Spinnova Plc’s Financial Statements Bulletin January–December 2023 (correction due to technical problem)

Company releases 28.02.2023

SPINNOVA PLC, COMPANY RELEASE, 28 FEBRUARY 2023,  (08:45) A.M. EET

Spinnova Plc’s Financial Statements Bulletin January–December 2023: Woodspin’s first commercial factory construction work completed and Spinnova team strengthened

This release is a summary of Spinnova’s Financial Statements Bulletin for January to December 2022. The complete report is attached to this release and available on the company’s website at https://spinnovagroup.com/reports/.

JANUARY–DECEMBER 2022

• Revenue grew to EUR 24 279 thousand (EUR 6 063 thousand).
• Operating result for the period was EUR -12 309 thousand (EUR -7 172 thousand).
• Total investments were EUR 16 293 thousand (EUR 4 366 thousand). The increase was mainly related to the Woodspin joint venture.
• Net cash was EUR 76 314 thousand (EUR 100 093 thousand).
• The number of permanent employees at the end of the period grew to 75 (58).
• Building our first commercial factory for Woodspin. In addition, feasibility planning for Woodspin’s second factory has been ongoing.
• Continuing to introduce new commercial products with brand partners, including adidas, Marimekko and Bestseller.
• Strengthening of key teams and management.

JULY–DECEMBER 2022

• Revenue grew to EUR 16 644 thousand (EUR 5 661 thousand).
• Operating result for the period was EUR -6 486 thousand (EUR -4 079 thousand).
• Total investments were EUR 8 859 thousand (EUR 1 414 thousand), the increase mainly related to the Woodspin joint venture.

• 1 August: Kim Poulsen started as CEO.
• 29 December: Board of Directors decided on a new share-based commitment programme for the CEO, aligning the CEO and shareholders, to increase the company’s value in the long term.

KEY FIGURES

1 The company’s potential dilutive instruments consist of stock options. As the company’s business has been unprofitable, stock options would have an anti-dilutive effect and therefore they are not taken into account in measuring the dilutive loss per share. Thus, there is no difference between the undiluted and diluted loss per share.
 

The number of shares used in the key performance indicators table are found in the Appendix on page 25.

Unless otherwise specified, all figures presented in this report in brackets refer to the corresponding period of the previous year.

BUSINESS PROGRESS IN 2022 AND OUTLOOK

The one thousand tonne Woodspin factory

The construction work for Woodspin’s first factory in central Finland was completed at the end of October, after which work to finalize the technology installations has continued. The factory has started up and has been producing fibre in February 2023.  The ramp-up will continue through the year 2023, gradually increasing production capacity. Spinnova’s textile development work continues, and we are planning to launch our first products using Suzano micro-fibrillated cellulose (MFC) as raw material.

Woodspin second factory

The market opportunity and ambition level to scale to one million tonnes with Suzano remains unchanged. Feasibility planning for the next plant progressed well during 2022. Both optimal size and comparison of brownfield and greenfield sites are under evaluation. Spinnova is actively working with Suzano to improve the efficiency of the raw material process. At the same time Spinnova continues to further develop the technology concept of the spinning process. The business case for the next Woodspin factory investment is being finalized and will use the learnings from the first factory as it ramps up production. It is therefore expected that the next Woodspin plant will be completed after 2024.

Respin

At the end of 2022 the Respin pilot line built by Spinnova produced fibre from leather waste raw material. Following the success of the pilot trials, Spinnova and ECCO have agreed to proceed towards commercializing the product and to go ahead with a feasibility study and pre-engineering of the first commercial factory, which is planned to be located in the Netherlands.

Other raw materials and end uses

Spinnova continued to develop other raw material sources and to evaluate applications beyond apparel. Recent tests with recycled textile fibre showed promising results. The company will continue to invest into research and development during 2023.

Macroeconomic environment

In 2022, the macroeconomic environment continued to change, resulting in higher energy prices, material price inflation, supply chain challenges and possible higher cost of financing.  

Commercial outlook

The long-term demand for sustainable textile fibres and materials remains strong and Spinnova expects to see increased interest as more fibre volumes become available as Woodspin ramps up.

FINANCIAL GUIDANCE FOR 2023

Spinnova will continue to work towards its long- and medium-term business targets and execute its strategy accordingly in 2023.

The timing of the final investment decisions of the next Woodspin and Respin plants will be key factors in the timing of Spinnova’s technology revenues.

In 2023, revenues are estimated to be lower than in 2022, impacted by expected phasing of technology sales fees. The loss will increase during 2023 as the company is ramping up operations.

CEO’S REVIEW

Spinnova’s committed and talented team reached many significant milestones in 2022. We completed the first commercial factory construction work for Wood spin and strengthened the management and our key operational teams.

Spinnova had record revenues in 2022. At the same time the operating loss increased primarily due to the company investing in future growth.  Challenges in the global supply chain, uncertain market conditions and increasing inflation increased the costs of materials and services in 2022, while the impact from increased energy prices was a minor factor on the company’s results.

Safety is one of our top priorities and I’m particularly happy that we did not have any lost time incidents during 2022. Also, our health and safety processes took a step further, and we were awarded the ISO 45001 occupational health and safety management system certification in December.

Commercial launches continued with brand partners

During the second half of 2022, we continued to introduce new commercial products with our brand partners. Commercial product launches are a sign of our successful research and development and demonstrate the suitability of the SPINNOVA® fibre for a wide range of applications. For example, the first commercial product with adidas, the adidas TERREX HS1 mid-layer hoodie, was available for consumers online and in select retail outlets from July.

Marimekko launched a capsule collection of three products made with SPINNOVA® fibre. This was the first time the fibre was used in a fabric with a printed pattern. We were honoured as Marimekko chose to use their iconic poppy pattern in the Spinnova capsule collection.  Bestseller’s brand JACK&JONES launched trousers made from a blend of SPINNOVA® fibre and cotton.

With Halti, we announced the launch of a water resistant and windproof parka, which is expected to hit the stores in spring 2023. The parka is dyed with imogo’s sustainable hi-precision dyeing technology and is the first product to make use of both Spinnova’s and imogo’s technologies. In addition, we continued our cooperation with The North Face, Bergans and Icebreaker. The fibre used in the 2022 product launches was produced on Spinnova’s pilot line using MFC from Scandinavia. At the same time Suzano has been ramping up their own MFC production in 2022 for the Woodspin factory launch.

Year 2022 was a year of awards for us, as we were recognized in several fields, showing the team’s great efforts to reach our common goal to produce the most sustainable textile fibres and materials in the world.

Woodspin’s first factory construction work completed – fibre produced – Respin

In 2022, the main strategic goal was to build our first commercial factory for Woodspin, a 50/50 joint venture with Suzano. The construction work was completed at the end of October after which the work has continued to finalize the technology installations. I am very satisfied that we were able to progress the project to commissioning and towards the commercial start-up despite the challenging global macroeconomic and supply chain environment.

At the same time, we have continued working on the feasibility study of the technology concept for Woodspin's second factory.

Respin – Fibre produced on the pilot line and feasibility planning started for the next plant

The joint venture work with ECCO progressed well, producing fibre from leather waste at the end of 2022.  We have decided to go ahead with a feasibility study and pre-engineering of the next factory, which is planned to be located in the Netherlands.

Thank You!

My first half year at the helm of Spinnova has been eventful and I look forward to taking the next step in reaching industrial scale in our operations and the production of SPINNOVA® fibre together with our world class team, partners, customers and investors. I would like to thank all stakeholders who continue to support and believe in our sustainable mission of transforming the raw material base of the entire global textile industry for the better.

Best Regards,
Kim Poulsen
CEO

THE BOARD OF DIRECTORS’ PROPOSAL FOR DISTRIBUTING PROFITS

In the medium term, Spinnova focuses on growth. The company does not expect to distribute a dividend in the short to medium term. The distributable unrestricted equity of Spinnova Plc on 31 December 2022 was EUR 89 383 thousand, of which the result of the period was EUR -13 344 thousand. The Board of Directors proposes to the Annual General Meeting that no dividend be distributed for the financial year January-December 2022, and that the loss of the financial year is recorded in the retained earnings.

In Jyväskylä, 28 February 2023
 

Spinnova Plc
Board of Directors

Financial Statements Bulletin Webcast

Spinnova is arranging a webcast event in conjunction with the Financial Statements Bulletin on Tuesday 28 February at 11.30 a.m. EET. Spinnova’s CEO Kim Poulsen and CFO Ben Selby will comment on the company’s July-December events and financial performance of 2022.

A recording of the event will be available on the investor website within 24 hours.

A registration is required and can be done at:
https://spinnova.videosync.fi/financial-statements-bulletin-2022

Upcoming financial disclosures

• Spinnova’s Annual Report for 2022 is estimated to be published in the week of 14/2023.
• Spinnova’s Annual General Meeting will be held on Thursday 4 May 2023. A separate invitation to the meeting will follow.
• Spinnova’s half-year financial report for January-June 2023 will be published on Thursday 31 August 2023.

For further information, please contact:

Kim Poulsen, CEO, Tel. +358 50 387 2063
Ben Selby, CFO, Tel. +358 50 305 8077
and Sophie Jolly, Interim Head of Investor Relations
Tel. +358 20 703 2430
ir@spinnova.fi

Certified advisor:
Aktia Alexander Corporate Finance Oy
Tel. +358 50 520 4098

Distribution:
Nasdaq Helsinki
Major media
 

SPINNOVA – Sustainable textile materials, naturally

Spinnova transforms the way textiles are manufactured globally. Based in Finland, Spinnova has developed breakthrough patented technology for making textile fibre out of wood or waste, such as leather, textile, or agricultural waste, without harmful chemicals.

The SPINNOVA® fibre creates zero waste and side streams or microplastics, and its CO2 emissions and water use are minimal. SPINNOVA® materials are quickly biodegradable and circular. Spinnova is committed to using only sustainable raw materials such as FSC certified wood and waste. SPINNOVA® fibre is produced without harmful or complex chemical processes and has the touch and feel of natural fibres such as cotton and linen.

Spinnova has received awards from e.g., the Fast Company, ISPO, Scandinavian Outdoor, ANDAM, Monocle and Marie Claire UK.

Spinnova’s shares (SPINN) are listed on the Nasdaq First North Growth Market Finland.

SPINNOVA® home: www.spinnova.com
Corporate & IR site: www.spinnovagroup.com

Attachments

• Spinnova Plc’s Financial Statements Bulletin January-December 2022 (pdf)