New progress in commercial, industrial, and extra-financial
terms:
- Delivery of the first batches, now aiming for continuous
industrial production
- Thailand joint venture structuring in progress with Mitr
Phol
- Success of the first HR barometer (AFYREN Global People
Survey), with a 97% employee participation rate showing strong
employee commitment
A solid financial situation as of June 30, 2023:
- AFYREN NEOXY's financial position strengthened, covering
start-up progress
- Underlying cash burn1 of €3.6 million with effective management
of operating expenses
- €52.7 million cash available on June 30, 2023
Regulatory News:
AFYREN (Paris:ALAFY), a greentech company that provides
manufacturers with low-carbon, bio-based products through its
unique fermentation technology based on a completely circular
model, today announced financial results for the half-year ended
June 30, 2023, and approved by the Board of Directors on September
18, 2023.
Nicolas SORDET, CEO of AFYREN, stated: "The first half of
the year has seen significant progress on several key projects for
AFYREN. Thanks to a major mobilisation of all its teams, AFYREN
NEOXY is close to the start of continuous production and the
successful transition to industrial scale, to meet the sustained
demand of its customers. The commitment of our teams has also
enabled us to make parallel progress on our discussions with our
partner for the creation of a joint venture in Thailand. As a
result, we are progressing on the roadmap that should enable us to
operate three plants in France and abroad by 2027”.
Update on AFYREN NEOXY’s
progress
In June 2023, AFYREN announced significant progress in the
plant's production operations and the delivery of the first batches
of bio-based organic acids.
Since June, the work to make operations more reliable and start
continuous production has made tangible progress: the technical
solutions identified are gradually being deployed, and the positive
results mean that AFYREN NEOXY can expect to reach breakeven2 in
the first half of 2024 (initially planned for the end of the 2023
financial year).
As a reminder, once industrial production started, AFYREN plans
to gradually ramp up volumes to produce 16,000 tonnes of carboxylic
acids per year at full capacity. This production, which offers a
unique, low-carbon, local alternative to petroleum-based
competition, has applications in markets as varied as human and
animal nutrition, flavour and fragrances as well as lubricants and
technical fluids. Since the beginning of 2023, strategic customers
have renewed their confidence in the project led by AFYREN,
confirming commercial commitments for cumulative contractual
revenue of over €165 million.3
Ongoing structuring of joint venture
agreement with Mitr Phol in Thailand
In January 2023, AFYREN announced that it entered into a
partnership project with Mitr Phol, a world leader in the sugar
industry, to set up a biorefinery in Thailand to serve the Asian
market which represent 25% of the carboxylic acids global market.
This second plant project aims to achieve a production capacity of
around 28,000 tonnes per year at full capacity.
Discussions concerning the project's joint venture (70% owned by
AFYREN and 30% by Mitr Phol) are in advanced stages. The next step
is the signature4 followed by engineering studies to specify the
investment required and the schedule for construction and
production start-up.
Success of the first HR barometer
(AFYREN Global People Survey)
In January 2023, AFYREN organised its first internal barometer
for all employees. Carried out in the form of an online survey on
themes such as support for Group strategy and objectives, internal
relations, quality of working life, and skills development and
recognition, the barometer was a resounding success, with a 97%
employee participation rate.
It highlighted strengths and areas for improvement at various
levels of the organisation. It was followed by collective
workshops, organised from April to July 2023 within each team, to
co-construct concrete action plans. A Group action plan based on
certain initiatives is also being rolled out.
AFYREN is setting up a long-term monitoring system to track
progress: a second HR barometer is scheduled for 2024.
Strengthening of AFYREN NEOXY's
financial situation
In the first half of 2023, AFYREN NEOXY’s financial situation
was reinforced to secure the progress of the AFYREN NEOXY start-up
phase.
In March 2023, AFYREN NEOXY secured a €5 million overdraft
facility with BNP for 2023, reduced to €2.5 million in 2024, to
cover financing needs arising during the start-up phase
(pre-financing of disbursements of grants, etc.).
In April 2023, AFYREN NEOXY took out a €1 million Innovation
loan (Prêt Innovation) with Bpifrance. The loan is repayable in 31
quarterly instalments, including a deferred principal repayment on
the first 11 instalments.
In accordance with existing financing agreements, AFYREN and
Bpifrance subscribed in May 2023 to a €3.5 million capital increase
(of which €2 million subscribed by AFYREN) and €3 million
convertible bond issue by AFYREN NEOXY (of which €1.5 million
subscribed by AFYREN).
Other financing has been secured since June 2023: a €6 million
New Industry loan (Prêt Nouvelle Industrie) subscribed in August
2023 with Bpifrance and two factoring contracts signed in September
2023 with BPCE Factor concerning receivables from French and
foreign customers.
Net loss in line with development
progress and solid financial position
Simplified P&L (in thousands of
euros)
06/2023
06/2022
Var.
Revenue
1,956
1,763
+11%
licensing and development of industrial
know-how
708
708
-
other services provided
1,247
1 054
+18%
Operating loss
(3 097)
(2,580)
+20%
Net financial loss
503
(160)
-
Share in loss of equity-accounted company
(net of tax)
(2,529)
(1,420)
+78%
Net loss
(5,123)
(4,160)
+23%
The Company's revenue amounted to €1.96 million in the first
half of 2023, up 11% from €1.76 million in the first half of 2022.
Revenue is essentially made up of income from patent and know-how
licenses of the Group, unchanged from the first half of 2022, and
income from various contracts entered into with AFYREN NEOXY, up
compared with 2022, because of various technical services provided
in the context of the start-up of the plant.
Net operating expenses5 amounted to €5 million in the first half
of 2023, compared with €4.3 million in the first half of 2022, an
increase of €0.7 million.
This increase was mainly attributable to:
- purchases and external expenses, up €0.3 million, including
expenses related to the development of the Group's next plants,
particularly in Thailand;
- staff costs up €0.2 million due to the increase in the number
of employees, with the average number of full-time equivalents
(FTE) increasing from 31 as of 30 June 2022 to nearly 40 as of 30
June 2023 (excluding AFYREN NEOXY), to support the Group’s
growth.
Operating expenses include €0.4 million related to development
costs for the Group's future plants, increasing by €0.2 million
compared with the first half of 2022. In addition, research and
development spending recognised as expenses increased from €0.6
million in the first half of 2022 to €0.9 million in the first half
of 2023.
After recognition of other expenses6 of €(0.5) million, current
operating income was €(3.1) million, the increase in expenses was
partially offset by the increase in revenue.
Financial result records a €0.7 million improvement thanks to
financial income from cash and cash equivalent investment.
The share accounted for in AFYREN NEOXY's net income was €(2.5)
million in the first half of 2023, compared with €(1.4) million in
the first half of 2022. This change is mainly related to the
plant's operating expenses, in the absence of revenue. AFYREN NEOXY
will recognise revenue when acid batches are delivered to its
customers from continuous production.
Net income was €(5.1) million at the end of June 2023, compared
with €(4.2) million at the end of June 2022: the net loss reflects
a phase in which AFYREN and AFYREN NEOXY teams have been fully
mobilised by the reliability and start-up of the first plant and
the development of subsequent plants.
Simplified balance sheet (in thousands
of euros)
06/2023
12/2022
Non-current financial assets
21,832
20,998
of which equity-accounted securities
16,456
16,513
Current assets
54,548
63,822
of which cash and cash equivalents
52,652
62,333
Total assets
76,380
84,821
Equity
65,920
70,978
Non-current provisions
5,354
5,885
of which loans and financial debts
3,641
3,485
Current liabilities
5,107
7,958
of which loans and financial debts
1,597
5,054
Total liabilities
76,380
84,821
As of June 30, 2023, AFYREN has a solid balance sheet with
Shareholder’s equity of €65.9 million, the decrease compared to end
of December 2022 coming from the net loss of the period.
As of June 30, 2023, AFYREN’s total financial debt was low, at
€5.2 million including lease liabilities and €4.9 million excluding
lease liabilities7.
The Group has a cash position of €52.7 million which enables it
to meet its obligations and finance its future developments. Cash
outflows over the period totaled €9.7 million, of which €3.5
million related to the strengthening of the AFYREN NEOXY financial
position and €3.6 million from the repayment of a convertible bond
subscribed in March 2020, against €1 million of new loan
subscription (Prêt Innovation). Adjusted for these items, the
underlying cash burn was €3.6 million.
2027 outlook
As part of its growth strategy, the Company aims to achieve the
following by 2027:
- three production units with a combined installed capacity of
around 72,000 tons;
- cumulated production revenue from the three plants of more than
€150 million8;
- a target current EBITDA margin at Group level of around
30%9.
These objectives depend on certain variables, in particular:
(i) a timetable for the construction, commissioning and ramp-up
of plants 2 and 3, depending on feedback from AFYREN NEOXY,
engineering studies for plant 2, and the choice for plant 3 between
an AFYREN NEOXY extension scenario or establishment on a new
site;
(ii) the direct and indirect effects of the macro-economic
context, in particular the availability of equipment and materials
during the construction phase and the impact of the energy crisis
on plant operating costs and sales prices, the latter tending to
offset each other. AFYREN proposes a robust model in the face of
petro-sourced competition, which influences prices for the entire
market.
Availability of the 2023 Half-year
report
The Company will make its 2023 half-year financial report
available to the public and file with the Autorité des marchés
financiers no later than September 22, 2023.
About AFYREN
Founded in 2012 to address manufacturers’ growing need to reduce
the carbon footprint of their inputs and move towards more natural
ingredients, AFYREN manufactures biobased products to replace
petroleum-derived molecules. Because of its innovative, unique, and
proprietary process, the French greentech company offers
low-carbon, bio-based alternatives in the following sectors: human
and animal nutrition, cosmetics, flavors and fragrances, and fine
chemicals. By valorizing local, non-food biomass, AFYREN helps
manufacturers offer more sustainable finished products while
remaining competitive.
The company is pursuing an ambitious development plan to better
serve its international customers. Its first plant, AFYREN NEOXY, a
joint venture with Bpifrance’s SPI fund, is located in France to
serve mainly the European market. In early 2023, AFYREN announced
the launch of a factory project in Thailand, partnering with a
world leader in the sugar industry. AFYREN is also developing its
presence in the Americas, in line with the distribution agreements
already signed.
In 2023, AFYREN employs more than 110 people in Lyon,
Clermont-Ferrand & Carling Saint-Avold and invests 20% of its
budget in R&D each year.
AFYREN has been listed on Euronext Growth® in Paris since 2021
(ISIN code: FR0014005AC9, mnemonic: ALAFY).
Find out more: afyren.com
Appendix
1. Income statement
In €k
2023.06
2022.06
Revenue
1,956
1,763
Other income
226
234
Purchases and external expenses
(1,538)
(1,210)
Payroll costs
(3,249)
(3,024)
Depreciation of fixed assets and rights of
use
(406)
(301)
Other expenses
(86)
(42)
Current operating income
(3,097)
(2,580)
Non-current operating income
-
-
Operating income
(3,097)
(2,580)
Financial income
746
14
Financial expenses
(243)
(174)
Net financial income
503
(160)
Share in income of equity-accounted
company (net of tax)
(2,529)
(1,420)
Income before tax
(5,123)
(4,160)
Income tax
-
-
Net income for the year
(5,123)
(4,160)
Earnings per share
Basic earnings per share (in euros)
(0.20)
(0.16)
Diluted earnings per share (in euros)
(0.20)
(0.16)
2. Balance sheet
In €k
2023.06
2022.06
Intangible assets
3,492
3,621
Property, plant and equipment
349
358
Rights of use
363
446
Equity-accounted securities
16,456
16,513
Non-current financial assets
1,172
62
Non-current assets
21,832
20,998
Trade receivables
1,237
788
Current financial assets
361
71
Other current assets
298
630
Cash and cash equivalents
52,652
62,333
Current assets
54,548
63,822
Total assets
76,380
84,821
Share capital
519
517
Issue premiums
85,179
85,089
Reserves
(4,937)
399
Retained earnings
(9,720)
(5,828)
Net income for the year
(5,123)
(9,200)
Equity attributable to the owners of
the Company
65,920
70,978
Non-current borrowings and financial
liabilities
3,446
3,261
Non-current lease liabilities
195
224
Defined benefit liabilities
57
67
Non-current provisions
14
14
Non-current deferred income (customer
contract liabilities)
661
1,321
Non-current deferred income (grant)
981
997
Non-current liabilities
5,354
5,885
Current borrowings and financial
liabilities
1,447
4,867
Current lease liabilities
150
187
Trade payables
488
520
Current deferred income (customer contract
liabilities)
1,369
1,319
Other current liabilities
1,652
1,066
Current liabilities
5,107
7,958
Total liabilities
10,461
13,843
Total equity and liabilities
76,380
84,821
3. Cash flow statement
(simplified)
In €k
2023.06
2022.06
Net income for the year
(5,123)
(4,160)
Total elimination of expenses and
income with no cash impact
3,074
2,914
Total cash flow
(2,049)
(1,246)
Total changes in working
capital
(258)
(290)
Net cash from operating
activities
(2,307)
(1,536)
Acquisition of PPE and intangible assets,
net of disposals
(231)
(198)
Capitalised development expenses
(76)
(17)
Investment grants (incl. CIR offsetting
capitalised expenses)
(15)
(31)
Subscription to AFYREN NEOXY capital
increase
(2,000)
-
Interest received
665
14
Increase in non-current financial
assets
(1,501)
-
Increase in current financial assets
(liquidity contract)
(400)
-
Net cash used in investing
activities
(3,557)
(232)
Capital increase
93
-
Purchase / sales of treasury share
(202)
-
Proceeds from new borrowings and financial
liabilities
1,001
76
Repayment of borrowings and financial
liabilities
(818)
(274)
Repayment of convertible bonds
(3,567)
-
Payment of lease liabilities
(110)
(52)
Interest paid on borrowings and financial
liabilities
(27)
(99)
Interest paid on bonds
(178)
(178)
Interest paid on lease liabilities
(9)
(1)
Net cash used in financing
activities
(3,816)
(528)
Net change in cash and cash
equivalents
(9,681)
(2,298)
Cash and cash equivalents as of January
1st
62,333
67,128
Cash and cash equivalents as of June
30
52,652
64,831
1Before redemption of convertible bonds (€3.6m), net of new
borrowings (€1.0m) and reinforcement of AFYREN NEOXY's financial
strength (€3.5m) 2 Positive current EBITDA margin 3 Volume x price
as per contract terms 4 Upon agreement of all parties on final
terms 5 Net of other income, mainly operating grants including in
particular the research tax credit 6 Other expenses include
depreciation of fixed assets, amortization of leasehold rights of
use, and miscellaneous expenses. 7 Lease liabilities represent €0.3
million at the end of June 2023 8 Revenue in excess of €150 million
correspond to the combined revenue of the production units 9
Recurring EBITDA margin is defined at Company level.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230918819821/en/
AFYREN Director for ESG, Communications and Public
Affairs Caroline Petigny caroline.petigny@afyren.com
Investor Relations Mark Reinhard
investisseurs@afyren.com
NewCap Investor Relations Théo Martin / Mathilde
Bohin Tel: 01 44 71 94 94 afyren@newcap.eu
NewCap Media Relations Nicolas Merigeau / Gaëlle
Fromaigeat Tel: 01 44 71 94 98 afyren@newcap.eu International
Media relations Bogert-Magnier Communications James Connell +33
6 2152 1755 jim@bogert-magnier.com
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