Thank you for joining Noble Capital Markets' Emerging Growth Virtual Equity Conference. I'm Mark Reichman, one of Noble's Senior Research Analysts. Today, we are joined by Mr. Ranjeet Bhatia, Chief Executive Officer of Agilyx ASA. Agilyx is a European plastics recycling company listed on the Oslo Stock Exchange under the ticker AGLX. In the U.S., the company shares trade on the OTCQX market under the symbol AGXXF, while the company's sponsored American depositary receipts trade under the symbol AGYXY. Following the presentation, you may submit your questions using the tab at the bottom of your screen. Ranjeet, the floor is yours.
Thank you, Mark. Good afternoon, everybody, and thank you for joining today. A special thank you to Noble for inviting us to attend this year. It's a pleasure to be here. I'm Ranjeet Bhatia, Chief Executive of Agilyx. I've been a shareholder in this business since 2009. I stepped in as the Chief Executive in 2024. As Mark mentioned, I'm based in Oslo, Norway. The company has been through a significant transformation over the last couple of years, and I'm very excited to share with you today the update and this is really our first presentation in the U.S. market, so I expect there'll be many more, but really honored to be here. Skip the disclaimer. So we were founded in 2004 in Portland, Oregon, Agilyx was, to address the increasing, unfortunately still increasing, plastic waste crisis.
We have a scale and exposure across a fragmented European Union market, and we're very well-positioned to capitalize on recent EU regulation that's already come into effect and some that is still pending. We pivoted to Europe in 2025, and we acquired 45% of GreenDot Global, and then increased our ownership in that business to majority control in 2026. We have two complementary businesses that are delivering recycling solutions for the plastic industry. The first is the operating platform, GreenDot Global, which as I mentioned, is really Europe's leading integrated plastic recycler, and it's now fully consolidated into Agilyx as of late April of this year, 2026. GreenDot, and I'll go into more detail on its business model in the subsequent slides, but just at a high level, GreenDot receives and owns plastic waste, operates mechanical recycling facilities in multiple European countries.
We have good visibility on EBITDA growth over the coming few years. It is profitable today, and that's what generates the cash today for the group. The second segment is arcLABS, which is our wholly owned subsidiary technology and analytics center based in Portland, Oregon. It has 20+ years of chemical recycling research and development expertise, 22 patents, and offers lab services that support both our own facilities and those of third parties. It's really the R&D leg of our business. It owns chemical recycling IP as well, and that way it does operate into similar space as some of the U.S. comps that you may have heard of, such as PureCycle or Aduro. We are the only company with an operating facility in our sector, and we operate that through a licensee, Toyo Styrene, outside of Tokyo.
This slide is really intended to help explain what we do in aggregate and why it is helpful to be across the value chain. We have structured Agilyx with the strategic and industrial logic to control high volumes of plastic waste and then route that plastic waste through mechanical and chemical recycling feedstock prep plants and the preparation plants. Thus, we really have the capability to route plastic volumes through the most profitable channels in a pretty dynamic and changing marketplace. I would say an additional benefit of controlling plastic from the source to recycled product is that we are able to develop into a one-stop shop for brands and retailers who are already customers of our business and are working on pan-European recycling strategies, looking for a counterparty to help them do that at scale.
Shifting to the slide specifically, the left four columns on this slide are services provided by GreenDot, which is a contracted supplier of waste handling in Germany's extended producer responsibility, otherwise known as EPR segment. It is a significant producer of recycled plastic with mechanical recycling facilities across five countries. It is also a supplier of chemical recycling feedstock and a co-developer of an AI-powered compliance software platform, which is being built to address the increasingly complex EU reporting requirements. Needless to say, it takes years to develop these relationships, the brand awareness, the market capabilities, and just even the operating permits and expertise. We feel fortunate to have such a great collection of capability in-house. The right two columns are the capabilities of the technical platform I referred to, arcLABS.
That is again, our U.S.-based R&D center, which qualifies feedstock and plastic feedstock and licenses technology out to third parties. I would say with reference to the U.S. market, where EPR, which really was founded in Germany as a business model, is now starting to roll out in the U.S. market across various states in a similar way to what EU is doing today to manage its plastic packaging and waste requirements. That is of particular interest to arcLABS, which is located on the West Coast and is already pretty actively engaged with a wide range of stakeholders to look at supporting that rollout of the EPR market in the U.S. market. Focusing on that EU market, Plastics Europe estimates utilization sits at only about 58% of its total capacity.
There have been a series of structural headwinds in the industry, and the effect of that underutilization is that capacity has been shrinking. Capacity is down roughly 1 million tons, the equivalent of France's entire recycling capacity. It is a very significant change in capacity. That is really plant shutting down due to weak economics, which is a function of high energy cost, cheap imports of recycled plastic, as well as low cost or low price on virgin plastic resins. There are headwinds in the industry, but we have seen that as an opportunity, and I think we have actually benefited from this outcome based on our strategy. That is because our EPR platform, which I will come again to again in more detail, the GreenDot business core engine is independent. Its pricing and value and margins is independent of plastic commodity prices.
It is pretty consistent in its ability to generate cash flow. Similarly, we have been pretty opportunistic in acquiring distressed assets over the last year, at least since we have been involved as Agilyx at pretty extremely favorable prices. It has been an opportunity for us. There have been headwinds in the industry, but I think opportunity for us, and we are coming out of this in a pretty good position. It is really EU legislation which has changed the equation and is absolutely going to have an impact in the near, already have an impact and will continue to have a significant impact. That legislation is specifically referred to as PPWR, which is Europe's Packaging and Packaging Waste Regulation. It came into legal force in August of this year, so just a couple of months ago.
It requires recycled content targets in packaging by 2030, and that all packaging placed in the European Union has to be recyclable by 2030. Critically, from November 21st of 2026, the EU will ban plastic waste exports to non-OECD countries. That means that all that waste that was being shipped outside of Europe for recycling will now primarily need to be processed inside the European Union. Plastics Europe, which is a leading industry group here in the EU, projects that recycled plastic demand will need to double or for use, recycled plastic demand will double by 2030 and have to double again by 2040 as a function of these regulations, which are now coming into effect. Our, meaning GreenDot's, mechanical recycling capacity will directly benefit from that demand increase because we produce the high quality recycled plastic that the market needs to meet those targets.
We actually believe that demand is going to outstrip current capacities and will accelerate the need for chemical recycling, which is another emerging section of the industry to meet those targets. On chemical recycling itself, we do have a strong footprint there, both through being able to provide chemical recycling feedstock through GreenDot facilities and also conversion technology from arcLABS gives us a really great foothold in that sector. I think some of that evidence of the advanced regulatory environment and expectations for chemical recycling is the primary U.S. peers of our company that are operating in the U.S. or also recently announced projects or activities in the European market. There is really a focus in this market in terms of its leadership and its potential for near term opportunity. We have been preparing.
As I mentioned, we made acquisitions preparing for legislation, what we expect to be really a wave of demand. Agilyx invested in GreenDot in July 2025. GreenDot acquired Forplast in November of 2025, which is an Italian mechanical recycler, bought RG Group, which is a French mechanical recycler, in February, Anviplas in Spain in June, and Agilyx moved to majority control of GreenDot also in April 2026. As I mentioned previously, we believe the near term policy milestones are going to create a really meaningful shift in demand, and we have really built a new platform that is primed to capitalize on that opportunity. Focusing for a moment on GreenDot's EPR business. Under the extended producer responsibility schemes, GreenDot is paid by producers to collect, to sort, and to recycle plastic. We are paid before plastic is sold.
We are paid really for the management fee of that rather than the commodity price. Therefore, revenue really doesn't depend on commodity plastic pricing. We have about 90,000 customers, I mean, it's a significant business. The likely EPR revenue in 2026 is EUR 325 million. I include here to help the investors understand or shareholders potentially understand the history, I've included the gross profit at the EPR at GreenDot from 2020 to 2025. You can see that they're really consistent gross profits, a little bit up, a little bit down, but pretty consistent and predictable. That's what we really loved about the GreenDot Global when we got involved with it. It's the reason we made a move into the company.
It provides very stable cash flows and allows GreenDot to weather cyclicality and in fact, expand during downturns, as evidenced by the acquisitions that we funded in the last 12 months. Taking a look at the segment analysis at GreenDot, we have really the three lines, the EPR, which is really the generating the cash as I mentioned. Mechanical recycling, which is turning profitable this year, and then chemical recycling, which is still earlier stage in development. That market is a lot further out. EBITDA in 2025 at GreenDot was circa EUR 11 million. In 2026, we have very good visibility on EUR 19 million. Again, that visibility is based on the fact that we get so much of our EPR business at the beginning of the year when those contracts are signed. We have good visibility on the full year performance.
Then we project about EUR 50 million in 2028 EBITDA, and much of that growth is really associated with increasing contributions from the mechanical recycling plants. You can see here that swing to EUR 21 million of EBITDA contribution from mechanical recycling in 2028. I would emphasize that this 2028 estimate really only requires the assets that we've already acquired and really assumes no further M&A. Of course, there's lots of opportunities to expand, but to hit our targets here, we can use just the assets that we've currently acquired running at full capacity over the next couple of years. We did report at the end of August the H1 financial earnings for Agilyx, and we reported EUR 85 million in sales for the first half. Our consolidated H1 EBITDA was a negative, just under EUR 2 million.
We did consolidate only two months of GreenDot operations because we took control of that business at the end of April. Cash balances for the group were just under EUR 55 million at June 30th, about EUR 45 million at GreenDot Global and EUR 10 million at the parent. I also do include here a slide on GreenDot on 100% basis for the first half, so you can see the pro forma performance of the business even though we only consolidated two months. It gives you a sense also of what we will be consolidating moving forward. Of course, for Q3 and for second half, we expect to 100% consolidate both all three months of the quarter and then the full six months of the second half. Then a note on Agilyx's current cash position and runway. We have no near-term capital needs. We're self-funded for growth.
We did place a convertible bond, a EUR 50 million convertible bond in three tranches between November and May and are funded at least until late 2027, if not past that. GreenDot did improve its balance sheet in June 26 through an equity placement and is self-funded out of operating cash flow. We do have a refinancing optionality at GreenDot's bank facilities in 2027, and the board is certainly considering whether to do that or not. It's an interesting way to fund future growth opportunities without having to go to the capital markets. I just want to emphasize, therefore, that an investor today is really not taking a refinancing risk on this business. On a consolidated basis, Agilyx will be EBITDA profitable in 2026, and it's really one of the few green stories turning a profit, but also growing very quickly.
Lastly, just in summary, GreenDot does anchor the platform, as you can tell from these slides. EU regulation is creating a wave of demand that's already started in terms of its impact. Our production quality is moving up the value chain to really capture the plastic premiums available for high-quality plastic that'll be delivered to the EU regulatory regime, regulatory-driven demand. GreenDot and Agilyx really together can close the loop on this last quarter of the circular diagram here on the slide, where GreenDot can provide chemical recycling feedstock and Agilyx can provide the conversion technology. Again, that's a market which we think is coming, but not a core focus of our business today, but something for the future. Lastly, just to emphasize that we're well-funded to meet our objectives, and we're looking forward to sharing continued good news.
We're pretty excited about what's coming in the coming quarters and anxious to update the market as things develop. That's, Mark, what I had today in terms of prepared presentation. Happy to take any questions.
Thank you, Ranjeet. What are the key points of differentiation between GreenDot and other European recyclers, and what competitive advantages come from operating across multiple stages of the recycling value chain?
It's a good question. I think at the core of it, as I mentioned, the core of GreenDot's business is the EPR platform that it operates in Germany. It is collecting 400,000 tons a year of waste, about 200,000 tons of plastic. It's up to GreenDot what it wants to do with that. It controls that. It owns that waste effectively and can send it down whichever path it wishes. If it didn't control the next stage in the value chain, whether it's mechanical recycling plants or in the future chemical recycling plants, it would be providing that margin opportunity to other players. Instead, it really picks the high-quality plastic that it's coming through its own systems and then captures additional margin by putting it through its own mechanical recycling plants. That forward integration provides a margin opportunity. It also provides flexibility.
As the markets are changing, GreenDot can decide to offload that plastic to other channels that it doesn't own, or it can decide to increase the volume that it's putting through its own systems, and it can select for the quality coming in on the sourcing. It can select the kind of plastic that maximizes what its mechanical recycling customers are looking for in terms of high-quality plastic. It has a lot of flexibility by being able to be both controlling the source as well as controlling the output.
What are the most important regulatory changes occurring in Europe, and how are they expected to improve the long-term economics of recycled plastics?
There's a few moving pieces that really together make for the market. I think one of the most important, or the most important, is that it's setting binding targets by 2030. Plastic packaging on the market in Europe will have to have a percentage of it, in say 30%, depends on the type of plastic and packaging, but say roughly 30% of that content has to be recycled. That creates the demand pool for use that it wasn't in the market previously. The second part of that is to make sure that the EU is sourcing that plastic domestically. It's starting to do two things. One, it's making sure that any exports are banned outside the European Union, so that what can't happen is that waste plastic is collected in Europe and then shipped to other countries for processing and then shipped back in at low pricing.
It's for protecting its local production capacity and its waste shed. The other aspect of that is that on the import, it's increasingly making sure that anything coming into the European Union has been processed according to standards that mirror the EU's own requirements. It's very difficult for low-cost producers overseas to ship plastic into Europe and claim the same level of credit that applies to those targets that are being produced, that are being mandated.
Now, GreenDot has expanded mechanical recycling capacity. How much earnings growth can come simply from improving utilization and margins on the capacity you already own?
A pretty significant opportunity there. A lot of those three acquisitions we made are still being integrated, so not running at full capacity. But if you consider the potential to run some increase in pricing, not great, 10% increase in pricing over the years, times the 100,000 tons that we've picked up in input capacity, about 90,000 tons of output capacity, and you consider a 15% margin, which is what we would expect in those plants, that's a EUR 20 million EBITDA contribution on existing assets. We really do see mechanical recycling to be the growth engine for EBITDA. We'll see some growth in the EPR business as we optimize for that market, but it's mechanical recycling where we have real opportunity to move the needle.
You mentioned in your presentation the goal to generate EBITDA of EUR 50 million in 2028. You talked a little bit about bridging the gap from the present. But how much of that comes from utilization, product mix, pricing, or chemical recycling? I think you mentioned it doesn't rely on acquisitions.
Sorry, Mark, I lost the signal on the last part of that question. You can just repeat.
Well, in your presentation, you mentioned the goal to generate EBITDA of EUR 50 million in 2028 for GreenDot. You bridged the gap during your presentation, but I was just wondering how much of the delta between 2026 GreenDot EBITDA and the EUR 50 million goal in 2028, how much of that comes from utilization, product mix, pricing, chemical recycling? I think you mentioned it does not rely on acquisitions.
That's right. Our pricing assumptions increasing in that period are relatively modest, 10%-15%. The rest is really running at full capacity. We are making some investments in quality to improve the output quality to meet the higher margin opportunities. There's some working capital that's being reinvested for upgrades internally, so not M&A, but improving our internal capacity. Relative to chemical recycling, which as I mentioned, I think is the most uncertain of that industry, because it's still on the come and companies are trying to figure out how to meet those needs and how to build those plants. We're showing a delta from where we are now to 2028 of EUR 10 million on the EBITDA line, but we're losing EUR 5 million last year, so it's really a EUR 5 million profit by 2028.
The swing is the impact on our EBITDA is big, but it's really our plants that have not been in production are now starting to come online and producing product. We've been careful about projections on that sector because we aren't sure, but we do think that we should be able to make some incremental change based on contracts we currently have visibility on or have already signed.
It seems like from your slide, the company's funded through at least late 2027, so I was just wondering, how are you thinking about capital allocation, such as organic investment, additional acquisitions, potentially increasing Agilyx's ownership of GreenDot?
Our capital is. The primary focus will be capital expenditure to increase our own capacity and then servicing our. We have debts outstanding at GreenDot. We're servicing both amortizing debt and interest payments. We're consuming cash. Some working capital increase is required as those factories hit larger throughput numbers. We're really not budgeting for acquisitions. We have that opportunity with some free cash flow if we want to, but it's not something that we're prioritizing. I think we need to focus on execution of what we have and not take additional risk at this point. I think we have what we need to hit our targets.
Agilyx owns 50.1% of GreenDot, consolidates 100% of the business. So how should investors think about the cash that can ultimately be upstreamed to Agilyx after debt service, minority interest, and reinvestment needs?
We'll have to refinance the GreenDot lines, which we tend to do probably in 2027 before dividends can be repaid up from GreenDot to Agilyx. We don't see that as a 2027 event relative to dividend payments, but toward the end of 2027, that flexibility would be there, and at that point, it would be a decision of how we want to use that cash. Our operating assumption is that cash will be used to improve GreenDot operations and expand its potential, rather than being a dividend payment up to Agilyx. From 2027 to 2028, that's certainly an optionality if that's something we wanted to do.
What level of investment will be required to support the growth plan over the next several years?
We have about EUR 25 million of CapEx that we would need to put into the business, which will be funded from existing cash flow from the current operations.
Okay. Then I just wanted to go back earlier of something you mentioned in the presentation, that European recyclers have faced some difficult economics because of the low-cost virgin resin, the recycled plastic imports, and higher energy prices. I was just kind of wondering, what specific changes or catalysts cause you to conclude that maybe the industry margins are now approaching an inflection point? What assumptions need to hold for your 2028 margin targets to be achieved?
We are seeing selectively, I would say not across the full platform, but in some of the manufacturing facilities, mechanical recycling facilities, increasing pricing and increasing demand for product as industry is getting ready to meet those targets and wants to line up supply to make sure they have the volume secured for that outcome. Our plants are running, they're profitable, and we've seen that downturn, but because we're producing high-quality material with very specific output and long-term customers, we've been pretty insulated from that. But again, we are seeing some change in terms of demand increases and quality increases, which relates to pricing. Our sense is that our customers are looking for that product, and they know it's going to be in short supply, and they're preparing for their supply chains.
Relative to
Sorry, go ahead.
Well, then just lastly, looking over the next 12- 24 months, what are the key upcoming milestones that investors should be watching closely? Also, why is now a good time for investors to consider Agilyx?
The milestones over the next year or two will be increasing profitability, showing at our mechanical recycling plants as a function of pricing improvements as the market develops and running at full capacity. These acquisitions were made in the last 12 months. They are still being integrated. They still haven't made their full impact yet. Every quarter moving forward, we will start seeing the impact of that flowing through the system, and as the scale increases, the profitability is increasing. I think we will continue to see news flow from the European Union in terms of implementation of their EU requirements, including, as I mentioned, in November will be the export ban, but in 2027, they will set the pricing penalties for non-compliance with the targets that will be effective in 2030.
Regulatory push will continue to sort of catalyze interest, and I think you're going to see more and more brands announcing comprehensive recycling plans to meet their objectives, and that GreenDot will be part of those discussions and some of those announcements.
Ranjeet, thank you for joining us today. As a reminder, a replay of this presentation will be available on www.channelchek.com. On behalf of Noble Capital Markets, thank you to everyone who joined us, and we hope you enjoy the remainder of the Emerging Growth Virtual Equity Conference.
Thank you, Mark.