Good morning. I'm Arina van Oost, responsible for investor relations at Tekna. Welcome to Tekna's presentation for the financial results of the fourth quarter of 2022. Luc Dionne, CEO of Tekna Holding ASA, will be presenting a pre-recorded webcast today. Questions can be submitted via email to investors@tekna.com. A summary of the questions and answers will be made available on tekna.com by Wednesday, February 15. Now over to you, Luc.
Before getting into the details, let me share a brief overview of Tekna for those who are joining us for the first time. Next slide. Tekna is a world leading provider of advanced materials. The company was founded in 1990. It has its headquarter in Canada. We are listed on the main board of the Oslo Stock Exchange. Tekna has just over 200 employees working in three production facilities and sales offices, subsidiaries, and distributors strategically located at Canada, the USA, France, China, Korea, India, and Japan. We are supporting our global portfolio of world-class customers. What has made Tekna relevant in the market, however, is our technology and our product portfolio. Next slide, please. Tekna operates in four segments that are driven by global megatrends: acceleration in space exploration and space tourism, deglobalization, climate change, digitalization, connectivity, and demography.
Systems and additive materials are the two segments generating revenues today, while microelectronics and energy storage are segments that we are developing. If we look a little closer to additive manufacturing and systems segment. Next slide, please. Additive materials is the largest segment with nearly 75% of our revenues this year. More than 80% of these revenues are generated by recurring customers. We manufacture these materials in the form of very fine metal powders that are used in various applications such as additive manufacturing. The graph here on the left depicts the distribution of these sales by industry, and the table on the right shows the quality of customers we are serving. One third of our additive materials are delivered to the aerospace industry.
One third are delivered to the manufacturers of the additive manufacturing machines, also called 3D printers. The balance is distributed between medical applications, consumer electronics, and the automotive industry. Since 2014, we have developed an industry leading position with many blue chip customers. We secured long-term supply agreements with customers like Airbus. We have delivered hundreds of tons of quality powders in highly regulated industries. The supplier qualification process in these industries are stringent and take time. Customers expect that we deliver constant quality on time, every time. This is leading to a sticky business model with long-term customer commitments. Next slide, please. Our second segment, the Plasma Systems. This segment has two main product lines, the R&D Plasma Systems and the PlasmaSonic Solutions.
Both product lines of proprietary design machines uses high frequency induction coils to create inside an enclosure a thermal plasma environment that reaches up to 10,000 degrees. The R&D plasma systems are typically sold to government and academic institutions and OEMs for conducting research and development work. These machines are configured to produce small samples of micron size and nano size materials. The annual revenues from this product range between $8 million and $15 million annual. Two years ago, we introduced a PlasmaSonic Solution product line to the market. Tekna is the only company in the world offering a comprehensive portfolio of plasma-based turnkey solutions that allow to reproduce, measure, and characterize the behavior of materials exposed to hypersonic flight and orbital space conditions, such as those seen by the spacecraft vehicles.
We have an active opportunity pipeline that could deliver between $45 million-$75 million in revenue. We can see here at the bottom the quality of customers that have an interest for this product family. Next slide. A short update on corporate and ESG. In January, we have announced the appointment of Mr. Espen Scheie at the position of Chief Financial Officer of Tekna. Espen held roles as VP Finance and Controlling at Arendals Fossekompani ASA, which is Tekna's largest shareholder, and will operate from Tekna's headquarter in Canada. Mr. Blackburn, the former CFO, will stay with the company in a senior executive role as an advisory to the CEO and assisting the finance team. In April 11, Tekna will publish its annual and sustainability report. Stay tuned for that. Next slide, please.
Now let's have a closer look at where we concluded 2022 and the highlights of Q4 results. Next slide. First, 2022. One of our top priorities this year was building capacity to meet the growing demand for additive materials. In early Q4, we have taken immediate steps to accelerate our path to profitability. Tekna generated 2022 revenues of $26.9 million and a negative adjusted EBITDA of $12.8 million, down from minus $4.6 million in 2021. The EBITDA performance is attributable to transitory lower systems margins, materials machine upgrade efforts, which are continuing, and overhead costs related to onboarding of staff in anticipation of the growth plan.
We concluded the year with an impressive backlog of orders on hand of $25 million, up by 64% over last year, of which $14 million are additive materials order. Both for systems and materials, this is the largest backlog Tekna has ever had starting a new year. Immediately after releasing the Q3 results last year, we have initiated actions to improve our profitability and our cash position. These included maintaining the pace of our machine capacity expansion for additive materials and accelerating the manufacturing of three additive material production machines that will be coming online in 2023. We have progress in our discussions with AFK to secure financing and have agreed on the terms for a $25 million loan facility.
In addition, we have identified and started the implementation of actions that are aimed at improving our operational excellence through overhead cost reduction, CapEx and organization rightsizing, and strategic focus on near-term revenue opportunities. If we go to the next slide. Let's take a closer look into Q4. Both revenue and EBITDA improved over previous year in large part due to the improving system sales and margins. Nevertheless, reaching our profitability target remains a priority, and to accelerate this process, we have identified a series of measures that are currently being implemented. The actions are taken on both systems and materials segments. First, we will improve the contribution margin through price and cost adjustments, as well as improved machine productivity.
Secondly, we do experience rising costs due to the inflationary environment. We expect to improve the operating efficiency and cost in 2023 compared to 2022 on the back of cost reduction measures that we have initiated in Q4. We also address the use of our cash by prioritizing CapEx allocation towards near-term return on investment, namely CapEx for the manufacturing of additive materials has been maintained, and the manufacturing of the new machines is being accelerated. We have maintained the CapEx for microelectronics materials to finalize the remaining tasks of the customer qualification pilot line. We have postponed the CapEx for industrial scale machines of both microelectronics and energy storage material until we have firm signs of orders. I will say more about these two later in my presentation.
The effect of some of these changes have started last year, while others will be reflected throughout the year. In the current context of Tekna and the economy we are in today, the best use of our resources is to return a profit by increasing the focus of our resources on near-term sales and profit initiatives. On the next slide, I will discuss the materials and systems orders and backlog. Next slide. The industrialization of additive manufacturing by OEMs has driven significant demand for materials. Q4 orders intake grew from Q3, and we could have done better with more capacity available. The additive materials segment remained strong throughout 2022, where we have sold out our manufacturing output of the highest sellable part numbers.
We have consolidated our position with many OEMs with whom we are observing sizable increases in volumes for 2023, some of them with Tekna as sole source in the frame of long-term supply contracts. The materials segment concluded the last quarter with revenue of $4.7 million and a strong backlog of $14 million. The traction for additive powders remains strong in the market. Tekna materials are instrumental to the industrialization success of leading original equipment manufacturers. Increasing capacity, as we are planning to achieve in 2023, will translate into higher additive materials availability, shorter delivery lead times, and increased sales. Next slide. In the first half of 2022, the system segment dealt with lower volumes resulting from two years of slow business development due to COVID restrictions, as well as some orders with lower margins than usual.
This resulted in a transitory negative effect of 10%-15% on the profit generated by this segment. However, the segment rebounded in the second half of 2022 with the award of a major $9 million PlasmaSonic order, followed by two orders for R&D scale systems that amounted to $1.6 million. These revenues are expected to be executed in 2023, and margins are expected to be back in the usual 60%+ range. Next slide, please. Some interesting information about our efforts in securing a financing option with AFK. As stated in November last year, we have initiated a dialogue with Arendals Fossekompani regarding future financing for Tekna.
We have made substantial progress, and I am excited to report that just a few days ago, we have agreed with AFK on the terms of a $25 million loan facility. The loan facility is structured around the following key terms. Three tranches of $5 million, $10 million, and $10 million respectively are scheduled to be released between Q1 2023 and Q1 2024, with the third tranche subject to certain performance criteria. The repayment for each loan falls on the third anniversary from the drawdown of the relevant tranche. The final terms of this loan facility will be disclosed upon the finalization of the agreement with AFK. AFK has been a tremendously responsible owner from the very first day, and this agreement is again a great demonstration. Next slide. Now, a few words about the market and the outlook.
This slide here provides an overview of the four verticals as seen by the field analyst. In the case of hypersonic travel, the opportunities in the market were assessed by Tekna. We have identified a potential of $220 million for PlasmaSonic solutions similar to the order we have just received in last October. The 2023 system pipeline of both R&D scale and PlasmaSonic solutions remain strong. The margins are expected to improve. We foresee that new orders will be announced throughout the year. It is expected that the additive manufacturing industry will grow at a rate of up to 30% until 2030. There is an increasing number of OEMs operating at industrial scale. I will show two example of this on the next slide.
In 2023, Tekna will focus on growing our market share by increasing our machine capacity, either by improving the machine performance or increasing the number of machines in operation. The industry analysts expect that the demand for microelectronics MLCC devices will grow 14% in average by 2027. We are pursuing the qualification with the target customers, and we have initiated discussions with MLCC partners to implement nickel nanopowder manufacturing in Asia. With regard to energy storage, it is expected that the demand for silicon anode materials related to lithium-ion battery will see a CAGR of 28%.
For the time being, we are prioritizing the significant opportunities in the above segments over energy storage. However, we continue our ongoing dialogues with strategic partners, sorry. Now, if we take a closer look at each material segment, starting with additive manufacturing. Next. Next slide.
To build on my earlier comments, we are observing today a growing number of companies that have adopted additive manufacturing as a process progressing from the validation stage of the 3D printing technology to the manufacturing at scale of commercial volumes. The graphs here are examples of two of our customers that have reached the commercial stage. Customer A is a European original equipment manufacturer with whom we have signed a 10-year supply agreement. Customer B is a North American original manufacturer of aerial taxi. The vertical axis are sales of materials expressed in kilograms. As we can see in both cases, from 2019 to 2022, we had a smooth, constant, but modest progression of annual deliveries. In 2023, we see a hockey stick pattern developing.
In both cases, the customers have confirmed their volumes needs for 2023, which is shown by the light green bar with nearly 50% of these volumes already being committed. Of course, these are not the first customers who have gone through this transition phase, but it confirms that the additive manufacturing will continue on its growth path, and it emphasizes importance for Tekna to continue on expanding our production capacity. Which leads me to the next slide. About our machine capacity upgrade program. Consistent progress has been achieved in Q4 with our machine upgrade program, and a first machine qualified with a 40% output increase. Despite the intermittent machine downtime caused by the upgrades, we have maintained at least as good machine output as we have seen in the previous quarters. The development and upgrade work continues through Q1 2023.
It's a real balancing act between managing the machine downtime, meeting our delivery targets, and synchronizing with customer qualification rollout plan. Nevertheless, we are excited by the progress, and we are targeting 70% increase in our production run rate to be qualified by the end of Q1 2023, which we expect to be reflected in the output of Q2. Next slide, please. Looking at our development initiatives with microelectronics materials. First, the setup of the customer validation line is mostly completed in our factory in Canada with minimal investment required to conclude this phase of the program. We have initiated a cycle of Tekna product to customer technology pairing with 4 potential customers. Successful pairing of technologies should lead to first orders of small batches, typically less than 100 kilograms, followed by a progressive ramp up in volumes.
We have updated the status with two customers from our last quarterly report. In Korea, the trials have continued progressing. The customers has conducted MLCC device printing trials with Tekna's material. This is a step further up in the evaluation process. The customer shared feedback during a recent meeting in Korea. Product adjustment will be implemented with the customer's collaboration to accelerate the process. In Asia Pacific, the customer also made good progress on conducting their trials. The lab analysis are ongoing and feedback is expected later this quarter during an in-presence technical review meeting.
At this stage, we will wait the completion of the ongoing rounds of trials prior to providing revised outlook. Next slide. About energy storage segment. In Q4, we have completed the implementation of an industrial scale plasma machine, specifically configured for the manufacturing of nano silicon.
This is a unique process with IP owned by Tekna to manufacture among the highest quality and smallest size silicon material. We have produced some initial samples, and we will continue dialogue with strategic partners to clarify the way forward and keep our option open with this program. For now, we will be prioritizing the significant opportunities we have in additive manufacturing and microelectronics over the energy storage segment. The LG Chem joint development agreement that we have shared with you earlier last year still continues in 2023. Next slide, please. To conclude this presentation, Tekna and AFK agreed on the terms for a CAD 25 million loan facility. Despite slower additive material sales last year, Tekna has sold out its capacity of most popular part numbers.
The sales of additive materials have been growing steadily in the previous years, and we have built an enviable position in the market. Increasing sales, production, and delivery of additive materials remains our top priority this year. Investments in microelectronics have provided us with a unique pilot line. In 2023, we intend to pursue the significant potential in microelectronics while we will carefully manage the cash flow and resources. Accelerating the path towards profitable operation is a second key area of focus. We have initiated the implementation of measures that are expected to deliver operating costs reduction year-over-year in spite of the inflationary environment we are in today. Last but not least, thanks to our strong order backlog, we expect operating revenues and margins to increase during 2023.
We're starting 2023 with nothing less than a systems and materials backlog nearly as high as the total revenues we have generated last year. This concludes our fourth quarter presentation. Thank you to all for your kind attention today. Special thanks to our employees, our customers, and investors.