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Accsys

Interim (Half Year) Results for the six months ended 30 September 2021

November 23, 2021

Strong revenue growth – delivering on expansion strategy

Accsys, the fast-growing and eco-friendly company that combines chemistry and technology to create high performance, sustainable wood building products, announces its interim results for the six months ended 30 September 2021 (“H1 FY 22”).

  H1 FY 22 H1 FY 21 Change
Total Group revenue   €56.2m €42.9m 31%
Underlying gross profit   €17.2m €14.3m 20%
Accoya® Manufacturing margin1   31.0% 33.5% (250bps)
Underlying EBITDA2   €4.5m €4.3m 5%
Underlying EBIT3   €1.5m €1.6m (6%)
Underlying (loss) before tax   (€0.3m) (€0.1m)  
(Loss)/profit before tax   (€0.2m) €1.0m  
Period end net cash/ (debt)4   €2.4m (€16.3m)  
Accoya® sales volume   29,555m3 26,422m3 12%

Key highlights:

  • Group revenue and Accoya® sales volumes up 31% and 12% respectively versus the prior year comparative period, which was impacted by COVID-19.
  • Maintaining good profitability with underlying gross profit up 20%:
  • Improvement in gross profit supported by Accoya® sales price increases substantially offsetting higher raw material costs.
  • 31% Accoya® manufacturing margin with 250bps decline due to changes in product sales mix.
  • 5% growth in underlying EBITDA2 with planned investment in group organisation capability to support growth and the expected production capacity increases in 2022.
  • Strategic growth projects under our ‘5x’ production capacity expansion target by 2025 are progressing well:
  • World-first Tricoya® (Hull) plant – on track to commence operations by July 2022.
  • Accoya® (Arnhem) plant – addition of a fourth reactor (+33% new capacity to 80,000m3) on track to be complete by around the end of Q1 calendar year 2022.
  • Accoya® USA JV – further project work progressing; final investment expected in coming months upon completion of financing workstream.
  • 4% increase in operating cash flow5 with continuing good cash generation from Accoya® segment; Net cash of €2.4m includes cash of €60.9m at period-end to fund expansion projects including planned US JV investment; Recent Group debt refinance improving debt cost and structure.

Notes

  1. Accoya® Manufacturing margin is defined as Accoya® segmental underlying gross profit (excluding Licence income and marketing services) divided by Accoya® segmental revenue (excluding Licence income and marketing services) (See note 2 to the financial statements)
  2. 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 2 to the financial statements).
  3. 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 2 to the financial statements).
  4. Net cash/(debt) is defined as short term and long-term borrowings (including lease obligations) less cash and cash equivalents. (See note 12 to the financial statements).
  5. Group operating cashflow is Cash inflows from operating activities before changes in working capital and exceptional items.

Robert Harris, CEO, commented:

“We are pleased to report our first half results, delivering strong growth in both revenue and gross profits. This performance demonstrates further progress on our strategy and the hard work of our employees to deliver for our customers.

There is continuing high demand for our Accoya® and Tricoya® products as customers focus on higher performance materials as well as on sustainability. It is this demand, which continues to exceed supply, that has enabled us to substantially offset the wider market pressures from raw materials costs and supply chain disruption through price increases.  

We are progressing our strategic growth projects to increase production capacity five-fold by 2025. The construction of a fourth Accoya® reactor in Arnhem is progressing well and our US Accoya® JV with Eastman is approaching its final investment decision. With Accsys now directly project-managing the completion of our Hull Tricoya® facility, we have made good progress towards the plant being commercially operational by July 2022. Our expansion at Arnhem and the new Hull plant will together see Accsys double its present operating production capacity of 60,000m3 to 120,000m3 by July 2022.

Looking ahead we remain confident in delivering on market expectations. Longer term we believe there will be significant further demand for Accsys’ higher performance, lower maintenance and more sustainable products as the world focuses on decarbonisation.”