Slides
Page 1
ECOSYNTHETIX INC Jeff MacDonald| CEO Rob Haire | CFO Q3 2025 Earnings Results November 7, 2025
Page 2
FORWARD LOOKING STATEMENTS Certain statements contained in this MD&A constitute forward-looking statements. All statements other than statements of historical fact may be forward-looking statements. These statements relate to, but are not limited to, future events or future performance, our expectations regarding the Company’s growth, results of operations, estimated future revenues, and requirements for additional capital, production costs, future demand for latex- based products, business prospects and opportunities, our ability to successfully commercialize our products, expectations as to the amount of reduction that the Company’s products may have on a manufacturer’s carbon footprint. Forward-looking statements are often, but not always, identified by use of words such as ‘‘may’’, ‘‘will’’, ‘‘should’’, ‘‘could’’, ‘‘seek’’, ‘‘anticipate’’, ‘‘contemplate’’, ‘‘continue’’, ‘‘expect’’, ‘‘intend’’, ‘‘plan’’, ‘‘potential’’, ‘‘budget’’, ‘‘target’’, ‘‘believe’’, ‘‘estimate’’ and similar expressions. The forward-looking statements in this document include, but are not limited to, statements regarding the Company’s expected product pipeline, plans to expand the Company’s business into new markets, the Company’s ability to achieve organizational efficiencies, and other statements regarding the Company’s plans and expectations in 2025. Such statements reflect our current views and beliefs with respect to future events, are subject to risks and uncertainties, and are based upon several estimates and assumptions that, while considered reasonable by us, are inherently subject to significant business, economic, competitive, political and social uncertainties and contingencies. Those assumptions and risks include, but are not limited to, the Company’s ability to successfully allocate capital as needed and to develop new products, as well as the fact that our results of operations and business outlook are subject to significant risk, volatility, and uncertainty. Many factors could cause actual results, performance, or achievements to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking statements. We have made material assumptions regarding, among other things: that our intellectual property rights are adequately protected; our ability to obtain the materials or services necessary for the production of our products; our ability to convert prospects from the industrial trial phase into full commercial customers; our ability to market products successfully to our customers; that we will continue to possess unique intellectual property rights; changes in demand for and prices of our products or the materials required to produce those products; labour and material costs remaining consistent with our current expectations; the price and availability of substitute or competitive products; and that we do not and will not infringe third party intellectual property rights. Some of our assumptions are based upon internal estimates and analysis of current market conditions and trends, management plans and strategies, economic conditions and other factors and are necessarily subject to risks and uncertainties inherent in projecting future conditions and results. Some of the risks that could affect our future results and could cause those results to differ materially from those expressed in the forward-looking information include, among other things: the impact of the conflict in Ukraine including the potential expansion of the conflict into other countries or regions; the availability and price of natural feedstocks used in the production of our products; agricultural risks that could impact crop yields and bio-based materials; a significant decrease in the market price of petroleum related feedstocks; changes in government regulations and policies relating to our business; inflationary pressures that may affect labor, raw materials, energy, agricultural commodities and other input costs; fluctuations in energy costs used to run production facilities; the inability to effectively expand our production facilities; dependence on certain customers and changes in customer demand; credit and concentration risk associated with cash and cash equivalents as well as accounts receivable; the risk of volatility in global financial conditions, as well as significant decline in general economic conditions; increase in industry competition; variations in our financial results; our ability to effectively commercially market and sell our products; the inability to retain key personnel; the inability to develop new technologies and products; an inability to protect, defend or use our intellectual property and/or infringement of third-party intellectual property; enforcement of intellectual property rights; the ability to acquire intellectual property; the risk of litigation with respect to intellectual property and other matters; our ability to protect our know-how and trade secrets; changes to regulatory requirements, both regionally and internationally, governing development, production, exports, taxes, labour standards, waste disposal, and use, environmental protection, project safety and other matters; the impact of infectious disease outbreaks on our business; a shortage of supplies, equipment and parts; a breach in cyber-security; company growth and the impact of significant operating and capital cost increases; changes in the current political and regulatory environments in which we operate; the inability to secure additional government grants; a deterioration in our cash balances or liquidity; the inability to obtain equity or debt financing; insufficient product liability insurance; the impact of issuance of additional equity securities on the trading price of the common shares; the impact of ethical, legal and social concerns relating to genetically modified organisms and the food versus fuel debate; the risk of business interruptions; the impact of volatile market price for common shares; the impact of changes in interest rates; the impact of changes in foreign currency exchange; losses from hedging activities and changes in hedging strategy, as well as the factors identified in the “Risk Factors” section of the Company’s Annual Information Form dated February 18, 2025. Such factors are not intended to represent a complete list of the factors that could affect us. These factors should be considered carefully, and prospective investors should not place undue reliance on forward-looking information. IFRS and Non-IFRS Measures This MD&A makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of the results of operations of the Company from management’s perspective. Accordingly, they should not be considered in isolation or as a substitute for analysis of the financial information of the Company reported under IFRS. We use non-IFRS measures such as Adjusted EBITDA to provide investors with a supplemental measure of operating performance and thus highlight trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures. We also believe that securities analysts, investors, and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Our management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess its ability to meet its capital expenditure and working capital requirements. Adjusted EBITDA as presented herein is not a recognized measure under IFRS and should not be considered as an alternative to operating income or net income as measures of operating results or an alternative to cash flows as measures of liquidity. Adjusted EBITDA is defined as consolidated net income (loss) before interest, income taxes, depreciation, amortization, impairment loss on property, plant and equipment (PP&E), gain or loss on disposals of PP&E, accretion, and other non-cash expenses deducted in determining consolidated net income (loss). ECOSYNTHETIX INC. 2
Page 3
$1.6 $0.5 $1.0 $(0.6) Q3 2024 Q3 2025 LTM Q3 '24 LTM Q3 '25 $0.4 $0.2 $(1.9) $0.03 Q3 2024 Q3 2025 LTM Q3 '24 LTM Q3 '25 $5.2 $5.8 $15.9 $20.3 Q3 2024 Q3 2025 LTM Q3 '24 LTM Q3 '25 STRONGER DEMAND ACROSS STRATEGIC END MARKETS DROVE HIGHER VOLUMES Net Sales Adj EBITDA (loss) Cash provided by operating activities 11% (USD millions) ECOSYNTHETIX INC. 3 POSITIVE ADJ. EBITDA 4 OF LAST 5 QUARTERS 45% 1.6x 28% 67% 102%
Page 4
STRONG DEMAND FROM LEADING GLOBAL PULP MANUFACTURER ECOSYNTHETIX INC. 4 Account investing in marketing resources Direct promotion with customers Publications and social media Account demonstrating consistent and growing success with their differentiated product that uses SurfLock Run-rate production more than tripled since original purchase order in February 2025 SurfLock used in one mill today, of multiple pulp and paper mills operated by the account SurfLock improves strength and delivers cost reductions through use of lower cost fibres SurfLock addresses supply gap for stronger long fibre in market
Page 5
HISTORICAL PRICE SPREAD: SOFTWOOD VS. HARDWOOD FIBRE ECOSYNTHETIX INC. 5 Gap between softwood and hardwood fibre is structural Consistent imbalance of high-cost softwood fibre and lower cost hardwood fibre 300 50 -- 150 50 200 100 250 2013 202520172015 2019 2021 2023 BSKP vs. BHKP ($/t)
Page 6
(Based on revenue (USD billions)) TOP 15 GLOBAL FORESTRY & PAPER COMPANIES Source: Statista – Global leading forestry and paper companies 0 5 10 15 20 International Paper WestRock Oji Holdings Smurfit Kappa Stora Enso UPM Nine Dragons Paper Nippon Paper Mondi Suzano DS Smith Metsa Group CMPC Shandong Chenming BillerudKorsnas ECOSYNTHETIX INC. 6 0 4 8 12 Stora Enso Georgia Pacific Metsa IP CMPC Arauco UPM APRIL + Bracell APP + PE + Domtar Suzano (Market pulp capacity (tonnes millions)) TOP 10 GLOBAL PULP COMPANIES Source: Hawkins Wright, August 2023. Market pulp capacity including hardwood and softwood volumes (Includes AraucoMAPA and UPM Paso de los Torostotal capacities)
Page 7
DEMONSTRATING REPEATABILITY OF WINS IN TISSUE END MARKET ECOSYNTHETIX INC. 7 Two new wins in tissue end market in the quarter Wins a result of work with the RNM Group, a new distribution partner RNM Group has a track record of growing new chemistries and driving adoption Every commercial tissue account is using SurfLock across multiple lines ECOSYNTHETIX INC. 7
Page 8
DuraBind the clear incumbent in the bio-based glue market WOOD COMPOSITES PROGRESS: ECOSYNTHETIX INC. 8 Increasing demand and regular order pattern from first mill of the strategic account Second facility conducting regular runs at low volume levels DuraBind cost competitive, even cost advantaged vs. incumbent at certain points in 2025 First two lines are part of ~17 lines that serve the international retailer (30% backward integrated and 70% from third-party suppliers by volume)
Page 9
INTERNATIONAL RETAILER’S PRIMARY CLIMATE FOCUS: HALVE GHG EMISSIONS ACROSS VALUE CHAIN BY 2030 1 9 Source: https://www.ikea.com/global/en/our-business/sustainability/our-circular-agenda/ 1) From a base year of 2016
Page 10
Dow continues to grow and expand MaizeCare program Progress on smaller brands at top 10 players in personal care Clear commitment and belief from Dow in all-natural ingredients opportunity long-term ECOSYNTHETIX INC. 10 ALL-NATURAL POLYMERS IN PERSONAL CARE
Page 11
US$30.4 MILLION IN CASH AND SHORT-TERM INVESTMENTS (09/30/25) USD millions (except gross margin) Q3 2025 Q3 2024 2025 2024 Net Sales $5.8 $5.2 $14.9 $13.1 Gross Profit $1.7 $1.7 $4.0 $3.7 Gross Margin 29.9% 33.3% 27.1% 28.5% Gross Margin adjusted for manufacturing depreciation 34.2% 36.8% 31.9% 32.7% Adjusted EBITDA1 (loss) $0.2 $0.4 $(0.1) $(1.0) 1) Adjusted EBITDA is defined as consolidated net income (loss) before interest, income taxes, depreciation, amortization and other non-cash charges deducted in determining consolidated net income (loss). ECOSYNTHETIX INC. 11 Q3 2025 FINANCIAL SUMMARY
Page 12
OPERATING COST STRUCTURE Selling, General & Administrative (USD, millions) Research & Development (USD, millions) R&D EFFORTS CONTINUE TO FOCUS ON FURTHER ENHANCING VALUE $0.0 $0.2 $0.4 $0.6 $0.8 $1.0 $1.2 $1.4 $1.6 $1.8 $2.0 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 $- $0.1 $0.2 $0.3 $0.4 $0.5 $0.6 $0.7 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 ECOSYNTHETIX INC. 12
Page 13
$(1.2) $(1.0) $(0.8) $(0.6) $(0.4) $(0.2) $- $0.2 $0.4 $0.6 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 Q4 24 Q1 25 Q2 25 Q3 25 CONSISTENT PATTERN OF IMPROVEMENT IN ADJ EBITDA AND CASH FLOW Quarterly Adj EBITDA (USD millions) POSITIVE ADJ. EBITDA 4 OF LAST 5 QUARTERS $0.2 -$9.0 -$8.0 -$7.0 -$6.0 -$5.0 -$4.0 -$3.0 -$2.0 -$1.0 $- $1.0 $2.0 2015 2016 2018 2019 2020 2021 2022 2023 2024 YTD Q3 25 Annual Cash Flows from (used in) Operations (USD millions) $0.3 ECOSYNTHETIX INC. 13
Page 14
BUILDING TO $100M+ IN SALES TODAY: COMMERCIAL WITH MARKET LEADERS IN EACH VERTICAL NEW PULP, TISSUE / PACKAGING LINES AND EARLY PERSONAL CARE WINS MULTIPLE NEW LINES IN WOOD COMPOSITES AND PULP, TISSUE / PACKAGING $100M SALES A B C D E 14ECOSYNTHETIX INC. ACHIEVABLE WITH EXISTING PARTNERS LEADING GLOBAL FURNITURE RETAILER LEADING GLOBAL TISSUE / PAPERBOARD MANUFACTURERS NEW WOOD COMPOSITES MANUFACTURERS WITHIN RETAILER’S SUPPLY CHAIN MOMENTUM ACROSS END MARKETS
Page 15
QUESTIONS & ANSWERS