Accsys Technologies Interim Results for the Six Months Ended 30 September 2024

Clear strategic progress, significant increase in Adjusted EBITDA and 10% increase in total sales volumes

Accsys, the world’s leading supplier of premium, high performance and sustainable wood building materials, announces its unaudited interim results for the six months to 30 September 2024 (H1 FY25).

Dr Jelena Arsic van OS, CEO Accsys Technologies PLC said:

“Our results show strong progress. The transformation programme and the actions we have put in place are working. Accsys is continuing its growth momentum, delivering double digit growth in a relatively soft building materials market. At the same time the Group is materially improving profitability, and cash conversion. The Group is now better positioned to fulfil its attractive market potential.

Accsys has moved beyond its peak investment period. In H1, we have simplified and derisked the Group through the successful start-up of the Kingsport plant and the decision to discontinue the project in Hull. We are accelerating sales and marketing activities, and an operational turnaround is in progress.

As we look ahead, we are excited and pleased to upgrade guidance for the year. With our US facility fully operational, we have greater capacity to serve our customers in one of the world’s most attractive markets with our industry leading wood building products. Our increased capacity and product availability mean we are in a strong position to capitalise on the anticipated improvement in market conditions as it occurs and deliver on our medium-term ambition of 100,000m³ sales volume.

Financial overview

• 10% increase in total Accoya sales volumes at 31,553m3 (H1 FY24: 28,807m³) reflecting robust customer demand for our materials despite continued challenging market conditions in the global construction and building materials sectors
  • North America sales volumes showed impressive growth of 18% year on year at 4,983m³, highlighting growth potential for the newly operational Kingsport site
  • Volumes in regions outside of the US are up +8%, driven by robust performances in the UK, France, Benelux, and ROW
  • Accoya for Tricoya sales volumes are up 7% year-on-year, underlining Tricoya’s long-term potential
• 4% growth in aggregated revenue (inclusive of JV) at €74.1m
  • Revenue growth driven by increased sales volumes across regions, with average sales price across the mix maintained at a high level.
  • Aggregated wood revenue increased by 7%, partially offset by a reduction in non-wood revenues, primarily acetic acid sales, which have a natural hedge against acetyls purchasing.
• Gross margins exceeding 30% target
  • 9% increase in gross profit driven by increased sales volumes and optimisation of wood procurement
• €2.4m growth in adjusted EBITDA to €4.0m, driven by robust demand, pricing discipline and 22% reduction in underlying operating costs
  • Business transformation programme delivered €2.5m savings compared to H1 FY24
  • Additionally, lower operating costs in Hull contributed to a €1.4m saving compared to H1 FY24
• €3.3m increase in US JV EBITDA loss (to €4.3m) compared to H1 FY24 (€1.0m) as Accoya USA concluded its pre-operating activity and initiated commercial operations in the period
• Tricoya UK resolves to enter creditors voluntary liquidation with an exceptional restructuring cost of €3.9m recognised in the period and a final exceptional non-cash impairment charge of €18m.
  • Annual operating cost savings of €3m are expected from the Hull plant closure.
• Large capital expenditure projects now complete, derisking the business and moving past the point of peak investment
• Net debt at 30 September of €40.2m, an increase of €3.1m from the end of the last financial year, primarily due to planned investments of €7.2m into the US joint venture

Operational Highlights

• Good progress made on FY25 operational targets:
  • Accoya USA site: The joint venture Accoya production facility in Kingsport, Tennessee is now commercially operational
  • Operational efficiencies: the Solid Roots program is on track to deliver a 500 basis points improvement in overall equipment effectiveness (OEE) at our Arnhem facility in the financial year
  • Cost savings: The Company is on track to deliver €3m of cost savings from the business transformation programme in FY25, in addition to annualised cost savings of €3m from Hull closure
• Acceleration of sales and marketing, supporting progress towards run rate of 100,000m³ by end of FY27
• New CFO Sameet Vohra appointed on 30 September 2024

Current Trading and Outlook

• Accsys has made a good start to H2 FY25 and expects full year results to be significantly ahead of market consensus
• While market conditions are expected to remain challenging in the near term, the Group expects total sales volumes in H2 FY25 to maintain growth momentum, driven by positive demand development in key European markets and the new capacity in the USA
• The Group will focus on maximising sales and marketing to produce returns on its major plants in Arnhem and Kingsport
• With the gross margin maintained, the Company will continue to benefit from the business transformation programme and savings from the closure of Hull
• As Accoya USA continues to ramp up, underlying profitability is expected to improve in the second half of the year
• The Company will hold an Investor Strategy Day at its Arnhem site on 30 January 2025

For full press release click here.

About Accsys Technologies

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 Accoya® wood and Tricoya® wood elements: 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 an up to 50-year warranty, locking carbon stored in the wood into useful products for decades, with performance characteristics that match or better those of non-renewable, resource-depleting and polluting alternatives. Accsys is listed on the London Stock Exchange AIM market and on Euronext Amsterdam, under the symbols ‘AXS’. Visit www.accsysplc.com.

Source: Accsys Technologies PLC