TIDMAXS
RNS Number : 6627V
Accsys Technologies PLC
16 April 2021
AIM: AXS
Euronext Amsterdam: AXS
16 April 2021
Accsys Technologies PLC
("Accsys", the "Group" or the "Company")
Trading Update
Accsys, the fast-growing and eco-friendly company that combines
chemistry and technology to create high performance, sustainable
wood building products, today announces a trading update for the 12
months ended 31 March 2021 ("FY21"), on an unaudited basis.
FY21 Trading
-- Strong sales and revenue growth in the second half following
the rapid recovery after the initial impact of COVID-19 in the
first quarter:
o FY21 Accoya(R) revenue of approximately EUR91m, up around 10%,
with H2 up approximately 23% on H2 in prior year, with Group
revenue in excess of approximately EUR98m.
o FY21 Sales volumes of approximately 60,466m(3) , up around
4%.
-- Further progression on profitability, due to an improved
manufacturing margin through a combination of initiatives.
-- Production has continued at capacity levels throughout H2
driven by ongoing strong demand from new and existing
customers.
-- At the end of the year we are focussing on rebuilding our
inventory stock levels, which are lower than usual due to
reductions during COVID-19 disruption in H1 FY21 and some
consequent supply chain disruptions.
Progress towards doubling Group production capacity in the next
year:
Tricoya(R) Hull UK Plant
-- Construction is in the final stages of completion.
-- Under the project schedule provided by the lead contractor,
the initial processing of Tricoya(R) wood elements and expected
revenue generation is due to commence in July 2021.
-- Based upon management experience, we believe that this
schedule is at risk of being delayed by around three to six months
due to COVID-19 related challenges, recent engineering changes, and
the final stages of construction taking longer than anticipated. As
a result, we believe that full operational ramp-up is now likely to
commence in H2 FY22.
-- We are considering a full range of options to mitigate these
risks to the schedule. We have engaged expert third party
consultants to assess the lead contractor's schedule and options
for optimisation and redeployment of staff. Changing the approach
to commissioning and contractual options are also under
consideration. Our goal is to commence production safely and
swiftly; plant operator teams are in place to take over plant areas
and systems as soon as they are ready.
-- We are working towards minimising the costs associated with
delays, including those due to COVID-19, and continue to ensure
such costs are not material to the project as a whole.
-- Being the first plant of its type in the world, we continue
to plan for a three-year ramp-up to reach target production
capacity of 30,000 metric tonnes (40,000m(3) equivalent) and expect
to achieve EBITDA break-even at 40% capacity utilisation.
Accoya(R) Arnhem Plant Fourth Reactor
-- Good progress with the planned extension of the existing
Accoya(R) plant at Arnhem, the Netherlands.
-- Initial permits received and ground works commenced in
February 2021 with project on track to be operational Q4 FY22 as
planned.
-- Project will add a fourth reactor with an additional
20,000m(3) of capacity (representing an increase of 33%), taking
the plant at Arnhem to an annual production capacity of 80,000m(3)
of Accoya(R) .
Accoya(R) USA Plant: JV progress
-- Completed market due diligence which has confirmed the
substantial market opportunity for Accoya(R) wood in North
America.
-- Good progress achieved in developing the site-specific
engineering plans for building an Accoya(R) plant under a joint
venture with Eastman Chemical Company in USA.
-- Accsys has a 60% equity interest in the US joint venture with Eastman at 40%.
-- Making good progress towards full agreements and making final
investment decision in summer CY21 with construction to commence
thereafter.
-- Accsys has an existing presence in North America (sales
volume of approximately 6,642m(3) in FY21) with significant
customer demand for Accoya (R) but to date has been constrained by
production capacity in Arnhem. The US joint venture provides an
exciting opportunity for Accsys to deepen its market penetration in
this significant market where demand for high quality, sustainable
building materials is growing.
Year End Financial Position & FY Results date
-- Net debt of approximately EUR12.5m compared to EUR16.3m as at
30 September 2020, reflecting strong operating cash-flows offset by
further investment in new manufacturing capacity.
-- Balance sheet remains robust following careful cash
management during the past year given COVID-19 disruption.
-- Accsys intends to publish its preliminary results for the
full financial year in late June 2021, covering the financial year
ended 31 March 2021.
Rob Harris, Accsys CEO, said:
"We have delivered a strong 12 months during which we have grown
revenues, profits and preserved cash by successfully managing the
revenue, margin and cost challenges presented by COVID-19. This
strong performance reflects the agility of our business and the
underlying demand for our sustainable products as the world further
focuses on decarbonisation.
We have continued to make good strategic progress and are now
into the final stages of construction at our Hull Tricoya(R) plant,
the first of its type in the world. Whilst COVID-19 has presented
challenges in the final phases, we are looking forward to the plant
being operational in the second half of the new financial year and
remain confident that there is a significant addressable market for
Tricoya(R) .
During the period we have hit a number of key milestones on
expanding our Arnhem plant with groundwork started on our fourth
reactor and we remain on track to for it to be operational in Q4 FY
2022.
We are making good progress on our joint venture with Eastman
Chemical Company to build an Accoya(R) plant in North America. Our
recent market due diligence has reaffirmed our view that North
America is a significant growth market.
As we look ahead, we are in a unique position to build on the
strong financial progress this year whilst living our broader
purpose, underpinned by our clear ESG Strategy. Our products are
aligned to the global trend of decarbonisation with demand
outstripping supply and consequently we are increasing production
in the Netherlands, UK and intend to do so in the US to reach our
'5X' growth ambition to increase our production capacity to
200,000m3 per annum by 2025 and meet this growing demand."
Ends
For further information, please contact:
Accsys Technologies plc ir@accsysplc.com
Sarah Ogilvie, Investor Relations
========================================= ======================
Numis Securities (London)
Oliver Hardy (NOMAD), Ben Stoop +44 (0) 20 7260 1000
========================================= ======================
Investec Bank plc (London)
Carlton Nelson, Alex Wright +44 (0) 20 7597 5970
ABN Amro (Amsterdam)
Richard van Etten, Geertje Cornelissen +31 20 344 2000
========================================= ======================
FTI Consulting (UK)
Matthew O'Keeffe, Alex Le May +44 (0) 20 3727 1340
========================================= ======================
Off the Grid (The Netherlands)
Frank Neervoort, Yvonne Derske +31 681 734 236
========================================= ======================
Notes to editors:
Accsys (Accsys Technologies PLC) is a fast-growing business with
a purpose: changing wood to change the world. The company combines
chemistry, technology and ingenuity to make high performance wood
products that are extremely durable and stable, opening new
opportunities for the built environment and giving the world a
choice to build sustainably.
Accsys transforms fast-growing, certified sustainable wood into
building materials with characteristics that match or better those
of man-made, intensely resource-depleting and heavily
carbon-polluting alternatives.
The company's primary focus is on the production of Accoya (R)
wood and Tricoya (R) wood elements, as well as technology licensing
via its subsidiaries Titan Wood Limited and Tricoya Technologies
Limited. Accsys has its head office in London, UK, production
operations in Arnhem, the Netherlands, an American office in
Dallas, Texas, and is constructing the world's first Tricoya (R)
plant in Hull, UK.
Accsys is committed to a more sustainable world and uses
abundantly available wood sources that are certified as
sustainable. With our business model already aligned with several
UN Sustainable Development Goals, Accsys is currently working on
identifying further strategic ESG priorities to have an even
greater positive impact on the world.
Any references in this announcement to agreements with Accsys
shall mean agreements with either Accsys or its subsidiary entities
unless otherwise specified. Accsys Technologies PLC is listed on
the London Stock Exchange AIM market and on Euronext Amsterdam,
under the symbols 'AXS'.
More information about Accsys can be found at
www.accsysplc.com
Accoya (R) wood is a sustainable, durable and stable solid wood
product with exceptional performance, finish and sustainability.
Accsys' proprietary acetylation process makes the wood more
dimensionally stable and, because it is no longer easily
digestible, extremely durable. Produced from certified (e.g. FSC
(R) ) sustainable sources, Accoya (R) wood has many environmental
credentials and ecolabels, and is one of very few building
materials to be Cradle to Cradle Certified(TM) at the Gold level,
with a Platinum rating for Material Health, confirming that no
harmful or toxic additives or chemicals are present to leach out
into the environment.
With an up to 50 year warranty and 70+ year service life, the
combination of sustainability, dimensional stability, durability
and retained strength means that Accoya (R) wood offers a wealth of
new opportunities to architects, designers, specifiers,
manufacturers and homeowners. These benefits result in lower
maintenance and total cost of ownership while also offering
significant sustainability benefits. For more information about
Accoya (R) wood, visit www.accoya.com .
Tricoya (R) wood elements ( www.tricoya.com ) are produced using
Accsys' proprietary technology for the acetylation of wood chips
and particles for use in the fabrication of panel products such as
medium density fibreboard (MDF) and particle-board.
Panel products made with Tricoya (R) wood elements are truly
durable and stable enough for use outdoors and in wet environments.
Combining the sustainability, durability and stability from our
acetylation process with the ease of use and quality finish of wood
panel products, the enhanced durability and dimensional stability
opens new opportunities for the use of these products, making them
suitable in applications and environments that previously required
solid wood, synthetic or unsustainable materials.
Tricoya (R) wood elements have been lauded as the first major
innovation in the wood composites industry in more than 30 years.
For more information about Tricoya (R) wood elements, visit
www.tricoya.com.
Wood acetylation is a process which increases the naturally
occurring acetyl content of wood, thereby changing its physical
properties. When carried out to a sufficient degree throughout the
wood, as with Accsys' proprietary process, it significantly reduces
the ability of the wood to absorb water without adding any toxic or
harmful compounds, elements or substances that were not already
present in the wood. This makes it much more dimensionally stable
and, because it is no longer easily digestible to most organisms,
extremely durable.
'Accsys' and 'Accsys Technologies' are trading names of Titan
Wood Limited ("TWL"), a wholly-owned subsidiary of Accsys
Technologies PLC. Accoya (R) , Tricoya (R) and the Trimarque Device
are registered trademarks owned by TWL, and may not be used or
reproduced without written permission from TWL, or in the case of
the Tricoya (R) registered trademark, from Tricoya Technologies
Limited, a subsidiary of TWL with exclusive rights to exploit the
Tricoya (R) brand.
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