Accsys Technologies Plc · LSE:AXS
Accsys Technologies — Investor Day (January 2025)
63 slides from Accsys Technologies's investor day presentation, Jan 30, 2025
Slide 1: Accsys in FOCUS
Accsys in FOCUS 30th January 2025
Slide 2: Reset, Transform, Grow
Reset, 04 01 Transform, Grow Dr Jelena Arsic van Os CEO 2
Slide 3: Speakers joining me today
SPEAKERS JOINING ME TODAY… Sameet Vohra, John Alexander, Hans Pauli, Chief Financial Officer Group Commercial Director Managing Director, Arnhem Dr Pablo Steenwinkel, Sergio Munhoz Group Director of Rod Graf North America Sales Technology and Innovation GM Accoya USA Director 3
Slide 4: Agenda
AGENDA 12.30pm Welcome and kick off 1:30pm Arnhem operations 2:50pm Q&A 12.35pm Strategy 1.40pm Coffee break 3:45pm Site tour 1.05pm Finance 2.00pm Commercial strategy 5.00pm End 1.15pm Technology and innovation 2.30pm Accoya USA 4
Slide 5: Changing wood to change the world
WHY DO WE EXIST Changing wood to change the world. Changing wood is what we do, and we do it to change the world for the better. 5
Slide 6: Disrupting the building materials industry with proprietary high performance products
DISRUPTING THE BUILDING MATERIALS INDUSTRY WITH PROPRIETARY HIGH PERFORMANCE PRODUCTS AND TECHNOLOGY APPLICATIONS APPLICATIONS Outdoor Windows Under Windows Speciality Cladding Decking Fencing Cladding and & Doors water & Doors Wet Interiors Components Furniture BETTER THAN OTHER MATERIALS BECAUSE P
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Slide 8: Sustainability is in the company DNA
SUSTAINABILITY IS IN THE COMPANY DNA CO2 IN ATMOSPHERE 0.8 TONNES CO2 PER 1M3 +450,000 TONNES CO2 CAPTURED ACCOYA CAPTURED IN OUR PRODUCTS SINCE 2007 CO2 IN 2024 WE CAPTURED 45,390 TONNES CO2 IN OUR PRODUCTS. EQUIVALENT TO 30,000 HOMES’ ELECTRICITY USE PER YEAR. 8 50 YEAR WARRANTY
Slide 9: Unique value proposition – high barrier to entry
UNIQUE VALUE PROPOSITION – HIGH BARRIER TO ENTRY A genuine premium product with low maintenance costs, an unrivalled 50- Product differentiation year warranty, and the industry's only established acetylation manufacturing footprint. IP protection 27 patent families across 45 countries, >300 patents
Slide 10: The company at inflection point
INTRODUCTION THE COMPANY AT INFLECTION POINT Volume FY24 EBITDA FY24 Gross margin FY24 Large CapEx Complete 56,568m³ €4.8m 30% Dual listing on AIM & Euronext Group revenue Employees S&P ESG Score €136m AXS 210* TOP QUINTILE IN OUR SECTOR *Excludes Accoya USA 10
Slide 11: Three production locations, HQ in London
THREE PRODUCTION LOCATIONS HQ IN LONDON ARNHEM, NETHERLANDS BARRY, WALES KINGSPORT, USA • First of its kind chemical process • Acquired in 2021 • JV Accoya USA • Operational since 2007 • Accoya colouring and profiling • Replica of Arnhem Accoya process • Able to operate at maximum capacity • Able to
Slide 12: Strong growth prospects going forward
STRONG GROWTH PROSPECTS GOING FORWARD ARNHEM AND BARRY ACCOYA USA Arnhem and Barry facility operate at circa 31% Gross Margin with Replicates Arnhem site with potential to be more efficient due operational transformation program ongoing in Arnhem to acetyl supply proximity and USA market premium Arn
Slide 13: Accsys operates in growing markets driven by mega trends
ACCSYS OPERATES IN GROWING MARKETS DRIVEN BY MEGA TRENDS Urbanisation & Housing shortages Sustainable construction population growth and aging stock and biophilic design 4-6% mid-term CAGR* Global construction materials market EUROPE UNITED KINGDOM NORTH AMERICA 3% — 4% 2% — 5% 5% — 8% *CAGR sources
Slide 14: Significant market share opportunity in core markets
SIGNIFICANT MARKET SHARE OPPORTUNITY IN CORE MARKETS DRIVEN BY MARKET TRENDS AND VALUE PROPOSITION 8.6m m³ Market share opportunity Addressable market US Cladding, decking, windows and doors, Wood (addressable) 1.5m m³ Market share opportunity Addressable market Europe Cladding, decking, windows and
Slide 15: Steady growth performance, yet to reach full potential
STEADY GROWTH PERFORMANCE, YET TO REACH FULL POTENTIAL 100k run rate Wood volumes m3: 43k 50k 58k 60k 60k 63k 57k 62k c. 151 FY27 Outlook Positive FCF Revenue figures are aggregated, i.e. Include 60% share of JV revenue for FY25 onwards Challenging market environment caused a dip in sales in 15 FY24
Slide 16: Reset and transform
DEVELOPMENTS LAST 18 MONTHS RESET AND TRANSFORM Significant strategic, operational and financial progress WHERE WE WERE WHERE WE ARE NOW Genuine Complex investment Simplified investment proposition innovation proposition De-risked with major CapEx projects completed in Attractive large Exposed to mu
Slide 17: Strategy
STRATEGY /\ accsys
Slide 18: Maximised returns, end-to-end process management
Maximised returns End-to-end process Grow our distribution channels Performance driven culture Embedded HSE culture management and geographies Engaged workforce Continuous focus on Deleveraged balance sheet Stable and reliable production New product innovation on ESG 18
Slide 19: Phases of the FOCUS Strategy
STRATEGY Phases of The FOCUS Strategy Phase One FY24-27 Phase Two FY28-30 Phase Three FY30 Transform and Improve Optimise Grow ✓ Operational efficiencies ✓ Expansion concept in the US ✓ Sustainable profitable growth implemented proved from existing assets – delivered ✓ Full nameplate capacity utilis
Slide 20: Phase 1 targets
OUR STRATEGY Phase 1 100,000m3 12% 30% > 75% Volume growth Adjusted EBITDA Gross Margin Operating cash flow *run rate end FY27 Margin conversion 20
Slide 21: Phase 1 and Phase 2 targets
OUR STRATEGY Phase1 2 Phase 100,000m 3 3 > 75% 120,000m 15%12% 30% 30% Volume growth Volume growth Adjusted Adjusted EBITDA EBITDA Gross Gross MarginMargin Operating cash flow *run raterate *run endend FY27 FY30 Margin Margin conversion 21
Slide 22: Key takeaways: reasons to invest
KEY TAKEAWAYS Reasons to invest 1 Unique genuine high-end patented product and technology 2 Large available growing market; pricing power 3 Passing peak investment provides substantial ROIC opportunity 4 Leaner, less complex, capable teams 5 Inflection point reached 22
Slide 23: Financial
Financial 02 Sameet Vohra CFO 23
Slide 24: Phases and sales volume growth
PHASES 1 AND 2 SALES VOLUME GROWTH Total 120k m3 m3 120 • Four reactors in ‘000s Total 100k Arnhem, two reactors in c. m3 Kingsport 100 35-40 c. 25-30 • Operational excellence 80 to deliver nameplate Total c. c. 61-63k 80-85 capacity m3 c. 60 63.3 c. 6-7 70-75 60.5 59.6 55.9 • 100,000 m3 volume at c
Slide 25: FOCUS strategy execution to drive revenue growth
FOCUS STRATEGY EXECUTION TO DRIVE REVENUE GROWTH €m 300 • Volume growth drives revenue growth Total CAGR +14%* c. 60 250 Group CAGR +11% • Geographical (FY25-FY30) c. 230 diversification 200 CAGR +11% (FY21-FY24) • Maintaining a high average selling price 150 162.0 c. 12 139,3 136,2 • Innovation wit
Slide 26: Gross margin underpinned by operational excellence
GROSS MARGIN UNDERPINNED BY OPERATIONAL EXCELLENCE • Operational efficiencies support Gross Margin at target level of 30% • Stable and reliable production maximising asset utilisation • SOLID roots, Lean Six Sigma programme implementation and greater automation • Supply chain optimisation for wood a
Slide 27: Delivering EBITDA growth and sustainable margin progression
DELIVERING EBITDA GROWTH AND SUSTAINABLE MARGIN PROGRESSION • Volume growth drives adjusted EBITDA growth • Profit growth delivered by increased volumes and operational leverage • Increased returns without significant increase in capital employed • Sustainable margin progression to target of >15% in
Slide 28: Free cash flow de-leverages the balance sheet
CAPITAL ALLOCATION • Strong conversion of EBITDA into operating cash flow • Target operating cash flow conversion > 75% • Disciplined approach to working capital management • Low maintenance capital expenditure (~ €3-4m pa) in strategy phases 1 & 2 FREE CASH FLOW DE-LEVERAGES THE BALANCE SHEET 28
Slide 29: Net debt – de-leveraging through organic growth
NET DEBT – DE-LEVERAGING THROUGH ORGANIC GROWTH 50 • Strategy execution will generate 45 44,1 significant increase in operating cash flow 40 37,1 • Growing the margin through operational 35,9 35 excellence 30 • Prioritising organic growth and balance 27,2 sheet efficiency 25 • Focus on capital alloc
Slide 30: Innovating for Growth
Innovating for 03 Growth Dr Pablo Steenwinkel, Group Director of Technology and Quality 30
Slide 31: Committed to continuous innovation
COMMITTED TO CONTINUOUS INNOVATION Disrupting the traditional wood market with our new technology and innovation Since 2007 we have significantly improved efficiencies: Production cycle times reduced by ~40% and further 5-10% opportunity under investigation. Batch volumes: increased 15% and further
Slide 32: Rigorous patent protection to 2040 and beyond
RIGOROUS PATENT PROTECTION TO 2040 AND BEYOND ACCOYA PROCESS ACCOYA COLOR TRICOYA PANEL TRICOYA PROCESS SECONDARY PROCESS 2010 2015 2020 2025 2030 2035 2040 2045 Production processes and products have been protected in 45 countries by 27 patent families Intellectual property: (>300 patents). - Conti
Slide 33: Innovation with new processes and products: what's to come?
INNOVATION WITH NEW PROCESSES AND PRODUCTS: WHAT’S TO COME? New wood species Fire retardant Accoya and source geographies (through partnerships) Process innovation: cycle time; Accoya Color energy efficiency; capacity utilisation product range expansion 33 Acetylated veneers
Slide 34: Lots to look forward to!
IN SUMMARY WE WILL CONTINUE TO DISRUPT THE TRADITIONAL WOOD MARKET WITH OUR NEW TECHNOLOGY AND INNOVATION THROUGH: PRODUCT: PROCESS: PATENT: PARTNER: Drive growth through Continuous improvement Further develop our Remain an attractive innovation and to support margin growth, strong patent position,
Slide 35: Operational Delivery Excellence
Operational 04 Delivery Excellence Hans Pauli, Arnhem Site Director 35
Slide 36: Arnhem site: delivery model key for the company strategy
ARNHEM SITE DELIVERY MODEL KEY FOR THE COMPANY STRATEGY • Production capacity 80,000 m³ • FY24 Production ~56,000 m³ • Arnhem facility operates at circa 17% EBITDA-margin • 150 colleagues ~100 production ~20 R&D + Engineering ~30 support functions • Innovation Hub • 20,000m² external warehousing 36
Slide 37: Operational optimisation: unlocking the full potential of our primary asset
OPERATIONAL OPTIMISATION: UNLOCKING THE FULL POTENTIAL OF OUR PRIMARY ASSET TRANSFORMATION PROGRAMME TO MAKE ARNHEM OPERATE LIKE A “SWISS CLOCK” End FY27 Focusing on zero harm Journey to Zero LTI ROADMAP 2025 - 2027 Reliability and availability ~20% increase annually from current volumes Operational
Slide 38: Mastering the supply chain end to end
MASTERING THE SUPPLY CHAIN END TO END PROCESS IS A KEY INGREDIENT Key to driving efficiencies, cash conversion Secured access to long term supply Investing in technology and Embed "end-to-end thinking" of cost competitive raw materials operating systems Highest quality at every step to reduce from d
Slide 39: Arnhem is past peak investment
IN SUMMARY ARNHEM IS PAST PEAK INVESTMENT AND EVOLVING TO BE A MATURE PRODUCTION FACILITY A SOLID PROFITABLE GROWTH WITH NO SECURED MAXIMISING BASE ADDITIONAL CAPEX: SUPPLY: RETURNS: Provides a sound platform for Ability to increase output by Secured and diversified Solid Roots to optimise further p
Slide 40: Sales and Marketing Acceleration
Sales and 05 Marketing Acceleration John Alexander Group Commercial Director 40
Slide 41: Versatile across a wide range of building types in core markets
VERSATILE ACROSS A WIDE RANGE OF BUILDING TYPES IN CORE MARKETS From high-end luxury through functional volume end application Residential new build and Commercial; new build refurbishment Historical restoration and Hospitality; new build refurbishment 41
Slide 42: Accsys
/\ Accsys
Slide 43: Our end markets
OUR END MARKETS FY24 Wood revenue split by product Estimated revenue split by end application FY24 Wood revenue split by pro estimate Accoya Accoya Color Accoya for Tricoya Cladding Decking Windows and doors Other applications 43
Slide 44: Well positioned for volume growth in major geographies
WELL POSITIONED FOR VOLUME GROWTH IN MAJOR GEOGRAPHIES Total volumes: FY24 actual: 56,568m³ FY27 target: 100,000m³ run rate Accoya Volume By Region (m³) 35.000 30.000 25.000 20.000 15.000 10.000 5.000 - UK-Ire Rest of Europe Nth. America Rest of World Accoya for Tricoya FY24 FY27 Directional Split 4
Slide 45: Pricing premium is reflecting the value add
PRICING PREMIUM IS REFLECTING THE VALUE ADD N. America: Cladding / Siding Germany: Decking UK-I: Windows & Doors Cost per unit of wood Cost per unit of wood Cost per unit of wood Thermally modified US hardwood Thermally modified US hardwood Accoya Kebony Accoya Accoya Ipe Ipe Clear grade cedar Grand
Slide 46: Winning value proposition across core product applications
WINNING VALUE PROPOSITION ACROSS CORE PRODUCT APPLICATIONS WINDOWS: CLADDING: DECKING: 240% Wood price premium 300% Wood price premium 250% Wood price premium 10% Finished window premium 60% Built deck premium 35% Installed clad wall premium Accoya Window Manufactured Cost Accoya Installed Cladding
Slide 47: A commercial model built to drive growth
A COMMERCIAL MODEL BUILT TO DRIVE GROWTH PRIMARY FOCUS TIER 1 TIER 2 TIER 3 Direct distribution and sales Indirect Education and awareness Sub-distribution Builder Retail / Lumber Yard Contractor Architect Approved manufacturer House owner Relationship and mutual performance Primary demand generatio
Slide 48: Regional strategy
EARNING THE RIGHT TO GROW REGIONAL STRATEGY North America Rest of Europe UK&I Rest of World and Mexico Select strong partners by region and Direct type Increase coverage Consolidate Consolidate in existing markets. Grow in new Increase decking penetration and Finished deck product to build Select st
Slide 49: Reaching the end user: enhancing digital marketing
REACHING THE END USER: ENHANCING DIGITAL MARKETING OUR DIGITAL STRATEGY WILL DELIVER RESULTS IN THESE AREAS: Launch customer portal – drive efficiency, enhance customer 1. experience and engagement Optimise digital experience through improved search rankings 2. and high-performance website Invest in
Slide 50: Commercial organisation built to benefit from group assets
COMMERCIAL ORGANISATION BUILT TO BENEFIT FROM GROUP ASSETS AND LEAD LOCALLY: Strengthening the teams in key regions to deliver on strategy Plan to increase headcount in US and Europe over strategy period Core market teams established, locally led and focused on Primary Demand growth with Group Marke
Slide 51: Significant potential to grow market share and retain pricing discipline
IN SUMMARY SIGNIFICANT POTENTIAL TO GROW MARKET SHARE AND RETAIN PRICING DISCIPLINE UNRIVALLED PRICING RIGHT TARGETED PERFORMANCE DISCIPLINE STRUCTURE STRATEGY Winning product Performance attributes Commercial Defined regional and enable maintenance of segment strategy in range organisation built pr
Slide 52: North America Market Penetration
North America 06 Market Penetration Rod Graf, Managing Director, Accoya USA Sergio Munhoz, Sales Director, North America, Accsys 52
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Slide 54: Unlocking the huge potential in the N. America market
UNLOCKING THE HUGE POTENTIAL IN THE N. AMERICA MARKET 8.6m m³ Market share opportunity Addressable market US Cladding, Current market share decking, windows and doors, <1% of addressable market Wood (addressable) 9,285 m³ Current market share US *Not to scale Source: US – Principia Report, UK & Rest
Slide 55: Channel strategy – increase product availability to the end user
CHANNEL STRATEGY – INCREASE PRODUCT AVAILABILITY TO THE END USER PRIMARY FOCUS Sub-distribution Builder Retail / Lumber Yard Contractor Architect Approved manufacturer House owner SELECT STRONG PARTNERS GROW AGGRESSIVELY END USERS & CONSUMERS 55
Slide 56: Expand direct distribution in Texas, California and Florida
SELECT STRONG PARTNERS EXPAND DIRECT DISTRIBUTION IN TEXAS, CALIFORNIA AND FLORIDA Expand footprint in high demand areas Existing distribution Added in last three months Northeast - Grow # of Outlets (Sub-distribution and Retailers) through current wholesalers Northwest – Focus on signing new high-e
Slide 57: Double number of outlets to improve finished product offer
GROW AGGRESSIVELY DOUBLE # OF OUTLETS TO IMPROVE FINISHED PRODUCT OFFER Sub-distribution Retail / Lumber Yard Approved manufacturer Increase significantly number of sub-distributors, retailers and approved manufacturers • Over 10,000 Tier 2 outlets in decking and siding Revisit current outlets to en
Slide 58: Boost end user awareness and education
BUILDING AWARENESS BOOST END USER AWARENESS AND EDUCATION Builder SPECIFICATION Contractor Architect • Accelerate architect training and interactions with dedicated resource to rapidly increase awareness, with a focus on decking • More aggressive investment in social media and digital to House owner
Slide 59: Key takeaways Accoya USA
59 KEY TAKEAWAYS ACCOYA USA • Ramping up production, progress made towards profitability – expected FY26 • Accelerated learning and supply chain optimization • Clear Go-to-Market strategy • Capable people on the ground and continuing to invest in commercial capabilities • Getting Accoya closer to th
Slide 60: Wrap up and Q&A
07 Wrap up and Q&A /\accsys
Slide 61: Accsys at an inflection point: key takeaways
KEY TAKEAWAYS ACCSYS AT AN INFLECTION POINT 1 Unique genuine high-end product and technology 2 Large available growing market; pricing power 3 Stabilised and de-risked business 4 Inflection point reached 5 Passing peak investment provides substantial ROIC opportunity 61
Slide 62: Q&A
Q&A Dr Jelena Jelena Arsic Arsic Van van Os, Sameet Vohra, John Alexander, Hans Pauli, Chief ChiefExecutive ExecutiveOfficer Officer Chief Financial Officer Group Commercial Director Managing Director, Arnhem Rod Graf Dr Pablo Steenwinkel, Sergio Munhoz GM Accoya USA Group Director of North America
Slide 63: Thank you for attending
Thank you for attending 63