Good morning and welcome to this investor presentation from ReFuels. With me today to give this presentation we have, as usual, CEO Philip Fjeld and CFO and Managing Director Baden Gowrie-Smith. We will first have a presentation and then afterwards we will have a Q&A session. You can submit your written questions in the chat functions during the presentation or you can also submit an email to ir@investorweb.no and then we'll deal with the questions afterwards. With that, I hand the word over to Philip.
Thank you, Alan. Good morning to everyone, whether you're watching this live or on catch up. Very pleased to have announced this morning that the debt facility we've been talking about for months now has finally been concluded. GBP 25 million debt facility with Foresight . Baden will give some more information about that debt facility in a bit, but it's a good day for us. Clearly, we're now able to roll out more stations, and we are very pleased with the relationship we've got with Foresight that they want to continue to fund going forward. They must obviously like what the business is doing. With that, we'll go through some slides here. Next, please. We'll skip the—there we are. What is it we're doing? Just to give you a bit of a reminder on that one. We'll also give you a bit of a market update through these slides.
We are decarbonizing HGVs, heavy goods vehicles, focused on the U.K. today. There is a very small part of the vehicles on the road that make up a large part of the emissions. Typically, 1% of vehicles on the road being the heavy goods vehicles make up almost 20% of greenhouse gas emissions. That's what we are busy decarbonizing. Next slide, please. There we are. If we then look at biomethane or Bio-CNG that we are putting into vehicles, it is not only a green, 100% sustainable and renewable fuel, it is also cost competitive and considerably cheaper than regular diesel or HVO, 100% biodiesel. It offers typically 80%, 85%, 90% lower greenhouse gas emissions. With diesel, it's also possible to go negative, and we will increasingly be sourcing biomethane that does go negative.
Going forward, we often get a question, okay, so there is or there is seen in the industry that there is a limitation on how much biodiesel can be produced from sustainably sourced feedstock. What is the potential for biomethane there? We are really only scratching the surface. There is a megatrend currently across Europe of huge investments going into additional upstream capacity to produce biomethane. I think it was six months ago there was an estimate that came out of EUR 27 billion going into that sector. Since that, we've seen other announcements, so I presume that number is higher at this point in time. There is a huge wave currently of projects underway, which is very positive for us and our customers because that means we're going to have a strong pipeline of biomethane supply going forward. Next slide, please.
If we then just take a look at where we are today. We've got 16 large public access stations in operation. We're currently refueling north of 2,100 trucks per day. We're very proud that we saved our customers or helped our customers reduce their greenhouse gas emissions by more than 220,000 tons of greenhouse gas emissions last year. More importantly, this isn't just a niche application that a couple of fleets in the U.K., large fleets in the U.K. are using. We've got now north of 175 unique customers on our system and that is looking well. We are confident that that will continue to grow over the coming months and quarters. Next slide, please. Just to give you a bit of refresher, we put a new structure in place together with Foresight back in April of this year when we announced it. Why?
Because the previous structure was complicated and was making it hard for us to attract growth financing going forward. We are 100% equity financed so therefore we needed a new structure to attract debt. That is the new structure we've now got where we've got what was previously three verticals of the business, the upstream part, RTFCs with the biomethane sourcing and supply, CNG Fuels basically being the engine room, if you want, of the company and then also the stations. That's now all being come together under CNG Fuels and that is the platform where, which we are now raising debt through. We've got a strong balance sheet there. Next slide, please. This is just a reminder of what a typical station looks like. This is our most recent opening. This is Livingston up in Scotland, our second station in Scotland. Here you see that these are unmanned facilities.
The drivers turn up, they do all the work on site, we remotely monitor them. Livingston at full capacity will be able to refuel probably somewhere in the range of 600 trucks- 800 trucks per day. As I said, completely unmanned facilities as such. If you then look at how do you put renewable energy vectors into vehicles, whether that be, you know, liquid biofuels, whether it be gaseous, such as biomethane or potentially green electrons for battery electric trucks, there's no infrastructure anywhere in Europe that we are aware of that are as large and as efficient as this in putting renewable energy vectors into trucks. Next slide, please. Where are we currently in market penetration? How is that looking going forward?
Since the company was founded in 2014, we have, up until, I'd say the last 12 months, been limited to basically only growing and penetrating the so-called 4x2 truck market. There are about 25,000 trucks, 121,500 trucks on the road today which are so-called 4x2s. If you then look at the so-called 6x2, which is the heavier part of the spectrum, which can go up to 44 tons, there weren't really CNG trucks available there before, plus, minus at scale about 12 months ago. If you look at our market penetration into the 4x2 market, we're currently sitting at about 10% now. We expect that to continue to grow going forward. Whilst our market penetration in a 6x2 market is pretty much zero, that is starting to change. We're now starting to see mass adoption also happen in the 6x2 market.
If we can achieve the market share that we've today got in the 4x2 market, in the 6x2 market, we have a lot of growth ahead of us. Next slide, please. These are just two new customers that came on board just in the last six months: Tesco and Co-op. For those of you who aren't British, Tesco is the largest supermarket or food retailer in the U.K. Co-op is also a large one and I think the statements here to the right speak for themselves. Very excited, of course, to have them on board. Once again, this is just showing that we're not dealing now with a niche application that only a couple of select fleets are actually adopting. No, this is going into the mainstream.
We're now seeing mass adoption and we expect to see a lot more similar announcements from similar customers or large customers in the U.K. in the coming quarters. Next slide, please. That's for Baden. Thank you.
Thank you very much, Philip. Yes, I look very pleased. We've completed this fundraising. We are now fully equity funded from the perspective of, from the view for our shareholders and believe that going forward we should only need to use operational cash flow and debt as the combination to deliver the rollout plan, which is the current rollout plan of three years, nine additional high capacity stations and of course a larger fleet of our mobile refueling units as well. For those who watch our releases more regularly, they'll know that we started in the first half of the calendar year. We ran a comprehensive marketing exercise to a number of different types of debt funders and received a number of compelling offers.
The Foresight Group, who are existing funders, came forward with a very attractive offer that really met what we need at the moment for a number of different features that were within there. We found the rates to be at market, which was positive and cheaper than our other loans and funding we have within the business. It also has low prepayment fees and no prepayment term, which essentially enables a business to go and have a look at additional funding as and when we need it for the remainder of the rollout. Depending on the cash flow profile of the business, the way we are able to draw it down is very flexible.
Clearly, having used an existing funder who understands the business has the benefit of them being able to see, of them being able to sculpt drawdowns, us collectively being able to sculpt drawdowns much better, which again brings down that funding cost. Yes, of course we're very pleased that the Foresight Group have been happy to continue funding with us and to continue to invest in the rollout that we currently have. Once again, the current plan is for three stations per year for the next three years. What we really have here now is the ability to have a look at how cash flows and certificates are performing and manage our capital structure to accelerate the rollout should we need to in the future. Next slide please.
Thank you very much.
Here we just show again what we believe would be an average station that we roll out, the types of economics we see. Clearly these aren't three identical stations for the next ones we're building. They all have different features, but on average we see station CapEx coming in at around the GBP 8 million mark for new sites, IRRs in the 25%- 30% range, and fast payback periods for these types of stations. It's important to note that when we consider these IRRs, it's a 15-year IRR. We don't use a terminal value on them, and these are unlevered, which of course we now are able to lever the station returns. They also don't include the returns we make from RTFCs , which can be very substantial and would bring these payback periods down quite considerably.
In the event we were to include them, even with just stations alone, you can see the free cash flow yields that come off these sites go northwards towards 100% once the sites are established and reach their steady state rate, which is obviously a very compelling rate of return for an infrastructure investment. Thank you. Next slide please.
Thanks, Baden. Just to go through where we've come from and where we are going with regards to the next stations, I mentioned previously that we opened Livingston back in May. That's our most recent new station being opened. We've also been clear in the past that we've got Magor in South Wales going into development very shortly. We've also got Swindon in southwest England also getting ready there to go into development. Both of these are high capacity sites that will add considerable new capacity.
When we talk about capacity out of stations, by the way, just to give a bit of clarity there, it's not always very easy to give 100% clear answer what that capacity is because some of our stations might be constrained by the number of dispensers we have on site and other stations might be constrained by the amount of gas we can take off the grid. When we talk about high capacity and high pressure pipeline that we are connecting to, such as Magor and Swindon, there we will likely have unutilized compressor capacity, if you want, that we can then use to refuel more in the future. Both of those are either ready to go or will soon be ready to go.
We have a third one which this facility will also permit in the future, which we will come back to the market and provide a bit more clarity. Which one there we will select. Next slide please. If we then look at where we are with regards to the market we operate in. With regards to biomethane, we operate under the so-called RTFO Renewable Transport Fuel Obligation, which is a market-based mechanism. This is not a subsidy. It's been in place since 2008. It's got increasingly tight blending obligations which increase every year going forward. There is a consultation expected over the coming quarters which will look into whether or not the blending obligations should be stepped up further into the future. Currently it stops increasing in 2032 and the consultation will then look at what happens to increases post 2032. Next slide please.
If you look at where we've been on certificates, yes, there is volatility in that market for a number of reasons. For those of you who've followed us for years, what has been happening recently, we had a couple of years where certificate prices were depressed. The European market was being flooded predominantly by biodiesel, or alleged biodiesel that came out of China that now stopped and has balanced. If you look at where we are currently with regards to the certificate pricing, we've been in a sort of GBP 0.24- GBP 0.26 range for probably about six months. It's now broken out of that range, is now trading in the, typically trading in the GBP 0.27- GBP 0.28 range. Why is that? We are seeing a gradual tightening in the biodiesel market and in the biodiesel feedstock market, which is now translating into higher RTFC prices.
We already mentioned this in the past, but we're now actually starting to see that come to fruition. Next slide, please. If you then look at where we are currently, you know, we're in October 2025 today, what we've said that we are guiding, or we are basically saying that by 2030 we should be in a position to annualize about GBP 100 million worth of EBITDA. That means we need to grow there or thereabouts about 25% per annum. That's something that we currently feel confident is achievable. If you look at where we are currently on profitability, we are pretty much on track to meet that GBP 100 million EBITDA number in 2030. Next slide, please. What does that mean then? Clearly this is just a fairly simplistic illustration of what that could mean with regards to share prices, with regards to value creation.
Clearly there are many things that will happen, positives and negatives between now and then, but this is just an illustration of what that could look like compared to where we are today and what the future could lead to. You know, with the 6x2 HGV now really starting to get into the hands of customers. We've got north of 100 fleets that want to trial the vehicle. As those orders start to be placed and start to be delivered, we should remain on track to deliver, as I previously mentioned, that GBP 100 million EBITDA number by 2030, which this is premised on. Next slide, please. Finally, just to wrap up before we can take some questions here, where are we currently?
We are in a phase of mass adoption where we're starting to see Tesco as an example here, where we're starting to see huge new fleets come on board with quite ambitious adoption plans going forward. They are going down the biomethane route because they see that as scalable, it's economical and it is something that gives them quick wins very early on. These are companies that have maybe quite ambitious decarbonization targets. Maybe they want to be 50% off fossil by 2030, 100% by 2035. That means they need to start acting today. They can't sit on their hands and wait for something to come along in the future. As such, for a lot of these fleets, biomethane is the chosen option. If you look at where we are currently on the RTFCs, that market had, yes, it's volatile, but that has come up and has stabilized quite nicely.
It's moving up gradually. That has put us in a position now to source biomethane profitably and to achieve solid margins, which we can then use to further grow the business. We've now announced the debt piece here, which is a result of the, I would say, the new structure we put in place, which means we've now got a very strong balance sheet. We've got strong positive cash flows coming in from the operation across the group, and that has put us in a very, very good position to now continue to grow going forward without having to tap the equity markets because we can now, as we've just shown, we can tap attractive debt, and then we can continue to grow into the debt portion here at likely more attractive terms in the coming years.
With that, we can move to the last slide and then take some questions, please.
Yes, thanks Philip. Just a reminder, you can submit written questions in the chat or send an email to ir@investorweb.no. We have a couple of questions. The first one, it's now been a few months since you last reported your quarter. How has the quarter been since then, and has it been going according to your expectations?
Thanks. That's a good question to try to tease out of us whether we are on track or below track on our guidance of GBP 8 million- GBP 10 million. All I can say is we've got our earnings report at the end of November. I'm not going to give out any information today whether we are on track, above track, or below track. You know, catch up with us at the end of November and we'll give you a bit of an update then. All I can say in general, we're quite happy with the market as you've seen for the RTFC prices here. We're quite happy with the growth that we've seen on our monthly reports, and we'll come back to where we're at with regards to guidance, etc., at the end of November.
Good. We have one question on the build out beyond these three stations. You now have secured the debt to build out three stations and to get to your 28 goal of 20,000 HDVs in capacity. Are you fully funded?
Anyone take that one?
We are now obviously fully funded for the next three sites. The amount of additional funding we require, which is not equity funding for the remaining sites, really pivots on the speed of cash flow generation within the business itself. What's important to see, both from the marketing exercise we ran, is that we are a compelling investment case for the provision of debt, which is great to know. We have the ability to take on more if we need to. Also, the cash flow generation over the next year we expect to be very solid. Where that balance point is on debt versus cash flow we will decide in due course, but we certainly have the capacity to do it now and I'm very confident we'll be funding the next six stations with sensibly priced funding for investors.
Good. We have another question here, which is what is the opportunities for CNG fueling stations in Ireland or Northern Ireland?
Excellent question. If you look at the current market, I think there are eight or nine stations, fairly small stations in the Republic of Ireland at the moment. I think there's one or two private in Northern Ireland at the moment. Those are markets that we closely follow. We continue to have on and off discussions there whether or not that could make sense for us to look at. We've got a quite unique competency, not only in running the stations that you've seen, but also in design, build, operational philosophy, the whole package. That is something that is on our radar. If it's something that we actually get into, we will of course inform the market. There are certain aspects there that make a lot of sense to us strategically and that make sense to us from an operational perspective.
We've got customers using our stations across the U.K. today that also have a home base in Ireland or Northern Ireland. Tying that knot together, if you want, makes sense, but of course it needs to also make sense from a financial perspective and strategic perspective. It's on our radar. I will come back and inform the market if that's something that we will basically pull the trigger on.
Yes, we have another question here. How many truck orders do you expect these new stations to unlock? Have you had any indications from customers?
Yes, I won't go into details on that one. Other than that, we have a significant portfolio of sites that we could have chosen to move into the development. We have selected and we are selective now going forward to make sure that we take the sites that we feel are the most attractive ones, longer term of course, but also immediate term where we can get early loading at the sites. We have selected those and as such we are expecting significant truck orders of course to feed into these stations. I'll just add a point there that when we decide to move a station into development, we've been working for many years securing that site, doing surveys, getting planning approvals, discharging conditions.
It's really a lot of work has gone into it upfront which has given our existing and new customer base a lot of forewarning that is coming. I think also there, you know, we basically announced that a site has gone into construction, typically takes eight to nine months for it to become operational, some a bit shorter, some a bit longer. That also gives our customers a good indication for that. We aren't just talking about a station, we're actually building it. As we are seeing today from the truck manufacturers, historically, I say historically over the last three, four years it was particularly bad during COVID but lead time for gas trucks was maybe as long as 12 months. What we're seeing now, lead time for gas trucks has now come down to three to four months.
When we have a eight to nine month build period, that gives our existing customer base, a new customer base, a lot of time to also order trucks to coincide with opening of those stations.
Good. There's one question on RTFC prices. We saw an increasing price there, which you showed, Philip. How do you expect this to develop going into the next year?
Yeah, I mean my crystal ball is probably as good as anyone else's and I don't want to be pretending to know exactly how that's going to move around. All I can say is it's been evident for quite a long time now that the biodiesel market has been tightening. We of course had this huge wave of predominantly Chinese, to some extent Asian, but Chinese biodiesel that hit Europe in 2023 and to some extent first half of 2024 that's taken time to wash through the system. In the meanwhile we've also had the sustainable aviation fuel mandates that come into play on the 1st of January of this year. Sustainable aviation fuel is predominant to today produced from the same feedstock as road biodiesel such as HVO, used cooking oil, and tallow. What we've always, you know, our thesis has been that this market will tighten over time.
We're starting to see that happen. You know, will that tighten in a linear fashion? Of course not. There will be ups and downs there, but it is a gradual process and, you know, as such we weren't surprised to see the RTFC prices being lifted over the last couple of months. We've also got a couple of interesting policy developments happening in Europe. Germany, being the largest road transport market for diesel biodiesel, is looking to change and fundamentally make some pretty large fundamental changes to how it operates its road transport decarbonizing policy which will affect biodiesel and the feedstocks that go into that. That is expected to become in place or to go into place by the 1st of January or soon thereafter.
1st of January 2026, sorry, or soon thereafter if those changes do in place do indeed manifest themselves and that then that is also going to result in an increased tightening of the market. Where will RTFCs be going forward? I don't know, they could go up, they could go down. They're currently at GBP 27-GBP 28. At those price levels we are able to source biomethane profitably and generate healthy margins.
Good. Another question related to the build out. How long is the current lead time for long lead items associated with the build out, i.e., compressors, etc.?
It's a very good question. It depends and that's not me trying to dodge that question. Why do I say that? Because if we do a high pressure connection to, let's say, a high pressure pipeline such as LTS, there you will see that actually the connection to the LTS is usually a long lead item. If we have other stations, it might be the compressors that are long lead items. Compressor lead time depends on the spec and so on and so forth. We've seen that come out slightly recently, but as I said, typically when we put a digger on site, we will typically see that there is about an eigth to nine month lead time until we can commission a station. Maybe slightly longer, maybe slightly shorter. We haven't seen lead times change a lot.
As I say, it does depend what is the gating item depending on exactly the design of the station and which pipeline pressure we are connecting to.
Yes. We have another question, more on the long term outlook. What markets will be targeted first as you expand beyond the U.K. over the long term?
There was a question previously on Republic of Ireland, Northern Ireland. I think it makes sense for us to assess that market before we assess any other markets. Things can change. We are a dynamic, reactive company. We have parts of unique IP internally, how we operate the stations, design them and operate them, build them, etc. I would say that if I had a perfect crystal ball, I'd say that we will spend the majority of our time assessing opportunities in the Republic of Ireland and Northern Ireland before we move outside of the cluster of islands that we're currently present in.
Yes, there are no more questions. I hand it back to you, Philip, to conclude the call.
Thank you very much, Alan, and thank you to all of those who have been taking the time out of your busy day to listen to what we've had to say. Very excited clearly to have this debt process finally done. We've got some exciting quarters and years ahead with regards to the 6x2 now finally being on the road in the hands of customers so they can place orders. The new structure we put in place in April or concluded in April of this year has put us in a very strong position with regards to balance sheet so that we can attract debt, as Baden said here next year and the year after we will or are likely to have increased debt carrying capacity and that's a nice position to be in compared to where we have been in the past year.
All in all, some exciting times ahead and look forward to catching up with some of you again at the end of November. Thank you.