
other than out of profits available for distribution. Payment
or satisfaction of a dividend may be made wholly or in part
by distribution of assets, including fully paid shares or
debentures of any other company. The Directors may
deduct from any dividend payable to a member all sums of
money (if any) payable by such member to the Company in
respect of their ordinary shares.
Voting rights. On a poll, every shareholder who is present
in person or by proxy or represented by a corporate
representative has one vote for every share held by that
shareholder. In the case of joint holders of an ordinary
share, the vote of the senior who tenders a vote shall be
accepted to the exclusion of the votes of the other joint
holders. Seniority is determined by the order in which the
names of the joint holders appear in the Company’s register
of members in respect of the joint holding. The deadline for
appointing proxies to exercise voting rights at any general
meeting is set out in the notice convening the relevant
meeting. The Company is not aware of any agreements
between holders of its shares that may result in restrictions
on voting rights.
Return of capital. In the event of the liquidation of the
Company, after payment of all liabilities and deductions
taking priority, the balance of assets available for
distribution will be distributed among the holders of
ordinary shares according to the amounts paid up on the
shares held by them. A liquidator may, with the sanction of a
special resolution of the shareholders and any other
sanction required by law, divide among the shareholders in
kind the whole or any part of the Company’s assets or vest
the Company’s assets, but no shareholder may be
compelled to accept any assets upon which there is any
liability.
Taking account also of the Company’s current position and
principal risks, the Board sets out on page 100 how it has assessed
the prospects of the Company. In compliance with the provisions of
the UK Corporate Governance Code, the Board also confirms that it
has a reasonable expectation that the Company and the Group will
be able to continue in operation and meet their liabilities as they
fall due over the three-year period ending 31 March 2025.
Share capital
The Company’s share capital comprises ordinary shares
of £1.00 each par value.
Share restrictions
There are no limitations under the Company’s Articles of
Association that restrict the rights of members to hold the
Company’s shares. Certain restrictions may, from time to time,
be imposed on the transfer of the Company’s shares by laws
and regulations such as insider trading laws. In limited
situations, as permitted by the Articles, the Board may also
decline to register a transfer. The Company is not aware of any
agreements between holders of its shares that may result in
restrictions on the transfer of securities.
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Renewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report Other disclosures continued
Employee share schemes – control rights
The Company operates a number of employee share schemes.
Under some, ordinary shares may be held by trustees on behalf
of employees. Employees are not entitled to exercise directly any
voting or other control rights in respect of any shares held by
such trustees. Trustees have full discretion to vote or abstain
from voting at general meetings of the Company in respect of
such shares.
Retail bonds
As at 31 March 2022, the Company had in issue three retail bonds:
the first, comprising €100m 3.65% guaranteed notes due 16 June
2022; the second, comprising €75m 3.00% guaranteed notes due
19 July 2024; and the third, comprising €125m 3.00% guaranteed
notes due 23 July 2027. There are no restrictions under the
instruments governing these notes that restrict the rights of
investors to hold or transfer them. The Company is not aware of
any agreements between the holders of the notes that may
result in restrictions on their transfer.
Change of control – significant agreements
The Group’s principal financing instrument at 31 March 2022 is a
€425m banking facility, consisting of a €400m multi-currency
revolving credit facility with seven major banks and a €25m dual
tranche European Private Placement (EUPP). The facility
contains an option for those banks and investors to declare by
notice that all sums outstanding under that agreement are
repayable immediately in the event of a change of control of the
Company. Any such notice may take effect no earlier than 30
days from the change of control and, if exercised at 31 March
2022, would have required the repayment of €15.0m (FY21:
€185.4m) in principal and interest relating to the revolving credit
facility, along with a make-whole payment amounting to €0.7m
(FY21: €1.6m), which is not provided for in these financial
statements, payable to EUPP investors based on market yields at
31 March 2022.
The Group’s retail bonds issued in June 2015, July 2019 and July
2021 require notice to be given to bondholders within seven
business days of a change of control following which the holders
have an option to seek repayment at a 1% premium, within 60
days of that notice. Such repayment must be made within 10
business days of the expiry of the option period. If exercised at
31 March 2022, repayment of €307.0m (FY21: €179.5m) in principal
and interest would have been required.
The rules of the Company’s employee share plans provide that
awards and options may vest and become exercisable on a
change of control of the Company.
Research and development
The Group spent €203k (FY21: €204k) on research and
development in the year. This related to a number of projects
including research into using end-of-life goods for new products,
developing new sources of secondary materials for the circular
economy and innovative technologies for recycling as yet
unutilised waste streams.
Political donations
No donations were made by the Group for political purposes
during the financial year (FY21: £nil).
Notifiable interests
The Company has been notified of direct and indirect interests in
voting rights equal to or exceeding 3% of the ordinary share
capital of the Company as set out in the table below.
NOTIFICATIONS RECEIVED
UP TO 24 MAY 2022
Number of
shares
6,615,426
4,001,259
3,695,990
2,658,064
2,433,723
% issued
capital
8.26
5.00
4.61
3.32
3.04
Avenue Europe International
Management LP
SPICE ONE Investment Cooperatief U.A.
Coast Capital Management
Paradice Investment Management LLC
Pettelaar Effectenbewaarbedrijf N.V. in
its capacity as the legal owner of ASN
Aandelenpool, ASN Milieupool and ASN
Small & Midcappool
Investor relations
Renewi has an active investor relations programme to
engage with institutional investors, analysts, press and
other stakeholders.
The Company uses a number of channels to do this including its
AGM, face-to-face meetings, roadshows, analyst workshops,
videos, presentations, reports and its corporate website.
Annual General Meeting
Notice of the AGM of the Company to be held at the offices of
Ashurst LLP, The London Fruit & Wool Exchange, 1 Duval Square,
London, E1 6PW on Thursday, 14 July 2022 at 11.00am will be made
available to shareholders, together with a form of proxy, and will
also be available on the Company’s website at renewi.com.
Further to the recent lifting of Covid-19 restrictions, the Directors
are keen to reopen all channels of shareholder engagement and
welcome shareholders to attend the AGM.
The Directors consider that all the AGM resolutions are in the
best interests of the Company, and they recommend
unanimously that all shareholders vote in favour, as they intend
to in respect of their own shareholdings.
By order of the Board
Philip Griffin-Smith
Company Secretary
24 May 2022
Renewi plc, Registered in Scotland no. SC077438
Directors’
responsibilities
statement
The Directors are responsible for preparing
the Annual Report and the financial
statements in accordance with UK adopted
international accounting standards and
applicable law and regulations.
Company law requires the Directors to prepare financial
statements for each financial year. Under that law the Directors
are required to prepare the Group financial statements and have
elected to prepare the Company financial statements in
accordance with UK adopted international accounting
standards. Under company law the Directors must not approve
the financial statements unless they are satisfied that they give a
true and fair view of the state of affairs of the Group and
Company and of the profit or loss for the Group and Company
for that period.
In preparing these financial statements, the Directors are
required to:
select suitable accounting policies and then apply them
consistently;
make judgements and accounting estimates that are
reasonable and prudent;
state whether they have been prepared in accordance with UK
adopted international accounting standards, subject to any
material departures disclosed and explained in the financial
statements;
prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and the
Company will continue in business and
prepare a Directors’ Report, a Strategic Report and Directors’
Remuneration Report which comply with the requirements of
the Companies Act 2006.
accordance with legislation in the United Kingdom governing the
preparation and dissemination of financial statements, which
may vary from legislation in other jurisdictions. The maintenance
and integrity of the Company’s website is the responsibility of
the Directors. The Directors’ responsibility also extends to the
ongoing integrity of the financial statements contained therein.
Directors’ responsibilities pursuant to DTR4 of
the UK Listing Rules
The Directors confirm to the best of their knowledge:
The financial statements have been prepared in accordance
with the applicable set of accounting standards and give a true
and fair view of the assets, liabilities, financial position and
profit and loss of the Group and Company
The Annual Report includes a fair review of the development
and performance of the business and the financial position of
the Group and Company, together with a description of the
principal risks and uncertainties that they face
Directors’ statement as to the disclosure of
information to auditors
All of the current Directors have taken all the steps that they
ought to have taken to make themselves aware of any
information needed by the Company’s auditors for the purposes
of their audit and to establish that the auditors are aware of that
information. The Directors are not aware of any relevant audit
information of which the auditors are unaware.
By order of the Board
Philip Griffin-Smith
Company Secretary
24 May 2022
Renewi plc, Registered in Scotland no. SC077438
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the Company’s
transactions and disclose with reasonable accuracy at any time
the financial position of the Company and enable them to
ensure that the financial statements comply with the Companies
Act 2006.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
The Directors are responsible for ensuring that the Annual Report
and Accounts, taken as a whole, are fair, balanced and
understandable, and provide the information necessary for
shareholders to assess the Group’s performance, business model
and strategy.
Website publication
The Directors are responsible for ensuring the Annual Report and
the financial statements are made available on a website.
Financial statements are published on the Company’s website in
158
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Renewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report
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i
FINANCIAL STATEMENTS
Renewi plc
Annual Report and Accounts 2022
161
Independent
auditor’s report
to the members
of Renewi plc
Opinion on the financial statements
In our opinion:
the financial statements give a true and fair view of the state of
the Group’s and of the Parent Company’s affairs as at 31 March
2022 and of the Group’s profit for the year then ended;
the Group financial statements have been properly prepared in
accordance with UK adopted international accounting
standards;
the Parent Company financial statements have been properly
prepared in accordance with UK adopted international
accounting standards and as applied in accordance with the
provisions of the Companies Act 2006; and
the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements of Renewi plc (the
‘Parent Company’) and its subsidiaries (the ‘Group’) for the year
ended 31 March 2022, which comprise the Consolidated Income
Statement, the Consolidated Statement of Comprehensive
Income, the Consolidated Balance Sheet, the Consolidated
Statement of Changes in Equity, the Consolidated Statement of
Cash Flows, the Parent Company Balance Sheet, the Parent
Company Statement of Changes in Equity, the Parent Company
Statement of Cash Flows and notes to the financial statements,
including a summary of significant accounting policies. The
financial reporting framework that has been applied in their
preparation is applicable law and UK adopted international
accounting standards and as regards the Parent Company
financial statements, as applied in accordance with the
provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in
the Auditor’s responsibilities for the audit of the financial
statements section of our report. We believe that the audit
evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion. Our audit opinion is consistent
with the additional report to the Audit Committee.
Independence
Following the recommendation of the Audit Committee, we were
appointed by the Directors on 22 October 2020 to audit the
financial statements for the year ending 31 March 2021 and
subsequent financial periods. The period of total uninterrupted
engagement including retenders and reappointments is two
years covering the years ending 31 March 2021 and 31 March
2022. We remain independent of the Group and the Parent
Company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical
responsibilities in accordance with these requirements. The
non-audit services prohibited by that standard were not
provided to the Group or the Parent Company.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
Directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our
evaluation of the Directors’ assessment of the Group and the
Parent Company’s ability to continue to adopt the going concern
basis of accounting included:
Review of the Director’s going concern assessment, forecasts
and covenant compliance for the Group and the Parent
Company for a period of at least 12 months from the date of
approval of the financial statements
Our review included the following:
• comparing the profit and cash flow outturn per the forecasts
against historically achieved levels and challenging the
basis behind significant variances through meetings with
divisional finance to qualitatively explain key variances;
• detailed enquiries with the Board of Directors and
management on assumptions made in the preparation of
the forecasts. In particular, we have focused on how key
judgements from other areas of our audit, such as the
Belgium State Aid claim against the Group, expected
performance of the ATM plant, and the sustainability of
recyclate pricing are modelled both in terms of future
profitability and expected cash inflows and outflows;
• we have also challenged the completeness of
management’s downside and reverse stress test modelling,
based on our own knowledge of the sector and macro-
economic forecasts, including considering the Group’s
resilience to the ongoing Russia-Ukraine war, potential
economic slow-down and the impact on energy costs and
diesel pricing;
• recalculation and consideration of management’s ability to
meet facility and covenant headroom under both the base
case and downside scenarios.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group and the Parent Company’s ability to continue as a going
concern for a period of at least 12 months from when the
financial statements are authorised for issue.
In relation to the Parent Company’s reporting on how it has
applied the UK Corporate Governance Code, we have nothing
material to add or draw attention to in relation to the Directors’
statement in the financial statements about whether the
Directors considered it appropriate to adopt the going concern
basis of accounting.
Our responsibilities and the responsibilities of the Directors with
respect to going concern are described in the relevant sections
of this report.
Overview
Coverage
90% of Group profit before tax (2021: 94%)
98% of Group revenue (2021: 84%)
94% of Group total assets (2021: 91%)
Significant
components
THE SCOPE OF OUR AUDIT
2022
2021
Key audit matters
Going concern and covenant
compliance1
Revenue recognition
Presentation of non-trading and
exceptional items2
Impairment of goodwill, intangible
and tangible assets3
Valuation of onerous contract
provisions
Valuation of landfill provisions
Provision for ongoing legal matters
Accounting for taxation4
1 This item is no longer considered a key audit matter given strong trading
performance in 2022 and the resilience displayed by the Group to Covid-19 related
events and the resulting headroom against covenants.
2 This item is no longer considered a key audit matter following the reduction in
quantum of non-trading and exceptional items.
3 Following the strong trading performance in 2022, impairment risk has diminished
and, as such, this item was not considered a key audit matter.
4 Certain key tax judgements have either been resolved during the year or reduced
in judgement due to improved trading performance and are no longer deemed a
key audit matter.
Materiality
Group financial statements as a whole
£6.51m based on 5% of earnings before
interest and tax adjusted for non-recurring
items (2021: €6.77m based on 0.4% of
revenue)
An overview of the scope of our audit
Our Group audit was scoped by obtaining an understanding of
the Group and its environment, including the Group’s system of
internal control, and assessing the risks of material misstatement
in the financial statements. We also addressed the risk of
management override of internal controls, including assessing
whether there was evidence of bias by the Directors that may
have represented a risk of material misstatement.
Our involvement with component auditors
We designed an audit strategy to ensure that we obtained the
required audit assurance for each component for the purposes
of our Group audit opinion (in accordance with ISA 600 (UK)).
Components were scoped in to address aggregation risk and to
ensure sufficient coverage was obtained of group balances on
which to base our audit opinion.
For the work performed by component auditors, we determined
the level of involvement needed in order to be able to conclude
whether sufficient appropriate audit evidence has been obtained
as a basis for our opinion on the Group financial statements
as a whole.
Our approach to scoping, along with our involvement with
component auditors is detailed in the table below:
We focused our Group audit scope primarily
on six significant components, which were
subject to full scope audit procedures.
These significant components contribute 90%
of the Group profit before tax (on an absolute
basis), 98% of Group revenue and 94% of
Group total assets.
The six significant components were the
Commercial Waste Netherlands and
Commercial Waste Belgium operating
segments, UK Municipal (part of Specialities),
ATM (part of Mineralz & Water), Group Central
Services – Eindhoven (part of GCS) and Group
Central Services – Milton Keynes (also part
of GCS).
For the Commercial Waste Netherlands,
Commercial Waste Belgium, ATM and GCS
Eindhoven components, following
involvement at the planning stage in risk
assessment and setting the overall audit
approach and strategy with the component
auditor (BDO member firms), we conducted a
detailed review of the testing performed and
attended both physical and remote meetings
with local management and the component
auditor to evaluate conclusions reached.
The audit of the UK Municipal and Group
Central Services – Milton Keynes components
were performed by BDO LLP.
We instructed BDO member firms to perform
specified procedures, designed by the Group
audit team to address the risk of material
misstatement arising from key balances in
non-significant components, with testing
performed on certain material balances
within these components.
This specific scope testing was performed on
components that contribute less than 1% of
the Group profit before tax and 10% of the
Group revenue.
These components included:
• Coolrec Nederland B.V.
• Maltha Glasrecycling Nederland B.V.
• Renewi Tisselt N.V.
• Mineralz B.V.
• Mineralz Zweekhorst B.V.
• Verwerking Bedrijfsafvalstoffen
Maasvlakte (VBM) C.V.
• Mineralz ES Treatment N.V.
Specified
procedures
and audits of
balances on
non-
significant
components
Remaining
non-
significant
components
Parent
Company and
consolidation
For all other components, analytical review
procedures were performed by the Group
audit team to confirm our conclusion that
there were no significant risks of material
misstatement of the aggregated financial
information.
The Parent Company is located in the UK and
is audited by the Group audit team.
The Group audit team performed testing of
the consolidation and related consolidation
adjustments posted in preparation of the
Group financial statements.
162
163
Renewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant assessed risks of material misstatement (whether or not due to
fraud) that we identified, including those which had the greatest effect on: the overall audit strategy, the allocation of resources in the
audit and directing the efforts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
KEY AUDIT MATTER
HOW THE SCOPE OF OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
Revenue recognition – Section 3.1
We considered the following factors in
our risk assessment in regard to revenue
recognition:
as a listed business, there may be
pressure on management to achieve
results to meet market and
shareholders’ expectation. This
may lead to a risk of inappropriate
entries to revenue being recorded,
in particular via manual journal
entries; and
contracts in certain operating entities
with customers contain performance
obligations, which are performed after
billing has occurred, giving rise to
deferred revenue (for example, at
ATM). This may give rise to a risk
material misstatement arising from
the cut-off of revenue either through
misidentification of these terms and/
or through incorrect measurement of
the quantum of unprocessed
performance obligations.
Due to the potential pressure on
management to misstate revenue and
given the judgemental nature of
measuring the amount of unprocessed
waste at the balance sheet date, we
consider revenue recognition to be a key
audit matter.
Valuation of onerous contract
provisions – Section 4.10
The Group holds €79.9m (2021: €80.9m)
of onerous contract provisions on its
balance sheet at year end – the
significant majority of which is in
connection with the UK Municipal
business within the Specialities
reporting segment.
The measurement of these provisions at
the year-end involves a high degree of
estimation and judgement, in particular
as the provisions relate to cash outflows
that arise over a long-term horizon and
are influenced by market conditions in
the offtake and recyclate markets that
are difficult to forecast.
Given the level of estimation uncertainty
and judgement involved, we consider
the valuation of onerous contracts and
the associated disclosure in the financial
statements to be a key audit matter.
In addressing the risk that erroneous manual journal entries may have been posted to
revenue, our audit procedures have included:
identification and testing of material, manual journal entries posted to revenue in the
period including agreeing to supporting documentation; and
tracing a sample of revenue transactions recorded in the period to supporting
documentation.
In addressing the risk of incorrect measurement of deferred revenue balances arising on
unprocessed waste, our audit procedures have included:
attending waste counts at material waste collection and processing sites, which were
performed by management’s experts in certain key locations. We evaluated the experts’
capabilities, competence and objectivity in providing their service;
verified the quantum of processed and non-processed waste had been accurately
applied from physical waste counts and were then appropriately reflected in revenue
and deferred revenue calculations;
reviewing the conversion rates for various waste types from volume to weight through
assessment of the density assumptions;
agreeing the cost price per type of waste to underlying supporting documents; and
performing analytical audit procedures comparing actual deferred revenue to an
estimate informed by application of the gross profit margin achieved in the prior period
to the costs incurred in March 2022.
Key observations:
Based on this testing, we are satisfied that revenue recognition was appropriate for the
year ended 31 March 2022.
In auditing the valuation of onerous contract provisions, our audit procedures
have included:
obtaining the onerous contract models that are used to determine the carrying value of
provisions and our modelling team have interrogated the accuracy and integrity of the
models;
discussing with divisional management the process used to update onerous contract
models, to understand the process, rigour and expertise involved in building up the cash
flow forecasts;
assessing the appropriateness of discount rates used by comparison with government
bond yields over a consistent timeframe;
considering management’s forecasting ability in light of actual outturn versus historical
forecasting;
considering the consistency of onerous contract modelling with the forecasts used in
other areas;
corroborating assumptions used in the models, including input tonnage and recyclate
pricing on variable revenue streams to recently achieved levels;
performing sensitivity analysis on key inputs (notably recyclate pricing, discount rates
and volumes of waste processed), in order to understand how sensitive the model is to
these inputs; and
considering the appropriateness of the sensitivity disclosures included in the notes to
the financial statements in connection with the onerous contracts.
Key observations:
Based on the testing performed, we believe that the Group’s estimate of the onerous
contract provision falls within a reasonably acceptable range as at 31 March 2022.
KEY AUDIT MATTER
HOW THE SCOPE OF OUR AUDIT ADDRESSED THE KEY AUDIT MATTER
Valuation of landfill provisions
– Section 4.10
The required restoration and aftercare of
landfill sites results in provisions being
recognised within the financial
statements of the Group.
The Group holds €156.9m (2021:
€157.6m) in respect of these site
restoration and aftercare (‘landfill’)
provisions on its balance sheet at year
end.
The long-term horizons involved in
estimating the provisions give rise to
increased levels of judgement and high
levels of estimation uncertainty.
There are a number of significant
assumptions involved in estimation of
future cash flows, including: the period
of aftercare; the level of expected future
costs; and the discount rate applied.
Changes in government legislation or
policy may impact the expected level of
aftercare required by the Group.
Given the level of estimation and
judgement involved in determining the
required provision, we consider
valuation of landfill provisions and the
associated disclosure in the financial
statements to be a key audit matter.
Provision for ongoing legal matters
– Section 4.10
The Group has significant exposure to
complex environmental regulations. The
Group is also currently subject to a
number of ongoing matters as outlined
in Sections 4.10 and 8.4 of the financial
statements.
The most significant case currently
facing the Group is the legal case
announced by the European
Commission on 6 February 2020 into
State Aid provided to the Group by the
Walloon Region of Belgium, where
management has estimated a maximum
exposure of €63m (including interest).
The outcome of such matters is
uncertain and involves significant
judgement and estimation regarding
both the determination of the most
likely outcome of any claim and the
associated quantum. We therefore
consider this to represent a key audit
matter.
In auditing the valuation of landfill provisions, our procedures have included but were not
limited to:
discussing with divisional management the process used to update the models, to
understand the process, rigour and expertise involved in building up the cash flow
forecasts;
reviewing the underlying assumptions (notably discount rates and expected future costs)
in the model prepared by Renewi’s external environmental specialists (where applicable)
against key changes year-on-year and challenging whether movements are appropriate
in the context of our expectations (informed by legislative changes, economic drivers of
cost and other factors) and assessment of their expectations;
review of the output of management’s experts (where applicable), to assess volume
assumptions via drone and other techniques. We evaluated all experts’ capabilities,
competence and independence in providing their service;
assessment of the historical outturn of aftercare and restoration spend in FY22 compared
with prior year budgets to assess management’s accuracy in forecasting;
reassessed the discount rates used by comparison against government bond yields over
equivalent time periods; and
considered the appropriateness of the sensitivity disclosures included in the notes to the
financial statements in connection with landfill provisions, compared with the
requirements of IAS 37.
Key observations:
Based on the procedures performed, we believe that the Group’s estimate of the landfill
provisions falls within a reasonably acceptable range as at 31 March 2022.
Our procedures included:
review of Board minutes, internal audit reports, internal integrity reports and internal
health and safety monitoring (SHEQ reports) for indications of further legal matters and
therefore the completeness of amounts provided for legal claims;
enquiry of the Group’s legal counsel regarding the completeness of identified key
ongoing legal matters, along with their assessment of the likely outcome of key matters
and the basis for this assessment;
in respect of the ongoing State Aid case:
• made enquiries of external lawyers to understand their estimate of the outcome;
• review of external legal advice and specific case matter confirmations for any
contradictory or supporting information;
• review of written correspondence from the Group’s external counsel for any
contradictory or supporting information;
• corroboration of the claim amount through review of aid previously received;
• assessment of evidence that the €15.1m provision represents the Group’s best
estimate of the likely economic outflow based on the most likely outcome of this
matter;
in respect of certain other legal claims or environmental tax exposures, we have had
direct discussion with external lawyers and/or obtained written case matter
confirmations;
review of correspondence with other lawyers during the year, including their reported
quantification of likely economic outflow; and
review of professional fees expense accounts for large unexplained legal costs, which
could indicate the presence of further ongoing cases requiring provision.
Key observations:
Based on our procedures performed, we believe that provisions and contingent liability
disclosures in respect of both the State Aid case and other cases are reasonable and
appropriate. We note that scenarios do exist (although not considered the ‘most likely’
scenarios) where these claims could be settled for amounts that are materially more or less
than the provision made at 31 March 2022.
164
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Independent auditor’s report to the members of Renewi plc continuedRenewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report Our application of materiality
We apply the concept of materiality both in planning and performing our audit, and in evaluating the effect of misstatements. We
consider materiality to be the magnitude by which misstatements, including omissions, could influence the economic decisions of
reasonable users that are taken on the basis of the financial statements.
In order to reduce to an appropriately low level the probability that any misstatements exceed materiality, we use a lower materiality
level, performance materiality, to determine the extent of testing needed. Importantly, misstatements below these levels will not
necessarily be evaluated as immaterial as we also take account of the nature of identified misstatements, and the particular
circumstances of their occurrence, when evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the financial statements as a whole and performance materiality
as follows:
GROUP FINANCIAL STATEMENTS
Materiality
€6.51m (FY21: €6.77m).
PARENT COMPANY
FINANCIAL STATEMENTS
£13m (FY21: £6.37m).
Basis for determining
materiality
5% of EBIT adjusted for non-recurring items
(FY21: 0.4% of Group revenue).
2% of net assets (FY21: 1% of net assets).
Rationale for the
benchmark applied
As the principle intent of the Group is to generate
stakeholder return, a profit-based measure is considered
most appropriate.
Revenue was selected in the prior year as earnings based
measures were not considered to have sufficient stability,
as a result of a combination of integration activity
following the merger of the legacy VGG and Shanks
businesses. Given the trading performance in the year, we
consider that transitioning to an earnings based measure
is appropriate.
Net assets is considered the primary measure
of shareholders in assessing the performance
of the Parent Company, as performance will
be measured on the performance of its
investments through dividend receipts and
impairment charges.
The increase to 2% represents alignment
with our internal methodology.
Performance
materiality
Basis for determining
performance
materiality
€4.56m (FY21: €4.40m).
£9.1m (FY21: £4.14m).
Performance materiality has been set at 70% (FY21: 65%).
Our performance materiality percentage has increased,
given this is our second year of appointment, having
developed relevant business and risk understanding
during our first-year audit. The percentage selected
ensures our audit adjustment aggregation risk is at an
appropriate level.
Performance materiality has been set at 70%
(FY21: 65%).
Our performance materiality percentage has
increased for the reasons set out opposite.
Component materiality
We set materiality for each component of the Group based on a percentage of between 18% and 86% of Group materiality, dependent
on the size and our assessment of the risk of material misstatement of that component. Component materiality ranged from
€1,200,000 to €5,600,000. In the audit of each component, we further applied performance materiality levels of 70% of the
component materiality to our testing, to ensure that the risk of errors exceeding component materiality was appropriately mitigated.
Reporting threshold
We agreed with the Audit Committee that we would report to them all individual audit differences in excess of €130,000 (2021:
€133,000). We also agreed to report differences below this threshold that, in our view, warranted reporting on qualitative grounds.
Other Companies Act 2006 reporting
Based on the responsibilities described below and our work
performed during the course of the audit, we are required by the
Companies Act 2006 and ISAs (UK) to report on certain opinions
and matters, as described below.
Strategic
report and
Directors’
report
In our opinion, based on the work
undertaken in the course of the audit:
the information given in the Strategic
report and the Directors’ report for the
financial year for which the financial
statements are prepared is consistent with
the financial statements; and
the Strategic report and the Directors’
report have been prepared in accordance
with applicable legal requirements.
In the light of the knowledge and
understanding of the Group and Parent
Company and its environment obtained in
the course of the audit, we have not
identified material misstatements in the
Strategic report or the Directors’ report.
Directors’
remuneration
In our opinion, the part of the Directors’
remuneration report to be audited has been
properly prepared in accordance with the
Companies Act 2006.
Matters on
which we are
required to
report by
exception
We have nothing to report in respect of the
following matters in relation to which the
Companies Act 2006 requires us to report to
you if, in our opinion:
adequate accounting records have not
been kept by the Parent Company, or
returns adequate for our audit have not
been received from branches not visited
by us; or
the Parent Company financial statements
and the part of the Directors’
remuneration report to be audited are not
in agreement with the accounting records
and returns; or
certain disclosures of Directors’
remuneration specified by law are not
made; or
we have not received all the information
and explanations we require for our audit.
Other information
The Directors are responsible for the other information. The
other information comprises the information included in the
Annual Report and Accounts, other than the financial statements
and our auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except to
the extent otherwise explicitly stated in our report, we do not
express any form of assurance conclusion thereon. Our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
course of the audit, or otherwise appears to be materially
misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to determine
whether this gives rise to a material misstatement in the financial
statements themselves. If, based on the work we have
performed, we conclude that there is a material misstatement of
this other information, we are required to report that fact.
We have nothing to report in this regard.
Corporate governance statement
The Listing Rules require us to review the Directors’ statement in
relation to going concern, longer-term viability and that part of
the Corporate Governance Statement relating to the Parent
Company’s compliance with the provisions of the UK Corporate
Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements or our knowledge obtained during the audit.
Going
concern and
longer-term
viability
Other Code
provisions
the Directors’ statement with regards to the
appropriateness of adopting the going
concern basis of accounting and any
material uncertainties identified set out on
page 157; and
the Directors’ explanation as to its
assessment of the entity’s prospects, the
period this assessment covers and why the
period is appropriate set out on page 157.
Directors’ statement on fair, balanced and
understandable set out on page 118;
Board’s confirmation that it has carried out
a robust assessment of the emerging and
principal risks set out on page 118;
the section of the annual report that
describes the review of effectiveness of risk
management and internal control systems
set out on page 118; and
the section describing the work of the Audit
Committee set out on page 129.
166
167
Independent auditor’s report to the members of Renewi plc continuedRenewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report European Single Electronic Format (ESEF)
The Annual Report and Accounts of Renewi plc, has been
prepared in single electronic reporting format (ESEF), pursuant
to the Commission Delegated Regulation (EU) 2019/815 of
17 December 2018, supplementing Directive 2004/109/EC of
the European Parliament and the Council. The requirements
to be met are set out in the aforementioned delegated regulation
(these requirements are hereinafter referred to as: the RTS
on ESEF).
In our opinion, the Annual Report and Accounts, made up in
XHTML format, including the partly tagged consolidated financial
statements as included in the reporting package by Renewi plc,
has been prepared in all material respects in accordance with the
RTS on ESEF.
Management is responsible for preparing the Annual Report and
Accounts, including the financial statements, in accordance with
the RTS on ESEF, whereby management combines the various
components in a reporting package. Our responsibility is to
obtain reasonable assurance for our conclusion on whether the
Annual Report and Accounts in this reporting package, is in
accordance with the requirements. We have taken into
consideration what is stated in Alert 43.
Our procedures included:
obtaining an understanding of the entity’s financial reporting
process, including the preparation of the annual financial
report in XHTML-format;
obtaining the reporting package and performing validations to
determine whether the reporting package containing the inline
XBRL instance document and XBRL extension taxonomy files
have been prepared in accordance with the technical
specifications; and
examining the information related to the consolidated
financial statements in the reporting package to determine
whether all required taggings have been applied and whether
they are in accordance with the RTS on ESEF.
Responsibilities of Directors
As explained more fully in the Directors’ responsibilities
statement, the Directors are responsible for the preparation of
the financial statements and for being satisfied that they give a
true and fair view, and for such internal control as the Directors
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error.
In preparing the financial statements, the Directors are
responsible for assessing the Group’s and the Parent 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 Group or the Parent Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always
detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be
expected to influence the economic decisions of users taken on
the basis of these financial statements.
Extent to which the audit was capable of detecting
irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material
misstatements in respect of irregularities, including fraud. The
extent to which our procedures are capable of detecting
irregularities, including fraud, is detailed below:
We have gained an understanding of the legal and regulatory
framework in which the Group operates through our core team
members’ knowledge of the industry and countries in which the
Group operates, in addition to enquiries of Group legal counsel.
Based on this understanding, we identified that the principal
risks of non-compliance with laws and regulations relates to
environmental and health and safety regulations. We have
example, forgery, misrepresentations or through collusion. There
are inherent limitations in the audit procedures performed and
the further removed non-compliance with laws and regulations
is from the events and transactions reflected in the financial
statements, the less likely we are to become aware of it.
A further description of our responsibilities is available on the
Financial Reporting Council’s website at: frc.org.uk/
auditorsresponsibilities. This description forms part of our
Auditor’s Report.
Use of our report
This report is made solely to the Parent Company’s members, as
a body, in accordance with Chapter 3 of Part 16 of the Companies
Act 2006. Our audit work has been undertaken so that we might
state to the Parent Company’s members those matters we are
required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept
or assume responsibility to anyone other than the Parent
Company and the Parent Company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
Mark Cardiff
Senior Statutory Auditor
For and on behalf of BDO LLP, Statutory Auditor
London, UK
24 May 2022
BDO LLP is a limited liability partnership registered in England and Wales (with
registered number OC305127).
considered the extent to which non-compliance might have a
material impact on the financial statements. We have reviewed
Board minutes and other key correspondence (including with
external counsel) to identify any undisclosed instances of
non-compliance with such regulations. We also considered
those laws and regulations that have a direct impact on the
preparation of the financial statements, including Companies Act
2006, the listing rules and local tax laws. We have reviewed the
financial statements against Companies Act 2006 and Listing
Rules disclosure checklists to confirm that disclosures are
compliant with the requirements. In respect of local tax laws, we
have focused our testing on the recognition of deferred tax assets
and the quantification of uncertain tax positions, in accordance
with our understanding of the associated local tax legislation
supported by in-country tax experts.
We have considered the incentives and opportunities of
management to carry out fraudulent financial reporting
(including override of controls) and determined that the
principal risks relate to management bias in determining
accounting estimates and judgements (the most significant of
which are outlined in our key audit matters above) and through
the recording of inappropriate journal entries.
We communicated relevant identified laws and regulations and
potential fraud risks to all engagement team members, and
remained alert to any indications of fraud or non-compliance
with laws and regulations throughout the audit.
Audit procedures performed, which are capable of detecting
irregularities, including fraud, include:
critical challenge and exercise of professional scepticism in the
assessment of significant accounting estimates, judgements
and policies for any indications of management bias;
identification and testing of unusual journal entries focusing
on journals with parameters indicative of fraud; and
detailed verification of consolidation level journal entries.
Our audit procedures were designed to respond to risks of
material misstatement in the financial statements, recognising
that the risk of not detecting a material misstatement due to
fraud is higher than the risk of not detecting one resulting from
error, as fraud may involve deliberate concealment by, for
168
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Independent auditor’s report to the members of Renewi plc continuedRenewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report Consolidated Income Statement
For the year ended 31 March 2022
Consolidated Statement of Comprehensive Income
For the year ended 31 March 2022
2022
Non
trading &
exceptional
items
€m
Note
Underlying
€m
2021
Restated*
Non
trading &
exceptional
items
€m
Total
€m
Underlying
€m
Revenue
Cost of sales
Gross profit (loss)
Administrative expenses
Operating profit (loss)
Finance income
Finance charges
Share of results from associates and
joint ventures
Profit (loss) before taxation
Taxation
Profit (loss) for the year
Attributable to:
Owners of the parent
Non-controlling interests
2,3.1
3.3
3.3
2,3.3
5.4
5.4
4.4
3.4
5.9
1,869.2
(1,512.5)
356.7
(223.1)
133.6
9.3
(38.2)
0.5
105.2
(26.4)
78.8
77.9
0.9
78.8
–
0.1
0.1
(9.7)
(9.6)
0.2
(0.1)
–
(9.5)
6.1
(3.4)
(3.4)
–
(3.4)
1,869.2
(1,512.4)
356.8
(232.8)
124.0
9.5
(38.3)
0.5
95.7
(20.3)
75.4
74.5
0.9
75.4
* The comparatives have been restated due to prior period adjustments as explained in section 1 Basis of preparation.
Earnings per share
Basic
Diluted
Underlying basic
Underlying diluted
1,693.6
(1,408.5)
285.1
(212.1)
73.0
10.9
(38.1)
1.6
47.4
(11.6)
35.8
35.9
(0.1)
35.8
Note
3.5
3.5
3.5
3.5
2022
cents
Restated*
2021
cents
93
93
98
98
7
7
45
45
Restated*
Total
€m
1,693.6
(1,424.2)
269.4
(233.3)
36.1
11.3
(38.1)
1.6
10.9
(5.4)
5.5
5.6
(0.1)
5.5
Items that may be reclassified subsequently to profit or loss:
Exchange differences on translation of foreign subsidiaries
Fair value movement on cash flow hedges
Deferred tax on fair value movement on cash flow hedges
Share of other comprehensive income of investments accounted for using the equity method
Items that will not be reclassified to profit or loss:
Actuarial gain (loss) on defined benefit pension schemes
Deferred tax on actuarial gain (loss) on defined benefit pension schemes
Other comprehensive income (loss) for the year, net of tax
Profit for the year
Total comprehensive income (loss) for the year
Attributable to:
Owners of the parent
Non-controlling interests
Total comprehensive income (loss) for the year
* The comparatives have been restated due to prior period adjustments as explained in section 1 Basis of preparation.
The notes on pages 175 to 244 are an integral part of these consolidated financial statements.
Note
5.5
3.4
4.4
7.2
3.4
2022
€m
(0.2)
16.5
(1.9)
0.5
14.9
10.5
(2.4)
8.1
23.0
75.4
98.4
97.5
0.9
98.4
Restated*
2021
€m
(3.1)
14.3
(2.4)
0.3
9.1
(23.3)
4.4
(18.9)
(9.8)
5.5
(4.3)
(4.2)
(0.1)
(4.3)
–
(15.7)
(15.7)
(21.2)
(36.9)
0.4
–
–
(36.5)
6.2
(30.3)
(30.3)
–
(30.3)
* The comparatives have been restated in accordance with the requirements of IAS 33 Earnings per share following the share consolidation and also due to prior period
adjustments as explained in section 1 Basis of preparation.
The notes on pages 175 to 244 are an integral part of these consolidated financial statements.
170
171
Consolidated Balance Sheet
As at 31 March 2022
Consolidated Statement of Changes in Equity
For the year ended 31 March 2022
Assets
Non-current assets
Goodwill and intangible assets
Property, plant and equipment
Right-of-use assets
Investments
Financial assets relating to PPP contracts
Derivative financial instruments
Defined benefit pension scheme surplus
Other receivables
Deferred tax assets
Current assets
Inventories
Investments
Loans to associates and joint ventures
Financial assets relating to PPP contracts
Trade and other receivables
Derivative financial instruments
Current tax receivable
Cash and cash equivalents – including restricted cash
Assets classified as held for sale
Total assets
Liabilities
Non-current liabilities
Borrowings
Derivative financial instruments
Other non-current liabilities
Defined benefit pension schemes deficit
Provisions
Deferred tax liabilities
Current liabilities
Borrowings
Derivative financial instruments
Trade and other payables
Current tax payable
Provisions
Total liabilities
Net assets
Issued capital and reserves attributable to the owners of the parent
Share capital
Share premium
Exchange reserve
Retained earnings
Non-controlling interests
Total equity
31 March
2022
€m
Note
Restated*
31 March
2021
€m
4.1
4.2
4.3
4.4
4.5
5.5
7.2
4.8
3.4
4.7
4.4
4.4
4.5
4.8
5.5
5.2
6.3
5.3
5.5
4.9
7.2
4.10
3.4
5.3
5.5
4.9
4.10
5.9
5.9
5.9
5.9
5.9
592.8
553.6
213.8
14.3
135.7
0.4
8.6
5.1
41.6
1,565.9
22.5
11.1
0.9
7.7
269.3
6.6
0.9
63.6
382.6
3.3
385.9
1,951.8
(518.7)
(14.6)
(36.2)
(6.3)
(258.1)
(47.0)
(880.9)
(148.9)
(0.1)
(528.4)
(24.2)
(31.1)
(732.7)
(1,613.6)
338.2
99.5
473.8
(15.0)
(227.1)
331.2
7.0
338.2
594.9
560.7
233.8
17.2
142.4
7.9
–
4.1
51.3
1,612.3
20.6
9.3
0.9
6.7
247.7
1.2
0.5
68.8
355.7
–
355.7
1,968.0
(689.1)
(25.3)
(54.4)
(11.4)
(252.6)
(50.9)
(1,083.7)
(47.8)
(0.2)
(546.2)
(13.8)
(38.7)
(646.7)
(1,730.4)
237.6
99.5
473.6
(14.8)
(326.8)
231.5
6.1
237.6
* The comparatives have been restated due to prior period adjustments as explained in section 1 Basis of preparation.
The notes on pages 175 to 244 are an integral part of these consolidated financial statements.
The Financial Statements on pages 170 to 257 were approved by the Board of Directors and authorised for issue on 24 May 2022. They
were signed on its behalf by:
Ben Verwaayen
Chairman
Otto de Bont
Chief Executive Officer
172
Balance at 1 April 2021 – restated*
Profit for the year
Other comprehensive (loss) income:
Exchange loss on translation of foreign subsidiaries
Fair value movement on cash flow hedges
Actuarial gain on defined benefit pension schemes
Tax in respect of other comprehensive income items
Share of other comprehensive income of investments accounted
for using the equity method
Total comprehensive (loss) income for the year
Share-based compensation
Movement on tax arising on share-based compensation
Proceeds from exercise of employee options
Own shares purchased by the Employee Share Trust
Balance as at 31 March 2022
Balance at 1 April 2020
Profit (loss) for the year – restated*
Other comprehensive (loss) income:
Exchange (loss) gain on translation of foreign subsidiaries
Fair value movement on cash flow hedges
Actuarial loss on defined benefit pension schemes
Tax in respect of other comprehensive income items
Share of other comprehensive income of investments accounted
for using the equity method
Total comprehensive loss for the year – restated*
Share-based compensation
Movement on tax arising on share-based compensation
Disposal of non-controlling interest
Own shares purchased by the Employee Share Trust
5.5
7.2
3.4
4.4
7.3
5.9
5.9
5.5
7.2
3.4
4.4
7.3
5.9
Share
capital
€m
Share
premium
€m
Exchange
reserve
€m
Note
Restated*
Retained
earnings
€m
Non-
controlling
interests
€m
Restated*
Total
equity
€m
99.5
–
473.6
–
(14.8)
–
(326.8)
74.5
6.1
0.9
237.6
75.4
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0.2
–
(0.2)
–
–
–
–
(0.2)
–
–
–
–
–
16.5
10.5
(4.3)
0.5
97.7
2.5
1.3
–
(1.8)
–
–
–
–
–
0.9
–
–
–
–
(0.2)
16.5
10.5
(4.3)
0.5
98.4
2.5
1.3
0.2
(1.8)
99.5
473.8
(15.0)
(227.1)
7.0
338.2
99.5
–
473.6
–
(11.6)
–
(327.6)
5.6
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(3.2)
–
–
–
–
(3.2)
–
–
–
–
–
14.4
(23.3)
2.0
0.3
(1.0)
1.4
0.3
1.3
(1.2)
Balance as at 31 March 2021 – restated*
99.5
473.6
(14.8)
(326.8)
* The comparatives have been restated due to prior period adjustments as explained in section 1 Basis of preparation.
The notes on pages 175 to 244 are an integral part of these consolidated financial statements.
1.4
(0.1)
0.1
(0.1)
–
–
–
(0.1)
–
–
4.8
–
6.1
235.3
5.5
(3.1)
14.3
(23.3)
2.0
0.3
(4.3)
1.4
0.3
6.1
(1.2)
237.6
173
Consolidated Statement of Cash Flows
For the year ended 31 March 2022
Notes to the financial statements
Profit before tax
Finance income
Finance charges
Share of results from associates and joint ventures
Operating profit
Amortisation and impairment of intangible assets
Depreciation and impairment of property, plant and equipment
Depreciation and impairment of right-of-use assets
Impairment of investment in associate
Net gain on disposal of property, plant and equipment and intangible assets
Exceptional (credit) charge on long term provisions
Net decrease in provisions
Payment related to committed funding of the defined benefit pension schemes
Other non-cash items
Share-based compensation
Operating cash flows before movement in working capital
(Increase) decrease in inventories
(Increase) decrease in receivables
(Decrease) increase in payables
Cash flows from operating activities
Income tax paid
Net cash inflow from operating activities
Investing activities
Purchases of intangible assets
Purchases of property, plant and equipment
Proceeds from disposals of property, plant and equipment
Acquisition of business assets
Net cash outflow in relation to prior year sale of business
Capital contribution to associates and joint ventures
Dividends received from associates and joint ventures
Receipt of deferred consideration
Purchase of other short-term investments
Outflows in respect of PPP arrangements under the financial asset model
Capital received in respect of PPP financial assets
Finance income
Net cash outflow from investing activities
Financing activities
Finance charges and loan fees paid
Investment in own shares by the Employee Share Trust
Proceeds from share issues
Loan from non-controlling interest
Proceeds from retail bonds
Proceeds from bank borrowings
Repayment of bank borrowings
Settlement of cross-currency interest rate swaps
Repayment of PPP debt
Repayments of obligations under lease liabilities
Net cash outflow from financing activities
Net decrease in cash and cash equivalents
Effect of foreign exchange rate changes
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
* The comparatives have been restated due to prior period adjustments as explained in section 1 Basis of preparation.
The notes on pages 175 to 244 are an integral part of these consolidated financial statements
2022
€m
95.7
(9.5)
38.3
(0.5)
124.0
11.1
74.7
45.5
1.9
(0.8)
(1.6)
(5.8)
(3.6)
–
2.5
247.9
(1.9)
(23.2)
(34.8)
188.0
(7.6)
180.4
(8.4)
(77.6)
4.7
(0.5)
(0.8)
–
1.3
0.3
(2.2)
(0.4)
6.2
9.9
(67.5)
(28.4)
(1.8)
0.2
–
125.0
141.6
(312.2)
6.4
(5.7)
(44.2)
(119.1)
(6.2)
1.0
68.8
63.6
Restated*
2021
€m
10.9
(11.3)
38.1
(1.6)
36.1
19.1
80.4
42.5
–
(0.1)
3.7
(11.0)
(3.6)
2.6
1.4
171.1
0.2
25.1
57.1
253.5
(14.8)
238.7
(4.1)
(58.0)
4.5
–
–
(1.1)
1.6
0.6
(0.8)
(1.9)
5.1
10.2
(43.9)
(30.8)
(1.2)
–
0.5
–
9.0
(269.0)
–
(4.1)
(40.4)
(336.0)
(141.2)
0.2
209.8
68.8
Note
4.1
4.2
4.3
4.4
7.3
4.8
4.9
6.1
5.9
5.1
5.1
5.1
5.1
5.1
5.2
SECTION 1. BASIS OF PREPARATION
This section provides general information about the Group and the accounting policies that apply to the consolidated financial
statements as a whole. Accounting policies that are specific to a particular note are provided within the note to which they relate.
This section also details the new or amended accounting standards adopted during the year as well as the anticipated impact of
future changes to accounting standards that are not yet effective.
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 and the address of the
registered office is given on page 261. The nature of the Group’s operations and its principal activities are set out in section 2.
The consolidated financial statements of the Group are prepared in accordance with UK adopted international accounting standards
in conformity with the requirements of the Companies Act 2006.
The consolidated financial statements have been prepared on the historical cost basis, except for derivative financial instruments, other
receivables relating to invoice finance facilities, share-based payments, plan assets within pension schemes, unlisted investments and
short-term investments which are stated at fair value. The accounting policies adopted in the consolidated financial statements have
been consistently applied. The Group has applied all accounting standards and interpretations issued relevant to its operations and
effective for accounting periods beginning on 1 April 2021. The consolidated financial statements are presented in Euros and all
amounts are rounded to the nearest €0.1m unless otherwise stated.
Going concern
The Directors have adopted the going concern basis in preparing these consolidated financial statements after assessing the Group's
principal risks including an assessment of the impact of continued recovery from the Covid-19 pandemic, the current high inflationary
environment and the uncertainty arising from the invasion of Ukraine.
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 modelling over an 18-month period to 30 September 2023. This includes expectations on
the future economic environment, available liquidity, which includes repayment of the €100m Belgian retail bond in June 2022, as well
as other principal risks associated with the Group’s ongoing operations.
The assessment includes a base case scenario setting out the Directors’ current expectations of future trading and a plausible but
severe downside scenario and without applying any mitigating actions to assess the potential impact on the Group’s future financial
performance. The key judgement in both scenarios is the level and speed of economic recovery following the disruption caused by the
Covid-19 pandemic and the impact of recent geopolitical events.
The downside scenario includes significantly weaker macro-economic conditions leading to a volume decline, well below the forecast
economic growth in all our territories in FY23 and FY24. Other downsides include a significant decline in recyclate prices from the
current levels, higher energy and diesel prices, operational downtime in some of our plants and a settlement of the provision arising
from the European Commission investigation into alleged state aid in Belgium. These factors reduce FY23 EBIT by 31% compared to
the base case. No mitigating cost and cash actions, such as deferral of uncommitted capital expenditure, working capital actions and
reduced discretionary spend, have been applied to our downside modelling as these are not necessary to preserve sufficient liquidity
or to avoid a breach of covenants.
In the base case and plausible downside scenarios the Group has sufficient liquidity and headroom in its existing facilities and no
covenants are breached at any of the forecast testing dates.
In addition, a reverse stress test calculation has been undertaken to consider the points at which the covenants may be breached.
Underlying EBIT in FY23 would need to reduce by 59% compared to the base case without considering any mitigating actions. In the
opinion of the Directors there is no plausible scenario or combination of scenarios that we consider to be remotely likely that would
generate this result.
Having considered all the elements of the financial projections, sensitivities and mitigating actions, 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.
In accordance with Provision 31 of the UK Corporate Governance Code, the Directors have also assessed the prospects and financial
viability of the Company for a period longer than the 12 months required in the going concern assessment. Further details are provided
in the Viability Statement on page 100.
174
175
Notes to the financial statements continued
SECTION 1. BASIS OF PREPARATION CONTINUED
SECTION 1. BASIS OF PREPARATION CONTINUED
Prior year restatements
PPP non-recourse net debt presentation
Given that cash held in UK PPP entities is not freely available to the Group, historically management determined that it was appropriate
to present these cash balances together with the gross non-recourse debt as PPP non-recourse net debt. In preparing these financial
statements, management identified this presentation of cash and cash equivalents and PPP non-recourse debt in the balance sheet as
an error and accordingly a prior year adjustment has been made. Non-recourse debt in these UK PPP entities has always been excluded
from the calculation of the Group’s covenants which remains unchanged. It has been determined that the appropriate presentation
should be on a gross basis in line with the requirements of IAS 32 Financial Instruments. The impact of this change has led to gross PPP
non-recourse debt and PPP cash held at bank being presented separately within borrowings and current assets respectively which has
resulted in the following changes to the 31 March 2021 Balance Sheet: an increase in non-current borrowings of €15.2m, an increase in
current borrowings of €2.1m with a corresponding increase in cash and cash equivalents of €17.3m. There is no impact on the Income
Statement, earnings per share, Statement of Comprehensive Income, Group equity or the alternative performance measure of core net
debt. The Balance Sheet and Statements of Cash flows together with related disclosures have been restated to reflect this adjustment.
A 31 March 2020 balance sheet has not been presented as considered not material, the impact is an increase in non-current borrowings
of €14.0m, an increase in current borrowings of €1.3m with a corresponding increase in cash and cash equivalents of €15.3m.
Earnings per share due to share capital consolidation
At the Annual General Meeting of Renewi plc held on 15 July 2021, shareholders approved the consolidation of the Company’s share
capital on the basis of one new ordinary share with a nominal value of £1.00 each for every ten existing ordinary shares of 10 pence each
held. As a result earnings per share disclosures have been restated in these consolidated financial statements in accordance with the
requirements of IAS 33 Earnings per share and as set out in note 3.5.
Change in accounting policy – Configuration or customisation costs in cloud computing, Software as a Service (SaaS)
arrangements
In April 2021 the IFRS Interpretations Committee (IFRIC) published an agenda decision in relation to the interpretation on accounting
for configuration or customisation costs in cloud computing or Software as a Service (SaaS). As a result the Group has reviewed its
accounting policy regarding the configuration and customisation costs incurred when implementing SaaS arrangements.
The Group’s revised policy, applied retrospectively, aligns with the IFRIC agenda decision whereby:
In SaaS arrangements where the Group controls the underlying software, configuration and customisation costs are capitalised as part
of bringing the identified intangible asset into use
Where the Group does not control the underlying software, but the related configuration and customisation costs are not distinct from
access to the software, these costs are expensed over the term of the SaaS contract
In all other circumstances, configuration and customisation costs are recognised as an expense as incurred, except in the limited
instances where these costs result in a separately identifiable intangible asset.
We have determined that €3.9m of costs incurred and capitalised during the current financial year and the net book value of €7.3m of
software intangible assets held at 31 March 2021 no longer meet the criteria for recognition under IAS 38 Intangible assets. The impact
on opening reserves for the year ended March 2020 of €3.7m was deemed immaterial and has therefore been included in the year
ended March 2021 adjustment. Accordingly, €3.9m (2021: €7.3m) has been expensed and disclosed as a non-trading and exceptional
administrative expenses item because it arises from the one-off introduction of interpretations to accounting policy guidance and is
material in size. The prior year balance sheet has been adjusted with a reduction of €7.3m of intangibles, an increase in deferred tax
assets of €1.8m and a reduction in retained earnings of €5.5m. The impact on the Statement of Cash flows is a €4.7m increase in
cashflows from operating activities and a reduction in cash outflows due to investing activities of €4.7m.
The impact of the above restatements on the Consolidated Income Statement for the year ended 31 March 2021 is as follows:
Income statement extract
Underlying operating profit
Non-trading and exceptional items
Operating profit
Profit before taxation
Taxation
Profit for the year
176
31 March 2021
(previously
reported)
€m
Restatement
due to PPP
cash and debt
€m
Restatement
due to SaaS
arrangements
€m
31 March 2021
(restated)
€m
73.0
(29.6)
43.4
18.2
(7.2)
11.0
–
–
–
–
–
–
–
(7.3)
(7.3)
(7.3)
1.8
(5.5)
73.0
(36.9)
36.1
10.9
(5.4)
5.5
The impact of the above restatements on the Consolidated Balance Sheet as at 31 March 2021 is as follows:
Balance Sheet extract
Goodwill and intangible assets
Deferred tax assets
Non-current assets
Cash and cash equivalents – including restricted cash
Current assets
Total assets
Borrowings – non-current
Non-current liabilities
Borrowings – current
Current Liabilities
Total liabilities
Net assets
Issued capital and reserves attributable to the owners of the parent
Retained earnings
Other equity
Non-controlling interests
Total equity
31 March 2021
(previously
reported)
€m
Restatement
due to PPP
cash and debt
€m
Restatement
due to SaaS
arrangements
€m
31 March 2021
(restated)
€m
602.2
49.5
1,617.8
51.5
338.4
1,956.2
(673.9)
(1,068.5)
(45.7)
(644.6)
(1,713.1)
243.1
(321.3)
558.3
237.0
6.1
243.1
–
–
–
17.3
17.3
17.3
(15.2)
(15.2)
(2.1)
(2.1)
(17.3)
–
–
–
–
–
–
(7.3)
1.8
(5.5)
–
–
(5.5)
–
–
–
–
–
(5.5)
(5.5)
–
(5.5)
–
(5.5)
594.9
51.3
1,612.3
68.8
355.7
1,968.0
(689.1)
(1,083.7)
(47.8)
(646.7)
(1,730.4)
237.6
(326.8)
558.3
231.5
6.1
237.6
The impact of the above restatements on the Consolidated Statement of Cash Flows for the year ended 31 March 2021 is as follows:
Statement of Cash Flows extract
Net cash flows from operating activities
Net cash flows from investing activities
Net cash flows from financing activities
Net decrease in cash and cash equivalents
Effect of foreign exchange rate changes
Cash and cash equivalents at 31 March 2020
Cash and cash equivalents at 31 March 2021
31 March 2021
(previously
reported)
€m
Restatement
due to PPP
cash and debt
€m
Restatement
due to SaaS
arrangements
€m
31 March 2021
(restated)
€m
243.4
(48.6)
(337.3)
(142.5)
(0.5)
194.5
51.5
–
–
1.3
1.3
0.7
15.3
17.3
(4.7)
4.7
–
–
–
–
–
238.7
(43.9)
(336.0)
(141.2)
0.2
209.8
68.8
The impact of the above restatements on basic and diluted earnings per share for the year ended 31 March 2021 is as follows:
Basic
Diluted
Underlying basic
Underlying diluted
31 March 2021
(previously
reported)
cents
Share capital
consolidation
cents
Restatement
due to PPP
cash and debt
cents
Restatement
due to SaaS
arrangements
cents
31 March 2021
(restated)
cents
1.4
1.4
4.5
4.5
12.6
12.6
40.5
40.5
–
–
–
–
(7.0)
(7.0)
–
–
7.0
7.0
45.0
45.0
177
Notes to the financial statements continued
SECTION 1. BASIS OF PREPARATION CONTINUED
SECTION 1. BASIS OF PREPARATION CONTINUED
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 2022:
Onerous Contracts – Costs of Fulfilling a Contract (Amendments to IAS 37)
Property, plant and equipment: Proceeds before Intended Use (Amendments to IAS 16)
Annual improvements to IFRS Standards 2018-2020 (Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41)
References to Conceptual Framework (Amendments to IFRS 3).
The amendment to IAS 37 Onerous Contracts – Costs of Fulfilling Contract clarifies that the costs of fulfilling a contract should include
an allocation of other costs that relate directly to fulfilling the contract. Costs that relate directly to a contract consist of both the
incremental costs of fulfilling that contract – for example, direct labour and materials; and an allocation of other costs that relate
directly to fulfilling contracts – for example, an allocation of the depreciation charge for an item of property, plant and equipment used
in fulfilling that contract among others. Prior to this amendment there has been a diversity in practice as to whether the costs of
meeting contractual obligations should comprise only incremental costs or also include an allocation of direct costs which would have
been incurred regardless of whether the contract was being performed or not. The Group’s current accounting policy only includes
incremental direct costs when measuring the costs to fulfil a contract. The amendment is effective from 1 April 2022 and requires any
additional provisions to be recognised as an adjustment to retained earnings at that date. The Group is in the process of finalising the
impact of this amendment and it is currently estimated that this will result in an increase in the existing onerous contract provisions of
approximately €53m.
The following amendments are effective for the period beginning 1 April 2023:
Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
Definition of Accounting Estimates (Amendments to IAS 8)
Deferred Tax Related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12).
The Group does not expect a significant impact from any of the other new accounting standards and amendments.
Consideration of climate change
In preparing the financial statements, the Directors have considered the impact of climate change, particularly in the context of the risks
identified in the TCFD disclosures on pages 66 to 73 this year. Physical climate change poses risk to our operations and supply chain
however mitigation measures are either already in place or are in the process of being further developed therefore no medium-term
impact is expected from climate change. The Directors are aware of the changing risks attached to climate change and are in the
process of developing a TCFD Roadmap which will lead to quantifying the business impact of material climate related risks and
opportunities. There have been no material impacts identified on the financial reporting judgements and estimates. In particular,
the impact of climate change has been considered in respect of the following areas:
Going concern and viability of the Group over the next three years
Cash flow forecasts in the impairment assessments of goodwill
Carrying value and useful economic lives of property, plant and equipment.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of Renewi plc (the Company), all its subsidiary undertakings
(subsidiaries) and the Group’s interests in joint ventures, associates and joint operations.
Subsidiaries are entities which are directly or indirectly controlled by the Group. Control exists where the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the
entity. Where there is a non-controlling interest this is identified separately from the Group’s equity. Accounting policies of subsidiaries
have been adjusted where necessary to ensure consistency with those used by the Group. The results of subsidiaries acquired or sold
during the year are included in the consolidated financial statements from or up to the date control passes. All intra-group transactions,
balances, income and expenses are eliminated on consolidation. A joint venture is a joint arrangement whereby the parties that have
joint control of the arrangement have rights to the net assets of the arrangement. An associate is an entity, other than a subsidiary or
joint venture, over which the Group has significant influence. Significant influence is the power to participate in the financial and
operating decisions of an entity but is not in control or joint control over those policies. Investments in associates and joint ventures are
accounted for using the equity method of accounting and are initially recognised at cost or, in the case of a disposal of the majority
shareholding, at fair value. The cumulative post-acquisition profits or losses and movements in Other Comprehensive Income are
adjusted against the carrying amount of the investment. When the Group’s share of losses exceeds the carrying amount of the joint
venture or associate, the carrying amount is reduced to nil and recognition of further losses is discontinued except to the extent that the
Group has incurred legal or constructive obligations or made payments on behalf of the joint venture or associate. Accounting policies
of associates and joint ventures have been adjusted where necessary to ensure consistency with the policies of the Group. Where the
Group is party to a jointly controlled operation, the Group proportionately accounts for its share of the income and expenditure, assets
and liabilities and cash flows on a line-by-line basis in the consolidated financial statements.
Other investments in entities that are neither associates, joint ventures nor subsidiaries are held at fair value through profit or loss
except for the other unlisted investments that the Group has elected to hold at fair value through Other Comprehensive Income.
Foreign currencies
The financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which
the entity operates (the functional currency). The results and financial position of all the Group entities that have a functional currency
different from the presentational currency of the Group are translated as follows:
monetary assets and liabilities at each balance sheet date are translated into Euros at the closing year end exchange rate;
income and expenses in each Income Statement are translated into Euros at the average rate of exchange for the year;
equity items are translated at the historical rate being the average rate of exchange in the year when the transaction occurred; and
the resulting exchange differences are recognised in the exchange reserve in Other Comprehensive Income.
In addition to the Group’s presentational currency of Euros, the most significant currency for the Group is Sterling with the closing rate
on 31 March 2022 of €1: £0.845 (2021: €1: £0.852) and an average rate for the year ended 31 March 2022 of €1: £0.849 (2021: €1: £0.885).
Cumulative exchange differences are recognised in the Income Statement in the year in which a non-Euro denominated subsidiary
undertaking is sold.
The Group applies the hedge accounting principles of IFRS 9 Financial Instruments relating to net investment hedging to offset the
exchange differences arising on foreign currency denominated borrowings with the translation of foreign operations. Net investment
hedges are accounted for by recognising exchange rate movements in the exchange reserve, with any hedge ineffectiveness being
charged to the Income Statement in the period the ineffectiveness arises.
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. The areas
involving a higher degree of judgement or complexity are set out below and in more detail in the related notes. Critical estimates are
defined as those that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within
the next financial year. The estimates and associated assumptions are based on factors including historical experience and expectations
of future events that are considered to be relevant and reasonable. These estimates, assumptions and judgements are reviewed on an
ongoing basis.
178
179
Notes to the financial statements continued
SECTION 1. BASIS OF PREPARATION CONTINUED
SECTION 1. BASIS OF PREPARATION CONTINUED
Judgements in applying the Group’s accounting policies
Use of alternative performance measures – The Group uses alternative performance measures as we believe these measures provide
additional useful information on the underlying trends, performance and position of the Group. These underlying measures are used by
the Group for internal performance analysis and incentive compensation arrangements for employees. The term ‘underlying’ refers to
the relevant measure being reported for continuing operations excluding non-trading and exceptional items. These include underlying
earnings before interest and tax (underlying EBIT), underlying profit before tax, underlying profit after tax, underlying earnings per share
and underlying EBITDA (earnings before interest, tax, depreciation and amortisation). The terms ‘EBIT’, ‘EBITDA’, ‘exceptional items’,
‘adjusted’ and ‘underlying’ are not defined terms under IFRS and may therefore not be comparable with similarly titled profit measures
reported by other companies. These measures are not intended to be a substitute for, or superior to, GAAP measurements of profit.
A full list of alternative performance measures and non-IFRS measures together with reconciliations are set out in note 8.3.
Non-trading and exceptional items – In establishing which items are disclosed separately as non-trading and exceptional to enable a
better understanding of the underlying financial performance of the Group, management exercise judgement in assessing the size,
nature or incidence of specific items. A policy for non-trading and exceptional items is followed consistently and is submitted to the
Audit Committee for annual review. See note 3.3 for further details of the costs included within this category.
Service concession arrangements – Management considered all relevant factors including the expectation by the relevant client
authority of who was the primary obligor, the ability of the Group to set the selling price, who performed the service, who assumed the
credit risk and who had discretion in selecting suppliers. Following this assessment the Group determined that it acted as agent during
the construction phase of the UK Municipal contracts. Consequently the consideration from local authorities for the operations of waste
management service concessions is treated as financial assets relating to PPP contracts in accordance with IFRIC 12. Management
determined that the cash flows relating to the outflows and capital repayments in respect of PPP arrangements under the financial
asset model are investing activities in the statement of cash flows and not operating cash flows. At the balance sheet date, the Group
has financial assets relating to PPP contracts of €143.4m (2021: €149.1m). Consideration relating to financial assets is split between a
service element as revenue and a repayment element, split between capital and interest receivable that is deducted from the financial
asset. Further details are given in notes 3.1 and 4.5.
Defined benefit pension scheme surplus – Management have concluded that the UK defined benefit pension scheme rules determine
that upon winding up the scheme the Group has an unconditional right to a refund once all of the liabilities have been discharged and
that the trustees of the scheme do not have the unilateral right to wind up the scheme, therefore the asset is not restricted and no
additional liability was recognised. See note 7.2 for further details of the scheme.
Taxation – The recognition of deferred tax assets, particularly in respect of tax losses, is based upon management’s judgement that it is
probable that there will be taxable profits in the relevant legal entity or tax group which will utilise the assets in the future. In respect of
tax losses, the time expiry period, if any, is also taken into account in the analysis. The Group assesses the availability of future taxable
profits using the five year projections as used for impairment reviews, together with other available forecasts. The predictability of
income streams is also taken into consideration and where profits are highly predictable beyond the five year projections, profits from
subsequent periods are taken into account in the recognition of deferred tax assets. The longest period of forecasts used to calculate
deferred tax recovery is nine years. Where there is some uncertainty around profits in five year projections and a period of five years
or less to the time expiry of the losses exists, the profits used to calculate a deferred tax asset are amended to reflect management’s
judgement of the higher probability profit streams within those forecasts. The intention is to avoid the recognition of a deferred tax
asset that is not ultimately recovered. Provisions have been recognised where necessary in respect of any uncertain tax positions in the
Group, being an uncertainty over whether the relevant tax authority will accept the tax treatment.
Expected credit loss allowance – Management have used judgement to determine how the expected credit loss allowance could
be impacted as a result of the Covid-19 pandemic and other macro-economic factors. For trade receivables and accrued income, in
addition to using a provision matrix based on the payment profile of revenues a detailed review has been undertaken at a customer
level in order to assess the likely potential of default considering the nature of the customers business and any government support
measures. Further details are set out in note 4.8.
Alleged Belgium State Aid Claim – Management have used judgement in determining if a liability or contingent liability exists by
considering whether an outflow of economic benefit is probable or possible as a result of past events. Legal advice has been obtained
to determine that the most likely outcome, the median case, results in a €15m provision. It is noted that the potential maximum claim
could be higher resulting in a potential further liability. Further details are set out in notes 4.10 and 8.4.
Contingent liabilities – Management have used judgement in determining if a contingent liability exists and if a provision needs to be
recognised by considering whether an outflow of economic benefit is possible as a result of past events including seeking legal advice
where appropriate in order to determine the most likely outcome. Where it is considered that there is a possible obligation but it is not
probable that there will be an outflow of economic benefit or the amount cannot be reliably estimated then a contingent liability is
disclosed as set out in note 8.4.
Estimates and assumptions
Impairment of goodwill – Impairment testing is carried out annually at a cash generating unit (CGU) level. The Group estimates the
recoverable amount of a CGU using a value in use model which involves an estimation of future cash flows and applying appropriate
discount and long-term growth rates. The future cash flows are derived from approved forecasts which have taken into account the
ongoing impact of Covid-19 together with increasing energy prices and high inflation as a result of the events in Ukraine, specifically
with regard to recovery of input volumes across different waste streams. Details of the key assumptions and sensitivity analysis are
given in note 4.1.
Impairment of tangible assets, intangible assets and investments – The Group assesses the impairment of tangible assets,
intangible assets and investments whenever there is reason to believe that the carrying value may exceed the fair value and where
a permanent impairment in value is anticipated. The determination of whether the impairment of these assets is necessary involves
the use of estimates that includes, but is not limited to, the analysis of the cause of potential impairment in value, the timing of such
potential impairment and an estimate of the amount of the impairment.
Landfill related provisions – The Group has landfill related provisions of €156.9m (2021: €157.6m). These provisions are long term in
nature and are recognised at the net present value of the best estimate of the likely future cash flows to settle the Group’s obligations.
The period of aftercare post-closure and the level of costs expected are uncertain and could be impacted by changes in legislation
and technology and can vary significantly from site to site. The timings of cash outflows are uncertain and have been based on
management’s latest expectation. A discount rate is applied to recognise the time value of money and is unwound over the life of the
provision. Details of the discount rates used and sensitivity assumptions are set out in note 4.10.
Onerous contract provisions – Onerous contract provisions arise when the unavoidable costs of meeting contractual obligations exceed
the cash flows expected. The Group has onerous contract provisions of €79.9m (2021: €80.9m) which have been provided for at the lower of
the net present value of either exiting the contract or fulfilling our obligations under the contract. The most significant component of these
provisions relates to UK Municipal PPP contracts which amount to €77.3m (2021: €78.9m). The provisions have been based on the best
estimate of likely future cash flows including assumptions on tonnage inputs, plant performance and recyclates pricing. A discount rate is
applied to recognise the time value of money and is unwound over the life of the provision. Further details including the discount rates used
and sensitivity assumptions are set out in note 4.10.
Right-of-use assets and lease liabilities – Estimates and assumptions are made in calculating the incremental borrowing rate used
to measure lease liabilities. For certain leases the determination of the lease liability is based on assumptions of the term of the lease,
whether purchase options are likely to be exercised and the amount expected to be payable under any residual value guarantees as set
out it note 5.3.
Defined benefit pension schemes – The calculation of the present value of the defined benefit pension schemes is determined by using
actuarial valuations based on assumptions including discount rate, life expectancy and inflation rates. The principal assumptions used to
measure the schemes’ liabilities, sensitivities to changes in those assumptions and future funding obligations are set out in note 7.2.
Taxation – The recognition of deferred tax assets, particularly in respect of tax losses, is based upon management’s calculation of
expected taxable profits in the relevant legal entity or tax group against which to utilise the assets in the future. In respect of tax losses,
the time expiry period, if any is also taken into account in the calculation. The Group assesses the availability of future taxable profits
using the five year projections as used for the value in use calculations for impairment reviews together with other available long-term
forecasts. The predictability of income streams is also taken into consideration and where profits are highly predictable beyond the five
year projections, profit from subsequent periods are taken into account in the recognition of deferred tax assets. The longest period of
forecasts used to calculate deferred tax recovery is nine years. Where there is some uncertainty around profits in five year projections
and a period of five years or less to the time expiry of the losses exists, the profits used to calculate a deferred tax asset will be amended
to reflect management’s estimate of the higher probability profit streams within those forecasts. The intention is to avoid the
recognition of a deferred tax asset that is not ultimately recovered. Provisions have been recognised where necessary in respect of any
uncertain tax positions in the Group and are based upon management’s evaluation of the potential outcomes of the relevant
discussions with the tax authorities. Further details on sensitivity assumptions are set out in note 3.4.
180
181
Notes to the financial statements continued
SECTION 1. BASIS OF PREPARATION CONTINUED
Waste disposal cost accruals – Management have used judgement in determining the value of disposal cost accruals with a carrying
amount included in accruals and other payables of €48.9m (2021: €54.3m). Included in this is €14.9m (2021: €24.7m) relating to
processed soil accruals at ATM. The value is determined by management’s best estimate after carrying out an assessment of the cost
per tonne to dispose of the waste based on historical transactions, discussions with potential customers and knowledge of the market
as in some cases, due to the nature of some of these accruals there is no observable market data. Management carry out sensitivity
analysis on a range of potential outcomes and an increase or reduction of the cost per tonne by 10% would impact the ATM accrual
by €1.5m. It is anticipated that the majority of the waste with the most judgemental values should be disposed of during the next
12 months and as such is recorded as a current liability.
SECTION 2. SEGMENTAL INFORMATION
This section shows the performance, net assets and other information on a segmental basis. The Group’s segmental reporting
reflects the management structure which is aligned with the core activities of the Group.
The Group’s chief operating decision maker is considered to be the Board of Directors. The Group’s reportable segments,
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 are unchanged from March 2021 and are set out below.
Commercial Waste
Collection and treatment of commercial waste in the Netherlands and Belgium.
Mineralz & Water
Specialities
Decontamination, stabilisation and re-use of highly contaminated materials to produce certified
secondary products for the construction industry in the Netherlands and Belgium.
Processing plants focusing on recycling and diverting specific waste streams. The operations are
in the UK, the Netherlands, Belgium, France, Portugal and Hungary.
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
Netherlands Commercial Waste
Belgium Commercial Waste
Intra-segment
Commercial Waste
Mineralz & Water
Specialities
Inter-segment revenue
Revenue
2022
€m
896.2
466.9
(2.6)
2021
€m
828.4
412.9
(0.7)
1,360.5
1,240.6
193.9
350.1
182.8
300.8
(35.3)
1,869.2
(30.6)
1,693.6
During the course of the year, the Group identified certain revenue transactions in the Specialities division which were presented net
within the results for the year ended 31 March 2021 which, under IFRS 15, should be presented gross between revenue and cost of sales.
These items have been corrected prospectively however no adjustment has been recorded in the year ended 31 March 2021
comparatives as the impact on revenue and cost of sales, which if corrected would increase both by €12m, is not considered material.
There is no impact on gross profit or operating profit.
SECTION 2. SEGMENTAL INFORMATION CONTINUED
Results
Netherlands Commercial Waste
Belgium Commercial Waste
Commercial Waste
Mineralz & Water
Specialities
Group central services
Underlying EBIT
Non-trading and exceptional items (note 3.3)
Operating profit
Finance income (note 5.4)
Finance charges (note 5.4)
Finance income – non-trading and exceptional items (note 3.3)
Finance charges – non-trading and exceptional items (note 3.3)
Share of results from associates and joint ventures
Profit before taxation
2022
€m
93.1
42.6
135.7
5.8
4.1
Restated*
2021
€m
53.7
23.1
76.8
0.3
2.4
(12.0)
(6.5)
133.6
(9.6)
124.0
9.3
(38.2)
0.2
(0.1)
0.5
95.7
73.0
(36.9)
36.1
10.9
(38.1)
0.4
–
1.6
10.9
* The comparative for non-trading and exceptional items has been restated following the change in accounting policy in relation to Software as a Service arrangements
as explained in section 1 Basis of preparation.
Net Assets
31 March 2022
Gross non-current assets
Gross current assets
Gross liabilities
Net assets (liabilities)
31 March 2021
Gross non-current assets
Gross current assets
Gross liabilities
Net assets (liabilities)
Commercial
Waste
€m
Mineralz &
Water
€m
Specialities
€m
Restated*
Group central
services
€m
Restated*
Tax, net debt
and
derivatives
€m
1,010.8
192.0
(399.3)
803.5
1,042.6
174.1
(414.6)
802.1
257.5
37.9
(206.4)
89.0
258.2
31.6
(224.3)
65.5
219.3
67.7
(174.7)
112.3
225.7
64.3
(173.0)
117.0
36.3
17.2
(79.7)
(26.2)
26.6
15.2
(91.4)
(49.6)
42.0
71.1
(753.5)
(640.4)
59.2
70.5
(827.1)
(697.4)
Restated*
Total
€m
1,565.9
385.9
(1,613.6)
338.2
1,612.3
355.7
(1,730.4)
237.6
* The comparatives have been restated due to prior period adjustments as explained in section 1 Basis of preparation.
182
183
Notes to the financial statements continued
SECTION 2. SEGMENTAL INFORMATION CONTINUED
Other disclosures
2022
Capital additions:
Property, plant and equipment
Right-of-use assets
Intangible assets
Depreciation charge:
Property, plant and equipment
Right-of-use assets
Amortisation of intangibles
Impairment charge:
Property, plant and equipment
Right-of-use assets
Goodwill and Intangible assets
Investment in associate
Non-trading and exceptional items before tax
2021
Capital additions:
Property, plant and equipment
Right-of-use assets
Intangible assets
Depreciation charge:
Property, plant and equipment
Right-of-use assets
Amortisation of intangibles
Impairment charge:
Property, plant and equipment
Right-of-use assets
Goodwill and Intangible assets
Non-trading and exceptional items before tax
Commercial
Waste
€m
Mineralz &
Water
€m
Specialities
€m
Restated*
Group
central
services
€m
Restated*
Total
€m
52.0
17.0
0.1
50.6
34.0
3.2
5.2
0.7
–
–
6.2
48.4
50.9
–
57.4
29.9
3.5
6.2
0.3
–
16.1
13.0
1.6
1.7
12.8
3.0
0.6
0.2
–
–
–
(2.9)
5.5
0.8
0.1
10.9
3.1
0.7
–
–
–
6.6
5.0
0.1
4.6
3.5
1.7
–
–
–
1.9
0.7
5.7
2.9
0.2
5.0
3.7
1.6
–
1.5
9.5
1.7
3.5
7.4
1.3
4.3
3.3
–
–
2.3
–
5.5
1.5
6.3
11.0
0.9
4.0
3.8
–
–
–
73.3
27.1
9.3
69.3
44.8
8.8
5.4
0.7
2.3
1.9
9.5
61.1
60.9
11.3
74.2
40.7
9.6
6.2
1.8
9.5
4.8
10.1
5.5
36.5
* The comparative for non-trading and exceptional items before tax in Group central services has been restated following the change in accounting policy in relation to Software
as a Service arrangements as explained in section 1 Basis of preparation.
Geographical information
The Group’s segment assets (non-current assets being intangible assets, property plant and equipment, right-of-use assets and
investments) by geographical location are detailed below:
Netherlands
Belgium
UK
France
Portugal
Hungary
Segment assets
2022
€m
985.8
362.1
6.6
17.4
2.5
0.1
1,374.5
Restated*
2021
€m
1,000.4
379.8
9.5
14.7
1.6
0.6
1,406.6
SECTION 3. OPERATING PROFIT AND TAX
This section contains the notes that relate to the results and performance of the Group during the year, along with the related
accounting policies that have been applied.
3.1 Revenue recognition
The Group applies IFRS 15 Revenue from Contracts with Customers which requires companies to apportion revenue from customer
contracts to separate performance obligations and recognise revenue as these performance obligations are satisfied. The majority
of the Group’s revenue is generated from the performance obligation to the customer to collect and process the waste.
In the Commercial segment where the contract with a customer includes the collection of waste with a positive value and in the
Specialities segment where a customer is paid a compensation based on the composition of the waste processed, the transaction price
includes an element of non-cash consideration. This increases revenue with a corresponding increase in cost of sales for the value of the
waste collected or compensation paid with no impact on operating profit.
Accounting policy
Under IFRS 15 revenue is defined as income arising in the course of the Group’s waste collection and processing activities and is
recognised when the control of goods or services transfer and is allocated to individual performance obligations. Revenue represents
the fair value of consideration received or receivable for goods and services provided in the normal course of business, including landfill
tax but excluding sales taxes, discounts and inter-company sales. Revenue is recognised either at a point in time, for example when the
goods or services are transferred, or over time. Revenue is recognised over time when the customer simultaneously receives and
consumes the goods or services or when there is an enforceable right to payment for performance completed to date. The Group’s
revenue is not subject to conditions that would imply a variable consideration in most cases. There is a limited number of contracts with
variable consideration where revenue is only recognised to the extent that it is highly probable that a significant reversal in the amount
of cumulative revenue recognised will not occur.
Revenue recognition criteria for the key types of services have been examined, determined and documented on a divisional level, based
on the general and specific contracts with customers and are as follows:
Inbound revenue relates to the collection and/or processing of waste. The transaction price is based on contractually agreed prices for
collecting and processing the waste and differs depending upon the nature of the contract – contracts can be an all-in-tariff, split between
rent, processing and transport or a price per tonne basis for different types of waste. Due to the very short time period between the start and
completion of the performance obligations (usually on the same day), the revenue recognition and the allocation of the transaction price
over performance obligations is usually straightforward and dependent on the daily collection and processing of the waste.
― Waste collection services: revenue is recognised at the point in time when the waste is delivered to transfer stations or to a third-party
processing facility.
― Waste processing services: where the Group’s revenue contracts include an obligation to process waste, revenue is recognised over
time based on the percentage of the processing service or activity that has been undertaken as there is an enforceable right to
payment for performance completed. Where the waste processing has a very short cycle then revenue is recognised at the point
in time when the waste is processed.
Outbound revenue relates to the sale of recyclate materials and products from processing waste and the generation of power from gas.
The transaction price is agreed with the customer either in a contract or in relation to a market index and is charged based on tonnage
or kilowatt hour and in some situations will include an additional charge for transport services.
― Sale of recyclate materials and products from waste: revenue is based on contractually agreed prices and is recognised at a point
in time when control of the asset is transferred to the buyer.
― Income from power generation: for gas produced by processes at anaerobic digestion facilities and landfill sites revenue is
recognised at a point in time based on the volumes of energy produced and an estimation of the amount to be received.
On-site revenue relates to activities and services provided to the customer on their own site, mainly cleaning services at customer
installations. The transaction price can be a contracted lump sum or is charged by applying a fixed price by hour, litre or item depending
on the nature of the contract.
Other includes charges for sundry low value packing materials, waste advisory services to customers, services to support customers with
waste collection and treatment activities.
The timing of payments from customers is generally aligned to revenue recognition and subject to agreed invoice terms. Unprocessed
waste may give rise to deferred revenue, where invoices to customers are raised in advance of performance obligations being completed
or require an accrual for the costs of disposing of residual waste once the Group has an obligation for its disposal. These amounts are
shown in deferred revenue or accruals in the financial statements as appropriate. Further details relating to deferred revenue are given
in note 4.9. Accrued income (unbilled revenue) at the balance sheet date is recognised at fair value based on services provided and
contractually agreed prices. It is subsequently invoiced and accounted for as a trade receivable and further details are set out in note 4.8.
* The comparative for intangible assets in the Netherlands has been restated following the change in accounting policy in relation to Software as a Service arrangements as
explained in section 1 Basis of preparation.
184
185
Notes to the financial statements continued
SECTION 3. OPERATING PROFIT AND TAX CONTINUED
3.1 Revenue recognition continued
SECTION 3. OPERATING PROFIT AND TAX CONTINUED
3.1 Revenue recognition continued
The practical expedient available under IFRS 15 has been taken whereby any financing element of the contract has been ignored as the
timing difference between the satisfaction of the obligations under the contract and the receipt of payment due under the contract are
expected to be one year or less. The Group’s Private Finance Initiative/Public Private Partnership (PPP) contracts in the Municipal business
line are waste management contracts which require the building of new infrastructure and all rights to the infrastructure pass to the local
authority at the termination or expiry of the contract. The Group applies IFRIC 12 (Service Concession Arrangements) which specifies the
accounting treatment applied by concession operators. Under IFRIC 12, the operator’s rights over infrastructure operated under concession
arrangements should be accounted for based on having considered the extent to which the grantor (the local authority) controls the assets,
over what services the operator must provide with the infrastructure, to whom it must provide them and at what price. Having considered
these factors, the Group applies the ‘financial asset’ model to account for the infrastructure as it has an unconditional right to receive cash.
The Group splits the local authority payment between a service element as revenue and a repayment element that is deducted from the
financial asset. The part of the service element which covers the obligation to undertake major refurbishments and renewals to maintain the
infrastructure such that it is handed over to the local authority in good working order is known as lifecycle and is deferred and only
recognised as revenue when the service is provided, further details are given in note 4.5.
The following tables show the Group’s revenue by type of service delivered and by primary geographical markets:
By type of service
2022
Inbound
Outbound
On-Site
Other
Total revenue
2021
Inbound
Outbound
On-Site
Other
Total revenue
By geographical market
2022
Netherlands
Belgium
UK
France
Other
Total revenue
2021
Netherlands
Belgium
UK
France
Other
Total revenue
Commercial
Waste
€m
Mineralz &
Water
€m
Specialities
€m
Inter-segment
€m
1,073.0
212.2
53.1
22.2
1,360.5
1,032.2
130.4
41.3
36.7
1,240.6
146.5
47.4
–
–
193.9
136.3
46.5
–
–
182.8
231.4
116.5
–
2.2
350.1
210.1
89.7
–
1.0
300.8
(31.6)
(3.5)
(0.2)
–
(35.3)
(26.3)
(2.6)
(0.1)
(1.6)
(30.6)
Commercial
Waste
€m
Mineralz &
Water
€m
Specialities
€m
Inter-segment
€m
895.5
465.0
–
–
–
1,360.5
827.9
412.7
–
–
–
1,240.6
152.9
41.0
–
–
–
193.9
140.8
42.0
–
–
–
182.8
55.4
39.8
216.3
26.3
12.3
350.1
40.7
28.1
205.5
18.9
7.6
300.8
(32.9)
(2.4)
–
–
–
(35.3)
(29.0)
(1.6)
–
–
–
(30.6)
Total
€m
1,419.3
372.6
52.9
24.4
1,869.2
1,352.3
264.0
41.2
36.1
1,693.6
Total
€m
1,070.9
543.4
216.3
26.3
12.3
1,869.2
980.4
481.2
205.5
18.9
7.6
1,693.6
Revenue recognised at a point in time amounted to €1,652.5m (2021: €1,580.3m) with the remainder recognised over time. The majority
of the Commercial Waste and Specialities revenue is recognised at a point in time, whereas for Mineralz & Water 57% of revenue (2021:
55%) is recognised over time.
3.2 Operating profit
Detailed below are the key amounts recognised in arriving at the operating profit for the year:
Staff costs
Depreciation of property, plant and equipment
Impairment of property, plant and equipment (not included in non-trading and exceptional items)
Depreciation of right-of-use assets
Impairment of right-of-use assets (not included in non-trading and exceptional items)
Amortisation of intangible assets
Impairment of intangible assets
Impairment of investment in associate
Repairs and maintenance expenditure on property, plant and equipment
Net gain on disposal of property, plant and equipment and intangible assets
Expense relating to short-term leases
Expense relating to low-value assets
Income from subleasing right-of-use assets
Non-trading and exceptional items
Net charge on trade receivables and accrued income expected credit loss allowance
2022
€m
402.5
69.3
5.4
44.8
0.7
8.8
2.3
1.9
99.7
(0.8)
17.4
9.5
(0.8)
9.5
0.6
Restated*
2021
€m
395.6
74.2
1.6
40.7
–
9.6
–
–
93.4
(0.1)
16.9
9.0
(1.0)
36.5
4.7
Note
7.1
4.2
4.2
4.3
4.3
4.1
4.1
4.4
3.3
4.8
* The comparative for non-trading and exceptional items has been restated following the change in accounting policy in relation to Software as a Service arrangements as
explained in section 1 Basis of preparation.
The total remuneration of the Group’s auditors, BDO LLP and its associates for services provided to the Group during the year was:
Audit of parent company and consolidated financial statements
Audit of subsidiaries pursuant to legislation
Audit related assurance services
Fees payable to the auditors pursuant to legislation
2022
€m
0.4
1.3
0.2
1.9
2021
€m
0.4
1.2
0.2
1.8
In the prior year BDO LLP were also paid de minimis non-audit services of €400 for a software licence entered into historically. Given the
value and nature these non-audit services do not present a risk to audit independence however the service has not been renewed in the
current year.
186
187
Notes to the financial statements continued
SECTION 3. OPERATING PROFIT AND TAX CONTINUED
3.3 Non-trading and exceptional items
SECTION 3. OPERATING PROFIT AND TAX CONTINUED
3.3 Non-trading and exceptional items continued
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. Items classified as non-trading and exceptional are disclosed
separately due to their size or incidence to enable a better understanding of performance. 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 change in fair value of non-
hedged derivatives, the impact of terminating hedge derivatives, ineffectiveness of derivative financial instruments, the impact of
changing the discount rate on provisions, amortisation of acquisition intangibles and one-off tax credits or charges. The Group
incurs costs each year in maintaining intangible assets which include acquired customer relationships, permits and licences and
excludes amortisation of these assets from underlying EBIT to avoid double counting such costs within underlying results.
Exceptional items are considered individually and assessed at each reporting period.
Renewi 2.0 improvement programme
Portfolio management activity:
Prior year disposals
Other changes in long-term provisions
Other items:
Configuration or customisation costs in cloud computing, Software as a Service arrangements
Restructuring (credit) charge – cash
Restructuring charge – non-cash impairments
Goodwill impairment
Ineffectiveness and impact of termination of cash flow hedges
Amortisation of acquisition intangibles
Non-trading and exceptional items in profit before tax
Tax on non-trading and exceptional items
Exceptional tax (credit) charge
Total non-trading and exceptional items in profit after tax
Note
2022
€m
6.6
Restated*
2021
€m
7.3
(0.7)
(3.1)
3.9
(0.5)
–
–
3.4
(0.1)
3.4
9.5
(2.4)
(3.7)
3.4
(2.6)
3.7
7.3
3.1
5.3
9.5
25.2
(0.4)
3.3
36.5
(7.2)
1.0
30.3
4.1
* The comparative has been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
Renewi 2.0 improvement programme
Renewi 2.0 improvement programme is a significant one-off business improvement project with expected capital and one-off costs
of €40m over a three-year period and as a result is considered to be exceptional. Following the transformational merger five years ago,
the goal of the Renewi 2.0 programme is to make the Group more streamlined and more efficient and improve customer experience
and increase employee engagement. The programme also includes around €4m of IT integration costs carried over from the original
integration programme and now merged with the Renewi 2.0 digitisation plans. This is the second year of the programme with total
costs of €6.6m (2021: €7.3m) of which €0.1m (2021: €0.3m) are recorded in cost of sales and €6.5m (2021: €7.0m) are recorded in
administrative expenses.
Portfolio management activity
The credit of €0.7m (2021: €2.6m) relates principally to releases of warranty provisions in relation to prior year disposals and is all
recorded in administrative expenses.
Other changes in long-term provisions
Other changes in long-term provisions of €3.1m credit (2021: €3.7m charge) relates to future cash flow funding requirements in relation
to Dutch landfills as a result of changes in the discount rate as determined by the relevant Dutch Province in relation to the long-term
aftercare funds. These funds are managed and under the control of the Province. This resulted in a reduction of €1.6m in landfill
provisions and a €1.5m cash refund from the Province. The credit (2021: charge) was all recorded in cost of sales.
Other items
Configuration or customisation costs in cloud computing, Software as a Service (SaaS) arrangements, relate to the Group updating its
accounting policy on when software can be capitalised following the IFRIC interpretation. This guidance clarified the criteria under
IAS 38 Intangible assets in relation to SaaS arrangements as explained in section 1 Basis of preparation. As a result €3.9m of costs
incurred in the current year have been expensed. In addition €7.3m of capitalised intangible assets in existence at 31 March 2021 have
been expensed as a prior year restatement as they no longer meet the criteria for recognition as an asset. The costs have been expensed
as a non-trading and exceptional item due to the size, nature and incidence as they are not reflective of underlying performance.
The prior year goodwill impairment of €9.5m related to the Maltha business as a result of a reduction in the expected future cash flows
due to difficult market conditions.
The restructuring charges in the prior year related to a Covid-19 cost action programme to address the challenges of the pandemic.
These costs were considered to be exceptional due to the total cost of the programme and the one-off nature. The costs of €8.4m
were reflected following the decision to close two processing lines in Belgium and some sites and business activities in the Netherlands.
Of the total costs €5.3m were non-cash asset impairments. Following a reassessment in the current year €0.5m of these charges have
been released as no longer required.
The total charge of €3.4m (2021: €25.2m restated) was split €0.5m credit (2021: €8.4m charge) in cost of sales and €3.9m charge (2021:
€16.8m restated) in administrative expenses.
Items recorded in finance charges and finance income
The €0.1m credit (2021: €0.4m) relates to the termination and ineffectiveness on the cancelled cross-currency interest cash flow hedges and
ineffectiveness of the Cumbria PPP project interest rate swaps as a result of a revised repayment programme for the PPP non-recourse debt.
Amortisation of acquisition intangibles
Amortisation of intangible assets acquired in business combinations of €3.4m (2021: €3.3m) is all recorded in cost of sales.
Exceptional tax (credit) charge
The €3.7m exceptional tax credit related to changes in UK tax rates as explained in note 3.4. The prior year exceptional tax charge of
€1.0m related to changes in tax rates in the Netherlands. Where one-off tax credits or charges are deemed significant they are classified
as exceptional and outside of normal tax charges.
3.4 Taxation
This section details the accounting polices applied for tax, the current and deferred tax charges or credits in the year,
a reconciliation of the total tax expense to the accounting result and the movements in deferred tax assets and liabilities.
Accounting policy
Current tax is based on taxable profit or loss for the year. Taxable profit differs from profit before tax in the Income Statement because
it excludes items of income or expense that are taxable or deductible in other years or that are never taxable or deductible. The asset
or liability for current tax is calculated using tax rates that have been enacted, or substantively enacted, at the balance sheet date.
Deferred tax is recognised in full where the carrying value of assets and liabilities in the financial statements is different to the
corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent that it is probable that the taxable profits will be available
against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that have been enacted, or
substantively enacted, at the balance sheet date. Deferred tax is charged or credited in the Income Statement, except where it relates
to items charged or credited directly to equity in which case the deferred tax is also dealt with in equity. Deferred income tax liabilities
are not provided on taxable temporary differences arising from investments in subsidiaries as the timing of the reversal of the temporary
difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred
tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities,
when they relate to income taxes levied by the same taxation authority.
188
189
Notes to the financial statements continued
SECTION 3. OPERATING PROFIT AND TAX CONTINUED
3.4 Taxation continued
SECTION 3. OPERATING PROFIT AND TAX CONTINUED
3.4 Taxation continued
The Group operates primarily in the Netherlands, Belgium, the UK and France, all of which have their own tax legislation. Deferred tax
assets and liabilities have been calculated based on the substantively enacted tax rates in the relevant jurisdictions at the balance sheet
date or those rates expected to apply when the related deferred tax asset is realised or the deferred tax liability is settled. The Group has
available tax losses, some of which have been recognised as deferred tax assets and some have not based on management’s best
estimate of the ability of the Group to utilise those losses.
Income Statement
The tax charge based on the profit for the year is made up as follows:
Current tax
UK corporation tax
– Current year
– Adjustment in respect of prior year
Overseas tax
– Current year
– Adjustment in respect of the prior year
Total current tax charge
Deferred tax
– Origination and reversal of temporary differences in the current year
– Exceptional tax credit
– Adjustment in respect of the prior year
Total deferred tax charge (credit)
Total tax charge for the year
2022
€m
Restated*
2021
€m
1.4
(0.9)
17.1
(0.2)
17.4
(0.8)
3.7
–
2.9
20.3
1.4
–
10.3
0.7
12.4
(6.5)
–
(0.5)
(7.0)
5.4
Exceptional charge relating to changes in Netherlands tax rate
In September 2020 the Dutch government announced the cancellation of the reduction to 21.7% for the period ended 31 March 2022 and
subsequent periods with the rate to remain at 25% going forward and this was enacted on 15 December 2020. This resulted in a prior year
exceptional tax charge of €1.0m.
Furthermore, in October 2021 the Dutch government announced an increase in the rate to 25.8% for the period ending 31 March 2023 and
subsequent periods which was enacted in December 2021. In addition, a tightening of the general interest deduction rule (also referred to
as the EBITDA rule) by lowering the 30% EBITDA threshold to 20% was also enacted. As a result, Dutch deferred tax has been calculated
at the substantively enacted rates depending on when the timing differences are expected to reverse.
Deferred tax
Deferred tax is provided in full on temporary differences under the liability method using applicable local tax rates. Deferred tax assets
and liabilities are only offset where there is a legally enforceable right of offset and there is an intention to settle the balances net.
The analysis of the net deferred tax liability and the net deferred tax charge in the Income Statement is as set out below:
Retirement benefit schemes
Tax losses
Derivative financial instruments
Capital allowances
Other timing differences
At 31 March
Balance Sheet
Income Statement
2022
€m
(0.5)
37.1
0.7
(37.2)
(5.5)
(5.4)
Restated*
2021
€m
2.7
37.1
2.6
(42.9)
0.9
0.4
2022
€m
(0.8)
–
–
5.7
(7.8)
(2.9)
Restated*
2021
€m
(0.3)
2.6
(0.1)
1.0
3.8
7.0
* The comparatives have been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
* The comparatives have been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
The tax on the Group’s profit for the year differs from the UK standard rate of tax of 19% (2021: 19%), as explained below:
The movement in the deferred tax balance during the year was:
Total profit before taxation
Tax charge based on UK tax rate of 19% (2021: 19%)
Effects of:
Adjustment to tax charge in respect of prior years
Profits (losses) taxed at overseas tax rates
Non-deductible other items
Non-deductible profit on portfolio management activity
Non-deductible goodwill impairment
Unrecognised deferred tax assets
Exceptional charge relating to change in Netherlands tax rate
Exceptional credit relating to change in UK tax rate
Total tax charge for the year
2022
€m
95.7
18.2
(1.1)
5.7
3.0
–
–
(1.8)
–
(3.7)
20.3
Restated*
2021
€m
10.9
2.1
0.2
(0.5)
1.6
(0.5)
1.8
(0.3)
1.0
–
5.4
* The comparatives have been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
Exceptional credit relating to change in UK tax rate
In the UK Chancellor’s Budget of 3 March 2021 it was announced that the UK corporation tax rate will increase to 25% with effect from 1 April
2023. This measure was substantively enacted on 24 May 2021. As a result, the UK deferred tax position has been calculated based on the
substantively enacted rates of 19% and 25% (2021: 19%). This resulted in an exceptional tax credit of €3.7m in the current year.
Net deferred tax asset (liability) at 1 April
(Charged) credited to Income Statement
(Charged) credited to Other Comprehensive Income
Movement in tax arising on share-based compensation
Exchange rate changes
Net deferred tax (liability) asset at 31 March
Analysed in the Balance Sheet, after offset of balances within countries, as:
Deferred tax assets
Deferred tax liabilities
Net deferred tax (liability) asset at 31 March
2022
€m
0.4
(2.9)
(4.3)
1.3
0.1
(5.4)
41.6
(47.0)
(5.4)
Restated*
2021
€m
(9.7)
7.0
2.0
0.3
0.8
0.4
51.3
(50.9)
0.4
* The comparatives have been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
The majority of the €41.6m (2021: €51.3m restated) deferred tax assets are expected to be recovered after more than one year and the
majority of the €47.0m (2021: €50.9m) deferred tax liabilities are expected to reverse after more than one year.
As at 31 March 2022, the Group had unused trading losses (tax effect) of €93.3m (2021: €79.7m restated) available for offset against
future profits. Deferred tax assets have been recognised in respect of €37.1m (2021: €37.1m restated) of such losses and recognition is
based on management’s projections of future profits in the relevant companies. No deferred tax assets have been recognised in respect
of the remaining €56.2m (2021: €42.6m) due to the uncertainty of future profit streams. Tax losses may be carried forward indefinitely in
the relevant companies. Changes in future profitability will impact the recoverability of the deferred tax assets recognised in respect of
losses. A 10% decrease in profitability would result in a reduction of €4m in the value of the deferred tax assets.
190
191
Notes to the financial statements continued
SECTION 3. OPERATING PROFIT AND TAX CONTINUED
3.4 Taxation continued
In the prior year, Dutch tax losses could only be carried forward for between 6 and 9 years (depending on the date of origin of the
losses). New rules were enacted on 4 June 2021 which allow losses to be carried forward indefinitely. However, the offset of tax losses
against taxable income in excess of €1m is intended to be limited to a maximum of 50%. This legislation takes effect for accounting
periods beginning on or after 1 January 2022. Therefore the deferred tax asset positions in respect of Dutch tax losses have been
calculated based on the newly enacted rules.
No liability has been recognised on the aggregate amount of temporary differences associated with undistributed earnings of
subsidiaries. This is because the Group is in a position to control the timing and method of the reversal of the differences and it is
probable that such differences will not give rise to a tax liability in the foreseeable future. The total temporary difference at 31 March
2022 amounted to €243.8m (2021: €226.2m) and unrecognised deferred tax estimated to arise on the unremitted earnings is €nil
(2021: €nil) which would relate to taxes payable on repatriation and dividend withholding taxes levied by overseas jurisdictions. UK tax
legislation relating to company distributions provides for exemption from tax for most repatriated profits, subject to certain exemptions.
3.5 Earnings per share
Basic earnings per share is calculated by dividing the profit attributable to the owners of the parent entity by the weighted average
number of ordinary shares during the year excluding shares held by the Employee Share Trust.
Diluted earnings per share is calculated by dividing profit for the year attributable to the owners of the parent entity by the
weighted average number of ordinary shares during the year plus the weighted average number of any commitments made by the
Group to issue shares in the future.
Underlying basic and diluted earnings per share excludes non-trading and exceptional items, amortisation of acquisition intangibles
and the change in fair value of derivatives, net of related tax. Non-trading and exceptional items are those items that need to be
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.
At the Annual General Meeting of Renewi plc held on 15 July 2021, shareholders approved the consolidation of the Company’s share
capital on the basis of one new ordinary share with a nominal value of £1.00 each for every ten existing ordinary shares of 10 pence each
held. This was subsequently completed on 19 July 2021 when the issued share capital of 800,236,740 10 pence shares were replaced
with 80,023,674 £1 shares. As a result earnings per share have been restated in accordance with the requirements of IAS 33 Earnings per
share. For details of share allotments during the year see note 5.9.
Weighted average number of shares (million)
Profit after tax (€m)
Non-controlling interests (€m)
Profit after tax attributable to ordinary shareholders (€m)
Basic earnings per share (cents)
2022
2021 restated*
Basic
Dilutions
Diluted
Basic
Dilutions
Diluted
79.7
75.4
(0.9)
74.5
93
0.4
–
–
–
–
80.1
75.4
(0.9)
74.5
93
79.5
5.5
0.1
5.6
7
0.1
–
–
–
–
79.6
5.5
0.1
5.6
7
* The comparatives have been restated due to prior period adjustments as explained in section 1 Basis of preparation.
SECTION 3. OPERATING PROFIT AND TAX CONTINUED
3.5 Earnings per share continued
The reconciliation between underlying earnings per share and basic earnings per share is as follows:
2022
2021 restated*
Cents
€m
Cents
Underlying earnings per share/Underlying profit after tax attributable
to ordinary shareholders
Adjustments:
Non-trading and exceptional items
Tax on non-trading and exceptional items
Exceptional tax
Basic earnings per share/Earnings after tax attributable to ordinary shareholders
Diluted underlying earnings per share/Underlying profit after tax attributable
to ordinary shareholders
Diluted basic earnings per share/Earnings after tax attributable to
ordinary shareholders
* The comparatives have been restated due to prior period adjustments as explained in section 1 Basis of preparation.
SECTION 4. OPERATING ASSETS AND LIABILITIES
98
(12)
3
4
93
98
93
77.9
(9.5)
2.4
3.7
74.5
77.9
74.5
45
(46)
9
(1)
7
45
7
€m
35.9
(36.5)
7.2
(1.0)
5.6
35.9
5.6
This section contains Balance Sheet notes showing the assets and liabilities used to generate the Group’s results and the related
accounting policies.
4.1 Intangible assets
Accounting policy
Goodwill represents the excess of the purchase consideration over the fair value of the Group’s share of the net identifiable assets at the
date of acquisition and is measured at cost less accumulated impairment losses. Goodwill arising on acquisitions prior to the date of
transition to IFRS (31 March 2004) has been retained at the previous UK GAAP net book value following impairment tests.
For the purpose of impairment testing, goodwill is allocated to those cash generating units (CGUs) or groups of CGUs that are expected
to benefit from the synergies of the business combination. Goodwill is tested annually for impairment or more frequently if events or
changes in circumstances indicate a potential impairment. Any impairment is charged immediately to the Income Statement and is not
reversed in a subsequent period. In conducting the impairment review on goodwill and intangibles, management is required to make
estimates of pre-tax discount rates, future profitability and growth rates. The pre-tax discount rates are derived from the Group’s
weighted average cost of capital (WACC) which takes into account the capital structure of the Group, the cost of risk-free rate finance
and the relative volatility of the equity of the Group compared to the market and is adjusted by management as considered appropriate
for each CGU.
Landfill void represents the value of landfill capacity to deposit waste in two landfill sites in the Netherlands. The initial landfill void was
capitalised at fair value on the acquisition of a Netherlands operation in 2006 and further void has been acquired in relation to the
Maasvlakte landfill site and capitalised at cost. The assets are amortised over their estimated useful life on a void usage basis and
measured at cost less accumulated amortisation. The estimated remaining useful life is up to 18 years.
An internally generated intangible asset arising from the Group’s software and systems development is recognised when an asset is
created that can be identified, it is probable that the asset will generate future economic benefits that the Group controls and the
development cost can be reliably measured. Following the IFRS Interpretations Committee (IFRIC) agenda decision published in April
2021, the Group has reviewed its accounting policy regarding the configuration and customisation costs incurred when implementing
Software as a Service (SaaS) arrangements:
In SaaS arrangements where the Group controls the underlying software, configuration and customisation costs are capitalised as part
of bringing the identified intangible asset into use
Where the Group does not control the underlying software, but the related configuration and customisation costs are not distinct from
access to the software, these costs are expensed over the term of the SaaS contract
In all other circumstances, configuration and customisation costs are recognised as an expense as incurred, except in the limited
instances where these costs result in a separately identifiable intangible asset.
192
193
Notes to the financial statements continued
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.1 Intangible assets continued
4.1 Intangible assets continued
Other intangible assets are capitalised on the basis of the fair value of the assets acquired or on the basis of costs incurred to purchase
and bring the assets into use. They are subsequently measured at cost less accumulated amortisation. They are amortised over the
estimated useful life on a straight-line basis, as follows:
The net book value of acquisition related intangibles of €19.0m (2021: €22.1m) includes customer relationships of €14.6m (2021: €16.7m)
and permits of €4.1m (2021: €5.0m).
Contract right relating to leasehold land
Contract right relating to PPP contracts in Municipal
Computer software
Acquisition related intangibles:
Waste permits and licences
Customer relationships*
Term of the lease
Term of the contract
Up to 5 years
5 to 20 years
Up to 14 years
* The remaining useful life of customer relationships is based on the accumulated excess earnings approach
Intangible assets are analysed as follows:
Cost
At 1 April 2020
Additions
Reversal of previously capitalised SaaS costs
Disposals
Exchange rate changes
At 31 March 2021 – restated
Additions
Acquisition through business combinations (note 6.1)
Disposals
Reclassifications
At 31 March 2022
Accumulated amortisation and impairment
At 1 April 2020
Amortisation charge
Impairment charge
Reversal of amortisation relating to previously capitalised SaaS costs
Disposals
Exchange rate changes
At 31 March 2021 – restated
Amortisation charge
Impairment charge
Disposals
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021 – restated
At 31 March 2020
Goodwill
€m
Landfill void
€m
Restated*
Computer
software and
others
€m
Acquisition
related
intangibles
€m
Restated*
Total
€m
624.8
–
–
–
–
624.8
–
–
–
–
624.8
63.7
–
9.5
–
–
–
73.2
–
–
–
73.2
551.6
551.6
561.1
27.3
–
–
–
–
27.3
1.6
–
–
–
28.9
20.6
1.4
–
–
–
–
22.0
1.2
–
–
23.2
5.7
5.3
6.7
59.1
11.3
(11.2)
(17.6)
0.8
42.4
7.7
–
(9.1)
(0.4)
40.6
42.2
4.9
–
(3.9)
(17.4)
0.7
26.5
4.2
2.3
(8.9)
24.1
16.5
15.9
16.9
73.7
–
–
–
–
73.7
–
0.3
(0.1)
–
73.9
48.3
3.3
–
–
–
–
51.6
3.4
–
(0.1)
54.9
19.0
22.1
25.4
784.9
11.3
(11.2)
(17.6)
0.8
768.2
9.3
0.3
(9.2)
(0.4)
768.2
174.8
9.6
9.5
(3.9)
(17.4)
0.7
173.3
8.8
2.3
(9.0)
175.4
592.8
594.9
610.1
* The comparatives have been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
Of the total amortisation charge of €8.8m (2021: €9.6m), €3.4m (2021: €3.3m) related to acquisition related intangible assets which has
been charged in cost of sales. Of the remaining amortisation expense of €5.4m (2021: €6.3m), €1.3m (2021: €1.7m) has been charged
in cost of sales and €4.1m (2021: €4.6m) has been charged in administrative expenses. The prior year reversal of amortisation relating
to previously capitalised SaaS costs has been credited to administration expenses within non-trading and exceptional items.
The current year impairment charge of €2.3m is a result of a detailed review of computer software assets. The prior year goodwill
impairment of €9.5m related to the Maltha CGU as a result of a reduction in the expected future cash flows due to difficult
market conditions.
Goodwill impairment
Impairment testing is carried out at a CGU level on an annual basis.
The material CGUs are Netherlands Commercial Waste, Belgium Commercial Waste and Mineralz & Water. A summary of the closing net
book values by reportable segment is set out below:
Netherlands Commercial Waste
Belgium Commercial Waste
Commercial Waste
Mineralz & Water
Specialities
Total goodwill
2022
€m
262.1
136.3
398.4
129.5
23.7
551.6
2021
€m
262.1
136.3
398.4
129.5
23.7
551.6
The Group estimates the recoverable amount of a CGU using a value in use model by projecting cash flows for the next five years
together with a terminal value using a long-term growth rate. However, given a landfill closure in Mineralz & Water CGU it is more
appropriate to use a 14 year model for projecting cash flows. The five year plans used in the impairment models are based on
management’s past experience and future expectations of performance. They also reflect the planned changes in the CGUs as a result
of the Renewi 2.0 improvement programme and actions instigated in the current year together with expected general market and
economic conditions. The key assumptions underpinning the recoverable amounts of the CGUs tested for impairment are forecast
revenue and underlying EBIT, taking into account the recovery from the impact of Covid-19. The forecast revenues in these models are
based on management’s predictions of overall market growth rates, including both volume and price. Underlying EBIT margin is the
average EBIT margin as a percentage of revenue over the five year forecast period. The pre-tax discount rate reflects the Group’s
assessment of the risks related to the CGUs and the countries in which they operate.
For each of the material CGUs, the key assumptions used in the value in use calculations are shown below:
2022
Revenue (% annual growth rate from year 1 to year 5)
Underlying EBIT margin (average % of revenue for years 1 to year 5)
Long-term growth rate*
Pre-tax discount rate
Netherlands
Commercial
Waste
Belgium
Commercial
Waste
Mineralz &
Water
2.9%
8.0%
2.0%
8.7%
3.5%
8.9%
2.0%
9.7%
2.5%
7.7%
2.0%
9.0%
* The terminal long-term growth rate of 2.0% is only applied to the results of ATM and Tisselt within the Mineralz & Water CGU.
2021
Revenue (% annual growth rate from year 1 to year 5)
Underlying EBIT margin (average % of revenue for years 1 to year 5)
Long-term growth rate*
Pre-tax discount rate
Netherlands
Commercial
Waste
Belgium
Commercial
Waste
Mineralz &
Water
2.3%
6.5%
2.0%
8.5%
2.5%
5.8%
2.0%
8.8%
1.1%
10.2%
2.0%
8.5%
* The terminal long-term growth rate of 2.0% is only applied to the results of ATM and Tisselt within the Mineralz & Water CGU.
A long-term growth rate of 2% has been applied as this is deemed to represent the long-term growth rate for the industry and in the
countries in which the Group operates.
The prior year impairment charge of €9.5m related to the Maltha business line in Specialities division.
194
195
Notes to the financial statements continued
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.1 Intangible assets continued
Sensitivity to changes in assumptions
The Group performs sensitivity analysis on the impairment testing by considering reasonably possible changes in the key assumptions
used. For the Commercial Waste, Mineralz & Water and Coolrec CGUs a change in discount rate of 1% demonstrated that there is still
appropriate headroom and it is concluded that no reasonably possible change to the assumptions would result in an impairment
charge. The headroom for the Maltha CGU is more limited. At 31 March 2022 the recoverable amount for this CGU exceeds the carrying
value by €3m. On a sensitised profit basis applying an annual 5% profit reduction or with a 0.5% increase in discount rate the headroom
would reduce to €1m.
4.2 Property, plant and equipment
Accounting policy
Property, plant and equipment, except for freehold land and assets under construction, is stated at cost less accumulated depreciation
and provision for impairment. Freehold land is not depreciated. Cost includes the original purchase price of the asset and the costs
attributable to bringing the asset to its working condition for its intended use. The asset’s residual values and useful lives are reviewed
and adjusted if appropriate at the end of each reporting period.
Where a government grant has been received in relation to an item of capital expenditure it is generally deducted from the carrying
amount of the asset purchased once all the conditions have been met. However, where the grant has been received and the conditions
of the grant have not been fully met then the government grant is recognised as a liability at the value of the cash received and is
subsequently transferred to the asset once all conditions are fully met.
Assets other than goodwill are reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value. An impairment loss is recognised immediately as an operating expense and at each subsequent reporting
date the impairment is reviewed for possible reversal.
Depreciation is provided to write off cost (less the expected residual value) on a straight-line basis over the expected useful economic
lives as follows:
Buildings
Landfill site development costs including engineering works
Plant and installations
Trucks, cars and service vehicles
Other items of plant and machinery
Computer equipment
Fixtures and fittings
Up to 30 years
Up to 30 years (over the operational life of the site)
Up to 20 years
Up to 12 years
Up to 15 years
Up to 5 years
Up to 10 years
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.2 Property, plant and equipment continued
Property, plant and equipment are analysed as follows:
Land and
buildings
€m
Landfill
sites
€m
Plant and
machinery
€m
Cost
At 1 April 2020
Additions
Disposals
Reclassifications
Exchange rate changes
At 31 March 2021
Additions
Acquisition through business combinations (note 6.1)
Disposals
Transferred to Assets held for sale (note 6.3)
Reclassifications
Exchange rate changes
At 31 March 2022
Accumulated depreciation and impairment
At 1 April 2020
Depreciation charge
Impairment charge
Disposals
Reclassifications
Exchange rate changes
At 31 March 2021
Depreciation charge
Impairment charge
Disposals
Transferred to Assets held for sale (note 6.3)
Exchange rate changes
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
At 1 April 2020
464.7
11.7
(2.3)
2.2
0.3
476.6
17.3
–
(1.5)
(6.7)
–
0.1
485.8
149.8
14.9
2.5
(2.0)
2.2
0.3
167.7
14.0
0.2
(1.1)
(4.1)
0.1
176.8
309.0
308.9
314.9
68.5
–
(0.1)
–
–
68.4
0.5
–
(0.5)
–
–
–
68.4
50.4
1.8
–
(0.1)
–
–
52.1
2.2
–
(0.4)
–
–
53.9
14.5
16.3
18.1
Total
€m
1,305.9
61.1
(92.0)
2.2
0.5
1,277.7
73.3
0.2
(54.9)
(6.7)
0.4
0.1
772.7
49.4
(89.6)
–
0.2
732.7
55.5
0.2
(52.9)
–
0.4
–
735.9
1,290.1
521.7
57.5
3.7
(85.9)
–
0.2
497.2
53.1
5.2
(49.7)
–
–
721.9
74.2
6.2
(88.0)
2.2
0.5
717.0
69.3
5.4
(51.2)
(4.1)
0.1
505.8
736.5
230.1
235.5
251.0
553.6
560.7
584.0
Depreciation expense of €66.6m (2021: €71.8m) has been charged in cost of sales and €2.7m (2021: €2.4m) in administrative expenses.
The impairment charge of €5.4m relates to several sites across the Commercial division following detailed reviews including €1.4m
in relation to the advanced sorting project in Belgium. The prior year impairment charge of €6.2m related to a Covid-19 cost action
programme to address the challenges of the pandemic, resulting in the actual and planned closure of processing lines and sites in the
Commercial Division in both Belgium and the Netherlands which resulted in asset impairments. The impairment charge of €5.4m
(2021: €6.2m) has been charged to cost of sales.
Included within the net book value of property, plant and equipment of €553.6m (2021: €560.7m) are assets under construction of which
€16.5m (2021: €18.1m) is plant and machinery and €2.5m (2021: €6.2m) is land and buildings. The net book value of plant and machinery
of €230.1m (2021: €235.5m) includes €109.7m (2021: €106.0m) of plant and installations, €55.5m (2021: €60.5m) of machinery and
€59.3m (2021: €63.3m) of containers.
196
197
Notes to the financial statements continued
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.3 Right-of-use assets
Accounting policy
Right-of-use assets are recognised at the lease liability commencement date and are initially measured at cost which comprises the
initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct
costs incurred.
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease
term. If the lessor transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use
asset reflects that the Group will exercise a purchase option, then the right-of-use asset is depreciated over the useful life of the
underlying asset, which is determined on the same basis as those in property, plant and equipment. The lease liability is remeasured
when there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group
changes its assessment of whether it will exercise a purchase extension or termination option or if there is a revision to fixed lease
payments. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-
of-use asset. The Group leases out a limited number of right-of-use assets which are classified as operating leases from a lessor
perspective with the exception of one sub-lease which is classified as a finance sub-lease.
Right-of-use assets are reviewed for impairment whenever events or circumstances indicate that the carrying value may not be
recoverable following the same approach as property, plant and equipment as stated in note 4.2.
Right-of-use assets are analysed as follows:
Cost
At 1 April 2020
Additions/modifications
Disposals
Derecognition of right-of-use assets into a finance sub-lease
Reclassifications
Exchange rate changes
At 31 March 2021
Additions/modifications
Disposals
Exchange rate changes
At 31 March 2022
Accumulated depreciation and impairment
At 1 April 2020
Depreciation charge
Impairment charge
Disposals
Reclassifications
Exchange rate changes
At 31 March 2021
Depreciation charge
Impairment charge
Disposals
Exchange rate changes
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
At 1 April 2020
198
Land and
buildings
€m
Plant and
machinery
€m
130.7
16.0
(0.3)
(0.4)
(2.3)
0.6
144.3
9.9
(2.2)
0.2
134.3
44.9
(3.4)
–
2.3
0.2
178.3
17.2
(6.2)
–
Total
€m
265.0
60.9
(3.7)
(0.4)
–
0.8
322.6
27.1
(8.4)
0.2
152.2
189.3
341.5
24.8
9.8
0.2
(0.3)
(0.6)
0.6
34.5
10.4
0.2
(1.3)
0.2
44.0
108.2
109.8
105.9
24.3
30.9
1.6
(3.3)
0.6
0.2
54.3
34.4
0.5
(5.5)
–
83.7
105.6
124.0
110.0
49.1
40.7
1.8
(3.6)
–
0.8
88.8
44.8
0.7
(6.8)
0.2
127.7
213.8
233.8
215.9
4.3 Right-of-use assets continued
The net book value of plant and machinery right-of-use assets includes €1.7m (2021: €3.4m) of plant and installations, €90.1m (2021:
€105.0m) of machinery including trucks and €13.7m (2021: €15.3m) of company cars.
Depreciation expense of €37.3m (2021: €33.0m) has been charged in cost of sales and €7.5m (2021: €7.7m) in administrative expenses.
The impairment charge of €0.7m is principally a small number of trucks in the Commercial division. The prior year impairment charge
of €1.8m related to UK Municipal and the Covid-19 cost action programme in Netherlands Commercial.
4.4 Investments and loans to associates and joint ventures
Accounting policy
Investments in associates and joint ventures are accounted for using the equity method of accounting and are initially recognised at cost or,
in the case of a disposal of the majority shareholding, at fair value. The cumulative post-acquisition profits or losses and movements in
Other Comprehensive Income are adjusted against the carrying amount of the investment. When the Group’s share of losses exceeds the
carrying amount of the joint venture or associate, the carrying amount is reduced to nil and recognition of further losses is discontinued
except to the extent that the Group has incurred legal or constructive obligations or made payments on behalf of the joint venture or
associate. Accounting policies of associates and joint ventures have been adjusted where necessary to ensure consistency with the policies
of the Group.
For the other unlisted investments the Group made an irrevocable election to classify these at fair value through Other Comprehensive
Income rather than profit or loss because this is considered to be more appropriate for these strategic investments. They were initially
recorded at fair value and then remeasured at subsequent reporting dates with the unrealised gains and losses recognised in Other
Comprehensive Income.
Short-term investments are measured at fair value through profit or loss with unrealised gains and losses recognised in the
Income Statement.
Loans to joint ventures and associates are measured at amortised cost and where appropriate a 12-month expected credit loss
allowance is recorded on initial recognition. If there is subsequent evidence of a significant increase in the credit risk the allowance
is increased to reflect the full lifetime expected credit loss.
199
Notes to the financial statements continued
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.4 Investments and loans to associates and joint ventures continued
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.5 Financial assets relating to PPP contracts
Key judgement
The Group has a 50.001% interest in the joint venture Wakefield Waste Holdings Limited. Upon the sale of 49.99% of this entity in 2016
the Group assessed the criteria of control considering power over the investee, exposure or rights to a variable return and the ability to
use power over the investee to affect the amount of the investors returns. The Group determined that it does not meet the criteria for
having control as each partly jointly controls the entity and as a result it is appropriate to equity account.
The carrying amount of investments and loans to associates and joint ventures are as follows:
Loans
Loans to
associates
and
joint ventures
€m
Investments
Joint ventures
€m
Associates
€m
Other unlisted
investments
€m
Short-term
investments
€m
Total
investments
€m
0.9
–
–
–
–
–
–
–
0.9
–
–
–
–
–
–
–
0.9
1.5
–
0.9
(0.5)
–
–
–
–
1.9
–
–
0.1
(0.5)
–
–
–
1.5
9.4
1.1
0.7
(1.1)
0.3
–
0.1
0.2
10.7
–
(0.7)
0.4
(0.8)
0.5
–
(1.9)
8.2
4.7
–
–
–
–
–
(0.1)
–
4.6
–
–
–
–
–
–
–
4.6
8.1
0.8
–
–
–
0.4
–
–
9.3
2.2
–
–
–
–
(0.4)
–
23.7
1.9
1.6
(1.6)
0.3
0.4
–
0.2
26.5
2.2
(0.7)
0.5
(1.3)
0.5
(0.4)
(1.9)
11.1
25.4
At 31 March 2020
Additions
Share of retained profits
Dividend income
Fair value adjustment on cash flow hedges
Fair value movement on short-term investments
Reclassification
Exchange rate changes
At 31 March 2021
Additions
Transferred to Assets held for sale (note 6.3)
Share of retained profits
Dividend income
Fair value adjustment on cash flow hedges
Fair value movement on short-term investments
Impairment charge
At 31 March 2022
The loans to associates and joint ventures of €0.9m (2021: €0.9m) are current. Total investments are split €11.1m current (2021: €9.3m)
and €14.3m non-current (2021: €17.2m).
Investments in joint ventures are held at €nil when the Group’s share of losses exceeds the carrying amount. The Group has not
recognised an investment value in relation to the UK Municipal Wakefield Waste Holdings Limited joint venture as there are insufficient
future cash flows to support a carrying value. The Group’s share of profits in the year was €3.1m (2021: €1.8m profit) which resulted in
a cumulative profit of €1.1m (2021: €2.0m loss).
Where the associate or joint venture holds non-recourse PPP debt there is a restriction on payment of dividends, which is due to the
terms of the financing facility agreements and as such requires lender approval.
Details of joint ventures and associated investments are shown in note 8.1. No joint venture or associate is considered individually
material to the Group for further disclosure.
Financial assets result from the application of IFRIC 12 on accounting for concession arrangements relating to the UK PPP
Municipal contracts.
Accounting policies and key judgements
Financial assets relating to PPP contracts are classified as financial assets at amortised cost and are initially recognised at the fair value of
consideration receivable and subsequently at amortised cost. These service concession arrangements under IFRIC 12 represent the present
value of the future cash flows of the contract. These cash flows are dependent on, amongst other things, tonnages, indexation, recycling
rates and labour costs.
The IFRS 9 general approach is applied in relation to expected credit loss which requires an allowance to be recorded on initial
recognition if appropriate and then at each reporting date an assessment is made to determine the changes in the risk of default
occurring over the expected life of the financial asset. The UK Municipal division entered into PPP long-term waste management
contracts with local authorities which included the infrastructure capital costs. UK local authorities have historically held a strong credit
profile with the capacity to meet financial commitments and none have ever defaulted. These financial assets are assessed to have low
credit risk based on low risk of default, the vital nature of the service being provided, strong financial capacity to meet contractual cash
flow obligations in the near term and adverse changes in economic and business conditions in the longer term may, but will not
necessarily, reduce the local authority’s ability to fulfil its obligations.
UK PPP contracts
The Group is the operator for one class of service concession arrangements, that of the provision of waste treatment and waste
treatment facilities, and these are classified as service concession arrangements in accordance with IFRIC 12. If the Group
underperforms, including failure to divert waste from landfill, the contract can be terminated before the end of its term.
The Group’s UK PPP arrangements relate to the construction and operation of waste management facilities for local authorities and at
the end of the concession arrangement the facility will be handed over to the local authority. The building of the facilities was governed
by the engineer, procure and construct contract entered into by the Group at that time. The construction work was undertaken by third
party contractors with drawdowns of financing from the UK PPP funders used to pay the subcontractor for the construction works. The
Group considered all relevant factors in the contractual arrangements between the parties to determine whether the Group acted as
agent or principal during the construction phase. On the basis that the construction contractor was known to the local authority at the
date of financial close and in view of the negligible credit risk taken by the Group, on balance, despite some overall risk residing with the
Group for delivery of services, the Group acted as agent versus principal in the provision of construction services.
In light of these conclusions and the historical presentation of the revenue and costs associated with the construction services net in the
Income Statement, we consider that the most appropriate classification of the PPP non-recourse debt cash flows in the Statement of
Cash Flows is as financing outflows and capital received in relation to PPP financial assets as investing cash flows and not as operating
cash flows. This classification has been consistently applied to all periods presented in the financial statements.
200
201
Notes to the financial statements continued
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.5 Financial assets relating to PPP contracts continued
Other information for PPP contracts
The table below sets out the Group’s interest in service concession arrangements as at 31 March 2022.
Contract
Argyll & Bute
Cumbria
Wakefield
Financial close
September 2001
June 2009
Full-Service Commencement
April 2003
April 2013
January 2013
December 2015
Contract Expiry
September 2026
June 2034
February 2038
Interests in Special
Purpose Vehicle
Renewi: 100%
Renewi: 100%
Renewi: 50.001%
Equitix Infrastructure 4
Limited: 49.999%
Barnsley, Doncaster
and Rotherham
East London
Waste Authority
March 2012
July 2015
June 2040
Renewi: 100%
December 2002
August 2007
December 2027
Renewi: 20%
JLEN Environmental Assets
Group (UK) Limited: 80%
There have been no changes to any of the arrangements during the year ended 31 March 2022. Further disclosures in respect of service
concession arrangements as required by paragraph 6 SIC 29 are provided on pages 62 to 65 of the Specialities operating review.
The movements in financial assets during the year are as follows:
At 1 April 2020
Income recognised in the Income Statement: Interest Income (note 5.4)
Advances
Repayments
Exchange rate changes
At 31 March 2021
Income recognised in the Income Statement: Interest Income (note 5.4)
Advances
Repayments
Exchange rate changes
At 31 March 2022
Current
Non-current
At 31 March 2022
Current
Non-current
At 31 March 2021
€m
147.8
9.0
1.9
(15.0)
5.4
149.1
9.0
0.3
(16.1)
1.1
143.4
7.7
135.7
143.4
6.7
142.4
149.1
At 31 March 2022 and 2021 there was no expected credit loss allowance recorded in relation to the financial assets relating to PPP
contracts as explained in note 5.7.
The table below reconciles the financial asset repayments to the Statement of Cash Flows:
Capital received in respect of PPP financial assets included in cash flows from investing activities
Interest in relation to PPP financial assets included in finance income in cash flows from investing activities
2022
€m
6.2
9.9
16.1
2021
€m
5.1
9.9
15.0
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.6 Capital commitments
Contracts placed for future intangible assets
Contracts placed for future capital expenditure on property, plant and equipment
Contracts placed for future right-of-use assets
Contracts placed for future capital expenditure on financial assets
2022
€m
2.7
38.6
38.8
0.3
Restated*
2021
€m
3.4
15.0
8.2
0.3
* The comparatives have been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
4.7 Inventories
Accounting policy
Inventories are stated at the lower of cost and net realisable value and are measured on a first in first out basis.
Inventories are analysed as follows:
Raw materials and consumables
Finished goods
2022
€m
13.8
8.7
22.5
2021
€m
12.7
7.9
20.6
In the current year there was a write down of €0.3m (2021: €1.1m) of inventories to net realisable value. This included €0.3m (2021: €0.8m)
in the Commercial Waste division and €nil (2021: €0.2m) in Specialities. The charge was recognised as a cost of sale and in the prior year
€0.2m was recognised as an exceptional cost of sale.
4.8 Trade and other receivables
Accounting policy
Trade receivables and accrued income do not carry interest and are initially recognised at the transaction price and are subsequently
measured at amortised cost net of impairment loss allowances. Accrued income relates to the Group’s rights to consideration for work
completed but not billed at the reporting date until they become unconditional, at which point they are transferred to trade receivables.
Unbilled amounts arise when revenue is recognised prior to an invoice being raised to the customer; typically, this arises when
supporting documentation is required to be delivered with the invoice, the invoice needs to be agreed with the customer prior to issue
or revenue is recognised over time with the invoice only raised on completion of all the performance obligations.
The Group applies the IFRS 9 simplified approach to measuring expected credit losses (ECL) which uses a lifetime expected allowance
for all trade receivables and accrued income which includes an assessment of both the current and forecast conditions at the reporting
date. To measure the ECL, trade receivables and accrued income have been assessed by the divisions and grouped based on ageing.
Accrued income relates to unbilled services provided and has substantially the same risk characteristics as the trade receivables for
the same types of contracts. The Group has therefore concluded that the expected loss rates for trade receivables are a reasonable
approximation of the loss rates for accrued income. The ECL on trade receivables and accrued income is estimated using a provision
matrix by reference to payment profiles of revenue. In addition outstanding trade receivables and accrued income have been reviewed
on a detailed customer by customer basis taking into account general economic conditions of the industry in which the debtor operates
in, past default experience and an analysis of the current financial position of the debtor. The Group has not yet seen a marked increase
in trade receivable write offs as a result of the Covid-19 pandemic, however as the Government support has now come to an end it is
expected that the number of bankruptcies will increase.
For receivables other than trade receivables and accrued income the general approach under IFRS 9 is applied which requires an ECL
allowance to be recorded on initial recognition if appropriate and then at each reporting date an assessment is made to determine the
changes in the risk of default occurring over the expected life of the receivable.
202
203
Notes to the financial statements continued
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.8 Trade and other receivables continued
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.8 Trade and other receivables continued
The Group has entered into invoice finance facilities whereby certain of its trade receivables are sold to third parties on a regular basis and
the trade receivables subject to these arrangements are derecognised. For the proportion of trade receivables derecognised the Group has
neither transferred nor retained substantially all the risks and rewards of ownership and control has not passed to the third party, therefore
the Group continues to recognise part of the trade receivable according to the Group’s continuing exposure to the risks and rewards. This is
determined by the extent to which the Group remains exposed to any remaining late payment risk and is included within trade receivables
and other payables. The Group continues to perform the servicing of the receivables sold and is not authorised to use the receivables sold
other than in its capacity as servicer. The value of this service is not considered material for specific disclosure.
Other receivables includes amounts recoverable under invoice finance arrangements from the third party which are classified at fair
value through profit and loss. The classification is appropriate as the receivables are held within a business model which has the
objective to sell contractual cash flows. Amounts owed under leases where the Group is the lessor and the terms of the lease meet the
definition of a finance lease are also classified as other receivables.
Trade and other receivables are analysed as follows:
Non-current assets
Other receivables
Prepayments
Current assets
Trade receivables
Accrued income
Expected credit loss allowance
Trade receivables and accrued income – net
Deferred consideration
Other receivables
Prepayments
The carrying amounts of trade and other receivables are denominated in the following currencies:
Euro
Sterling
2022
€m
0.9
4.2
5.1
177.8
86.2
(26.0)
238.0
–
16.5
14.8
269.3
2022
€m
237.3
37.1
274.4
2021
€m
1.0
3.1
4.1
155.0
83.4
(25.9)
212.5
0.2
18.7
16.3
247.7
2021
€m
214.3
37.5
251.8
As at 31 March 2022 the total value of trade receivables subject to the invoice finance facilities was €90.4m (2021: €90.9m). The Group
recognises the continuing involvement carrying amount in trade receivables of €0.3m (2021: €0.3m) and therefore the net amount of
transferred assets was €90.1m (2021: €90.6m). The carrying amount of the associated liability was €0.3m (€2021: €0.3m). The Group
considers that the carrying amount of the continuing involvement asset and related liability equals the fair value.
The amount owed to the Group from the financial institutions providing invoice finance facilities is €9.5m (2021: €9.5m). This represents
the portion of the receivable that has been sold that is not advanced but is covered by credit insurance and is included within other
receivables. This classification also includes €1.0m (2021: €1.1m) relating to the net investment in leases where the Group acts as lessor
of which €0.9m (2021: €1.0m) is non-current and €0.1m (2021: €0.1m) is current. No financial assets within other receivables were
impaired in the current or prior year.
The expected credit loss allowance for trade receivables and accrued income is equivalent to 10% (2021: 11%) of gross trade receivables
and accrued income and the movement in the loss allowance is shown below:
At 1 April
Charged to Income Statement
Utilised
Reclassification
Exchange rate changes
At 31 March
2022
€m
25.9
0.6
(0.6)
–
0.1
26.0
2021
€m
22.4
4.7
(1.0)
(0.8)
0.6
25.9
The expected credit loss allowance includes €15.4m (2021: €15.3m) in relation to 100% of the gross receivable balance for the
receivables relating to the terminated Derby contract in the UK Municipal business line within Specialities. There has been no change in
the value of this loss allowance with the increase from 2021 to 2022 representing a movement in foreign exchange. For both March 2022
and March 2021 this receivable is included in the category of more than 180 days past due.
The expected credit loss allowance for trade receivables and accrued income is as follows:
31 March 2022
Expected loss rate %
Gross carrying amount (€m)
Expected credit loss allowance (€m)
31 March 2021
Expected loss rate %
Gross carrying amount (€m)
Expected credit loss allowance (€m)
More than
30 days
past due
More than
90 days
past due
More than
180 days
past due
18%
3.4
0.6
9%
4.5
0.4
30%
2.0
0.6
17%
3.5
0.6
90%
21.6
19.5
95%
21.4
20.3
Current
2%
237.0
5.3
2%
209.0
4.6
Total
10%
264.0
26.0
11%
238.4
25.9
The increase in receivables in the Statement of Cash Flows of €23.2m differs to the balance sheet movement of €22.6m by €0.6m mainly
as a result of a receivable being settled in relation to a disposal which is included within the €0.8m net cash outflow in relation to prior
year sale of business.
204
205
Notes to the financial statements continued
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.10 Provisions
Accounting policy
Provisions are recognised where there is a present legal or constructive obligation as a result of a past event and it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation. The value of a provision is the present value of the expenditures expected to be required to settle the
obligation and where the effect of the time value of money is material a discount is applied and is unwound over the life of the
provision. The discount rates are reviewed at each year end with consideration given to relevant market rates. The landfill provisions are
principally located in the Netherlands and Belgium therefore the discount rate is calculated with reference to Government bond yields
in these countries. The onerous contract provisions are principally in the UK therefore the discount rate is calculated with reference to
UK Government bond yields. The unwinding of the discount to present value is included within finance costs.
The Group’s policies on provisions for specific areas are:
Site restoration and aftercare provisions are recognised at the net present value (NPV) of the estimated future expenditure required to
settle the Group’s restoration and aftercare obligations at its landfill and mineral extraction sites. Provision is made for the Group’s
unavoidable costs in relation to restoration liabilities. Provision is made for the NPV of post closure costs (aftercare) as the aftercare
liability arises. Costs are charged to the Income Statement based on the quantity of waste deposited in the year or recognised as a landfill
site asset within property, plant and equipment and depreciated over the operational period of the site.
Aftercare provisions relate to landfill sites in the Netherlands, Belgium and the UK. The aftercare obligations in relation to the Netherlands
landfill sites are transferred to the Province in line with the legal framework which requires the Group to prepare aftercare plans which
must be approved by the Province. The Group is required to provide the funds to the Province which are then administered and
controlled by the Province per landfill location. The Group recognises an aftercare provision to the extent that additional contributions
are required. For the landfill sites in Belgium and the UK the aftercare obligation remains with the Group.
Onerous contract provisions are recognised at the NPV of the future cash flows when the unavoidable costs of meeting the obligation
under the contract exceed the economic benefits expected to be received.
Legal and warranty provisions are recognised when the Group has a present legal or constructive obligation as a result of past events, it is
probable that an outflow of resources will be required to settle the obligation and the amount can be reliably measured. The value of the
provision is management’s best estimate of the expenditure required to settle the present obligation based on the most likely outcome.
Provisions for restructuring costs are recognised when a detailed formal plan exists and those affected by that plan have a valid
expectation that the restructuring will be carried out.
Long-service employee awards included within Other provisions are recognised as long term employee benefits in relation to employees
in the Netherlands and Belgium in accordance with IAS 19 Employee Benefits. The valuation method is similar to defined benefit pension
schemes although the cost is recognised immediately in the Income Statement. These plans are unfunded.
The split of timings of outflows is not certain and has been estimated based on management’s latest expectation.
4.9 Trade and other payables and other non-current liabilities
Accounting policy
Trade and other payables are not interest bearing and are measured initially at fair value and subsequently held at amortised cost.
Where a government grant has been received in relation to an item of capital expenditure it is generally deducted from the carrying amount
of the asset purchased once all relevant conditions, such as completion of the project and an independent audit of costs, have been met. In
circumstances where the grant has been received and all conditions of receipt have not been met the government grant is recognised as a
liability at the value of the cash received. On satisfaction of all conditions it is subsequently transferred to plant and equipment.
Trade and other payables and other non-current liabilities are analysed as follows:
Non-current liabilities
Other tax and social security payables
Deferred revenue
Government grants
Current liabilities
Trade payables
Accruals and other payables
Other tax and social security payables
Deferred revenue
Government grants
2022
€m
29.7
4.8
1.7
36.2
117.3
300.8
61.3
48.4
0.6
528.4
The carrying amounts of trade and other payables and other non-current liabilities are denominated in the following currencies:
Euro
Sterling
2022
€m
499.0
65.6
564.6
2021
€m
49.5
4.1
0.8
54.4
136.8
308.2
49.7
50.2
1.3
546.2
2021
€m
538.5
62.1
600.6
The non-current other tax and social security payables relate to the Dutch government tax deferrals in relation to Covid-19 which are
repayable in 36 instalments from October 2021.
At 31 March 2022 the balance of interest accrued relating to total borrowings was €7.9m (2021: €5.4m) and was included within the
accruals and other payables balance. This balance was after finance charges of €29.3m (2021: €30.3m) (including the finance charges
impact of the cross-currency and interest rate swaps) net of a cash outflow of €28.4m (2021: €30.6m) (excluding €1.6m (2021: €0.2m of
loan fees).
Deferred revenue primarily relates to waste received or collected which has not yet been processed in accordance with the performance
obligations of the contracts with customers. At each month end the amount of unprocessed waste is determined and there is an
adjustment to revenue with a corresponding credit to deferred revenue. Additionally, in the Municipal business line within Specialities
deferred revenue relates to the service element of the PPP contracts known as lifecycle as explained in note 3.1. Of the deferred revenue
recognised at 31 March 2021 of €54.3m (2020: €55.1m), €50.7m (2021: €48.0m) has been recognised in revenue during the year ended
31 March 2022.
The decrease in payables in the Statement of Cash Flows of €34.8m differs to the balance sheet movement of €36.0m by €1.2m as a result
of capital creditors, foreign exchange, interest accruals and the transfer of a government grant to property, plant and equipment following
the satisfaction of all conditions.
206
207
Notes to the financial statements continued
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
SECTION 4. OPERATING ASSETS AND LIABILITIES CONTINUED
4.10 Provisions continued
Provisions are analysed as follows:
At 1 April 2020
Provided in the year
Released in the year
Finance charges – unwinding of discount (note 5.4)
Utilised in the year
Exchange rate changes
At 31 March 2021
Provided in the year
Released in the year
Finance charges – unwinding of discount (note 5.4)
Utilised in the year
Exchange rate changes
At 31 March 2022
Within one year
Between one and five years
Between five and ten years
Over ten years
At 31 March 2022
Within one year
Between one and five years
Between five and ten years
Over ten years
At 31 March 2021
Site
restoration
and
aftercare
€m
Onerous
contracts
€m
Legal and
warranty
€m
Restructuring
€m
Other
€m
152.8
5.7
(1.1)
3.7
(3.7)
0.2
157.6
1.4
(2.6)
3.9
(3.4)
–
156.9
5.7
49.3
50.8
51.1
156.9
8.4
45.7
55.1
48.4
157.6
89.7
17.4
(15.8)
2.4
(15.6)
2.8
80.9
6.2
(4.8)
2.3
(5.3)
0.6
79.9
9.2
23.4
23.1
24.2
79.9
11.0
28.2
20.2
21.5
80.9
25.2
3.2
(2.4)
–
(0.3)
–
25.7
0.4
(1.3)
0.1
(1.8)
–
23.1
4.7
15.6
0.5
2.3
23.1
7.3
15.1
0.7
2.6
25.7
4.3
5.9
(1.0)
–
(5.4)
–
3.8
4.8
(0.7)
–
(3.9)
–
4.0
4.0
–
–
–
4.0
3.8
–
–
–
3.8
Total
€m
290.1
39.4
(21.1)
6.3
(26.6)
3.2
291.3
17.5
(11.2)
6.4
(15.4)
0.6
18.1
7.2
(0.8)
0.2
(1.6)
0.2
23.3
4.7
(1.8)
0.1
(1.0)
–
25.3
289.2
7.5
5.4
3.4
9.0
25.3
8.2
4.6
3.3
7.2
23.3
31.1
93.7
77.8
86.6
289.2
38.7
93.6
79.3
79.7
291.3
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
31 March 2022 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 30 years (2021: 31 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. 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.
Onerous contracts
Onerous contract provisions arise when the unavoidable costs of meeting contractual obligations exceed the cash flows expected. Onerous
contracts are provided for at the lower of the NPV of either exiting the contracts or fulfilling our obligations under the contracts. The
provisions have been calculated on the best estimate of likely future cash flows over the contract term based on the latest budget and five
year plan projections, including assumptions on tonnage inputs, plant performance with efficiency improvements, off-take availability and
recyclates pricing. The provisions are to be utilised over the period of the contracts to which they relate with the latest date being 2040.
4.10 Provisions continued
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.
On 6 February 2020 the European Commission announced its decision to initiate a formal investigation in which it alleges that the
Walloon Region of Belgium provided state aid to the Group in relation to the Cetem landfill. An adverse judgement would require the
Walloon Region to seek repayment from the Group and a provision of €15.1m has been recognised in both the current year and the prior
year as non-current as timing of any cash flow is expected to be after 12 months from the balance sheet date. The matter remains
ongoing and based on legal advice management consider this value to be their best estimate of the potential exposure based on the
most likely outcome. Further contingent liability information is provided in note 8.4.
Restructuring
The restructuring provision primarily relates to redundancy and related costs incurred as a result of restructuring initiatives. As at
31 March 2022 the provision is expected to be spent in the following twelve months as affected employees leave the business.
Other
Other provisions includes dilapidations €9.1m (2021: €8.7m), long-service employee awards €7.0m (2021: €6.0m) and other
environmental liabilities €9.2m (2021: €8.6m). 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 2071.
Sensitivities
Landfill related provisions in the Netherlands and Belgium have been discounted at a real discount rate of 0.49% (2021: 0.49%).
The impact of a 0.5% reduction in the discount rate would result in an increase in the provisions of approximately €6m (2021: €9m).
Onerous contracts relating to the Municipal business line within the Specialities Division have been discounted at a real discount rate
of 0.98% (2021: 0.98%). A 0.5% reduction in the discount rate would result in an increase in the provisions of approximately €3m (2021:
€3m). In addition to a change in discount rate, the provisions are sensitive to achievement of improvement initiatives and the impact of
future recyclate prices. We have based our assumptions for recyclate prices on observed prices over recent periods, which includes
periods of both record high and record low prices. Recyclate prices have reached record highs in the last year and are expected to fall,
but there is uncertainty as to when or to what extent. Prices for metals and plastics are assumed to fall to an average level of observed
prices over recent periods but paper prices remain above that level due to structural changes in the market. This uncertainty could lead
to an increase or reduction in the onerous contract provisions of around €5m.
208
209
Notes to the financial statements continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING
This section outlines how the Group manages its capital structure and related financing costs. It includes cash, borrowings,
derivatives and the equity of the Group. The instruments in place enable the Group to maintain the required capital structure in
order to finance the activities both now and in the future.
Total net debt reflects the Group’s cash and cash equivalents and borrowings including IFRS 16 lease liabilities and PPP cash and
non-recourse debt. Net debt for covenant reporting includes cash and cash equivalents and finance leases previously reported
under IAS 17 but excludes additional lease liabilities reported under IFRS 16 and both cash and the non-recourse debt relating to the
UK PPP contracts.
5.1 Movement in total net debt
2022
Bank loans and overdrafts
European private placements
Retail bonds
Lease liabilities
Debt excluding PPP non-recourse debt
PPP non-recourse debt
Total debt
Cash and cash equivalents – core
Cash and cash equivalents – restricted relating to PPP contracts
Total net debt
Analysis of total net debt:
Net debt excluding PPP non-recourse net debt
PPP non-recourse net debt
Total net debt
Restated*
At
1 April 2021
€m
(184.8)
(24.7)
(174.5)
(247.8)
Cash flows
€m
170.6
–
(125.0)
44.2
Other
non-cash
changes
€m
(0.5)
(0.1)
0.3
(25.6)
Exchange
movements
€m
0.6
–
–
(0.1)
At
31 March 2022
€m
(14.1)
(24.8)
(299.2)
(229.3)
(631.8)
(105.1)
(736.9)
51.5
17.3
(668.1)
(580.3)
(87.8)
(668.1)
89.8
5.7
95.5
(9.8)
3.6
89.3
80.0
9.3
89.3
(25.9)
–
(25.9)
–
–
(25.9)
(25.9)
–
(25.9)
0.5
(0.8)
(0.3)
0.8
0.2
0.7
1.3
(0.6)
0.7
(567.4)
(100.2)
(667.6)
42.5
21.1
(604.0)
(524.9)
(79.1)
(604.0)
* The comparatives for cash and cash equivalents relating to PPP contracts and PPP non-recourse debt have been restated due to a prior year adjustment as explained
in section 1 Basis of preparation.
2021
Bank loans and overdrafts
European private placements
Retail bonds
Lease liabilities
Debt excluding PPP non-recourse debt
PPP non-recourse debt
Total debt
Cash and cash equivalents – core
Cash and cash equivalents – restricted relating to PPP contracts
Total net debt
Analysis of total net debt:
Net debt excluding PPP non-recourse net debt
PPP non-recourse net debt
Total net debt
Restated*
At
1 April 2020
€m
(437.9)
(24.6)
(174.3)
(226.6)
Restated*
Cash flows
€m
260.0
–
–
40.4
Other
non-cash
changes
€m
(1.0)
(0.1)
(0.2)
(60.9)
Restated*
Exchange
movements
€m
(5.9)
–
–
(0.7)
Restated*
At
31 March 2021
€m
(184.8)
(24.7)
(174.5)
(247.8)
(863.4)
(105.3)
(968.7)
194.5
15.3
(758.9)
(668.9)
(90.0)
(758.9)
300.4
4.1
304.5
(142.5)
1.3
163.3
157.9
5.4
163.3
(62.2)
–
(62.2)
–
–
(62.2)
(62.2)
–
(62.2)
(6.6)
(3.9)
(10.5)
(0.5)
0.7
(10.3)
(7.1)
(3.2)
(10.3)
(631.8)
(105.1)
(736.9)
51.5
17.3
(668.1)
(580.3)
(87.8)
(668.1)
* The comparatives for cash and cash equivalents relating to PPP contracts and PPP non-recourse debt have been restated due to a prior year adjustment as explained
in section 1 Basis of preparation.
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.1 Movement in total net debt continued
Net decrease in cash and cash equivalents
Net decrease in borrowings and lease liabilities
Total cash flows in net debt
Lease liabilities entered into during the year
Lease liabilities cancelled during the year
Capitalisation of loan fees
Amortisation of loan fees
Exchange gain (loss)
Movement in net debt
Total net debt at beginning of year
Total net debt at end of year
2022
€m
(6.2)
95.5
89.3
(27.1)
1.5
1.6
(1.9)
0.7
64.1
(668.1)
(604.0)
Restated*
2021
€m
(141.2)
304.5
163.3
(60.9)
–
0.2
(1.5)
(10.3)
90.8
(758.9)
(668.1)
* The comparatives relating to net decrease in cash and cash equivalents, borrowings and lease liabilities have been restated due to a prior year adjustment as explained
in section 1 Basis of Preparation. The total cash flows in net debt remain unchanged.
5.2 Cash and cash equivalents
Accounting policy
Cash and cash equivalents comprises of core cash which includes cash balances, money market funds and call deposits with a maturity
of three months or less at the date of deposit and restricted cash at bank balances relating to PPP contracts. The cash held in the PPP
entities is not freely available to the Group and historically these cash balances were presented together with gross PPP non-recourse
debt as PPP non-recourse net debt. Also included in cash and cash equivalents is €2.3m (2021: €1.7m) held by joint operations which is
only available to the Group in consultation with all other partners in the joint operation.
Cash at bank and in hand and cash at bank restricted relating to PPP contracts is held at amortised cost. Money market funds are constant
net asset value funds with same day access for subscription and redemption. The funds fail the ‘solely payments of principal and interest’
criteria under IFRS 9. They are therefore classified at fair value through profit and loss, although the fair value is materially the same as
amortised cost. Gains and losses arising from changes in fair value are included in the Income Statement in net finance charges.
Cash and cash equivalents are analysed as follows:
Cash at bank and in hand – core
Cash at bank – restricted relating to PPP contracts
Total cash and cash equivalents
2022
€m
42.5
21.1
63.6
Restated*
2021
€m
51.5
17.3
68.8
* The comparatives have been restated to include cash at bank – restricted relating to PPP contracts due to a prior year adjustment as explained in section 1 Basis of preparation.
The carrying amounts of cash and cash equivalents are denominated in the following currencies:
Euro
Sterling
Canadian Dollar
2022
€m
29.8
33.8
–
63.6
Restated*
2021
€m
41.1
27.5
0.2
68.8
* The comparatives have been restated to include cash at bank – restricted relating to PPP contracts due to a prior year adjustment as explained in section 1 Basis of preparation.
210
211
Notes to the financial statements continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.3 Borrowings
Accounting policy
Retail bonds and bank borrowings
Interest bearing loans and retail bonds are recorded at their initial fair value which normally reflects the proceeds received, net of direct
issue costs and subsequently at amortised cost. When the Group exchanges one debt instrument for another one with an existing lender
and with substantially different terms, such exchange is accounted for as an extinguishment of the original financial liability and the
recognition of a new financial liability. Similarly, the Group accounts for substantial modifications of the terms of an existing liability or
part of it as an extinguishment of the original financial liability and the recognition of a new liability. The terms are considered to be
substantially different if the discounted present value of the cash flows under the new terms calculated using the original effective rate,
is at least 10% different from the discounted present value of the remaining cash flows of the original financial liability. Any gain or loss
on extinguishment is recognised in the Income Statement.
Lease liabilities
Lease liabilities are recognised as a right-of-use asset and a corresponding lease liability at the date at which the leased asset is
available for use by the Group. The Group leases various real estate properties and items of plant, machinery and trucks for normal
business operations across the divisions. Lease terms are negotiated on an individual basis and contain a wide range of different terms
and conditions.
For new contracts entered into the Group considers whether a contract is or contains a lease. A lease is defined as ‘a contract that
conveys the right to use an asset for a period of time in exchange for consideration’. To apply this definition the Group assesses whether
the contract meets three key evaluations which are:
The contract contains an identified asset, which is either explicitly identified in the contract or implicitly specified by being identified at
the time the asset is made available to the Group;
The Group has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use,
considering its rights within the defined scope of the contract; and
The Group has the right to direct the use of the identified asset throughout the period of use. The Group assesses whether it has the right
to direct ‘how and for what purpose’ the asset is used throughout the period of use.
The lease liability is initially measured at the present value of the contractual payments due to the lessor over the lease term,
discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing
rate. Generally, the Group uses its incremental borrowing rate as the discount rate, which is determined based on interest rates from
various external financing sources and adjusted to reflect the terms of the lease and type of leased asset. The incremental borrowing
rate is reassessed on a regular basis. The exercise price of any purchase options are only included in the carrying value if the Group can
assess with reasonable certainty that the option would be exercised.
The lease liability is subsequently measured at amortised cost and remeasured when there is a change in future lease payments arising
from a change in an index or rate or if there is a change in the Group’s estimate of the amount expected to be payable under a residual
value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there
is a rise in-substance fixed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the
carrying amount of the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to the Income Statement over the lease
period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
The Group has applied the exemption not to recognise a right-of-use asset and a lease liability where the leased assets are of a low
value determined as being below €5,000 when new or when the lease duration is for 12 months of less. For these items the annual
expense of lease payments is disclosed in note 3.2.
Estimates and assumptions
Extension and termination options are included in a number of real estate and plant and machinery leases across the Group. In
determining the lease term, management has considered all facts and circumstances that create an economic incentive to exercise such
options. Extension options are only included in the lease term if the lease is reasonably certain to be extended or not terminated.
The Group estimates the incremental borrowing rate by taking into account the type of right-of-use asset, the lease term and the country
of operation.
5.3 Borrowings continued
Borrowings are analysed as follows:
Non-current borrowings
Retail bonds
European private placements
Term loans
Revolving credit facility
Lease liabilities
Bank loans
PPP non-recourse debt
Current borrowings
Retail bonds
Lease liabilities
Bank loans and overdrafts
PPP non-recourse debt
2022
€m
199.2
24.8
–
12.8
187.3
–
94.6
518.7
100.0
42.0
1.3
5.6
148.9
Restated*
2021
€m
174.5
24.7
85.2
97.1
205.7
1.3
100.6
689.1
–
42.1
1.2
4.5
47.8
* The comparatives of current and non-current PPP non-recourse debt have been restated due to a prior year adjustment as explained in section 1 Basis of preparation.
European private placements, revolving credit facility and retail bond borrowings include capitalised loan fees of €3.2m (2021: €3.5m).
The carrying amounts of borrowings are denominated in the following currencies:
Euro
Sterling
* The comparatives of sterling borrowings have been restated due to a prior year adjustment as explained in section 1 Basis of preparation.
The table below details the maturity profile of non-current borrowings:
2022
€m
552.0
115.6
667.6
Restated*
2021
€m
437.6
299.3
736.9
Between one and two years
Between two years and five years
Over five years
2022
2021 Restated*
Debt
excluding PPP
non-recourse
debt
€m
PPP non-
recourse debt
€m
52.6
154.6
216.9
424.1
5.5
18.7
70.4
94.6
Debt
excluding PPP
non-recourse
debt
€m
PPP non-
recourse debt
€m
139.6
356.4
92.5
588.5
5.5
21.3
73.8
100.6
Total
debt
€m
58.1
173.3
287.3
518.7
Total
net
€m
145.1
377.7
166.3
689.1
* The PPP non-recourse debt comparatives have been restated due to a prior year adjustment as explained in section 1 Basis of preparation.
212
213
Notes to the financial statements continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.3 Borrowings continued
5.3 Borrowings continued
The following table analyses the Group’s financial liabilities including derivative financial instruments into relevant maturity groupings.
The maturities of the undiscounted cash flows, including interest and principal, at the balance sheet date are based on the earliest date
on which the Group is obliged to pay and as a result will not always reconcile with the amounts disclosed in the Balance Sheet.
At 31 March 2022
Retail bonds
Bank loans – Revolving credit facility and European private placements
Bank loans – PPP non-recourse debt
Lease liabilities
PPP Interest rate swaps
Fuel derivatives
Trade and other payables
Financial liabilities and derivative financial liabilities
Fuel derivatives
Financial liabilities and total derivatives
At 31 March 2021
Retail bonds
Bank loans – Term loans, revolving credit facility and European private placements
Bank loans – PPP non-recourse debt
Lease liabilities
PPP Interest rate swaps
Fuel derivatives
Trade and other payables
Financial liabilities and derivative financial liabilities
Cross-currency interest rate swaps – pay
Cross-currency interest rate swaps – receive
Financial liabilities and total derivatives
Within
one year
€m
Between one
and five years
€m
Over
five years
€m
Total
contractual
cash flows
€m
109.6
2.2
9.7
48.1
2.3
0.1
411.0
583.0
(6.6)
576.4
5.9
5.2
7.6
48.8
4.1
0.2
445.0
516.8
2.3
(3.4)
515.7
94.5
41.5
38.3
113.7
6.4
–
–
294.4
(0.4)
294.0
185.4
216.7
38.2
132.5
14.1
–
–
586.9
169.9
(178.3)
578.5
128.7
–
82.5
161.4
7.3
–
–
379.9
–
379.9
–
–
85.0
161.7
12.7
–
–
259.4
–
–
259.4
332.8
43.7
130.5
323.2
16.0
0.1
411.0
1,257.3
(7.0)
1,250.3
191.3
221.9
130.8
343.0
30.9
0.2
445.0
1,363.1
172.2
(181.7)
1,353.6
Revolving credit facility, term loans and European private placements
At 31 March 2022, the Group had a Euro denominated multicurrency green finance facility of €425m (2021: €520m) including a €400.0m
(2021: €412.5m) revolving credit facility (RCF) and €25.0m (2021: €25.0m) European private placement (EUPP). In the prior year the facility
also included a €82.5m term loan which has been repaid during the year. Of the RCF €30m matures on 18 May 2023, €65m matures on
18 May 2024 and €305m matures on 18 May 2025. The EUPP has a maturity of December 2023 for €15m and December 2025 for €10m.
At 31 March 2022 €15.0m (2021: €99.8m) of the RCF was drawn for borrowings in Euros. The remaining €385.0m (2021: €312.7m) was
available for drawing of which €48.5m (2021: €48.3m) was allocated for ancillary overdraft and guarantee facilities. The EUPP and RCF
are unsecured and have cross guarantees from members of the Group. Further details are given in note 5.8.
Retail bonds
At 31 March 2022, the Group had three issues of green retail bonds. The bonds of €100m (2021: €100m) maturing in June 2022 have an
annual gross coupon of 3.65%, the bonds of €75m (2021: €75m) maturing in July 2024 have an annual gross coupon of 3.00% and the
bonds of €125m issued on 23 July 2021 maturing in July 2027 have an annual gross coupon of 3.00%. The retail bonds are unsecured
and have cross guarantees from members of the Group. Further details are given in note 5.8.
Lease liabilities
The Group’s lease liabilities are payable as follows:
Within one year
Between one and five years
More than five years
2022
2021
Minimum
lease
payments
€m
48.1
113.7
161.4
323.2
Interest
€m
Principal
€m
(6.1)
(18.7)
(69.1)
(93.9)
42.0
95.0
92.3
229.3
Minimum
lease
payments
€m
48.8
132.5
161.7
343.0
Interest
€m
Principal
€m
(6.7)
(19.2)
(69.3)
(95.2)
42.1
113.3
92.4
247.8
For most plant and machinery leases the Group has an option to purchase the leased assets at the end of the lease term. There are no
restrictions imposed by lessors to take out further debt or leases.
PPP non-recourse debt
The PPP non-recourse debt is held in three PPP companies: Argyll & Bute, Cumbria and Barnsley, Doncaster & Rotherham with
maturities on 15 January 2023, 30 September 2032 and 30 June 2037 respectively. Each UK Municipal PPP company has non-recourse
loan facilities which are secured by a legal mortgage over any land and a fixed and floating charge over the assets of the PPP company
and the carrying amount of financial assets pledged excluding cash was €135.6m (2021: €142.7m).
In the majority of cases subsidiaries holding non-recourse PPP debt and financial assets are restricted in their ability to transfer funds to
the parent in the form of cash dividends or to repay loans and advances. This is due to the terms of the financing facility agreements and
lender approval is required to make such transfers.
Liquidity risk
Liquidity risk is the risk that the Group does not have sufficient financial resources to meet its obligations as they fall due. The Group
primarily manages liquidity risk by monitoring forecast cash flows to ensure that revolving credit facility drawdowns are arranged as
necessary and an adequate level of headroom is maintained. The way the Group manages liquidity risk has not changed from the
previous year. Furthermore, the Group utilises its cash resources which are either held in bank accounts or highly liquid money market
funds to manage its short-term liquidity.
The Group has unutilised committed borrowing facilities expiring between one and two years of €30.0m (2021: €nil) and expiring
more than 2 years of €321.5m (2021: €279.5m) in relation to the Euro denominated multicurrency green finance facility. The unutilised
committed PPP non-recourse debt borrowing facilities of €2.2m (2021: €2.2m) expire in more than 2 years. In addition, the Group has
access to €12.5m (2021: €12.5m) of undrawn uncommitted working capital facilities.
214
215
Notes to the financial statements continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.4 Net finance charges
Accounting policy
Finance charges, including direct issue costs, are accounted for on an accruals basis in the Income Statement using the effective interest
rate method. Interest receivable on financial assets relating to PPP contracts is added to the financial asset based on the rate implied at
the start of the PPP project.
5.5 Derivative financial instruments and hedging activities
Accounting policy
All derivatives are initially recognised at fair value and subsequently measured at fair value at each reporting date. The fair value of a
derivative financial instrument is classified as a non-current asset or liability when the remaining maturity of the hedged item is more
than one year and as a current asset or liability when the remaining maturity is less than one year.
In certain circumstances, finance charges may be classified as non-trading or exceptional due to their size or incidence to enable
a better understanding of the underlying net finance costs. These non-trading or exceptional income or charges include:
In accordance with its treasury policy, the Group only holds derivative financial instruments to manage the Group’s exposure to
financial risk. The Group does not hold derivative financial instruments for trading or speculative purposes.
The change in fair value where a derivative financial instrument does not qualify for hedge accounting
Ineffectiveness incurred by a derivative financial instrument that does qualify for hedge accounting
The gain or loss where a derivative financial instrument is terminated
A significant impairment of an interest receivable balance.
Net finance charges are analysed as follows:
Finance charges
Interest payable on borrowings
Interest payable on PPP non-recourse debt
Lease liabilities interest
Unwinding of discount on provisions (note 4.10)
Interest charge on the retirement benefit schemes (note 7.2)
Amortisation of loan fees
Other finance costs
Total finance charges before non-trading and exceptional items
Non-trading and exceptional finance charges:
Charge as a result of the termination of cash flow hedges (note 3.3)
Total non-trading and exceptional finance charges
Total finance charges
Finance income
Interest receivable on financial assets relating to PPP contracts (note 4.5)
Unwinding of discount on deferred consideration receivable
Interest income on the retirement benefit schemes (note 7.2)
Other finance income
Total finance income before non-trading and exceptional items
Non-trading and exceptional finance income:
Ineffectiveness income on cash flow hedges (note 3.3)
Total non-trading and exceptional finance income
Total finance income
Net finance charges
2022
€m
13.5
7.4
7.2
6.4
0.1
1.9
1.7
38.2
0.1
0.1
38.3
(9.0)
(0.1)
–
(0.2)
(9.3)
(0.2)
(0.2)
(9.5)
2021
€m
14.0
7.4
7.2
6.3
–
1.5
1.7
38.1
–
–
38.1
(9.0)
(0.1)
(0.3)
(1.5)
(10.9)
(0.4)
(0.4)
(11.3)
28.8
26.8
The exposure to financial risk includes:
Interest risk and foreign exchange risk on the Group’s variable rate borrowings and
Commodity risk in relation to diesel consumption.
The Group manages these risks through a range of derivative financial instruments, including interest rate swaps, cross-currency
interest rate swaps and fuel derivatives.
Hedge accounting
Derivative financial instruments are considered to be used for hedging purposes when they alter the risk profile of an underlying
exposure of the Group in line with the Group’s risk management policies. At the inception of the hedge relationship, the Group formally
designates and documents the relationship between the hedging instrument and hedged item, along with its risk management
objectives and its strategy for undertaking various hedge transactions. Hedge accounting allows the matching of gains and losses
on hedged items and associated hedging instruments in the same accounting period to minimise volatility in the Income Statement.
In order to qualify for hedge accounting, prospective hedge effectiveness must meet all the following criteria:
An economic relationship exists between the hedged item and the hedging instrument
The effect of credit risk does not dominate the value changes resulting from the economic relationship
The hedge ratio is the same as that resulting from actual amounts of hedged items and hedging instruments for risk management.
The hedge ratio for each designation is established by comparing the quantity of the hedging instrument and the quantity of the
hedged item to determine their relative weighting. For all the Group’s existing hedge relationships the hedge ratio has been determined
at 1:1. Where there is a cumulative loss or gain on the hedging instrument and it is no longer expected that the loss or gain will be
recovered it is immediately recognised in the Income Statement.
Derivatives designated as hedging instruments are classified on inception as cash flow hedges or net investment hedges. Changes in the
fair value of derivative financial instruments that are designated and qualify as cash flow hedges are recognised in Other Comprehensive
Income and subsequently reclassified into profit or loss as the hedged cash flows occur. Net investment hedges are accounted for in a
similar way to cash flow hedges. Certain derivative financial instruments do not qualify for hedge accounting and are held at fair value
through profit or loss. Changes in the fair value of such instruments are recognised in the Income Statement as a non-trading finance
income or finance charge.
Hedge accounting is discontinued when the hedging instrument expires or is sold, terminated, exercised or no longer qualifies for hedge
accounting. At that time, any cumulative gain or loss on the hedging instrument recognised in equity is retained in equity until the
forecast transaction occurs at which point it is recognised in the Income Statement. If a hedged transaction is no longer expected to
occur, the net cumulative gain or loss recognised in equity is recognised in the Income Statement immediately as a non-trading finance
income or finance charge.
Ineffectiveness
Sources of hedge ineffectiveness in the Group may arise when there is a change in circumstances that affect the terms of the hedged
item such that the critical terms no longer match exactly the critical terms of the hedging instrument such as if there is a change in the
credit risk of both counterparties, if there is a change in the underlying debt profile of a variable rate loan in relation to interest rate
swaps, a change in the foreign exchange rate or a change in timing of the cash flows being hedged in relation to the cross-currency
interest rate swaps. Additional sources of hedge ineffectiveness include if there is a reduced requirement for diesel volumes in relation
to the fuel derivatives or for Euros under the forward foreign exchange contracts. Any ineffectiveness is recognised in the Income
Statement as a non-trading finance income or finance charge.
216
217
Notes to the financial statements continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.5 Derivative financial instruments and hedging activities continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.5 Derivative financial instruments and hedging activities continued
On 5 March 2021, the UK’s Financial Conduct Authority (FCA) formally announced the cessation of all GBP London Interbank Offered
Rate (LIBOR) benchmark settings published by ICE Benchmark Administration (IBA) after 31 December 2021. In response, during the
current year, work has been undertaken with the providers of the PPP non-recourse borrowings and interest rate swaps to amend
the benchmark rate referenced in the loan agreements and derivative hedging instruments from GBP LIBOR to GBP SONIA (Sterling
Overnight Index Average) including a credit adjustment spread on the debt to compensate for the basis differential between the two
benchmarks. Progress has been made but the documentation has not yet been executed.
Consequently at 31 March 2022 the Group continues to have an exposure to the GBP LIBOR benchmark for its interest rate swaps
relating to PPP contracts with a notional principal amount of €100.9m. Transition to GBP SONIA is expected to occur during 2022. The
interest rate swaps are designated as cash flow hedge relationships hedging GBP LIBOR term loans. The FCA are publishing a synthetic
GBP LIBOR but its availability is not guaranteed beyond the end of 2022. The Group contracts are now referenced to this synthetic LIBOR
rate and we will continue to work to bilaterally amend these contracts to transition to SONIA. The transition is not expected to have a
significant impact on the Group, although there will be changes to systems, processes, risk and valuation models, as well as managing
related tax and accounting implications.
Given the uncertainties in terms of the timing or the amount of interest rate benchmark-based cash flows, the Group continues to adopt
the Amendments to IFRS 9, IAS 39 and IFRS 7 Interest Rate Benchmark Reform issued in September 2019 (“Phase 1 relief”) in relation to
GBP LIBOR hedging instruments in hedge relationships that have not transitioned yet to SONIA. Adopting these amendments provides
temporary relief from applying specific hedge accounting requirements to hedging relationships directly affected by IBOR reform.
The reliefs mean that this IBOR reform should not generally cause hedge accounting to terminate. However, any hedge ineffectiveness
continues to be recorded in the Income Statement as a non-trading item. Furthermore, the amendments set out triggers for when the
reliefs will end, which include the uncertainty arising from interest rate benchmark reform no longer being present.
The Group will continue to apply the Phase 1 relief to its hedge relationships until the end of the uncertainty. The Group anticipates that
this uncertainty will continue until the contracts are amended to specify both the spread adjustment between the existing GBP LIBOR
rate and SONIA and the effective date of the replacement benchmark rate.
Derivative financial instruments are analysed as follows:
Cross-currency interest rate swaps – cash flow hedges
Fuel derivatives – cash flow hedges
Relating to PPP contracts:
Interest rate swaps – cash flow hedges
Interest rate swaps – at fair value through profit or loss
Total
Current
Non-current
Total
2022
Assets
€m
–
7.0
–
–
7.0
6.6
0.4
7.0
Liabilities
€m
–
0.1
14.6
–
14.7
0.1
14.6
14.7
2021
Assets
€m
Liabilities
€m
7.7
1.4
–
–
9.1
1.2
7.9
9.1
–
0.2
25.2
0.1
25.5
0.2
25.3
25.5
218
Cross-currency interest rate swaps
During the year ended 31 March 2022 all forward cross-currency interest rate swaps in place at 31 March 2021 with a notional principal
amount outstanding of €176.1m were terminated incurring a charge of €0.1m. At 31 March 2021 the Group held four floating rate
contracts in relation to Sterling borrowings: £37.5m swapped to €41.6m at a fixed interest rate of 1.27% expiring October 2022, £37.5m
swapped to €41.6m at a fixed interest rate of 1.29% expiring October 2022, £50m swapped to €56.8m at a fixed interest rate of 1.35%
expiring December 2022 and £25m swapped to €28.4m at a fixed interest rate of 1.40% expiring December 2022.
During the year ended 31 March 2022 the asset relating to cross-currency interest rate swaps terminated resulting in a movement of
€7.7m (2021: €5.7m). This movement included interest income of €0.2m (2021: €2.6m) which was wholly paid in cash during the year
(presented in both the Income Statement and Statement of Cash Flows within finance charges as this offset the interest charge on
the related borrowings), a fair value movement of €nil (2021: €0.3m loss) of which €0.1m income (2021: €0.5m loss) was taken to Other
Comprehensive Income with the remainder to the Income Statement, the impact of foreign exchange in the related debt was a loss of
€1.3m (2021: €6.0m gain) and as a result of the termination of the cross-currency interest rate swaps in the current year there was a cash
inflow of €6.4m (2021: €nil).
Fuel derivatives
The notional value of wholesale fuel covered by fuel derivatives at 31 March 2022 amounted to €14.7m (2021: €11.1m). The Group has
annual usage across the Netherlands and Belgium of approximately 43m litres of diesel per annum of which approximately 27m litres
have been fixed at an average of €0.44 per litre for the year to 31 March 2023 (notional value €12.6m) and a further 5m litres has been
fixed at an average of €0.51 per litre for the year to 31 March 2024 (notional value €2.7m).
Interest rate swaps relating to PPP contracts
The notional principal amount of the outstanding interest rate swap contracts at 31 March 2022 was €100.9m (2021: €104.6m). Under these
contracts the interest rates on PPP non-recourse borrowings for Argyll & Bute, Cumbria and Barnsley, Doncaster & Rotherham projects are
fixed at rates of 5.8%, 4.8% and 3.4% respectively from inception to expiry on 16 January 2023, 30 September 2032 and 30 June 2037
respectively. The gains and losses recognised in the Statement of Comprehensive Income for cash flow hedges will be released to the
Income Statement within finance costs until the repayment of the non-recourse borrowings. A revised repayment programme for the
Cumbria PPP project borrowing has led to ineffectiveness of a credit of €0.2m (2021: €0.2m) being recognised for the related interest rate
swap which has been taken to the Income Statement as a non-trading and exceptional finance credit.
During the year ended 31 March 2022 the liability of the interest rate swaps relating to PPP contracts reduced by €10.7m (2021: €6.3m),
included in this movement was an interest charge of €4.1m (2021: €3.8m) which was wholly paid in cash during the year (presented in both
the Income Statement and Statement of Cash Flows within finance charges), a fair value gain of €10.9m (2021: €7.6m) of which €10.7m
(2021: €7.4m) gain was taken to Other Comprehensive Income with the remainder to the Income Statement and the impact of foreign
exchange was €0.2m (2021: €1.3m) loss.
The following table shows the impact of the Group’s cash flow hedges in Other Comprehensive Income:
At 1 April
Effective element of changes in fair value arising from:
Cross-currency interest rate swaps
Fuel derivatives
Forward foreign exchange contracts
Interest rate swaps relating to PPP contracts
At 31 March
2022
€m
(23.8)
0.1
5.7
–
10.7
(7.3)
2021
€m
(38.1)
(0.5)
7.3
0.1
7.4
(23.8)
219
Notes to the financial statements continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.5 Derivative financial instruments and hedging activities continued
Net investment hedge
Renewi plc, a Sterling functional currency company, has Euro borrowings of €300.0m (2021: €175.0m) with a fair value of €300.2m
(2021: €178.5m) which have been designated as a net investment hedge of the Group’s investments denominated in Euros. The hedge
was 100% effective for the year ended 31 March 2022 (2021: 100%) and as a result the related exchange loss of €3.0m (2021: €7.1m) has
been recognised in the exchange reserve in the consolidated financial statements.
The following tables show the impact of the Group’s cash flow hedges and net investment hedge on the Balance Sheet, Other
Comprehensive Income and Income Statement:
Hedging instrument
Hedged item
Change in
the fair value
used to
determine
hedge
effectiveness
€m
Cumulative
cash flow
hedge
movement
in Other
Comprehensive
Income
€m
Hedge
ineffectiveness
included in the
Income
Statement
in the year
€m
Nominal
amount at
31 March
2022
€m
Change in
the fair value
used to
determine
hedge
effectiveness
€m
Cumulative
movement
in exchange
reserve
€m
Weighted
average
hedged
rate
Hedge
ratio
–
14.7
100.9
–
5.7
6.3
–
6.9
0.1
–
(14.2)
(0.2)
–
–
–
–
(5.7)
1.32%
€0.46
per litre
(6.1)
4.07%
300.0
(2.5)
–
–
(15.3)
2.5
–
Hedging instrument
Hedged item
Change in
the fair value
used to
determine
hedge
effectiveness
€m
Cumulative
cash flow
hedge
movement
in Other
Comprehensive
Income
€m
Hedge
ineffectiveness
included in the
Income
Statement
in the year
€m
Nominal
amount at
31 March
2021
€m
Change in
the fair value
used to
determine
hedge
effectiveness
€m
Cumulative
movement
in exchange
reserve
€m
176.1
(10.9)
(0.1)
(0.2)
11.1
–
104.6
7.3
0.1
1.0
1.2
–
–
–
(24.9)
(0.2)
–
–
–
–
Weighted
average
hedged
rate
1.32%
€0.33
per litre
–
10.9
(7.3)
(0.1)
(0.9)
4.07%
175.0
(6.9)
–
–
(18.3)
6.9
–
–
1:1
1:1
1:1
Hedge
ratio
1:1
1:1
1:1
1:1
1:1
March 2022
Cross-currency interest rate
swaps/variable rate borrowings
Fuel derivatives/purchase
of diesel
Interest rate swaps/variable
rate borrowings relating to
PPP contracts
Net investment hedge:
Euro borrowings/investment in
Euro denominated subsidiaries
March 2021
Cross-currency interest rate
swaps/variable rate borrowings
Fuel derivatives/purchase
of diesel
Forward foreign exchange
contracts/off-take contracts
Interest rate swaps/variable
rate borrowings relating to
PPP contracts
Net investment hedge:
Euro borrowings/investment in
Euro denominated subsidiaries
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.6 Financial instruments and related disclosures
Accounting policy
The Group classifies and measures its financial assets at amortised cost or at fair value (either through Other Comprehensive Income or
through profit or loss). The classification depends on the entity’s business model for managing the financial assets and the contractual
term of the cash flows.
Assets that are held for collection of contractual cash flows, where those cash flows represent solely payments of principal and interest,
are measured at amortised cost.
Derivatives are initially recognised at fair value and subsequently measured at fair value at the end of each reporting period. The
accounting for subsequent changes in fair value depends on whether the derivative is designated as a hedging instrument and, if so,
the nature of the item being hedged. Derivatives which are not hedging instruments are measured at fair value through profit or loss
upon initial recognition
Short-term investments are classified and measured at fair value through profit or loss with changes in the fair value recognised in the
Income Statement. Unlisted investments not held for trading are held at fair value and the Group has elected to present subsequent
changes in fair value in Other Comprehensive Income. Dividends on these investments are recognised in the Income Statement when
the Group’s right to receive the dividends is established, it is probable that they will be paid and the amount can be reliably measured.
Cash and cash equivalents includes money market funds which are constant net asset value funds with same day access for
subscription and redemption. The funds fail the ‘solely payments of principal and interest’ criteria under IFRS 9. They are therefore
classified as fair value through profit and loss, although the fair value is materially the same as amortised cost. Gains and losses arising
from changes in fair value are included in the Income Statement in net finance charges.
Financial liabilities are classified and measured at fair value through profit or loss or at amortised cost.
Fair value hierarchy
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 year ended 31 March 2022, there were no transfers between level 1 and level 2 fair value measurements and no transfers into
or out of level 3.
220
221
Notes to the financial statements continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.6 Financial instruments and related disclosures continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.6 Financial instruments and related disclosures continued
Valuation techniques used to derive level 2 fair values
Unlisted non-current investments comprise unconsolidated companies where the fair value approximates the book value
Short-term investment valuations 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 value of the European 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.
The table below presents the Group’s assets and liabilities measured at fair values:
Assets
Unlisted non-current investments (note 4.4)
Short-term investments (note 4.4)
Derivative financial instruments (note 5.5)
Liabilities
Derivative financial instruments (note 5.5)
European private placements
Retail bonds
Carrying value of financial assets and financial liabilities
Financial assets
Financial assets at amortised cost
Loans to associates and joint ventures
Trade and other receivables at amortised cost#
Cash and cash equivalents (excluding money market funds)
Financial assets relating to PPP contracts
Derivatives used for hedging
Fuel derivatives
Cross-currency interest rate swaps
Financial assets at fair value through profit or loss (mandatorily)
Short-term investments
Other receivables relating to invoice finance facilities
Financial assets at fair value through 0ther comprehensive income
Unlisted non-current investments
2022
Level 2
€m
2021
Level 2
€m
4.6
11.1
7.0
22.7
14.7
25.7
300.2
340.6
2022
€m
0.9
243.4
63.6
143.4
7.0
–
11.1
9.5
4.6
483.5
4.6
9.3
9.1
23.0
25.5
26.6
179.1
231.2
Restated*
2021
€m
0.9
219.3
68.8
149.1
1.4
7.7
9.3
9.5
4.6
470.6
Note
4.4
4.8
5.2
4.5
5.5
5.5
4.4
4.8
4.4
* The comparatives for cash and cash equivalents have been restated due to a prior year adjustment as explained in section 1.
# Trade and other receivables at amortised cost comprise trade receivables and accrued income net of allowance of €238.0m (2021: €212.5m) and other receivables held
at amortised cost of €5.4m (2021: €6.8m).
The Group considers that the fair value of financial assets is not materially different to their carrying value.
Financial liabilities
Financial liabilities at amortised cost
Revolving credit facility, European private placements and other loans
Retail bonds
Lease liabilities
Trade and other payables excluding non-financial liabilities#
PPP non-recourse debt
Financial liabilities at fair value through profit or loss
Interest rate swaps relating to PPP contracts
Derivatives used for hedging
Fuel derivatives
Interest rate swaps relating to PPP contracts
Note
5.3
5.3
5.3
4.9
5.3
5.5
5.5
5.5
2022
€m
38.9
299.2
229.3
418.1
100.2
–
0.1
14.6
Restated*
2021
€m
209.5
174.5
247.8
445.0
105.1
0.1
0.2
25.2
1,100.4
1,207.4
* The comparatives for PPP non-recourse debt have been restated due to a prior year adjustment as explained in section 1 Basis of preparation.
# Trade and other payables excluding non-financial liabilities comprises trade payables, other payables and accruals of €418.1m (2021: €445.0m).
With the exception of retail bonds and European private placements, the Group considers that the fair value of bank borrowings, trade
and other payables and lease liabilities are not materially different to their carrying value.
5.7 Financial risk management objectives and policies
The Group is exposed to market risk (interest rate risk and commodity price risk), foreign exchange risk, liquidity risk and
counterparty credit risk. The Group’s Treasury Committee is charged with managing and controlling risk relating to the
financing and liquidity of the Group under policies approved by the Board of Directors. The Group does not enter into
speculative transactions.
Interest rate risk
Changes in interest rates could have an impact on the interest cover covenant of the Group’s core facilities and on the interest charge
in the Income Statement. In order to monitor and manage the risk, borrowings and the expected interest cost for the year are frequently
forecast and sensitised for potential changes.
The Group has continued to limit its exposure to interest rate risk by using fixed rate retail bonds, European private placements, fixed
rate lease liabilities and cross-currency interest rate swaps until July 2021. The proportion of the Group’s total borrowings excluding
PPP non-recourse floating rate borrowings that were fixed or hedged at 31 March 2022 was €554.3m (2021: €629.9m) or 97% (2021: 98%).
Additionally, the PPP non-recourse floating rate borrowings are hedged using interest rate swaps which hedge the interest cash flows.
Further details of the IBOR transition from LIBOR to SONIA is set out in note 5.5.
Interest rate swaps and cross-currency interest rate swaps are accounted for under IFRS 9 with changes in the fair value recognised in
Other Comprehensive Income, as they are effective hedges. Any ineffectiveness is recognised in the Income Statement as a non-trading
income or charge. The interest rate swap in relation to the Argyll & Bute PFI contract has not been designated as a hedge by the Group
therefore it is classified at fair value through profit or loss.
222
223
Notes to the financial statements continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.7 Financial risk management objectives and policies continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.7 Financial risk management objectives and policies continued
Interest rate sensitivity for bank borrowings
Interest on the floating rate revolving credit facilities and the term loan until it was repaid will vary as interest rates increase or decrease.
If rates had moved by 1% the impact on profit before tax would have been a loss or gain of €0.6m (2021: €0.9m) based on the average bank
borrowings during the year.
Interest rate sensitivity for PPP non-recourse borrowings
The PPP non-recourse borrowings are fully hedged with interest rate swaps. The fair values of interest rate swaps used for hedging of
PPP non-recourse borrowings are determined with reference to floating market interest rates. A 1% increase in interest rates would have
reduced the fair value of the interest rate swap liabilities and resulted in a pre-tax gain in Other Comprehensive Income of €6.2m (2021:
€8.4m) and a pre-tax gain in the Income Statement of €0.7m (2021: €0.4m). A 1% decrease in interest rates would have increased the fair
value of the interest rate swap liabilities and led to a pre-tax loss in Other Comprehensive Income of €6.9m (2021: €6.3m) and a pre-tax
loss in the Income Statement of €0.8m (2021: €3.5m).
Foreign exchange risk
The Group operates in the UK and is exposed to translation risk on the value of assets denominated in Sterling into Euros. Renewi plc, a
Sterling functional currency company, has Euro borrowings which are designated as a net investment hedge of the Group’s investments
denominated in Euros. The Group has limited transactional risk as the Group’s subsidiaries conduct the majority of their business in
their respective functional currencies. Some risk arises in Euros on the export of processed waste from the UK to Europe.
Foreign exchange sensitivity
The impact of a change of Sterling foreign exchange rates of 10% on the Group’s profit before tax would be €2.1m (2021: €0.9m) and the
impact on underlying profit before tax would have been €2.2m (2021: €1.2m).
Commodity price risk and sensitivity
The Group is exposed to diesel price changes which are managed using forward contracts. The Group manages other exposures to
prices of paper, plastics, metals, residual fuels and other recyclates associated with off-take through commercial contracting. The
impact of a change in unhedged wholesale fuel prices (excluding duty) of 10% on the Group’s profit before tax would have been
€1.3m (2021: €1.1m).
Credit risk
Credit risk is the risk of financial loss where counterparties are not able to meet their obligations. The Group’s principal financial assets
are cash and cash equivalents, trade and other receivables and financial assets relating to PPP contracts. The Group’s objective is to
reduce its exposure to counterparty default by restricting the type of counterparty it deals with and by employing an appropriate policy
in relation to the collection of trade receivables. The Covid-19 pandemic together with increasing energy prices and high inflation as a
result of the events in Ukraine are having a significant impact on various sectors and industries and the impact has been considered
when assessing the credit risk of the Group.
The Group recognises lifetime expected credit losses at the point of initial recognition for trade receivables and accrued income as set
out in note 4.8. For other financial assets, a loss allowance is recognised for expected credit losses taking into account changes in the
level of credit risk. Where credit risk is considered to be low, the loss allowance is limited to expected losses arising from default events
that are possible within 12 months from the balance sheet date. At 31 March 2022 taking into account the impact of Covid-19 and other
macro-economic factors there has not been a significant increase in credit risk in relation to receivables where the IFRS 9 general
approach is followed to determine expected credit loss.
At 31 March 2022 the amount of credit risk on cash and cash equivalents totalled €63.6m (2021: €68.8m restated to include restricted
cash at bank relating to PPP contracts as explained in section 1). The banks and financial institutions used by the Group for core cash
and cash equivalents are restricted to those with the appropriate geographical presence and suitable credit rating. Money market
investments are made in accordance with the internal treasury policies and the fund invested in has AAA rating by both Fitch and S&P.
The Group has an objective to minimise cash and where possible repay the Group borrowings to manage counterparty credit risk
amongst other objectives. The restricted cash relating to PPP contracts is managed in accordance with the guidelines specific to each of
the PPP contracts. Expected credit losses over cash and cash equivalents are considered to be immaterial with no losses experienced.
Trade and other receivables mainly comprise amounts due from customers for services performed. Each division monitors the level of
trade receivables on a monthly basis, continually assessing the risk of default by any counterparty taking into account that the Group
uses credit insurance to minimise the credit risk of trade receivables. As a result of Covid-19 together with increasing energy prices and
high inflation due to the events in Ukraine a detailed review has been undertaken at a customer level in some cases, in order to assess
the likely potential of default considering the nature of the customers business and any government support measures. At 31 March
2022 the amount of credit risk on trade and other receivables amounted to €243.4m (2021: €219.3m). The Group does not hold any
collateral as security.
The financial assets relating to PPP contracts are recoverable from the future revenues relating to these contracts. Management
consider these to be very low risk as the counterparties for the future revenues are local authorities or councils in the UK. This is
reviewed on a regular basis and there has been no change in the capacity of the counterparties to meet the contractual cash flow
obligations. At 31 March 2022 the amount of credit risk on financial assets amounted to €143.4m (2021: €149.1m).
For derivative financial assets the maximum exposure to credit risk at the reporting date is the net fair value of the derivative assets
which are included in the consolidated statement of financial position.
No other loans to associates or joint ventures are credit impaired.
5.8 Capital management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to provide optimal
returns for shareholders, maintain an efficient capital structure to reduce the cost of capital and provide appropriate levels of liquidity
headroom. In order to meet these objectives, the Group may issue or repay debt, issue new shares or adjust the amount of dividend
paid to shareholders.
As a result of the Covid-19 pandemic no dividends were paid for the year ended 31 March 2021 and no dividend is being paid for the year
ended March 2022. The Board will review the reinstatement of dividends taking into consideration the trading performance, macro-
economic outlook and the significant changes in the investment and growth opportunities for the Group.
The following table shows the capital of the Group:
Total borrowings
Less: PPP non-recourse borrowings
Less: Lease liabilities as a result of the adoption of IFRS 16
Less: core cash and cash equivalents (excluding restricted cash at bank relating to PPP contracts)
Net debt as per banking covenant definition
Total equity
Total capital
* The comparatives have been restated due to prior year adjustments as explained in section 1 Basis of preparation.
Note
5.3
5.3
5.2
2022
€m
667.6
(100.2)
(221.9)
(42.5)
303.0
338.2
641.2
Restated*
2021
€m
736.9
(105.1)
(236.7)
(51.5)
343.6
237.6
581.2
The Group monitors its financial capacity by reference to key financial ratios which provide a framework within which the Group’s
capital base is managed. The Group’s Euro denominated multicurrency green finance facility agreements have covenants including
adjusted net debt to comparable adjusted EBITDA and interest cover in accordance with a frozen GAAP concept. The Group has
complied with its banking covenants during the year.
224
225
Notes to the financial statements continued
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
SECTION 5. CAPITAL STRUCTURE AND FINANCING CONTINUED
5.9 Equity
Accounting policy
Share capital and share premium
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or share options are
shown in equity as a deduction, net of tax, from the proceeds. The share premium account represents any excess of the net proceeds
over the nominal value of any shares issued.
At the Annual General Meeting of Renewi plc held on 15 July 2021, shareholders approved the consolidation of the Company’s share
capital on the basis of one new ordinary share with a nominal value of £1.00 each for every ten existing ordinary shares of 10 pence each
held. This was subsequently completed on 19 July 2021 when the issued share capital of 800,236,740 10 pence shares was replaced with
80,023,674 £1 shares.
Share capital allotted, called up and fully paid
At 1 April 2020 and 31 March 2021 (ordinary shares of 10p each)
Issued under share option schemes – prior to share consolidation (ordinary shares of 10p each)
Ordinary shares of 10p each held on 19 July prior to the consolidation
Adjustment to number of shares following the share consolidation
Issued under share option schemes (ordinary shares of £1 each)
At 31 March 2022 (ordinary shares of £1 each)
Share capital –
Ordinary shares
Share
premium
Number
€m
€m
800,141,536
95,204
800,236,740
(720,213,066)
36,263
80,059,937
99.5
–
99.5
–
–
99.5
473.6
–
473.6
–
0.2
473.8
During the year 95,204 (2021: nil) ordinary shares of 10p each were allotted prior to the share consolidation and 36,263 ordinary shares
of £1 each were issued after the consolidation being the exercise of share options under the Savings Related Share Option Schemes for
an aggregated consideration of €0.2m (2021: €nil). Further disclosures relating to share-based options are set out in note 7.3.
Exchange reserve
The exchange reserve comprises all foreign exchange differences arising since 1 April 2005 from the translation of the financial
statements of non-Euro denominated operations, excluding those disposed of, as well as from the translation of liabilities that hedge
the Group’s net investment in foreign operations.
Retained earnings
The Group includes within retained earnings the cumulative balance relating to the effective portion of hedging instruments carried
at fair value in a qualifying cash flow hedge and further details are provided in note 5.5.
The Group also includes the cumulative impact of the Renewi Employee Share Trust within retained earnings. The Trust owns 552,851
£1 shares (0.7%) (2021: 5,013,343 10p shares (0.6%)) of the issued share capital of the Company in trust for the benefit of employees of the
Group. The Trust waives its dividend entitlement. During the year 798,433 10 pence shares (2021: 4,419,977 10 pence shares) were
transferred to individuals under the LTIP and DAB schemes prior to the share consolidation and 34,580 £1 shares were issued under
the DAB scheme after the consolidation. During the year 237,000 £1 shares (2021: 3,888,031 10 pence shares) were purchased by the
Trust at a cost of €1.8m (2021: €1.2m).
5.9 Equity continued
Non-controlling interests
The information below reflects the amounts included in the Group’s Income Statement and Balance Sheet for subsidiaries with material
non-controlling interests.
2022
2021
Revenue
Profit (loss) after tax
Other comprehensive loss
Total comprehensive income (loss)
Total comprehensive income (loss)
allocated to the non-controlling interests
Disposal of non-controlling interest
Non-current assets
Current assets
Non-current liabilities
Current liabilities
Net assets
Accumulated non-controlling interests
Net (decrease) increase in cash and cash
equivalents
Maltha
Groep
€m
60.2
Others
€m
37.3
3.1
–
3.1
0.4
–
8.1
11.6
(1.3)
(6.6)
11.8
2.3
1.8
–
1.8
0.5
–
24.0
19.5
(4.1)
(25.2)
14.2
4.7
(0.1)
Total
€m
97.5
4.9
–
4.9
0.9
–
32.1
31.1
(5.4)
(31.8)
26.0
7.0
3SE
(Barnsley,
Doncaster &
Rotherham)
€m
Maltha
Groep
€m
52.0
(0.9)
–
(0.9)
(0.2)
–
23.2
18.8
(5.1)
(24.1)
12.8
4.3
Others
€m
20.4
0.9
–
0.9
0.3
–
6.4
10.5
(0.9)
(7.4)
8.6
1.8
–
Total
€m
82.3
(0.6)
(0.4)
(1.0)
(0.1)
4.8
29.6
29.3
(6.0)
(31.5)
21.4
6.1
3.4
9.9
(0.6)
(0.4)
(1.0)
(0.2)
4.8
–
–
–
–
–
–
–
–
(0.1)
3.4
The disposal of non-controlling interest of €4.8m in the prior year is the value of the non-controlling interest at the date of disposal which
was transferred to retained earnings and includes the impact of the Group no longer owing external subordinated debt to a third party.
5.10 Dividends
Accounting policy
Final dividend distributions to the equity holders are recognised in the period in which they are approved by the shareholders in general
meeting. Interim dividends are recognised when paid.
The Directors have not recommended a final dividend for the year ended March 2022 (2021: nil).
226
227
Notes to the financial statements continued
SECTION 6. ACQUISITIONS AND DISPOSALS
This section provides details of acquisitions and disposals.
6.1 Acquisitions
Accounting policy
The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of
the subsidiary is the fair value of assets transferred, liabilities incurred or assumed including the equity interests issued by the Group.
Identifiable assets acquired and liabilities and contingent liabilities assumed, meeting the conditions for recognition under IFRS 3, are
recognised at their fair value at the acquisition date. The fair value of businesses acquired may include waste permits, licences and
customer relationships with the value calculated by discounting the future attributable revenue streams, which are recognised as
intangible assets and amortised. The Group recognises any non-controlling interest in the acquired entity on an acquisition by
acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquired entity’s net identifiable
assets. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded
as goodwill. The costs of acquisition are charged to the Income Statement in the year in which they are incurred.
Acquisitions
During the year ended March 2022 Netherlands Commercial Division acquired plant and machinery business assets of €0.2m and
acquisition related intangible customer lists of €0.3m.
6.2 Disposals
Accounting policy
The results of operations disposed of during the year are included in the consolidated Income Statement up to the date of disposal,
unless they meet the criteria of a discontinued operation.
There have been no disposals in the current year.
6.3 Assets classified as held for sale
Accounting policy
Assets classified as held for sale are measured at the lower of their carrying amount and fair value less costs to sell. Assets are classified
as held for sale if their carrying amount will be recovered through a sale transaction rather than through continuing use. This condition
is regarded as met only when the sale is highly probable and the assets are available for sale in their present condition. Following the
classification as held for sale, non-current assets are not depreciated.
The Group had €3.3m (2021: €nil) assets classified as held for sale at 31 March 2022. The assets include €2.0m land and buildings at
a Netherlands Commercial Division site which has now been closed and €1.3m in the Belgium Commercial Division in relation to an
associate of €0.7m and land and buildings of €0.6m. All these assets are expected to be sold within the next 12 months
6.4 Discontinued operations
Accounting policy
A discontinued operation is a component of the Group’s business that represents a separate major business line or geographical area of
operations that meets the criteria to be classified as held for sale. Discontinued operations are presented in the consolidated Income
Statement as a single line which comprises the post-tax profit or loss of the discontinued operation along with the post-tax gain or loss
recognised on the re-measurement to fair value less costs to sell or on disposal of the assets or disposal groups constituting
discontinued operations.
There are no discontinued operations in the current or prior year.
228
SECTION 7. EMPLOYEE BENEFITS
7.1 Employee costs and employee numbers
This note shows the staff costs and the average monthly number of employees analysed by reportable segment.
Wages and salaries
Social security costs
Share-based benefits
Other pension costs
Total staff costs
The average number of employees by reportable segment during the year was:
Commercial Waste
Mineralz & Water
Specialities
Group central services
Total average number of employees
7.2 Retirement benefit schemes
Note
7.3
7.2
2022
€m
311.6
56.6
2.5
31.8
402.5
2021
€m
306.6
56.6
1.4
31.0
395.6
2022
2021
4,568
337
864
384
6,153
4,702
342
861
355
6,260
The Group operates defined benefit and defined contribution schemes in the UK and overseas.
Accounting policy
The Group accounts for pensions and similar benefits under IAS 19 (revised) Employee Benefits.
The pension cost for the defined benefit schemes is assessed in accordance with management’s best estimates using the advice of an
independent qualified actuary and assumptions in the latest actuarial valuation. For defined benefit plans, obligations are measured
at discounted present value. Plan assets in the UK scheme are recorded at fair value and in the overseas schemes the plan assets are
calculated as the cash value of all future insured benefit payments using an appropriate discount rate. The operating and financing
costs of the plans are recognised separately in the Income Statement. Interest is calculated by applying the discount rate to the net
defined pension liability. Actuarial gains and losses are recognised in full through the Statement of Comprehensive Income and
surpluses are recognised only to the extent that they are recoverable. Movements in irrecoverable surpluses are recognised immediately
in the Statement of Comprehensive Income.
Payments to defined contribution schemes are charged to the Income Statement as they become due. The Group participates in several
multi-employer schemes in the Netherlands which are accounted for as defined contribution plans as it is not possible to split the assets
and liabilities of the schemes between participating companies. The Group has been informed by the schemes that it has no obligation
to make additional contributions in the event that the schemes have an overall deficit.
Retirement benefit schemes costs
UK defined contribution scheme
Overseas defined benefit schemes
Overseas defined contribution schemes
2022
€m
1.7
2.3
27.8
31.8
2021
€m
1.6
1.1
28.3
31.0
229
Notes to the financial statements continued
SECTION 7. EMPLOYEE BENEFITS CONTINUED
7.2 Retirement benefit schemes continued
SECTION 7. EMPLOYEE BENEFITS CONTINUED
7.2 Retirement benefit schemes continued
UK defined benefit scheme
The UK defined benefit pension scheme (called the Shanks Group Pension Scheme) provides pension benefits for pensioners, deferred
members and eligible UK employees and is closed to new entrants and closed to future benefit accrual. The defined benefit scheme
provides benefits to members in the form of a guaranteed level of pension payable for life and the level of benefits provided depends on
the members’ length of service and final salary. Plan assets are managed by Aon Investments Ltd on behalf of the Trustees. There are
five trustees currently, three appointed by the Company and two nominated by members, who are responsible for ensuring the scheme
is run in accordance with the members’ best interests and the pension laws of the UK which are overseen by The Pensions Regulator.
The most recent triennial actuarial valuation of the Scheme, which was performed by an independent qualified actuary for the Trustees of the
Scheme, was carried out as at 5 April 2021. The Group has agreed to pay annual deficit contribution of €3.6m (£3.1m) until December 2024.
The total estimated contributions expected to be paid to the scheme in the year ending 31 March 2023 are €3.6m.
The significant actuarial assumptions adopted at the balance sheet date were as follows:
Discount rate
Rate of price inflation
Consumer price inflation
2022
% p.a.
2.8
3.6
3.0
2021
% p.a.
2.1
3.3
2.7
The discount rate assumption is derived from the single agency curve based on high quality AA rated bonds. The mortality assumptions
are based on standard mortality tables which allow for future mortality improvements. The assumptions are that a member currently
aged 65 will live on average for a further 23 years (2021: 22 years) if they are male and for a further 25 years (2021: 24 years) if they are
female. For a member aged 40 who retires at age 65 the assumptions are that they will live on average after retirement for around a
further 24 years (2021: 23 years) if they are male or for a further 27 years (2021: 26 years) if female The weighted average duration of
the defined benefit obligation is approximately 16 years.
Overseas defined benefit schemes
The overseas defined benefit obligation relates to funded plans, mainly insurance contracts managed by insurers, in both the
Netherlands and Belgium. There are various schemes which are based on average salaries and in some cases on final salaries. The
assets consist of qualifying insurance policies which match the vested benefits. The build-up of rights for inactive member are indexed
on the basis of additional interest and the rights of active employees are being indexed unconditionally with the price-inflation figure.
There are no unfunded plans. The plans are subject to laws for pension insurance companies offering pension arrangements and are
overseen by Autoriteit Financiele Markten in the Netherlands and Autoriteit voor Financiele Diensten en Markten in Belgium. The Group
has no responsibilities for governance of the plans other than correct calculation and timely payment of the contributions. The total
estimated contributions expected to be paid to the schemes in the year ending 31 March 2023 are €2.4m.
The significant actuarial assumptions adopted at the balance sheet date were as follows:
The amounts recognised in the financial statements for all defined benefit schemes are as follows:
Income Statement
Current service cost
Interest expense (income) on scheme net liabilities
Net retirement benefit charge before tax
Statement of Comprehensive Income
Actuarial gain (loss) on scheme liabilities
Actuarial (loss) gain on scheme assets
Actuarial gain (loss)
2022
Overseas
€m
2.3
0.1
2.4
2022
Overseas
€m
8.2
(6.7)
1.5
UK
€m
–
–
–
UK
€m
14.8
(5.8)
9.0
Total
€m
2.3
0.1
2.4
Total
€m
23.0
(12.5)
10.5
2021
Overseas
€m
1.1
0.1
1.2
2021
Overseas
€m
1.3
(1.1)
0.2
UK
€m
–
(0.4)
(0.4)
UK
€m
(24.1)
0.6
(23.5)
Total
€m
1.1
(0.3)
0.8
Total
€m
(22.8)
(0.5)
(23.3)
Cumulative actuarial gains and losses recognised in the Statement of Comprehensive Income since 1 April 2004 are losses of €30.4m
(2021: €40.9m).
Balance Sheet
Present value of funded obligations
Fair value of plan assets
Pension schemes net asset (deficit)
Related deferred tax asset (note 3.4)
Net pension asset (liability)
Classified as:
Defined benefit scheme surplus – included in non-
current assets
Defined benefit pension schemes deficit – included
in non-current liabilities
Pension schemes net asset (deficit)
UK
€m
(201.2)
209.8
8.6
(2.1)
6.5
8.6
–
8.6
2022
Overseas
€m
(74.5)
68.2
(6.3)
1.6
(4.7)
–
(6.3)
(6.3)
Total
€m
(275.7)
278.0
2.3
(0.5)
1.8
8.6
(6.3)
2.3
2021
Overseas
€m
(79.9)
72.5
(7.4)
1.9
(5.5)
–
(7.4)
(7.4)
UK
€m
(216.7)
212.7
(4.0)
0.8
(3.2)
–
(4.0)
(4.0)
Total
€m
(296.6)
285.2
(11.4)
2.7
(8.7)
–
(11.4)
(11.4)
The UK scheme’s assets of €209.8m (2021: €212.7m) are invested via Aon’s Delegated Consulting Service which is a fiduciary investment
management platform managed by Aon Investments Limited. A breakdown of the underlying investment classes is given below:
Discount rate
Rate of price inflation
Rate of salary inflation
2022
% p.a.
1.7 to 2.0
2.0
2.0 to 2.5
2021
% p.a.
1.1 to 1.3
2.0
2.0 to 2.5
Equities
Liquid alternatives
Fixed income
Liability driven investment
Cash and others
The discount rate assumption is based on interest rates applying to high quality corporate bonds with a term approximately equal
to the term of the related pension liability. The mortality assumptions are based on standard mortality tables which allow for future
mortality improvements. The assumptions are that a member currently aged 65 will live on average for a further 21 years (2021: 22 years)
if they are male and for a further 23 years (2021: 24 years) if they are female. For a member aged 40 who retires at age 65 the
assumptions are that they will live on average after retirement for around a further 23 years (2021: 24 years) if they are male or for
a further 25 years (2021: 26 years) if female. The maturity of the schemes ranges from 18 to 23 years.
The overseas schemes assets of €68.2m (2021: €72.5m) are insurance contracts managed by insurers in the Netherlands and Belgium.
2022
€m
87.7
23.6
24.1
65.8
8.6
209.8
2021
€m
57.1
17.9
26.0
105.0
6.7
212.7
230
231
Notes to the financial statements continued
SECTION 7. EMPLOYEE BENEFITS CONTINUED
7.2 Retirement benefit schemes continued
The movement in the pension scheme deficit (asset)
At 1 April 2020
Current service cost
Interest income (expense)
Net actuarial (loss) gain recognised in the year
Contributions from employer
Exchange rate changes
At 31 March 2021
Current service cost
Interest expense
Net actuarial gain recognised in the year
Contributions from employer
Exchange rate changes
At 31 March 2022
Reconciliation of the defined benefit obligation
At 1 April 2020
Current service cost
Interest expense
Remeasurements:
Actuarial (loss) gain on scheme liabilities arising from changes in financial assumptions
Actuarial (loss) gain on scheme liabilities arising from change in demographic assumptions
Actuarial gain on scheme liabilities arising from changes in experience
Contributions from plan participants
Benefit payments
Exchange rate changes
At 31 March 2021
Current service cost
Interest expense
Remeasurements:
Actuarial gain on scheme liabilities arising from changes in financial assumptions
Actuarial (loss) gain on scheme liabilities arising from change in demographic assumptions
Actuarial gain (loss) on scheme liabilities arising from changes in experience
Contributions from plan participants
Benefit payments
Exchange rate changes
At 31 March 2022
UK
€m
16.0
–
0.4
(23.5)
3.4
(0.3)
(4.0)
–
–
9.0
3.5
0.1
8.6
UK
€m
(186.7)
–
(4.4)
(24.4)
(1.1)
1.4
–
6.6
(8.1)
(216.7)
–
(4.3)
15.3
(4.4)
3.9
–
6.5
(1.5)
Overseas
€m
(7.5)
(1.1)
(0.1)
0.2
1.1
–
(7.4)
(2.3)
(0.1)
1.5
2.0
–
(6.3)
Overseas
€m
(79.6)
(1.1)
(0.9)
0.9
0.4
–
(0.5)
0.9
–
(79.9)
(2.6)
(0.9)
9.0
0.8
(1.6)
(0.5)
1.2
–
Total
€m
8.5
(1.1)
0.3
(23.3)
4.5
(0.3)
(11.4)
(2.3)
(0.1)
10.5
5.5
0.1
2.3
Total
€m
(266.3)
(1.1)
(5.3)
(23.5)
(0.7)
1.4
(0.5)
7.5
(8.1)
(296.6)
(2.6)
(5.2)
24.3
(3.6)
2.3
(0.5)
7.7
(1.5)
(201.2)
(74.5)
(275.7)
SECTION 7. EMPLOYEE BENEFITS CONTINUED
7.2 Retirement benefit schemes continued
Reconciliation of plan assets
At 31 March 2020
Interest income
Remeasurements: Return on plan assets excluding interest expense
Contributions from employer
Contributions from plan participants
Benefit payments
Exchange rate changes
At 31 March 2021
Current service cost
Interest income
Remeasurements: Return on plan assets excluding interest expense
Contributions from employer
Contributions from plan participants
Benefit payments
Exchange rate changes
At 31 March 2022
UK
€m
202.7
4.8
0.6
3.4
–
(6.6)
7.8
212.7
–
4.3
(5.8)
3.5
–
(6.5)
1.6
Overseas
€m
72.1
0.8
(1.1)
1.1
0.5
(0.9)
–
72.5
0.3
0.8
(6.7)
2.0
0.5
(1.2)
–
Total
€m
274.8
5.6
(0.5)
4.5
0.5
(7.5)
7.8
285.2
0.3
5.1
(12.5)
5.5
0.5
(7.7)
1.6
209.8
68.2
278.0
Significant defined benefit pension scheme risks
Through its defined benefit pension schemes the Group is exposed to a number of risks, the most significant of which are set out below.
Asset volatility – The UK scheme liabilities are calculated using a discount rate set with reference to corporate bond yields and if plan
assets underperform this yield, this will result in a deficit. The UK pension scheme’s assets are held in a portfolio of pooled funds which
are single priced at the net asset value. The investment objective of the portfolio is to achieve long-term total returns in excess of a
nominal portfolio of long-dated Sterling bonds through a diversified portfolio of collective investment schemes, which may include
derivatives. Investments are well diversified, such that the failure of any single investment would not have a material impact on the
overall level of assets. The Trustees have agreed an underlying strategy with the Group so that any ongoing improvements in the
scheme’s funding position would trigger movements from growth assets to non-growth assets in order to protect and consolidate
such improvements. The plan assets in the overseas pension schemes are calculated as the cash value of all future insured benefit
payments using an appropriate discount rate.
Inflation risk – The majority of benefit obligations are linked to inflation and higher inflation will lead to higher liabilities.
Life expectancy – The majority of the obligations are to provide benefits for the life of the member, so increases in the life of the
member will result in an increase in the liabilities.
Changes in bond yields – A decrease in corporate bond yields will increase plan liabilities, although this will be partially offset by
an increase in the value of the investments.
Sensitivities for defined pension benefit schemes
The sensitivity analyses are based on a change in an assumption while holding all other assumptions constant. In practice, this is
unlikely to occur, as changes in assumptions may be correlated. When calculating the sensitivity of the defined benefit obligation to
significant actuarial assumptions the same method (present value of the defined benefit obligation calculated with the projected unit
credit method at the end of the reporting period) has been applied as when calculating the pension liability recognised within the
Balance Sheet.
Discount rate
Rate of price inflation
Consumer price inflation
Impact on defined benefit obligation
UK
Overseas
Change in
assumption
%
Increase in
assumption
€m
Decrease in
assumption
€m
Change in
assumption
%
Increase in
assumption
€m
Decrease in
assumption
€m
0.25
0.25
0.25
7.6
(3.7)
(3.7)
(7.8)
4.8
4.8
0.25
0.25
–
2.9
(0.1)
–
(3.0)
0.1
–
232
233
SECTION 7. EMPLOYEE BENEFITS CONTINUED
7.3 Share-based payments continued
Fair value of awards and options granted during the year
Valuation model
Weighted average fair value
Weighted average share price
Weighted average exercise price
Expected volatility
Expected life
Risk-free interest rate
Dividend yield
SRSOS
LTIP
2022
Binomial
2021
Black-Scholes
2022
Share price
2021
Share price
2022
Monte Carlo
and Finnerty
2021
Monte Carlo
223p
555p
422p
51%
3 years
0.25%
2.2%
6p
20p
20p
47%
3 years
(0.1)%
1.3%
508p
548p
–
–
3 years
–
–
26p
26p
–
–
3 years
–
–
362p
548p
–
53%
3 years
0.16%
–
23p
26p
–
48%
3 years
(0.2)%
–
For the LTIP awards granted, the fair value of the element subject to non-market conditions has been calculated based on the share
price at the award date and the expense recognised is based on expectations of these conditions being met which are reassessed at
each balance sheet date. The Monte Carlo valuation model is used to determine the weighted average fair value of the market
conditions element of awards granted. Expected volatility has been calculated using average volatility historical data over a three-year
period from the grant date. The risk-free interest rate is based on the implied yield of zero-coupon government bonds with a remaining
term equal to the expected life. The expected life used in the models equals the vesting period. The awards granted vest after three
years, four years and five years. There is no service condition after three years on any of the awards granted, just a holding period of
between one and two years.
Charge for the year
The Group recognised a total charge of €2.5m (2021: €1.4m) relating to equity-settled share-based payments. The DAB awards for the
year ended 31 March 2022 have not yet been granted and therefore the charge is based on an estimate.
Notes to the financial statements continued
SECTION 7. EMPLOYEE BENEFITS CONTINUED
7.2 Retirement benefit schemes continued
Life expectancy
UK
Overseas
Increase
by 1 year in
assumption
€m
Decrease
by 1 year in
assumption
€m
Increase
by 1 year in
assumption
€m
Decrease
by 1 year in
assumption
€m
(9.4)
8.6
(2.0)
2.0
Other overseas schemes
The total cost in the year for other overseas pensions was €27.8m (2021: €28.3m). In the Netherlands in particular, most employees are
members of either a multi-employer pension scheme or other similar externally funded schemes, including Government funded schemes.
7.3 Share-based payments
As described in the Directors’ Remuneration Report, the Group issues equity-settled share-based payments under a Savings Related
Share Option Scheme (SRSOS), a Long-Term Incentive Plan (LTIP) and a Deferred Annual Bonus (DAB) arrangement. Further details
and performance metrics of both LTIPs and DABs can be found in the Directors’ Remuneration Report on pages 138 to 155.
Accounting policy
The Group issues equity-settled share-based awards to certain employees. The fair value of share-based awards is determined at the
date of grant and expensed on a straight-line basis over the vesting period with a corresponding increase in equity based on the Group’s
estimate of the shares that will eventually vest. At each balance sheet date the Group revises its estimates of the number of awards that
are expected to vest based on service and non-market performance conditions. The amount expensed is adjusted over the vesting
period for changes in the estimate of the number of shares that will eventually vest, except for changes resulting from any market-
related performance conditions.
At the Annual General Meeting of Renewi plc held on 15 July 2021, shareholders approved the consolidation of the Company’s share
capital on the basis of one new ordinary share with a nominal value of £1.00 each for every ten existing ordinary shares of 10 pence each
held. This adjustment has been applied to the outstanding awards and options as presented below:
Outstanding awards and options
Outstanding at 1 April 2020
Granted
Forfeited
Expired
Exercised/vested
Outstanding at 31 March 2021
Forfeited
Expired
Exercised/vested
Outstanding on 19 July 2021 prior to share consolidation
Adjustment to the number of shares following the share consolidation
Granted
Forfeited
Exercised/vested
Outstanding at 31 March 2022
Exercisable at 31 March 2022
Exercisable at 31 March 2021
At 31 March 2022:
Range of price per share at exercise
Weighted average remaining contractual life
SRSOS
LTIP
DAB
Number of
options
5,121,329
4,797,900
(2,438,792)
(106,354)
–
7,374,083
(350,341)
(119,120)
(95,200)
6,809,422
(6,128,480)
89,323
(62,527)
(36,263)
671,475
6,436
119,120
Weighted
Average
exercise
price
Number of
awards
Number of
awards
10,502,128
5,965,521
(510,067)
(1,728,178)
(1,319,755)
12,909,649
(650,750)
(1,976,460)
(573,802)
9,708,637
(8,737,775)
487,111
(35,000)
–
366,408
1,200,909
–
–
(91,383)
1,475,934
–
–
(155,535)
1,320,399
(1,188,361)
69,159
–
(34.580)
1,422.973
166,617
30p
20p
27p
71p
–
24p
22p
76p
23p
23p
–
422p
242p
417p
245p
520p
76p
200p to 520p
1 to 2 years
234
235
Notes to the financial statements continued
SECTION 8. OTHER NOTES
SECTION 8. OTHER NOTES CONTINUED
8.1 Subsidiary undertakings and investments at 31 March 2022
8.1 Subsidiary undertakings and investments at 31 March 2022 continued
The structure of the Group includes a number of different operating and holding companies that contribute to the consolidated
financial performance and position.
Subsidiary undertakings
In accordance with section 409 of the Companies Act, a full list of subsidiaries at 31 March 2022 is disclosed below by country of
incorporation which is the principal country of business. All are wholly owned by the Group and have a 31 March year end, unless
otherwise stated, and all operate in the waste management sector and have been consolidated in the Group’s financial statements.
Those subsidiaries owned directly by Renewi plc, the parent company, are indicated with an asterisk.
Subsidiary
Address of the registered office
Incorporated in the Netherlands
ATM B.V.
A&G Holding B.V.
B.V. Twente Milieu Bedrijven
CFS B.V.
Coolrec B.V.
Coolrec Nederland B.V.
Coolrec Plastics B.V.
EcoSmart Nederland B.V.
Glasrecycling Noord-Oost Nederland B.V. (67%)
Immo C.V.
Maltha Glasrecycling Nederland B.V. (67%)
Maltha Glassrecycling International B.V. (67%)
Maltha Groep B.V. (67%)
Mineralz B.V.
Mineralz Maasvlakte B.V.
Mineralz Zweekhorst B.V.
Orgaworld International B.V.
Orgaworld Nederland B.V.
Orgaworld WKK 1 B.V.
Orgaworld WKK II B.V.
Orgaworld WKK III B.V.
Renewi Commercial B.V.
Renewi Europe B.V.
Renewi Hazardous Waste B.V.
Renewi Icopower B.V.
Renewi Monostreams B.V.
Renewi Nederland B.V.
Renewi Netherlands Holdings B.V.
Renewi Overheidsdiensten B.V.
Renewi Smink B.V.
Renewi Support B.V.
Robesta Vastgoed Acht B.V.
Robesta Vastgoed B.V.
Semler B.V.
Verwerking Bedrijfsafvalstoffen Maasvlakte (V.B.M.) C.V.
Vlasweg 12, 4782 PW, Moerdijk, Netherlands
Van Hilstraat 7, 5145 RK Waalwijk, Netherlands
Flight Forum 240, 5657 DH Eindhoven, Netherlands
Wetering 14, 6002 SM Weert, Netherlands
Van Hilststraat 7, 5145 RK Waalwijk, Netherlands
Grevelingenweg 3, 3313 LB Dordrecht, Netherlands
Van Hilststraat 7, 5145 RK Waalwijk, Netherlands
Spaarpot 6, 5667 KX Geldrop, Netherlands
Columbusstraat 20, 7825 VR Emmen, Netherlands
Loswalweg 50, 3199 LG Maasvlakte Rotterdam, Netherlands
Glasweg 7, 4794 TB Heijningen, Netherlands
Glasweg 7, 4794 TB Heijningen, Netherlands
Glasweg 7, 4794 TB Heijningen, Netherlands
Van Hilstraat 7, 5145 RK Waalwijk Netherlands
Loswalweg 50, 3199 LG Maasvlakte Rotterdam, Netherlands
Doesburgseweg 16D, 6902 PN Zevenaar, Netherlands
Lindeboomseweg 15, 3825 AL Amersfoort, Netherlands
Lindeboomseweg 15, 3825 AL Amersfoort, Netherlands
Hornweg 67 1044 AN Amsterdam, Netherlands
Hornweg 69, 1044 AN Amsterdam, Netherlands
Hornweg 71, 1044 AN Amsterdam, Netherlands
Lindeboomseweg 15, 3825 AL, Amersfoort, Netherlands
Lindeboomseweg 15, 3825 AL, Amersfoort, Netherlands
Vlasweg 12, 4782 Moerdijk, Netherlands
Kajuitweg 1, 1041 AP Amsterdam, Netherlands
Flight Forum 240, 5657 DH Eindhoven, Netherlands
Flight Forum 240, 5657 DH Eindhoven, Netherlands
Lindeboomseweg 15, 3825 AL, Amersfoort, Netherlands
Rijksweg-Zuid 91, 4715 TA Rucphen, Netherlands
Lindeboomseweg 15, 3825 AL, Amersfoort, Netherlands
Flight Forum 240, 5657 DH Eindhoven, Netherlands
Flight Forum 240, 5657 DH Eindhoven, Netherlands
Flight Forum 240, 5657 DH Eindhoven, Netherlands
Ockhuizenweg 5-A, 5691 PJ Son, Netherlands
Loswalweg 50, 3199 LG Maasvlakte Rotterdam, Netherlands
Subsidiary
Address of the registered office
Incorporated in Belgium
EcoSmart NV
Enviro+ NV
Maltha Glasrecyclage Belgie BV (67%)
Mineralz ES Treatment NV
Ocean Combustion Services NV
Recydel SA (80%)
Renewi Belgium NV
Renewi Chemical Services NV
Renewi Logistics NV
Renewi NV
Renewi Shared services Center SA (previously Belgo-Luxembourgeoise
de Services Publics SA)
Renewi Tisselt NV
Renewi Valorisation & Quarry NV
Renewi Wood Products NV
Gerard Mercatorstraat 8, 3920, Lommel, Belgium
Gerard Mercatorstraat 8, 3920, Lommel, Belgium
Fabrieksstraat 114, 3920 Lommel, Belgium
Gerard Mercatorstraat 8, Lommel, Belgium
Baeckelmansstraat 125, 2830 Tisselt, Belgium
Rue Wérihet 72, 4020 Liège, Belgium
Gerard Mercatorstraat 8, 3920, Lommel, Belgium
Gerard Mercatorstraat 8, 3920, Lommel, Belgium
Gerard Mercatorstraat 8, 3920, Lommel, Belgium
Berkebossenlaan 7, 2400 Mol, Belgium
Gerard Mercatorstraat 8, 3920, Lommel, Belgium
Baeckelmansstraat 125, 2830 Tisselt, Belgium
Gerard Mercatorstraat 8, 3920, Lommel, Belgium
Gerard Mercatorstraat 8, 3920, Lommel, Belgium
Incorporated in Germany
ATM Entsorgung Deutschland GmbH (Year end 31 December)
Coolrec Deutschland GmbH (Year end 31 December)
Kaldenkirchener Strasse 25, D-41063, Mönchengladbach, Germany
Stadtweide 17, 46446 Emmerich am Rhein, Germany
Incorporated in France
Coolrec France SAS (90%)
Maltha Glass Recycling France SAS (67%)
Incorporated in Hungary
Maltha Hungary. Üvegújrahasznosító (67%)
Incorporated in Portugal
Maltha Glass Recycling Portugal Lda (67%)
Incorporated in the UK
Renewi European Holdings Limited
Renewi Holdings Limited*
Renewi PFI Investments Limited*
Renewi SRF Trading Limited
Renewi UK Services Limited
Safewaste Limited
Subsidiary undertakings holding UK PPP contracts
Renewi Argyll & Bute Limited
Renewi Argyll & Bute Holdings Limited*
Renewi Cumbria Limited
Renewi Cumbria Holdings Limited
Renewi BDR Holdings Limited (previously 3SE (Barnsley, Doncaster &
Rotherham) Holdings Limited))
Renewi BDR Limited (previously 3SE (Barnsley, Doncaster &
Rotherham) Limited))
Rue Iéna Parcelle 36, 59810 Lesquin, France
Zone Industrielle, 33450 Izon, France
1214 Budapest, Orion utca 14, Hungary
Parque Industrial da Gala, Lotes 26 e 27, 3081-801 Figueira da Foz, Portugal
Dunedin House, Auckland Park, Mount Farm, Milton Keynes,
Buckinghamshire, MK1 1BU, United Kingdom
Dunedin House, Auckland Park, Mount Farm, Milton Keynes,
Buckinghamshire, MK1 1BU, United Kingdom
Dunedin House, Auckland Park, Mount Farm, Milton Keynes,
Buckinghamshire, MK1 1BU, United Kingdom
Dunedin House, Auckland Park, Mount Farm, Milton Keynes,
Buckinghamshire, MK1 1BU, United Kingdom
Dunedin House, Auckland Park, Mount Farm, Milton Keynes,
Buckinghamshire, MK1 1BU, United Kingdom
Dunedin House, Auckland Park, Mount Farm, Milton Keynes,
Buckinghamshire, MK1 1BU, United Kingdom
16 Charlotte Square, Edinburgh, EH2 4DF, United Kingdom
16 Charlotte Square, Edinburgh, EH2 4DF, United Kingdom
Dunedin House, Auckland Park, Mount Farm, Milton Keynes,
Buckinghamshire, MK1 1BU, United Kingdom
Dunedin House, Auckland Park, Mount Farm, Milton Keynes,
Buckinghamshire, MK1 1BU, United Kingdom
Dunedin House, Auckland Park, Mount Farm, Milton Keynes,
Buckinghamshire, MK1 1BU, United Kingdom
Dunedin House, Auckland Park, Mount Farm, Milton Keynes,
Buckinghamshire, MK1 1BU, United Kingdom
236
237
Notes to the financial statements continued
SECTION 8. OTHER NOTES CONTINUED
SECTION 8. OTHER NOTES CONTINUED
8.1 Subsidiary undertakings and investments at 31 March 2022 continued
8.1 Subsidiary undertakings and investments at 31 March 2022 continued
Joint ventures, associates and joint operations
At 31 March 2022 the Group through wholly owned subsidiaries had the following interests in joint venture companies, joint operations
and associates, all of which operate in the waste management sector.
Group
Holding %
Most recent
year end
Address of the registered office
Joint ventures
Incorporated in the Netherlands
Green Collective B.V.
50%
31 December 2021
PQA B.V.
50%
Recycling Maatschappij Bovenveld B.V. 50%
50%
SQAPE B.V.
31 December 2021
31 December 2021
31 December 2021
Mr E.N. van Kleffensstraat 10, 6842 CV, Arnhem,
Netherlands
Bennebroekerdijk 244, 2142 LE, Cruquius, Netherlands
Coevorderweg 48, 7737 PG Stegeren, Netherlands
Bennebroekerdijk 244, 2142 LE Cruquius, Netherlands
31 December 2021
31 December 2021
31 March 2022
L. Coiseaukaai 43, 8380 Dudzele, Belgium
Reinaertlaan 82, 9190 Stekene, Belgium
Regenbeekstraat 7C, 8800 Roeselare, Belgium
Incorporated in Belgium
Marpos NV
Recypel BV
Silvamo NV
Incorporated in the UK
Caird Evered Holdings Limited
Caird Evered Limited
45%
50%
50%
50%
50%
31 December 2021
31 December 2021
Wakefield Waste Holdings Limited
50.001%
31 March 2022
Wakefield Waste PFI Holdings Limited
50.001%
31 March 2022
Wakefield Waste PFI Limited
50.001%
31 March 2022
Bardon Hall, Copt Oak Road, Markfield, Leicestershire,
LE67 9PJ, United Kingdom
Bardon Hall, Copt Oak Road, Markfield, Leicestershire,
LE67 9PJ, United Kingdom
Dunedin House, Auckland Park, Mount Farm,
Milton Keynes, Buckinghamshire, MK1 1BU,
United Kingdom
Dunedin House, Auckland Park, Mount Farm,
Milton Keynes, Buckinghamshire, MK1 1BU,
United Kingdom
Dunedin House, Auckland Park, Mount Farm,
Milton Keynes, Buckinghamshire, MK1 1BU,
United Kingdom
Associates
Group
Holding %
Most recent
year end
Address of the registered office
Incorporated in the Netherlands
AMP B.V.
Dorst B.V.
33%
50%
31 December 2021
31 December 2021
RetourMatras B.V.
31.63%
31 December 2021
Victoriberg 18, 2211 DH Noordwijkerhout, Netherlands
Wateringveldseweg 1, 2291 HE Wateringen,
Netherlands
Goudseweg 181 Unit E, 2411HK, Bodegraven,
Netherlands
Oostkade 7, 4541 HH Sluiskil, Netherlands
Baanhoekweg 42, 3313 LA Dordrecht, Netherlands
Baanhoekweg 46, 3313 LA Dordrecht, Netherlands
Westvaartdijk 97, 1850 Grimbergen, Belgium
Rue des trois Burettes 65 1435 Mon-Saint-Guibert,
Belgium
31 December 2021
31 December 2021
31 December 2021
31 December 2021
31 December 2021
31 December 2021
Johannesgasse 15, 1010 Wien, Austria
31 March 2022
31 March 2022
Dunedin House, Auckland Park, Mount Farm,
Milton Keynes, Buckinghamshire, MK1 1BU,
United Kingdom
Dunedin House, Auckland Park, Mount Farm,
Milton Keynes, Buckinghamshire, MK1 1BU,
United Kingdom
Tankterminal Sluiskil B.V.
Zavin B.V.
Zavin C.V.
Incorporated in Belgium
SUEZ PCB Decontamination NV
Valorem SA
Incorporated in Austria
EARN Elektroalgeräte Service GmbH
Incorporated in the UK
ELWA Limited
ELWA Holdings Limited
40%
33%
33%
23%
30%
33%
20%
20%
238
Joint operations
Incorporated in the Netherlands
Hydrovac V.O.F.
Induserve V.O.F.
Octopus V.O.F.
Smink Boskalis Dolman V.O.F.
Group
Holding %
Most recent
year end
Address of the registered office
50%
33%
50%
50%
31 December 2021
31 December 2021
31 December 2021
31 December 2021
Graafsebaan 67, 5248 JT Rosmalen, Netherlands
Flight Forum 240, 5657 DH Eindhoven, Netherlands
Forellenweg 24, 4941 SJ Raamsdonksveer, Netherlands
Lindeboomseweg 15, 3825 AL Amersfoort, Netherlands
8.2 Related party transactions
Transactions between the Group and its associates and joint ventures
The Group had the following transactions on arm’s length terms and outstanding balances with associates and joint ventures, in the
ordinary course of business:
Sales
Purchases
Management fees
Receivables at 31 March
Payables at 31 March
Loans made by Group companies at 31 March
Loans made to Group companies at 31 March
Associates
Joint ventures
2022
€m
51.5
4.4
0.8
5.0
0.2
0.7
–
2021
€m
51.2
4.4
0.8
5.2
0.2
0.7
–
2022
€m
20.1
2.4
0.4
2.5
0.4
0.2
0.6
2021
€m
18.8
1.3
0.4
2.2
0.2
0.2
0.6
The receivables and payables are due one month after the date of the invoice and are unsecured in nature and bear no interest.
Remuneration of key management personnel
Key management personnel comprises the Board of Directors and the members of the Group’s Executive Committee. The disclosures
required by the Companies Act 2006 and those specified by the Financial Conduct Authority relating to Directors’ remuneration
(including retirement benefits and incentive plans), interests in shares, share options and other interests, are set out in the Directors’
Remuneration Report on pages 138 to 155, and form part of these consolidated financial statements. The emoluments paid or payable
to key management personnel were:
Short-term employee benefits
Termination benefits
Post-employment benefits
Share-based payments
2022
€m
6.3
–
0.2
1.1
7.6
2021
€m
5.6
0.4
0.2
–
6.2
8.3 Explanation of non-IFRS measures and reconciliations
The Directors use alternative performance measures 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. The alternative performance measures
used are set out below, there have been no changes in approach.
239
Notes to the financial statements continued
SECTION 8. OTHER NOTES CONTINUED
SECTION 8. OTHER NOTES CONTINUED
8.3 Explanation of non-IFRS measures and reconciliations continued
8.3 Explanation of non-IFRS measures and reconciliations continued
Financial Measure
How we define it
Underlying EBIT
Operating profit excluding non-trading and exceptional items,
amortisation of intangible assets arising on acquisition and the change in
fair value remeasurements of derivatives. Amortisation on acquisition
intangibles is excluded to avoid double counting of costs in underlying
EBIT as the Group incurs costs each year in maintaining intangible assets
which include acquired customer relationships, permits and licences
Underlying EBIT margin Underlying EBIT as a percentage of revenue
Underlying EBITDA
Underlying EBITDA
margin
Underlying profit
before tax
Underlying EPS
Underlying effective
tax rate
Return on
operating assets
Post-tax return on
capital employed
Adjusted free cash flow
Free cash flow
Free cash flow
conversion
Non-trading and
exceptional cash
flow items
Total cash flow
Core cash
Underlying EBIT before depreciation, amortisation and impairment
of plant, property and equipment, intangible assets and investments,
profit or loss on disposal of plant, property and equipment and
intangible assets.
Underlying EBITDA as a percentage of revenue
Profit before tax excluding non-trading and exceptional items,
amortisation of intangible assets arising on acquisition and the change
in fair value remeasurements of derivatives
Earnings per share excluding non-trading and exceptional items,
amortisation of intangible assets arising on acquisition and the change
in fair value remeasurements of derivatives
The effective tax rate on underlying profit before tax
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 intangibles
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
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 or receipts, settlement
of ATM soil liabilities and cash flows relating to the UK PPP contracts.
Payment 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
Net cash generated from operating activities principally excluding non-
trading and exceptional items and including interest, tax and replacement
capital spend
The ratio of free cash flow to underlying EBIT
Renewi 2.0 and other exceptional cash flows are presented in cash flows
from operating activities and are included in the categories in note 3.3,
net of opening and closing Balance Sheet positions
Total cash flow is net debt excluding loan fee capitalisation and
amortisation, exchange movements, settlement of cross-currency interest
rate swaps, movement in PPP cash and PPP non-recourse debt and
additions to IFRS 16 lease liabilities
Core cash excludes cash and cash equivalents relating to UK
PPP contracts
Core net debt
Core net debt includes core cash excludes debt relating to the UK PPP
contracts and lease liabilities as a result of IFRS 16
Liquidity
Net debt to
EBITDA/leverage ratio
Liquidity headroom includes core cash, money market funds and
undrawn committed amounts on the multicurrency green finance facility
Adjusted net debt to a comparable adjusted annualised underlying
EBITDA in accordance with frozen GAAP, excluding lease liabilities which
are a result of IFRS 16, and translated at an average rate of exchange for
the period
Why we use it
Provides insight into ongoing profit generation
and trends
Reconciliations of certain non-IFRS measures are set out below:
Reconciliation of operating profit (loss) to underlying EBITDA
2022
Operating profit (loss)
Non-trading and exceptional items
(excluding finance items)
Underlying EBIT
Depreciation and impairment of property, plant and
equipment and right-of-use assets
Amortisation and impairment of intangible assets
(excluding acquisition intangibles)
Impairment of investment in associate
Non-exceptional (gain) loss on disposal of property,
plant and equipment and intangible assets
Underlying EBITDA
2021
Operating profit (loss)
Non-trading and exceptional items
(excluding finance items)
Underlying EBIT
Depreciation and impairment of property, plant and
equipment and right-of-use assets
Amortisation of intangible assets (excluding
acquisition intangibles)
Non-exceptional (gain) loss on disposal of property,
plant and equipment
Underlying EBITDA
Netherlands
Commercial
Waste
€m
Belgium
Commercial
Waste
€m
Mineralz &
Water
€m
Specialities
€m
Group central
services
€m
89.1
4.0
93.1
56.2
0.9
–
(1.3)
148.9
40.4
2.2
42.6
34.2
–
–
0.7
77.5
8.7
(2.9)
5.8
16.0
0.6
–
–
22.4
3.2
0.9
4.1
8.1
0.6
1.9
(0.2)
14.5
(17.4)
5.4
(12.0)
5.7
5.6
–
–
(0.7)
Total
€m
124.0
9.6
133.6
120.2
7.7
1.9
(0.8)
262.6
Netherlands
Commercial
Waste
€m
Belgium
Commercial
Waste
€m
Mineralz &
Water
€m
Specialities
€m
Restated*
Group central
services
€m
Restated*
Total
€m
46.3
7.4
53.7
59.8
1.2
(0.8)
113.9
14.4
8.7
23.1
29.1
0.1
0.2
52.5
(4.5)
4.8
0.3
14.0
0.6
0.1
15.0
(7.9)
10.3
2.4
8.7
0.6
0.3
12.0
(12.2)
5.7
(6.5)
4.9
3.8
0.1
2.3
36.1
36.9
73.0
116.5
6.3
(0.1)
195.7
* The comparatives for operating loss and non-trading and exceptional items in Group central services have been restated following the change in accounting policy in relation
to Software as a Service arrangements as explained in section 1 Basis of preparation.
Reconciliation of statutory profit before tax to underlying profit before tax
Statutory profit before tax
Non-trading and exceptional items in operating profit
Non-trading and exceptional finance net income
Underlying profit before tax
2022
€m
95.7
9.6
(0.1)
105.2
Restated*
2021
€m
10.9
36.9
(0.4)
47.4
* The comparatives for statutory profit before tax and non-trading and exceptional items in operating profit have been restated following the change in accounting policy
in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
Provides insight into margin development
and trends
Measure of earnings and cash generation to
assess operational performance
Provides insight into margin development
and trends
Facilitates underlying performance evaluation
Facilitates underlying performance evaluation
Provides a more comparable basis to analyse our
tax rate
Provides a measure of the return on assets across
the Divisions and the Group excluding goodwill
and acquisition intangible balances
Provides a measure of the Group return on assets
taking into account the goodwill and acquisition
intangible balances
Measure of cash generation in the underlying
business, including regular replacement capital
expenditure and excluding items of a historic
nature, to fund growth capital projects and invest
in acquisitions. We classify our capital spend into
general replacement expenditure and growth
capital projects which include the innovation
portfolio and other large strategic investments
Measure of cash available after regular
replacement capital expenditure to pay
dividends, fund growth capital projects and invest
in acquisitions
Provides an understanding of how our profits
convert into cash
Provides useful information on non-trading and
exceptional cash flow spend
Provides an understanding of total cash flow of
the Group
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
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
Provides an understanding of available
headroom to the Group
Commonly used measure of financial leverage
and consistent with covenant definition
240
241
Notes to the financial statements continued
SECTION 8. OTHER NOTES CONTINUED
SECTION 8. OTHER NOTES CONTINUED
8.3 Explanation of non-IFRS measures and reconciliations continued
8.3 Explanation of non-IFRS measures and reconciliations continued
Reconciliation of adjusted free cash flow as presented in the Finance review
Reconciliation of property, plant and equipment additions to replacement capital expenditure as presented in the Finance review
Net cash generated from operating activities
Exclude non-trading and exceptional provisions and working capital
Exclude payments to fund defined benefit pension schemes
Exclude deferred Covid taxes
Exclude offtake of ATM soil
Exclude UK Municipal contracts
Include finance charges and loan fees paid (excluding exceptional finance charges)
Include finance income received
Include repayment of obligations under lease liabilities
Include purchases of replacement items of intangible assets
Include purchases of replacement items of property, plant and equipment
Include proceeds from disposals of property, plant and equipment
Include repayment of UK Municipal contracts PPP debt
Included capital received in respect of PPP financial assets net of outflows
Include movement in UK Municipal contracts PPP cash
Adjusted free cash flow
2022
€m
180.4
11.0
3.6
10.6
10.3
9.2
(28.4)
9.9
(44.2)
(8.4)
(64.5)
4.7
(5.7)
5.7
(3.6)
90.6
Restated*
2021
€m
238.7
17.3
3.6
(54.1)
2.6
19.3
(30.8)
10.2
(40.4)
(4.1)
(51.1)
4.5
(4.1)
3.2
(1.3)
113.5
* The comparatives have been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
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
Purchases of intangible assets
Purchases of replacement property, plant and equipment
Proceed from disposals of property, plant and equipment
Net replacement capital expenditure
Growth capital expenditure
Total capital spend as shown in the cash flow in the Finance review
2022
€m
(8.4)
(64.5)
4.7
(68.2)
(13.1)
(81.3)
Restated*
2021
€m
(4.1)
(51.1)
4.5
(50.7)
(6.9)
(57.6)
* The comparatives have been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
Purchases of intangible assets
Purchases of property, plant and equipment (replacement and growth)
Proceed from disposals of property, plant and equipment
Purchases and disposal proceeds of property, plant and equipment and intangible assets within Investing
activities in the consolidated Statement of Cash Flows
2022
€m
(8.4)
(77.6)
4.7
Restated*
2021
€m
(4.1)
(58.0)
4.5
(81.3)
(57.6)
* The comparatives have been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
Property, plant and equipment additions (note 4.2)
Intangible asset additions (note 4.1)
Reversal of capitalised SaaS costs in the year ended 31 March 2021
Proceeds from disposals of property, plant and equipment
Movement in capital creditors (included in trade and other payables)
Growth capital expenditure – as disclosed in the Finance review
Government grant received in a prior period transferred to property, plant and equipment
Replacement capital expenditure per Finance review
2022
€m
(73.3)
(9.3)
–
4.7
(1.9)
13.1
(1.5)
(68.2)
Restated*
2021
€m
(61.1)
(11.3)
4.7
4.5
5.6
6.9
–
(50.7)
* The comparatives have been restated following the change in accounting policy in relation to Software as a Service arrangements as explained in section 1 Basis of preparation.
Reconciliation of total cash flow as presented in the Finance review
Total cash flow
Additions to lease liabilities
Repayment of obligations under lease liabilities
Movement in PPP non-recourse debt
Movement in PPP cash and cash equivalents
Capitalisation of loan fees net of amortisation
Exchange movements
Settlement of cross-currency interest rate swaps
Movement in total net debt (note 5.1)
2022
€m
29.4
(25.6)
44.2
5.7
3.6
(0.3)
0.7
6.4
64.1
Restated*
2021
€m
117.5
(60.9)
40.4
4.1
1.3
(1.3)
(10.3)
–
90.8
* The comparatives for movements in PPP non-recourse debt and PPP cash and cash equivalents have been restated as explained in section 1 Basis of preparation.
Reconciliation of total net debt to net debt under covenant definition
Total net debt
Less PPP non-recourse debt
Plus PPP cash and cash equivalents
Less IFRS 16 lease liabilities
Net debt under covenant definition
* The comparatives for PPP non-recourse debt and PPP cash and cash equivalents have been restated as explained in section 1 Basis of preparation.
2022
€m
(604.0)
100.2
(21.1)
221.9
(303.0)
Restated*
2021
€m
(668.1)
105.1
(17.3)
236.7
(343.6)
242
243
Notes to the financial statements continued
Consolidated five year financial summary
SECTION 8. OTHER NOTES CONTINUED
8.4 Contingent liabilities
There is an ongoing investigation by the European Commission in which it alleges the Walloon region of Belgium provided state aid to
the Group in relation to the Cetem landfill. An adverse judgement would require the Walloon region to seek repayment from the Group.
Both the Walloon Region and Renewi believe that no state aid was offered and will defend their conduct vigorously. Renewi has
provided €15m based on legal advice which represents management’s best estimate of the most likely outcome. It is noted that the
potential maximum claim is €58m (excluding compound interest currently amounting to €5m), and therefore there is a potential further
liability should the Group be wholly unsuccessful in its defence. A ruling from the European Commission has not been received and is
expected during FY23 but no monies would likely become payable until FY24 should the European Commission conclude Renewi did
receive state aid.
The criminal investigation into the production of thermally cleaned soil at ATM has been closed without any prosecution. It is noted that
there are discussions ongoing on the application of thermally cleaned 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.
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.
In respect of contractual liabilities the Group and its subsidiaries have given guarantees and entered into counter indemnities of bonds
and guarantees given on their behalf by sureties and banks totalling €226.0m (2021: €219.8m).
8.5 Events after the balance sheet date
On 24 May 2022 the Group announced that it had signed a conditional agreement to acquire 100% of the shares of GMP Exploitatie BV
(“Paro”), an Amsterdam based commercial waste and recycling business. The agreement is conditional upon competition approval and
completion of relevant employee representation procedures. The cash consideration will be €53.5m including debt with the net assets
to be determined on the date the acquisition completes later in 2022.
Consolidated Income Statement
Revenue from continuing operations1
Underlying EBIT from continuing operations1
Finance charges – interest
Finance charges – other
Share of results from associates and joint ventures
Profit from continuing operations before exceptional items and tax
(underlying profit)
Non-trading and exceptional items
Profit (loss) before tax from continuing operations
Taxation
Exceptional tax and tax on exceptional items
Profit (loss) after tax from continuing operations
Loss after tax from discontinued operations
Profit (loss) for the year
Profit (loss) attributable to:
Owners of the parent
Non-controlling interests
Consolidated Balance Sheet
Non-current assets
Other assets less liabilities
Total net debt
Net assets
Equity attributable to owners of the parent
Share capital and share premium
Exchange reserve and retained earnings
Non-controlling interests
Total equity
Financial ratios
Underlying earnings per share – continuing operations
(cents per share) 2
Basic earnings (loss) per share – continuing operations
(cents per share) 2
Dividend per share (pence per share) 2
2022
€m
1,869.2
133.6
(19.2)
(9.7)
0.5
105.2
(9.5)
95.7
(26.4)
6.1
75.4
–
75.4
74.5
0.9
75.4
1,565.9
(623.7)
(604.0)
338.2
573.3
(242.1)
331.2
7.0
338.2
98c
93c
–
Restated*
2021
€m
1,693.6
73.0
(19.3)
(7.9)
1.6
47.4
(36.5)
10.9
(11.6)
6.2
5.5
–
5.5
5.6
(0.1)
5.5
1,612.3
(706.6)
(668.1)
237.6
573.1
(341.6)
231.5
6.1
237.6
45c
7c
–
2020
€m
1,775.4
87.6
(23.4)
(11.0)
0.9
54.1
(113.5)
(59.4)
(13.3)
12.2
(60.5)
(16.6)
(77.1)
(77.9)
0.8
(77.1)
1,625.8
(631.6)
(758.9)
235.3
573.1
(339.2)
233.9
1.4
235.3
51c
(77)c
4.5p
2019
€m
1,780.7
85.5
(13.3)
(10.1)
0.4
62.5
(151.5)
(89.0)
(15.6)
28.0
(76.6)
(21.1)
(97.7)
(92.8)
(4.9)
(97.7)
1,439.6
(472.7)
(647.4)
319.5
573.1
(254.6)
318.5
1.0
319.5
59c
(90)c
14.5p
2018
€m
1,760.3
82.5
(14.0)
(8.8)
2.6
62.3
(115.1)
(52.8)
(15.7)
17.1
(51.4)
(2.5)
(53.9)
(54.2)
0.3
(53.9)
1,669.2
(637.7)
(595.2)
436.3
573.1
(142.9)
430.2
6.1
436.3
58c
(65)c
30.5p
1. Revenue and underlying EBIT from continuing operations is stated before non-trading and exceptional items as set out in note 3.3.
2. For all prior years, earnings per share and dividend per share have been recalculated to reflect the share consolidation as set out in section 1 Basis of preparation.
* The comparatives for the year ended 2021 have been restated due to prior period adjustments as explained in section 1 Basis of preparation.
244
245
Parent company Balance Sheet
As at 31 March 2022
Parent company Statement of Changes in Equity
For the year ended 31 March 2022
Assets
Non-current assets
Intangible assets
Property, plant and equipment
Investments
Defined benefit pension scheme surplus
Other receivables
Deferred tax assets
Current assets
Trade and other receivables
Cash and cash equivalents
Total assets
Liabilities
Non-current liabilities
Borrowings
Provisions
Defined benefit pension scheme deficit
Current liabilities
Borrowings
Trade and other payables
Provisions
Total liabilities
Net assets
Equity
Share capital
Share premium
Retained earnings*
Total equity
31 March
2022
£m
31 March
2021
£m
Note
6
7
8
16
9
10
9
11
12
15
12
13
14
16
16
0.2
0.2
525.8
7.3
363.4
7.0
903.9
6.5
8.3
14.8
918.7
(168.3)
(1.1)
–
(169.4)
(84.5)
(10.2)
(0.8)
(95.5)
(264.9)
653.8
80.0
401.6
172.2
653.8
0.3
0.2
524.5
–
254.2
6.1
785.3
6.0
8.8
14.8
800.1
(148.6)
–
(3.4)
(152.0)
–
(7.8)
(3.5)
(11.3)
(163.3)
636.8
80.0
401.4
155.4
636.8
Balance at 1 April 2021
Profit for the year
Other comprehensive income (loss):
Actuarial gain on defined benefit pension scheme
Tax in respect of other comprehensive income items
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based compensation
Movement in tax arising on share-based compensation
Proceeds from exercise of employee options
Own shares purchased by the Employee Share Trust
Balance at 31 March 2022
Balance at 1 April 2020
Profit for the year
Other comprehensive (loss) income:
Actuarial gain on defined benefit pension scheme
Tax in respect of other comprehensive income items
Total comprehensive income for the year
Transactions with owners in their capacity as owners:
Share-based compensation
Movement in tax arising on share-based compensation
Own shares purchased by the Employee Share Trust
Balance at 31 March 2021
* As permitted by section 408 of the Companies Act, the Company has elected not to present its own Income Statement or Statement of Comprehensive Income.
The Company reported a profit for the year ended 31 March 2022 of £9.1m (2021: £32.8m).
The notes on pages 249 to 257 are an integral part of these financial statements.
These Financial Statements were approved by the Board of Directors and authorised for issue on 24 May 2022. They were signed on its
behalf by:
Ben Verwaayen
Chairman
Otto de Bont
Chief Executive Officer
Note
Share
capital
£m
80.0
–
Share
premium
£m
401.4
–
Retained
earnings
£m
155.4
9.1
Total
equity
£m
636.8
9.1
7.7
(1.7)
15.1
2.1
1.1
0.2
(1.5)
–
–
–
–
–
0.2
–
7.7
(1.7)
15.1
2.1
1.1
–
(1.5)
401.6
172.2
653.8
401.4
–
–
–
–
–
–
–
139.1
32.8
(21.0)
4.0
15.8
1.3
0.3
(1.1)
620.5
32.8
(21.0)
4.0
15.8
1.3
0.3
(1.1)
15
3
16
16
15
3
16
–
–
–
–
–
–
–
80.0
80.0
–
–
–
–
–
–
–
80.0
401.4
155.4
636.8
246
247
Parent company Statement of Cash Flows
For the year ended 31 March 2022
Notes to the parent company financial statements
Profit before tax
Fair value loss on financial instruments
Finance income
Finance charges
Operating profit
Amortisation of intangible assets
Dividend income
Net decrease in provisions
Payment related to committed funding of the defined benefit pension scheme
Share-based compensation
Exchange gain
Operating cash flows before movement in working capital
Increase in receivables
Increase (decrease) in payables
Cash flows from operating activities
Income tax received
Net cash outflow from operating activities
Investing activities
Dividend received in cash
Finance income
Net cash inflow from investing activities
Financing activities
Proceeds from share issues
Finance charges and loan fees paid
Proceeds from retail bonds
Proceeds from bank borrowings
Repayment of bank borrowings
Investment in own shares by the Employee Share Trust
Net cash inflow (outflow) from financing activities
Net (decrease) increase in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
2022
£m
7.0
–
(18.5)
9.6
(1.9)
0.1
(3.5)
(1.6)
(3.1)
2.1
0.6
(7.3)
(109.7)
0.1
(116.9)
0.6
(116.3)
2.2
16.8
19.0
0.2
(8.8)
106.9
2.6
(2.6)
(1.5)
96.8
(0.5)
8.8
8.3
2021
£m
32.7
(0.1)
(18.0)
7.1
21.7
0.1
(28.0)
(0.5)
(3.1)
1.3
3.1
(5.4)
(0.9)
(2.0)
(8.3)
0.7
(7.6)
28.0
15.0
43.0
–
(6.6)
–
8.0
(29.7)
(1.1)
(29.4)
6.0
2.8
8.8
1. ACCOUNTING POLICIES – COMPANY
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 given on page 261. The nature of the Company’s principal activity is a head office corporate function.
The financial statements for Renewi plc the Company are presented in Sterling being the functional currency of the entity and are
rounded to the nearest £0.1m unless otherwise stated.
Basis of preparation
The separate financial statements of the Company are presented in compliance with the requirements for companies whose shares are
listed on the London Stock Exchange. They have been prepared on the historical cost basis, except for share-based payments, which are
stated at fair value. The policies set out below have been consistently applied. The Company has applied all accounting standards and
interpretations issued relevant to its operations and effective for accounting periods beginning on 1 April 2021.
Going concern
Having assessed the principal risks and other matters in connection with the viability statement, the Directors consider it appropriate
to continue to adopt the going concern basis of accounting in preparing these financial statements.
Statement of compliance
The financial statements are prepared in accordance with UK adopted international accounting standards in conformity with the
requirements of the Companies Act 2006.
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). There were no new standards, amendments to standards or interpretations not yet effective that would
be expected to have a material impact on the Company.
Intangible assets
Computer software is capitalised on the basis of the costs incurred to purchase and bring the assets into use. These costs are amortised
over the estimated useful life ranging from one to five years on a straight-line basis.
Property, plant and equipment
Property, plant and equipment, except for freehold land, is stated at cost less accumulated depreciation and provision for impairment.
Cost includes the original purchase price of the asset and the costs attributable to bringing the asset to its working condition for its
intended use. Freehold land is not depreciated. The asset’s residual values and useful lives are reviewed and adjusted if appropriate at
the end of each reporting period.
Depreciation is provided to write off the cost of fixtures and fittings (less the expected residual value) on a straight-line basis over an
expected useful life of up to 10 years.
Assets are reviewed for impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. An
impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable
amount is the higher of fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are
discounted to their present value. An impairment loss is recognised immediately as an operating expense and at each subsequent
reporting date the impairment is reviewed for possible reversal.
Investments in subsidiary undertakings
Investments in subsidiary undertakings are stated at cost less any provision for impairment in value. Investments are reviewed for
impairment whenever events or circumstances indicate that the carrying amount may not be recoverable. An impairment provision is
recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of
fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value.
248
249
Notes to the parent company financial statements continued
1. ACCOUNTING POLICIES – COMPANY CONTINUED
1. ACCOUNTING POLICIES – COMPANY CONTINUED
Provisions
Provisions are recognised where there is a present legal or constructive obligation as a result of a past event and it is probable that an
outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the
amount of the obligation.
Employee benefits
Retirement benefits
The Company accounts for pensions and similar benefits under IAS 19 (revised) Employee Benefits. For defined benefit plans, obligations
are measured at discounted present value whilst plan assets are recorded at fair value. The operating and financing costs of the plans are
recognised separately in the Income Statement. Interest is calculated by applying the discount rate to the net defined pension liability.
Actuarial gains and losses are recognised in full through the Statement of Comprehensive Income; surpluses are recognised only to the
extent that they are recoverable. Movements in irrecoverable surpluses are recognised immediately in the Statement of Comprehensive
Income. Payments to defined contribution schemes are charged to the Income Statement as they become due.
Share-based payments
The Company issues equity-settled share-based awards to certain employees. The fair value of share-based awards is determined at the
date of grant and expensed on a straight-line basis over the vesting period with a corresponding increase in equity based on the
Company’s estimate of the shares that will eventually vest. At each balance sheet date, the Company revises its estimates of the number
of awards that are expected to vest based on service and non-market performance conditions. The amount expensed is adjusted over
the vesting period for changes in the estimate of the number of shares that will eventually vest, save for changes resulting from any
market-related performance conditions.
Taxation
Current tax
Current tax is based on taxable profit or loss for the year. Taxable profit differs from profit before tax in the Income Statement because
it excludes items of income or expense that are taxable or deductible in other years or that are never taxable or deductible. The asset
or liability for current tax is calculated using tax rates that have been enacted, or substantively enacted, at the balance sheet date.
Deferred tax
Deferred tax is recognised in full where the carrying value of assets and liabilities in the financial statements is different to the
corresponding tax bases used in the computation of taxable profits. Deferred tax liabilities are generally recognised for all taxable
temporary differences and deferred tax assets are recognised to the extent that it is probable that the taxable profits will be available
against which deductible temporary differences can be utilised. Deferred tax is calculated at the tax rates that have been substantively
enacted at the balance sheet date. Deferred tax is charged or credited in the Income Statement, except where it relates to items charged
or credited directly to equity in which case the deferred tax is also dealt with in equity.
Foreign currencies
The functional currency of the Company is Sterling. Monetary assets and liabilities denominated in foreign currencies at the year end are
translated at the period end exchange rates. Foreign currency gains or losses are credited or charged to the profit and loss account as
they arise.
Financial instruments
Amounts owed by subsidiary undertakings
Amounts owed by subsidiary undertakings are initially recognised at fair value and subsequently measured at amortised cost using
the effective interest method less any provision for impairment losses. The Company measures impairment losses using the general
expected credit loss model taking into account objective evidence of impairment as a result of assessing the estimated future cash
flows of the financial asset.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with a maturity of three months or less and is held at amortised cost.
External borrowings
Retail bonds and bank loans are recorded at the proceeds received, net of direct issue costs. Finance charges, including premiums
payable on settlement or redemption and direct issue costs, are accounted for on an accruals basis in the Income Statement using the
effective interest rate method.
Trade payables
Trade payables are not interest bearing and are stated initially at fair value and subsequently held at amortised cost.
Amounts owed to subsidiary undertakings
Amounts owed to subsidiary undertakings are initially recognised at fair value and subsequently held at amortised cost.
Other receivables and other payables
Other receivables and other payables are initially recognised at fair value and subsequently measured at amortised cost.
Called up share capital
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new ordinary shares or share options are
shown in equity as a deduction, net of tax, from the proceeds. The share premium account represents any excess of the net proceeds
over the nominal value of any shares issued.
Dividends
Dividend distributions to the equity holders are recognised in the period in which they are approved by the shareholders in general
meeting. Interim dividends are recognised when paid.
2. KEY 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. The areas
involving a higher degree of judgement or complexity are set out below and in more detail in the related note.
Defined benefit pension scheme
The Company operates a defined benefit scheme in the UK for which an actuarial valuation is carried out as determined by the trustees
at intervals of not more than three years. The pension cost under IAS 19 (revised) Employee Benefits is assessed in accordance with
management’s best estimates using the advice of an independent qualified actuary and assumptions in the latest actuarial valuation.
Management have concluded that the pension scheme rules determine that upon winding up the scheme the Company has an
unconditional right to a refund of any surplus once all the liabilities have been discharged and that the trustees of the scheme do not
have the unilateral right to wind up the scheme, therefore the asset is not restricted and no additional liability was recognised. The
principal assumptions in connection with the retirement benefit scheme are set out in note 7.2 of the Group financial statements.
Impairment of investments in subsidiary undertakings
Investments in subsidiary undertakings are reviewed for impairment whenever events or circumstances indicate that the carrying value
may not be recoverable. The carrying value is estimated based on projected cash flows which may be long term in nature as detailed
in note 8.
3. EMPLOYEES
Staff costs
Wages and salaries
Social security costs
Share-based benefits
Other pension costs
Total staff costs
2022
£m
4.1
0.4
2.1
0.1
6.7
2021
£m
4.0
0.3
1.3
0.1
5.7
The average number of people (including executive directors) employed by the Company was 18 employees (2021: 17).
See pages 138 to 155 of the Directors’ Remuneration report for details of the remuneration of executive and non-executive Directors and
their interest in shares and options of the Company. Further details on share-based payments are set out in note 7.3 of the Group
financial statements.
250
251
Notes to the parent company financial statements continued
4. AUDITORS’ REMUNERATION
The auditors’ remuneration for audit services to the Company was £0.1m (2021: £0.1m) and the fees paid to BDO LLP and its associates for
non-audit services for audit related assurance services for the Company were £35,000 (2021: £nil).
5. DIVIDENDS
The Directors have not recommended a final dividend for the year ended March 2022 (2021: nil).
6. INTANGIBLE ASSETS
8. INVESTMENTS
At 1 April 2020 and 2021
Additions
At 31 March 2022
Investments
in subsidiary
undertakings
£m
524.5
1.3
525.8
Cost
At 1 April 2020, 31 March 2021 and 31 March 2022
Accumulated amortisation and impairment
At 1 April 2020
Amortisation charge
At 1 April 2021
Amortisation charge
At 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
At 31 March 2020
7. PROPERTY, PLANT AND EQUIPMENT
Cost
At 1 April 2020, 31 March 2021 and 31 March 2022
Accumulated depreciation and impairment
At 1 April 2020, 31 March 2021 and 31 March 2022
Net book value
At 31 March 2022
At 31 March 2021
At 31 March 2020
Computer
Software
£m
0.5
0.1
0.1
0.2
0.1
0.3
0.2
0.3
0.4
Total
£m
0.3
0.1
0.2
0.2
0.2
Land
£m
Fixtures and
fittings
£m
0.1
–
0.1
0.1
0.1
0.2
0.1
0.1
0.1
0.1
During the year the Company made a further investment of £1.3m in an existing subsidiary.
In the opinion of the Directors, the value of investments in subsidiary undertakings is not less than the aggregate amount of £525.8m
(2021: £524.5m). This assessment is based on the value in use calculated with reference to the discounted cash flow forecasts for each
of the reporting segments of the Group as set out in note 4.1 of the Group financial statements. The Group performs sensitivity analysis
of the impairment testing by considering reasonably possible changes in the key assumptions used. The results of sensitivities performed
demonstrated significant headroom and it is concluded that no reasonably possible change to the assumptions would result in an
impairment charge.
9. TRADE AND OTHER RECEIVABLES
Non-current assets
Amounts owed by subsidiary undertakings
Current assets
Amounts owed by subsidiary undertakings
Other receivables
Prepayments
The carrying amounts of trade and other receivables are denominated in the following currencies:
Sterling
Euro
2022
£m
2021
£m
363.4
254.2
4.1
0.4
2.0
6.5
2022
£m
33.6
336.3
369.9
4.3
0.9
0.8
6.0
2021
£m
19.2
241.0
260.2
During the year an expected credit loss allowance of £2.0m (2021: £1.3m) was charged to the Income Statement in relation to loans
owed by subsidiary undertakings in the UK Municipal business. The Directors do not consider there to be any significant increases in
credit risk in relation to the remaining receivables.
Interest on amounts owed by subsidiary undertakings is received at rates of between 0% and 14% (2021: 0% and 14%), the balances are
unsecured and repayable either on demand or in accordance with the loan agreements with a final repayment date of 30 September 2039.
252
253
Notes to the parent company financial statements continued
10. DEFERRED TAX ASSET
13. TRADE AND OTHER PAYABLES
Deferred tax is provided in full on temporary differences under the liability method using the applicable tax rate.
At 31 March 2020
Charge to Income Statement
Credit to equity
At 31 March 2021
(Charge) credit to Income Statement
(Charge) credit to equity
At 31 March 2022
Retirement
benefit
scheme
£m
Other
timing
differences
£m
Tax losses
£m
(2.7)
(0.7)
4.0
0.6
(0.7)
(1.7)
(1.8)
5.2
(0.2)
–
5.0
2.3
–
7.3
0.3
(0.1)
0.3
0.5
(0.1)
1.1
1.5
Total
£m
2.8
(1.0)
4.3
6.1
1.5
(0.6)
7.0
The majority of the £7.0m (2021: £6.1m) deferred tax asset is expected to be recovered after more than one year.
As at 31 March 2022, the Company has unused tax losses (tax effect) of £7.3m (2021: £5.0m) available for offset against future profits.
A deferred tax asset has been recognised in respect of £7.3m (2021: £5.0m) of such losses and recognition is based on management’s
projections of future profits in the Company. Tax losses may be carried forward indefinitely.
11. CASH AND CASH EQUIVALENTS
The carrying amount of cash and cash equivalents of £8.3m (2021: £8.8m) was denominated in the following currencies:
Sterling
Euro
Canadian Dollar
12. BORROWINGS
Non-current borrowings
Retail bonds
Current borrowings
Retail bonds
2022
£m
8.3
–
–
8.3
2021
£m
8.4
0.2
0.2
8.8
2022
£m
2021
£m
168.3
148.6
84.5
–
At 31 March 2022 the Group had three issues of green retail bonds. The bonds of £84.5m (€100m) (2021: £85.0m (€100m)) maturing in
June 2022 have an annual gross coupon of 3.65%, the bonds of £63.1m (€75m) (2021: £63.6m (€75m)) maturing in July 2024 have an
annual gross coupon of 3.00% and the bonds of £105.2m (€125m) issued on 23 July 2021 maturing in July 2027 have an annual gross
coupon of 3.00%.
Of the non-current borrowings of £168.3m (2021: £148.6m), £nil (2021: £85.0m) is due to be repaid between one and two years, £63.1m
(2021: £63.6m) is due to be repaid between two and five years and £105.2m (2021: £nil) is due to be repaid after five years.
The carrying amounts of borrowings are denominated in Euros.
Trade payables
Other tax and social security payable
Accruals and other payables
Amounts owed to Group undertakings
The carrying amounts of trade and other payables are denominated in the following currencies:
Sterling
Euro
Amounts owed to Group undertakings are interest free, unsecured and repayable upon demand.
14. PROVISIONS
At 1 April 2021
Additions
Released in the year
Utilised in the year
At 31 March 2022
2022
£m
0.2
0.4
9.5
0.1
10.2
2022
£m
3.7
6.5
10.2
2021
£m
0.2
0.3
7.1
0.2
7.8
2021
£m
3.6
4.2
7.8
£m
3.5
0.2
(0.4)
(1.4)
1.9
Provisions principally include warranties, whereby under the terms of the agreements for the disposal of certain businesses, the
Company has given warranties to the purchasers which may give rise to payments. The Company has the liability until the end of the
contractual terms in the agreements.
15. RETIREMENT BENEFIT SCHEME
The Company’s defined benefit pension scheme (called the Shanks Group Pension Scheme) covers eligible UK employees and is closed
to new entrants and closed for future benefit accrual. The plan provides benefits to members in the form of a guaranteed level of
pension payable for life and the level of benefits provided depends on the members’ length of service and salary. The total estimated
contributions expected to be paid to the scheme in the year ending 31 March 2023 are £3.0m. Further details are provided in note 7.2 of
the Group financial statements.
254
255
Notes to the parent company financial statements continued
16. SHARE CAPITAL AND SHARE PREMIUM
17. FINANCIAL INSTRUMENTS CONTINUED
At the Annual General Meeting of Renewi plc held on 15 July 2021, shareholders approved the consolidation of the Company’s share
capital on the basis of one new ordinary share with a nominal value of £1.00 each for every ten existing ordinary shares of 10 pence each
held. This was subsequently completed on 19 July 2021 when the issued share capital of 800,236,740 10 pence shares were replaced
with 80,023,674 £1 shares.
The following table analyses the Company’s financial liabilities including derivative financial instruments into relevant maturity
groupings. The mpaturities of the undiscounted cash flows, including interest and principal, at the balance sheet date are based
on the earliest date on which the Company is obliged to pay.
At 31 March 2022
Retail bonds
Trade and other payables
At 31 March 2021
Retail bonds
Trade and other payables
Within
one year
£m
Between one
and five years
£m
Over five
years
£m
92.7
3.8
96.5
5.0
7.8
12.8
79.8
–
79.8
157.9
–
157.9
108.7
–
108.7
–
–
–
Total
£m
281.2
3.8
285.0
162.9
7.8
170.7
18. CONTINGENT LIABILITIES
In addition to the contingent liabilities as referred to in note 8.4 of the Group financial statements, the Company has given guarantees in
respect of the Group’s subsidiary undertakings’ borrowing facilities totalling £74.8m (2021: £220.0m). The Company also has contingent
liabilities in respect of both VAT and HM Revenue & Customs group payment arrangements of £1.6m (2021: £1.1m).
19. RELATED PARTY TRANSACTIONS
A list of the Company’s subsidiaries is set out in note 8.1 of the Group financial statements. Transactions with subsidiaries relate to
interest on intercompany loans, management charges and dividends. Net interest income was £18.6m (2021: £17.5m), management
charges were £5.4m (2021: £3.8m) and dividends received were £3.5m (2021: £28.0m). Total outstanding balances are listed in notes
9 and 13.
Share capital allotted, called up and fully paid
At 1 April 2020 and 31 March 2021 (ordinary shares of 10p each)
Issued under share option schemes – prior to share consolidation (ordinary shares of 10p each)
Ordinary shares of 10p each held on 19 July prior to the consolidation
Adjustment to number of shares following the share consolidation
Issued under share option schemes (ordinary shares of £1 each)
At 31 March 2022 (ordinary shares of £1 each)
Share capital –
Ordinary shares
Share
premium
Number
£m
£m
800,141,536
95,204
800,236,740
(720,213,066)
36,263
80,059,937
80.0
–
80.0
–
–
80.0
401.4
–
401.4
–
0.2
401.6
During the year 95,204 (2021: nil) ordinary shares of 10p each were allotted prior to the share consolidation and 36,263 ordinary shares
of £1 each were issued after the consolidation being the exercise of share options under the Savings Related Share Option Schemes for
an aggregated consideration of £0.2m (2021: £nil). Further disclosure relating to share-based options are set out in note. 7.3 of the
Group financial statements.
Renewi plc Employee Share Trust
The Renewi plc Employee Share Trust owns 552,851 £1 shares (0.7%) (2021: 4,302,746 10 pence shares (0.6%)) of the issued share capital
of the Company in trust for the benefit of employees of the Group. The Trust waives its dividend entitlement. Retained earnings include
ordinary shares held by the Trust to satisfy future share awards which are recorded at cost. During the year 798,433 10 pence shares
(2021: 4,419,977 10 pence shares) were transferred to individuals under the LTIP and DAB schemes prior to the share consolidation and
34,580 £1 shares were issued under the DAB scheme after the consolidation. During the year 237,000 £1 shares (2021: 3,888,031 10 pence
shares) were purchased by the Trust at a cost of £1.5m (2021: £1.1m).
17. FINANCIAL INSTRUMENTS
The carrying value of the Company’s financial assets and financial liabilities is shown below:
Financial assets
Trade and other receivables excluding prepayments
Cash and cash equivalents
Financial liabilities
Retail bonds
Trade and other payables excluding non-financial liabilities
Note
9
11
12
13
2022
£m
367.9
8.3
376.2
252.8
9.8
262.6
2021
£m
260.8
8.8
269.6
148.6
7.5
156.1
The fair value of financial assets and financial liabilities is not materially different to their carrying value except for the retail bonds which
have a fair value of £253.6m (2021: £152.5m).
256
257
i
m
u
g
l
e
B
e
t
s
a
W
l
a
i
c
r
e
m
m
o
C
,
i
g
n
a
r
e
S
OTHER INFORMATION
Renewi plc
Annual Report and Accounts 2022
259
Shareholder
information
Private shareholders
Corporate shareholders
Holders
1,518
549
%
73.4
26.6
Shares held
791,180
%
1.0
79,268,757
99.0
Total
2,067
100.0
80,059,937
100.0
Size of shareholding
Holders
%
Shares held
1 - 5,000
5,001 - 25,000
25,001 - 50,000
50,001 - 100,000
100,001 - 250,000
250,001 - 500,000
over 500,000
1,771
111
40
46
35
26
38
85.7
951,529
5.4
1.9
2.2
1.7
1.3
1.8
1,345,242
1,378,069
3,216,680
5,967,652
9,534,565
57,666,200
%
1.2
1.7
1.7
4.0
7.5
11.9
72.0
Total
2,067
100.0
80,059,937
100.0
Registrar services
Administrative enquiries concerning shareholdings in the
Company made via the London Stock Exchange should be
directed to the Registrar, Computershare Investor Services plc,
The Pavilions, Bridgwater Road, Bristol BS99 6ZZ.
Computershare can also be contacted by telephone on
+44 (0)370 707 1290. Shareholders can manage their holding
online by registering at investorcentre.co.uk.
Queries in relation to shareholdings through Euronext should be
directed to Renewi’s Euronext Listing and Paying Agent, ABN
AMRO Bank N.V. who can be contacted at as.exchange.agency@
nl.abnamro.com.
Website
Shareholders are encouraged to visit our website, which has a
wealth of information about Renewi.
There is a section designed specifically for investors. It includes
detailed coverage of the Renewi share price, annual results,
performance charts, financial news and investor relations’
videos. This Annual Report can also be viewed on our website,
together with many other reports, at renewi.com.
Dividends
Shareholders are strongly encouraged to receive their cash
dividends by direct transfer as this ensures dividends are
credited promptly and efficiently. Shareholders who do not
currently have their dividends paid directly to a bank or building
society account, and who wish to do so, should complete a
mandate form obtainable from Computershare. Overseas
shareholders wishing to receive their dividend payment in local
currency can now do so using Computershare’s Global Payments
Service.
Financial calendar
14 July 2022
Annual General Meeting
November 2022
Announcement of interim results
31 March 2023
May/June 2023
2023 financial year end
Announcement of 2023 results
For updates to the calendar during the year, please visit the
Company website: renewi.com.
ShareGift
If shareholders have only a small number of shares, the value of
which makes it uneconomical to sell, they may wish to consider
donating them to the charity ShareGift (UK registered charity no.
1052686).
Further information may be obtained from its website at
sharegift.org or by calling +44 (0)20 7930 3737.
Electronic shareholder communication
Shareholders may elect to receive future shareholder documents
and information by email or via the Company’s website. This is
intended to help the environment by reducing paper and
transport as well as reducing administrative costs including
printing and postage. Please contact the Company Registrar for
details.
Share fraud warning
Fraudsters use persuasive and high-pressure tactics to lure
investors into scams. They may offer to sell shares that turn out
to be worthless or non-existent, or to buy shares at an inflated
price in return for an upfront payment. While high profits are
promised, if you buy or sell shares in this way you will probably
lose your money.
How to avoid fraud
Firms authorised by the Financial Conduct Authority (FCA) in the
UK will rarely contact you out of the blue with an offer to buy or
sell your shares. If you feel that the person contacting you is not
legitimate, note their name and the firm they work for. You can
check the Financial Services Register at fca.org.uk to see if the
person and firm is authorised by the FCA. If the firm does not
have contact details on the register or they are out of date, call
the FCA on 0800 111 6768 (from the UK) or +44 20 7066 1000
(from abroad). You can search the list of unauthorised firms to
avoid at fca.org.uk/scams. If you buy or sell shares from an
unauthorised firm, you will not have access to the Financial
Ombudsman or Financial Services Compensation Scheme. You
should always consider getting independent financial advice
before any transaction.
Report a scam
If you are approached by a fraudster, please tell the FCA
using the share fraud reporting form at fca.org.uk/scams,
where you can find out more about investment scams, or
call the FCA Consumer Helpline. If you have already paid
money to share fraudsters, you should contact Action Fraud
on +44 (0)300 123 2040.
Company
information
Principal offices
Renewi Commercial Waste Netherlands
Flight Forum 240
5657 DH Eindhoven
The Netherlands
Renewi Commercial Waste Belgium
Gerard Mercatorstraat 8
B-3920
Lommel
Belgium
Corporate Head Office
Renewi plc
Dunedin House
Auckland Park, Mount Farm
Milton Keynes
Buckinghamshire
MK1 1BU
UK
Tel: +44 (0)1908 650580
Company Secretary
Philip Griffin-Smith, FCG
email: company.secretary@renewi.com
Website
renewi.com
Renewi Mineralz & Water
Vlasweg 12
4782 PW
Moerdijk
The Netherlands
Renewi Specialities
Dunedin House
Auckland Park, Mount Farm
Milton Keynes
Buckinghamshire
MK1 1BU
UK
Registered Office
Renewi plc
16 Charlotte Square
Edinburgh
EH2 4DF
Registered in Scotland
No. SC077438
Corporate advisers
Independent Auditors
BDO LLP
Principal Bankers
ING Bank N.V.
Coöperatieve Rabobank U.A.
ABN AMRO Bank N.V.
KBC Bank N.V.
BNP Paribas Fortis S.A./N.V.
HSBC Bank plc
Landesbank Baden-Wurttemberg
Financial Advisers
Greenhill & Co International LLP
Corporate Brokers
Investec
Peel Hunt
Euronext Listing and Paying Agent
ABN AMRO Bank N.V.
Solicitors
Ashurst LLP
Dickson Minto W.S.
Remuneration Committee Advisers
FIT Remuneration Consultants LLP
260
261
Renewi plcAnnual Report and Accounts 2022Renewi plcAnnual Report and Accounts 2022Governance reportFinancial statementsOther informationStrategic report
Glossary
LLP – Limited liability partnerships
LTI – Lost time injuries
LTIP – Long-Term Incentive Plan
M&A – Mergers and acquisitions
MBT – Mechanical biological treatment
NOx – Gases (nitric oxide and nitrogen
dioxide) produced when fuel is burned
PFAS – Per- and polyfluoroalkyl
substances
PFI – Private finance initiative
PPP – Public private partnership*
PS – Polystyrene
RDF – Refuse-derived fuel
ROA – Return on operating assets
ROCE – Return on capital employed
SDGs – UN Sustainable
Development Goals
SHEQ – Safety, health, environment
and quality
SPV – Special purpose vehicle
TCFD – Task Force on Climate-Related
Financial Disclosures
TGG – Thermally treated soil
TSR – Total shareholder return
VGG – Van Gansewinkel Groep B.V.
WEEE – Waste from electrical and
electronic equipment
ZEV – Zero-emission vehicle
ABS – Acrylonitrile butadiene styrene
AD – Anaerobic digestion
ATM – Afvalstoffen Terminal Moerdijk, a
brand in our Mineralz & Water Division
BDR – Barnsley, Doncaster and
Rotherham
Benelux – The economic union of
Belgium, the Netherlands and
Luxembourg
Bio-LNG – Bio-liquefied natural gas
C&D – Construction and Demolition
CER – Constant exchange rate
CFS – A brand in our Mineralz & Water
Division
CI – Continuous improvement
CLA – Collective labour agreement
Core net debt – Borrowings less cash
from core facilities excluding PPP
non-recourse net debt and lease liabilities
as a result of IFRS 16
DAB – Deferred annual bonus
EBIT – Earnings before interest and tax
EBITDA – Earnings before interest, tax,
depreciation and amortisation
ELWA – East London Waste Authority
EPS – Earnings per share
ESG – Environmental, social and
governance
FCA – Financial Conduct Authority
FTE – Full-time equivalent
HIPS – High Impact Polystyrene
HIT – Hazards, incidents or threats
HWRCs – Household waste recycling
centres
I&C – Industrial and commercial
ICT – Information and communications
technology
IFRS – International Financial Reporting
Standards
IL&T – Human Environment and
Transport Inspectorate
KPI – Key performance indicator
*PPP refers to a public private partnership project in the UK between (1) one or more local
authorities and (2) a special purpose vehicle owned either solely by Renewi or together
with joint venture partners and financed with project finance debt, under which Renewi, as
operator, performs some of the waste management functions of the relevant local authorities.
These include, where appropriate, those projects that also benefit from central government
private finance initiative (PFI) credits.
262
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Please see details on page 260 on how to receive electronic copies of future documentation from Renewi plc.
Cover image: Greg Meeson hitandrun creative studio. Photography: Epsilon Studios
Renewi plcAnnual Report and Accounts 2022 Renewing Earth
Renewi plc Annual Report and Accounts 2022
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Renewi plc Dunedin House, Auckland Park, Mount Farm, Milton Keynes, Buckinghamshire MK1 1BU