Carbios (ALCRB) H1 2024 earnings summary

Executive summary

• Construction of the world's first industrial PET enzymatic biorecycling plant in Longlaville, France, is progressing on schedule, targeting commissioning in late 2025 and production in 2026.

• Focus on enzymatic recycling technologies for PET and PLA, supported by a strong R&D and patent portfolio (59 patent families, 150+ employees).

• Three revenue streams: licensing PET biorecycling, PLA biodegradation, and future polymer innovations.

• Strategic partnerships and licensing LOIs with major brands (L'Oréal, PepsiCo, Nestlé Waters), industrial partners (Indorama, Desmet, Novonesis), and international groups (Zhink Group, SASA, FCC Environment UK).

• Several feedstock supply agreements and MOUs secured for the Longlaville plant, including with Landbell Group, Hündgen, TOMRA Textiles, and Nouvelles Fibres Textiles.

Financial highlights

• Cash position at June 30, 2024, was €120M, with €23.4M in term deposits and €42.5M in expected public funding; total cash and term deposits stood at €144M, down from €192M at year-end 2023.

• H1 2024 loss from operations was €20M, with a total H1 loss of €80M; net loss was €18.1M, up from €13.7M in H1 2023.

• R&D expenses increased to €11.8M, with net R&D expenses at €8.2M after subsidies.

• Financial income improved due to capital increase, deposit returns, and interest on money market investments.

• Sales and marketing expenses rose to €4.3M, and general & administrative expenses to €7.6M, mainly due to ERP implementation and staff costs.

Outlook and guidance

• Longlaville plant expected to generate over €150M revenue and over €50M EBITDA at full ramp-up, with IRR expected above 20% and EBITDA margin above 40%.

• Licensing model to provide upfront fees, recurring enzyme revenue share, and premium royalties.

• Break-even expected in 2027, driven by plant operations and licensing income.

• PLA biodegradation commercial activity to start end of 2024 or early 2025.

• Construction and recruitment for the plant will continue through the second half of 2024.