Accsys Technologies PLC

Good day and thank you for standing by. Welcome to the Axis Technologies PLC preliminary results for the year ended 31st of March 2023 webcast. At this time, all participants are in a listen only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. you will then hear an automated message advising your hand is raised. I would now like to hand the conference over to your speaker today, Stephen O'Dell, Executive Chair of Access Technologies PLC. Please go ahead.

Good morning, everyone, and welcome to our preliminary results presentation for the year-ended 31st of March, 2023. Here's our usual disclaimer. which I'll let you read in your own time. Next slide, please, operator. In terms of this morning's agenda, I will begin with an overview of the results, then Stephen Sarlow will take you through the financial detail. I'll then go through the business review, highlighting progress on our growth and expansion strategy, the recent challenges we've overcome, and the outlook for our business. Next slide, please. Overall, I'm pleased with our performance in FY23. Demand for our Accoya and Tricoya brands has been strong throughout the year as customers have continued to seek out our outstanding products. The strength of the Accoya brand has allowed us to offset macroeconomic inflationary pressures such as high energy and chemical costs through price increases. As a result, revenue increased by 34% to 162 million euros. The completion and startup of reactor four in Arnhem, combined with the reactors one to three returning to production after the plant shut down in April and May 22, has led to a 6% growth in volumes and record volume production in quarter four. I'm delighted to report that EBITDA rose by 120% to 22.9 million euros. Turning now to our operating highlights. The completion of Reactor 4 in Arnhem adds 33% additional capacity to the plant and has enabled us to sell more products than ever before. Since breaking ground at our Accoya USA plant in Kingsport, Tennessee in April 22, we've made good progress with construction successfully completing a number of key milestones. However, as previously announced in May this year, the project has experienced some delays and cost inflation, which is being felt throughout the industry globally. The plant, which will service the substantial latent demand in the North American market, is expected to commence commercial operations mid-2024. And of course, We're providing a significant update on our whole project today. The board has been reviewing the plant over the last six months and believes in the underlying attractive economics and margins of completing its construction. We will therefore continue to explore funding options to support the plant's construction. More details of that later. And I will now hand over to Steven Salo to go through the numbers.

Thank you, Stephen, and good morning, everyone.

I'll now take you through the financial results, starting with the financial highlights. Revenue growth for the year was strong, up 34% to €162 million. This was achieved despite a 19% reduction in sales in H1 caused by production constraints in Arnhem during the construction of Reactor 4. The strong growth in the full-year revenue reflects high product demand higher average sales prices, and the implementation of an energy price premium to mitigate higher gas prices. Despite the gas price and other inflationary cost pressures, our key manufacturing profit metrics were strong. Gross margins were 4% higher than last year at 34%, and in excess of our long-term target for gross margin of 30%. This enabled gross profit to increase by just over 19 million euros 55.2 million euros, with price increases more than offsetting rising raw material costs. The resulting underlying EBITDA of 22.9 million euros represents growth of 120% ahead of our previous guidance of nearly doubling last year's EBITDA. We have recorded an exceptional non-cash impairment charge of 86 million euros in respect to the tri-quarter assets. This takes account of the previously reported capex to complete construction at 35 million euros, a higher pre-tax weighted average cost of capital, principally due to higher interest rates, and a decrease in the production volume forecast for the plant from 30,000 megatons to 24,000 megatons. Stephen will cover the latest on the Tricoya project in detail later on. Net debt increased by 16.9 million euros in the year to just over 44 million euros. This is due to the planned investment of 29 million euros in ACOIA USA and CAPEX investments of 30 million in respect of Arnhem and Hull. This spend was partially offset by the 19 million capital raise in May 2022, the reduction in the NatWest loan of 9.4 million euros as part of the Tricoya consortium restructuring and from EBITDA generation during the year. Next slide, please. Looking now at our sales mix, during the period, we have continued to balance our customer demands with our capacity constraints while successfully targeting key growth markets. We continued to see strong underlying demand for Akoya across all our regions and with our tri-Koya panel manufacturers. Our proportion of sales into North America increased where we are targeting the market ahead of our planned US capacity expansion in what remains the largest market for our products globally. 24% of our total sales volumes come from Tricoya, and this proportion increased during the year by 2%, clearly an important product for us. Looking now at how Acquia and Tricoya have performed during the year. Acquia's revenue and sales volume raised by 37 and 6% respectively. The increase was driven by product demand higher average sales prices and the implementation of the energy price premium. At the interims in November, we guided the market to expect a 50% uplift in sales volumes in H2, and I'm delighted to report we beat this with a 64% sales volume increase H2 on H1. While sales volumes into the UK and Ireland and Europe were slightly down year on year, we delivered double digit growth in our key American and rest of world markets. I'd also like to draw your attention to the final figure in the chart, the 18% sales growth of Tricoya to our customers. The strength of this performance and the continued market demand for the product underpins our belief in the long-term market potential for Tricoya, which brings me to a few more comments on Tricoya. Next slide, please. Again, you can see the revenue and sales volume performance of Tricoya in the chart on the left, I think one more number warrants attention, and that is the 24% of total group volumes that Tricoya represents. This clearly reinforces the strategic importance of the Tricoya market to Axis. As mentioned on the previous slide, market demand for Tricoya remains strong, and the applications of our Tricoya product continue to be many and varied. Turning now to EBITDA progression. You will see that we've carefully managed our profitability at a time of increasing raw material costs. Average acquire prices increased significantly, offsetting higher raw material prices and ensuring that we achieved in excess of our long-term target of 30% gross margin. Included within the 30.7 million euro sales price increase, 23.3 million euros is purely attributable to ACOYA price increases implemented in both FY22 and FY23. 3.5 million is due to the benefit of stronger US dollar, noting that we sell ACOYA in euros to most of our customers, but our North American pricing is in US dollars. And 3.9 million euros is from the energy price premium, which we implemented in May 2022. This is the mechanism whereby we invoiced our customers an additional amount if gas price prices increased above certain thresholds and enabled us to mitigate the effects of volatile acetyls pricing. With the stabilization of gas prices during the second half of the year, we are no longer adding this surcharge. 3.1 million euros came from higher volume productions. Raw materials increased, driven by higher acetic anhydride costs and raw wood costs. Other manufacturing costs also increased due to the high inventory levels and high utility costs, most of which is due to higher energy pricing. ACOIA operating costs and other group operating costs both increased more moderately, with main increases due to higher staff and insurance costs. The ACOIA USA JV share of loss also increased, reflecting an increase in project activity levels. Most of the costs incurred have been capitalized within the JV. with a total of 31.2 million euros invested to date. The cost associated with the JV will increase in FY24 as we gear up towards mechanical completion and the operation of the plant. Next slide, please. This brings me to summarize the five-year profit and revenue performance of Axis. You will see that Axis has been on a journey, a successful journey, and one worth reflecting on. Whilst the jump in revenue in FY22 to FY23 is impressive, it is important to view this in light of the overall strong progression that's been made over the last five years. We've managed to grow revenue on a compound basis by 21% and underlying EBITDA by 125%. We plan to continue building on this growth and positive momentum. Turning now to our debt position. Opening net debt of 27.2 million euros. increased by 16.9 million euros during the year, ending with a closing net debt position of 44 million euros at 31 March, 2023. There are a number of moving parts to highlight. The Akoya business generated EBITDA of 38.5 million euros. Following the TriKoya construction being put on hold following the November restructuring, it generated an operating loss of 5.1 million euros. Working capital increased during the year driven by higher inventory levels and higher receivables following the increase in production levels related to Reactor 4 coming online. The group spent 29.8 million euros of CapEx during the year, including 7.9 million into the Arnhem expansion project, plus 20.1 million into the construction of the whole plant prior to it being put on hold. Our investment in Acquia USA during the year was 29 million euros. This cash represented accesses 60% investment and was made alongside Eastman's 40% investment. Finally, Axis completed an equity raise by way of a placing in May 2022, raising net proceeds of 19 million euros, which have helped strengthen the balance sheet, increase liquidity headroom and fund additional costs for Reactor 4 in Arnhem. Moving on to the next slide and to explain our financial position in more detail. I have covered net debt and our investment into Accoya USA, so I will not repeat those comments here. To note, tangible assets of 110 million euros decreased by 71 million euros due to the Tricoya impairment of 86 million euros, partially offset by additional capex spend during the year. Networking capital increased by 14.7 million euros, driven by higher inventory levels, 9.6 million euros, Receivables, which increased by €1.2 million, and a decrease in payables of €4 million. In relation to the reduction in payables, €8.7 million of the opening balance was mainly connected to a capex spend on hull prior to the project being put on hold and unwound during the year. I would also like to draw your attention to the VRI, or Value Recoverability Instrument, which represents a liability of €1.4 million. This instrument was issued to NatWest as part of the Tricoya debt restructuring, which I will cover in more detail shortly. At 31 March 2023, we held cash balances of 26.6 million euros, a 15.5 million euro decrease on the prior year. This is attributable to construction costs relating to Arnhem and Hull and the investment into Equoia USA and the increase in inventory referred to above. This was partially offset by the capital raise in May 2022, 10 million euro proceeds from loans and cash flow generated from our operating activities. More importantly, when adjusting for the cash pledged for the letter of credit provided to First Horizon Bank of approximately 10 million euros. And in the prior year, the adjustment for cash earmarked to be invested in Accoya USA adjusted cash increased by 12.5 million euros during the year to 16.8 million. Next slide, please. In November 2022, we agreed with our partners, Ineos Medite, BGF and Volantis, to acquire 100% ownership of the plant, the whole plant, and the Tricoya Group entities, Tricoya Technologies Limited and Tricoya UK Limited, in exchange for 11.9 million new shares in Axis, representing 5.74% of our total share capital. valued at 9.5 million euros. At the same time, we restructured the debt arrangements between Tricoya UK and NatWest, which resulted in a 9.4 million euro reduction in the principal debt to 6 million euros and restructured into a new seven-year term loan with no capital repayments during this period. In addition, we issued the VRI instrument to NatWest as part of this restructure. The construction of plant was then put on hold. It is clear that the market for Tricoya has attractive underlying fundamentals, which Stephen O'Dell will discuss in more detail very shortly. However, this restructuring was executed to provide access with a wider range of options in respect of serving this market and in relation to completing the plant in a time frame more of our making. The reorganization of the Tricoya Consortium will also provide access with improved licensing opportunities. I will now hand back to Stephen for the business review and outlook. Thank you, Stephen.

Many of you follow our business closely, so I'll run through the next few slides pretty quickly as a recap of what we do, our products, our market, and our strategy. Our proposition is this. We have innovative technology and world-leading products which are positioned within the global wood products market, which is currently estimated to be worth some $748 billion in 2023, and with a compound annual growth rate of 7.4%. At Axis, we transform fast-growing, certified, sustainable wood into a building material with characteristics that perform strongly against man-made, resource-depleting, and carbon-polluting alternatives. As our products compete with and indeed displace other building materials, including concrete and plastics, the market opportunity is even greater. We have bold but realistic growth ambitions, and our strategy is predicated on four key pillars of growth. The first is to develop market opportunities to drive revenue growth. The second is to grow our global manufacturing production capacity and do things faster, better, and more safely. Thirdly, we will continue to develop our process-related technologies and products to protect and grow our leading market position And fourth, we will continue to develop our people and organizational capability to enable us to meet our growth objectives. Next slide, please. Many of you will be familiar with this slide and our products, so I'll skip over it. We'll upload the presentation to our website after this call if you wish to review it in more detail. Next slide. This year has been one of major significance for the company as we completed the expansion of our plant in Arnhem through the addition of Reactor 4, which began operations in September 2022. Reactor 4 adds an additional 20,000 cubic meters of capacity, taking Arnhem's maximum annual capacity to 80,000 cubic meters. As reported back in November, we did have some unexpected delays in the final installation and supply of equipment for reactor 4, and also experienced some defects to machinery, which resulted in an unplanned second shutdown across the plant in April and May 22. Since startup, however, the reactor has been working well. Further work on enhancing productivity to reduce cycle times and deliver more capacity is planned for the coming year. We're also investing in new stacking technology to drive efficiency improvements across the plant. A couple of words now about our Akoya color operations in Barry Wiles. The plant has increased our ability to convert Akoya wood into Akoya color, a product which combines the benefits of Akoya wood with color all the way through the wood from surface to core. A much smaller site in Arnhem, the plant has a maximum capacity of 12,500 cubic meters a year. Operation improvements to the site last year resulted in an increase of production of 140% to just over 4,000 cubic meters. And while this is a good result, we would expect a further increase in production in the coming year. Akoya Color's unique proposition is proving to be very attractive to customers in our target markets, particularly in the decking category, where the surface to core gray color requires less maintenance to maintain over the long term. In addition to our existing markets of Germany, Switzerland, Austria, and the US, Akoya Color was launched this year in Australia, New Zealand, and France. It's also worth pointing out to you that Akoya Color generates a higher gross profit per cubic meter than Akoya. And so we enhance our product margins over time. Turning now to the US and our joint venture with eSmith. As we have said many times before, North America is the largest potential market for our products. Together with world-leading chemicals giant Eastman, we're building an aqua plant in Kingsport, Tennessee. The new plant, which will replicate the proven technology of our successful plant in Arnhem, has an initial capacity of approximately 43,000 cubic meters. Under the terms of the JV, Axis holds 60% interest and Eastman 40% in the project. Progress with construction of the plan, which commenced in April 2022, has been good, and a number of key milestones are now complete. However, as announced in our May trading statement, the project has experienced some delays in cost inflation, which I will add are being experienced throughout the construction industry at the moment. So we're not alone in this. We therefore expect to commence operations in mid 2024. Both we and Eastman remain fully committed to the project and its successful completion. As you will have seen highlighted in our results statement this morning, costs will increase at the site in the coming year. Now, this partly reflects the inflation increases I referred to just now, but it's mostly because as we near completion, we need to increase our investment in people and infrastructure in preparation for startup. And finally, before I move to the next slide, a comment about health and safety at the site, which is, of course, of paramount importance to us as a group. By the 2023 year end, the plant celebrated over 150,000 hours worked with only one minor first aid injury, which I think is a fantastic achievement. Moving on now to the world's first tricoia plant in whole, and the Board's review of the project, which has been on hold since November last year. Before I go into the detail, let me start by saying the key findings of the Board's review. We continue to believe in the underlying attractive economics and margins associated with completing the construction of Hull, and we will therefore continue to explore funding options to support the plant's construction, including strategic partners and lending institutions. Looking at the cost to finish the construction and complete commissioning, our original assessment was that we would require up to 35 million euros for this. And we can confirm that this is still the case. Bicoi production for Marlham has continued over the period. And our offtake partners, Medite and Finza, who convert the coir into tricoir and help seed the market, remain committed and supportive partners. And demand for the product remains strong. Ongoing discussions with both partners about future arrangements following completion of the plant remain positive. We've also been in discussions with certain strategic partners with a view to providing appropriate funding necessary to complete the plant's construction. To date, the company has been unable to reach acceptable terms with any of these strategic partners. Looking forward, should we be unable to secure third party funding, we will use modest levels of internally generated cash to maintain the plant and progress some pre-construction work. Despite our continued confidence in the future for Tricoya, the board is clear, however, that the core Axis business must not be compromised to find a solution for Hull. In the meantime, we will continue to work with our partners to develop the Tricoya market using Acquia, including exploring the expansion of dedicated capacity for greater volume production within our existing facilities. Next slide, please. To the left of the slide is a summary of our performance. And despite some disappointing setbacks, it has nevertheless been a year of considerable progress, as I hope we have communicated to you today. Looking forward to FY24, we expect to leverage the benefits from greater economies of scale associated with higher production volumes at our plants. This year will also be one of transition, during which we will implement actions to ensure the business's sustainable growth and to drive value creation for our shareholders. These actions include moving towards completion of the Kingsport plan, which will incur higher costs this year, as I have already outlined, and also further investment in the core business to support higher volume production. In view of our increased capacity, from the expansion of Arnhem and future capacity from Kingsport, and in light of the softening of price and demand in the global construction industry, we're dedicating more resource to our sales and marketing activity globally, and particularly in the US, to create more demand as supply becomes available. We've made a good start to FY24, with performance in line with our expectations. With our new executive management team in place to drive the business forward in its next phase of growth, we are confident in delivering further financial and operational progress in the coming year and in the longer term demand and growth opportunity for Akoya and Tricoya. Thank you for listening. We will now hand back to the operator who will moderate today's question and answer session and which will be hosted by our CFO, Stephen Salmo. Over to you, operator.

Thank you. As a reminder, to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please note that questions today may only be asked by analysts and investors. Please stand by while we compile the Q&A queue. Our first question comes from the line of Martin Dendrigeva from ABN AMRO Oddo. Please go ahead. Your line is open.

Yes, good morning. And it is indeed a difficult name, operator. Martin Dendrigeva for ABN AMRO Oddo. Can you hear me, by the way?

Yes, I can, Martin. Good morning.

Okay, thank you. My first question is with regards to Tricoya UK. Well, you've had six months of discussions. You see long-term potential, attractive margins, or even financing pre-construction. So can you shed a bit of light on what is the key hurdle? Is that valuation? Is that shareholder agreement details? Is it that your strategic partners still see some uncertain economics? That would be part one. And part B would be, as I said, you've had six months. What time are you going to take to complete this process? Is it going to be another three months? Is it going to be another six months? Just a bit of light on the timing of this process. That's question one, please.

Thanks very much for the question, Martin. I think it's fair to say we have been talking with strategic partners around funding options. I think it's fair to say we need to reach an agreement that would work for both parties, including our shareholders. So we haven't been able to reach an agreement with any strategic partner that we've been speaking to to date. In terms of, your question was what is the biggest hurdle that we see right now, and the biggest hurdle that we see right now is putting in place the appropriate financing to fund the completion of the construction. So we will continue to explore options in respect of that. And in terms of your second question, what sort of timeframe that we would put on this, we will continue to assess it, but the group you know, continues to generate excess or not excess cash, you know, generate cash flow and internally generated cash flow maybe in time deployed to complete the construction of Hull.

Did I understand you correctly that you, okay, so you're even, if developments move your way, you might even decide to finance it and fund it completely. That's what you said last.

Yes, so effectively all options are on the table, and yes, we will consider the use of internally generated cash flow to fund the construction in time.

Okay, and just going back, obviously funding was the key element that needs to be resolved, but in your discussions with these strategic partners, what is the key hurdle? Is that the valuation of the plants? Is it that you're still in discussions, not so much on evaluation, but what happens if things turn out a little bit different from the planned scenario? Are the strategic partners understanding of your belief that there is an interesting economic proposal? Not so much the funding, it's of course the key problem. What are the strategic partners saying to you why you could not reach

Martin, I think you'll probably appreciate that we wouldn't disclose discussions that we're having with third parties, the details thereof.

Then I'll move on to my second question. Could you provide a bit of guidance, obviously no sales or MDA numbers, but perhaps something on production or whether that 34% gross margin is sustainable? Could you provide a bit of colour on 2024, a bit of guidance there?

So, just as a policy... Sorry, Martin. Go ahead, Stephen. As a policy, we don't provide guidance. However, I think what I would draw your attention to is we have indicated record production in H2 of FY23 And as stated in the Chairman's statement, we've had a good start to FY24. In terms of our long-term gross margin target is 30%, and we will do what we can to maintain and to beat that target.

Okay, so it doesn't make any sense to ask a question about the incremental OPEX you know, the staff additions, the marketing investments, anything you could help us with to understand what the impact might be of those elements in terms of OPEX.

In terms of, sorry, what was the question, Martin? Do you mind repeating it, please?

Yeah, in the question, you've outlined that you've been adding staff, group operations and engineering, director, center of engineering and project. Obviously there's a tail end effect of that in 2024. You've announced a marketing program in the UK. You will invest more in marketing in the US. So is there something you can help us with with regards to OPEX, incremental OPEX in 2024?

Martin, we're not providing guidance at that level of detail at this stage.

OK, then hopefully one that you can answer. Acquire color. To what kind of capacity is the plant after these modifications? Where can it go in terms of production capacity?

I think, if you like, we're looking at, in FY24, targeting a few thousand

meters cubes to go through that plant less less than uh less than double digits less than double digits okay and then my final one uh the cost over in sequoia usa is is there anything you could help us with in terms of ballpark a range perhaps so we can get a better understanding of what a cost overrun means

Again, I've got nothing more to add beyond what we've stated in our R&S.

All right. Thank you very much, gentlemen. Thank you.

Thank you. We'll now move on to our next question. Our next question comes from the line of Kristen Hulth from Numis. Please go ahead, your line is open.

Thank you very much, morning team. Three questions from me, if that's okay. So the first one, just sort of following on the question on Hull and the ability to use potentially internal resources in time. I imagine that's not necessarily the first choice as we stand here today, but if that is the route that has to be taken, how should we think about that in terms of timing? and, you know, leverage, capacity to increase leverage, et cetera. The second one is just on the U.S. Akoya plant. A modest delay, and as you say, not driven by project-specific dynamics. It's a general theme across the U.S. But how does the board consider the risk of future delays from here? Are there any particular pinch points or milestones which we should be aware of? And then finally, I know H2 was very strong at Arnhem in terms of production, but you wouldn't even need to generate the same level of production volume in FY24 to be at full capacity utilization. What is the reason that Arnhem can't, or is there a reason that Arnhem can't run at full capacity utilisation in FY24 rather than sort of ramping up over the two years that you've guided to? Thank you.

Thank you very much, Christian. Right, let me just try and address those questions. So in terms of timing of funding hull from our internal cash flow, That would not be a short-term measure. I think, you know, it's flagged that's a medium to long-term measure in the chairman's commentary on Hull. And in terms of leverage, I mean, I think, you know, we'll need to assess how the group develops over the next 12, 24 months and any, you know, bank's appetite to increase or potentially project finance that asset. We are very much looking at all options at this stage, and we will continue to reassess utilizing internally generated cash flow over the period. In terms of the milestones to completion, there aren't really pinch points. We continue to work with Eastman and our contractor on the site in Kingsport to complete the project. We're working very, very closely with a very experienced project team and continue to push that forward toward completion. With respect to Arnhem and the, let's call it operating at capacity, I think there's a certain point to mention just in terms of extrapolating H2 production over an entire year we go through a period of regular maintenance or a maintenance stop in respect of Arnhem and that you know occurred this year in H1 rather than you know and did not occur in H2 so if you like you had six months of relatively uninterrupted production in H2, whereas in H1 this year, we will have conducted our maintenance stop. So that would impact an extrapolation or pure extrapolation of H2 production.

That answers your questions. Thank you very much, Stephen.

Thank you. We'll now move on to our next question. Our next question comes from the line of Johan van den Hoeven from Edison Group. Please go ahead. Your line is open.

Good morning, gentlemen. Johan van den Hoeven, Edison Group. A few questions left. If you look at the R&R plant And indeed, R4, you mentioned before, ramp-up of two years, this September next year. What are the plans, if there are plans, for Reactor 5 or more? And the second question is about the new stacking technology. I thought you had built a completely new stacker when R4 was going to be ready. Can you explain a bit more what it means, the new stacking technology. Are you not satisfied with the content with the current stacker?

Is that just two questions, Jeroen? Yeah, oh, sorry, yeah. Okay, well, thanks very much, Jeroen. I appreciate the questions. So in terms of a fifth reactor, I think it's fair to say that the management team are focused on Firstly, delivering Kingsport, and at this stage a fifth reactor is not currently being planned for, although we'll continue to assess that. I think it's worth mentioning the Kingsport facility in the US, whilst it commences with two reactors, it has the ability to add on additional reactors much more easily than perhaps adding a fifth reactor to Arnhem. So that's just something to bear in mind. In respect of the stacker technology, so there was a new stacker was brought in to, let's say, cope with the additional capacity that was coming online with the fourth reactor starting up in Arnhem, and that's the reason why we've moved to a new stack of technology in Arnhem.

If I understand correctly, that came hand in hand with the new stacker, I guess. So what's happening now that you're looking into new technology?

uh sorry i think i think the point was made around that the the the stacker was installed in in line with r4 and we are looking at improvements to the stacker technology or sorry let's call it the new stacker that we have in arnhem okay so

So the maximum capacity was 100,000 cubic meters, I think, the stacker, which might not be there yet, of course. That's what you mean we have to improve.

Correct. There are some more efficiencies that we want to add to the stacker so it runs more smoothly in line with our reactors and our production schedules.

Okay, thank you. Last question for now. Martijn already tried it about the cost overruns in the US. You don't want to disclose any costs. But going forward, is there more risk, so to speak, to more cost overruns? Or is it agreed now that to a certain amount and that's it until it's realized?

So, look, I think the point to note is that, you know, any major complex project involves, you know, change orders and, you know, let's call it scope improvements. And that's what we're dealing with the contractor together with Eastman in respect of the development of the plant in Kingspores. So, you know, we're still, you know, um expecting to complete the project in in you know mid 2024 um there is you know there is time frame in there that you know we may decide to change some of the scope or make some changes to to the delivery of the plant and that would obviously come at an additional cost but we won't do so unless we see a benefit okay thank you

Thank you. We'll now move on to our next question. Our next question comes from the line of Ben Bourne from Investec. Please go ahead. Your line is open. Ben Bourne, your line is open. Please go ahead with your question.

Good morning all. Stephen, thank you very much for that update. Just a couple of questions. I'm intrigued by Tricoya now at 24%. Can you just expand on the use cases so far to give us a flavour for the longer term? And then the second question relates to Oikoya US sales expansion. Which regions are you most excited about and why, please?

So would you mind repeating that question, those questions for me, please, Ben?

Sure. The first one is, can you expand on the tri-COIA use cases so far, just to give us a flavour for the longer term? And the second question is relating to a COIA US sales expansion. Which regions are you most excited by and why?

Look, thanks very much, Ben. In terms of the Tricoya panel applications, I mean, effectively, we sell our Tricoya to, sorry, we sell our Tricoya, which is chipped and used as Tricoya to our two partners, Finza and Medite. And they use those chips into manufacturing Tricoya panels which are a much more sustainable, durable, and reliable MDF panel or alternative to MDF panels. So wherever you see the use of MDF panels, you can extrapolate the use of a Tricoya panel, which will involve a much stronger, durable, and more sustainable product. With respect to the US, I mean, I think, you know, also in terms of North America, I mean, we see the US as, you know, a market where we can, you know, expand our presence and our distribution. You know, you'll be aware that, you know, across Europe, we primarily use distributors to sell our Akoya product. And those distributors in the states are represented across wider areas than simply individual states. So there is a real opportunity for us to expand our distribution networks in the U.S. and therefore penetrate the U.S. market and North American market much more widely than we currently do. Okay, thank you.

Thank you. There are no further questions at this time, so I'll hand the call back to you for closing remarks.

Thank you very much for everyone for joining this webcast. Appreciate the questions, and we shall see you at the interims. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.