Ladies and gentlemen, thank you for standing by, and welcome to the Quantafuel Global Investor Conference call. I would now like to hand the conference over to the speaker today, Mr. Kjetil Bøhn, CEO for Quantafuel. Please go ahead, sir. Thank you. Good morning, everyone. This is Kjetil Bøhn. It feels strange to have this call this way, but I guess it's part of the times that we're in. We had our fourth quarter report out this morning. I hope that everyone had the opportunity to read through that. I wanted to use today's call to give it maybe a little bit more flavor and of course, let you at the end of the introduction or the presentation, have some questions, if any. I would like to start with the Skive. Skive has, of course, been the core focus for us for a very long time. We started off, as you know, in September. During the fourth quarter, we had as a main objective to get up and running as close to full capacity on at least one line as possible. As we wrote before Christmas, we were in the beginning, struggling with the mass balance in our reactor, basically that we were producing too much gas and that this gave us some problems further down in the line. We managed to solve these problems. I talked about climbing the ladder, I think, in November, and we managed to do so and reached about 90% capacity on one line. It was just actually technicalities that held us back from 100%. Very pleased with that. I think it's fair to add that when you are operating or when you're commissioning such a plant as we are, chemical process plant, it's time-consuming. When you implement a change, want to do something new or make modifications, you have to cool down first to implement and then start up again, and it's a time-consuming procedure. It's a procedure where you have to then test if everything is at the level, it's no leakage, and you have to heat up again. It takes a week or up to 10 days sometimes to do these modifications. We were extremely pleased to reach that level before Christmas. What we have seen and experienced is that we've had some challenges that goes to operating stability, meaning that after 30, 40, 50, or 80 hours of operations, we have had some instability. We decided then, during the Christmas break and in the period after, to make some modifications to this in close relationship with BASF. The reason is, of course, to increase stability and to get longer periods of operations. We are now working on two lines, and we have taken the time to implement these modifications to get up and running again. As we wrote this morning, we now have a target to get at least one of these lines up and running at full capacity over a longer period of time so that we get the time to also optimize on operating parameters. Operating parameters for us is time, it's pressure, and it's heat. When we have the stability and the time to optimize on these operating parameters, we can also then increase product quality. This is what we actually will consider a proof of concept. What are we really doing in Skive? We are really looking at how the entire system of Quantafuel is working, the unique part of Quantafuel. We have a system to upgrade the oil, to remove impurities, and to change the molecular structure. When we have done that at a stable level on one line, that is what we consider proof of concept. This is important for us, of course, because our strategy, as spelled out many times before, and also again this morning, is to use the experience at Skive both in the process of building the factory and of course, now, when we have started to get operational experience to prepare the ground for a large-scale industrial rollout. As I am sure that many of you have listened to myself before, as I've said time and time again, there is an enormous market. BASF alone, 20 million tons, cracking capacity in Europe of over 100 million tons. Skive is 20,000 ton. For us to be relevant, this is about scaling up. It's about being able to roll this out at multiple locations. First in Europe, we consider Europe to be the primary target market for this because of the regulations and the pricing, and then in due time, across other regions. We are now there that we are working on two lines. We have as a relatively short-term goal to get to what we consider a proof of concept, to get the whole system on online working. We know that, as I also written before, that to get to four lines, there are some modifications needed, especially since we've been given some requirements by Danish authorities. We now plan for that to happen during late spring or the summer break so that we now have some plan to be fully operational in Denmark during the third quarter. Before that, we would like to get to the point, as I said, where we have at least one, maybe two lines fully up and running and can get all the answers we need for the FEED that we have conducted. We started back in May last year, with a EPC FEED study, together with Rambøll. What they have done, in close coordination with ourselves, is that they now have prepared the foundation for the next generation Quantafuel plants, the large-scale plants, that you see a picture of in today's presentation, where we are building 40,000 ton modules, and can combine them, of course, to 80,000 ton or maybe 120,000 ton. Over the years, we have had numerous requests from companies all over the world wanting to do some sort of partnerships, not in any shape or fashion trying to be arrogant. We could have signed a number of MOUs and so on. We felt that it was never correct before we were ready to start entering into these commercial relationships and be more concrete on time and capacity. We're getting to that point now. First of all, we took great pleasure in the press conference held by BASF in December, where they had a keen focus on Quantafuel and also for the first time set concrete targets for the MOU. They said then that they wanted 250,000 ton of products by 2025 and we take that as confidence in what we are doing and we are also glad that they pointed us as the key strategic partner within this. We of course, have some ambition to be the company that delivers on these targets for them. We will also over the next couple of months, show you where other places we intend to build up. We of course, are now in this discussion with current strategic partners and others, to find the locations and find the timelines for a large scale rollout. This of course, also means that we and BASF have the confidence that we are progressing in Skive, that we get the answers that we're hoping for, even if it takes some time. As I said, it takes some time because every time you make some changes, we spend maybe a week or two. For us, it's important to see the progress month by month, and it's important for us to know that we are moving in the right direction and knowing that we will get there. The first FID, we expect to be our own project in Esbjerg in Denmark. We are planning there to establish a plant that could handle 80,000 ton or more of mixed plastic waste. That will, when it's built, be the by far largest production site for chemical recycling. If you then ask, why will the first come also in Denmark? First of all, we have an organization there. Secondly of all, we are then considered to be material recycling in Denmark. The political environment has already confirmed that, it's also a country that has set its own very ambitious target above the European targets. The European target is to have at least 50% of packaging material recycled within the next four years. That is extremely ambitious, Denmark has actually gone even longer and set a higher target for themselves. There is close to no recycling capacity in Denmark as of today, meaning that if they should be even remotely close to reaching their target, it needs to be built up, we are planning to do that. You should expect us to come back shortly. We have the land, we have the support from the municipality and the country itself. We, of course then plan to see and show over the next couple of months and lay the foundation for a large-scale rollout throughout Europe and be more concrete on which countries we are talking about, which site and with which partners. It's clear that besides Denmark, we are of course focusing on the largest market, the most populated market, and that, as you would know, is the U.K., it's France, it's Germany, it's Italy, and it's of course, as we have said many times before, ARA, Antwerp, Amsterdam and Rotterdam. We look forward to that. We also have a second plant that is coming up now. It's in Kristiansund in Norway. I answered this question before. Why? Why another small plant in between? We bought this company, Replast, that has tested for some year and learned a lot about mechanical recycling and now implementing changes to get up to the high capacity in sorting of plastic waste. We are doing that because from some of the waste streams, see that some sorting is needed. It's a change to what we have said before. We can take mixed waste plastic, and we can take it with some impurities and so on, but some of these waste streams from household waste and others have 30%, sometimes 40% of elements that are not plastic, and we're not meant to recycle mobile phones or other things. Some degree of sorting that is done already in places but by doing it themselves in a combined integrated facility, it gets much more efficient and it is much more financial gain from such an integrated operation, and we get total control also of the feedstock. The other purpose of the plant in Kristiansund is to also test some new technology. There is two sides to that. One is that we are testing a new reactor. We have, as I said many times, the pyrolysis reactor itself is that core of the Quantafuel technology. We have scanned the market for years. I think the ISF has looked at more than 100 different suppliers, and we have come up with one that we believe has some unique properties. It is a faster process than the one we have in Denmark. It takes less space and has a higher capacity in terms of space needed. That is one thing that we are then testing. The other thing is that we have a name that we might at one time consider to change, but it's Quantafuel. We believed two, three, or four years ago that we should become a fuel producer, that we should produce diesel for combustion engines and for cars and for trucks because, at the time, it was really the fuel market that was matured. We have realized and learned with the changes in European policy, especially over the last two years, that we're not going to produce for the fuel market. We're going to produce for the recycling market. The reason for this is that if you produce fuel, you are not considered material recycling in Europe, you're not part of this ambitious target, and you're not part of the large waste streams. If you produce something that can go into as a feed for new plastic, you are considered material recycling. That is why we have changed. That also means that we should focus on producing more naphtha, because naphtha is the starting point for plastic production. This is not extremely hard for us because we already have a system and technology to crack. We have a hydrocracker. That is the core of what we're doing. Putting it in a simple way, we're going to crack some more. We're going to crack these hydrocarbons into shorter chains than what we aimed for when we started to build in Skive. We have therefore, together with close cooperation also with BASF, developed a new catalyst that is even more active. Actually, we haven't, to be honest, developed it. They developed it many years ago, at the time, we were not aiming for naphtha, we actually had this naphtha catalyst, we have taken a year to then take it to the, let's say, commercial stage where we have tested it and made it more robust, we're going to then implement this in Kristiansund. In Kristiansund, we first will establish a pilot with a capacity of 10 tons per day, or 1/6 of Skive, I'm happy to tell you that the pilot is there. It is up and it's warm. We haven't taken some plastic to yet, we are running it at the moment on used oil to learn the operators how to handle it and so on. It's running, we will start the plastic in the near future. That has also give us a very good foundation and input on how future Quantafuel plants will look. We made a couple of acquisitions before and after Christmas that we feel are important. Replast, I've already talked about now, going to be a site that will be approximately the same size as Skive, with a combination of mechanical and chemical, approximately the same financial output expected in this phase. We made a partnership with our longstanding partner on the catalyst side in Malmö, Hulteberg, to strengthen that team. We have had several new employees coming into this new R&D setup from Haldor Topsoe and others. We see that the expertise and the knowledge we have there is extremely important. We see that it can be utilized for many things. We are now looking at how we best can utilize every aspect of what's coming out to the streams from plastic. I had an introductory call with them some time back. I think we're up to 11 now, chemists and scientists on that side, making it a very strong team that we will hopefully benefit greatly from in the years to come. We bought 40% of a company called Geminor. Geminor is a large logistic and trading company of waste. Why do we do that, and why them? First of all, they have a unique setup. Most companies within the recycling sector are local. They are connected to one country. Some are in several countries, but they are extremely heavy on assets. They are large asset-heavy companies. Geminor has a much lighter foothold, but they are still present in 11 markets. We see a tremendous consolidation within the waste market in Europe going on these days. This is because the European Union especially have set much higher targets for recycling of not only plastic, but every type of waste. When the market moves from simple dumping of waste in a dump site to having demands of recycling of many types of material, it gets much more advanced. Some of these traditional local setups are no longer able to comply with new legislation. We see then that more advanced companies emerge. Last time I saw, I think that the rate of the merger and acquisitions within this market had increased in almost 50% from 2019 to 2020. That this is a sign of what is going on the ground, where you get larger entities with a broader geographical foothold taking a space within this market. We also believe that it will be more profitable and it get more advanced and more professional. With Geminor, we secure our own place. This gives us the ability to get raw material from a large geographical area. We believe that this will give us lower prices or in our case, we'll actually get paid more. Secondly, we believe that it will do something with the quality of the material that we receive. It will also do something else for us that is extremely important, and that is traceability. If you're going to deliver on this target of the European Union, and you're going to be material recycling, you need to know where raw material is coming from. You need to know how it's transported, and you need to know what it becomes. We can see that many are thinking of producing some sort of oil that could go to some sort of refinery. Well, the European Union will demand traceability to the entire value chain. That is what we are trying to achieve. We have, through Geminor, a system where we will know where the raw material coming from, how it's transported. We will take it to naphtha, which is the actual feedstock for a new plastic so that it can be traced through the entire value chain to build the new plastic. That is the concept of Quantafuel, and we see also that the policies in Europe will demand that you're able to check. You cannot put a CO2 footprint on what you're doing or claiming how you are within this value chain and system if you don't have that traceability. We have worked with Geminor for a long time. We could have continued that, but we saw that there were several companies who knocked on their door, and we chose to take a more strategic investment to be even closer to them. We also then have the option to buy this company. They're about 80 employees now with about EUR 200 million turnover, so that will be a quite large addition to what we are doing. So far, we have taken a strategic position within this company. We have been able to build up a position in the market. We are using that to strengthen our value chain, and we will, of course, have that also as an active part of our strategy moving forward. That will come as no surprise if we choose to use that position also with further acquisitions in the months and years to come. I think that was my main message for today. It is difficult to just talk to a large silent audience through a phone. I hope I don't get too used to this. I think then I will just open up for questions, and then if there is things that I missed or things that you want me to elaborate on, please feel free to send in your questions. Thank you. We're open for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Thank you. Our first question comes from the line of Jon Hille-Walle from Nordea. Please ask your question. Hello, Kjetil. Thank you for a good presentation. I was wondering if you could shed a little bit more light on the process in Skive. Is it correct that it is still only on the pyrolysis reactor that you are working and modifying, or are you also working on the catalyst at the moment? No, we are not working that much on the reactor any longer, actually. The first challenges we had before Christmas, as I said, was that we struggled with the mass balance. To be very technical, it meant that we're producing too much gas. That is temperature and it's time in the reactor that influence these parameters. We then managed to solve that. The next step has been that we get some impurities downstream the reactors and some ash particles and some back. This creates some operating instability that we have now implemented some steps to improve. The reason is, again, as I said, it is to get longer runs of operation because we have been running for 20, 30, 40, 50 hours, but we would like to run for a longer period of time because that gives us more time to start adjusting on operating parameters to then optimize on quality. The process that we have, it's a combination of the technology and parameters. It is how much you, as an example, crack this material. It's time within the hydrocracker. That is, of course, overall important to be as stable as possible. We needed to take some steps to increase that in close cooperation with BASF, and that is what we have done lately. The goal is, of course, that we now again will get up to 100%, that we will have longer runs. There will be stops, some planned, and most likely some unplanned. That is the life of a chemical process plant. We have taken some time to make some modifications with the goal of increasing stability. We should not complain about COVID and so on, except that we have to have this call this way. That's no fun. It takes a little bit longer to get parts these days, and we had incidents also where suddenly workers are not allowed into the country, and you have to rearrange and find someone else, it's just time-consuming. We have progress week by week and month by month. I think that was also confirmed, if not directly, at least indirectly, by our partner in December. No, we have moved from the reactor to the system after the reactor to optimize that and so on. Okay. Thank you. Thank you. Our next question comes from the line of Haakon Amundsen from ABG. Please ask your question. Your line is open. Yes, good morning, Haakon from ABG. Just a question on the new design you are testing at Kristiansund. You have previously given some guidance on economics on new large-scale plants. I'm just wondering if this guidance kind of roughly stands also with the new plant design or if you want to give some color on how would you think about the economics on the basis of what you expect to learn from this. Yeah. Well, the design now is as it stands for Esbjerg, as an example, is with the current reactors that they're using in Skive, as you have seen from the presentation this morning and others is that we are now implementing sorting, actually in front. As I said, it gives a lot of meaning to have it in the same place. There is already several places in Europe sorting capacity. Of course, that is an additional investment, but it also gives some additional revenue. I think that for the plant economics of Esbjerg, I think when we make that FID, I think that we should use that time to go into more detail. Again, we have changed a little bit over the years, last year, and have that as an integrated step, at least for Esbjerg. It might be different other places in Europe because we might enter into partnerships also where recycling companies are involved. Of course then we will build in close cooperation with them and maybe existing sorting facility that they have. Then, of course, we'll not build something integrated like that. We would rather integrate towards existing if there are large recycling companies involved. When it comes to the new reactor, now we're testing it. We have tested it before, or actually, BASF has tested it, because we were not allowed to travel from Norway at the time. We have not had the pleasure ourselves to, or as Quantafuel employees, to be there, see it in operation, but our good friends in Germany have. We are, of course, hopeful that this also will be a step in the right direction for us on operational parameters and also then on costs. We believe that this could be a more cost-efficient solution. It's a smaller unit. It's more, in a way, robust system. I wouldn't say that, and don't get this wrong, it's a robust system in Skive as well. We have needed to upgrade these reactors that we use in Skive to European standard and build a lot of safety around it to take it to a European standard. This is a reactor that is built in Europe, and we expect it to have less of these support systems around. First, now it's running. As I said, we have seen it in operation before. We have seen the gas coming out, but now we're going to run it ourselves, and after some 1,000 hours of operation, we will know better how fast this can be implemented and how it influences, especially then, on the CapEx side. We wont materially change the OpEx side. We believe that, especially on CapEx. Yes. All right. Thank you for that. Thank you. Thank you. Ladies and gentlemen, as a reminder, if you wish to ask a question, please press star one on your telephone keypad. Our next question comes from the line of Elliott Jones from Fearnley. Hi, this is Elliott from Fearnley. Just a quick couple of questions. In terms of the supply chain, clearly obviously that's a very important step for chemical recyclers, and you guys have Geminor now. Would it be sensible for us to expect further potential M&A in upstream, in terms of other types of investments such as that? Yes. You should expect us to be active on merger and acquisitions. I think it's fair to say that we have, even though Skive is still in commissioning, that we have a leading status within this. I think it's fair to say we see that from the calls that we get, and we will also see that over the next couple of months, what type of partners that wants to work with Quantafuel. Again, it is because we believe it's highly needed to do this upgrade that we're doing to get the value chain as simple as possible, to get the traceability through the entire chain. Geminor was important. We have then, in the last three months, actually done three transactions, Geminor, Replast, and Hulteberg. You should expect us to continue looking for those kind of opportunity. We are talking about EUR 80 billion market within 10 years per year. We want to be the market leader. We will build as fast as we can and as aggressively as we can. We will do it both through organic growth and through strategic acquisitions. Every tool that we have in the toolbox, we will utilize to keep and strengthen that position. Got it. Thanks. Then there was one last question. It kind of builds on the last person, but in terms of the smaller reactors up in Kristiansund, if you do get a positive result in the testing up there, is there a chance there for that? I assume you won't obviously swap them in for the bigger reactors at Skive. Is there a chance in the future you'll be actually having two sets of reactors working, one at Kristiansund and another plant, and the other one at Skive? Maybe you can choose which one works best, or is it more like if that one up there works and has a higher kind of net yield, then you're probably going to go for that one in the future? Well, in an ideal world, we are hedging ourselves a little bit now. We know what we have. We know what we have tested in scale in Skive, so we don't want to lose any time, of course. We are planning for that, and we had, as I said, some challenges with it, but the reactor now works fine. It's not the main focus any longer, so we can live with that. Of course, in an ideal world, we get the confirmation of the results we've had before on the reactor in Skive. Again, we have tested it before. We get confirmation that it works the way that we hope that it works, and then it will replace what we have in future plant. I don't see a reason for having two if that one gives us some benefits. We are in a way hedging ourselves a little bit these days, to work on the one that we now have operational experience with and then see how fast we can get confirmation on the other one. Understood. Thanks. Thank you. Ladies and gentlemen, as a reminder, if you wish to ask a question, please press star one on your telephone keypad. Hello, it's Karin Busch from DNB. I have a few questions. When you're taking the FID for the next plant in Denmark in Q1, how is the lead time for this plant compared to the timeline for Kristiansund? We will build it out in stages. I think that when it comes to this Esbjerg plant, that we aim to have an FID, we hope to have an FID there shortly. I think that I will leave the timeline. It's what we are changing now from Skive, to say something about that, is in Skive, we have in a way built it ourselves. We have been in charge of the building process with a lot of suppliers. We have taken the risk and also the, let's say, the punishment through costs with the changes. It's become, of course, costly. Any time you make a change, you have to remove the isolation, put it back on, and so on. It's time-consuming and costly, but now it's going to be an EPC contract. When we now are talking about an FID, we obviously have the foundation for that quite clear. It's going to be built out in stages, and since we haven't made that decision yet, I think I don't want to go into speculations about the time. I want to come back to that. I think that the timelines that we have said before regarding the time it will take to build plants and so on, that probably stands pretty well. We need to make a decision on how we build it out and in what stages and so on. Since that decision is not made yet, I will come back to the timelines and CapEx and everything for that specific plant when we have made that decision. Yeah, that's fair. Then one more regarding the delivery to BASF. When can we expect to get some information around pricing of your product? First of all, we will now in a very short period of time start to send trucks to— our products to Germany. There are already standing trucks ready there, that will be visible, fair to say that that is expected to now happen in a short period of time. We always have a huge storage capacity ourself that has been filled up, we have some samples around and smaller [trucks] and so on, also that's an expectation that we now start to send in larger volumes. The pricing of naphtha, as I've said, is a question mark for this market as it really don't exist. We have for the first period a fixed price that is close to what we have guided on before. Then we'll see how this market develop. Of course, it helped tremendously for us. We also had this tax that are now being implemented of EUR 800 per ton. When we get through this first period, it's fair to assume that we will have part of that influencing our price. The market is not really mature yet. I think I have to stick to what I said before, that we don't know exactly how the pricing is going to be. We have said before that at least expect to be somewhere around first generation fuel prices. That's what we have used before, at least. Thank you. That's it from me. Thanks. We have no further question over the phone. Please go ahead. There are no further questions? Okay. I thank you all for the attention. We look forward to come back shortly with updates on FIDs and potentially new partners. If there are no further questions, I will wish you all a very good day. Again, thank you for listening. Thank you. Ladies and gentlemen, that does conclude your conference for today. Thank you for participating. You may now all disconnect. Thank you.