Betolar Plc Half-Year Financial Report 1 January–30 June 2022 (unaudited)

Betolar Plc

Company Release 31 August 2022 at 8:30 a.m. EET

Betolar Plc Half-Year Financial Report 1 January–30 June 2022 (unaudited)

The first Geoprime® agreements in Europe and Asia launched Betolar's commercial phase

This is a summary of the half-year financial raport for January-June 2022, which is in its entirety attached to this release and can be downloaded from the company’s website at https://www.betolar.com/investors

January–June 2022 in brief

• Net sales amounted to EUR 21 thousand (EUR 0 thousand)
• Gross margin1 amounted to EUR -5 thousand (EUR 0 thousand)
• EBITDA1 amounted to EUR -4,599 thousand (EUR -1,055 thousand)
• Operating profit (loss) was EUR -5,017 (EUR -1,254 thousand)
• Profit for the period amounted to EUR -5,407 thousand (EUR -1,258 thousand)
• Earnings per share1,2 were EUR -0.28 (EUR -0.14)
• Cash and cash equivalents at the end of the period amounted to EUR 33,590 thousand (EUR 1,731 thousand)
• The number of pilot customers1 increased to 14 (1)
• The number of employees increased significantly and averaged 49 (23) during the period

Main events in January–June 2022

• Betolar entered the commercial phase after concluding the first Geoprime agreements with a total of five customers, four of which are in Europe and one in Asia.
• In addition to the commercial agreements, the company carried out piloting with a total of 14 new customers in accordance with the targets.
• The development of Betolar's capabilities continued to be strong with new recruitments. The implemented recruitments were especially focused on research and product development, establishing supply chains and strengthening of commercial competence.
• The research and development activities were carried out as planned during the period. The activities were targeted at strengthening capabilities, carrying out material research, development of the AI platform, refining the digitalisation strategy, development of Geoprime Academy and expanding the patent portfolio.
• On 12 May 2022, Betolar's Board of Directors appointed Riku Kytömäki as the new CEO of the company. The current CEO Matti Löppönen will continue in his position until Kytömäki starts, which will take place no later than 12 November 2022.
• Ilkka Iittiläinen was appointed as Head of Operations and a member of the Management Team on 29 March 2022.

Events after the review period

• Betolar entered the commercial phase in India after signing the first commercial Geoprime agreements with three Indian concrete product manufacturers.
• In August, Betolar signed a development cooperation agreement with Consolis Parma, a leading manufacturer of pre-cast concrete elements.
• The company's Management Team will be complemented by two new members. Ville Voipio was appointed as Chief Commercial Officer and will start on 1 October 2022. Jarno Poskela will start as Chief Technology Officer on 1 September 2022.

• Pekka Hintikka, the company's current Chief Technology Officer, will step down from the Management Team and continue to support Betolar’s R&D activities in an advisory role until his retirement.

The figures in brackets in this report refer to the comparison period, i.e. the same period in 2021, unless otherwise specified. The figures for the comparison period are based on the audited financial statements.

Key figures

1)      Betolar uses certain alternative performance measures (gross margin, EBITDA, earnings per share and number of pilot customers) as indicators of operational profitability and performance. The definitions and calculation formulas of these measures are enclosed to the report.

2)      The weighted average used in the calculation of earnings per share is as follows: 30 June 2022: 19,491,134, 30 June 2021: 9,086,582 and 31 December 2021: 10,448,522 shares.

CEO Matti Löppönen

Betolar's commercial business was launched at the beginning of the year in our main markets in Europe and Asia. We have reached and exceeded our first, short-term goals in terms of customer numbers and global startup of our operations. In the first half of the year, five concrete product manufacturers signed an agreement to use the Geoprime solution in their industrial-scale production. The economic impact of the first commercial agreements is already visible in the net sales of January–June, although it is rather moderate due to the production volumes of the ramp-up phase.

During January–June, pilots focusing on product development and plant testing were carried out with 14 new customers. We expanded the geographical scope of the Geoprime solution by launching pilot projects in Italy, Poland and Saudi Arabia. There are now a growing number of concrete product manufacturers interested in the Geoprime solution, which is why we strive to balance between piloting with new customers and promoting the launch of commercial customers' production, production volumes and selling and marketing to end customers.

We strengthened our presence in India, where our local organisation started its operations. In addition to active sales work, we can support customer-oriented and efficient local Geoprime solution piloting.  The growing number of pilot projects, environmental strategies of several Asian countries and market feedback confirm our view that the construction sector is adopting new environmentally friendly solutions quickly and widely.

Our research and development activities focused on material research as well as on the long-term project of building our data and analytics platform called Betolar Platform Program . During the period, we made progress in both areas. In material research, we focused on the research of slag from the steel industry. In this context, Betolar signed a letter of intent concerning research cooperation with two Australian companies specialising in vanadium extraction, RISAB and Vanadium Recovery Project Oy (VRP), for the purpose of developing the extraction process in the plant planned to be established in Pori. At the end of August, we entered development co-operation in a new demanding area of ​​concrete construction. Together with Consolis Parma, we are starting to test the suitability of our solution for hollow-core slabs, which are part of concrete construction.

The development of the data and analytics platform, which utilises artificial intelligence, proceeded to the specification of the digital strategy and architecture and to the recruitment of people with the new key skills. Our cooperation with Silo AI, one of the largest AI laboratories in Europe, which was announced in August, will further accelerate our development.

Our key recruitments during the period strengthen our capabilities in digitalisation, supply chain management, commercial operations and research and development. In January–June, a total of 18 new experts joined Betolar. As our operations and the number of employees grow, we pay particular attention to maintaining the foundation of our unique corporate culture while building our processes and operating models to support business growth, efficiency and risk management.

As a result of the ongoing green transition in the construction sector, the demand for low-carbon construction materials is growing strongly. Green financial markets favour projects with tangible and sufficiently effective climate and sustainability impacts. Public sector operators responsible for controlling and licensing construction and urban development set their own green goals, requirements and guidance models in order to promote the use of green solutions in new and repair construction and infrastructure.

Betolar's business is based on enabling and accelerating the green transformation of the concrete industry through science and technology. During the reporting period, we took the first commercial steps. The construction sector is facing a major green transition. In more and more countries in Asia and Europe and around the world, we are building a solution with our customers to the biggest ever challenge in the construction industry.

Financial reporting 

Betolar will publish the following financial reports in 2022

•        Business review 1–9/2022 will be published on 26 October 2022

Betolar's financial reports are available at www.betolar.com/investors.

Webcast for investors and media

Betolar will organise a live webcast in Finnish for investors and media on 31 August. 2022 at 10:00 a.m. Finnish time. The webcast can be viewed at https://betolar.videosync.fi/2022-q2-tulokset/register

In the presentation, CFO Riikka Ylikoski will introduce Betolar’s half year results and other current affairs of the company. A recording of the webcast and a corresponding presentation in English will be available on Betolar’s investor site later during the same day.

Betolar Plc

Further enquiries 

Matti Löppönen, CEO, Betolar Plc, tel. +358 50 306 6335

Riikka Ylikoski, CFO, Betolar Plc, puh. +358 40 828 2632

Certified Adviser:
Skandinaviska Enskilda Banken AB (publ) Helsinki Branch, +358 9 6162 8000

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 several previously unused, massive industrial by-products 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. Betolar’s mission is to enable the green transformation of various industries globally, especially in the construction, process and energy industries by providing solutions to utilise its unique materials technology. For more information, visit https://www.betolar.com/

Betolar Oyj Half-year-financial-report