Symphony Environmental Technologies (LSE:SYM) — Interim Results

0:01 Good morning, ladies and gentlemen, and welcome to the SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time using the Q and A tab

0:17 Thank you. It's appropriate to do so. Before we begin, we'd like to submit the following poll. And if you give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand over to CEO, Michael Laurier. Good morning. Good morning to you. Good morning, everybody, and thank you for joining this presentation. As I move to slide number two and then on to slide three, the introduction, we've broken it into four parts. So I'm gonna take you through four parts and explain the business itself.

1:07 So as many of you will know, this is SYMPHONY ENVIRONMENTAL TECHNOLOGIES listed on the AMARKET since 2001. And we are a world leader and developer of additives, sometimes called Masterbatch, for making plastic smarter, safer, and of course, sustainable.

1:39 To understand the business, you really got to understand the global issue. And the global issues are daily, and it's daily every day. Doesn't matter where you are in the world, you'll hear the issue of plastic pollution, microplastics, ban it, get away from plastics is evil, food preservation. You hear about crop growing, getting more a crop per acre. You're hearing of how essential water is. You're hearing of human safety. These are all major, major global pressing issues in today's world. This is what we're focusing on. And if you look at what we've developed, our technologies, we actually offer immediate solutions to those awful issues which every person on this planet is aware of.

2:38 And our solutions are scalable. In other words, scalable means pretty much instantaneous. You don't need new equipment. You don't need massive investment. And therefore, it's immediate. It's an upgrade to an existing pretty good product, polyethylene. And it's non disruptive. So the important part here is the implementation of our technologies means no material increase in cost. That's pretty important because today financially, everybody in the world is stretched. No change to machinery, no change to product quality is an upgrade to an existing product.

3:26 And of course, it doesn't upset the recyclability of a product, and it can be made from recyclate. And of course, the consequences of forcing change, which is ongoing, that we fight globally, is this the alternative products to polyethylene do increase CO2 emissions, something that we need to avoid, of course. And based on our studies, as well as other studies, continuation of polyethylene products that become biodegradable means that you're not increasing the life cycle impact of those products. And here you set the scene for our business. It's global.

4:12 It's dealing with the world's most pressing needs. So you look at SYMPHONY as a global solution, a solution where you're upgrading existing products, which means we're not involved in putting massive, massive amounts of equipment in. This is product development and sales and marketing. And so we look at some of the numbers. We see from this slide, globally, we're looking around about four hundred and four four hundred and thirty or 4,000,000,000 of value in the market that we're trying to put our products, which translates to something like 367,000,000 tons massive of products produced every year. And of course, very little of this is collected, processed.

5:14 So our solution, what is it? Some of you will know, some of you won't know, but it's good to remind ourselves what is this business all about? Traditional plastics, you manufacture it, you use it, and 86% of it gets discarded globally. Could end up man fill or it could end up as litter. And, of course, as we know, these plastics can last for decades, more than thirty years, some say thousands of years, but essentially an awful long time.

5:46 To our solution, at the manufacturing phase, you add generally 1% of our biodegradable technology, or maybe 1% of our antimicrobial during the manufacturing process. That's why you don't need to change your equipment. It goes seamlessly into the extrusion process. The DTP technology will enhance the properties of that plastic. It will give it antimicrobial, in some cases anti insecticidal, in other cases flame retardant, and so on. And so we improve a boring product. We give it some interesting dynamics. We make it intelligent. And that's what D2W will do. We will make it self destruct if it ends up in the open environment.

6:33 And of course, we make it self destruct, and then it organically returns back to nature, becomes food for bacteria and fungi. That's an overview of what our addition to normal plastics will do. Additives, master batches, we make those pieces of plastic far more smarter than they already are. And that, of course, has got value. But look at where we are. Since inception, since 2001, our sales have been something in the order of a £142,000,000 worth of products. There's a lot of products that we've sold in that period of time. You're looking at a business that's capital light, has more than 40% gross margins, and is operationally geared.

7:24 Operationally geared because essentially, we have a distribution model. It's their investment into the marketing and sales of our products. And that's the way this can scale up pretty fast and is set to scale up very, very fast. Investments, dollars 3,600,000 so far in terms of R and D and investment. 7% of our revenue is invested into research since 2015. And, of course, you can't get world domination or even attempt to get world domination unless you've got some very, very powerful partners. So we have announced relationships with a group of Imbo in a major, major supply agreement.

8:11 But of course, they were one of the first large corporations to start using our D2W technology. We announced a very, very powerful relationship within Durama Corporation. And we also announced some really, really interesting relationships with Ribulus, who are very, very large company producing irrigation pipes. I'm going to tell you a little bit more about that as we go more into the presentation. And of course, we've got 60 plus live opportunities from rigorous onwards where we are engaging in lots of customer trials to move much, much further globally into some of these great technologies that we've got today.

8:59 So where do we come from and where are we going? Our growth journey started in 'ninety five. We got listed in 2001. We became a pioneer in 2003 on biodegradability using the water droplet logo, D2W. We enhanced our product range and focused on being a multi technology supplier and launched our D2P technologies in 2015. They've continued to develop over the years. Huge amount of time and investment have gone into those, primarily into the antimicrobials. And in 2019, we were awarded the Green Economy mark from the LSE and have a listing in relation to the work that we've done globally.

9:53 And then you see a significant investment over time by VINCEL. They recently have moved their holdings into another company called CPearl. But who are VINCEL? The owners of VyndaL are the Indorama family. So, you start to see the link. Who are these large investors? Our strategy has always been to encourage investors to promote, be part of the commercial activity, and here's a very, very good example of that working. And then announced in 2020 that we finally got, after years and years of research, more than 10 FDA, U. FDA approval for our DTP for bread packaging. It was a mega step forward, very, very difficult to achieve, and left us being the only player in the world that's got this approval. No other company has FDA approval in The United States Of America to put their technology into bread packaging.

11:05 We added to that by saying that one of our technologies was effective against the COVID nineteen, showing a ninety nine point nine percent kill rate in just one hour. I think we've a similar number now in ten minutes. But the interesting part about the technology is it's protection for life. You put it into a glove, you put it into a face mask, you put it into a chopping board, you give it the antimicrobial performance for life. And that's what's so interesting about that technology. And now into more recent years, into the 2021, 2022, you start to see an interesting development. You see the JV in India with Indorama Corporation.

11:59 We get the small caps award 2021. We get the Canadian food approval following The US food approval for bread in 2021. And we announced very, very recently positive changes to the regulations for our biodegradable technology in Peru and Mexico. Huge fights, huge amount of investment going into advocacy, demonstrating to politicians that ours is a proven viable option. And then, of course, we announced this year a very exciting step forward with our group of Imbo, the world's largest bread manufacturing company in relation to our DTP. It shows there must be tremendous value to enter into an exclusive agreement just for us and also for them. It's a great, great partnership.

12:51 And then Ribulus, a very, very large Israeli company actually, recently merged or taken over, have recently accelerated their sales with their irrigation pipes with our insecticide technology. So in other words, they could sell a pipe, a water irrigation pipe or hose around the world and claim that the insects, instead of attacking the pipe to try and get to the water, will go the other way. It repels those insects.

13:25 And we've given them a competitive edge that their competitors don't have. They're excited, we're excited, we see massive growth in relation to insecticidal technologies. But not just into the pipes, but into other areas. And then, we announced very, very recently that in India, the regulations exempt biodegradable products from being made into three times the current thickness. In other words, the legislation in India, like most countries' legislation trying to deal with plastic pollution, they decided that they would ban products that were not biodegradable or compostable, or they would force people into increasing their thicknesses by up to three times.

14:14 Spectacular announcement that then resulted into us putting some numbers down on our recent communications. So that's the sort of short growth journey that we had. And moving on to Ian Bristow's part. Yeah. Hi. Good morning. I'm Ian Bristow. I'm the CFO of SYMPHONY. Michael and I together with a couple of other people founded SYMPHONY all those years ago. Thank you, Michael. So I'm gonna gonna concentrate on the headlines of our interim financial statement that we released to the market last week. In summary of our business financially, we're all high margin, and we strongly invest in r and d and operations.

15:00 The most significant part of our business financially is that we are operationally geared. So with all these exciting developments, relationships, products that we have as we see them come in commercially, then it should transform into profitability very, very quickly. And that profitability, we believe, should be on a good gradient as revenue grows on a good gradient as well. But international, very much international. Our selling selling markets are everywhere from Europe to China to Middle East, Korea, parts of Africa, the whole of The Americas as well. So we have blocks blocks of revenue in all those areas.

15:47 In terms of manufacturing, we we're not manufacturers ourselves. We're CapEx light as a business. So we use what we call toll manufacturers globally positioned in the main continents around the world. It gives us pretty much unlimited capacity for our products, and, also, it saves c o two emissions and also costs for shipping costs, etcetera, etcetera, and it allows us to deliver efficiently to our customers in our global locations. And in terms of the costs that we've got as a business, it's really established this global infrastructure, where our cost base is set up for much higher global revenues. So the table there is a brief highlight of the half year for 2022 compared to 2021.

16:39 And what I'll do, I'll go through those in a bit more detail in the next slide. So this slide is is our statement of comprehensive income or profit and loss account. So the revenue primarily was softer due to a number of reasons. One of those was some destocking in our Middle East area. The reason for that is, quite simply, is the is the switch of manufacturing. So manufacturing for that area was held in the Far East. That manufacturing plant still continues supplying the Far East region, but you'll see in in August that we signed an agreement locally for manufacturing in that region, and that led to destocking in the region and and and a reduction for revenues for us, invoice revenues during that

17:25 period. And that that is reversing as we speak. The actual logistics is so sorry. The the manufacturing itself is great for SYMPHONY. It enables cheaper products. It enables better working capital control. And, primarily, it's better for the market. They prefer local production, and it's in an area where regulation is in is in our favor for our product. Also, our glove strategy as well. So there was over a million pound of gloves sold in the first half twenty twenty one. Zero glove sales in 2022. Our strategy is to change from selling commodity gloves into a much more, technical glove with our antimicrobial included, and, we're still on the path of getting our European, CE marking for those gloves and, anticipating that during the back end of this year.

18:15 Gross margins softened as well during the period. Really, there was high raw material costs and also other costs, regulatory costs in there. And again, these are reduced and actually moving back to normal levels as we go into as we are into half two and going into next year. Distribution, were very, very high, and also distribution was an issue because of COVID. We're finding ships missing ports, not not arriving when they should, all because of COVID, and and and a lot of lot of the boxes containers were stuck in China in various parts of the world. That led to some revenues slipping, but it also led to extreme extremely high distribution costs. Again, with our factory factory chain, especially for The Middle East, that mitigates that risk for us going forward. And we're seeing costs now soften during this during this half too. In terms of our administrative expenses, this is all part of us being operationally geared.

19:13 Those costs are there. They're they're there to sustain a much high revenue business. Within that, we have our head of sales, head of operations, head of procurement, innovation director, and four teams behind them operating and working this pipeline

19:28 and working our various factories around the world. As I said, could could withstand much higher revenues than than where we are at the moment. And you'll see also within there the small little 22,000 costs, which is the, the share of the joint venture costs for the first few months of this year. So the joint venture started trading in February, and we'll discuss that a little bit more as we go through the presentation.

19:52 So in terms of our balance sheet, really, in terms of the strengthening of the balance sheet, we, there was an equity fundraiser of £1,000,000 with CPEL. Now CPEL were. They've changed changed the the investment holding company there. They currently own 17.4%, just behind Somerset who have just over 18%, really demonstrating their support for SYMPHONY. Now the owners of CPO are the same family as Indorama Corporation who are the same family as the the joint venture partners in India. You So can see they're following on from what Michael was saying there, which is their their support and their integration and part of SYMPHONY and part of SYMPHONY's move forward. Within our assets, noncurrent assets,

20:38 you can see property, plant, and equipment, fairly light there for the business. There's no intention of increasing that of any material value. Investments there, the interest in joint venture, it was a $6,070,000 pound investment of which is under equity accounting. So we're only accounting for the profits losses of the joint venture. So the costs, the first half go against the interest. And then you've got the investment of 123,000 there. That's our investment in Era Nova.

21:06 And Michael will go into a little bit more detail about that a bit later on in in the in the in our presentation. Inventory is quite high. We keep high inventories. It's very important that we keep our raw materials at at very good levels, our active ingredients at very good levels, and we do that across the world. Very important for us not to not to run out. So we have a good strategy there. Trade receivables, reduced from December. Revenue had reduced. But receivables, we do offer long terms. Our terms are fairly long, and but they are all primarily a tradious credit insured. So it allows us to trade within these regions, using credit insured. So our receivables are underwritten. And just on the cash flow statement there, the main movement, from in terms of our working capital cycle was the reduction in debtors of about 500,000.

21:59 And you can see that our net cash used during the first six months, 700,000, and that we sort of we've repaired that with the million pound placing since the year end. And we have a very good relationship with HSBC. We use invoice financing. It's a 1,500,000, and the board has stated and continues to state that we have sufficient working capital, not only to support the business, but to to really grow grow going forward. And with our with our various manufacturing plants, we're able to turn over orders very, very quickly. The lead time for manufacturing is very, very quick. And being a high margin business, cash creation, cash generation is extremely quick as well. So if I just go through the brief highlights that we announced during the interim statement.

22:46 So for the first six months, supply agreement with Bimbo, which Michael just mentioned, the continued progression of our d two p pipeline, that's within the 60 projects, and some very, very good results on our antimicrobial insecticide and flame retardant that we're expecting to to result in orders during quarter four this year, and our changing glove strategy, which I've already discussed. And for d two w, it's not any regulatory advances, but we're also seeing commercial advances in The US. A very good agreement with a company called Better Earth who supply who supply the bottles to some very pro high profile vitamin companies in The US, and we hope to sort of update the market in the short, medium term on that as that develops. As Michael mentioned, d two w regulatory confirmation in Peru. Since the year end, there was

23:33 a new standard in Mexico. And we are looking at positive regulatory process also in in the key markets, essentially in South America. And within our within our expenditure, we've announced in the past advocacy that we employ and deploy in these areas. With Peru and Mexico, you can see that starting to work, and we can see in in other countries as well, further developments, which we hope to announce in due course. And just post period end, India, the big announcement of India, which Michael went through and we'll go through a bit later. The Rivulus orders of $300,000, significant jump there, and, we're we're expecting growth quarter four going into next year as well with with Rivulus. Middle East manufacturing, which I've been through, and strengthening the balance sheet, and, obviously, with the Mexican biodegradable standard.

24:24 So all showing movement going the right way. Michael, back over to you. Two w, many of you will know what it is, but it is an additive sometimes referred to as a polymer that you add to ordinary plastics that will make it biodegrade within a controlled period of time to biodegradable compounds which becomes a food source for bacteria. Right now, we're treating something like 200,000 tons of plastic per year. It's a pretty big number. But as we said in the beginning, globally, we're looking at markets, we say here, 370,000,000 tons. Number I gave earlier was about 400,000,000 tons.

25:11 In other words, it's a very big market, and we're aiming to take a a good chunk of that. But, of course, the important part is that less than 14% of plastic food packaging is recycled. So it's ending up in the environment. That's why you've got this desperation to do something with it. In terms of our evidence, we've got four decades of it proving that the technology really does work. And the most recent was an independent study done which we call Oxamar in France, funded by the government, the French government. And an interesting one done by Queen Mary University that essentially said our material will biodegrade 90 times faster than any other normal plastic material.

25:59 But that's only part of the huge amount of data that we've got in support of this technology. And a good snapshot, and I'm not gonna go through the detail of this, if you just look at the column on the left, d two w treated plastic, it will biodegrade on land. It will biodegrade in the oceans. It's nontoxic. In other words, it doesn't produce mice microplastics. It's fully recyclable. That's important. You don't mess up recycling. It can be made from recycling. It's the best in c o two emissions from any product, not just on this list, from any product. The the least c o two emissions in the entire process, and it's, of course, the lowest cost. Now if you look at the alternatives to that, ordinary plastics, you see an awful lot of no's versus our yes's.

26:50 Compostables, which is where the serious heavy money is, they don't even have all the yes's because they don't biodegrade on land and they're not recyclable and it goes on. And then we look at the ERANOVA. Ian touched on it, our investment in ERANOVA. We're taking bioplastics derived from green algae, toxic waste, and putting it into plastics, and we can combine that with our DGW. But not for today's presentation, but we are also in the renewable section. And the interesting part about that technology, for every one ton of product that we make, we capture one ton of carbon. And of course, as we said before, we've got a strengthening situation at the moment.

27:35 22 countries have adopted their legislation so far to mandate the use of biodegradable plastics, a combined population in excess of 750,000,000. And so a short snapshot of those countries, they're pretty widespread in colors on the map. I'm not going to go for every one, but probably one of the most significant other than, if you like, India is Saudi Arabia, in fact, the entire Middle East. They're very, very hot zones for us at the moment. But we are global. We're trying to deal with the global issue of plastic pollution. And what our structure is doing is we're full on in relation to communicating the credibility behind our technology.

28:29 And if we look at the d to p range technologies, the very, first here is the food additives. The issue is food spoilage and wastage. How can you minimize it? Well, use our FDA approved antimicrobial bread packaging or use some of our ethylene and moisture absorbers. You can control the life of bananas, for example, using our technology. Or we're doing some work on blueberries to stop them creating fungi and mold which should get in those little plummets. So all sorts of interesting areas that our D2P technology is being developed for and that we're working towards in that huge 60 plus pipeline that I mentioned earlier.

29:14 Go to the next, the water pipes. Water pipes, water tanks, a lot of work's gone into that, and we've got a number of projects moving forward. Keeping that pipe free from the buildup of biofilms is the main focus. Water, heat, sun, you create algae, you create biofilms, stagnation of water. Putting our technology into that keeps it clean, so it's got a lot of value. And of course, you put the D2P technology into household gloves as well as nitrile gloves, ongoing projects which are taking longer than we anticipated, but we're on course to get regulatory clearances. And then you look towards the flame retardant technologies we've got, an awful lot of formulations, an awful lot of standards.

30:00 And where we're indicating that we've got successful trials, successful tests, it means we've developed formulations and we've managed to have them tested to certain international standards that are required by the government specifiers of buildings. A number of great, great technologies we've got. But the most important thing is we've got a number of very, very substantial buyers evaluating the technology, and we hope to give further updates on our flame retardants as we have been in our insecticidals. And then of course in copper cables, we have anticorrosive and rodent propellant technology, another area of work that we're doing. And of course, as Ian touched on, there's a lot going on with Riverless and also with other companies similar to Riverless on a global basis on the insecticides.

30:54 Remember that all of these are additives that go into an existing product. So the speed of moving into substantial cells can be pretty short. And then, Ian, if you can go through this, please. Yes, of course. Thanks, Michael. Announced, Michael well, announced in his chief executive outlook, in the interims, a near term pipeline. This is a pipeline that we can see, the value in the pipeline, that we believe we can achieve as an annualized run rate, between now and during the first half of twenty twenty three. And it's really for a conversion of what we've just been discussing. It's it's the pipeline. It's the big relationships, contracts, some of the some of the products that we have. And we're we're able to break that down into into five areas just so you can get context within that. And the first one is our d two w, which we've been supplying for many, many years now. And if we just compare everything against last year's revenue, so 2021, our revenues for DHW is 7,200,000.

32:02 So we're expecting a near term annualized run rate of reaching 9,000,000. And where do we get that from? It's really in in two major areas. It's it's Latin America where we invested in our advocacy in the region, and we've seen some results in Peru and a new stand in Mexico. And that that continues, and we're confident that there will be further further wins in that. So that should should add should add to revenues. And also The Middle East, as discussed, having a local production now. And within The Middle East is is is is as Marco said, there's strong regulations there. And there's been a there's been a lack of proper enforcement. So revenues there's material revenues in the region that the enforcement could be better, and we're our understanding is that enforcement is gonna is gonna ramp up as such back into this year going to next year.

32:54 So those two areas alone should develop should develop the DFW revenues further, approaching annualized figure of about 9,000,000. So we're go on to bread. So bread in its own is its own segment here. It's a big it's it's our own technology. We're the only ones that have it. We're the only ones that have FDA approval, and we have a relationship and agreement with Bimbo. And we've been supplying Bimbo, if you remember, for the last ten or twelve years with D2W. So we've got a very, very close working relationship with them. And, as we go through the final, tests and trials and packaging discussions, etcetera, etcetera, we believe that the near term revenues for Bimba and for others because this because it's FDA, it's globally globally recognized.

33:40 It's a global, approval, if you like. Most countries would rely on The US and also Europe, for that matter, for various for various items. So we're seeing that could get to 2,500,000. It's a very high margin product for us, hence hence, the, the steep growth from zero there, is what we anticipate. For the insecticidal, revenues of about 100,000 only last year. This year should be about 600,000, and we're we're predicting a modest growth there per million. But Rigolus are looking to grow. Rigolus themselves have been taken over, so there's there's more opportunity there. Won't threaten us if anything that should improve that. And there are other areas, other sectors, other markets that we're working on. And, say, is Israel, which is Europe, but there's other parts of Europe. There's India as well, and we're looking at growth in The Americas. So that could be a lot higher than a million, but we've a million now.

34:33 Now the general is really our pipeline other than the above. So we've got 60 or so, customer led trials and tests. A lot of these tests are now successful, so negotiations are happening as we speak. So a revenue of 200,000 last year, so we've mark we put a marker for a million in terms of what our near term visibility is on all on all of those, and we hope there should be a lot more as we go to next year. And then the gloves, actually, the reduction there in gloves because of the EU certifications. So that will go from the million pound of of of noncertified gloves and low value glove last year to a more high value certified glove, but we expect that to start a little bit slower. And all of this excludes India, and, Michael will discuss India in a minute. But, India, as we announced, the same charity interims, they're looking at value starting of next year of £250,000 per month. And you've got to remember that SECRETY accounted at 46.5%, so it's not included in our in our revenue estimations.

35:32 Michael? Okay. Thank you, Ian. India, most recent, most dynamic at the moment. It's moving. And just sort of recapture where we are, it's it's obviously a population very large, 1,400,000,000 people. And very interestingly, our data indicates a market of 14,000,000 tonnes. That's a very, very big number. And it's that number of tonnes that's been targeted by the government to restrict, ban, do something with. So you begin to grow and get a picture together here. We formally the company with Indorama, and we formally announced trading starts in February of this year. So it's only this year it's been pretty, pretty fast. And we have a really, really good dynamic management team and people from the industry handpicked by Indorama that we have within that company.

36:30 We have a 46.5% holding. It's very, very deliberate because it needed to be Indian in all respects. India will support India, and that's why we announced that we had signed a exclusive manufacturing agreement with an existing Indian compound. So we no longer export products across the world into India, which wasn't very good for carbon footprint and certainly cost. So it's India, India, and India, and we have 46.5% holding. But with what I describe as the A team that we've got in there in terms of management. Now we announced because they're very, very confident that they've got this within their sites An expected level of sales of around £250,000 per month in very early twenty twenty three.

37:23 And you look at what's going on. We've got 16 hub distributors. These are seriously large distribution units. Units, businesses that understand the plastic industry already supplying their products into the plastic industry. So we're not talking about anybody that doesn't have the connections. We're talking about distributors that have got working relationships and got connections. And the general view is that they will have more than a 30 of those hub distributors. They're multimillion dollar businesses by h one two thousand twenty three. So there you set the dynamics. You can't get to these massive numbers without having the structure in place. And we had the structure, and we actually got the regulations.

38:13 And we're now seeing that biodegradable will be exempt. But it's got to be government approved technology in order to achieve that. But the general view at the moment is we tick all the boxes and that's only a matter of time and we get the official approvals on our technology. So yes, watch this space in India. We're pretty excited with it. It's dynamic. It's moving extremely fast. But consider this, it's not just about India. India will have a global effect just like Saudi Arabia. It means that there will stop products being exported into India that doesn't meet their biodegradability standards which is where Saudi Arabia is. And you'll be getting more news on that during the course of 2023.

38:59 You can't even ship a bunch of flowers wrapped in plastics or garments wrapped in plastics unless they're biodegradable. As well as food products, meats, all of that will be covered by these sort of moves that we've been working on for so long. So watch this space. It looks pretty dynamic. And of course, when we look at this pretty map here, the key opportunities, you can sort of start to see a growing footprint around the world. We've got rivulous on our insecticides. We've got US FDA or United States and Canada. Lots of stuff moving forward on that. This is all backed into 60 plus customer opportunities.

39:45 We've got the recent manufacturing agreement in The UAE. That's in place for similar reasons as we have India in place. They want locally produced products. It makes a cheaper product. It's more competitive. It's a preferred product. And we're doing that at a time when legislation is beginning to move very, very quickly towards quite aggressive enforcement. And then, of course, Latin America, we've often communicated on our strategy in Latin America. Latin America, they don't have sophisticated collection systems or recycling systems. So biodegradability that's approved by the governments is essential. And what you're seeing is we have a big tick from Peru.

40:33 We've got a standard that's just being published in Mexico. All these countries use vast amounts of plastics, And they have, going through their various parliaments, legislation that's going to make biodegradables the preferred technology to use. So I guess, in relation to Latin America, if I had to put a color on it, it's hot. A lot of movements, it's taking a long time, very difficult to predict timing, but we're certainly moving towards the finishing line on that. And of course, India, as I said to you, major, major, major. We've got great, great partners. We talk with them daily. We communicate daily. We're testing loads and loads of samples. But it's not just a D2W play. A very, very big play on antimicrobials for food packaging, not just bread, but other forms of food that we touched on, and a very, very big play on insecticides.

41:29 And remember, everything we do is synergistic. The same buyers would not just buy biodegradable, but they buy an antimicrobial, or they buy flame retardant. So our strategy was to widen the product range to be able to sell more and to be able to create more value for a single account. And that is the end of my presentation to Thank you. That's great. Michael, Ian, thank you very much indeed for updating investors this morning. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. But just while Michael and Ian take a few moments just to review those questions submitted already, I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your Investor Meet company dashboard.

42:16 Michael, Ian, as you can see, you've had quite a considerable number of questions submitted through today's presentation. And if I may, ask you to read out the questions and give a response, of course, where it's appropriate to do so. And then I'll pick up from you at the end, sir. Okay. Good. I'm gonna read out the first question by an individual called Paul M. Nice to meet you, Paul. Great question you raised, and I'll read it out. Clearly, this is an exciting time for the business. Yes. I agree with that. Moving into revenue uplift phase. One, can you help us understand how large the revenues could be in the next few years? Having won the bread business with Coupa Bimbo in South America, do you hope to win the rest of GB's business globally?

43:08 And this is an exclusive contract. Good questions. And of course, we've put ten years into bread. And we see this as a massive, massive market. And I think in one of our communications, we said The United States alone, the market for bread is around $20,000,000,000. It doesn't mean $20,000,000,000 worth of packaging. We sort of estimate that could be about a billion dollars worth of packaging that we would be treating just in that market. If we're the only player, well, our hopes are pretty ambitious. So I'll leave it to your imagination where we might be going with that. But we are in a very, very dynamic scenario with United States, Canada, Latin America, and of course, globally. It's not all about United States. It's not all about one company.

43:55 And moving on to the the second part of the questions in terms of revenue. Well, our own vision is global. I said that right in the very beginning. We're looking at doing something with that massive, massive billion, multibillion dollar market, either in flame retardants or in biodegradability or antimicrobials. You have to keep watching this space, look for our communications. We welcome interaction with shareholders or people interested and people that want to get involved actually because it's about communications. But it is a very, very big ticket item and we're looking at it on a global basis on sales potential many, many times greater than where we are at the moment.

44:45 I hope that answers your question, Paulette. Moving to a second question. John H actually says, and the legal action with the EU, any updates? No. There's no updates on the EU. That's an ongoing saga. We would guess that probably in the first half of next year, we we should have a hearing date. We feel pretty confident about it. But remember, the SUP directive, based on our legal interpretation, which we have very, very recently, it reconfirmed very, very securely that this is not our product that the directive bans. It bans a product that they call this oxo degradable, a product that will create microplastics, or a product that can't be recycled, a product that pushes up, if you like, CO2. It's got no environmental benefits.

45:45 Or in other words, the product they're banning is the opposite to our product, which actually achieves everything they're trying to ban. So we actually look at it as an endorsement. But too many people are confused, and that's why we took the legal action. I hope that answers your question. Gary M. Says, with SYMPHONY ENVIRONMENTAL PLC, an association with CPL TECHNOLOGIES, which now owns 15.4 of SYMPHONY ENVIRONMENTAL's capital, do you expect that SYMPHONY Technologies will in the near future find their way into the Indorama Group worldwide operations? Well, yes, we are working very closely with Indorama Corporation, obviously. And that's why they hold so much of us because they believe in what we're doing.

46:35 They're supporting what we're doing. And the first thing you've seen is a JV in India. Hopefully, you'll see more news from us in relation to Indorama. Other questions? What are your expectations on EU court case? I've given that one. Are the second half revenues so far making up the shortfall for the first half? Ian, would you like to cover that one? Well, we can't give you a trading update as such. So we've updated the market in terms of our what we're doing at the moment. So I think an update for that will be given at the right time in terms of terms of us. I think in terms of if you're looking at looking at where we're going, look at the pipeline, the 14,000,000 that we anticipate, and that's something we we are seeing from now until the first half of next year in terms of how that grows into an annualized run rate of 14,000,000.

47:36 So that's the answer to that question. I I have a question from Sammy that says, with Venmo's adoption of your DDP technology, how important is this validation, and how quickly can you expand this success into other large food companies? I think it's important to know we've got about ten years of data on this. And the data we've got consistently shows that using our technologies got pretty amazing results. It's very, very effective. So we've got a lot of data that already demonstrates that the product is effective. And group Bimba themselves, if they adopt it fully and we expect them to be well on course to do that, then the revenues there will be quite interesting to our shareholders. But there are a lot of other food companies that we're looking at. There are others that we're working the technology through, not in North America, but in other parts of the world. So bread is a big ticket item for us beyond our biodegradabilities.

48:39 So we'll keep shareholders advised on the progress on that. And Michael B also says, Does D2W work in plastic drink bottles, e. G, Coke? If not yet, are you exploring the possibility in the future? Absolutely, we are, but it won't work in PET. We sort of have an agreement with organizations like Coca Cola that we won't try and make a PET bottle biodegradable because they believe that they can pick them all up and recycle them. Well, I've got my view on that. I'm sure you've got your view on that. But there are other parts of the Coca Cola bottle or a water bottle like the one you're thinking about. The tops, the BOP wrapping around it that gives pretty colors, the shrink wraps that go around and brings all the bottles together, they can all be made biodegradable.

49:30 And we've got a lot of global discussions going on, trials going on and some people actually using the technology for that. Though, some types of bottles, but a traditional Coke coater Pepsi Coke bottle, the answer is no, this technology is not designed to work with that. Iain, would you like to pick up any of the questions? Sorry. I was just waiting politely waiting for you to finish there. D two p and d two w, do they work together for Michael b? Michael b's got a few questions I think I could quickly answer a few of them. So, yes, they do. So B2W and d two p do work together. Some applications, you you want the product to some of the d two p applications, especially in construction, pipes, etcetera, etcetera, you want product to last forever. But where products are potentially littered, then D2W can be added with D2P.

50:23 The EU nitrile glove certification, which I did mention during the presentation, we expect that quarter four this year. The trials, good question. So previously, we mentioned 100 trials, now only 60. That's more of a rationalization. So that's more of a focus. One was where he was at. And then since then, we've brought in a layer of heads, and it's been rationalized down to 60. So if anything, that's an improved or focused position of SYMPHONY. In terms of other bread manufacturers, we can't comment on negotiations with our bread manufacturers, but but we are as part of our presentation and part of the pipeline, yes, of course, it makes sense to be speaking to other bread companies globally where the Bimbo agreement doesn't cover. So the answer is there's various discussions going on there.

51:18 I think Okay. Let me come in on one here while I need to digest one or two more questions. Assuming transformation to profitability in the near term, what are your intentions with regard to share dividends? I think that's a smashing idea. We'd like to get into heavy profitability and present to our own board the idea of giving a dividend distribution. Too early to really define anything, but I'm sure that's something that the board would absolutely favor when we get to that point. Great question. There's a question on China. Excited to know of your joint venture in China. That was obviously last year. It wasn't a joint venture. There was an agreement in China. But China's been going through some issues recently. So it's not a market that we've concentrated on.

52:08 Although there's obviously work going on behind the scenes within China, our focus has been more on India and other parts of the world, over the last twelve months, but that's still there. Thank you, Richard l. In terms of Jason m, how fast can you make the plastic biodegrade if we had 2%? I think it's rather 1%. It's not as simple as that. There's an optimum addition rate that our master batch goes in at, and there's also other ingredients. It's not just a it's not just a catalyst that helps degradation. It's not for touch degradation. It initially breaks down the breaks down the carbon chains. There's also other elements as well because you don't want the product to break down too quickly. The product has to have a life, etcetera. So there's a lot of science behind that.

52:55 So adding 2% does not make it quick. In terms of how fast, we can make it as fast as people want it generally, but people generally want it to sort of degrade over a over a number of months, because it's the most important thing is to have the plastic serve its use purpose in the in the first place. So, yeah, it can take a number of months up to two years, basically, depending on on the requirement there. So thank you, Jason. Are we suing death for misleading parliament, ENN? That obviously results from, our colleague, Michael Steven, and his bioplastics news, column, which I we encourage you all to read, so subscribe to bioplastics news on that. I don't think that's really an option, but, obviously, we're finding DEFRA wanting in terms of their their advice, their memorandums on the use of various types of plastic.

53:49 We're finding that the responses that they asked for from various leading organizations hasn't quite given the evidence behind the various statements DEFRATE is making. But there's there's nothing more I can say on that. E and N, are we looking to repeat Indian bottle elsewhere? Yes, of course. With the right partner in the right area, that that will be a model that that may be appropriate in various parts of the world. Okay. So let me just step in while Ian takes a briefer briefer on that. Quentin B says your map of adoption is interesting, but why is it that so few of the first world economies, by far the most significant economy, have adopted your technology?

54:35 Well, first world economies, United States, EU, and areas like that. We think The US is wide open to us. They're in no particular direction. And we've got a lot of things going on in the EU. For example, the nutritional bottles of one project, there'll be others that we'll probably update the market on in due course. So I think for The US, we still got the usual battles between us and compostables. And the EU, we have, again, the reason we don't have any traction in the EU, we've got this huge thing with the EU parliament. And so we decided that we should focus our time into markets that do not have sophisticated waste management systems like we might have in the EU or other more sophisticated markets. We work on the countries that really needed plastic. They couldn't afford the alternatives. They don't have composting facilities.

55:37 They don't have the collection systems. Countries that need to recycle like India, they don't want to encourage products that would kill their recycling. And more important, costs. So you then begin to draw a map. You've got The Middle East that will never give up oil. That's never going to happen. They're not going to switch from oil to paper. So they're going to want to go for a biodegradable option that would encourage oil. That's why we're there. You've got Africa, and there's a lot more we're going be saying in relation to Africa. But that's fast developing. They use a lot of plastic, not just in carry bags, but for crop growing purposes. And the Latin Americas. Though in all these countries, massive, massive volumes of plastics were in the right markets. The volumes are in use, and they wanna do something with plastic pollution.

56:25 So we're in a perfect position. As I said in the beginning, the world is really trying to make serious changes right now. Our option is non disruptive. We're in the right markets globally at the right time with the right technologies. I hope that answers your question. And then Michael B said, is DGW FDA approved for food contact as well as D2P? Yes, it is. It is food contact approved. We've done a lot of work in things like meat products. Ian says, I submitted few questions via email just before the meeting. Hope you received them. Yes, I did. I don't have them in front of me, Ian, but happy to chat it through any time offline. They were quite simple, reasonable questions, but I don't have them in front of me. So my apologies on that.

57:17 Steven d said, is Bimba still a major d two w customer? Is it not moving to TIPA compostable? Well, they tried to go towards compostable. They weren't particularly excited at paying three times more for a product that wasn't recyclable. And also, a compostable product wasn't going to biodegrade in the open environment. So it didn't go down too well with them. No, they're still a major customer of ours. And as you would have seen in the last year, they officially launched their products with our D2W brand. So they're getting more and more into the program. Michael B. Says, what are your expectations on the EU court case compensation and changes of legislation? Our expectations are very, very positive. We think we will have a good chance at winning this. As for the compensation, it would be extremely nice to get the millions that we have in our case, but the most important thing is that we win the case, it sends a global message.

58:17 And I think our growth becomes even faster than it already is on biodegradability. I don't see any more questions. Michael, Ian, you've been absolutely brilliant. You've taken every question, and there are quite a few for you to go through this morning. So thank you to everybody for your engagement this morning. And Michael, Ian, thank you very indeed for your responses. I know investor feedback will be particularly important to you both, and I'll shortly redirect investors on the call to give you their thoughts and expectations. But I wondered if before doing so, may just ask you for a few closing comments just to wrap up with, after which I'll send investors for feedback. Thank you. Thank you. I hope everybody found this presentation interesting. What I really do want to get over is we're looking at the globe. We're looking at those main demands in the world. People are definitely wanting to do something with plastic pollution.

59:06 And the answer is not to ban it. Banning it creates all sorts of awful situations globally. You increase cost, increase CO two emissions, you destroy recycling. There's so many negatives in banning it. So this company has developed the technology, it's got proven technology that resolves that issue. We pretreat the plastic and we make it organically recycled back to nature. Is a great, great product. We're in the market at a great time, and our D2P technology just enhances our position by multiples. Delighted to make this presentation and would welcome any direct questions or emails beyond this presentation. That's great. Michael, Ian, thank you once again indeed for your time this morning. Can I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order the management team can better understand your views and expectations?

59:59 This may take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of SYMPHONY ENVIRONMENTAL TECHNOLOGIES PLC, I'd like to thank you for attending today's presentation. I wish you all a very pleasant morning.