Earnings Release • Sep 26, 2022
Earnings Release
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AMSTERDAM, 17 August 2022, 07:00 hrs CEST - Avantium N.V. (Euronext Amsterdam and Brussels: AVTX), a leading innovative chemical technology company dedicated to developing and commercialising proprietary technologies for the production of chemicals from renewable sources, today reports its 2022 half year results.
Tom van Aken, Chief Executive Officer of Avantium, comments: "We have made significant positive strides across our business over the last six months. We are very pleased that we have started constructing the world's first commercial facility for the production of FDCA, the key
building block of PEF. This will allow us to accelerate commercialisation of our technology and make PEF widely available. We have also expanded our commercial partnerships, reinforcing both the value and huge potential of PEF.
We remain committed to demonstrating the commercial potential of all of our technologies. The equity offering in April 2022 has allowed us to invest further in delivering rapid progress across our business."
______________________________________________________________________________
Avantium Renewable Polymers aims to commercialise its proprietary YXY® Technology, used to produce FDCA (furandicarboxylic acid), the main building block of the plant-based, high-quality, recyclable polymer PEF (polyethylene furanoate).
On 9 December 2021, Avantium announced that it had taken a positive Final Investment Decision (FID) to construct the FDCA Flagship Plant in Delfzijl, the Netherlands. This world's first commercial FDCA factory is set to produce 5 kilotonnes of FDCA per annum. At an Extraordinary General Meeting of Shareholders on 25 January 2022, Avantium received support from its shareholders for this positive FID. This support enabled Avantium to execute all the relevant investment and debt financing documentation necessary to complete the transaction. Financial Close for the investment project related to the FDCA Flagship Plant was on 31 March 2022. With Financial Close, engineering company Worley Nederland B.V. and Bio Plastics Investment Groningen B.V.1 have become minority shareholders in the Avantium subsidiary, Avantium Renewable Polymers, responsible for the FDCA Flagship Plant. Worley and Bio Plastics Investment Groningen together have acquired a 22.6% shareholding in Avantium Renewable Polymers, while Avantium holds 77.4% of the equity. Furthermore, a €90 million debt financing package has been signed with a consortium of Dutch banks, comprising ABN AMRO Bank, ASN Bank, ING Bank and Rabobank, as well as with the Dutch government-backed impact investment fund Invest-NL.
On 20 April 2022, Avantium celebrated the First Piling Ceremony for its FDCA Flagship Plant at the Chemie Park Delfzijl site in the Netherlands, representing the start of the construction of the FDCA Flagship Plant. Construction is planned to be completed by the end of 2023, enabling the commercial launch of PEF from 2024 onwards. For the construction phase, Avantium and Worley agreed on the terms of an EPC (Engineering, Procurement and Construction) contract for the FDCA Flagship Plant. The EPC contract includes a 50-50% risk-sharing agreement. The risk sharing agreement ensures that cost overruns incurred on the agreed EPC contract will be shared with Worley. This risk sharing mechanism excludes any scope changes made to the Flagship Plant design.
Over the past months, the construction of the FDCA Flagship Plant has progressed according to plan. By the end of June 2022, approximately 700 piles had been driven into the ground to prepare the foundation. In July 2022, subcontractors started laying the pipes and pouring the concrete for the ground floor.
In the first half of 2022, Avantium secured five additional offtake commitments for the Flagship Plant, bringing the total of such contracts to ten, across a variety of product applications and locations. Over the past months, contracts were signed with: Sukano AG, a company expert in additive and colour masterbatches and compounds for polyester and speciality resins (Switzerland); Carlsberg Group, one of the leading brewery companies in the world (Denmark); LVMH Group (Moët Hennessy Louis Vuitton), an international leader in luxury goods (France); AmBev, the Brazilian company, which is part of the AB InBev Group, the largest brewing company in the world (Brazil); and another undisclosed global brand owner. Those five offtake agreements were in addition to the already signed offtake commitment with specialty chemical company Toyobo (Japan), specialty polyester film producer Terphane (US), the beverage bottling company Refresco (Netherlands), international rigid packaging supplier Resilux (Belgium), and an
1 Bio Plastics Investment Groningen' (BPIG) was incorporated by Groningen Seaports and regional investment funds NOM (Investment and Development Agency for the Northern Netherlands), Investeringsfonds Groningen and Groeifonds.
undisclosed major global food & beverage brand owner. The partners will purchase Avantium's FDCA at agreed price levels for a period of at least five years.
Carlsberg Group, a member of the PEFerence consortium2 , announced in June 2022 that it has launched a trial of its latest Fibre Bottle, which contains an inner layer of PEF produced in Avantium's current Pilot Plant. Carlsberg is sampling the Fibre Bottle with 8,000 consumers and other selected stakeholders in eight pilot markets in Western Europe throughout the summer. This is the very first time that a PEF-lined beer bottle has been trialled with consumers and their reactions and comments will be closely monitored.
Another important commercial milestone in the first half of 2022 was the formation of the PEF Textile Community in June 2022 with five reputable global companies: Antex, BekaertDeslee, Chamatex, Kvadrat and Salomon. Antex has produced yarns made from PEF and a PEF-based TiO2 Masterbatch developed and produced by Sukano. From the initial developments, Antex has validated that PEF yarns can be produced by using existing PET spinning and texturing lines, which will facilitate market adoption. Antex intends to further validate PEF as a sustainable material for yarn production. The other PEF Textile Community members are now using the PEF yarn samples to explore the potential of PEF fabric for their particular applications.
With its proprietary sugars-to-glycols Ray Technology™, Avantium produces mono-ethylene glycol (MEG) and mono-propylene glycol (MPG) from plant-based feedstock. MEG is a vital ingredient in the production of polyesters widely used in textiles and packaging. MPG is a valuable intermediate used in a wide variety of applications, such as anti-freeze products. Avantium announced in 2021 that it plans to form a joint venture with the Cosun Beet Company for the construction and operation of a commercial production plant to convert sugar beet to glycols on the basis of Avantium's Ray Technology. The companies are in discussions with interested partners to prepare for commercial validation and to potentially establish offtake agreements, in parallel to conducting engineering studies and exploring financial support programmes.
In the first half of 2022, Avantium successfully restarted operations at the Ray Technology™ demonstration plant in Delfzijl, after activity at the demonstration plant had been halted due to an accident in 2021. Following the accident, Avantium conducted extensive safety assessments and implemented improved process safety measures, including adjustments to the design of the Ray Technology™ demonstration plant.
Avantium's Volta Technology, a carbon capture and utilisation technology, is a cutting-edge electrocatalytic platform which converts carbon dioxide (CO2) via electrochemistry into high-value ingredients including formic acid, oxalic acid and glycolic acid.
Two of our ongoing Volta projects took important steps forward in the first half of 2022. In January 2022, as part of the OCEAN programme3 , Avantium installed a mobile Volta Technology container unit at an RWE power plant in Germany. During a six-month period, the container operated for 1000 hours with the world's largest gas diffusion CO2 conversion cell and successfully converted CO2, coming directly from the power plant, into potassium formate. As part of the RECODE
2 The PEFerence consortium receives funding from the Circular Bio-based Europe Joint Undertaking (CBE JU) under the European Union's Horizon 2020 research and innovation programme under grant agreement No 744409.
3 The OCEAN project aims to use CO2 emitted by power plants to produce oxalic acid (which is the basis for various high-value chemicals. The project has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No 767798.
programme4 , Avantium also installed a second Volta unit at a Titan cement factory in Greece. During a three-month period, Avantium's will convert CO2, coming directly from a capture facility located at the cement factory, into formate.
In May 2022, Avantium announced that it has been awarded a €3 million grant by the EU Horizon Europe programme to fund its participation in the 4-year research and development programme WaterProof5 . The €3 million grant will be paid out in tranches to Avantium over a period of four years. Under the WaterProof programme, Avantium will convert CO2 from wastewater purification and waste incineration into formic acid, using its proprietary Volta catalytic electrochemistry platform, with demonstration campaigns at Waternet in Amsterdam and HVC in Alkmaar, the Netherlands.
Avantium Catalysis provides advanced catalysis R&D services, systems and testing to a broad range of global customers. The Services R&D business provides in-house customised contract research projects. The Systems business comprises Avantium's unique and advanced Flowrence® and Batchington high-throughput catalyst testing systems, which are tailored to accelerate catalyst screening and to study catalyst deactivation.
The Catalysis business unit recorded revenues of €4.5 million in the first half of 2022 (HY 2021: €4.3 million). Despite the challenges caused by the disruption of the supply chains of key (sub)components and microchips, and the continuing travel restrictions (particularly in China) as a result of the COVID-19 pandemic, Avantium Catalysis received several new orders for Flowrence® systems and contract R&D projects from companies and academic institutions around the world. Order intake for H1 2022 was higher than in the first half of 2021, at €5.1 million (HY 2021: €4.2 million), a clear signal that the Catalysis business is recovering after the COVID-19 lockdown.
On 14 April 2022, Avantium successfully raised €45 million through a public offering of new Avantium shares, with a priority allocation period for its existing shareholders, a retail offering and a private placement. The equity offering comprised 11,250,000 new ordinary shares, representing approximately 36% of the Company's issued share capital. The Offer Shares were placed at a price of €4.00 per new ordinary share. The proceeds will primarily be applied (i) to develop Ray Technology™ and to scale-up towards commercialisation via technology licensing, (ii) to further develop Dawn and Volta technologies, as well as to assess economic feasibility and scale-up towards commercialisation, and (iii) for general corporate purposes, working capital and overall funding.
At the Extraordinary General Meeting of Shareholders (EGM) held on 25 January 2022, the shareholders approved the appointment of Nils Björkman as a member of the Supervisory Board for a term of four years, ending at the close of the Annual General Meeting to be held in 2026. In March 2022, Cynthia Arnold stepped down as Supervisory Board member due to personal circumstances. Avantium continues to have access to her valuable expertise and advice through a consultancy arrangement. Trudy Schoolenberg has notified the company of her decision, for personal reasons, to resign as Supervisory Board member effective as of 31 August 2022. The Supervisory Board will consist of: Edwin Moses (chairman), Margret Kleinsman, Michelle Jou and Nils Björkman. The Supervisory Board has started the selection process for additional Supervisory Board members.
Total first half 2022 revenues increased to €5.0 million (HY 2021: €4.7 million). Other income
Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, +31 20 586 8080,
4 The RECODE project aims to recycle CO2 in the cement industry to produce added-value additives. It has received funding from the European Union's Horizon 2020 research and innovation programme under grant agreement No 768583.
5 The WaterProof Project receives funding from the Horizon Europe Framework Programme under the Grant Agreement No 101058578.
decreased slightly to €3.2 million (HY 2021: €3.3 million). The grant income in the first half of 2022 is predominantly the result of the previously awarded grant programmes PEFerence, IMPRESS and DEI+. 6 Avantium successfully secured an additional grant in the first half of 2022, to support its participation in the 4-year research and development programme WaterProof. In the first half of 2022, Avantium recorded higher "total revenues and other income": €8.2 million compared to €8.0 million in HY 2021.
Direct costs increased by €4.1 million in the first half of 2022 to €19.2 million (HY 2021:€15.1 million.) Of the increase, €1.8 million is related to non-recurring items.
Employee costs increased by €2.1 million, as planned, due to an increase in staff employed to prepare for the scale-up in Avantium Renewable Polymers, higher salaries and recruitment and training fees. Headcount increased by 10 FTE compared to the first half of 2021. The employee costs of first half of 2021 also included a benefit of the 2020 bonus accrual which was released as this bonus was not paid out to employees.
Patent & Advisory costs increased by €0.9 million due to one-off legal and advisory fees incurred as part of Financial Close activities within Avantium Renewable Polymers. Raw materials increased due to higher sales in Avantium Catalysis and higher input costs. Housing and office expenses increased post-COVID due to the restart of office activities and rising utility costs.
Total EBITDA decreased from €-7.1 million in the first half of 2021 to €-11.0 million in the first half of 2022.
Finance costs increased to €1.3 million (HY 2021:€0.2) primarily due to €1.0 million in fees incurred relating to the debt financing.
The loss for the half year of 2022 is €17.3 million (HY 2021: €10.9 million).
The balance sheet as of 30 June 2022 increased to €146.8 million (31 December 2021: €77.7 million), with net equity of €93.9 million.
Cash and cash equivalents totalled €72.1 million as of 30 June 2022 (31 December 2021: €34.9 million). The improved cash position is primarily due to the successful €45 million capital increase by means of a public offering in April 2022. The net proceeds from the capital increase after bank, legal and consultancy fees were €41.6 million. In addition, Avantium Renewable Polymers received €20.0 million cash investment from Bio Plastics Investment Groningen for the equity stake it acquired in Avantium Renewable Polymers. The net cash used in operating, investing and lease activities in the first half was €24.4 million (HY 2021: €9.6 million).
Capital expenditure increased to €10.2 million (HY 2021: €1.5 million) as a result of investments in the FDCA Flagship Plant.
The working capital includes a receivable of €10 million recognised by Avantium RNP Flagship B.V. on 31 March 2022 from Worley as part of their contribution in kind. The receivable is payable equally over the next 24 months starting from April 2022. As of 30 June 2022, the remaining balance is €8.8 million. Working capital also includes a prepaid expense of €11.3 million recognised by Avantium N.V. The prepaid expense relates to the warrants issued, as part of the debt financing agreement, to the respective banks. The prepayment will be expensed as a finance cost at each drawdown of the facility on a pro-rata basis.
Working capital movements were €-2.1 million in the first half of 2022 versus €-0.5 million in 2021 due to the increased amount of payables settled in the first half of 2022.
A non-controlling interest was recognised on 31 March 2022, as there was a change in ownership of Avantium Renewable Polymers, a subsidiary of Avantium N.V. Worley Nederland B.V. and Bio Plastics Investment Groningen B.V. together acquired a 22.6% shareholding in Avantium
Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, +31 20 586 8080,
6 PEFerence is a consortium of organisations aiming to replace a significant share of fossil-based polyesters with the 100% plant-based PEF. The PEFerence project has received funding under Bio Based Industries Joint Undertaking under the European Union's Horizon 2020 research and innovation programme under grant agreement No 744409. IMPRESS (grant agreement No 869993) is a consortium of ten organisations aiming to demonstrate a new biorefinery concept based on integrating novel processes such as Avantium's Dawn and Ray Technologies. Bio-MEG Proeffabriek is a grant project supported by the European Regional Development Fund (ERDF) through Samenwerkingsverband Noord Nederland (SNN). This grant aims to accelerate innovation in the quest for a low-carbon economy. With the Demonstration Energy and Climate Innovation (DEI+) scheme, the Netherlands Enterprise Agency (RVO - Rijksdienst voor Ondernemend Nederland) financially supports projects that contribute to a cost-effective reduction of CO2 emissions by 2030.
Renewable Polymers, while Avantium continues to hold 77.4% of the equity. The initial recognition of the non-controlling interest amounted to €12.0 million.
| in millions of € | 30 June 2022 | 30 June 2021 |
|---|---|---|
| Cash position at the beginning of the half year |
34.9 | 26.6 |
| EBITDA | (11.0) | (7.1) |
| Lease payments | (0.9) | (0.9) |
| Working capital movement | (2.1) | (0.5) |
| Capital expenditures | (10.2) | (1.5) |
| Other | (0.2) | 0.4 |
| Net cashflow used in operating, investing and lease activities |
(24.4) | (9.6) |
| Net proceeds from Capital raise |
41.6 | 26.4 |
| Proceeds from 3rd party equity stake in RNP |
20.0 | — |
| Net incease/(decrease) in cash and cash equivalents |
37.2 | 16.8 |
| Cash position at the end of the half year |
72.1 | 43.4 |
Avantium Renewable Polymers will focus on building the FDCA Flagship Plant. Inflation and supply chain disruptions, as a result of the Russia-Ukraine war, as well as the aftermath of the COVID-19 pandemic, are putting substantial pressures on costs and time schedules. Avantium anticipates that the Flagship Plant CAPEX will be materially higher, due predominantly to inflation as well as scope changes. The company is closely monitoring and managing the situation as effectively as possible. Avantium expects that construction of the Flagship Plant will be completed by the end of 2023 and that the plant will be fully operational during 2024. Avantium Renewable Polymers remains fully committed to securing additional offtake agreements in order to sell out the FDCA Flagship Plant capacity prior to start-up. As part of its commercialisation strategy, Avantium is exploring licensing opportunities for the future large-scale production of FDCA and PEF.
Avantium Renewable Chemistries will continue to conduct engineering studies with its Ray Technology™. It will also focus on exploring commercial opportunities for plantMEG™ and plantMPG™.
Avantium Catalysis will increasingly look for opportunities to grow its business in the field of renewable chemistries.
This Interim Report for the six months ended 30 June 2022, and the condensed consolidated financial statements included herein have not been audited or reviewed by an external auditor.
The Management Board of Avantium N.V. declares that, to the best of its knowledge, the condensed consolidated financial statements give a true and fair view of the assets, liabilities, financial position and the result of Avantium N.V. and its subsidiaries and the interim report
includes a fair review of the information required pursuant to section 5:25d, subsections 8 and 9 of the Dutch Financial Markets Supervision Act (Wet op het financieel toezicht).
Amsterdam, 17 August 2022,
Tom van Aken, Chief Executive Officer Bart Welten, Chief Financial Officer
| in Euro x 1,000 | 30 June 2022 | 30 June 2021 |
|---|---|---|
| Revenues | 4,982 | 4,749 |
| Other income | 3,184 | 3,291 |
| Total revenues and other income | 8,166 | 8,040 |
| Operating expenses | ||
| Raw materials and contract costs | (1,525) | (1,210) |
| Employee benefit expenses | (11,214) | (9,156) |
| Office and housing expenses | (1,284) | (900) |
| Patent, license, legal and advisory expenses | (2,524) | (1,639) |
| Laboratory expenses | (1,514) | (1,407) |
| Advertising and representation expenses | (549) | (178) |
| Other operating expenses | (571) | (637) |
| Net operating expenses | (19,181) | (15,127) |
| EBITDA | (11,015) | (7,087) |
| Depreciation, amortisation and impairment charge | (3,937) | (3,706) |
| EBIT | (14,952) | (10,793) |
| Finance costs - net | (1,312) | (150) |
| Fair value remeasurement - Warrants | (1,085) | — |
| Loss before income tax | (17,349) | (10,943) |
| Income tax expense | — | — |
| Loss for the half-year | (17,349) | (10,943) |
| Other comprehensive income | — | — |
| Total comprehensive expense for the year | (17,349) | (10,943) |
| Loss attributable to: | ||
| Owners of the parent | (16,363) | (10,943) |
| Owners of Non-Controlling interest | (985) | — |
| (17,349) | (10,943) | |
| Total comprehensive expense attributable to: Owners of the parent |
(16,363) | (10,943) |
| Owners of Non-Controlling interest | (985) | — |
| (17,349) | (10,943) | |
| in Euro | 30 June 2022 | 30 June 2021 |
| Earnings per share for profit attributable to the ordinary equity holders of the company |
||
| Basic earnings per share7 | (0.45) | (0.39) |
| Diluted earnings per share | (0.45) | (0.39) |
7 Basic earnings per share are calculated by dividing the net result for the period by the weighted average number of ordinary shares.
Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, +31 20 586 8080,
| in Euro x 1,000 | 30 June 2022 | 31 December 2021 |
|---|---|---|
| ASSETS | ||
| Non-current assets | ||
| Property, plant and equipment | 30,642 | 23,324 |
| Intangible assets | 1,853 | 1,835 |
| Right-of-use assets | 9,431 | 9,479 |
| Total non-current assets | 41,926 | 34,638 |
| Current assets | ||
| Inventories | 1,332 | 1,238 |
| Trade and other receivables | 31,438 | 6,888 |
| Cash and cash equivalents | 72,150 | 34,911 |
| Total current assets | 104,920 | 43,037 |
| Total assets | 146,846 | 77,675 |
| EQUITY | ||
| Equity attributable to owners of the parent | ||
| Ordinary shares | 4,255 | 3,129 |
| Share premium | 270,696 | 230,252 |
| Other reserves | 12,556 | 11,936 |
| Accumulated losses | (193,648) | (195,291) |
| Total equity attributable to the owners of the parent | 93,859 | 50,026 |
| Non-Controlling interest | 11,027 | — |
| Total equity | 104,886 | 50,026 |
| LIABILITIES | ||
| Non-current liabilities | ||
| Lease liabilities | 9,215 | 9,099 |
| Financial liability | 12,335 | — |
| Total non-current liabilities | 21,550 | 9,099 |
| Current liabilities | ||
| Lease liabilities | 1,606 | 1,604 |
| Trade and other payables | 18,594 | 16,750 |
| Provisions for other liabilities and charges | 211 | 196 |
| Total current liabilities | 20,410 | 18,550 |
| Total liabilities | 41,960 | 27,649 |
| Total equity and liabilities | 146,846 | 77,675 |
| in Euro x 1,000 | Attributable to equity holders of the company | |||||
|---|---|---|---|---|---|---|
| Ordinary shares |
Share premium |
Other reserves |
Accumulated losses |
Non controlling interest |
Total Equity |
|
| Balance at 1 January 2021 | 2,591 | 204,296 | 10,407 | (171,057) | — | 46,238 |
| Comprehensive expense | ||||||
| Result for the year | — | — | — | (10,943) | — | (10,943) |
| Other Comprehensive expense for the year |
— | — | — | — | — | — |
| Total Comprehensive expense for the year |
— | — | — | (10,943) | — | (10,943) |
| Transactions with owners | ||||||
| – Employee share schemes - value of Employee services |
— | — | 415 | — | — | 415 |
| – Employee share schemes LTIP investment shares granted |
— | — | — | — | — | — |
| – Transfer value share scheme to retained earnings |
— | — | (92) | 92 | — | — |
| – Issue of ordinary shares |
534 | 25,860 | — | — | — | 26,394 |
| – Shares delivered from treasury shares |
— | — | — | — | — | — |
| Total transactions with owners | 534 | 25,860 | 324 | 92 | — | 26,809 |
| Balance at 30 June 2021 | 3,125 | 230,156 | 10,731 | (181,908) | — | 62,104 |
| Balance at 1 January 2022 | 3,129 | 230,252 | 11,936 | (195,291) | — | 50,026 |
| Comprehensive expense | ||||||
| Result for the year | — | — | — | (16,363) | (985) | (17,349) |
| Other Comprehensive expense for the year |
— | — | — | — | — | — |
| Total Comprehensive expense for the year |
— | — | — | (16,363) | (985) | (17,349) |
| Transactions with owners | ||||||
| – Employee share schemes value of Employee services |
— | — | 457 | — | — | 457 |
| – Employee share schemes - LTIP investment shares granted |
— | — | 181 | — | — | 181 |
| – Transfer value share scheme to retained earning |
— | — | (19) | 19 | — | — |
| – Issue of ordinary shares |
1,126 | 40,444 | — | — | — | 41,570 |
| – Shares delivered from treasury shares |
— | — | — | — | — | — |
| Total transactions with owners | 1,126 | 40,444 | 619 | 19 | — | 42,208 |
| Disposal of Subsidiary | — | — | — | 17,987 | 12,013 | 30,000 |
| Balance at 30 June 2022 | 4,255 | 270,696 | 12,555 | (193,648) | 11,027 | 104,886 |
Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, +31 20 586 8080,
| in Euro x 1,000 | 30 June 2022 | 30 June 2021 |
|---|---|---|
| Cash flows from operating activities | ||
| Loss for the year from continuing operations | (17,349) | (10,943) |
| Adjustments for: | ||
| – Depreciation of property, plant and equipment |
2,873 | 2,870 |
| – Amortisation |
22 | 29 |
| – Depreciation of right of use assets |
1,043 | 808 |
| – Share-based payment |
457 | 415 |
| – Finance costs - net |
1,312 | 150 |
| – Fair value remeasurement on Warrants |
1,085 | — |
| Changes in working capital (excluding exchange differences on consolidation): |
||
| – Increase in inventories |
(95) | (43) |
| – Increase in trade and other receivables |
(4,551) | (4,672) |
| – Increase in trade and other payables |
2,575 | 4,177 |
| – Increase in provisions |
15 | 24 |
| (12,613) | (7,185) | |
| Interest paid on current accounts | (116) | (59) |
| Interest received on current accounts | — | 2 |
| Other interest and bank charges | (456) | (10) |
| Net cash used in operating activities | (13,184) | (7,253) |
| Cash flows from investing activities | ||
| Purchases of property, plant and equipment (PPE) | (10,192) | (1,493) |
| Purchases of intangible assets | (40) | — |
| Proceeds from 3rd party equity stake in RNP | 20,002 | — |
| Net cash used in investing activities | 9,770 | (1,493) |
| Cash flow from financing activities | ||
| Principal elements of lease payments | (912) | (879) |
| Net proceeds from capital raise | 41,570 | 26,394 |
| Net cash used in financing activities | 40,658 | 25,515 |
| Net increase in cash and cash equivalents | 37,244 | 16,768 |
| Cash and cash equivalents at beginning of the year | 34,911 | 26,626 |
| Effect of exchange rate changes | (6) | 2 |
| Cash and cash equivalents from continuing operations at end of financial year |
72,150 | 43,396 |
| Cash and cash equivalents at end of financial year | 72,150 | 43,396 |
Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, +31 20 586 8080,
Avantium N.V. ('the company') and its subsidiaries (together 'the group') is a company limited by shares, incorporated and domiciled in The Netherlands. Its registered office and principal place of business is at Zekeringstraat 29, 1014 BV in Amsterdam.
The information in these condensed consolidated interim financial statements ("financial statements") is unaudited and not reviewed.
The information is reported on half-year-to-date basis ended 30 June 2022. Where material to an understanding of the period starting 1 January 2022 and ended 30 June 2022, further information is disclosed. The interim financial statements were discussed and approved by the Management Board and the Supervisory Board. The interim financial statements have not been audited or reviewed.
Avantium prepared the half year figures on going concern basis. The material uncertainty that existed on the company's ability to continue as a going concern was resolved in April 2022 as the company secured funding. Based on Avantium's current business plan, the cash resources and debt financing should enable the Company to reach its next significant operational and industrial milestones. These milestones include the commissioning of the FDCA Flagship Plant in 2024 and the final investment decision for the first commercial plant producing plantMEG™ and plantMPG™ using Ray Technology™.
The interim financial statements should be read in conjunction with Avantium N.V.'s consolidated financial statements in the 2021 annual report as approved on 23 March 2022, which has been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and IFRS Interpretations Committee (IFRS IC) applicable to companies reporting under IFRS. The interim financial statements have been prepared in accordance with IAS 34 'Interim financial reporting'.
The significant accounting policies applied in these consolidated interim financial statements are consistent with those applied in Avantium N.V.'s consolidated financial statements in the 2021 annual report for the year ended 31 December 2021.
A number of amended standards became applicable for the current reporting period. Avantium did not have to change its accounting policies or make retrospective adjustments as a result of adopting these amended standards.
On 31 March 2022, there was a change in ownership of Avantium Renewable Polymers, a subsidiary of Avantium N.V. Worley Nederland B.V. and Bio Plastics Investment Groningen B.V. together have acquired a 22.6% shareholding in Avantium Renewable Polymers, while Avantium continues to hold 77.4% of the equity. The change in shareholding did not result in Avantium N.V. losing control over the subsidiary, Avantium Renewable Polymers. This resulted in an amount of €18 million to be presented as a profit in the Consolidated Statement of Changes in Equity. The details of the transactions between the equity participants are as follows:
| (In Euro x 1,000) | 31-03-2022 |
|---|---|
| Fair value of the consideration received | 30,000 |
| Increase in the non-controlling interest | (12,013) |
| Adjust to equity attributable to owners of the parent | 17,987 |
Revenue is only generated from external customers and no transactions with other segments have taken place.
| (In Euro x 1,000) | 30-6-2022 | 30-6-2021 |
|---|---|---|
| Catalysis | 4,450 | 4,254 |
| Renewable Chemistries | — | 450 |
| Renewable Polymers | 475 | 45 |
| Unallocated items | 58 | — |
| Total segment revenue | 4,982 | 4,749 |
| (In Euro x 1,000) | 30-6-2022 | 30-6-2021 |
|---|---|---|
| Catalysis | 130 | 88 |
| Renewable Chemistries | 1,454 | 1,872 |
| Renewable Polymers | 1,520 | 1,289 |
| Unallocated items | 80 | 42 |
| Total segment other income | 3,184 | 3,291 |
The main KPI of the company within the profit & loss account is EBITDA. Note that the EBITDA figure excludes company overheads and shared service activities.
The EBITDA is calculated in the following manner: Profit/loss for the period plus Finance costs-net plus depreciation, amortisation and impairment charge.
The EBITDA figures of the business segments are as follows.
| (In Euro x 1,000) | 30-6-2022 | 30-6-2021 |
|---|---|---|
| Catalysis | 416 | 1,038 |
| Renewable Chemistries | (2,115) | (700) |
| Renewable Polymers8 | (4,615) | (3,164) |
| Total EBITDA of business segments | (6,314) | (2,826) |
| (In Euro x 1,000) | 30-6-2022 | 30-6-2021 |
|---|---|---|
| Total EBITDA of business segments | (6,314) | (2,826) |
| Amortisation | (22) | (29) |
| Depreciation of property, plant and equipment | (2,873) | (2,870) |
| Depreciation of right of use assets | (1,043) | (808) |
| Finance costs - net | (1,312) | (150) |
| Share based compensation | (457) | (415) |
| Rent | (312) | (80) |
| Fair value remeasurement | (1,085) | — |
| Company overheads/other | (3,932) | (3,765) |
| Loss before income tax from continuing operations |
(17,349) | (10,943) |
The 'Company Overhead & Other' costs category comprises mainly of shared services and company overhead costs.
Except as disclosed below, there are no material changes to the company's related parties, related party transactions (including their terms and conditions) and (future) obligations towards related parties, compared to 31 December 2021.
At the Extraordinary General Meeting of Shareholders (EGM) held on 25 January 2022, the shareholders approved the appointment of Nils Björkman as a member of the Supervisory Board for a term of four years, ending at the close of the Annual General Meeting to be held in 2026.
During the first half of 2022, 419,000 additional options awards were approved and awarded under the company's Employee Stock Options Plan (ESOP).
In addition, management purchased 72,586 Investment shares under the company's Long-Term Incentive Plan (LTIP) and received an entitlement to 72,586 Matching shares, such grant being subject to vesting and lock-up obligations, totalling 145,172 shares.
8 A Service Level Agreement ("SLA") is in place since April 2022 between Avantium Renewable Polymers B.V. and Avantium Support B.V.. The SLA cost charged by Avantium Support B.V. to Avantium Renewable Polymers B.V. for the first half of 2022 amounted to €0.4 million.
On 31 March 2022, Avantium N.V. issued 2.84 million warrants, with an exercise price of €0.10, to the consortium of banks as part of the €90 million debt financing package for the FDCA Flagship Plant.
On 14 April 2022, 1.02 million additional warrants were issued to the warrant holders, to compensate for the dilutive effect of the equity offering according to the debt financing agreement with the lenders.
The initial recognition of the warrants amounted to €11.3 million.
The warrants are recognised under IFRS 9 Financial Instruments as a Financial Liability. The warrants are measured subsequently at fair value through profit or loss at each reporting date. The fair value of the warrants on 30 June is €12.3 million. The increase in the share price of €0.28 resulted in the increase in the fair value of the warrants. The subsequent fair value remeasurement of the warrants resulted in a loss at 30 June 2022 of €1.1 million, recognised under fair value remeasurement in the Statement of Comprehensive Income.
More information about this press release:
Caroline van Reedt Dortland, Director Communications, Avantium +31-20-5860110 / +31-613400179, [email protected]
On Wednesday 17 August 2022 at 08:00 am (CET) Avantium will host a conference call for analysts.
The interim report and transcript of the analyst call will be available at www.avantium.com
| Date | Event |
|---|---|
| 22 March 2023 | Publication full-year results 2022 and publication annual report 2022 |
| 10 May 2023 | Annual General Meeting |
| 16 August 2023 | Publication of half-year results 2023 |
Avantium is a leading technology development company and a forerunner in renewable chemistry. Avantium develops novel technologies based on renewable carbon sources as an alternative to fossil-based chemicals and plastics. The company currently has three technologies at pilot and demonstration phase. The most advanced technology is the YXY® plant-to-plastics–technology that catalytically converts plant-based sugars into FDCA (furandicarboxylic acid), the key building block for the sustainable plastic PEF (polyethylene furanoate). Avantium has successfully demonstrated the YXY® Technology at its pilot plant in Geleen, the Netherlands, and has started construction of the world's first commercial plant in 2022, with planned large-scale production of PEF in 2024. The second technology is Ray Technology™ and catalytically converts industrial sugars to plant-based MEG (mono-ethylene glycol): plantMEG™. Avantium is scaling up its Ray Technology™ and the demonstration plant in Delfzijl, the Netherlands opened in November 2019. The third technology is called the Dawn Technology™ that converts non-food biomass into industrial sugars and lignin in order to transition the chemicals and materials industries to non-fossil resources. In 2018, Avantium opened the Dawn Technology™ pilot biorefinery in Delfzijl, the Netherlands. Next to developing and commercialising renewable chemistry technologies, the company also provides
Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, +31 20 586 8080,
advanced catalysis R&D services and systems to customers in the refinery and chemical industries. Avantium works in partnership with like-minded companies around the globe to create revolutionary renewable chemistry solutions from invention to commercial scale.
Avantium's shares are listed on Euronext Amsterdam and Euronext Brussels (symbol: AVTX). Avantium is included in the Euronext Amsterdam SmallCap Index (AScX). Its offices and headquarters are in Amsterdam, the Netherlands.
This press release by Avantium N.V. contains information that qualified or may have qualified as inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 (MAR).
This press release may include forward-looking statements. Other than reported financial results and historical information, all statements included in this press release, including, without limitation, those regarding our financial position, business strategy and management plans and objectives for future operations, are forward-looking statements. These forward-looking statements are based on our current expectations and projections about future events and are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements. Many of these risks and uncertainties relate to factors that are beyond Avantium's ability to control or estimate precisely, such as future market conditions, the behaviour of other market participants and the actions of governmental regulators. The risks outlined in the risk management paragraph of the Avantium N.V. 2021 Annual Report and in the Prospectus of the April 2022 public offering remain valid. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release and are subject to change without notice. Other than as required by applicable law or the applicable rules of any exchange on which our securities may be traded, we have no intention or obligation to update forward-looking statements.
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