Accsys Technologies PLC

Welcome, everyone, to Access Technologies PLC Preliminary Results presentation for year-ended 31st of March, 2026. Today's speakers are Dr. Jelena Arsikdanos, Chief Executive Officer of Access Technologies, and Samit Bora, the Company's Chief Financial Officer. Jelena and Sam will take you through an overview of the business and financial performance for the year before we open the floor for questions. Please note that we will be prioritizing questions from analysts. We will be showing some videos during the presentation. You have the option to click on the enlarge button to make the video larger. With this, I would like to pass over to our speakers.

Good morning, everyone, and thank you for joining us. Before we begin, I would like to draw your attention to this image. It shows soon to open Google headquarters in London Futuring and Akoya Facade. This is one of our largest projects to date, and we are incredibly proud to have been specified for such a landmark development. Financial year 26 was an excellent year in which Axis delivered strong strategic and financial progress, marked with robust growth and a significant improvement in profitability. Against the challenging macroeconomic backdrop, We delivered record global Acquia sales volumes that increased by 21% with growth across all our key regions and a particularly strong performance in North America. We significantly increased group revenue by 20% on like-for-like basis, reflecting resilient demand for our premium products, continuous pricing discipline, and the increasing strength of our commercial platform. We are expanding our reach. During the year, we broadened our distribution network and expanded our product offering. In its first full financial year of trading, the joint venture achieved EBITDA profitability and volume increase of 60%. This performance reinforces the strategic importance of local manufacturing in North America, our key growth market. The most encouraging aspect of FY26 is the quality of the growth we delivered. Adjusted EBITDA increased by 96% to 21.2 million euros, and adjusted EBITDA margin improved to 11.6%, bringing us very close to our Phase 1 focus target of 12%. Gross profit margin also remained strong at 30.9%, above our 30% target. Underlying basic earnings per share were 2.1 cents, a material improvement compared to a loss per share of 5 cents in the prior year, all driven by the significant improvement in profitability. Financial year 26 was a year of disciplined capital and balance sheet management with improved leverage ratio and operating cash flow at target level. In October 2025, we completed refinancing on improved terms, strengthening our capital structure and enhancing our financial flexibility to support the future growth. All in all, financial year 26 was a year of strong operational execution, market share gains, and a step-changing profitability, while de-risking the balance sheet and building momentum in North America. The first phase of the focus strategy concludes in March 2027 and was designed to be transformational for the business, with ambitious targets established at the time in the response to the trading environment of FY24. These lines highlight significant progress made against our key strategic metrics over the past three years. During this period, our sales run rate increased from 65,000 to 97,000 cubic meters, adjusted EBITDA margin improved from 3.5% to 11.6%, and gross profit was sustained consistently above 30%. Net debt leverage ratio reduced from 4.4 to below two times and cash flow conversion is on 75% target. Most importantly, FY26 demonstrated that Axis has evolved into a fundamentally stronger business. The company has a clear and achievable strategy and the de-risked profile vis-à-vis unfinished large capital projects. Today, Acoria is produced at three production sites localized in the key markets for woods building materials. Finally, our customers are at the center of everything we do. We continue to elevate our sales, marketing, and customer support. Our teams are standing behind this fantastic progress and I'm taking this opportunity to thank all our colleagues across the globe for their efforts and dedication. As we look ahead, our priorities remain clear. Innovation, higher capacity utilization, further improvement in profitability and returns, and continuing the leveraging. With this, I will pass now over to Sam to provide a detailed overview of our financial performance.

Thank you, Yelena. Over the next few slides, I'm going to talk you through the financial results of the year in more detail. This slide summarizes the strong financial performance for the financial year. I'll go into more detail on the financial performance in the next couple of slides, but highlighting some of them now. Starting with sales volumes, group sales volumes were up 6% to 60,384 cubic meters compared to the prior year. However, when you exclude the 3,802 cubic meters, sales made by the group to North America in the prior year before the Accoya USA JV commenced operations, the group's sales volumes were up by 13% on a like-for-like basis, with strong demand in all regions. Postal sales volumes, which includes all of the sales volumes from the JV and more clearly shows global demand for Accoya, increased by 21% to 77,237 cubic metres. Petolia USA saw 60% life-for-life sales volume growth to 16,853 cubic meters, a standout result. Group revenue increased by 12% to 153 million euros on a reported basis and 20% on a life-for-life basis. Aggregated revenue, which includes 50% of the revenue of the JV, was up 24% to 183 million euros. Gross profit was €6 million higher than the prior year at €47.4 million and the gross profit margin increased by 130 basis points on a life-to-life basis to 30.9% and remained above our target level of 30%. Underlying EBITDA which excludes the results of the joint venture increased by 26% to €21.1 million compared to €16.8 million in the prior year. margin to 16.1%. This reflects a strong sales volume and revenue growth, maintaining a gross margin above 30% and a cost control system we have over operating costs. It was really pleasing to see that the ECOI USA joint venture was EBITDA profitable in its first full financial year of trading, compared to a loss of €6 million in the prior year. Adjusted EBITDA, our main profitability performance venture, was up by 96% to €21.2 million, with an impressive 430 basis points increase in the margin to 11.6%, which is just below the 12% target that we have set for the end of Phase 1 of our strategy. Statutory profit after the tax was €6.5 million, after the recognition of a tax credit of €7 million in the year, following approval from the tax authorities of the advance pricing agreement that was in place 517 to 25. Accordingly, underlying earnings per share was 2.1 cents compared to a loss per share of 5 cents in the prior year. Turning to cash flow, operating cash flow was 15.8 million euros, up 5.1 million on the prior year with a cash conversion of 75% in line with our strategic target level and up 11 percentage points compared to the prior year. After capex of 5.5 million, free cash flow was 10.3 million, up 17% year on year. Net debt at 31st March 2026 stood at 41.4 million, 1.2 million lower than the prior year, with the leverage ratio improving significantly to below two times. I'll discuss the changes in revenue, profitability and net debt in more detail in the coming slides. Going into more detail on our revenue performance for the year. As I previously mentioned, group revenue increased by 12% on a reported basis to 153 million euros. Excluding the 10.3 million of revenue from sales made to North America from Arnhem before the JV started operations, which equated to 7% of the volume for the prior year, like-for-like revenue growth was 20%. The sales growth that we've seen during the year across all regions volumes transferred to the JV. Despite the challenging macroeconomic environment, we have maintained strong pricing discipline with a 1.7% increase in average Akoya sales price for the year. We saw a sustainable sales mix benefit to revenue in the year across our product range. We experienced substantial growth for our premium Akoya colour product with global sales volumes of 51% supported by capacity expansion and operational improvements at our Barry colouring facility. Colour now makes up a higher proportion of group sales volumes than the prior year. Sales to the JV increased by €7.4 million during the year and this is primarily made up of colour tolling that the Barry facility undertakes for the JV. Licency and royalty income from the JV was €2.6 million higher than the prior year as the group receives a royalty based on sales made by the JV. The final licensee payment was also received during the year, following successful completion of the performance test of the Kingsport plant, thereby granting exclusivity for the North American market to the joint venture. Other revenue represents tricoid panel sales and sales of acetic acid, which were broadly in line with the prior year. Aggregated revenue, which includes 50% of the joint venture's revenue, increased by 24% to $183 million. On a constant currency basis, aggregated revenue grew by 26% given the weakness of the dollar against the euro, with the dollar weakening by 7% over the course of the year. On the face of it, the reported gross profit margin increased by 60 basis points to 30.9% for the year. However, the prior year includes sales that were made to North America from Arnhem prior to the joint venture commencing commercial operations. These sales amounted to 3,802 cubic metres, which represented 7% of group sales volumes. They contributed €4 million of gross margin in the prior year and €2.9 million to EBITDA, as the average sales price in North America is higher than all other regions. Therefore, a more representative way to look at gross margin progression in the prior year is to exclude the €4 million from the comparator, resulting in the like-for-like gross margin improving by €10 million to €47.4 million, This £4 million gross margin reduction from transfer volumes has been more than offset by group sales volume growth, favourable sales length and higher average sales prices, together with the receipt of royalties and licensees from the JV. Our main production costs relate to raw material spend on raw wood and netter seed tiles, which when combined represent approximately 61% of the bill of materials cost. Raw wood costs are slightly raw wood costs were partly offset by lower wood grade chip costs. We saw an improvement in gross margin arising from net acetyls from improved utilisation of the CTKN hydride in the production process, a change in the supply mix and favourable FX as the US dollar weakened against the Euro. The gross margin at 30.9% continues to remain above our strategic target level of 30%. This slide shows the adjusted EBITDA progression during the year, reflecting the strong financial performance. We saw a 96% increase in adjusted EBITDA from €10.8 million to €21.2 million and a 430 basis points increase in the adjusted EBITDA margin to 11.6%, which is closer to the 12% target we set for the end of Phase 1 of our focus strategy and is very encouraging to see. Operating costs increased by 3.7 million euros during the year, which is primarily driven by strategic headcount additions in our commercial and operational organisation to support growth. And we have also strengthened local management teams in key areas. Following on from the business transformation programme that was undertaken in FY24, The average number of staff in the group FY26 is at the same level as in FY24, but we have re-balanced the mix, adding commercial revenue generating FTEs and strengthening operations, while at the same time reducing corporate headcounts. Accordingly, we have still retained €0.8 million of savings from the FY24 Business Transformation Programme, with operating costs revenue in FY26 compared to 20% in FY24 and we continue to maintain our disciplined approach to cost control. During FY26 there were no further costs associated with Hull after the business was placed into liquidation in December 2024. The joint venture was EBITDA profitable for the year with our 50% share of the EBITDA profits amounted to €0.1 million in its first full financial year of trading. despite the imposition of tariffs on wood imports into the USA, which commenced in October 2025. This evades substantial improvements in EBITDA profitability of €6.1 million year-on-year, compared to the €6 million loss recorded in the prior year. From a segmental perspective, EBITDA from our Akoya segment increased from €20.5 million to €24.7 million, with a healthy margin of 16.1%. up from 15% in the prior year. This growth is primarily due to the strong sales growth, the improvements in gross margin and cost control discipline. Corporate costs amounted to €3.6 million and were €0.1 million lower than the prior year, but importantly €1 million lower than in FY24. Corporate costs now amount to 2.3% of revenue compared to 2.7% in FY25 Therefore, underlying EBITDA, excluding the JV, increased by 26% from €16.8 million to €21.1 million. The margin improved by 150 basis points to 13.8%, reflecting the strong underlying profitability of the group. As I mentioned before, adjusted EBITDA increased by 96% from €16.8 million to €21.1 million. This slide shows the evolution of net debt during the year. Net debt at the end of March 2026 stood at €41.4 million, a decrease of €1.2 million compared to the start of the financial year. Debt reduction and deleveraging the balance sheet remained our key priority from a capital allocation perspective and the net leverage ratio reduced from 2.52 times to 1.96 times at the end of March 2026. Excluding the €26 million of convertible loan notes and associated accrued interest within the net debt total, then the leverage ratio is 0.74 times. Subsequent to year end, in June 2026, following the end of the peak interest period for the convertible loan note, €2.5 million of accrued CLN interest was in the year, which is primarily related to higher inventory levels within the group, and amounts owed by the JV. The increase in inventory was planned to ensure product availability to support strong demand, particularly in Akoya Colour, following the expansion of capacity at Barry. Accordingly, operating cash flow conversion was 75% in line with our Phase 1 target. CapEx was €5.5 million during the year, and this included in Arnhem and making health, safety and environmental improvements in the Arnhem Stacker Hall of €0.6 million. Free cash flow increased by 17% to €10.3 million and the free cash flow margin improved by 20 basis points to 6.7%. We also invested €3 million into the shopping venture to support this rampart given the substantial growth seen during the year. Net interest paid and accrued amounted to €5 million of which 2.2 million rose to interest accrued on the convertible loan note. During the year, we also finalised the APA agreements with the Dutch and UK tax authorities covering the years FY17 to 25. This resulted in tax received of €0.7 million in respect of previous tax years. In October 2025, we completed the refinancing of our debt facility with a new €55 million facility with APN AMRO and HSBC. through financial terms, which will save the group approximately €2 million in cash annually. The refinancing strengthens our capital structure, enhances financial flexibility and further de-risks our profile, positioning us to execute our strategy and growth plans with greater confidence and resilience. So in summary, we are very pleased with the FY26 financial performance. and are well positioned as we enter the final year of phase one of the focus strategy. I'll now hand you back to Jelena, who will take you through the business review.

Thank you, Sam. I want to spend a few minutes to look at the specific market dynamics in FY26. It has been a challenging period for the construction and building material sector, even before the current Middle East conflict began. Persistently higher costs and interest rates have delayed recovery and constrained overall construction activities, while geopolitical developments have added further uncertainty. In the US, tariffs have added another layer of pressure. These factors are especially impacting the new-build sector. The renovation, refurbishment, and infrastructure sectors, on the other hand, have been more robust. Against this backdrop, luxury sector and timber construction, which helps support aqua adoption, has continued to show good momentum, reflecting long-term sustainability drivers and the growth preference for the natural materials in design. In Europe, the new legislation, like EUDR, EU Deforestation Regulation, increases demand for verified, traceable, FCS-certified woods. This reduces the availability of high-risk tropical hardwoods, limiting growth of competitive material mid to long term. As mentioned on earlier slide, refurbishment and renovation have been among the more resilient segments on the market. Akoya performance on durability and the meaning of stability makes it the superior choice for doors and windows versus other wood alternatives. We have an extraordinarily strong reputation for these applications in the UK and Ireland. We are also growing our North America presence with expanded partnership amongst leading window and door manufacturers. Demand for Akoya is also supported by the premium residential and luxury segments, which tend to be less sensitive to borrowing costs and operate with different dynamics to the broader housing market. In the U.S., we are also seeing a clear structural shift towards modified wood over traditional timber driven by performance, durability, and reliability. In the U.S., modified wood is growing at around 14% annually, while traditional wood categories are in decline. Akoya is outperforming both, with growth of around 16% as we continue to take share. Looking in more detail on our regional performance, Acquia continued to gain share across all geographies in FY26. North America remains our largest addressable market at approximately 8.6 million cubic meters. Europe and the UK combined have an addressable market of 1.9 million cubic meters. We achieved 12% growth in the UK and Ireland, our most established market, as we continue to build our strong reputation for dormant replications, as well as gain for facade specifications. Europe grew 21%, with a good performance in Germany, driven primarily by good demand in the outdoor living market for decking, outdoor furniture, and playgrounds. We had positive momentum in Belgium after onboarding a recent distributor, where we are regaining presence in windows and doors markets. Across the rest of the world, we saw 9% growth with bright spots in Australia and New Zealand as our partnership with our distributors continued to develop. Akoya for tricoil sales grew at a more moderate pace 8% year-on-year due to overall market dynamics. Akoya had outstanding growth in the U.S. with 60% volume growth year-to-year. This was largely driven by premium residential projects. Looking ahead, we see opportunities to build our presence and specification in the commercial sector, where construction starts are up 10% on a rolling basis as of April 2026. We received highest growth from our existing customer base, who know and work with Akoya for longer, while we intensified support and onboarding of new SEND distributors. To further support sales, we also increased availability of Akoya color and introduced our first finished Akoya decking range. These actions supported 51% growth in our Akoya color product. Last but not least, average sales price showed an increase of 1.7% in FY26. This includes price increases in the U.S. to manage the impact of tariffs. A few words specifically on Acquia USA on standalone basis. Acquia USA is Axis joint venture with Eastman Chemicals, where Axis holds 60% in equity share. Reflecting the 60% volume growth, revenue increased by 178% from 18.1 million euros to 50.5 million euros versus previous year. Uni delivered EBITDA profitability with 10.2 million euros year-on-year improvement. This trend was encouraging, and we have another significant volume target in front of us for financial year 27, with focus to bring joint venture to cash break-even. We have added three new distributors in FY26, and intensified relationship with direct US windows and doors manufacturers. Volume and revenue growth is the most impacting lever on the performance of the joint venture. Significant effort was put in the new business development. We have increased commercial headcount in the U.S. and added dedicated specification selling in New York, focusing on the most prominent architectural firms in the country. Tariff impacts were managed actively by pricing and negotiations with the sawmill. We continue to see aquaria specified for incredible projects worldwide. In the North America, we are seeing strong demand in premium and luxury residential, as illustrated by this beautiful aquaria-clad home in Canada. Aquaria is also being used on growing number of high-profile public sectors projects, including the Edelman Fossil Museum in the U.S. and the Teenside Lido in England. In Europe, Akoya continues to be selected for design-led commercial applications, such as the news to our headquarters in Spain. Our presence in landscaping projects is also strengthening, particularly in the UK. From the Parkinson's UK Garden at the Chelsea Flower Show, which received the BBC People's Choice Award, to the Queen Elizabeth Memorial Park in London Regents Park, where Akoya was chosen for the benches. These projects are all made possible by support of our distribution network and approved manufacturers. I would like now to share a short video of our longest-standing North American partner, Spitz Group, who have more than 15 years of experience with Akoya and have been a significant contributor to the outstanding sales growth of Akoya in North America this year. Let's hear their reflections on our partnerships.

We're the Spitz Group. In Canada, we're Upper Canada Forest Products, Sierra Forest Products in the U.S., and we operate internationally as Amazon. Our business is wholesale distribution, catering to both commercial and residential applications. Our customers manufacture a variety of products, from cabinetry to furniture to flooring, all the way down to windows and doors, as well as decking and siding. We've been working with Akoya for over 15 years. We were the first distributor to import Akoya to North America. The attraction for us was the uniqueness of the product. It's a brand new science and nothing else in the marketplace even came close. Akoya is being utilized everywhere from mountain tops to seasides to deserts for its durability, for its longevity, for its low maintenance, but most of all for its beauty. Demand for Akoya is being driven by homeowners, architects, and designers who are looking for socially responsible solutions that encompass durability, low maintenance, long lifespan, and really, beauty.

Reflecting on our operational capabilities, we made substantial progress over the past three years in transforming Axis into a leaner and more efficient organization. This work has strengthened our foundations and given us a stronger platform for growth. As previously mentioned, the gross profit margin increased by 130 BPS to 30.9%, and we also maintained savings delivered through the FY24 transformation program, even after investing in headcount to support the growth. We continue to invest in our assets as well. As additional storage capacity for anhydride and acetic acid was commissioned in R&M, which has enabled simultaneous reactor feeding, increasing our flexibility and enabling a 5% increase in available production capacity. We also improved gas efficiency across our operations, contributing to an 8% reduction in scope 1 carbon emissions. At our Berry facility, we expanded capacity and improved heating efficiencies to support the growth of Akoya color. As a technology-led company, we continue to focus on innovation, developing enhanced fire-resistant Akoya solutions, expanding our product range, and exploring new wood species to support customer adaptation and long-term growth. IP protection remains a priority, and this year we had 13 granted patents, adding further protection to our core acetylation process and further improvements on Akoya and Chakoya technologies. IP was also obtained for cleaning up a post-acetylation acid stream. Both an ACOIA and ACOIA Color panel have achieved U.S. WUI wild urban interface compliance, enabling their use in the areas at high risk of wildfire. In parallel, through collaboration with external coating partners, we have advanced EU fire class D solutions for ACOIA. Our durability performance remains a clear differentiator. A growing number of coatings were approved, with industry-leading warranties of up to 15 years on Akoya for both opaque and translucent finishes, something that remains unique within the wood sector. This brings us to the outlook. Looking ahead, the group remains focused on innovation, market share gains, increasing capacity utilization, and driving further sustainable improvements in profitability. While macroeconomic conditions remain uncertain, with some inflationary pressures arising from the conflict in the Middle East, we are well positioned to manage the potential impact through the product differentiation, geographical diversification, and pricing discipline. The Board will continue to monitor developments closely and respond as appropriate. While mindful of the dynamic macroeconomic backdrop, Trading is in line with the board expectations for FY27, and the group is on track to deliver against its Phase 1 focus targets. With the milestones passed in 2026, Axis is now entering a new phase of growth with the substantial potential to deliver further significant shareholder value through our market-leading sustainable products, proprietary IP, large addressable growing markets, and established manufacturing footprint. Access is transforming, we are growing, and we are delivering. Thank you very much for your attention. We are open now for the questions.

Thank you. To ask a question, please press star 1 1 on your telephone and wait for your name to be announced. Do we know your question? please press star, one, and one again. Please note that we will be prioritizing questions from analysts. We will now take the first question. One moment, please. From the line of Adrian Kersey from Palmier Liberon Limited, please go ahead.

Good morning, guys. Fantastic result this morning. A couple of questions, if I may. In terms of you signed up some new distributor clients over the period, but they required a degree of education. How quickly do they typically take before you sign up a distributor before they start generating a meaningful contribution to the top line?

Hi, Adrian. I will take this answer if you don't mind. So thank you very much for your question. Well, as you rightly said so, we did put in new distributors. This year, 10 of them. And it takes usually 6 to 12 months to really get them going and get their sales out to outpace their stock build. When you get a new distributor, the first thing they do is they buy a stock, and then they are trying to get their business, new business development growing, because Akoya is a technical product and needs to educate also the manufacturers who are their customers how to use it, how to actually benefit maximally on the fantastic performance of Akoya. So it does take them a little bit of time to get used to it. And we put most of our attention of our technical support and salespeople to pass that onboarding period, as they call it.

Okay. And a sort of technical question on the balance sheet, if I may. Now, the convertible loan notes, they're now in the money. Can you remind us of the key conversion terms and also the interest rate benefits that you'll see once they get converted?

Yeah, okay, back to Adrian. So, yeah, I mean the convertible loan notes were issued as part of the November 23 equity raise and the principal value at the time was €21 million and they go from November 23 to November 29 at a fixed coupon rate of 9.5% per year. So the first two and a half years, no interest was payable. It was payment inclined or paid interest period. So the interest just accrued. That interest period, the two and a half year period, ended just a couple of weeks ago. And then the loan note holders, who are amongst our largest shareholders, and have been long-term investors in the company and very, very supportive of the business, could make a choice between letting them take their interest in either cash or equity. And given the significant increase in share price for it, it's effectively more than doubled since we've done our Capital Market Day last year. And you're right, the CLNs are in the money. The conversion strike price is 83.22 euro cents per share. and we're about 90, 91 cents per share. Some of the loan note holders decided to take two and a half million euros of that interest in equity. So that will, when the shares are issued in the first of July, that will reduce our net debt by two and a half million and then save us two and a half million at nine and a half percent of interest just on that single decision made.

Thanks, Sam.

Thank you. We will now take the next question from the line of Martin, then driver from IBM AMRO Auto VHS. Please go ahead. Martin, your line is open. Okay, due to no response, we will go with the next question. And our next question comes from the line of Alex Brooke from Canaccord Genuity London. Please go ahead.

Yeah, good morning. Thank you for taking my question. I'm very interested in hearing a bit more about your move to your own product, the decking collection, through will be the first time you've gone directly to end customers and the impact of that is.

Hi Alex, thank you very much for your question. Indeed, this is the decking collection by Akoya is our first attempt and if you like this year we tested the approach in Australia with our long-term distributors there, but also we are continuing to test it in Germany and Switzerland as well. This allows us to actually provide Akoya to be closer to the end consumer so that the project developers can go to the retail distribution place and pick up already profiled and finished decking that you can install. So we are trying to move a little bit further, keeping the portion of the value that is now being given away, and also at the same time trying not to fiercely compete with some of our distributors who are actually doing decking themselves. So it was very important to have a specific branding for our new decking program and also to do the phase, if you like, roll out so that we can accommodate market and do not have a competition with our direct customers.

Okay, thank you. I guess the competition was the obvious question. The second question is really about the profile in Akoya, USA. For the year, you have the DA, but it's growing very rapidly. Can you just talk a little about the kind of seasonal profile in that business, which I think is a bit different to...

Well, U.S. wood building material market is certainly one of its massive. It is one of the largest and most profitable in the world. If you drive around U.S., you see all of these houses being built, which is not necessarily the case if you are in U.K. or Europe or somewhere else. So it is a very specific market. Our ACOIA is targeting premium sectors. So as you saw in the presentation, most of our projects are either luxury private villas, residential villas, or big industrial or commercial projects where specification selling is a very important selling And it starts certainly a year or two years before you even build something. So that's why it is very important that you have a pipeline of projects in your portfolio and a specific specification effort to take care that you continue having those beautiful projects in the pipeline. We have, as I said, we have a significant growth with our existing distributors, because they are working with Akoya for a very long time, and also their approved manufacturers, so manufacturers of plugging or decking with whom they are working, their customers, they had already years of experience and they are broadening and gaining market share because of fantastic performance of the product. So if the architect would use it once, he still has its performance, he wants to use it again. So I think from the dynamics perspective, U.S. is much more dynamic than Europe or U.K. And in the U.S., it's much more dynamic and size-wise is much bigger. So 60% growth was needed for us as well in the U.S., and we also need to do another one, almost the same percent in this financial year, because we are focusing to bring AccorUSA as fast as possible from this EBITDA break-even position to the cash break-even position for

Thank you very much.

Thank you. We will now go to the next question. From the line of Martin, then driver from ABN AMRO AutoBHS, please go ahead. Your line is open.

Yes, thank you, operator. Can you hear me now? Yes, we can, Martin. Okay, great. I'm sorry, I could hear you guys in the previous attempt as well. Anyway, good morning, Sam. Good morning, Elena. Congrats with the results. I listened to the answer on the new distributors, which obviously makes sense, but can you talk a little bit, this is specifically Accoya USA, the existing distribution partners, can you talk a little bit about how far they are in terms of adoption, penetration relative to your own targets to get a bit of sense how these could contribute to growth in fiscal 2027?

So as I already mentioned, hi Martin, good to hear you. As I already mentioned to Alex, the most growth we saw this year in the US was coming from our existing distributor, not necessarily from the new one. So we did introduce quite a lot of new ones. They bought initial stock and they're working with that stock and reordering again, but it does take some time to really get them going and not competing with another Koya project, but building their own market share in the area where we pick for them. For the existing distributors, I will just give you an example of our largest distributor, Switch Group, which you heard in the video as well. So they would have a very large OEMs that are one of the largest companies in America to do the Akoya decking or Akoya cladding on a project. So they will be present worldwide. Delta is one of our largest customers that is direct customer of Akoya. And I believe last year we had a video of Delta explaining why do they believe in our project. Now Delta is now building a second factory So they are doubling their capacity, and they are probably one of the largest promoters of Akoya product range. So we continue. What we are also seeing is that manufacturers who believe in Akoya are also expanding their presence in the market because they are very satisfied how the products are performing in the place.

in a general sense, you're just very happy with how the existing distributors are doing. But is there some sort of level that you can share with us about where they should be going and where they are today? Are they at, you know, 60% of your target? Are they at 30% of your target? Are they just perhaps a bit more color on such a metric?

So if you see our targets for the next year, we said that we want to be at around 100,000 run rate in volume. Of this, 30% was for Acquire USA run rate in the last quarter, and for the Axis, 70%. That position would allow joint venture to be on a break-even cash position and it gives us utilization of the plant around 60-65% If you would see what does it mean for the if I look at my existing customers existing distributors, long-standing distributors, they would probably utilize more than half of that capacity, and then the rest would pick up the other half. They are also focusing on the areas of big, luxury, high-end construction focused on natural materials, and usually you see that in California, you see that in the areas of eastern coast of U.S., so New York, you see it in the Colorado space, in Texas, and Chicago area. Canada is also an important market for us, and as we now have a new distributor in Mexico, we started to see some new projects coming from Canadians, and Mexico that are quite helpful with that volume build.

That's very helpful. Moving back to Arnhem, if I may. You mentioned specifically the storage, the stacker capacity, some other efficiency improvements. How should we think of that gross profit margin then in 2027? Because you did 130 basis points underlying in 2026. Is that achievable again in 2027? And if not, why not?

So let me pick that one up again. Yeah, absolutely right. We made quite a lot of significant operational improvements in Ireland. I mean, the expansion of the acetal storage added 500% storage initial capacity to our anhydride and 300% to our acetic acid, which increased, you know, that resulted in about a 5% increase in our production capacity plus other projects that we are continuously working on, working on Black Belt Initiative, Lean Six Sigma, all of these. I think when you look at it, our target is a gross margin of above 30% and we would fully expect to be above the 30.9% that we just achieved for FY26 in FY27. But when you do look at it, 61% of our cost base for the bill of materials is the raw material cost, so wood and the net-to-sea tiles cost. So to the extent that there is inflationary pressure on that, you can't just keep on increasing your pricing to offset that. But we would expect to be above the 30.9% in FY27, probably not 130 basis points leap, because a lot of that was to do with the prime year, the normalisation effect of the body being transferred to North America, but we will be above 30.9%.

Understood, understood. Moving on to colour, you've doubled capacity now to 14,000. cubic meters by adding a second shift. Can you share with us roughly what the actual output was in 2026 and where do you see that going in 2027? And can you maybe remind us what the price premium was in 2026 or is in 2026 that color demands of a normal FOIA?

So the color output was around 8,000 cubic meters in FY2026, compared with the 5,400 cubic meters in FY25. And the price premium is around 25% in the U.S., a little bit more. But this is certainly one of the nicest and fastest growing product changes we have today.

Just to come back to that, so you did 2,600 cubic meters more in one year. Is that the type of growth rate that would be reasonable to assume in 2027?

We are, well, we do expect aquacolor to continue to grow. If it is going to do exactly the same, we are going to see, but it is certainly one of our fastest growing ranges we have.

Understood. One more question and then I'll move back into queue. On your phase two, you know, the segment optimize, You've almost achieved your 2027 targets in fiscal 2026. How do you feel about the timeline of that phase two optimised strategy? It requires between brackets only 20,000 cubic metres of volume increases in four years. Yes. Relatively cautious. Can you share your thoughts?

Yes, so we are actually, I just wanted to remind you that all of the phases are focused strategies were defined at the time when the only business reality we saw was the financial year 24. And at that time, when you set those targets in place, they looked extremely aggressive. Now, if you look at it from perspective today, because a lot of hard work was put in it, and you know, the company did progress and transform reasonably, that could now look, it is needed to review it. If you look at the other points, what If you look in a little bit more detail, what we say what we wanted to do in the optimized stage was to review the coloring, color locations. And you see we are selling quite a lot of color now in the U.S. from Barry. So there is an option of localizing production in the U.S., which is one of the things that we are quite busy at the moment. So when we are looking at the KPIs that needs to be achieved, and you're saying, yeah, it takes you only so little to get there, that is true. So in the sense to get the target from a phase two, we probably are going to – change those as we go forward. We are now in our strategy review for the phase two and phase three in order to present again in a new capital market day that we are planning in September of FY27, changes on the phase two and phase three of our strategy. There are a couple of things from the Phase 2 that we are already starting to do now. KPI targets are almost on the target, so we still have the improvement in profitability, significant, because we said Phase 2 is around 15%, and the volume growth there is big. And we will certainly start thinking about when new capacity should come. And when we are talking about new capacity, we assume that that new reactor would be in the U.S., and we certainly have to start somewhere middle of next year with the design and plans for that expansion to come in the year 30 in America.

Understood. I have some more questions, but I'll go back into queue for now.

Thank you. We will now take the next question from the line of Toby Thorrington from Equity Development. Please go ahead.

Yes, good morning all. Coming through loud and clear?

Yes. Yes, all good.

Great, thank you. Just a supplementary question, first of all, on color for these. I think you mentioned around 8,000 cube total production in FY26. Just curious to know how much of that would have gone to the US, please.

So of that baby, about 2,000 went to, just over 2,000 went to the USA. And that was over 100% growth year on year for the North American market.

Right, thank you. On the restated royalty and licence income line, obviously it increased year-on-year quite a bit. I think, Sam, you mentioned there was a one-off figure in there as well. Can you help us out a bit in terms of how you would expect that to move? Is there a base number which is flat and then there's an amount linked to How do you think of the development of that?

The return that Axis got from the joint venture was a one-off licence fee which was €5 million and that was effectively done in three instalments. The first one was signing the JD agreement. The second one was after the construction of the plant. And the third one was effectively after the final performance test was done. So of that 5 million, it was split into three equal tranches. So the last tranche from, let's say, 1.6 million euros was then recognised in FY26. So there's no more licence fee income in terms of the deflation plan to come. And then we get an ongoing percentage royalty of every dollar that they sell. is essentially our return. So it's just a single-digit royalty.

Right. So it would jag down by, I don't know, 1.75 million year-on-year because of the exclusion of the one-off, and then it will increase with the underlying volume in the US. Is that right? Yeah. Okay, thank you. Just on tax, the P&L and the cash question, Please, can you give us some sort of guidance what you'd expect the underlying tax rate to be through the P&L and the cash?

Yeah, yeah. So, I mean, we have, I mean, you saw there is a one-off tax credit in the account because we finalised an APA agreement. I mean, going forward... I'd expect, I mean the Netherlands operation is highly profitable, we have corporate costs in the UK plus also the profitability for the Barry operation in the UK. I'd expect a blended offensive rate of 20% on DBT for the group, excluding the JV and just slightly lower, probably around 15%, because we do have some tax losses in the Netherlands that we can utilise going forward.

Perfect. Thank you very much. And lastly, an operational one. Can you tell us what the expectation is for maintenance shutdowns, timing thereof in the UK and the US and possibly Bari this year?

No, but usually we have our big maintenance shutdowns in Arnhem. in October. It was October last year, it will be October this year as well. And we are planning to be down for the most of the month. Maybe there will be one week of manufacturing and then the rest is really all repairs and maintenance work that we have. Barry already had in the beginning small shutdown to phase the shutdown to replace some of the heat exchangers in the kilns. So we are not expecting a big shutdown in Bari and in the US they had their maintenance stop in June and they are not expecting to have any other maintenance stop until next year.

Okay, fingers crossed for that. Thank you very much. Thanks.

Thank you. We will now take the next question from the line of Edward Press from Berenberg. Please go ahead.

Hello, morning. Thank you for the presentation. Just one in relation to Germany, where I know you noted the strong growth. Have you got a sense of what has been driving this from a sort of high level? Is it a growing market for wood product? I don't know, maybe regulatory changes or something like that that's supporting demand? Or is it a case that access has actually just been growing share and taking it from competitors?

So, as I said, in Germany, we had quite a lot of pull from that outdoor living space, predominantly from decking, outdoor furniture and playgrounds. So, if you see in this space, Axis or Akoya, it's gaining significant share. because the space is becoming quite popular, especially in Switzerland, but also in Germany, to have natural materials, to have good-performing materials, long-lasting materials being used in those applications. And we do gain share from the tropical hardwoods. They're getting more difficult to source, in those countries and going forward it is going to become even more difficult with all of these regulations that are now being put in place.

So thank you, that's helpful.

Thank you. We will now take the next question. From the line of Alistair Stewart from Progressive Equity Research, please go ahead.

Pardon me. Good morning, both of you. Thanks very much. Just a few questions. Actually, most of mine have been answered already, but looking at slide 18, a few questions on the sales growth by geographical markets. You've just covered the question of Germany being strong. Stripping out Germany, have you got a rough idea how much lower that plus 21% year-on-year growth would be? That's the first question. Then on UK and Ireland, I'm not looking for precise figures, but I imagine Ireland was stronger than the 12% growth between the two. The housing market's been very strong there. Rest of the world, it's a smaller market, obviously, 9% growth. Is that market you're going to concentrate much on for growth? Obviously, your prime target is North America, but do you see the rest of the world catching up with the other non-North America markets? So I think that's about it, yeah.

Yeah, thank you, Alistair. So just for your understanding, so let's start with the UK because that's closest to home. 12% growth is really coming predominantly from the Windows and those applications in the UK. This is our largest, most established market, and UK for us is larger than, if you like, Ireland, because we do see a bulk of our business going into the joinery segment. So there we saw 12% as a result. We are selling a lot of Stripe Korea into Ireland, to Medite, but that is not being calculated in those numbers that we are giving for our clients. Now, when you look at Germany, Germany was growing 41%.

That's for a country under economic pressure. Imagine if they're doing better.

Yes, but for us, that is a duck. We look at it not as a Germany only. We look at it as a duck region. So it is Germany, Austria, and Switzerland. So if you see in that cluster, we did show significant growth of 41%. And then the rest of the world, we had, when you look at specifically Asia-Pacific, was around 7%, and then the rest of the world was in a slight decline. For us, the rest of the world is usually Middle East, and Middle East was, as we know, not really the right place to be. in the last few months. So, you know, Asia Pacific, we were growing 10%. That was slightly under our target and expectations because we had two of our distributors basically merging together. So they were optimizing the stock they had. But we are noticing now that their development, that, you know, they kind of did that exercise and they are now back to business and it looks good. and we get orders again, and they look good. So there is some reshuffling in the per country or per region, but overall good demand.

So on that basis, it sounds like with... seeking a new further distributor and hopefully the Middle East situation improving. That 9% could improve in the next couple of years?

Well, we are expecting to beat the underlying market. That is so-so. Is it going to, and our target is to go double-digit growth across our regions. That is in basic what we are focusing on. It will all depend, as you can imagine, how long, I mean, underlying demand is going to be driven by consumer confidence and interest rates and how long this conflict is going to sustain. So, you also can notice that our distributors, as the uncertainty comes, then everybody is also very careful with the stock. They are careful how much money they have invested sitting there. They want to see if the account is in a bad situation. So, everybody is optimizing whatever, optimizing their cash flows as much as they can. We have information that cash outflow, not cash outflow, but sales outflow of Akoya, for instance, for the UK, and the first of 10 of our distributors is higher than what they are buying. So that means that, you know, they are trying to, they sell through it higher than selling. So that means that they are just talking a little bit. But this is normal, and we see this regularly. And hopefully, if, you know, Bill comes through on Friday, and there is more certainty on the macroeconomics that this can have a positive impact on consumer confidence and hopefully later on on the overall demand. But as I said, we are focusing on the long-term projects, long-term specification selling, luxury sector that is a little bit less exposed. But you can imagine we are not completely shielded by, you know, macroeconomy. So we do what we can do and we control what we can control. And the rest, we leave it to the markets to regulate.

Great. All right. Thanks very much indeed.

Thank you. As a reminder, to ask a question, please press star 1 and 1. We will now take the next question from the line of Martin, the driver from ABN AMRO AutoBHS. Please go ahead.

Yes, thank you, operator. I have three more. Elena, can you talk a little bit about what you're going to do in terms of your sales and marketing for 2027? Are you still adding FTEs? How should we think about those two aspects of OPEX for 2027?

Well, you know, if you want to make the sales increase or accelerate sales in 27, we already put the people in place to deliver that. So I'm not expecting that we will be adding significant number of people now. We have people who we already added in FY26 who are now being fully trained and they are being, you know, exposed to the market and expected to deliver it to deliver that revenue to us. So I'm expecting, you know, one or two here and there, but a very, very limited number is going to be added in FY26. Sorry, FY27, yes.

Good. And then two questions for Sam, if I may. On the working capital, have you made substantial investments in inventory to facilitate growth and have a buffer? in relation to trade wars or how it may develop. How should we think of working capital in 2027? Will that buffer decline? I know there's still going to be growth, but how should we think about working capital?

And then my second question... I think the... I mean, you're absolutely right. I mean, you saw in FY 2010, there was a networking capital outflow, which is driven by inventory and also just amounts from the JV. I think really the... The sort of expansion of the colouring is the last driver behind that increase where we saw 51% colour growth in FY26 and we're expecting to see significant double digit colour growth in FY27. So the colouring production process is quite different from the depilation process because we're colouring the impregnation time is very, very short, a couple of hours, but it's actually the drying time which can be up to two weeks So your work in progress with colour is quite substantial. But also as Barry does the colouring for the Coir USA as well, it effectively binds the wood from Coir USA processes it and then sells it back to Accoya USA. So I would still expect to see a working capital outflow in terms of higher industry levels. Really, it's two reasons. One is to sort that out. expectancy in FY27 from a volume perspective as we go to the 100,000 cubic metre runway, but also because of the strong demand for colour, I'd expect to see a working capital outflow in relation to colour inventory levels. So probably around 3 to 5 million working capital outflow on inventory for FY27.

That's very helpful, thank you. And then my final question is also for you, Sam. You made a 3 million investment into the JV. Should we take anything into account for 2027 as well, given the high growth?

Yeah, I think what we did with the team, JV partner, Eastman, you know, a very supportive JV partner, you know, we had 60-50% volume growth that we saw in the next, last year, and we're, again, we're expecting very substantial sub-digit volume growth next year. So we decided we had to ramp up maybe in terms of higher levels of inventory, and that was, you know, a combination of equity, plus some also working capital outflow, But I mean if we're going to see significant double digit growth that we're expecting then I'd probably expect low Euro millions, maybe again 2 million to 2 to 3 million investment in the JV again and it's really there to support their growth in FY27.

Understood. Thank you very much for all the answers and clarification.

Thank you very much. That would be, I think, the last question we are going to have today. And please let me just close this call. Financial year 26 was a year to be proud of for Access. And we are very determined to continue on this journey. Thank you very much. And this call is being over.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.