Accsys Technologies Preliminary Results for the Year Ended March 31, 2022

Accsys, the fast-growing and eco-friendly company that combines chemistry and technology to create high performance, sustainable wood building products, announces its preliminary results for the year ended 31 March 2022 (“FY 22”).

Key highlights:

• Good growth in Group revenue, up 21% to €120.9m driven by increased average sales prices.
• Continuing strong market demand, in excess of capacity.
• Accoya® sales volumes broadly flat at 59,649m(3) , with volumes limited by capacity constraints, as well as temporary production downtime at the Arnhem plant connected to the installation of the fourth reactor (R4).
  • The plant’s existing three reactors are operating at capacity
• 11% increase in gross profit per cubic meter of Accoya® sold to €595/m(3) , as price increases offset inflationary raw material cost price pressures.
• Gross Profit up 9% to €36.0m, and Group underlying EBITDA(1) up 3% to €10.4m, with the higher gross profit being partially offset by investment in our organisational capability ahead of increased capacity coming on-line.
• Substantial progress on capacity expansion projects under ‘5X’ growth strategy(5) , despite ongoing construction challenges:
  • Accoya® Arnhem R4 commissioning has been progressing; during commissioning in June, some defective equipment was identified which requires remedial repair work, extending operational target date by at least 8 weeks into FY23 Q2 (July-September 2022).
  • World-first Tricoya® (Hull) plant:
  • Construction largely complete, with commissioning progressing. In June, construction challenges and rework of certain areas were identified resulting in a further delay to the target commercial operational date. Whilst uncertainty remains, we are targeting completion in the coming months.
  • The consortium’s total project capital cost is now expected to be €94-103m, an increase compared to our previously announced range of €90-96m. We are in discussion with our consortium partners regarding the consortium’s funding options for the additional costs.
  • Accoya® USA JV construction under way following final investment decision and funding package agreed in March 2022 and remains on track to be complete over approximately 2 years.
• Improving financial position: Year-end net debt of €27.2m and adjusted net debt(3) of €55m: Group refinance completed in H2 FY22 improving interest costs; Equity issue in Q1 FY23 strengthened the Group’s balance sheet.
• ESG: Good progress on safety strategy with LTIR(4) reducing to target 0.5 level; Scope 1 and 2 emissions intensity(6) increased 4% primarily due to R4 construction-related electricity usage ahead of increased volumes being produced.

Notes

1. Underlying EBITDA is defined as Operating profit/(loss) before Exceptional items and other adjustments, depreciation and amortisation, and includes the Group’s attributable share of our USA joint venture’s underlying EBITDA. (See note 3 to the financial statements).
2. Underlying EBIT is defined as Operating profit/(loss) before Exceptional items and other adjustments and includes the Group’s attributable share of our USA joint venture’s underlying EBIT. (See note 3 to the financial statements).
3. Net debt is defined as short term and long-term borrowings (including lease obligations) less cash and cash equivalents. (See note 29 to the financial statements). Adjusted net debt refers to Net Debt less remaining cash committed to be invested into Accoya USA joint venture (€27.9m).
4. Lost Time Incident Rate per 200,000 hours worked.
5. Accsys has set a ‘5x’ production capacity growth target, to achieve 200k m3 equivalent production capacity by 2025, from the 2019 level of 40k m3
6. Location based scope 1 (direct emissions from company owned or controlled sources) and scope 2 (indirect emissions from the generation of purchased energy, such as electricity) emissions intensity

Robert Harris, CEO commented:

“Accsys is pleased to report another period of good revenue growth as we continue to see strong demand for our world-leading high performance, sustainable construction products. It is this demand, which continues to exceed supply, that has enabled us to offset the wider market pressures from raw materials costs and supply chain disruption through price increases. We have grown gross profit, while also investing in our organisation to be ready to manage our growing operations.

We have made substantial progress in our capacity expansion projects, despite ongoing construction and macro-economic challenges during the year and in the first quarter of FY 23. The physical constructions of both the world’s first Tricoya plant in Hull and our Accoya plant expansion in Arnhem are largely complete, and whilst some near-term issues have been identified which are being addressed, commissioning of both facilities is in progress with both expected to be operational in the coming months. Our USA JV’s new 43,000m3 plant to service the substantial North American market is now also under construction.

In FY23, once complete, the added capacity from Hull and Arnhem is expected to double our operating capacity from 60,000m(3) to 120,000m(3), enabling us to begin to address the pent-up demand for our products.

With these revised project timelines on Hull and R4, we are targeting to nearly double EBITDA in FY23, subject to any further changes in the projects’ status.

In the longer term, we expect to achieve improved profitability and operating cash-flow generation as we penetrate target markets and leverage the expected benefit from greater economies of scale associated with higher production volumes. We remain focussed on executing the significant long-term growth opportunities ahead, with an ongoing commitment to safety and zero-harm to our people and the environment. With continued demand for Accsys’ higher performance, lower maintenance and more sustainable products as the world focuses on decarbonisation. We remain on track to meet this demand through increasing our capacity fivefold by 2025”.

For the full press release, click here.

Contact:

Sarah Ogilvie –  Investor Relations – ir@accsysplc.com

Source: Accsys Technologies PLC