Home » AFYREN publishes its 2022 Half-Year Results

AFYREN publishes its 2022 Half-Year Results

27 September 2022

Press release

Clermont-Ferrand/Lyon, September 27, 2022, at 05:45pm CEST – AFYREN, a greentech company that provides manufacturers with bio-based and low-carbon products thanks to its fermentation technology based on a completely circular model, today announced its results for the first half of the current fiscal year, ended June 30, 2022, and approved by the Board of Directors on September 27, 2022 .

Nicolas SORDET, CEO of AFYREN declares: “After a year 2021 full of challenges and achievements, this first half-year was the opportunity to pursue and implement our commercial, industrial and CSR strategy. The industrial commissioning of our AFYREN NEOXY plant on the Carling Saint-Avold site was carried out according to the announced schedule and within budget. Over the last few months, we have also built up a diversified portfolio of customers, made up of well-known players in all our target markets. Thanks to these assets and committed to our commitments, we are studying with the highest attention the establishment of a second international plant and confirm our commercial and financial targets. Finally, at the end of a summer during which climate change was top-of-mind worldwide, we are more than ever ideally positioned and committed to helping our customers reduce their impact on the environment.

Key financial information as of June 30, 2022

See table in documents

Sales in H1 2022 increased by 16% to €1.76 million. Sales generated by the licensing agreement amounted to €0.71 million in H1 2022, unchanged from H1 2021. They come exclusively from the lump sum portion of the know-how license granted to AFYREN NEOXY in December 2018. Other services of €1.05 million, up +29% year-on-year, correspond to services invoiced by the Company to AFYREN NEOXY under the agreements signed between the two companies.

Other income amounted to €0.2 million in H1 2022 compared to €0.1 million in H1 2021. They mainly comprise operating subsidies (including in particular the research tax credit) and investment subsidies received.

Current operating expenses amounted to €4.6m compared to €2.5 million on 30 June 2021, an increase of +83% to €2.1 million resulting mainly from the increase in payroll costs (+€1.4 million) and external purchases and expenses (+€0.7 million).

Thus, with the start-up phase of the AFYREN NEOXY plant and the preparation of the next plants, the Company logically recorded a drop in its operating profit as of June 30, 2022, to €-2.58 million.

Net financial expense was €0.2 million in H1 2022, mainly due to interest expenses related to the Company’s financial debt and interest related to IFRS restatements.

The share held in the result of AFYREN NEOXY amounts to €-1.4 million on June 30, 2022, against €-0.5 million on June 30, 2021. This evolution is mainly explained by the recruitment of the staff necessary for the operation of the plant.

Finally, the net result is €-4.2 million on June 30, 2022, against €-1.5 million on June 30, 2021. This net loss is in line with the Company’s expectations, in a phase where AFYREN and AFYREN NEOXY teams are fully mobilized for the start-up of the first plant and the preparation of the next ones.

Balance sheet as of 30 June 2022

As of June 30, 2022, AFYREN benefits from a solid balance sheet, as its shareholders’ equity amounts to €88.9 million, i.e. +159% compared to the first half of 2021 (mainly linked to the capital increase in the framework of the IPO in September 2021) and slightly down by -4.5% compared to December 31, 2021.

Cash and cash equivalents amounted to €64.83 million as of June 30, 2022, mainly including funds raised in connection with AFYREN’s IPO in September 2021.

Gross financial debt amounted to €8.6 million as of June 30, 2022, including borrowings and lease liabilities.

As a result, the net cash position was €56.23 million as of June 30, 2022.

H1 2022 Highlights

Activity

In line with the announced schedule and budget, the industrial commissioning of the AFYREN NEOXY plant, AFYREN’s first large-scale plant, was initiated in March. The industrial unit has since entered the start-up phase, consisting of tests for the gradual commissioning of the various equipment before the actual launch of production.

In May, AFYREN once again demonstrated the relevance of its biosourced, circular and low-carbon offer by signing a strategic contract for the supply of an organic acid from the AFYREN NEOXY range in animal nutrition.

Finally, at the end of May, AFYREN launched new brands for its biobased products in its target markets, offering competitive, high-performance solutions for manufacturers who are increasingly demanding more environmentally friendly alternatives.

CSR

Following several months of reflection and consultation, AFYREN has defined and formalized its Purpose: “We enable low-carbon, circular industry by providing biobased solutions built with our partners to benefit the environment“. The Company’s CSR approach is also supported by a statement defining the Company’s ambitions, values, and major commitments, as well as by a new extra-financial rating, up 11 points on the previous year.

Governance

The Annual General Meeting of shareholders held on 15 June 2022 approved all of the proposed resolutions, and in particular the appointments to the Board of Directors of Mrs. Patrizia MARRAGHINI as an independent Director and Chairwoman of the Audit Committee and Mrs. Caroline LEBEL as a Director.

Post-closing highlights (30 June 2022)

In July, the Board of Directors authorized the creation of a CSR Committee composed of Ms. Caroline LEBEL, Director, as Chairwoman of the CSR Committee, as well as Ms. Patrizia MARRAGHINI, independent Director, and Mr. Nicolas SORDET, Director and Chief Executive Officer of the company.

In August, AFYREN signed two strategic contracts with players in the cosmetics and nutraceuticals markets. As a result, AFYREN now has signed contracts for its entire portfolio of acids in all of its priority markets. The Company has also pre-sold more than 70% of AFYREN NEOXY’s targeted production volume of organic acids.

Outlook and financial objectives

AFYREN is currently studying the implementation of the plant n°2 for a commissioning at the end of 2024, in particular by the analysis of the various scenarios on several raw materials, in North America and in Asia, by the discussions in progress with potential partners and by the evaluation of the structuring of the financing. These analyses take into account the climate issues and possible opportunities to access an available and low-value raw material through partnership agreements, in order to optimize the carbon impact of the AFYREN solution. These analyses include feasibility studies (in terms of logistics, energy, CO2 impact, security of supply, and customer proximity) which will be used to confirm the deployment schedule.

In the longer term, and with two complementary plants (plant n°2 and n°3), AFYREN reaffirms its outlook and financial objectives:
1. To have an annual production capacity of more than 70,000 tons by 2026
2. To reach a positive adjusted current EBITDA margin for AFYREN NEOXY by 2023, and a positive current EBITDA margin for AFYREN by 2025
3. Achieve a recurring EBITDA margin at Group level of around 30% in 2027 with sales in excess of €150 million

Availability of the 2022 Half-Year Financial Report

The Company has made available to the public and filed with the Autorité des marchés financiers its 2022 half-year financial report on September 27, 2022.