Carbios Sa Act

Well, thank you very much and welcome, everybody. I'm very pleased to present you our results for 2023. 2023 was indeed a very exciting year for Carbio's development. So we had several good news. The first major milestone we achieved in 2023 was the signing of an exclusive strategic agreement with Novozymes, NovoNezis Oil, today. Novozymes is the largest enzyme producer in the world, and we have confirmed that Novozymes will produce and distribute carboxyl enzymes for our first plant in France, but for all the future licensing plants we will open in the world. So that was a very significant milestone for this exclusive partnership with Novozymes. Let's move on, please. We also had confirmation from the French state through the France 2030 programme and from the region where we are building the plant, which is the Grand Est region in the north-east of France, that we will receive significant non-dilutive subsidies. A total of €54 million has been granted to Carbio. This amount of subsidies would come in the in the coming years most of it would come in the coming years uh through um uh the milestones we are of construction of the plant but we are very pleased to have this these subsidies which is definitely a strong support and which shows the commitments of the french government to support carriers we have here a video of Mr. Macron, the French president, who testified in support of Carbios in December 2023. I don't know if we can put the video.

Carbios, you said it very well earlier, you recycle, you reduce emissions, you reduce dependence, and you allow us, in doing so, to get out of the oil field, It was a wonderful demonstration, I will not do it again here, but you are an illustration of what needs to be done. And so we must ask ourselves the same question for all mineral resources, that is to say our ability to preserve and recycle them.

So in 2023, we also signed a non-binding MOU with Indorama Venture, which testified the very strong interest of the PET industry into Carbios technology, Indorama being one of the largest PET producers, and Indorama willing to invest in the first plant in France with Carbios. So 2023 also marks some significant milestones in our innovation and development. In the month of April, we published our technological information summary from our demonstration plant. This is a very significant milestone because it shows that the technology which is installed works. It gives a lot of data on the process and its productivity and the quantity of products we can outcome. and it was a significant milestone to start not only to finalize the design of our first plant in Longueville but also to start the licensing approach which is key in the Carbios development and it was the key milestones to start this development of the technology and being able to contact the future potential licenses. Let's move on. So we also, in the month of September, did the inauguration of our new textile preparation line. Textile is absolutely very important in the Cabrio's strategy. We are capable of doing fiber-to-fiber depolymerization, and today you know that less than 1% of the textile is recycled fiber-to-fiber. So this is a huge opportunity for a carburetor development in all continents, and in particular in Asia. So with this preparation line, we are able to prepare the polyester post-consumer or post-industrial waste so that they can be prepared and taken by our depolymerization line. So that, my son, is very important for the upcoming development of CARBIOS technology. Next, please. so the the construction of our first plant is running on time we have um achieved to get the the permitting um in the in the record time for france which is 10 months we have already started the the work the preparation of the land is finished um and the the the the The contractualization of the DESMED company has been done to be able to build the plant. So the plant will have, I remind everyone, will have a capacity of 50,000 tons of PET, feedstocks, plastic and textile in that plant. The plant is located in the Longue-la-Ville city, which is at the border of Luxembourg, but on the French side in the Grand Est region. and we will operate with five shifts 24 hours that's creating about 150 new jobs between direct and indirect jobs so everything is running on schedule for this first plant which will deliver significant volumes to our brand owners to our customers in 2026 In terms of feedstock, which is an important part of securing the plant outcome, we have already contracted interesting contracts with CTO in France for the food trays. And we also announced a contract recently with a German group Land Bell to supply also some and to innovate on plastic feedstocks. At this stage, Carbios has secured 70% of the feedstocks needed for Longue-la-Ville and we continue to work on securing the full capacity for the time we will start the operation. In terms of licensing, things are progressing well. I just want to remind you that we have several targets. We are talking to PET producers across the globe. They are the most interested in our technology because we are the only technology which is fully plug and play to the PET production. We also are talking to chemical groups, which are very interesting in one of the two monomers we are producing, which is a PTA, teftalic acid. And we have also some interest from waste management companies, sometimes some brand owners directly or some sovereign funds in certain countries. So the key targets are there. The main targets we have developed very, very strongly are the producers and the chemical groups. Let's move on, please. So today we have put some presence, commercial presence in most of the key countries for the PET, our PET markets. We have people in many countries in the US, in North America, in China, in Korea, in Japan, in Taiwan, and we are covering Europe. And there are many countries where we have already advanced discussions for the licensing of our technology. Let's move on. So just to remind everyone the way Carbios revenues are going to be generated beyond the revenues from the first plant in Longue-la-Ville, which is a bit particular because we will be the majority shareholder of that plant. For the remaining part on licensing, we have three pillars of revenues. One is the licensing contracting, the licensing upfront model which generate upfront revenues for Carbios when we sign licensing and when we commission the plants for the licenses. And then when the plants of the licenses are operating, we have two big pillars of revenue. One on the enzyme, which is a kickback from Novozymes on selling the enzyme, which is the IP of Carbios. And the second one is the royalties we get from the licenses on the fact that they get a premium on selling the Carbios products. So that's the way the structure of revenue has been published already in our strategic update 2026. And that's the way these revenues are modelized by the analyst following Kavliost. So let's move on. So this is the vision of the revenue split of Carbios between 2026 and 2035. As you can see, we have at the beginning of Carbios significant revenues coming from the green bar, which are the revenues coming from the first plant. And also the upfront revenues, as I mentioned, which is the revenues we get when we sign and when we start to operate the licenses plants. Then with time, when the licensee plants will be operating, the royalty revenues will take over and will take the lion's share of our revenue. But we need obviously to have the plants operated before that dark blue line is growing. So that's the vision on the revenues of Carbios. One point I want to mention also is our biodegradation business, which is a Carbios active, is starting very positively. We have got the food grade approval in North America, and that's really the starting milestones to start revenue on this activity. This is the right bar on the graph. So in terms of innovation, we have announced several key milestones as well. We did a publication on the microfluidics, which is a technology that we have adapted to the plastic depolymerization, and basically which allows us to test millions of enzymes in a few hours. And this technology is used in other industries, but has been adopted by CARBIOS. And it's a true acceleration. At the beginning of CARBIOS, we were testing only a few hundred enzymes a day. Right now, we are able to test millions of enzymes a day. So that's a significant milestone for the development of future enzymes. Next slide, please. We also had significant publications in March 2023. We had a publication in Chemical Review on the work we did on our enzymes. And this is one of the most influential scientific journals in the world. And in October we had a publication on the comparisons of the Carbios enzyme compared to other enzymes which were published by other laboratories and which shows that there is a significant advantage for Carbios enzyme compared to any academic work which has been done so far. Our enzyme is 40 times more efficient than any other ones in terms of industrial application. So that was published in SAS catalysis. so what are the milestones for uh we have achieved and we will achieve so in term of um uh 2023 i will not repeat but we had the textile line which has started its operation we had the first fit stock contract and the start of the construction in 2024 we will complete the staffing the key staffing of the plant all the key people of the plant will be hired and starting their training In 2023, we started to staff North America and actually we were in advance on our milestones because we have already staffed Asia already in 2023. We said we would sign our first agreements on license in 2024. We are on path of doing that. We have major brand owners agreements on the volumes, which will be signed in 2024. We will open new consortiums in other industries beyond the one we have already in packaging and in textile. We will have new consortiums of players in other industries. And we will start the sales of our carbisactive PLA biodegradation solution in North America. In terms of R&D, in 2024, we will patent some enzyme work on new polymers. And as we have announced earlier, we are working beyond PET and PLA. We are working, for instance, on polyamides and on the polyolefins. And we will also organize the second round of our scientific summit where we organize several day meetings with all the key scientists in the world working on plastic depolymerization through enzymatic solutions. In terms of ESG, we have already achieved the percentage of independent board members and we will propose to the next General Assembly one more lady to join the board so that we will be above 40% female board member presence. This year, we are finalizing the ISO 14001 and 9001 for all our operations. And we will also get first circular LCA published in 2024. So that's the key milestones we are on track to get for 2024. So now I let the floor to our CFO, Pascal Bricoult, to come back on the results for 2023.

Thank you, Manuel. Good morning, everybody. So before looking at numbers in these four slides, the key elements that drive the accounts this year are number one, the capital increase of 133 million net relies in July 23. Number two is we get the permit for the Long La Vie plant in October. Then we start to invest in this project. You will see that in the account. And then the third point is that the cash burn is under control. So let's start with the asset side. And you see that the tangible assets increased by around 25 million. This is the acceleration of the Long Laville project once we get the permit in October. So it's a serious number of spendings to be on track on the timing once we get this permit. Number two or number one in the footnotes is the goodwill. The goodwill is tested every year. This is the carburetor's goodwill, the PLA activity goodwill, and that is confirmed in its substance for this closing. And then you have the cash equivalent or cash on hand, which is now 191, nearly 192 million. And the major increase is coming from the capital increase we made in July, less the tangible asset investments and less the cash burn for the year. So if you go on the next slide, again, on the shareholder equity, the big movement is starting with the capital increase for this net value of 133 million. And then you have the loss of the period, which is stable at 27. And you will see that even on the cash burn perspective is fairly under control. A few accounting variants is that we made, again, a leaseback operation for the demo facility. That's why the loans increased by around 4 million. And then you have a few... current liability which represent the increase of the debt we have regarding supplier for the tangible assets. If we can go on the next slide on the P&L. Yes, so you see that if we go on the R&D and I do prefer to look at the expense. So we are 19, we were 19 last year. We are now 18.8 this year. This is fairly stable, but behind this stability, we have additional 1 million who is now subsidized directly to our academic partner to work on project sponsored by Carbios. So if you want to make the full scope of what he spends for Carbios technology is This year is 20 million, is 18.8 plus around 1 million. And then we have the subsidized, which is basically tax incentive. And also we have the capitalization of the cost. Last year, we have capitalized 1.2. This year is nearly double because last year we start mid-year because of the IFRS trigger point that allow carburetors to start to capitalize mid-20s only. If you go on the marketing and selling expenses, it's 1.5 million plus, moving from 4.3 to 5.8. And 50% of this increase is all the staffing effort that was made last year with a full year effect this year and also additional people to cover the globe. to sell our technology on a global scale in more than 20 countries. And I think Emmanuelle showed you the map in the previous slide. Under what is named General Amine Expenses, we have about 3.3 million increase from 8.8 to 12.1. And 50% of this increase is a full-year effect, again, of recruitment we made late in the year in 2022 to start to structure the company better in all respects, plus a big effort this year to support the construction of the long-loving plant and all the functions that are needed around this project, including consulting services. These have been said, so operating expense increased by something like 2.8 million, and this is covered by the financial income that moved from a loss, 1.6, to a profit, 1.6, because we put all our cash in. from July 23 in short-term vehicles without any risk and very liquid. And then we come up with a variance of 3.2 million year on year. And then that ends with 27 losses, same as last year. If we go on the cash, then it will be a fairly summary of the big change. If you go on the next one, Yes. So on the operating activity, again, we are under control on the cash. It's 22 million. Investing activity is the effect of starting to invest in Longueville from October 22. And then financing activities, the big number is coming from not only the revenues, but also the capital increase cash that we receive in July 23. I think that's it for the financials.

So I think we can leave the floor to questions.

This is the conference operator. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touchtone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time.

So it seems we have a question.

There is a question in the chat on when do we expect to generate revenues with Carbios Active ex-Carbiolysis. As I mentioned in the milestones, we have contracts under discussion right now in the US, and we expect to generate revenues in 2024 from the first delivery of Carbios Active in the US. And can we give a range of revenues? I showed on the graph that the Carbis Active would be important in 2026. The revenues for 2024 will really depend on the moment we start the delivery. So, we will not publish at this stage revenue estimate and when we have the contracts finalized, we will obviously give some more information at that time. There is a question on how do we expect operational expenses to increase in 2024? Pascal, do you want to take that?

Yes, it will be in the range of 5 million, plus 5. Especially we made a strong push again on the R&D that we have some projects we cannot give detail because it's highly confidential and sensitive. We also do work on projects with the some brands, and we have also commercial activity with getting higher. Thank you. Type of short-term vehicle is... Repeat the question, Pascal, please. Yes. You put all the cash in short-term vehicles without any risk, It's like saving and loan stuff. It's 3% to 4% yield. We can withdraw the money overnight. We have a lot of preference for ESG-type vehicles. Even the yield is a little bit lower, but we want to be consistent with our DNA.

And then there is a question. How are you going to consolidate the GV with Indorama Ventures with your account? So, Pascal, maybe you want to take it?

That... At the moment, the way it is structured, it will be a full consolidation. But we need to make a full comprehensive review by the auditors once the contract will be fully finalized.

When will you receive the non-convertible loan from Indorama Venture into the GV? So I think the negotiation on the detailed contract with Indorama are ongoing. So Indorama has done a very extensive due diligence of the technology. Their conclusions are extremely positive. Their chairman, Mr. Aloke Loya, and their deputy CEO visited our installation at the end of 2023. They have expressed their strong confidence in the Carbius technology. And last week, Indorama has positively visited the enzyme production site of NovoNesis in Denmark, and they were very satisfied with the results. The ongoing information on the GV structure and loan with Indorama will come when it's possible to communicate. So there is a question on could you comment on the several partnerships considered as feasible license in 2020 and 2024 for how long you have been in touch with those players, regional breakdown, etc. So we are confident to sign several partnerships projects in 2024 for the licensing of the bio recycling technology. Licensing technology takes between 18 to 24 months, and so far we have established initial contacts with numerous PET producers in the world. Our unique technology is creating a lot of interest due to its plug-and-play capabilities, the low carbon impact of our production, the capability to process fiber-to-fiber polyester textile, and its easiness to operate. its capacity to access to inexpensive feedstocks such as food trays or textile, and the very high quality of the monomers we produce. We have several advanced discussions, and as soon as we can communicate on those, we will obviously communicate on it. But once again, we are confident to sign several partnerships in 2024. So there's a question, has Indorama contract been signed? So I just want to remind that the contract non binding has been signed in June 2023 and the negotiation of the detailed contracts are ongoing with Indorama. What increase of course do you expect of carburetics plastics in comparison to current plastic price? This is a very difficult question to answer because we need to put us in a dynamic of 2026 when we will have significant volumes on the market. What is for sure is the plastic, the recycled plastic demand is increasing due to regulations all over the world and in particular in Europe with a 25% incorporation. And the very high demand for fiber-to-fiber solutions creates a huge demand for fiber-to-fiber technologies. What makes Carbios competitive strong advantage is the access to feedstocks that cannot be processed by mechanical recycling, and in particular food trays and polyester fibers, feedstocks which are much less inexpensive than bottles. You need to know that a bottle is making... most of the fiber recycled goods today. And bottle waste price is going up in many geographies. So we believe the competitiveness of Carbios is increasing with a lack of bottles that is foreseen in the world. Could you comment on how many employees of Carbios are shareholders of the company and how much they hold? Same for the management. So we have recently done a program of shareholding access for the employees, which was 0.08% of the capital. So it's a small amount, but 88% of the employees of Carbios have become shareholders through that program. Some are independent shareholders, by the way, on their own. And the management owns also some shares by their own. And in terms of equity for the management, it's through performance shares that the management has a small part of the capital. I think we don't have any more questions, if I'm not wrong. So I would like to thank all of you for your interest in Carbios. And we will obviously keep you updated on the progress of Carbios on the key milestones that we plan to achieve in 2024. Thank you very much. Thank you.