Year-end Report 2022

Re:NewCell AB (publ)

Wed, Feb 15, 2023, 12:20 AM 8 min read

Net sales during the period amounted to SEK 5,037k (1,313)
Operating profit before depreciation and amortization (EBITDA) during the period amounted to SEK -93,097k (-58,815)
Profit/loss for the period amounted to SEK -88,333k (-66,224)
Cash flow from operating activities amounted to SEK -121,789k (-52,711)
Cash flow from investing activities amounted to SEK -162,740k (-93,240)
Earnings per share, before dilution, amounted to SEK -2.1 (-2.2)
The company's net debt at the end of the period amounted to SEK 516,773k (-254,867)

Significant events during the quarter

On October 27, Renewcell carried out a directed share issue of approximately SEK 158 million to Swedish and international institutional investors. The share issue has been used to finance the negative profit effect (operational expenses) and increased capital expenditures due to the delayed ramp-up of production operations at Renewcell 1. As a result of the directed share issue, the ramp-up of the production of Renewcell 1 to 60,000 tons in the first stage and then to 120,000 tons at a later stage can be completed without the need for additional financing.
On October 31, Renewcell 1 achieved "Commercial Operations Date", a defined date in the Company's loan agreements that relates to the point in time when the production line achieves functionality for commercial production
On November 15, Renewcell and the American company Eastman signed a letter of intent for development of yarn from recycled textiles
On December 6, the Austrian company Lenzing and Renewcell signed a large-scale and multi-year supply agreement. Lenzing Group is the world's leading supplier of sustainably produced cellulose fibers.
On December 29, Renewcell sent the first delivery of Circulose® dissolving pulp produced at Renewcell 1 in Ortviken, Sundsvall to customers
The company decided to reorganize operations at the demo plant in Kristinehamn to solely focus on product and process development. As a consequence the company is reducing the number of employees in Kristinehamn by 20.
During the month of December, Renewcell 1 produced approximately 650 tons of dissolving pulp, of which about 300 tons were of prime quality (within specification for Circulose®). About 55 tons were delivered to the customer already in December, the remaining volume is in stock for later delivery.
A number of warrants were exercised during the quarter to purchase newly issued shares in the company by CEO Patrik Lundström and two other employees. The purchase price was approximately SEK 25 million (see Note 4).

January - December
(Compared to the same period last year)

Net sales during the period amounted to SEK 12,559k (2,778)
Operating profit before depreciation and amortization (EBITDA) during the period amounted to SEK -252,037k (-120,658)
Profit/loss for the period amounted to SEK -299,936k (-117,695)
Cash flow from operating activities amounted to SEK -397,919k (-117,695)
Cash flow from investing activities amounted to SEK -880,285k (-312,174)
Earnings per share, before dilution, amounted to SEK -9.0 (-4.3).
The Board of Directors proposes that no dividend be paid for the financial year 2022.

Significant events after the quarter

The ramp-up of Renewcell 1 towards 60,000 tonnes in capacity continues. During the month of January Renewcell 1 produced over 1,000 tons of dissolving pulp, of which about half was of prime quality (within specification for Circulose®). About 190 tons were delivered to the customer, the rest is in stock for later delivery.

CEO Comment
Renewcell 1 is up and running and the first customer deliveries have been made
The first customer deliveries from Renewcell 1 were made in December and the factory ramp up is well under way. We produced over 1,000 tonnes in January and are now working to increase production up to a monthly level of 5,000 tonnes in the later part of the year. We also signed an agreement with Lenzing in the fourth quarter for the delivery of 80,000 to 100,000 tonnes over four years with an estimated value of approximately 1.5 billion SEK. The Lenzing and Sanyou agreements, when taken together, mean that we have sold two thirds of the 120,000 tonnes that Renewcell 1 will produce annually at full capacity.

On the political level we see a continuing strong support for the transformation in general but particularly regarding circularity, with the EUs "Green Deal" and USAs "Inflation Reduction Act" as two examples. Regulations continue to be tightened, especially in the textile and fashion sectors, focussed on developing recycling, minimising waste and counteracting so called "greenwashing". The fashion industry represents a large part of the global CO2 emissions which will continue to increase as a result of growth in the global middle classes. Renewcell's technology enables the fashion industry to move from a linear to a circular value chain and we operate the only large-scale textile recycling plant of its type, a plant that makes it possible to manufacture new textiles from 100% recycled material.

The fourth quarter was a good finish to a hectic year for Renewcell, where we built and started up the new factory in Ortviken in a little over 12 months. This was despite the fact that there has seldom been so many major challenges to handle at the same time: covid, inflation, problems in supply chains and war in Ukraine. Even given this backdrop we have built and started the new line and manufactured our first tonnes and delivered them to customers. This demonstrates that our innovative production technology works well and delivers 100% recycled dissolving pulp within specification. Now, we have full focus on ramping up production first to 60,000 tonnes in annual capacity and thereafter to 120,000 tonnes in the next step during 2024.

In our Kristinehamn facility the operation has beaten production and quality records quarter after quarter. We have worked in a systematic way to improve process, document operating windows and train employees from Ortviken which has been important ahead of the start-up of Renewcell 1. The focus going forward in Kristinehamn will be the development of technology and the production process.

We have also taken important commercial steps forward during the year where we have, among other things, signed a long-term supply agreement with Lenzing and made product launches with new brand partners such as ZARA, Tommy Hilfiger, GANNI, Pangaia, Filippa K and Jade Cropper. Renewcell and Circulose® have been mentioned in thousands of articles. Among these, the following can be named: CNBC, BBC, New York Times, Forbes, Fast Company, Financial Times, El Pais and Vogue - all of which means that the brand is beginning to get known.

During the year we made two new share issues. With these we have financed increased capital investments, the negative result effect from the delayed start-up, a more cautious ramp up to 60,000 tonnes of annual capacity and in the next step the investment to reach 120,000 tonnes of annual capacity.

The past year has been intense, and we would not have been where we are now without a top class team with the relevant experience of similar projects. The team works well together, and I would like to take my hat off to them and thank them for a job well done. Renewcell 1 is up and running with deliveries to customers and we are working with a gradual ramp-up to full capacity and a profitable future. Going forward Renewcell's expansion will be about delivering on Renewcell 1 and then building on that proof with the establishment of new production lines to meet the market demand.

Stockholm, February 2023
Patrik Lundström, CEO

Contacts

Patrik Lundström
CEO
patrik.lundstrom@renewcell.com
+46 76 183 47 17

Toby Lawton
Chief Financial Officer
investors@renewcell.com
+46 70 242 29 47

This information is information that Re:NewCell AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 2023-02-15 08:00 CET.

About Renewcell

Founded by innovators from Stockholm's KTH Royal Institute of Technology in 2012, Re:NewCell AB (publ) (‘Renewcell') is a multi-award-winning sustaintech company based in Sweden. The company's vision is to make fashion circular.

Through its patented process, Renewcell is able to recycle cellulosic textile waste, such as worn-out cotton clothes and production scraps, transforming it into a pristine new material called Circulose®. Drapers Magazine recognized Circulose® at their 2022 Sustainable Fashion Awards. Fast Company named Renewcell one of the World's Most Innovative Companies 2021. Circulose® was also included on TIME Magazine's list of the 100 Best Inventions 2020.

Renewcell is a publicly listed company with shares traded on Nasdaq First North Premier Growth Market with the ticker name RENEW and ISIN code SE0014960431. FNCA Sweden AB is Certified Adviser, +46(0)8-528 00 399, info@fnca.se.

Attachments

Year End Report Q4 22

SOURCE: Re:NewCell AB (publ)

View source version on accesswire.com:
https://www.accesswire.com/739434/Year-end-Report-2022

Terms and Privacy Policy

Your Privacy Choices

Utah Privacy Notice

More Info