Investor Presentation • Feb 8, 2024
Investor Presentation
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About Bergen Carbon Solutions
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Headquartered in Bergen, Norway, Bergen Carbon Solutions (BCS) is a leading player in the field of carbon utilisation. Since our establishment in 2016 and subsequent IPO in 2021, we have been dedicated to pioneering sustainable solutions that make a real-world impact.
Our core technology leverages the power of electrolysis to transform CO2 into valuable carbon products, including graphite and carbon nanotubes (CNTs) for the battery industry. By harnessing the potential of this process, we contribute to addressing environmental challenges while creating useful materials.
At BCS, we prioritise innovation that's rooted in practicality. Our team of experts collaborates to drive advancements in carbon utilisation. Our approach focuses on turning innovative ideas into tangible solutions.
While our operations are based in Bergen, our vision extends globally. Through partnerships and collaborations, we aim to amplify the impact of our solutions on a larger scale. We're not just making products; we're contributing to a more sustainable future.
Sustainability isn't just a tagline for us; it's the essence of our work. Our processes are producing products with a significantly reduced CO₂ footprint. By utilising advanced technology, we're making steps toward a greener tomorrow. Through practical innovation and a commitment to sustainability, we're actively shaping industries and pioneering change.
For more information and updates, visit our website: bergencarbonsolutions.com
Letter from the CEO
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I am pleased to present our report for the fourth quarter 2023. This year has been marked by a sole focus of our core electrolysis competence with significant efforts towards strategic advancements that position us for the expected growth. In addition to a significant strengthening of our organisation, our focus in 2023 has been on process optimisation, cost reductions and product quality in order to meet our client requirements. This work continued also into the fourth quarter with increasing interest also from new potential clients both in Asia as well as in Europe.
The process of validating and verifying our Multi-Walled Carbon Nano Tubes (MWCNT) for different battery applications and chemistries, with different partners, is technically complex and time consuming. The BCS technology, and our CCU equity story, attracts a lot of interest also among large, global industrial players. Several of these players wants to test our carbon product into their different battery applications. Following partner selection and negotiations, BCS produce and deliver test samples of its products for integration into the partner's battery design testing process. Subsequently, BCS receives feedback, implement changes, and deliver revised material samples. This iterative process may involve multiple rounds and, at times, prove time-consuming.
In order to gain competence internally of the impacts of our carbon product to different battery chemistries we are now in the process of implementing a new Battery Lab at our HQ in Bergen. The Battery Lab will have equipment for testing our product in different battery chemistries and will significantly increase the speed of product development towards the battery industry. This will build confidence and give us more control of the test results as well as give us valuable insights for further material development.
During the year we have implemented new process steps and installed new prosess- and testing equipment in our testing facility in Bergen. The result is significant progress in our cost reduction program as well as giving us a quicker feedback loop during our product qualification process. Our strategic partnership with TKG Huchems was extended during the year and the qualification process continues with positive developments.
Our sales and Business Development efforts have been strengthened during Q4 in order to further broadcast our attractive CCU equity story. Our proactiveness and announcements of product quality improvements have resulted in a steep raise of one-to-one client meetings. The sanctioning of new EU regulations applicable for certain strategic raw-materials, among them syntetic graphite, is also placing BCS within an improved geopolitical context. The importance of making our green carbon locally is essentially attracting more interest.
Our financial outlook remains robust. With an adjusted net loss in line with guidance at NOK 5.6 million for the quarter, we are maintaining a disciplined approach to our cost base. Importantly, our commitment to key priorities is backed by our solid financial footing, evident through our cash balance of NOK 233 million.
Our key priorities remain clear. Our focus is on delivering on MWCNT specification and progressing commercial discussions with potential partners. With the new Battery Lab in construction, we will increase the speed of this process and open the door for similar discussions with more potential partners.
In closing, I extend my gratitude to our dedicated team, supportive stakeholders, and partners who continue to share our vision of leading the shift from fossil to green carbon production, reducing emissions and contributing to a cleaner, greener industry landscape.
Odd Strømsnes, CEO of Bergen Carbon Solutions
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Adjusted net loss for the fourth quarter: NOK 5.6 million
Processes for verifying our technology and products towards customers is progressing according to plan
Continued improvements in reducing unit cost of our products
Investing in a Battey Lab at our HQ in Bergen to speed up the battery material verification process
Fully funded to deliver on key priorities, cash balance of NOK 233 million
In an extraordinary general meeting at 25 January, Rita Glenne was elected as a new board member of the board of directors
| Amounts in NOK thousand | Q4 2023 | Q4 2022 | FY 2023 | FY 2022 |
|---|---|---|---|---|
| Total revenue and other income | - | 1 144 | 296 | 1 486 |
| Total operating expenses | 18 034 | 18 783 | 75 104 | 57 441 |
| Operating profit (loss) | (18 034) | (17 639) | (74 808) | (55 955) |
| Net profit (loss) for the period | (8 557) | (14 984) | (66 049) | (54 001) |
| Net change in cash and cash equivalents | (6 016) | (10 733) | (59 945) | 185 694 |
| Cash and cash equivalents, end of period | 233 044 | 292 989 | 233 044 | 292 989 |
| Outstanding shares, end of period | 41 970 140 | 41 970 140 | 41 970 140 | 41 970 140 |
| Cash and cash equivalents/total asset | 85% | 87% | 85% | 87% |
| Equity ratio | 90% | 92% | 90% | 92% |
| Equity | 246 265 | 308 730 | 246 265 | 308 730 |
| Total assets | 273 118 | 336 670 | 273 118 | 336 670 |
* Unaudited consolidated group figures, simplified IFRS
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Through 2023, Bergen Carbon Solutions remained steadfast in its commitment to key strategic initiatives. These include enhancing the quality of the carbon product, cost reduction initiatives and technology qualification. Moreover, gaining deeper market insight has been prioritised in order to secure additional industrial business partners, where use of CNT (Carbon Nano Tubes) as an additive in the different battery designs has been, -and will continue, to be our key priority.
As a consequence, the company has throughout 2023 strengthened its organisation within battery design and electrolysis know-how. The organisation will be continually strengthened in 2024.
An extension of the MOU with TKG Hucems was announced in the third quarter. During fourth quarter there has been an increased CNT product testing activity to further progress and meet Huchems and market demands. The CNT is currently being tested in different battery applications in South Korea, and feedback is expected during the first quarter 2024.
BCS is currently in dialogue with several major global industrial players, both in Asia as well as Europe, with regard to CNT qualifications.
BCS' CCU value proposition in terms of contribution to a circular carbon value chain continues to attract attention in a market
dominated by CCS players. Consumption, - and transformation, of CO2 from flue gas into valuable carbon products for the battery industry is a second to none equity story.
In November 2023, synthetic graphite was recognised as a strategic raw material in the EU, in line with the Critical Raw Materials Act (CRMA). This reflects the EU's commitment to diversify its raw material supply. Today, the EU imports 99 per cent of its annual demand of natural graphite, primarily from China. With graphite representing one third of a battery's carbon footprint, BCSs technology can play a significant role helping to achieve the ambitions of the CRMA as an European supplier of synthetic graphite as well as contribute to the overall decarbonisation targets of Europe.
The battery certification passport announced by EU in July 2023, intended to prevent and reduce the adverse impact of batteries on the environment and ensure a safe and sustainable value chain for all batteries, has increased the European interest for BCS. The 'passport' will be implemented in 2027.
To ensure simplified corporate structure with more focus, the three daughter companies, BCS Productions, BCS Properties and BCS Opportunities were closed in 2023, no activities were recorded in these entities. BCS is also in the process of winding down activities in Carbon Development Solutions, will be completed in 2024.
Fourth quarter 2023 shows a net loss of NOK 8.6 million compared to loss of NOK 14.9 million in the fourth quarter of 2022.
Adjusted net loss for the quarter was NOK 5.6 million due to NOK 2.1 million in non-cash cost and NOK 0.9 million in non-recurring cost. The financial result is according to planned growth and continued technology development.
Cash and cash equivalents at the end of the period was NOK 233 million, compared to NOK 292.9 million in the fourth quarter of 2022.
For the year 2023, the company has interest income of NOK 10.5 million, these are accounted for in the fourth quarter. The company has had a conscious focus on risk-free placement of bank holdings.
In Q4, BCS received NOK 1.8 million as first part of funding from Innovation Norway on the joint research project with a Chinese partner on Sodium Ion Batteries. Funding received is partly booked against assets in the balance sheet and partly as a cost reduction.
BCS has a steady cash-burn according to planned growth, amounting to NOK 6 million in fourth quarter, benefitting from an interest income of NOK 10 million.
Total investments in fourth quarter 2023 were NOK 3.0 million, mainly technology equipment. Per year end 2023, total assets amounted to NOK 273 million, compared to NOK 336 million at the same time last year.
As part of the close down of daughter companies there has been a write down of receivables due to debt cancellation, amounting to NOK 0.95 million.
Total equity was NOK 246 million at end of fourth quarter 2023 compared to NOK 308 million in same period 2022.
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During 2023, the focus for BCS has been technology development and process optimisation as well as market insights. This will continue throughout 2024, with continued focus on product quality improvement.
There will be further investments in equipment to increase the acceleration of product qualification and process optimalisation.
Implementation of post electrolyses characterisation equipment has been approved by the Board of Directors, and will be fully operational before the summer 2024.
The new filtration and separation pilot line announced in July 2023, will continue to be an important project going forward in significantly reducing production cost. This separation pilot line purifies the produced material, and at the same time increases the recycling of the electrolyte with more than 90 per cent, as well as reducing BCS' CO2 footprint further.
The company will continue to recruit and develop strong technical competence in order to support our ongoing core technology activities.
The company has experienced an increased attention and interest during the year to BCS's carbon products, and the company's CCU capability, from large global industrial players. With several of these companies, BCS is now in a product qualification process. BCS will continue and strengthen the corresponding business development work going forward in 2024.
Asia is the largest market within CNT and graphite, and our market activity will still have a strong focus towards the Asian market during 2024. However, the recognition of synthetic graphite as a strategic raw material in EU together with the battery passport EU announced in July 2023, strategically places the BCS value proposition as a provider of green graphite to the European market. Hence, BCS will increase the market activities in Europe.
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| Amounts in NOK thousand | Q4 2023 | Q4 2022 | 2023 | 2022 |
|---|---|---|---|---|
| Revenue | - | 469 | - | 811 |
| Other operating income | - | 675 | 296 | 675 |
| Total operating income | - | 1 144 | 296 | 1 486 |
| Raw materials and consumables used Own work capitilised Personnel expenses Depreciation tangible and intangible assets Impairment loss Other operating expenses Operating profit/(loss) |
1 523 - 10 681 1 508 (101) 4 423 (18 034) |
(110) (281) 11 661 937 627 5 949 (17 639) |
3 687 - 36 133 6 399 526 28 359 (74 808) |
3 938 (1 291) 32 887 3 734 627 17 546 (55 955) |
| Other financial income Other financial expenses Profit/(loss) before tax |
10 619 1 142 (8 557) |
2 941 263 (14 961) |
10 689 1 930 (66 049) |
3 009 1 032 (53 978) |
| Income tax expense | - | (23) | - | (23) |
| Net Profit/(loss) for the period | (8 557) | (14 984) | (66 049) | (54 001) |
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| Amounts in NOK thousand | 2023 | 2022 |
|---|---|---|
| ASSETS | ||
| Development | - | - |
| Licenses and patents | 1 412 | 75 |
| Total intangible assets | 1 412 | 75 |
| Right of use asset | 15 509 | 18 486 |
| Plant and machinery | 17 630 | 20 972 |
| Equipment and other movables | 613 | 651 |
| Total tangible assets | 33 752 | 40 109 |
| Inventory | 2 285 | 973 |
| Trade receivables | - | 511 |
| Other current receivables | 2 624 | 2 013 |
| Cash and cash equivalents | 233 045 | 292 989 |
| Total current assets | 237 954 | 296 486 |
| Total assets | 273 118 | 336 670 |
| EQUITY AND LIABILITIES | ||
| Share capital | 126 | 126 |
| Share premium | 246 139 | 308 604 |
| Total equity | 246 265 | 308 730 |
| Lease liability | 13 694 | 16 633 |
| Total non-current liabilities | 13 694 | 16 633 |
| Accounts payable | 3 139 | 2 933 |
| Tax payables | - | 23 |
| Public duties payable | 2 512 | 1 952 |
| Other current liabilities | 4 629 | 3 735 |
| Lease liability short term | 2 879 | 2 664 |
| Total current liabilities | 13 159 | 11 307 |
| Total liabilities | 26 853 | 27 940 |
| Total equity and liabilities | 273 118 | 336 670 |
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| Amounts in NOK thousand | Q4 2023 | Q4 2022 | 2023 | 2022 |
|---|---|---|---|---|
| Cash flow from operating activities | ||||
| Profit (loss) for the period | (8 557) | (14 961) | (66 049) | (53 978) |
| Adjustments for: | ||||
| Depreciation, amortisation and impairment | 865 | 1 963 | 3 399 | 4 361 |
| Loss/gain on the sale of fixed asets | (101) | - | 526 | - |
| Changes in working capital; | ||||
| Change in inventory | (996) | 536 | (1 312) | (601) |
| Change in trade receivables | - | (505) | 511 | (459) |
| Change in trade payables | 995 | 1 741 | 206 | 511 |
| Change in other accrual items | (6 123) | 1 104 | (6 047) | 4 394 |
| Change in IFRS 16 | (69) | (298) | 38 | (4 736) |
| Cash generated from operating activities | (13 986) | (10 420) | (68 728) | (50 509) |
| Interest recieved | 10 689 | 2 941 | 10 689 | 3 009 |
| Income taxes paid | - | (23) | - | |
| Net cash flow from operating activities | (3 297) | (7 480) | (58 062) | (47 500) |
| Cash flow from investing activities | ||||
| Sale of fixed assets | - | - | 26 | - |
| Capital expenditures tangible assets | (2 718) | (3 253) | (1 908) | (8 965) |
| Capital expenditures manufactured intangible assets | - | - | - | - |
| Proceeds from investment grants Capital contribution and/or incorporation of subsidiaries |
- - |
- - |
- - |
- - |
| Net cash used in investing activities | (2 718) | (3 253) | (1 882) | (8 965) |
| Cash flow from financing activities | ||||
| Repayment of non-current liabilities Capital increase |
- - |
- - |
- - |
- 242 159 |
| Repayment of lease liabillities | - | - | - | - |
| Interest paid | - | - | - | - |
| Net cash flow from financing activitites | - | - | - | 242 159 |
| Net change in cash and cash equivalents | (6 015) | (10 733) | (59 944) | 185 694 |
| Cash and cash equivalents at the beginning of the period | 239 060 | 303 722 | 292 989 | 107 295 |
| Cash and cash equivalents at the end of the period | 233 045 | 292 989 | 233 045 | 292 989 |
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Fleslandvegen 70E NO-5258 Blomsterdalen Norway
bergencarbonsolutions.com
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