Company Releases

Betolar Plc's Business Review 1–9/2023: Good progress in developing the side-stream business - demand on the rise

3.11.2023

Betolar Plc

Company Release

3 November 2023 at 8:30 a.m. EET

Betolar Plc’s Business Review 1-9/2023 (unaudited)

Betolar Plc's Business Review 1–9/2023: Good progress in developing the side-stream business - demand on the rise

This is a summary of the Business Review for January-September 2023, which is attached in full to this release and can be downloaded from the company's website at: www.betolar.com/investors

July–September 2023 in brief

  • Net sales amounted to EUR 167 (45) thousand
  • EBITDA amounted to EUR -2,625 (-2,587) thousand
  • Cash and cash equivalents and short-term fund investments at the end of the period amounted to EUR 14,989 (30,328) thousand
  • The number of new pilot customers was 5 (5)
  • The average number of employees was 59 (56)

January–September 2023 in brief

  • Net sales amounted to EUR 298 (65) thousand
  • EBITDA amounted to EUR -8,811 (-7,104) thousand
  • Cash and cash equivalents and short-term fund investments at the end of the period amounted to EUR 14,989 (30,328) thousand
  • The number of new pilot customers was 23 (19)
  • The average number of employees was 62 (46)

Main events in July-September

  • In the concrete products segment, progress was particularly strong in India, where two new customers started the ramp-up of the production of Geoprime concrete products.
  • In the construction elements segment, the first hollow core slab pilot was carried out in Southeast Asia.
  • In the Waste upcycling product segment, the first contracts for side stream research and recovery were signed, such as a research project order from Inno Precast Company Limited, a Thai company belonging to the leading real estate developer Pruksa Group. The contract covers research and analysis of local side streams.
  • Betolar received a positive decision of EUR 2.7 million grant funding from Business Finland for a research and development project on alternative side streams.
  • Tuija Kalpala (M.Sc. Econ.) was appointed Chief Operating Officer and Member of the Management Team. She took up her position on 2 October 2023.
  • Janne Rauramo, the Executive Vice President of Strategic Partnerships and Member of the Management Team, will leave the company on 30 November 2023 at the latest.
  • In order to strengthen the implementation of the growth strategy, Betolar initiated a cost structure adjustment, as part of which the company entered into change negotiations. The negotiations started on 18 September 2023 and were concluded at the beginning of October 2023.

This is not an interim report under IAS 34. The company complies with the half-yearly reporting requirements of the Securities Markets Act and publishes business reviews for the first three and nine months of the year, which present key information and key figures on the company’s strategy and business development. The figures presented in this business review are unaudited. The figures in brackets refer to the corresponding period in the previous year, unless otherwise stated.

CEO Riku Kytömäki

Since the summer, in addition to commercial openings, we have focused on research and development of new strategic growth directions, mining and alternative side streams. As expected and in line with the focus of our updated strategy, our side stream expertise has opened up opportunities for us. The green transition is accelerating in various industrial sectors, which in turn is creating increasing pressure for the discovery of alternative binders and the use of unused side streams.

We continued to pilot our solutions in the concrete products and construction elements segments in different markets. Progress was particularly strong in India, where two new customers started the ramp-up of Geoprime concrete products in the third quarter. We also made good progress in the piloting and development of hollow-core slabs. In August, we carried out the first hollow-core slab pilot in South-East Asia, where we have identified growing interest to move into the production of precast load-bearing building elements.

Our net sales increased from the comparison period and from the previous quarter. We are still at the beginning of new strategic growth areas. The moderate increase in production volumes of first-generation concrete products is directly reflected in volume-based licensing and chemical revenues.

We continued to invest in our capabilities to upcycle new side streams, strongly supported by a EUR 2.7 million grant from Business Finland. We achieved readiness to enter the pilot phase of a new geopolymer recipe and dosage system. We expect that the new method will enable us to make more extensive use of industrial side streams and improve product quality characteristics. This in turn will open doors to move into more demanding application areas in the future.

In waste upcycling solutions, we signed the first contracts for side-stream research. An example of a sale of our research services is a research project order from Pruksa Group, a Thai property developer and concrete manufacturer. The contract covers research and analysis of local side streams. With the new side streams, Pruksa Group aims to promote a green transition in the production of concrete products. During the period, we have also progressed our side stream research service in North America.

Our financing needs for the strategy period require us to allocate resources as efficiently and productively as possible. We have refined our priorities as technology, business and markets evolve. We are aiming for total annual savings of EUR 5 million by adjusting our cost structure. We expect the impact of these savings to be moderately visible during the remainder of 2023 and fully realised in 2024. As part of the cost-saving measures, we started change negotiations in September, which were finalised in early October.

We are also constantly evaluating opportunities to improve our position in the value chain and scalable customer segments, for example through key partnerships. We are currently working on updates to our business model in line with our strategy and also examining our medium and long-term goals in this context.

Key Figures

(EUR thousand, unless otherwise specified) 7–9
2023
7–9
2022
1–9
2023
1–9
2022
1–12
20222
Financial indicators
Net sales 167 45 298 65 287
EBITDA1 -2,625 -2,587 -8,811 -7,104 -9,988
Cash and cash equivalents and short-term fund investments (at the end of the period)1,2 14,989 30,328 14,989 30,328 26,624
Operational indicators
Personnel (average number during the financial period) 59 56 62 46 51
Number of new pilot customer1 5 5 23 19 25

  1. Betolar uses certain indicators (EBITDA, cash and cash equivalents and short-term fund investments and number of pilot customers) as quarterly indicators of operational profitability and business performance. The definitions and calculation formulas of these indicators can be found in the appendix to the report.
  2. The figures for the financial year 2022 have been audited.

Betolar's financial reports are available on the company's website at www.betolar.com/investors

Webcast for investors and media

Betolar will host a live webcast in English for investors and media on 3 November 2023 at 10.00 a.m. Finnish time. The webcast can be followed at https://betolar.videosync.fi/q3-2023-result

During the presentation, CEO & President Riku Kytömäki and CFO Riikka Ylikoski will present Betolar's business review and other topical issues. A recording of the event and a corresponding presentation in English will be available on Betolar's investor website later in the day.

Betolar Plc

More information

Riku Kytömäki, President & CEO, Betolar Plc, riku.kytomaki@betolar.com, +358 50 511 8288

Riikka Ylikoski, CFO, Betolar Plc, riikka.ylikoski@betolar.com, +358 40 828 2632

Certified Adviser:

Aktia Alexander Corporate Finance Oy, +358 50 520 4098

About Betolar

Betolar Plc is a Finnish materials technology company that offers the production of sustainable and low-carbon concrete with the Geoprime solution. The solution converts industrial side streams into a cement substitute.  Betolar's artificial intelligence innovation can significantly reduce CO2 emissions compared to traditional cement-based concrete production by optimizing existing manufacturing processes, supporting solution development with advanced analytics, and creating global markets for side streams. Betolar's mission is to help reduce CO2 emissions and the use of virgin resources. 

Betolar was founded in 2016 and is domiciled in Kannonkoski, Finland. Betolar is listed on the Nasdaq First North Growth Market.

Read more: www.betolar.com

Betolar - Q3 2023 Business Review