Good morning, everybody. I hope that you've all been had a good morning in snowy Oslo. It's, it's great to see you. Tim, Russ and I are all here today. I apologize for the slight delay. We are not technically minded, it would appear. Like, we might be able to do chemistry, but not technology from an IT perspective, so I apologize for that. It's good to see you. We will take you through a handful of slides, or Tim and Russ will do that. If you've got any questions, feel free to use the feature where you raise your hand in Teams, and we will come to Q&A at the end, and come to you one by one, and at that point, you can unmute yourself and turn your camera on if you wish, and we will allow you to ask your questions. I will hand over to Tim.
Great. Thank you very much, Louise. Hello everybody. I'm hoping you can see us. We can't see you at the moment, we'll take that on trust that everybody's there. Really pleased to be here and to be able to present our full year 2022 results. I do realize it seems a bit odd presenting full year 2022 in late April, but I can assure you that if you're in Oslo this morning, it feels like to me at least, mid-January, because it's snowing pretty heavily. Without any further ado, shall we move on? You know, let's talk about a little bit about 2022 'cause it may be a few months back, but it's very important for us in terms of the development of the company.
We believe we took very significant steps in 2022. We talked about it as a sort of transitional year, one where we saw going through 2022 the opportunity then to drive substantial growth and build further momentum in the future. You know, key to that, I think, was the first commercial plant going into construction. As you know, we're an asset-light company. We are providing technology capability, support and key elements of equipment for others to build conversion units. That relies on a major chemical company or a major company saying, "I'm willing to put my money down to build one of these units." That proof point of Toyo Styrene going into construction, it was very crucial for us in 2022. That plant continues to advance very nicely.
We were hoping actually to have the pictures for today, but we're going through the final assembly of units ready for shipment to Japan. That plant is, I was hoping to have some photos of that today, but we'll share those later. That plant's on track for commissioning early next year. We also launched the TruStyrenics initiative with Technip. Technip, you know, the preeminent player in styrene, combining their refining purification technology with our conversion technology to provide a unique waste-to-product route for very distressed polystyrene-based waste. Very exciting. That is developing. It's moving forward. As you'll hear later, we've got our first TruStyrenics unit moving towards FID.
Obviously a huge amount of interest and engagement in 2022 around the development of Cyclyx. Let's forget that it's only just over two years old, Cyclyx. It has done amazing things in the past couple of years. We have the. That we announced the first Circularity Center. This unit that started off pretty small at about 40,000 tons ended up at the end of last year being announced by Exxon and Lyondell at 150,000 tons. Also we've launched the 10 to 90 initiative. That is the sourcing piece of what Cyclyx brings alongside the processing piece, which is what the Circularity Center addresses. Those together provide the feedstock for conversion technologies and can address the entire market.
Obviously we are listed to the main Oslo Børs last year, and you can see the picture of the bell ringing, which we were very excited to do. We've delivered significant revenue growth. Let's move on to the next page. I won't dwell on this too much, but I did just want to kind of remind everybody of the scale of the opportunity that we're going after. You know, there's some math on this page that breaks out how we get to the kind of numbers that we're talking about, you know, a $150 billion opportunity, and how that translates down into the potential number of plants based on where Agilyx can play in the conversion and purification part of the business, and Cyclyx in that sourcing and processing, where it's really addressing everything.
You can see the enormous opportunity there. Although 2022 was, you know, was a good step and we had some great sort of headlines in that year, you know, the opportunity ahead of us is just massive. That's what gets us excited about the impact that we can have and help others to have in addressing this opportunity, because that opportunity is also a real world challenge that we have to solve. Let's move on to the next page.
I thought it was important to kind of go back to basics in some ways, because there's been so much development and there's so much kind of terminology thrown around. That we felt it was good to kind of take stock of where are we, where do we fit into the overall ecosystem of the circular economy, and where is our competitive advantage really beginning to come into focus. Let's start in the top right-hand corner. Somebody has produced the plastic and now it's been used and it's gonna become waste. This is where Cyclyx comes in. End of life sorting, collecting, leveraging, chemical know-how, chemical knowledge into translating that waste into a usable feedstock, whether that's being used in mechanical recycling or whether it's being used in different forms of advanced recycling.
As I said, there's lots of different terminology that's thrown around, advanced recycling, molecular recycling, chemical recycling. What is it really all about? I'm gonna give you kind of a more simplistic way of thinking about this. The concept of waste to product and waste to intermediates. Let's start with a bit down the bottom. Waste to intermediate. This is actually what most people are doing. They're taking kind of a mixed bag of waste plastic, and they're kind of using a sledgehammer approach, which often is referred to as chemical recycling, to break that down into an intermediate product, a kind of a synthetic crude oil. That then needs to go all the way back through the refining and chemical production process. It needs quite a lot of work doing on it. It needs time.
You'll hear things like mass balance to work out how much can I actually assume is recycled. Once I've gone through that refining and chemical production process, then I can go into downstream units like polymer, plastic production, and then into my final formulation and into usable products. The piece in the middle, the yellow block, is the area that I want you to focus on right now, because this is an area where, yes, we can, and we do have offerings in the waste to intermediate, but the waste to product piece is the area that we are super focused on right now and where we have exciting new developments. What do I mean by that?
I mean, more along the lines of molecular recycling, being more precise, both in terms of the material that you bring in, but also the way that you break that down and the way you purify it, so that you're going from that waste, often highly distressed, but this is the integrated nature of what we offer, directly to a fungible, tradable commodity product. You can bypass, in other words, this whole section below. You can bypass a large part of the refining and chemical industry. This is what we offer with TruStar RX. This is what we offer with the work we've done with Mitsubishi on plexiglass, where you're going straight back to the raw material, pure raw material of plexiglass. Critically, it's what we're now opening up with BioBTX in this whole area of benzene, toluene, xylene.
More on that later, but the key thing here is, this focus and competitive advantage we have in this waste to product space is extremely significant. It's an area where there are not a lot of people playing, and where because you're skipping a step in the, in the value chain, you're not only able to attract more value for you, for us, for our customers, but also you're able to go after a broader range of customers because you're able to go after users of those commodities as opposed to producers of those commodities. Let's go to the next page. Talking about Cyclyx for a moment. Well, if you've been following this industry in any way at all, you're gonna have heard very, very clearly a resounding noise of alignment across the industry, recognizing that feedstock is key.
If we're going to drive the circular economy access to affordable, right quality, right availability feedstock is the key thing to advancing recycling and getting us from what our current state is, around 10% recycling to 90%, which is what we are focused on trying to enable. There's been a huge amount of activity in Cyclyx. Importantly, as you're all aware, we've developed the concept of the Cyclyx Circularity Center as a key enabling piece, bringing together the innovations that Cyclyx has in the sourcing space across the supply chain space, across the chemical characterization and into the physical supply of tailored, customized material that can then be used by others in their downstream conversion units. The likes of Exxon, Lyondell and others.
We've had a large number of different projects, basically looking at different ways of increasing the access to raw materials. The access to waste, sorry, in the right form. We've talked about take back programs with people like Teknor Apex. Also going into communities and seeing how can we access material at source in a way that actually is really engaging a broader part of the community. We've had examples where the increase in average recycling rates by well over 100% through some of the work we're doing in Houston. All different pieces is part of the experiment of putting the pieces in place to be able to feed the first big beast Circularity Center at 150,000 tons as we develop that at the current time.
You can see the step changes in revenue in Cyclyx moving upwards very strongly, also in terms of volume. We see this as really just the beginning, because again, 150,000 tons is that first CCC. We're moving in that direction, and we're putting in place the building blocks to allow us to do that. In terms of the conversion business, the Agilyx conversion business, you can see the step change in revenue on the right-hand side and also the move of volume into construction. Obviously we anticipate this moving up strongly in the future. The good news is that Toyo Styrene that continues to progress.
Factory acceptance testing is kind of happening right now of all the various pieces, and we expect to start up in the first quarter of next year. TruStyrenics is really building momentum right now. We have spent a lot of time working with Technip Energies on where to go, who to talk to, how to drive things forward. We clearly have two projects that are kind of, let's say, out in front on this. The first one is Kumho, where there has been an announced MOU between Kumho and TruStyrenics. We would anticipate a license moving forward with that.
It's, you know, this is a look back page, but I'm gonna look forward, which is the announcement around the TruStyrenics project with INEOS in North America. This is very exciting, bringing an FID by the end of this year, and that will be the first large scale TruStyrenics plant going to FID. We also had Mitsubishi Chemical with PMMA confirming last year the integrated nature of that pathway, the pathway to go from plexiglass back to the virgin raw material. The pieces are being put in place, and we think that we are now at a point where this can now move forward and generate significant improvements and increases in revenue. Let's go to the next page then, which is the new area. Just got announced.
I'm hoping you're as excited about this as I am because BTX is a huge, huge piece of the market which maybe if you don't follow the chemical industry, you may never have heard of. BTX stands for benzene, toluene, xylene, or aromatic chemicals. They are basically one of the fundamental building blocks of pretty much everything that's around you at the moment, actually. It touches almost everything. They, by volume, represent 40% of the petrochemical industry. This development with BioBTX, similar to TruStyrenics, we're leveraging our conversion capability with their fundamental technology capability to put that together so you can go from waste to a BTX, benzene, toluene, xylene product. That goes into, as I say, everything, including things that you may not have realized, like PET.
It also is, benzene is the fundamental building block for everything that is related to styrene. It's in nylon, it's in detergents. It's even in explosives, although that's not necessarily something that we're wanting to get into the circular economy of explosives. Suffice to say, it is everywhere, and it is a product that has or a product area that has significant global discontinuities around supply chains, which creates unique opportunities for us. For example, North America is structurally short of these products. Being able to provide a route to direct, recycled waste back to these products in a country like that is a huge, huge market opportunity. You probably guessed I'm very excited. It's probably, somewhere between five and six times the size this market of styrene on its own.
It, you know, importantly, it's growing very, very strongly, nearly 4% per year. Yeah, this is a unique first of its kind waste product pathway in a whole new area for us. The other thing that I'm gonna flag here, which is not maybe straightforward or obvious, is that this is not a normal project. You know, we announced this exploration, but BioBTX is finalizing funding and the expectation is off the back of that we would be able to advance license and equipment sales this year. This is not something that is, you know, mañana for the, for some time in the future, but this is the opportunity to go very, very quickly. Next page. Russ, I'll let you talk to this.
Yeah. Thank you, Tim. Good morning, everyone. Some highlights for our financial performance in 2022. As Tim showed you, revenue is up just over 200%, and it's a good combination of growth, both in the Cyclyx feedstock sales as well as Agilyx conversion business led by the Toyo project. Great growth for the business in the course of 2022. Acceleration in gross margin, as we mentioned in previous calls. We see that continuing to improve as we are scaling the business and accelerating the business. Gross margin is an area that has a lot of opportunity for improvement, especially when we start to get licensed sales, as Tim mentioned, in the near term. We'll continue to see good gross margin growth.
Our net profit loss for the year of $23 million, that loss attributable to several one-time costs, the major being our up-listing cost to up-list to the Oslo Børs. As part of that process, of course, we had to convert to IFRS, so we had to spend some dollars on that conversion process and using consultants to help us convert our books from a Norwegian GAAP US GAAP to IFRS. We continue to see acceleration and build out of our teams as we prepare for growth, especially in the Cyclyx business. We're continuing to invest in talent to be prepared to move forward, as well as continuing to shore up our infrastructure on IT.
We just went to a new IT managed provider that can give us a better global service for both our IT systems as well as providing that cybersecurity and security enablement to prepare us for international growth as well. Good investments for the future and that's the reason why a lot of our costs have gone up in 2022. From a cash position, you can see we ended the year at $13.7 million. We did highlight here that in March, our unaudited balance of $12 million, you can see our cash position, you know, at the end of the year and in the first quarter of this year, which is showing less of a cash burn in the first quarter.
Continuing to look at that as well as we see some good momentum on future projects, bringing in good cash into the business in the course of this fiscal year that we're now in.
Okay. Thank you very much, Russ. Looking forward, you know, we believe the outlook is very exciting in terms of what we see. You know, when we look at our conversion business, we're continuing to target the four projects into development per year. We're looking for two licenses in this year as well. We have a very healthy pipeline. What we're seeing is the impact of TruStyrenics in terms of the high priority styrene-based ones, and we'll see that evolve as these other technologies come through as well. I mentioned about the fact that INEOS is the INEOS Styrolution project is progressing towards FID in back end of this year. Very excited to be working with them on that.
I wanted to pick up on one of the things that I mentioned in that press release, where actually it originally came from them, where they described the TruStyrenics development as a real game changer. This is something that they saw as absolutely crucial in terms of this project. Very excited that that will be the first large scale TruStyrenics unit. We previously mentioned a anonymous EU project moving forward. That was back in around the September time last year. We didn't say who it was. You will see a very familiar logo on the page now because it is confirmed as Shell. Very excited to be working with them in Europe on that polystyrene-based project as well.
I already mentioned around Kumho and the work that's happening there and on BioBTX. When we look at Cyclyx, I mean, what we're seeing is a real continued engagement and growth. I mentioned earlier the recognition that feedstock is the limiting factor, this is creating a real groundswell of interest and engagement in what Cyclyx is doing. That first CCC is very well advanced in terms of engineering, we would anticipate that moving into construction in the second half. Obviously with Exxon pushing very hard because they have need for that material themselves, for their capabilities they've also been announcing. We expect really strong Cyclyx growth going forward.
It'll be, you know, CCCs are gonna be a big part of this. You know, we anticipate a lot more than one. There's also other ways that Cyclyx can grow volume as well as it supports, as I talked about before, really the broader industry swathe of recycling opportunities. With that, I'm going to pause and we'll go to Q&As.
Great.
If you have any.
I'm just... If I stop sharing, then at least we can see. I can see.
Oh, hands from-
Adam Forsyth has asked a question. Adam, unmute yourself. Go ahead.
Morning. Please excuse my background in a cheap hotel. Just on BioBTX. Just wondering, are you foreseeing this as a similar structure business-wise to TruStyrenics? Also, I wonder if what we should be looking for, given the pace of it that you're suggesting, should we be looking for intermediate milestones this year? What might those milestones be? Then just a couple of questions on the financials. Firstly, do you think we're at a run rate OPEX now, or are we going to see continuing investment in the current year? Also the comment on first quarter collections. I'm just wondering, are we at an exceptional level of collections or are we sort of in a normal place, particularly as we see ongoing working capital during the current year? Thanks.
OK. Let me just try to get those in the right order. So the milestones for BioBTX. Look, there's -- our business is asset-light, so it requires funding coming in from others. So a key milestone is BioBTX securing that. Subject to that, then milestones come very hard and fast. So we would anticipate license and equipment revenue in subsequent months. That could be this year. They have, they're very well advanced with their conversations, so that is not somewhere out in the far distant future. This is in quite imminent. Again, we wanted to get to that sort of stage before this was actually all announced.
It is very exciting and has the potential to go very, very fast. That was the first question. Second question was. OPEX. I think that, when you look at the volumes in Cyclyx at the moment, and you look at the progression through to you know, first, second, subsequent CCCs, there's clearly costs that will come in as part of that, and we're bringing in that cost very diligently so that it kind of matches up as far as possible with the volume growth and the volume capability. But there is, you know, clearly going to be cost associated with sourcing. What we try to do, as always, is to make sure that as much as possible that that is pre-invested by the person who's offtaking. That's always the game with an asset-like company. I would say in terms of of Agilyx, it's pretty good, pretty good run rate.
I mean, you know, yes, if we step up the guidance at some point to more than four projects a year going into development, we might have to come back and look at that. You know, the business is in a good place from an overall perspective right now. Cyclyx clearly is in a significant growth phase in terms of sourcing and processing. There will be some development there. As always, we're looking for pre-funding.
Q1 [inaudible] .
[crosstalk] On the collections effort, I wouldn't say it was an exceptional collections in Q1. I'd say it's. We are, you know, receiving cash to our payment terms. We're seeing that acceleration of cash coming in for Cyclyx when our clients prepay for feedstock. That's always helpful for us to have that cash on hand. We're not using the company's cash for sourcing feedstock for our main clients. We're seeing that continuing in our forecast. I think it's pretty status quo. We'll continue to see a good inflow of cash from our current projects as well as future projects, as Tim highlighted.
Great. thanks very much. Just to come back on BioBTX, just I wasn't quite sure if I got the structure right. Are you looking at sort of JV structure? Is it gonna be like TrueStyrenics, or is it gonna be something different?
I think the way that I would position this is, you know, we are, we're providing our conversion technology into an integrated system that they provide the kind of the back end that takes that, our material and turns it into a, into a BTX. It's not dissimilar to the kind of from a technology point of view, to TrueStyrenics. The difference is that they are very much in the build, own, operate space.
Yeah.
We're providing it to them to do that.
Got it.
As opposed to, you know, Technip is basically providing, their technology with our technology to people who are going to build, own and operate.
Yes. Yeah. Got it, got it. Brilliant. Thanks. Thanks very much. That's really helpful. Thank you.
Thanks, Adam.
Thank you.
Thanks, Adam.
Elliott, I see you've got your hand raised.
Hello. Yeah, good morning, guys. Congrats on the results, this year. Couple questions from me. First, could you by any chance shed some more light on the status of the Cyclyx Circularity Center? Just thinking with regards to instruction and H2, are you know, hopeful that's more the beginning of H2, or perhaps is that more likely to be near the end?
Yeah. Elliott, well, first of all, good morning.
Morning.
I'm gonna stick with H2. You know, look, this is, this is basically you know, what's very clear is that the partners are wanting this as soon as possible. You know, these things, especially with large companies, take a long time. I think the key thing is that the engineering is now very advanced. I would say two things, that the partners are very excited about what the way this now looks, and the level of interest from the broader industry and from the consortium members is extremely high. It's, you know, there's a lot of anticipation and desire to move things forward and keep that progress going.
One of the interesting things with this Circularity Center concept is that it needs to be married up to when the advanced recycling or chemical recycling is happening at the other end. You know, there's big investment. When you just look at the CCC itself, what you have to think of is there's many sort of multiples of that are happening in the downstream area to actually take that material. This is huge, huge amounts of money, just even with this first chain that is being put in right now in order to be able to create a large scale, really large scale circular platform.
Got it. Understood. Thanks, Tim. Just with regards to the Cyclyx, the KPIs you guys have given, which is, I think, very helpful, for myself and everyone else out there. I think you noted 7,600 tons processed output for Cyclyx. Is there any way you can give some type of idea as regards to kind of what that means for the input? You know, for example, in general, is that, you know, a 60%-80% conversion ratio, you know, from kind of raw stock to kind of feedstock process output?
Yeah. I don't have those numbers in front of me. Actually I think it's, you know, generalizations are very difficult in this space because it depends to a large extent on what the customer is wanting. Let me give you a specific example. If you take the distinction between the material that would be coming out of the Houston recycle project there with consumer recycling, the example that we shared in that deck. That will be post-consumer material. The volume you'll get there compared to the usable volume for advanced recycling as opposed to mechanical recycling, will look massively different from the material that yield from a 10 to 90 initiative to those same products.
This is part of the issue, because somebody who says, "I want, as part of my Circularity Center, to have a significant volume of post-consumer material," is going to want a Circularity Center that looks very, very different from somebody who says, "I'm okay with post-industrial or post-commercial." The reason for that is post-consumer has huge variability. You'll have a lot of, let's say, additional challenging materials to deal with that will require additional investment and will probably result in different yield factors. You know, this is part of the discussion around the CCCs, is what does the downstream user want? You know, is it 10% post-consumer or is it 40%? You know, whatever. That radically changes the system and it radically changes those yields.
I'm not trying to be evasive on that, but I think what's important is the complexity of dealing with this space and addressing the specificity of what the downstream user actually wants, is something that is part of the unique offering of Cyclyx to be able to work through. I think a lot of the companies that they're working with, including our well-named partners, that's been a learning process of kind of, you know, "Well, you know, give me this." It's like, "Okay. Well, give you this means this." It has implications.
Yeah. Fully understood. Thanks. Last question, I suppose, on the financial side. I think the gross margin development implied a 15% gross margin in H2, which is a fantastic improvement. I'm just wondering, in terms of going forward, given, you know, there's potentially more construction tickets coming, would you expect gross margins to remain positive, you know, for example, in the first half of 2023 and beyond?
I mean, I think that it's very clear that anytime you've got license and construction revenue coming through, you're gonna expect a very sort of healthy margin. As those revenues build up, become more significant, then I think, you know, that's gonna happen. The nature of Cyclyx means that it's a thinner margin. There will be on a, you know, Well, because we don't do quarterly, maybe you won't see it quite so much. On a half to half basis, there can be some movement around those based on when license and construction volumes come in. I think the way you've got to view this is a trend going upwards. As the overall business develops, as we start looking to the future of accelerating certain aspects of the business, then, you know, you're gonna be able to join the dots pretty clearly and see where it's going.
Great stuff. No, all clear. Thanks. Congrats again.
Thank you very much.
Great. It doesn't look like there are any further questions, but I'll give one last chance for anyone who wants to raise their hand. No? All right. In that case, I will hand over to Tim to close the meeting.
Thanks very much, everyone. Thanks for your attention. We're very excited about, you know, where we've been in the last year and, you know, we see a basis for growth for the future. I'm hoping that you're seeing that both in terms of, you know, these new pathways that are coming through, the growth opportunities around these waste product pathways where we really have a distinct, unique offering, leveraging our capability to take distressed waste and taking it through to a product. Also the excitement around Cyclyx and what's happening there. We hope and anticipate to be able to talk a lot more about that in the coming meetings and coming period of time.
A lot of things to look forward to, a lot of things to celebrate. We know that, you know, we are absolutely committed to, you know, driving the growth and the business forward over the coming period. Certain milestones we've talked about in terms of licensing, FIDs, construction, you know, moving Circularity Center force, these are all gonna be signposts on this path that we're talking about towards our long-term growth in revenue goals of $200 million-$300 million that we've talked about. Thank you very much, and look forward to meeting some of you later and others talking over the coming weeks. Thank you.
Thank you.
Thank you, everyone.