Quadrise Plc

Good afternoon, ladies and gentlemen. Welcome to the Quadrise interim results investor presentation. Throughout today's recorded presentation, investors will be in listening mode. Questions are encouraged. They can be submitted at any time just using the Q&A tab situated on the right-hand corner of your screen. Before we begin, we'd like to submit the following poll. I'm sure the company would be most grateful for your participation. I'd now like to hand over to the team from Quadrise. Peter, good afternoon.

Thank you very much, and thank you very much for joining us for the interim reporting for Quadrise. As always, we start with a disclaimer. I will leave that to you. and jump straight into the presentation. So the strategic challenges of Corevise are clear and well-known, so our focus is entirely on getting the MSC Cargill trial up and running. We have also since we last time met been having a meeting with OCP face-to-face that suggests we might be running a second trial with them leading into a commercial off-take agreement. But perhaps even more importantly, we have been upping and accelerating our efforts to build support from refineries, so we have feedstock supply available or at least plausible for when we need to scale up after these trials. I have mentioned at previous occasions, latest at the AGM, that we are looking at whether we can identify other shipping clients who would be willing to do commercial trials, perhaps in other segments. And this is an ongoing effort where we've been speaking with a good number of people that we believe are willing to be upfront users or first movers rather than the traditional shipping approach where you are first adapters rather. And I think we know pretty much who this is. So we've had meaningful discussions. We are talking to the right departments and all these companies. But it's something that takes a little bit of time. But it's an effort that is ongoing. We're also aware that while our focus is entirely on the trial and on the scaling up of the refinery efforts, we really need to look at the future as well. I think we have a great platform on the Bio-MSAR platform, but it's also one where much of the bio feedstock will vary. There's simply not enough feedstock in any one product to meet the IMO requirements should they ever be adopted. So as you will know, we have a staple product with the glycerine. We have been trying out the cashew nut oils and we are trying out other feedstocks that are perhaps a little bit further away. But it's really important that we can speed up our product or research to market time. And one of the ways of doing that is being Modernizing our data infrastructure is actually quite good, but leading into building digital twins. We're already part of an EU project in that respect, but it's something that will help us fine-tune before we do the actual machine test, fine-tune exactly how do we make the feedstock and prepare it for that test. And we can do that then in cyber instead of doing that on a machine, so hopefully speed up the whole process. We've been trying to sharpen our focus. Of course, we've conducted a lot of projects over the years. We're painfully aware that some of these are projects that are research-minded, so there can be longer periods of hibernation where nothing really happens and then they take off again. And that's just part of running a portfolio of different projects. But we also have more specific projects that you've heard about before and we're going to talk about today. And we just have to be very mindful that they continue to make commercial value to keep them alive. So that's an ongoing process. We have a clear focus on shipping clients. We have to make a choice. But it also means that in terms of power plants and industrial clients, They have to be really promising for us to invest time in it. Some of these other projects are far, far away, geographically at least, but we're trying to focus on them by also using external clients to speed up the process to market. We'll come back to that on the individual projects. And we are, of course, affected and we are watching what is happening on the regulatory front. Fuel EU is moving along according to plan. We are very mindful that a number of countries have looked at the Fuel EU rules and regulations to seek inspiration and they are likely to be adopted there. If IMO doesn't go ahead, timing is uncertain, localization is also a little bit uncertain, and clearly, as a former ship owner myself, there's nothing that ship owners fear more than having a number of different regulatory regimes. Having the level playing field and having one set of rules has enormous value. What we hear from the IMO is that the talks are ongoing, the Americans have offered their view on how it should proceed. Not very positive last Friday. Others have also offered their views. We might call that Liberia and Panama has both suggested to solutions that are close perhaps to the Greek position, which is lower fines, a broader base, more LNG involvement in the range of fuels that can be used. The feeling right now, certainly from my side, my personal view is that this is likely to take longer than just a one year suspension that the IMO decided last year in October in London. From the market point of view, we actually feel that what happens at IMO, it might not impact quarterisers technology that much. The main thing is that our fuel EU rules, they're driving change. What we are mindful of is that there are a lot of other things on the agenda, also of ship owners and most businesses. The pace of technological change, not just in AI, but in many other technologies. where exponential changes in these technologies is really changing the business landscape and no business can afford to ignore it or not be well briefed on it. Same thing we have on a broad term geopolitical transition that we have not seen at all at this level before in terms of a diminishment perhaps of the role of international law change in alliances, certainly uncertainty about many of the traditional alliances that we've been working with in the past, but also trading blocks changing quite rapidly. And that means that any company operating in this environment needs to look at their operational expenses before they look at anything else. So my clear impression from the last six months where we've been seeing a lot of ship owners and a lot of related businesses is that there's a strong focus on the green transition. But everybody understands that they need to make sure that their businesses are strong so they are going to be around for the green transition. So focus will be on cost to a very large extent. And that also matters, of course, for the choice of technology that we can offer. We're still selling both EMSA and bio-EMSA, but there's no doubt that the ability to deliver EMSA below the cost of conventional fuels is a major tool. And that's even before talking about the current conflict in the Middle East. What we are seeing is that many of the players we are dealing with are no longer competing on price or freight rates or even the availability of ships. It's about availability of bunker fuels. which is not a given and that is impacting the value chain. Clearly where sometimes we've been finding that we are dealing with much bigger players than ourselves and that holds its own challenges because they have many, many concerns to take into account. In a case like this, dealing with primarily large players have some benefit because they will be first in line to get the bunker fuels and I'm not saying it's easy for them either. But it's something that gives us some consolation as we're trying to get trials in place with MSC and Cargill in the first place. We are, if we look at the projects, first and foremost for us is the trials that have been planned for such a long time with MSC and Cargill. We've had quite frequent meetings and discussions with both of them over the last three months. I think they're positive. They're down to a few items now. What also happens when things take time and people are checking carefully the agreements they're entering into is that certain things come up again. Most recently we've been looking into whether VAT issues in the EU for the Antwerp trial would affect or would come into play with the tripartite. It seems not to be the case, so that's been sorted out. We're now discussing or looking at the terms and conditions which are standard for a big buyer of fuels. And my feeling is that we are getting very close now. We've had meetings, again, face-to-face. We are experiencing that NSC is committed to the two trials that have been agreed, so one for EMSA and one for BioEMSA. But we're also experiencing that they are very helpful when we are talking to refineries and others and pushing and endorsing not only the trial but building a scale up in terms of feedstock supply afterwards. So I think that's quite positive. Some of the issues, some of the things that have to happen now, we have filed for a branch in Belgium enabling us to start the production in Antwerp. That might be a little bit early as we haven't signed yet, but we just want to make sure that doesn't hold it up. There'll be some certifications that have to be renewed, but the whole process has been simplified. But again, we want to do that already now, so we don't have to wait for that. So I think... Well, I can tell you that it's all been signed and dotted. We're ready to go. My feeling is that we're getting quite close. And our focus has shifted, not shifted, but has now also been on how do we make sure that we can scale up after an expected successful trial. So no longer than three, four weeks ago, Jason and I and Linda as well were in Singapore exactly to look for potential suppliers from refineries, but also from buyer suppliers to make sure we're ready for that and had very positive meetings. Cannot really reveal who we've been talking to, but hopefully we can talk more about that later in the year. With that, I will hand over to you, Jason, on OCP.

Thanks, Peter. Yes, so in terms of OCP, again, Peter and myself earlier this year went out to Casablanca and met with the main people there. Quite a surprising meeting because they were extremely positive in terms of their cost leadership program which MSL fits in with. So the current status is that the updated trial agreement is well underway. So basically we're now detailing exactly which site we're going to be at. The likelihood is it's not going to be the same kiln as we had before which is slightly constrained with this OEM issue which we documented before. But the key thing is, I guess, behind the amendment to the agreement, we make sure that there's an operational board, obviously involving Peter and the head of the OCP there, to make sure that it's got management buy-in and make sure we try and avoid the delays that we've seen so far. The trial itself, the actual duration depends a little bit on the scale of the kiln that we're operating on. So if it's a smaller kiln, it'll be 30 days. If it's a bigger kiln, it's likely to be less. So really the plan is to basically carry out that trial. And a longer-term trial is needed. The previous trial was done over a period of a week or so. OCP were at least a longer-term trial of a couple of weeks minimum. to actually get the full operating data that they say is needed before they commit to commercial supply. So that's what we're doing. And in the meantime, our equipment remains on site. And any costs that are being incurred, we get them reimbursed for by OCP still. And that process has been working very well. In terms of the next project in the US with Valcor for basically heavy sweet oil, which is essentially a low-sulfur bitumen, ultra-low-sulfur bitumen product. We received, obviously, the first payment. We revised terms, if people remember, of the agreement last year. We basically received the first instalment last year as well. We basically invoiced the second instalment, which is due at the end of this month. So we're expecting payment of that 300k and then there's another 650 due at the end of the year. Samples that have been long overdue as well. They've been, essentially the Velcor have been going through a change, slight changes in their exact processing. So they've been holding back the samples until they know exactly which technology route they're going for, but that's now been finalised. So they're doing pilot runs at the moment to generate the samples that we expect to get fairly soon so we can do the testing in the second quarter of the year. Their pilot plant that was due to go in, be operational in Q3 has been delayed slightly because of the site that they selected was not fit for purpose. So they had to move site to a new location. So that delayed some of the civil work that was planned to be up and running by now. But that's moving ahead. So they expect the installation to happen during Q3 and the plant to be up and running in Q4. In the meantime, we've prepared our unit, it's nearly complete now, for shipment, and that will be done during the second quarter of the year to the US, with the expected deployment then in what's obviously part of the installation program in Q3. So really the plan is then to carry out a paid-for trial to produce actual trial volumes of fuel for local consumers, and it also initiates a marketing program that we've with Valcor as well now. This is actually live. But yeah, Valcor is here, so they're fully funded. Obviously, they've got a position now in Tomco as well in the UK. In terms of Panama, Again, as you remember, we carried out a trial in July, which went very well. Essentially, we got a letter of intent from Sparkle, basically stipulating what their demand will be. We know that there's other demand from other both part plants, both within Panama and Central America region, specifically around Honduras. The fuel permitting process, we've got basically EMSAR and Bio EMSAR have been basically approved as alternative fuels. So these are fuels that can be utilised as they're trying to phase out potentially fuel and diesel. So that's been approved. The process for the import permit has also been detailed now, but obviously we now need a live case where we can actually bringing the fuel with a partner. So we're discussing that with regional refineries and other logistics companies in the region with regards to commercial supply to Panama. And in the meantime, we've had some new arrivals to the team, including Matt Hyde, who's coming from BP, who's really helping with getting a deeper understanding of refinery economics there as well in that region. In terms of the BioEMSAR program, which is ongoing, we've been doing a lot of testing with additional biofuel feedstocks, including doing things in the lab, but also doing testing at third-party facilities in Germany, where these engine facilities are used by quite a lot of the parties, so it's a good endorsement for the fuel. We also kicked off a collaboration with the University of Bath, not just in terms of fuel research, but Peter mentioned before some of the AI digitisation as well. That's something that Bath can utilise in the future. And obviously it's potentially a good talent pool for us going forward in terms of their engineering and the technical people as well. And in the meantime, as Peter mentioned before, there's a world beyond glycerin for the biofuel, which really comes from biomass-derived material, which is abundant, but obviously there's different technologies to extract it. So we're working with the main technology providers there, all of which has its own features and challenges, but we're working through to actually get some of their products to market faster than they would normally expect through some of their other technology platforms, which is why they're working with us. And then as part of the development program as well, you know, we have an EU funded project which we're part of, us among sort of 18 other companies ranging from universities through to people in the marine space as well and actually owners of vessels as well. So that's been going very well and it's actually, you know, it's been quite active this year in putting together this digital twin which again Peter mentioned at the beginning. which is looking at four different types of existing vessels and four different types of new build vessels to see what's the optimum technology platform to decarbonize shipping. And it's looking at a range of different technologies of which MSL is one of those on the biofuel space. So it's a good platform for us to market our technology. And then Sustainable Ships is something that we launched again with them today, sorry this year rather, with Linda and Alfie especially have been very active in getting that up and running, doing an online seminar and that's brought through some quite good introductions already as part of that program. It's a good way of comparing how EMSAR and Bio EMSAR competes with other fuels. The next slide really just gives you a pipeline of the different fuel types that we're using and explains really what the bio-emissor is a mixing technology. It's a platform technology which now enables us to bring in a range of different biofuels into the finished product on the right, which needs to go through the appropriate engine testing, but ultimately can then be rolled out to the shipping fleet and really answer some of the questions around the abundance of biofuels. That's what we're really looking to nail and provide quite a unique approach difference in what we're offering because we can blend oil and water together. Some of these products, like the sugars that we mentioned, some of the, you know, the prolysis sugars and other means or other sort of components on here are actually water-soluble as opposed to being easily blendable with oil. So we have the ability to blend both. And I'll hand over to Xavier.