CirChem (CIRCHE) investor relations material

Market environment and industry trends

• Significant price fluctuations in raw materials and scrutiny of supply chains have increased operational challenges for industrial players.

• Solvents are widely used in manufacturing and process industries, but their waste is typically incinerated, making most solvent waste non-recyclable.

• Transitioning from a linear to a circular economy is essential, with circular business models requiring partnerships to close resource loops.

• Regulatory changes and sustainability reporting requirements are driving companies to prioritize circularity and resource optimization.

• Geopolitical uncertainty and stricter regulations are increasing demand for circular solutions and enhancing market positioning.

Business model and operations

• Operates the first industrial solvent recycling facility in the Nordics, using modular distillation technology and holding a permit for up to 20,000 tons of hazardous waste annually.

• Offers both closed-loop (returning purified solvents to the same customer) and open-loop (selling recycled solvents on the market) solutions.

• Closed-loop agreements exist with automotive and paint industries, with plans to expand to more customers and sectors.

• Open-loop flows address industries like pharmaceuticals and chemicals, where regulatory or purity requirements prevent reuse by the original producer.

• Building a network with major waste management companies, positioning as an independent partner for those without in-house recycling capabilities.

Commercial progress and partnerships

• Achieved organic growth in closed-loop business, with ongoing efforts to commercialize pilot projects and dialogues.

• Secured a major one-off order from Stena Denmark in 2024, boosting net sales, but future growth is expected from recurring closed-loop contracts.

• New agreements in early 2024 include partnerships with Stena Norway and EMV in Germany, expanding reach in the Nordic and German markets.

• Collaborates closely with waste management firms to optimize customer flows and enable recycling of previously non-recyclable solvent waste.

• Long sales cycles are typical due to the need for customer process changes, regulatory compliance, and extensive validation, but contracts are long-term (3–5 years) and foster deep integration.