Additional capacity comes at additional costs

Accsys Technologies 15 June 2022 Update
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Accsys Technologies

Additional capacity comes at additional costs

Capital raise/trading update

General industries

15 June 2022

Price

117p/€1.36

Market cap

£240m/€287m

€1.16/£

Net debt (€m) at 31 March 2022
(excluding leases)

27

Shares in issue

206.6m

Free float

35%

Code

AXS

Primary exchange

LSE

Secondary exchange

Euronext Amsterdam

Share price performance

%

1m

3m

12m

Abs

(13.7)

(20.8)

(29.2)

Rel (local)

(10.8)

(19.8)

(27.2)

52-week high/low

188p

114p

Business description

Accsys Technologies is a chemical technology company focused on the development and commercialisation of a range of transformational technologies based on the acetylation of solid wood and wood elements for use as high-performance, environmentally sustainable construction materials.

Next events

FY22 results

30 June 2022

Analyst

Johan van den Hooven

+44 (0)20 3077 5700

Accsys Technologies is a research client of Edison Investment Research Limited

To fulfil the ongoing strong market demand for its high-performance wood products, Accsys aims to expand its total processing capacity from 60,000m3 currently to 200,000m3 by 2025, with 60,000m3 coming on stream in the next three months. Construction delays in Arnhem and working capital needs were the main reasons for the €19m capital rise on 25 May 2022. We have updated our model and raised our revenue estimates, mainly to include the effect of higher pricing, but have lowered our profitability forecast by 14–22%, partly to reflect the mix effect of significantly higher revenue from by-product acetic acid sales.

Year end

Revenue
(€m)

EBITDA*
(€m)

Net profit*
(€m)

EPS
(€)

EV/Sales
(x)

EV/EBITDA
(x)

03/21

99.8

10.3

1.1

0.01

3.7

36.2

03/22e

121.1

10.4

2.3

0.01

3.4

39.4

03/23e

156.7

21.6

8.8

0.04

2.4

17.5

03/24e

194.5

35.1

18.8

0.09

1.8

10.0

Note: *EBITDA, net profit and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Equity raise for cost overruns and working capital

Accsys is still experiencing high market demand for both of its products – Accoya and Tricoya – but faces capacity constraints as the construction of new capacity is taking longer than initially anticipated. On 25 May, Accsys raised €20m (€19m net of expenses), which covers the €7m of cost overruns for reactor 4 in Arnhem (delayed by two months) and the remaining €13m will be used to provide working capital headroom for the ongoing business and expansion at Hull. Price increases have offset costs in FY22. However, this remains a headwind for the company to manage going forward, although it has introduced further price increases to help.

Updated estimates: Higher revenues at lower margins

We have updated our estimates published in our last update note. We have increased our FY23 revenue forecast by 6% due to the higher reported base in FY22 and to include the higher contribution from acetic acid sales. We have lowered our EBITDA forecast by 22% to reflect mix effects and the impact of higher raw material costs on gross margin. For FY24, we expect continued strong revenue growth and scale effects driving further margin improvement. Accsys seems on track for realising its targeted capacity of 200,000m3 by 2025 and, at current price levels, we estimate potential revenues of more than €325m at full capacity (versus c €120m in FY22). The capital raise has strengthened the company’s balance sheet and we estimate a net debt/EBITDA ratio of 2.6x in FY23.

Valuation: DCF offers upside

Accsys is currently trading on EV/Sales of 2.4x and EV/EBITDA of 17.5x in FY23e. Our updated model is based on four reactors in Arnhem and two in Hull. Our group DCF also reflects the separate value of the Accoya US joint venture (for 100% as it is under construction) and the Tricoya project in Malaysia (for only 50% as that project has yet to be committed). This all points to a value of €1.95 per share.

Capital raise for cost overruns and working capital

To expand capacity and set up a range of production facilities for its high-performance wood products Accoya and Tricoya to fulfil ongoing high market demand, Accsys has regularly tapped the market for new financing:

At the end of 2019, Accsys raised €43m (net of costs) for the expansion in Arnhem with the fourth reactor adding 20,000m3 to the existing 60,000m3 capacity, while also upgrading wood stacking and wood handling capacity. Planned investments at the time were €26m. This capital raise also financed cost overruns in Hull, preliminary evaluation work for the Accoya plant in the United States and working capital.

In May 2021, Accsys raised €35m (net of costs) for the planned construction of an Accoya factory in America, together with its 60%/40% joint venture partner Eastman. The companies expect a total investment budget of US$136m including US$70m in a bank loan and US$10m in working capital financing.

In May 2022, Accsys raised €19m (net of costs) to finance cost overruns in Arnhem and working capital requirements related to anticipated capacity expansions.

In its press release on 25 May 2022, the company stated that its cash headroom at 30 April 2022 was around €8m, which has been affected by several factors: 1) the changing economic environment leading to higher working capital (higher inventories) and higher volatility in acetyl prices; 2) additional costs related to the construction of the first Tricoya plant in Hull; and 3) additional costs and lower cash generation in Arnhem due to delays in the construction of the fourth reactor.

To finance the Hull plant, Accsys had also provided a loan of €17m to Tricoya UK, which has lowered its cash headroom for the time being. The lower than anticipated cash headroom was also a reason for the capital raise, which is further explained in detail below.

Additional costs for Arnhem fourth reactor

On 4 March 2022, Accsys provided guidance for the fourth reactor in Arnhem being operational in April after the test runs with its new wood stacker had already started. Following our plant visit in February and the company’s trading update in March, the company faced problems with the delivery of equipment, as well as challenges in the final installation and pipework tie-ins. This resulted in a second plant shutdown, which has delayed finalisation of construction of the fourth reactor by a few months until June 2022 and caused additional costs of €7m.

Working capital needs for higher capacity

The pace of capacity expansion, with Arnhem and Hull combined doubling the company’s capacity to 120,000m3, also requires more working capital, for which the remaining €13m of the recent capital raise will be used.

Additional funding of €3m for the Hull plant, which is currently in technical default. In our opinion, the easiest way to bridge this funding gap is for Accsys to extend its current loan of €17m to Tricoya UK by €3m. Bank requirements during construction are that the project is fully funded and after the start of production at the plant, bank covenants will be in place.

Provide contingency for its investment programmes in FY23.

Manage higher costs for logistics and inventories as well as volatility in the supply chain and acetyls costs.

A total of 13.8m new ordinary shares were issued, bringing the total number of shares outstanding to 206.6m (+7.2%). with the most recent list of shareholders holding a stake of at least 3% in the company shown in Exhibit 1.

Exhibit 1: Shareholder overview

Shareholder

Stake

Teslin Capital Management

16.2%

De Engh

11.2%

BGF

7.1%

Janus Henderson

5.4%

Decico

5.4%

VP Exploitatie

5.0%

London & Amsterdam Trust Company

4.7%

ABN Amro Private Banking

3.8%

Saxo Bank

3.3%

Fidelity International

3.2%

Total

65.3%

Shareholder

Teslin Capital Management

De Engh

BGF

Janus Henderson

Decico

VP Exploitatie

London & Amsterdam Trust Company

ABN Amro Private Banking

Saxo Bank

Fidelity International

Total

Stake

16.2%

11.2%

7.1%

5.4%

5.4%

5.0%

4.7%

3.8%

3.3%

3.2%

65.3%

Source: Accsys

Capacity expansion planning

Accsys has faced capacity constraints for the last few years, as it cannot finance and build capacity quickly enough to fulfil the high market demand for its products. Growing demand for sustainable businesses is creating robust demand for Accsys’s high-performance wood products, which provide a sustainable alternative to hardwoods and other materials. The market opportunity is significant, with Accsys having only a 2% share of the 2.6m m3 addressable market. The Arnhem facility produces Accoya and the Hull facility will soon produce Tricoya. Both are understood to be sold out. With strong demand and restricted capacity, the group has been able to push through price increases that have offset input price increases. Management again stated that the strategy to expand its total capacity to 200,000m3 by 2025 is on track, which we summarise in Exhibit 2.

Exhibit 2: Accsys’s capacity plans

Location

Capacity m3

Timing of capacity

Potential revenues, €m

Arnhem, the Netherlands

80,000

June 2022

160

Hull, UK

40,000

July/August 2022

40

Kingsport, US

43,000

Q224

86

Malaysia (as example of second Tricoya plant)

40,000

Q1–Q225

40

Total

203,000

326

Source: Accsys, Edison Investment Research

Arnhem, the Netherlands

The Accoya facility in Arnhem, the Netherlands, is currently Accsys’s only operating plant with capacity of 60,000m3 and, after the announced delay of a few months, the fourth reactor will be operational in June 2022, bringing total capacity to 80,000m3 (our estimate is that capacity could be a few thousand more m3 due to efficiency benefits). Based on the current price for Accoya of €2,000 per m3, total Accoya wood revenue could be €160m within the next two years as management anticipates a two-year ramp-up.

The new and much larger wood stacker, which is necessary to handle the higher volumes of wood, has been tested and fine-tuned (capacity is around 100,000m3). This stacker is much more modern, scanning all wood for quality (holes or cracks) beforehand and clearing it of dust, which is stored separately (to meet ESG standards).

During our site visit to Arnhem in February 2022, Accsys commented that it identified that its present site may have the potential to add two more reactors, but it hasn’t formally scoped this yet. In due course, this could add another €80m in revenues (at current price levels), albeit depending on successful financing but with more capacity coming on stream the company will be increasingly able to finance further expansion from its own resources.

Hull, UK

In the absence of a Tricoya plant in the past few years but for the use of market seeding, Accsys has been selling finished Accoya to Medite and Finsa, which process the wood to fibres which are then compressed to Tricoya panels. Accsys expects the plant in Hull to be operational in July/August 2022, requiring additional capex of €9m in FY23. The plant will have initial capacity of 30,000 metric tonnes of wood chips, which is equivalent to 40,000m3 of wood panels. Accsys said it expects a ramp-up period of three years and to reach an EBITDA break-even level at 40% of capacity. The gross margin of this Tricoya plant could be 40%, compared to 30% for the Arnhem Accoya plant. The reasons for the difference in margin are the continuous process for Tricoya versus the batch process for Accoya and the sourcing of any kind of wood locally rather than particular wood from New Zealand.

At full capacity, the Hull plant can deliver €40m in revenues, with the investment decision for expansion to be made in summer 2024 (we estimate at costs of around €50m).

Kingsport, US

Together with its 60%/40% joint venture partner Eastman, Accsys USA is planning to build the first Accoya factory outside the Netherlands, with the Arnhem plant as a blueprint. All environmental and construction permits have been already secured, materials with long lead times were ordered in 2021, financing was finalised in early March 2022 and in April the ground was broken. The facility will be built at and connected to the existing Eastman site in Kingsport, Tennessee, with agreements in place for ‘closed-loop’ reuse and recycling of acetyls. According to Accsys, the initial capacity of the two reactors being build will be 43,000m3 (previously communicated 40,000m3), with room available for another six reactors bringing potential capacity at the Kingsport site to more than 170,000m3. Based on the current price of Accoya of €2,000 per m3, this would bring the initial revenue level of the plant to €86m (potentially more than €320m if the plant ended up with eight reactors at this site). At the time of the capital raise for the US project, in May 2021, Accsys expected to realise revenues of US$ 90m at full capacity in the third year of operation, with a potential gross margin of at least 35% and EBITDA margin of at least 25%.

Exhibit 3: Time schedule for Accoya plant in Kingsport, United States

Source: Accsys Technologies

According to Accsys, independent research has shown an achievable market in North America of at least 10 times the initial capacity of its Accoya plant in Kingsport: between 440,000m3 and 950,000m3 per year. As such, there seems ample market opportunity to gradually expand the capacity of the Kingsport plant to more than 160,000m3 in due course.

Malaysia

In January 2019, Accsys announced that it was exploring the opportunity for an integrated acetic anhydride and Tricoya production plant in Malaysia with partner Petronas Chemicals Group Berhad (PCG). The plant will use the acetic acid from PCG's existing joint venture in Malaysia. We assume that the first reactor will be the same size as the one in Hull, producing wood chips for about 40,000m3 of wood panels.

The timing of the second Tricoya plant will be dependent on the planning of the ramp-up of the Hull plant as this will be the blueprint. After several delays over the past two years, the commercial start of Hull is now expected in July/August 2022. After at least six months of testing and two years of construction, the second Tricoya plant could be operational in Q1 or Q225, with Accsys also having to decide whether the second plant will be built in Malaysia.

The initial budget for Hull was €68m, so we assume capex for Malaysia to be €70–80m, with potential annual revenues of €40m (at current price levels).

Total capacity of 200,000m3 in 2025

Based on the above, we believe Accsys is on track to expand its capacity to 200,000m3 by 2025. We also estimate that it may need another capital raise to fund the Malaysian Tricoya plant, although the company will also be increasing its own cash generation and ability to fund capex in the coming years. Currently, no details are known about the construction planning or financing. However, if we assume an equal two-way partnership (like Accoya USA with Eastman), the investment for Accsys will be more than €20m.

Revenue growth in FY22 on higher prices

Ahead of the full set of FY22 results on 30 June 2022, Accsys provided a trading update on the headline developments in the last financial year.

Exhibit 4: Headline development FY22 (ending 31 March 2022)

€m

FY21

FY22

Change y-o-y

Accoya wood revenues

91.1

105.0

15%

Accoya volumes, m3

60,466

59,649

-1.4%

Total revenues (Edison estimate)

99.8

121.1

21%

EBITDA normalised (Edison estimate)

10.3

10.4

0%

Net debt reported

11

27

245%

Source: Accsys, Edison Investment Research

According to the company, Accoya wood revenue increased by c 15% to €105m, following the 12% increase over the first 10 months of the year, reflecting 27% growth in the last two months of the year. The revenue increase was driven by price increases as volumes were 1.4% y-o-y lower at 59,649m3 due to capacity constraints and a temporary plant shutdown related to the construction of the fourth reactor in Arnhem. Since 2020, capacity has been restricted to 60,000m3 in Accoya in Arnhem. Accsys has raised its prices several times over the past year and these have offset the significant increases in raw material costs (mainly acetyls). It is planning another price increase in June 2022, to further offset higher acetyls prices (we estimate in the high single-digit range).

Accsys has not provided FY22 group revenues yet, but we estimate a level of €121m (+21%), as revenue from the by-product acetic acid this year is much higher compared to last year, driven by price increases in acetyls (in H1 these revenues increased from €2.7m to €6.9m).

Gross margin will be lower compared to last year due to mix effects and the impact of higher cost of raw materials. Management indicated that group EBITDA expectations are in line with company guidance of 4 March, although the delays in Arnhem led to lower EBITDA and cash generation between December 2021 and May 2022. Consensus for FY22 EBITDA is currently around €10.5m and we forecast €10.4m, unchanged from our last published FY22 estimate.

Net debt increased from €11m last year to €27m (excluding lease liability of c €6m) at the end of March 2022, or €55m when adjusted for committed investments in Q123 for the Accoya joint venture in the US. The recent capital raise was also intended to strengthen the company’s balance sheet. We estimate an improvement in net debt/EBITDA to 2.6x in FY23, down from c 3.0x in FY22.

Estimates: New capacity kicks in this year

Accsys traditionally does not provide guidance for the current financial year. To cope with current inflation levels, the company mentioned that it will raise prices again from June 2022 and it has already introduced an energy price premium from May 2022 (this to mitigate the effects of volatile gas prices, which affect the company’s acetyl raw material costs).

We have revised our estimates following the company’s trading update, the announced delay of two months in new capacity coming on stream in Arnhem and the capital raise of €19m. The company stated that production is back at full capacity after the second plant stop caused by the delay in construction of the fourth reactor. In this three-week period, Accsys also executed its annual maintenance stop of around two weeks, thus the net loss in working days in the current fiscal year for the three existing reactors is about one week.

We have slightly lowered our expected revenue growth rate for FY23 (to incorporate the delay in Arnhem), but due to the higher base in FY22 we raise our estimate to €156.7m (previously €151.3m). This includes the contribution from the ramp-up of volumes in Arnhem and in Hull. Gross margin should recover somewhat, driven by price increases and increased scale. Part of the volumes in Arnhem will be transferred to Hull, which will have a positive mix impact as Accsys will be able to produce more high-grade Accoya rather than the low-grade currently used to manufacture Tricoya panels. We estimate that half of the Accoya wood volume will be transferred to Hull this year, leaving 7,500m3 for FY24. However, we have lowered our forecasts for gross margin due to the lower base in FY22, the mix effect of higher acetic acid sales, the later than expected ramp-up in Arnhem and the impact of higher raw material costs. For the same reasons, we have lowered our EBITDA forecast. Driven by the estimated higher gross margin (despite higher acetyl costs) and operating leverage, we estimate EBITDA of €21.6m in FY23 (previously €27.6m), delivering a margin of almost 14%.

Accsys said that it expects capex of €57m in FY23, being largely the finalisation of the fourth reactor in Arnhem, the finalisation of the Hull plant and the committed €35m for the Accoya USA joint venture. FY24 will be the first year with a full contribution from the fourth reactor in Arnhem and the Hull plant, delivering an estimated 24% revenue growth to €194.5m and further EBITDA improvement to €35.1m (margin 18%).

Exhibit 5: Change in P&L estimates

€m

FY22e

FY23e

FY24e

Old

New

Change

Old

New

Change

Old

New

Change

Sales

114.0

121.1

6.2%

151.3

156.7

3.6%

193.2

194.5

0.7%

Gross margin

32.4%

29.6%

36.6%

30.8%

36.8%

32.7%

EBITDA normalised

10.4

10.4

0.3%

27.6

21.6

-21.6%

41.3

35.1

-14.9%

EBITDA margin

9.1%

8.6%

18.2%

13.8%

21.4%

18.1%

Net profit (reported)

-1.2

2.1

N/A

8.2

8.8

7.7%

16.9

18.8

11.0%

Net profit (normalised)

-1.3

2.3

N/A

8.2

8.8

7.7%

16.9

18.8

11.0%

Source: Edison Investment Research

Valuation

For the valuation of Accsys we use a discounted cash flow (DCF) model as there are no other listed companies with a business profile close to that of Accsys. We note that Accsys is currently valued at EV/Sales of 2.4x and EV/EBITDA of 17.5x in FY23e.

Our updated model includes our estimates for the Arnhem plant with four reactors and the Hull plant ramping up in three years’ time, followed by an expansion of the same size (40,000m3). We have also used a DCF for a separate Accoya and Tricoya plant and add to our overall DCF a value for the Accoya plant in the US, which is expected to be operational in Q224 (but is not currently included in our running model). We also add a value for the planned Tricoya plant in Malaysia (or an alternative location) with a probability rate of only 50% as that project has yet to be committed. The investment decision will be taken after the Tricoya plant in Hull has been operational for at least six months (January/February 2023).

Our DCF model is based on the following assumptions:

We only consider organic revenue growth in our model as we do not expect the company to be very active in M&A.

A terminal revenue growth rate of 2.0% as market demand for its high-performance wood products remains high in a market segment that is far from mature.

A terminal EBITA margin of 18% as Accsys is well on the way to further building its profitability, driven by expanding its scale.

Accsys’s tax rate will remain low due to fiscal facilities and the large amount of tax losses carried forward. In our DCF model, we use a normalised tax rate of 25% and have added the NPV of the tax losses, which we expect to be utilised over the next few years.

We use a beta of 1.25 to reflect the relatively small size of the company while it builds up a track record for successfully setting up a range of production plants over the next few years.

We set a risk-free rate and market equity risk premium of 3.5% and 5.0% respectively, delivering a WACC of 8.9%.

Our DCF model suggests a fair value for Accsys of €1.95 per share. The sensitivity analyses in Exhibits 6 and 7 show the fair value outcome under different sales growth, EBITA margins and WACC scenarios.

Exhibit 6: Accsys sensitivity analysis, WACC versus terminal growth rate

Value per share, €

Terminal growth rate

1.0%

1.5%

2.0%

2.5%

3.0%

WACC

7.9%

2.12

2.21

2.31

2.43

2.58

8.4%

1.96

2.03

2.12

2.22

2.33

8.9%

1.82

1.88

1.95

2.03

2.13

9.4%

1.70

1.75

1.81

1.88

1.95

9.9%

1.60

1.64

1.69

1.74

1.80

Source: Edison Investment Research

Exhibit 7: Accsys sensitivity analysis, WACC versus EBITA margin

Value per share, €

EBITA margin

16.0%

16.5%

17.0%

17.5%

18.0%

WACC

7.9%

2.23

2.27

2.31

2.35

2.39

8.4%

2.05

2.08

2.12

2.15

2.19

8.9%

1.89

1.92

1.95

1.98

2.01

9.4%

1.76

1.78

1.81

1.84

1.87

9.9%

1.64

1.66

1.69

1.71

1.74

Source: Edison Investment Research


Exhibit 8: Financial summary

€'m

FY20

FY21

FY22e

FY23e

FY24e

31-March

IFRS

IFRS

IFRS

IFRS

IFRS

INCOME STATEMENT

Revenue (reported)

90.9

99.8

121.1

156.7

194.5

Gross Profit

27.5

33.1

35.9

48.2

63.7

EBITDA normalised

7.0

10.3

10.4

21.6

35.1

EBITDA reported

10.0

10.4

10.3

21.6

35.1

Depreciation & Amortisation

(5.6)

(5.7)

(6.1)

(9.2)

(9.5)

EBIT normalised

1.4

4.5

4.4

12.4

25.6

Exceptionals (Edison definition)

3.0

0.1

(0.2)

0.0

0.0

EBIT reported

4.4

4.6

4.2

12.4

25.6

Net Interest

(2.9)

(4.1)

(3.2)

(3.5)

(4.0)

Results of associates

0.0

(0.1)

(0.1)

(0.1)

(0.1)

Profit Before Tax

1.5

0.5

1.0

8.8

21.6

Reported tax

(0.6)

(1.3)

(0.1)

(0.9)

(2.2)

Profit After Tax

0.9

(0.8)

0.9

8.0

19.4

Minority interests

1.5

1.4

1.4

1.0

(0.5)

Net income (normalised)

(1.1)

1.1

2.3

8.8

18.8

Net income (reported)

2.4

0.5

2.1

8.8

18.8

Average number of shares (m)

132.7

164.9

180.0

205.7

211.8

Average number of shares, diluted (m)

145.8

173.3

187.0

212.7

218.8

EPS normalised (€)

(0.01)

0.01

0.01

0.04

0.09

EPS normalised diluted (€)

(0.01)

0.01

0.01

0.04

0.09

EPS reported (€)

0.02

0.00

0.01

0.04

0.09

DPS (€)

0.00

0.00

0.00

0.00

0.00

Revenue growth

21.0%

9.8%

21.3%

29.5%

24.1%

Gross Margin

30.3%

33.2%

29.6%

30.8%

32.7%

Normalised EBITDA Margin

7.7%

10.3%

8.6%

13.8%

18.1%

Normalised Operating Margin

1.5%

4.5%

3.6%

7.9%

13.2%

Reported EBIT margin

4.8%

4.6%

3.5%

7.9%

13.2%

BALANCE SHEET

Fixed Assets

137.6

155.6

211.7

261.3

256.6

Intangible Assets

11.0

10.9

10.7

10.6

10.4

Tangible Assets

126.7

144.4

183.7

230.4

225.8

Investments & other

0.0

0.3

17.3

20.3

20.3

Current Assets

69.8

72.5

56.8

54.1

104.0

Stocks

16.9

12.3

17.3

22.3

27.7

Debtors

8.6

9.8

13.1

17.0

21.1

Other current assets

7.0

2.8

3.3

4.2

5.0

Cash & cash equivalents

37.2

47.6

23.1

10.6

50.2

Current Liabilities

24.0

42.3

47.5

49.6

57.1

Creditors

7.8

9.5

10.3

13.1

15.9

Other current liabilities

10.9

23.2

22.5

21.8

26.6

Short term borrowings

5.3

9.7

14.7

14.7

14.7

Long Term Liabilities

56.3

49.2

41.2

51.2

61.2

Long term borrowings

56.3

49.2

41.2

51.2

61.2

Other long term liabilities

0.0

0.0

0.0

0.0

0.0

Shareholders' equity

127.1

136.6

179.9

214.6

242.3

Minority interests

34.4

37.2

37.2

37.2

37.2

Balance sheet total

207.4

228.1

268.6

315.4

360.6

CASH FLOW

Op Cash Flow before WC and tax

10.0

10.4

10.3

21.6

35.1

Working capital

(8.3)

8.3

(8.6)

(7.7)

(2.8)

Exceptional & other

(2.8)

(1.9)

4.2

4.3

4.8

Tax

0.2

0.1

(0.1)

(0.9)

(2.2)

Net interest

3.4

3.4

(3.4)

(3.5)

(4.0)

Net operating cash flow

2.4

20.2

2.3

13.8

30.9

Capex

(22.6)

(13.7)

(62.3)

(58.8)

(4.8)

Acquisitions/disposals

0.0

0.0

0.0

0.0

0.0

Equity financing

52.5

9.4

38.5

22.5

3.5

Dividends

0.0

0.0

0.0

0.0

0.0

Other

(8.6)

(2.9)

0.0

0.0

0.0

Net Cash Flow

23.7

13.1

(21.5)

(22.5)

29.6

Opening net debt/(cash), including lease

48.1

24.3

11.3

32.7

55.2

Closing net debt/(cash), including lease

24.3

11.3

32.7

55.2

25.7

Source: Accsys Technologies, Edison Investment Research


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This report has been commissioned by Accsys Technologies and prepared and issued by Edison, in consideration of a fee payable by Accsys Technologies. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

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Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

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Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

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This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

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Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Accsys Technologies and prepared and issued by Edison, in consideration of a fee payable by Accsys Technologies. Edison Investment Research standard fees are £60,000 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2022 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for "wholesale clients" within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are “wholesale clients” for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a “personalised service” and, to the extent that it contains any financial advice, is intended only as a “class service” provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the "FPO") (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the "publishers' exclusion" from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

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