Slide 1: Ecosynthetix Inc Investor Presentation Fall 2020
ECOSYNTHETIX INC Jeff MacDonald | CEO Rob Haire | CFO Investor Presentation Fall 2020
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS Certain statements contained in this annual information form constitute forward-looking statements. All hedging strategy; insufficient insurance coverage; the impact of issuance of additional equity securities on the statements other than statements of historical fact may
Slide 3: Health & Safety of Our Homes and Workplaces
HEALTH & SAFETY OF OUR HOMES AND WORKPLACES ECOSYNTHETIX INC. 3
Slide 4: Essential Building Block for Progress
BIOPOLYMER PLATFORM ESSENTIAL COST STABLE COMMERCIALLY VIABLE BUILDING NATURALLY DERIVED SAFE VERSATILE BLOCK FOR FULLY SCALED LOW CARBON FOOTPRINT PROGRESS PURPOSE DRIVEN INNOVATION ECOSYNTHETIX INC. 4
Slide 5: Is the Pace of Change Accelerating
The financial year 2019* marks an important break in the trend as the climate footprint of the IKEA value chain decreased while maintaining business growth, decreasing to meet the baseline level of FY16. The IKEA Sustainability Report FY19 is released today and outlines progress from across the IKEA
Slide 6: Our Platform's Potential
OUR PLATFORM’s DOZENS OF SECTORS: 100’s OF PRODUCTS: potential: Essential Building Block for Progress PACKAGING MINING FURNITURE ONE INNOVATION: CONSTRUCTION PAPER AGRICULTURE TRANSPORTATION FOOD HEALTHCARE WASTE PERSONAL BUILDING MANAGMENT CARE MATERIALS ECOSYNTHETIX INC. 6
Slide 7: A Multiple Shots on Goal Commercial Strategy
1 PERSONAL CARE hair care A MULTIPLE SHOTS ON GOAL COMMERCIAL PAPER & PACKAGING STRATEGY label adhesives 1) PAPER 2) WOOD COMPOSITES PAPER & PACKAGING WOOD MATERIALS PAPER & PACKAGING 3) PERSONAL CARE reading and advertising paper for furniture, floors & construction solutions ECOSYNTHETIX INC. 7
Slide 8: Total Addressable Markets
Coated paper & paperboard market Urea formaldehyde TOTAL ADDRESSABLE MARKETS today’s potential: $15B wood resin market ONE PLATFORM – THREE PRODUCTS SB Latex $4B styrene-butadiene latex market Polyvinylpyrrolidone $350M hair fixative binder market ECOSYNTHETIX INC. 8
Slide 9: Products Resonating
PRODUCTS resonating: Essential Building Block for Progress LEADING GLOBAL COMMERCIALLY RETAILER VIABLE VERSATILE COST STABLE LEADING FULLY SCALED SAFE NORTH AMERICAN PAPER PRODUCER LEADING GLOBAL CHEMICAL LOW CARBON NATURALLY CO FOOTPRINT DERIVED ECOSYNTHETIX INC. 9
Slide 10: Roadmap
ROADMAP Accelerating the utility of WOOD COMPOSITE PERSONAL CARE MARKET: our platform DISCOVERY PAPER MARKET MARKET: SWISS KONO GLOBAL CHEMICAL CO biopolymer, by partnering with PATENTS REVENUES CASH-FLOW WOOD COMPOSITE POSITIVE RETAILER industry leaders with the market reach/access to make the bigg
Slide 11: Urea Formaldehyde: A Hazardous Ingredient in Wood Composite Binders
UREA FORMALDEHYDE: A HAZARDOUS INGREDIENT IN WOOD COMPOSITE BINDERS U F U F THE SEARCH FOR A VIABLE ALTERNATIVE WITHOUT FORMALDEHYDE (PERFORMANCE + PRICE) ECOSYNTHETIX INC. 11
Slide 12: Formaldehyde Recognized as a Human Carcinogen
FORMALDEHYDE RECOGNIZED AS A HUMAN CARCINOGEN Governments Restricting Industry is An industry poised for change Usage & Introducing Creating Tougher Regulation Standards Expert Agencies Have Spoken Formaldehyde listed as “known to be a human carcinogen” Classified formaldehyde as a “probable human c
Slide 13: Sustainable Living and Building
and sustainable living and building 0.005 ppm Independent third party testing of wood composite manufactured with DuraBind New emission legislation in Germany from 01.07202@ Californian / USA emission standard CARB II / EPA TSCA Title VI European industry standard mae 1920's *"Limits related to EN 7
Slide 14: DuraBind: No Added Formaldehyde… No Problem!
DURABIND: NO ADDED FORMALDEHYDE… NO PROBLEM! OBJECTIVE: TRANSFORM THE WOOD COMPOSITES RESIN MARKET WITH OUR PROPRIETARY, SUSTAINABLE NAF SOLUTIONS ECOSYNTHETIX INC. 14
Slide 15: Change Will Only Be Possible If We Collaborate
Change will only be possible if we IKEA has the intention to convert presently used adhesives systems from collaborate with others and nurture fossil based to bio-based systems entrepreneurship. We are committed to taking the lead working together with IKEA will continuously reduce the everyone – fr
Slide 16: DuraBind: A Co-Binder Replacing Formaldehyde Binders
DURABIND: A CO-BINDER REPLACING FORMALDEHYDE BINDERS MDI: A HIGHLY CONCENTRATED MARKET $22B Global MDI Market (~$1B wood composites resins) MDI MARKET SHARE (%) NAF OTHERS DURABIND MDI SOLUTION DOW WANHUA HUNTSMAN MDI MANUFACTURERS BASF SEARCHING FOR NEW COVESTRO ADDRESSABLE MARKETS ECOSYNTHETIX INC
Slide 17: Massive Market Potential for a No Added Formaldehyde Leader
MASSIVE MARKET POTENTIAL FOR A NO ADDED FORMALDEHYDE LEADER PMDI N.A. Share in OSB 22% 48% $15B Global Wood Resin Market 1987 1991 2016 Oriented Medium Density Particle Board Strand Board Fiberboard No Added Formaldehyde Market Share by Application Source: Transparency Market Research Report ECOSYNT
Slide 18: Progress on Personal Care
PROGRESS ON PERSONAL CARE Marketing and development partner secured Consumer demand for green ingredients driving change Partner seeding market with hair IS fixative formulations ALL-NATURAL Award-winning technology INGREDIENTS Formulation work on new VIEWED AS A MARKET products proceeding DIFFERENT
Slide 19: Paper Market Update
PAPER MARKET UPDATE Majority of our sales remain paper CONTINUES TO PROVIDE North American graphic paper down A FOUNDATION TO ~25% in Q3 EXECUTE COMMERCIAL ACTIVITIES IN OUR OTHER All accounts remain active, despite lower volumes IS TWO GROWTH MARKETS Resiliency of paper market to recovery uncertain
Slide 20: Q3 2020 Financial Results
Q3 2020 FINANCIAL RESULTS USD millions (except gross margin) Q3 2020 Q3 2019 YTD 2020 YTD 2019 Net Sales $3.0 $4.5 $10.3 $14.0 Gross Profit $0.4 $1.0 $2.1 $3.0 Gross Margin 14.8% 22.3% 20.0% 21.5% Gross Margin adjusted for manufacturing depreciation 21.7% 26.2% 25.6% 25.5% Adjusted EBITDA1 (loss) $(
Slide 21: Stable Bottom Line Despite Paper Headwinds
STABLE BOTTOMLINE DESPITE PAPER HEADWINDS Quarterly Adj EBITDA loss Annual Cash Flows from (used in) Operations (USD millions) (USD millions) Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 YTD 14 14 14 15 15 15 15 16 16 16 16 17 17 17 17 18 18 18 18 19 19 19 19 20 20 2
Slide 22: #1 Priority: Strategic Wins in Wood Composites & Personal Care
RETAILERS PULLING SUPPLY CHAIN TOWARD GREEN INGREDIENTS GREAT PARTNERS ENGAGED #1 PRIORITY: STRATEGIC WINS IN WOOD COMPOSITES & PERSONAL CARE MULTIPLE SHOTS ON GOAL TO SUPPORT COMMERCIAL SUCCESS ECOSYNTHETIX INC. 22
Slide 23: Questions & Answers
SSYNTHETIX® QUESTIONS & ANSWERS
Slide 24: Corporate Overview
CORPORATE OVERVIEW TSX Symbol ECO Shares Outstanding 56.7M Market Capitalization (as at Nov 30, 2020) CDN $180M Net Debt Nil Cash Balance (as at Sep 30, 2020) USD $42.2M / CDN $56.2M ECOSYNTHETIX INC. 24