Osmosun S.A.

Earnings Release • Oct 29, 2024

H1 2024 results

• Results heavily influenced by the market's wait-and-see attitude and the Group's investment phase focused on larger projects
• Gross cash position of €4.2 million at 30 June 2024 (net position €2.1 million)
• Group reorganisation and changes in governance to adapt to the current environment and accelerate the transformation of projects

Chartres, 29 October 2024 – OSMOSUN® , a leading provider of solar-powered seawater and brackish water desalination solutions, today announces its results for the six months ended 30 June 2024.¹ (ISIN: FR001400IUV6 – Symbol: ALWTR)

€000	H1 2023	H1 2024
Revenues	1,288	1,505
period2 Production for the	1,370	1,598
Gross margin2	524	(563)
EBITDA2	(791)	(2,495)
Adjusted EBITDA2	(791)	(2,495)
Operating income/(loss)	(1,173)	(2,728)
Adjusted operating income/(loss)2	(1,173)	(2,728)
Net financial items	(41)	24
Net non-recurring items	82	71
Net income/(loss)	(1,132)	(2,633)

H1 2024 results

Revenues, which are recognised on a percentage-of-completion basis in accordance with costs incurred up to the balance sheet date, amounted to €1.5 million for the period, up 15% versus first

² See glossary

¹ The consolidated interim financial statements were approved by the Board of Directors on 28 October 2024. The financial report will be published on the Company's website osmosun.com as of 29 th of October 2024.

half 2023. Revenues were boosted by a number of major large-capacity contracts signed in 2022 and 2023 in regions including the Caribbean (Saint Kitts and Nevis) and Africa (Cape Verde, Morocco). The small-capacity contracts signed in 2023 and 2024 (mainly in Morocco, Tunisia, Polynesia and France) also made a contribution to revenues, further strengthening the Group's first half performance.

Gross margin amounted to negative €0.6 million, compared to positive €0.5 million in the first half of 2023, mainly due to the ongoing contract in Mauritania, as a result of the greater-than-expected use of direct sub-contracting during the installation phase of the two desalination units.

Adjusted EBITDA was a €2.5 million loss, compared with a €0.8 million loss in the first half of 2023, due to the impact of the lower gross margin and higher operating expenses related to the Group's structuring phase.

Having raised funds through its IPO in July 2023, Osmosun has embarked on an investment programme, particularly in human resources, to meet growing market demand and prepare for accelerated future growth. However, the economic climate has curtailed the implementation of the large projects currently under advanced negotiations, while the small-capacity projects signed are not sufficient to cover the new cost structure.

Personnel costs increased by 46% to €1.1 million in the first half. The average headcount increased by 32% to 32.3 FTE3 in H1 2024, compared to 24.5 FTE in H1 2023.

In particular, the sales and projects team was strengthened to develop the Group's local presence in priority regions (notably Africa and Asia-Pacific) and expand its capacity for preparing bids in order to multiply its growth opportunities for projects of all sizes. Meanwhile, the Group also bolstered its technical and operational teams in order to support the expected ramp-up in business and ensure the industrialisation of small-capacity projects.

Adjusted operating income was a €2.7 million loss (compared to a €1.2 million loss in H1 2023) after impairment, depreciation and provisions totalling €0.2 million.

The net loss for the period was €2.6 million, compared to a €1.1 million loss in H1 2023.

Operating free cash flow came to a €2.8 million outflow (compared to a €0.6 million outflow in H1 2023), including operating funding needs (€2.7 million outflow) and limited investments (€0.1 million outflow).

Shareholders' equity amounted to €5.2 million at 30 June 2024. The low level of revenues, combined with the cost of structuring the business, weighed on the Group's cash position, which

³ Full-time equivalent

stood at €4.2 million, compared to €7.2 million at 31 December 2023, with gross borrowings of €2.1 million, including €0.8 million maturing in less than one year. Net cash was €2.1 million.

At present, based solely on the development of contracts already signed and future inflows, the Company estimates that it has sufficient cash to cover the coming 12 months. Given the lack of visibility on when projects currently under advanced negotiations will materialise, cost and cash flow optimisation measures are being implemented to limit cash burn. The possibility of arranging additional funding may be reviewed over the coming months if necessary.

Changes in Group governance

At its meeting on 28 October 2024, the Board of Directors duly noted the departure by mutual agreement of Quentin Ragetly, Chairman, CEO and director of OSMOSUN. Maxime Haudebourg, founder and current Deputy Chief Executive Officer, has been appointed Chief Executive Officer.

Mr Haudebourg will manage current projects and will be responsible for reorganising the Company and strengthening its governance. He will carry out a strategic review to improve efficiency and accelerate project transformation. In particular, he will focus on restructuring the company's commercial approach, while ensuring that resources are adapted with a view to efficiency and cash preservation.

Ramp-up of the portfolio of contracts under advanced negotiation

At 30 June 2024, the order backlog (contracts signed to date), representing around ten projects, stood at €1.7 million, compared to €2.6 million at 31 December 2023 and €4.4 million at 30 June 2023. OSMOSUN signed no new major projects during the first half due to the retardative effect of current economic conditions on client decision-making lead times. However, a number of new small-capacity contracts were signed, notably in the port sector in France, Polynesia and Africa, as well as amendments to existing major contracts (primarily Saint Kitts and Nevis). Nearly 90% of the backlog is expected to be recognised in revenue by 31 December 2024.

Nearly 80 projects were under advanced negotiations,4 representing estimated potential revenues of €88 million at 30 June 2024, compared to €70 million at 31 December 2023 and €38 million at 30 June 2023. Around ten of these projects at an advanced stage of study involve projects worth over €2 million. It is important to stress that, despite the progress made in negotiations on these projects, the Group has very little visibility on the timing of their implementation, particularly in the case of major projects where decisions are regularly deferred.

⁴ See glossary

Other potential projects, referred to as "identified projects",5 on which the Group has not yet positioned itself, represent a total value of €115 million at 30 June 2024 (€131 million at 31 December 2023 and €124 million at 30 June 2023).

Outlook

Given the business levels recorded in the first half and the contracts already registered in the order book, FY 2024 revenues are expected to be stable compared with the previous year. Second half earnings are expected to show a slight improvement on the first half.

OSMOSUN® Chairman and CEO Maxime Haudebourg said:

"The various projects carried out over the last 24 months have enabled the Company to structure itself, develop its skills in major projects and grow its project portfolio. We are facing a more challenging economic environment that has slowed investment decisions, particularly on major projects, and the completion of commercial negotiations over the last 18 months. It is important to stress that we have not lost out, as none of the major projects in our pipeline of contracts under advanced negotiations was awarded during the period.

This climate of uncertainty and the lack of visibility on the transformation timeline, combined with the investments made to build up our teams and develop new partnerships, is inevitably weighing on our earnings and cash flow. We need to adapt quickly to the current climate and take the steps that will enable us to get through this difficult period while our investments pay off on new projects.

Our fundamentals remain strong and attractive. The solar-powered, battery-free seawater and brackish desalination technology developed by OSMOSUN is unique and meets real demand, and we are confident that we can become a major player in the water treatment sector in the coming years."

⁵ See glossary

Glossary

Projects in advanced negotiations: projects for which the Company has already made a firm offer and where the client is expected to sign within a few weeks (each qualified as PDD preliminary detailed design) or projects already qualified and undergoing negotiation with a maturity of several months (each qualified as PSD - preliminary summary design). As such, there is a risk that they may not be converted into a firm order.

Projects identified: projects for which not all the information is known or defined and qualification is still underway (maturity of over 12 months), as well as identified projects for which initial discussions have already been held with the client. As such, there is a risk that they may not be converted into a firm order.

Total production: sold production + inventoried production + capitalized production

Gross margin: Total production – purchase of raw materials and other supplies – change in inventory – direct sub-contracting

Adjusted EBITDA: Operating income restated for net depreciation and amortisation of intangible assets and property, plant and equipment and net provision charges/reversals + research tax credit

EBITDA: Operating income restated for net depreciation and amortisation of intangible assets and property, plant and equipment and net provision charges/reversals

Adjusted operating income: Operating income+ research tax credit

Operating free cash-flow: cash flow from operations – change in working capital – cash flow from investments

Next publication:

FY 2024 revenues, 19 March 2025 after market close

ABOUT OSMOSUN®

Founded in 2014, OSMOSUN® 's ambition is to become a leading player in the low-carbon water market in order to make drinking water accessible to all.

OSMOSUN® has developed a unique, patented, cost-effective, clean and sustainable solution for solar-powered battery-free seawater and brackish water desalination. This innovation makes OSMOSUN® units among the most energy-efficient and cost-effective solutions in the world. The water production capacities of its units range from 1 m3 to 50,000 m3 per day.

At 31 December 2023, 69 desalination units have been sold in 27 countries.

More information: OSMOSUN® | Create water where life is

CONTACTS
SPECIALIZED PRESS	FINANCIAL PRESS	INVESTOR RELATIONS
Nadège Chapelin	Deborah Schwartz	Hélène de Watteville
n.chapelin@nc-2.com	dschwartz@actus.fr	osmosun@actus.fr
+33 6 52 50 33 58	+33 1 53 67 36 35	+33 1 53 67 36 33

APPENDICES

BILAN		Au 30.06.2024		Au 31.12.2023
	État exprimé en €	Brut	Amortis. Provisions	Net	Net
	Immobilisations Incorporelles
	Frais d'établissement Frais de recherche et de développement Concessions brevets droits similaires	144 972 79 429 76 353	144 400 79 429 75 730	572 623	15 064 1 627
	Immobilisations Corporelles
ACTIF IMMOBILISE	Instal. techniques, mat et outillage indus. Autres immobilisations corporelles Immobilisations en cours	4 554 984 470 212	3 081 138 239 345	1 473 846 230 867	951 129 260 518 660 221
	Immobilisations Financieres
	Autres participations Autres titres immobilisés Autres immobilisations financières	180 515 200 000 98 540	149 245 70 317	31 270 129 683 98 540	31 270 170 699 98 540
	TOTAL	5 805 004	3 839 604	1 965 401	2 189 068
	Stocks et en-cours
	Matières premières, approvisionnements	548 867		548 867	511 568
	Avances et acomptes versés sur commandes	2 131		2 131	38 876
	Créances
ACTIF CIRCULANT	Créances clients et comptes rattachés Autres créances Valeurs mobilières de placement Disponibilités	1 143 500 206 277 3 104 653 1 090 102	14 373	1 129 127 206 277 3 104 653 1 090 102	1 465 938 582 320 6 066 380 1 133 835
comptes de régul.	Charges constatées d'avance	240 957		240 957	224 415
	TOTAL	6 336 488	14 373	6 322 115	10 023 333
	TOTAL ACTIF	12 141 493	3 853 977	8 287 516	12 212 401
	Capital social Primes d'émission, de fusion, d'apport			898 173 10 021 563	898 173 10 021 563
	RESERVES Réserve légale			4 750	4 750
Capitaux Propres	Report à nouveau			-3 724 114	-653 282
	Résultat de l'exercice			-2 633 446	-3 070 832
	Subventions d'investissement			599 946	571 546
			Total des capitaux propres	5 166 873	7 771 919
Autres Propres Fonds	Avances conditionnées			358 816	358 816
			Total des autres fonds propres	358 816	358 816
	DETTES FINANCIERES Emprunts dettes auprès des établissements de crédit Emprunts et dettes financières divers			2 098 358 4	2 431 520 4
Dettes	DETTES D'EXPLOITATION Dettes fournisseurs et comptes rattachés Dettes fiscales et sociales			313 562 328 023	816 353 371 317
	Produits constatés d'avance			21 881	462 472
			Total des dettes	2 761 828	4 081 667
	TOTAL PASSIF			8 287 516	12 212 401

	COMPTE DE RESULTATS État exprimé en €			Du 01.01.2024 au 30.06.2024	Du 01.01.2023 au 30.06.2023
		France	Exportation
	Ventes de marchandises
	Biens Production vendue Services	40 679 4 250	1 459 195 840	1 499 874 5 090	1 264 706 23 166
	Montant net du chiffre d'affaires	44 929	1 460 035	1 504 964	1 287 872
	Produits d'exploitation Production stockée Production immobilisée Subvention d'exploitation Reprises sur provisions et amortissements, transfert de charges Autres produits			35 402 45 416 12 000 6	-8 000 67 939 22 104 7
			Total des produits d'exploitation	1 597 788	1 369 922
Charges d'exploitation	Achats de matières et autres approvisionnements Variation de stock Autres achats et charges externes Impôts, taxes et versements assimilés Salaires et traitements Charges sociales du personnel Dotations aux amortissements Autres charges			846 696 -37 299 2 090 990 10 510 862 913 319 013 232 473 1	767 165 -163 901 735 643 14 341 598 753 209 222 381 989 2
			Total des charges d'exploitation	4 325 297	2 543 213
	RESULTAT D'EXPLOITATION			-2 727 509	-1 173 291
financiers Produits	Autres intérêts et produits assimilés Différences positives de change			71 162 22 409	1 364
			Total des produits financiers	93 571	1 364
financières Charges	Dotations aux amortissements et aux provisions Intérêts et charges assimilées Diffférences négatives de change			41 016 19 716 9 307	34 140 8 043
			Total des charges financières	70 039	42 182
	RESULTAT FINANCIER			23 531	-40 819
	RESULTAT COURANT AVANT IMPOTS			-2 703 978	-1 214 110
exceptionne Produits ls	Sur opérations en capital			70 532	81 950
			Total des produits exceptionnels	70 532	81 950
			Total des charges exceptionnelles	0	0
	RESULTAT EXCEPTIONNEL			70 532	81 950
	IMPOTS SUR LES BENEFICES			0	0
	TOTAL DES PRODUITS TOTAL DES CHARGES			1 761 890 4 395 336	1 453 235 2 585 396
		RESULTAT DE L'EXERCICE		-2 633 446	-1 132 160

CASH FLOW STATEMENT (IN EUROS)

FLUX DE TRÉSORERIE LIÉS À L'ACTIVITÉ	Du 01.01.2024 au 30.06.2024	Du 01.01.2023 au 30.06.2023
Résultat net	- 2 633 446	- 1 132 160
Amortissements et provisions +	273 489	381 989
Subvention d'investissement viré au résultat -	- 70 532	- 81 950
Plus-values de cession, nettes d'impôt -
+ Moins-values de cession, nettes d'impôt
= Marge brute d'autofinancement	- 2 430 489	- 832 121
Variation du besoin en fonds de roulement lié à l'activité -	290 919	- 660 517
Stocks et en-cours	37 299	155 901
Créances clients	- 336 810	- 735 956
Autres créances	- 412 788	315 710
Comptes de régularisation Actif	16 542	42 229
Fournisseurs et comptes rattachés	502 791	- 127 842
Autres dettes	43 294	- 74 139
Comptes de régularisation Passif	440 591	- 236 420
Flux net de trésorerie généré par l'activité (A)	- 2 721 408	-171 604
FLUX DE TRÉSORERIE LIÉS AUX OPÉRATIONS D'INVESTISSEMENT
Acquisitions d'immobilisations	49 821	116 744
Corporelles et incorporelles	49 821	112 982
Financières		3 762
Cessions d'immobilisations, nettes d'impôts	0	0
Corporelles et incorporelles
Financières
Flux net de trésorerie lié aux opérations d'investissement (B)	- 49 821	- 116 744
FLUX DE TRÉSORERIE LIÉS AUX OPÉRATIONS DE FINANCEMENT
Dividendes versés aux actionnaires
Subventions d'investissements et avances conditionnées	98 932	98 932
Augmentations de capital en numéraire		392 200
Émissions d'emprunts		2 150 000
Remboursements d'emprunts	333 162	400 504
Flux net de trésorerie lié aux opérations de financement (C)	- 234 230	2 240 628
Variation de trésorerie (A + B + C )	- 3 005 459	1 952 280
Trésorerie à l'ouverture (D)	7 200 215	386 172
Trésorerie à la clôture (A + B + C + D) (2)	4 194 755	2 338 452