Hello and welcome to the Avantium 2023 full-year results call. My name is Laura and I will be your coordinator for today's event. Please note this call is being recorded and for the duration of the call your lines will be on listen only. However, you will have the opportunity to ask questions at the end of the call and this can be done by pressing star 1 on your telephone keypad to register your question. If you require assistance at any point please press star 0 and you will be connected to an operator. Today we have Tom van Aken, CEO, Boudewijn van Schaïk, CFO, and Aarne Luten, Head of Investor Relations, as our presenters. I will now hand you over to your host, Aarne Luten, the Head of Investor Relations, to begin today's conference. Thank you. Yes, thank you, Operator. Good morning everyone and thank you all for joining us today. My name's Aarne Luten and I'm Avantium Head of Investor Relations. Today's prepared remarks will be delivered by our CEO, Tom van Aken, and our CFO, Boudewijn van Schaïk, followed by a Q&A session. This call is being recorded and a transcript of the call will be made available on Avantium's website soon after the call. Before we begin, I would like to point out a disclaimer at the bottom of our press release and remind participants that some of our comments today may include forward-looking statements reflecting Avantium's view of future events. These matters involve risks and uncertainties that could cause our results to materially differ from our forward-looking statements. I would like to hand over now to Tom van Aken, the floor is yours, Tom. Thank you, Aarne. Good morning everyone and thank you for taking the time to join us during this call. Yesterday evening Avantium announced its full-year 2023 results and we would like to run you through the key business and financial highlights. Let me start with the key business highlights. Two years ago we celebrated the first piling ceremony for our FDCA Flagship Plant and now we're in the completion stages of the construction of the facility. This quarter, as per plan, we started the first commissioning activities. To give you an example, we have already commissioned the electrical systems of our FDCA Flagship Plant. As said before, we plan to commission the FDCA Flagship Plant in phases, followed by the sequential startup of the different subsystems of the Flagship Plant. In line with previous guidance, we expect to start FDCA production in the second half of 2024. This will enable the launch of PEF products at commercial scale. We have made good progress on the recruitment of the FDCA Flagship Plant team and the FDCA Flagship Plant organization is now fully staffed. On a side note, yesterday evening we launched a new video where we elaborate on the full-year 2023 results and which gives you a good impression of where we stand with the FDCA Flagship Plant construction. I invite you to check it out online. Looking at the commercial progress, in 2023 Avantium signed additional offtake agreements for the FDCA Flagship Plant with adhesives producer Henkel, interior textile manufacturer Kvadrat, and sustainable fashion brand PANGAIA. This takes the total offtake agreements to 15. In November 2023 Avantium announced a collaboration with Albert Heijn, the largest supermarket chain in the Netherlands, via our offtake partnership with Refresco. Once the FDCA Flagship Plant is operational, the collaboration will see new fruit juice bottles made from PEF hit the Albert Heijn shelves. Under this collaboration we're planning to do more packaging projects with Albert Heijn and its suppliers. In 2023 we also signed our first technology license agreement and we are conducting promising discussions with other to explore additional licensing opportunities. As explained at our Capital Markets Day in December 2023, we believe that the realization of an operating FDCA Flagship Plant together with the implementation of our technology licensing strategy will mark a significant inflection point for Avantium. If we switch to the other parts of Avantium, 2023 was a strong year for our Volta Technology, our carbon capture and utilization solution. We signed two long-term strategic collaborations with SCG from Thailand and Norsk Hydro. Avantium and SCG Chemicals announced a joint development agreement in June for the further development of the promising polymer PLGA produced by Volta Technology. Over the next two years Avantium and SCG will collaborate on the construction of a pilot plant with an indicative capacity of 10 tons per year. Avantium aims to attract more strategic partnerships to support the scale-up and financing of the pilot plant for Volta. Our Ray Technology for the production of plant-based MEG took significant steps in 2023 from both the technical and the commercial perspective. Nonetheless, we decided to prioritize the commercialization and licensing of our FDCA and PEF technology. Therefore we've put further investments in our Ray Technology on hold until one or more appropriate strategic equity partners with the required resources have been secured. As a result, we've significantly scaled down our Ray Technology team. This was obviously a tough decision but I'm pleased that we're able to redeploy more than 80% of the employees working for the Ray Technology either to positions at the FDCA Flagship Plant or to vacancies in other business segments. In this way we were able to retain key talent, know-how, and expertise related to the Ray Technology within the company. For our R&D Solutions business we're on the right track to profitable growth after the first full year of pursuing our new strategic direction focusing on four sustainable chemistry areas. As a refresher, those areas include green hydrogen, chemical plastic recycling, absorption, and sustainable chemical building blocks. There were promising activities across those four areas in 2023 which resulted in a EUR 2.2 million increase in revenues for our Avantium R&D Solutions. Our Chief Financial Officer, Boudewijn van Schaïk, will tell you more about this and he will run you through the financial results in more detail. Bob, please go ahead. Thank you, Tom, and good morning everyone. So last night we published our unaudited financial results for 2023 and we expect to publish our annual report in the coming days but in any event no later than the middle of next week. Despite the significant effort from everybody involved, the auditor was unable to conclude on the final audit procedures yesterday and this resulted in a delay in the publication of our annual report. So let me begin by highlighting the progress that we have made on our financial position in 2023. It was another challenging year from a geopolitical, inflationary, and economic perspective. With persistently high inflation and high interest rates in 2023 as well as continued supply chain constraints, we experienced increased costs across all activities in the company which in particular impacted the construction of our FDCA Flagship Plant. I'm very pleased that we were able to secure a EUR 64.5 million financing package from the existing lenders and the shareholders in Avantium Renewable Polymers to cover the anticipated cost increase. In order to cover Avantium's share of the financing package, we successfully completed an equity raise of EUR 70 million in February 2024. With this funding secured, we have further solidified our financial profile and we expect to remain well capitalized through the commissioning and startup of our FDCA Flagship Plant. Moving to our key financials in 2023, total revenues amounted to EUR 19.7 million, an 11% increase compared to 2022. This increase is mainly the result of 20% higher revenues from our R&D Solutions business following new orders, the delivery of several flooring systems, as well as contract R&D projects during the year. Upon entering into the technology license agreement with Origin Materials in February 2023, Avantium Renewable Polymers received the first milestone payment of EUR 7.5 million and under IFRS 15 we recognize EUR 4.6 million in revenues under this contract in 2023. As a reminder, in 2022 we already received a EUR 5 million euro payment from Origin Materials which was related to due diligence. Our net operating expenses for the year were EUR 52.9 million which is an increase of 27% compared to last year. This increase is mainly delivered by the anticipated 20% increase in employees over the year as well as increased business activities including additional costs relating to compliance assessments of PEF and FDCA needed for the use as food contact material and its registration in jurisdictions of interest. As a result of the higher operating expenses, we reported EBITDA of -EUR 27.5 million in 2023 versus -EUR 16.3 million in 2022. Turning to our cash position, on 31 December 2023 this was EUR 35.2 million. Over the year we invested EUR 90 million in planned CapEx which was primarily for the engineering and construction of the FDCA Flagship Plant. This cash outflow was partly offset by drawdowns of EUR 75 million from the existing debt facility agreement and the EUR 2.5 million loan from Fonds Nieuwe Doen which was secured in February 2023 as well as EUR 6.7 million from our minority shareholders in Avantium Renewable Polymers under the shareholder loan agreement that we entered into in December last year. The cash position as per 31st of December does not include an additional EUR 15 million loan from our lenders for Avantium Renewable Polymers which we anticipate to draw down in the second quarter of this year. In our annual report we will also report on our ESG performance and our targets including our CO2 emissions and I invite you to take a look at this once it is published. Back to you, Tom. Thank you, Boudewijn. In conclusion, 2023 has been a good year for Avantium from both a commercial and execution perspective. Our most significant project, the construction of our FDCA Flagship Plant, remains on track. Moreover, we secured the necessary funding for the beginning of 2024 and the company is now well capitalized for the next phase of commercialization. Looking ahead, Avantium continues to pursue additional offtake agreements for the FDCA Flagship Plant and capacity reservations to support our licensees. We are also in advanced discussions with major feedstock suppliers for the supply of high fructose syrup to license plants for the production of FDCA and PEF. We're looking forward to another exciting year where we expect to bring the FDCA Flagship Plant on stream, laying the foundation for anticipated revenue streams to materialize in 2025 and beyond. For our Ray Technology, a core team continues to pursue funding from strategic investors to enable the long-term continuation of the Ray Technology. For our Volta Technology platform, Avantium aims to attract more external funding to support the scale-up of Volta Technology towards the pilot plant and its key products. Finally, our R&D Solutions business aims to continue to deliver double-digit top-line growth in 2024 compared to 2023. This concludes our prepared remarks, and operator, you may now open the line for questions, please. Thank you. Thank you. Ladies and gentlemen, as a reminder, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We'll now take our first question from Usama Tariq with ABN AMRO, ODDO BHF. Your line is open. Please go ahead. Hi, good morning, team. Thank you for the opportunity. My first question would be, could you comment on CapEx for next year and how do you see it for the first half and the second half, if you could provide some color there? Just a second small question would be, you just indicated that you're in advanced discussions with suppliers for the fructose syrup agreement. Wasn't it already done from my understanding or could you just provide a little bit more color as to which ones or if you could provide some names there? Thank you. Thank you. All right. Usama, thanks for your questions. I'll start with the first one on the CapEx for 2024. So we're progressing, Bob, with the construction of the FDCA Flagship Plant. We disclosed in 2022 what our investments in PPE were as well as 2023 and we've given guidance on the expected final CapEx number which we disclosed also during the Capital Markets Day. So I can't give you a forward-looking statement in terms of exact number but if you look at what we spent to date and what the guidance is, I think from there you can deduce what the remaining cost should be in 2024. What I can tell you is that we anticipate to incur those costs significantly, all of them, in the first half of this year as we work towards completion of the FDCA Flagship Plant and then startup in the second half of the year. Okay. Let me then move on to the second question on the high fructose suppliers. So just to be clear, the contract is in place for the supply of high fructose syrup to the FDCA Flagship Plant. That is a contract that we've signed with a French company, Tereos. So that is not what I refer to. I refer to the discussions for licensed facilities. And if you look at the discussion with licensed or with licensees, basically there are three major topics that form the base of these discussions. It is the supply of feedstock that they want to secure. It's about the technology and where are they going to build a FDCA plant under our technology license. And they want to, of course, make sure that the market demand is fulfilled and that there is sufficient demand for the products that they're going to be producing. What we have done is, in order to basically accommodate our licensees, we have initiated discussions with fructose suppliers. Of course, we have good contacts with all the major fructose suppliers in the world and we have basically are moving them to make sure that we have their commitment that they can supply sufficient volumes of high fructose syrup to licensees to make sure that the supply of raw materials is not going to be seen as a risk to our licensees. So that is where we want to make sure that we can provide them with the commitment of these fructose suppliers so that they feel like that part is being sufficiently covered. Is that. Thank you. Sufficient answer, Usama? Yeah. Thank you. We'll now move on to our next question from Paul de Froment with Bryan, Garnier & Co. Your line is open. Please go ahead. Yes. Thank you. Good morning, everyone. 2 questions for me. The first one regarding your legacy business, externalized R&D Solutions. Do you expect some new momentum over the next quarters or the next year? So that's my first question. And my second question is regarding your current licensing discussions, is there any strong interest coming from one of your 15 offtakers? Thank you very much. Okay. Thank you, Paul. So first to our RDS business or legacy business, as you call it, Paul. So we have set a new strategy which is focusing on those four sustainable chemistry areas. Last year we've seen that we've made, let's say, roughly EUR 2 million of revenue. That is in line with what we had expected. But this is really the start of a new business that we absolutely expected that business is going to further grow. I think in that sense it's also important to look at the bottom line impact of that because in 2023 we have made significant expansion of the team and investments in our capability which is why our expenses in that part of the business have gone up. That is really an investment that we've made for the future as we expect to further grow this business. And if you want to be able to do these type of projects, you need to have the capabilities both from a human resource perspective but also from a technical perspective. And that is where we've invested in in 2023 which is why you've seen that the, let's say, the bottom line impact of the RDS business was lower than in previous years but it is really something that we see as an investment for the future. In terms of our licensing discussions, we don't see, let's say, one of our current 15 offtake agreements as logical partners for buying a technology license from us. They are more interested in taking the product, so we're absolutely involving them in discussions to make sure that there is a sufficient demand for the material so that if people build large-scale FDCA plants, there are going to be customers to take those products. But if you look at the licensing discussions that we have, it is predominantly with companies that are in, let's say, the production of chemicals or the production of plastics, so polymer producers, or companies that are active in the supply of feedstock for this, so from, let's say, plant-based sugars. They look at these offtakers to really cover the commercial risk. But if you look at these brand owners, they typically don't like to invest in building large-scale chemical operations and therefore they see themselves more as the offtakers of the product covering the commercial risk while they're looking for chemical companies to be producing this and in that sense taking the operational and technical risk. Okay. That's very clear. Thank you very much. All right, Paul. Thank you. Thank you. Ladies and gentlemen, as a reminder once again, if you would like to ask a question, please press star one on your telephone keypad. Thank you. We'll now take our next question from Fernand de Boer. Degroof Petercam Degroof Petercam again. Sorry. Thank you. Please go ahead. Yes. Good morning and thank you for taking my questions. A few. One is coming back on the CapEx question. Of course, the CapEx thing is one thing but I think now also on the liability side, there are some in the working capital, there is some buildup for Worley. So could you tell us when do you expect to pay those bills for Worley? That's one thing because that also means cash out above CapEx. And then the second one is on your, let's say, gross profit of cost of goods sold. If I look at that, the step up in the second half in the cost of goods sold looks to me quite substantially given the step up in the revenues or in the sales. So could you elaborate a little bit on that because I think the sales growth in solutions doesn't require a lot of cost of goods sold. So what exactly happened here? And then the last one, if you look at your financial expenses, first half I think it was minus, let's say, -EUR 4.4 million and then you had a financial income in the second half of the year to fully offset that -EUR 4.4 million in the first half. So what was driving that because, yeah, actually your net debt is moving up so I'm a little bit amazed. Good morning, Fernand. Thank you. Thanks for your questions. So I'll answer your three questions. So the first one, indeed we had at the end of the year we had quite a big liability for a Worley invoice. There was an invoice that we received in December but wasn't due for payment yet. So we did have to accrue for that but we hadn't actually paid it. So we have a rolling payment cycle between receiving invoice and actually paying it. That invoice has long been paid so we typically have about a month of when we receive invoices and when we actually pay them. So it won't have a significant impact this year because, as I mentioned on the previous question, we expect to finalize all the CapEx costs in the coming months in relation to the Flagship Plant. Then on the COGS, it's a difficult one to explain because we've chosen for a P&L presentation whereby we do revenues and then we include all of our raw materials and cost of sales as net operating expenses. As the company's maturing and going from an R&D company more to an operating company, we are looking to change the presentation of our P&L to a more traditional revenue, cost of sales, gross margin presentation style. I think it'll also be easier to then understand what is actual operating expenses and what is revenue-related expenses. So this number is raw materials and contract costs but also includes, for example, laboratory consumables. As we've been ramping up activities also in the R&D Solutions business that also requires quite a bit of lab work related to that revenue, we have contract R&D work that requires a lot of lab work particularly upfront while these are quite long contracts that we have with major customers for this R&D work. We have costs related to the production in the pilot plant where we did quite a bit of work in the second half of the year also for materials that we've been selling. For R&D Solutions, we did see a back-ended activity during the year. So you'll recall at half year we presented lower results for R&D Solutions. We have recovered that in the second half of the year but that did mean quite substantial activities which also were related to an increase in costs. So that number is a combination of all of that. I understand it's difficult to really break that down and to understand how that is allocated. So as I mentioned, we will be looking going forward to provide better disclosure on that. In your P&L you simply split out all those costs. You have the raw materials and contract costs which moved up and the lab cost is a different line. I'm not sure if I fully understand your answer. Yes. So we have lab consumables which is related to revenue-generating activities and that is included in the raw materials costs. And the lab expenses are more lab overhead expenses that are not directly allocatable to revenue contracts. So again, there is a split. Okay. And then on the financial expenses, and again there I appreciate that particularly when you compare it to half-year figures. Remember we have done some restatements. One of the key restatements actually does relate to interest expense. In the past, we took the decision to expense the interest-related costs to the flagship. We've now taken the decision to capitalize those under IFRS. So in half year you would have still seen it going through the P&L. In full year we're now capitalizing all of the interest expenses so it's not actually going through the P&L. You do see it in the cash flow statement but you don't actually see the borrowing costs going through the P&L now. What's the reason then behind that to capitalize interest costs because I think you are the first company where I see this? Yeah. Yeah, Fernand. This was one of the things that we discovered with what we also disclosed. We've been working with an external accounting firm. We were initially of the view, indeed, it's better to expense it because it's also clearer for the reader. But under IFRS now, under the IAS statements, you actually have to capitalize borrowing costs if the borrowing is directly related to the activities to actually construct the asset. So if there's a direct relationship between the two of them, you actually do have to capitalize that now. You cannot expense it. But then it means that in the second half of this year when you start production in the Flagship Plant, how is this going to is it then those costs coming back in the P&L or going forward this means that it will be capitalized always as long as you have the debt all related to the Flagship Plant? Yeah. That's a very good question, Fernand. That was one of the reasons why we initially chose to have these costs going through the P&L for a consistency perspective because you're absolutely right. As soon as the flagship becomes operational, then the financing costs will go through the P&L and no longer in the balance sheet. Those costs which are capitalized will be amortized? Correct. Wow. For me, it's really this is the kind of solutions I think don't help transparency, and it's the first time actually that I see this. Okay. I'm happy to discuss with you offline and then refer you to the statements, Fernand. Yeah. Yeah. Thank you. We'll now take our next question from Reg Watson with ING. Your line is open. Please go ahead. Morning, all. So sorry. Just to come back on the balance sheet bottom line of the cash burn. So if I add it all up, you had EUR 35 million of cash in December. You've got another EUR 15 million coming in post that balance date from the loan extension and you've got another EUR 70 million coming in from the equity issue. So we get up to a grand total of EUR 120 million. So please, can you confirm that? And then also I appreciate you don't have a finalization of the CapEx costs for the plant yet but could you give us an indication of cash burn, please, going forward for, A, OpEx, B, working capital, and C, some sort of range for the CapEx would be helpful. Thanks. Okay. Thanks, Reg. Good morning. I do have to start by saying I can't make forward-looking statements so I'm not going to be able to give you exact numbers but I can confirm that the sum is correct. We have received the proceeds of the equity raise. It's obviously not the full EUR 70 million because we do have to deduct the banks, the lawyers, and all the other costs involved in that. But largely speaking, that is, let's call it, EUR 115 million total cash. That's the cash in. We do have CapEx investments on the flagship. I would say it's certainly not what we spent this year. If I look at what we expect, it'll be less than half of what we spent this year. But as I mentioned, if you just add what we spent in 2022, 2023, and then deduct that from the guidance we gave, that should give you a pretty good indication of what we still have to spend this year. Net cash in operations will go up. And the reason I say that is not because of necessarily the net operating expenses but we have a full operational team now in Delfzijl. So we have a team of roughly 80 people on the flagship plant. They're going to be busy with the startup so we will have costs for the startup, operational costs, consumables. So that's not Amsterdam corporate costs. That really is cost-related to the startup of the flagship but you will see that back in our operating expenses. So I do expect those to go up significantly compared to 2023. As I mentioned earlier, we will look into giving more disclosure on the allocation of those costs. Financing costs will also go up from a cash perspective. Again, not P&L because we have a facility fully drawn. We did the majority of the drawdowns sort of mid-last year so we will have the full financing cost during the course of the year. It's EUR 120. So that number is going to increase as well but that's still when I add those all up, we still have a good cash position left at the end of this year. At the end of this year. Yeah. So 2024. Okay. Thank you. Then I'd like to move on to Ray Technology and the decision to put it on ice for now. How does that leave you with the Cosun Beet Company partnership? Why was it not possible to proceed with them? And then related to that, you're now looking for partners in Volta Technology. So it seems a little inconsistent to put Ray on ice in order to save costs and then continue to expand Volta which will incur additional costs. Yes. Thank you, Reg. Good to hear your voice again in a while. Sorry, Tom. You guys have always had events when I've not been able to dial in. No, sorry for that. Yeah. So on the Ray side, so you're right. We put basically further investments on hold. Of course, it's also been done in close consultation with Cosun Beet Company. And And that is done because we did foresee that we would have to raise money multiple times in order to basically bring this to a stage of commercialization. And that is something that we thought was really going to be too difficult, and we wanted to make sure that we were going to focus our resources, our financial capital, but also our brainpower on FDCA and PEF first before we're going to take on other substantial projects like the Ray Technology. If you look at what we have in Ray, of course, it's actually a good running pilot plant. It's the process where we've made really good progress in 2023. We are now in discussion with other companies about this to see if they want to further fund the development, particularly the engineering of a Flagship Plant but of course also the investment related to building a Flagship Plant. And of course, we have still the Groeifonds EUR 50 million subsidy in place for the construction of such a Flagship Plant provided it's going to be built in the Netherlands. So we have a core team that is going to pursue this. That is actually in active discussions with strategic partners about this. And if that is something that is going to deliver the type of, let's say, a good outcome for the company, then we'll inform you about that in due course. But if that does not provide the type of, let's say, commitment that we're looking for, then it indeed means that this project is going to be put on ice and we will then have to evaluate later on if that is something that we can revitalize. I think it's different on the both. Yeah. So Tom, can I just stop you there before we move on to Volta? Does that mean that you would actually shut down the Ray pilot plant or is it viable on its own to continue running, making small batches of bioenergy? Well, we're not planning to actually decommission it. So the plant is actually going to be stopped in the first half of this year. And only if we have partners that want to continue. We have it in a state where we can easily restart it but Avantium doesn't want to actually use its financial resources to further develop the Ray Technology. So in that sense, we've redeployed the people that were working in the pilot plants to the FDCA Flagship Plant and that is why we've been able to now fill all the vacancies we had on the FDCA Flagship organization. But indeed, therefore, after that time, we will not be able to continue running this on our own. It's only if we have other partners in place that we will continue. Okay. I note that it's now moved to available for sale in the accounts. Is that purely an accounting requirement or would you actually consider selling the technology if somebody came along and made you an offer for it? It is the fact why this is reflected in the numbers as it held for sale was purely an accounting treatment, as you call it. Avantium, of course, is open for all, let's say, strategic options that present themselves to us and we'll evaluate what is the best way forward for this technology. We can't rule out, let's say, other strategic scenarios, Reg. Okay. Okay. Thank you. So on the Volta side, it is somewhat different because this is, of course, something which is significantly early in development and therefore also is not as cost-intensive or capital-intensive as the Ray Technology. But to be very clear, also here we have decided we're going to be supporting this business in 2024 but we are looking to find strategic and financial partners to fund this moving forward, in particular as this business is looking to it comes to a stage where we need to go to piloting this and that will require further capital. And at the capital markets day, we have indicated that Avantium will not use its balance sheet for funding that investment because we have prioritized the FDCA and PEF Technologies. So we do believe that there's a strong interest from both strategic partners but also from financial partners as carbon capture utilization is something which is a very hot segment in the industry. But we've been very clear that Avantium doesn't have, let's say, the capacity and the bandwidth to pursue this in parallel to FDCA and PEF and therefore we're going to be looking for ways to do that together with partners. Okay. Understood. Thank you. There are no further questions in queue. I will now hand it back to Tom for closing remarks. Thank you. Yes. So thank you for attending today's call and thank you for your continued interest in Avantium. If you have any further questions beyond what we've discussed in the call, you know where to find us and we'll keep you posted on our further progress. And we look forward to seeing you in the second half of the year, in particular, of course, once we are planning for the opening ceremony. I look forward to seeing you all in the northeastern part of the Netherlands. Thank you for now and see you soon. Bye. Thank you. This concludes today's call. Thank you for your participation. Stay safe. You may now disconnect.