Good morning. Welcome to Betolar's Q1 business review. My name is Melina Pinomaa, I'm heading our Investor Relations and Sustainability. This morning we have our CEO, Riku Kytömäki, and CFO, Riikka Ylikoski, presenting with me today. We'll go through the main events in Q1, look at the business review and financial review. Riku will tell more about our strategy update. Riku, feel free to start.
Thank you. Okay, good morning also from my side. I will go through the main events of quarter one, starting from telling that we continued the commercialization and research and development according to our plan. We have five pilot customers launched in quarter one. We also launched our new strategy, and our new strategy I will talk a little bit more later, but it aims to sustainable growth and stronger position in the value chain. Also we held our annual meeting at the end of March. That was a little bit unique concept with two places at the same time, Espoo and remotely, Kannonkoski, center of Finland. We got also one change in our management team.
Our COO, Ilkka Iittiläinen, is about to leave the company at the end of May, latest second of June. We have started our innovation center expansion in Kannonkoski. Those were the main events in a nutshell. Next I will give speech to our CFO, Riikka Ylikoski.
Thank you, Riku. Our net sales for the quarter was EUR 43,000. This was of course higher than the comparison period, but unfortunately lower than the previous quarter. The quarterly net sales occurrence tells about the early stage of the company, and it consisted of the chemical sales and license fee. One of the great learnings now during the Q1 and already last year is that it takes more time for our customers to start their production. That's why, for instance, we have been reviewing our strategy. We have been concentrating a lot to the technology development in our R&D innovations, AI platform development, and that resulted the negative EUR 3.1 million EBITDA. We invested to the personnel last year a lot.
We recruited a lot, that starts to also show in our burn rate. Our cash position is still strong and it was affected also of the innovation center investment in Kannonkoski. We continued during the Q1 the heavy piloting with our customers with whom we started on the Q4. We continued with the second and third wave piloting and also with five new customers. Our personnel, the average number of the personnel was 66. As said, we recruited a lot last year, and now we have been a little bit pacing that down and concentrating to the operational efficiency and process development.
Okay, I will go a little bit in more detail what comes to progress in the quarter one, and we have divided the progress reporting in four different segments. I start from the concrete products. That is the area Betolar has tested most of our solutions. We have expanded into new markets. We have new product launches, for example, with Tubobel in Belgium, and that is very promising. And also we have expanded to new market areas like Middle East, Africa. In this area, in concrete products, we have a lot of experience in past, and that we can utilize moving forward to the other segments, for example, to building and construction, bigger elements, for example, like hollow core slabs. That we have progressed in the quarter one with several tests.
Here we call it like hybrid product development, Geoprime hybrid. The reason is that there's like little bit mixed cement where some percentage of mix is based on cement. Because of our standards, we could do it without cement fully, and it would be a really, really good product, but the current standards require some cement to be included to fulfill the building and construction standard. Also, in mining, we have continued our efforts to commercialize and productize our offering. In this area, of course, there are lots of potential worldwide, not only in Nordics, but many other places around the globe.
The last one, that is very much along with our new strategy, we have developed new side streams, not only the GGBFS type of slag, but then some alternative side streams. Obviously, that takes quite some time to be in a commercialization phase. We have started some projects. These are all public references, for example, with Critical Metals here in Finland as well as Keliber project. Next, I will move to update our new strategy. We have communicated this at the end of March already, but just to repeat the main messages here. This is really one of the key events for the Q1.
We worked a lot around thinking through the strategy, what are the next steps and what are the drivers, you could call them mega trends or key drivers for business. Of course, this is very obvious starting from a climate change, there is obvious need for greener products and make the concrete much more green. It's about 8% of a worldwide CO2 emissions coming from the cement industry. That is a big picture. We are aiming at replacing cement in the concrete industry, as well as saving natural raw material resources by recycling materials. That goes to the second bullet here with circular economy. We target to use waste, not only like commercialized side streams, but something that is currently considered as waste.
Of course, when in many, many areas, many cities, many countries, there is a big movement towards like urbanization. If you take China, for example, there will be still dozens and dozens of millions of people moving into cities, and that requires, of course, infrastructure. Is it railway connections, bigger buildings, electrical transmission and so forth? All of these require concrete. Lately, unfortunately, as we know, there are lots of geopolitical reasons why businesses went quite difficult. Is it logistics or is it some other reason? Of course, the Ukraine war that is still ongoing, unfortunately.
This sort of crisis affect the supply chains and obviously there is a trend and key driver in the future that in many countries companies want to localize, actually take the supply chain back to, to the neighborhood, basically. Avoiding any interruptions in material availability or logistics. Our mission and vision, we didn't really change much actually. We took a number away from the mission from the CO2 emissions target, 'cause partly it's very difficult to justify a measure afterwards. The standards also are somewhat changing continuously. Anyhow, the main target is still there to lower the emissions and also lower usage of virgin raw materials. When our values we didn't touch, we just wanted to repeat over here.
The courage, the commitment to responsibility and prerequisite for working together. Okay, when thinking our strategy, we have divided into five different areas. The first one is about developing alternative side streams. As we talked earlier, in our releases, GGBFS and fly ash, that is in a way getting shorter. Availability is less and less, and also it's getting more and more expensive for a good reason. There are less and less coal power plants available. Thus there is less fly ash available, for example. We have put, and we will put quite a lot of effort here to commercialize these alternative side streams.
Those could be, for example, bio ashes, or they could be different kind of slags from a metal industry, not only the GGBFS that is commonly used today, but some other side streams. At the same time, number two, we are looking into creating a stronger position in the value stream, value chain. You could think about Betolar not only being like a brokerage in between the supply and customer, but also doing something for the side stream. That could be to commercialize as a Betolar product. It could be some kind of a further processing, grinding whatsoever, putting the chemicals in the side stream in a certain phase and delivering so-called Betolar product.
We have not given yet any detailed instruction what and when will happen, but we are looking into opportunities in this field. That would create a bigger kind of opportunity for value creation. Also have a better grip on a customer that Betolar cannot be bypassed. Thirdly, we are looking into solutions how to accelerate our commercial path to go international. Not only, for example, smaller concrete products, but we are now developing and testing bigger elements for construction. For example, hollow core slabs, and that is a solution that could scale much to much bigger volumes and it's also rather international solution, not only here in Finland. Talking about hollow core slabs. Number four, it's basically an outcome from a previous.
We need to have a side stream available. We need to have a technical solution to that. Then we will figure out that what is the target market to that combination. When the target market Is, when outcome of... We have a good enough side stream available. When it works commercially, it's profitable. When we go and see that, okay, in this market, we go to that segment, to that customer, and so forth. Here we gave an example that, for example, North America is pretty interesting and when some other areas, for example, in Middle East Africa.
The last one that is still there has been from early phase of Betolar, we have a AI system in the background. We are developing our recipes and making our R&D lead times faster. When it means that the go to market can be faster, our customers productization, the commercialization can be faster. In the long run, it can be also some other services built on this AI platform. For example, it could be something related to side streams, sales, or some other activities, normal marketplace activities. That is maybe a little bit in the longer term. Currently, we are concentrating on our recipes and our customer recipes and developing our R&D and making the lead times faster. All right.
When that is about the strategy in a nutshell, the next reporting date would be 25th of August, and when first nine months will be reported, November 3rd. Here, I think we would be ready for Q&A. Thank you.
Great. All right. We have some questions come up, online, and if you have in the audience any questions, feel free to raise your hand. We had question about the strategy. Maybe, Riikka, you can answer this one. I think investors are having difficult time to track your progress, as you don't provide that much information. Strategy update is clearly one key element. When do you think that you could provide us some more concrete actions regarding your new strategy?
It's very, very good question, and we think that now starting from our next, I mean, quarter two, quarter three reporting, we start reporting along these five lines with what has happened. Today, I gave a little bit of a verbal kind of content, what is behind those strategic initiatives, but when in a quarter two, for sure we can also already report something along those lines. Yet we didn't have much time since we reported the new strategy that was at the end of March. It's only, like, four weeks ago.
Yeah.
It's not yet so much to tell, for sure, the next report in August, we will tell more about the progress.
Good. Thank you. How many commercial contracts have you right now, and how many of these are in production phase? Why didn't you generate any revenue from these contracts?
Well, we actually generated revenue from these contracts because it was Our revenue for the Q1 consisted of the license fee and chemical sales. We don't disclose the amount of or the kind of like situation of our contracts, but there are customers both in Europe and in India that are doing continuous production currently.
Good. Thank you, Riikka. We have a few more. Are you still pursuing new customer contracts in concrete products, or is the focus now shifted totally towards the new segments?
The answer is that yes, we still do commercialization and find new customers along with the precast, the kind of a current product portfolio. We will not abandon that segment. Maybe the change there is that we will find bigger customers, maybe like more global customers, not only sort of a local customer in certain country, but we are looking bigger customers, bigger players in that field as well. It could be like sewage pipes, for example. It could be even with paving stones. I think the key there is the size of a customer that we can grow and scale with the customer.
Yeah. Exactly. Good. In what timeframe you plan to take steps towards the stronger position in the value chain as presented in the strategy?
Of course, we have this strategy, so we want to move along the strategy.
Mm.
It is not a just a kind of a vision, so it's a action plan. We have action, many items behind the strategy. When some we are subject to, it could be, for example, building something together with a JV partner, for example, when it's not fully in our hands.
Mm.
Yeah, we want to progress very fast. That is our intent. I cannot give any sort of monthly target, but we want to show something visible in the next coming quarters.
Good. Thank you. A question regarding Asia. Asian customers have clearly not ramped up their Geoprime-based production. Why not? What is holding them back as the ramp-up was supposed to be faster in Asia?
We have been working with the recipe with our Asian customers and also building the competence in our Asian team. We also learned now that during the Q1, that the winter season is not good for the overall in concrete production in, for instance, in India. Now we have been ramping up the customers, or customers have been ramping up their production still according to the plans.
Okay.
Yeah. Maybe I could little bit continue from there, saying that, of course, we are very early phase company, as Riikka said earlier. You cannot sort of linearize immediately that if one quarter is like the next quarter should be like that. There are also non-recurring engineering fees included, and some customers. Of course, we don't typically start with full production. We test with something, and then we need to go and convince their customer, and there are some times lag there, and obviously that has taken a little bit longer time what we anticipated.
Yeah.
Anyhow, the movement is going on and testing is going on, and end customer convincing is going on.
Yeah. Thank you. Let me see. Did I go through all the questions? Anything from the audience here? No? I think we've covered them all. Good. Hey, thank you so much for the questions, and, see you hopefully in August in our financial review. Thank you.
Thank you so much.
Thank you.