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Presentations

Capital Markets Presentation 2021

On October October 15th Enviro held a virtual Capital Markets Presentation.

At the presentation Enviro’s CEO Thomas Sörensson and Chairman of the Board Alf Blomqvist provided  a general update on the progress of efforts to establish new recycling plants and outlined the company’s view on how the global market for recovered carbon black and pyrolysis oil will develop.

You can download the presentation here. Capital Markets Presentation Enviro 2021-10-15

The entire filmed presentation can be found here and on Enviro’s Youtube channel.

FAQ Capital Markets Presentation 2021

A: Questions regarding the directed share issue

A1: Who subscribed for the shares in the private placement?

  • We don’t intend to issue separate information on who subscribed.
  • We can say that our largest owner, Michelin, took its share of the issue and therefore retains its holding of 20 per cent of the company.
  • Our next update of the shareholders’ register will take place on 31 December and, provided that any of the new owners are included in the ten largest shareholders on that date, they will be included in the list that we will publish on the company website in mid-January.

A2: You have stated a commitment not to conduct any new issues within six months and this has been interpreted as indicating that the money you now raised will not last longer than this – would you like to comment on this?

  • These are two entirely different subjects.
  • It is standard practice that in conjunction with an issue, a company makes certain time commitments relating to further raising of capital and this says nothing about how long cash funds will last.
  • As a result of the issue, we have a relatively strong cash base, but the length of time that it will last depends on the activities we conduct in various areas, in other words, how much we spend.

A3: I can’t find any detailed description of the reasons for the private placement that has been made – what was the actual purpose of the issue?

  • The issue proceeds will be used to strengthen our organisation;
  • For preparations for our expansion plan;
  • To finance day-to-day operating activities.

A4: When can we expect to see a financing solution that doesn’t involve more issues?

  • As communicated earlier, we have engaged the international investment bank Greenhill as financial advisor.
  • Their assignment is to help us prepare a long-term financing plan for our expansion plan. We will update the market continuously on the progress of this work.
  • The issue recently completed was not undertaken to finance our expansion plan, but to strengthen our organisation, prepare for our expansion and to finance operating activities.

B: Questions regarding the actual capital markets presentation

B1: Why did you not present more news? I had heard everything before.

  • Our presentation was intended to take an overall approach to matters that are key to us as a company and that we know are also of interest to capital markets and owners alike – to provide a complete view of where we stand and the opportunities we foresee going forward.
  • If you found that there was no news that was share price-sensitive, that was no coincidence.
  • Strict regulations apply to such information that is also known as inside information. The principal rule is that such information must be published immediately and disseminated symmetrically, meaning that it reaches various players in the capital market at the same time.

B2: Do you plan to hold more virtual capital markets presentations and if so, when?

  • We have not decided anything regarding this as yet.
  • If this proves popular, it is highly possible that we will do so.
  • If this is the case, we will inform the market and owners about it in good time through a press release.

B3: Has the company considered organising a physical capital markets day and inviting visitors, for example, to your plant in Åsensbruk? I believe that many owners would appreciate the opportunity to see your plant in reality.

  • That is not at all impossible.
  • However, such a visit requires extensive practical organisation and also takes rather a lot of time, so these factors will need to be weighed up.
  • If we decide to conduct such a visit, we will provide the information in good time through a press release.

C: Questions regarding the establishment in Uddevalla and future expansion

C1: What does the process look like going forward for the new plant announced in Uddevalla?

  • The first step has already been completed, namely, that we held consultation regarding the establishment.
  • The next step is to submit an application for an environmental permit and this is being prepared. We anticipate being able to do so during the autumn.
  • However, the process ahead comprises a large number of measures of different types and our plan is for the new plant to be completed during Q4 2023, as we have also communicated.

C2: How long will it take after the submission of the application before you know whether you will obtain the environmental permit?

  • We anticipate that it will take a maximum of a year from the submission of the application.
  • But that doesn’t mean that we will sit still and do nothing in the interim. The preparatory work is extensive and will proceed in the meantime.
  • Naturally, various types of supplementary documentation may be required, but on the whole, we expect to receive the permit that we need.

C3: The fact that you chose to hold consultations for two different sites has been interpreted by some as meaning that you intend to establish two new plants in the Uddevalla district and not one. Is that correct?

  • No, it has always been our intention to start up one new plant with a total capacity of 60,000 tonnes per year.
  • However, the initial capacity will be half, that is, 30,000 tonnes.
  • We currently have no more exact date for when we will reach a capacity of 60,000 tonnes.

C4: You have said that a final decision to build the plant is also dependent on several other factors – which other factors are these, more specifically?

  • They include ensuring access to end-of-life tyres so that the plant has the right volumes for recycling over time.
  • But it also involves securing supply contracts for recovered materials, some in the form of so-called offtake agreements that extend over longer periods of time and on special terms.
  • Both of these are central parts because they are decisive for the plant’s earnings capacity and therefore for our financing budget.

C5: In your capital markets presentation, you said that the ISCC certification conducted for recovered carbon black and oil from the plant in Åsensbruk has led to increased interest from players in the rubber and tyre industry, as well as players in the oil and chemicals industries. What form does this increased interest take and does it mean that you have negotiations already in progress regarding supply contracts?

  • It is correct that we have seen a clear increase in interest in our materials after announcing that we had received sustainability certification of our materials in accordance with the ISCC.
  • It is also correct that the interest is in both recovered carbon black and recovered oil, so-called pyrolysis oil.
  • We never comment on negotiations or discussions that are in progress, but naturally, we will communicate an agreement on a supply contract if and when we have such an agreement in place. It is, of course, a major competitive advantage that we were the first and, to date, the only company to obtain ISCC certification of recovered carbon black.

C6: The ISCC certification applied specifically to recovered materials from Åsensbruk. Does that mean that the future plant in Uddevalla will not automatically be able to deliver ISCC-approved materials when it starts up?

  • Each ISCC certification is conducted for each separate plant and it is correct that the certification we have now obtained applies to the material recovered at Åsensbruk.
  • Accordingly, when the plant in Uddevalla is finished, we will also need to conduct certification for the material recovered there and probably for the majority of future plants.
  • But we have developed a standardised, module-based concept for our reactors and plants, so we are convinced that the materials recovered in Uddevalla will meet the requirements in the same successful manner as the materials from Åsensbruk – it is exactly the same technology and the same plant design.

C7: You have communicated a very aggressive plan for the period prior to 2030. How can a small company such as Enviro succeed in establishing so many plants globally when it takes you two years to establish a single plant in Uddevalla?

  • We are now establishing detailed processes for all of the elements that are necessary for establishing a new plant – this involves everything from initial analyses of feasible and attractive sites to applications for local permits, construction, supply of materials and commissioning operations.
  • Understandably, these are processes that also require specific expertise and specific personnel and partners.
  • We have an aggressive program to succeed in developing the necessary processes and to be able to manage all of the steps that precede a new establishment.

C8: Will you be able to use the Swedish environmental permit to facilitate the application for the corresponding permits in other EU countries or does each country have its own permit process?

  • We assess that having an environmental permit for Åsensbruk will facilitate our process for Uddevalla, since we find that it supplements the documentation in many ways. There are separate processes for permits in other countries.
  • We will still have use for the documentation, etc., that we have prepared, but we will need to submit separate permit applications with separate processes.
  • We deem that we have leading technology and, through our solid practical experience of operating these types of plants and reporting to authorities, we are well prepared to present documentation for permit applications in most markets.

C9: How many permit processes do you have the capacity to handle simultaneously? After all, it is an aggressive expansion plan.

  • That is one of the questions we are looking at more closely now.
  • We know that we will need to prepare in various ways to manage this, which will include strengthening our organisation and partnerships. This is one of the activities that the issue proceeds will be used for.
  • Our assessment is that we will be able to manage as many parallel processes that our expansion plan requires.