- Improvement of the price competitiveness of HYNOCA® and
SYNOCA® solutions, in particular compared to other hydrogen and gas
production processes, thanks to a technology not impacted by the
rising costs of gas and electricity
- Favourable structural dynamics supported by the evolution of
the geopolitical and regulatory context
- Backlog(1) of 54 million euros and pipeline(2) of 235
million euros, in progression since the IPO
- Solid financial structure, with €48.8 million of available
cash at the end of September 2022
- Delays in delivery from an important supplier and customer
wait-and-see attitude regarding public subsidies impacting the
2022/2023 revenue target
- EBITDA(3) of €(4.2)m and net income of €(5.3)m
Regulatory News:
Haffner Energy (ISIN code: FR0014007ND6 - Ticker: ALHAF),
releases today its half-year results for the period ending
September 30, 2022, as approved on December 16, 2022 by the
Company's Board of Directors.
Philippe Haffner, Chairman and CEO of Haffner Energy,
stated: "The results for the first half of the year reflect the
transition of our offer to HYNOCA® modules and associated services.
Thanks to a disruptive, competitive and patented technology,
Haffner Energy notably benefits, namely due to the war in Ukraine,
from the acceleration of structural trends towards more
decarbonization and energy independence at a worldwide level. The
new regulations are clearly in favor of carbon-negative
technologies, and the importance of hydrogen itself is being
reinforced.
The current context of rampant inflation in the price of fossil
fuels and electricity allows HYNOCA® and SYNOCA® technologies to
strengthen their differentiation from other hydrogen and gas
production processes, notably by their unchanged energy costs.
Moreover, the biochar co-product should soon benefit from the
accreditation of the "Carbon Removal Certificates" by the European
Union. This will further promote the development of our business
and the attractiveness of our solutions.
The identified reserves of sustainable biomass, especially
agricultural residues, not subject to a conflict of use, are such
that biomass thermolysis will, likely, make a massive contribution
to the green hydrogen production objectives set by the European
Union for 2030 (2x10 million tons per year). Biomass thermolysis
also has the advantage of not requiring heavy infrastructure and
high electricity consumption, which allows for rapid
deployment.
Thanks to the continuing commercial momentum, we are confident
for the second half of the year, despite the current tensions in
the supply chain resulting in delayed deliveries of certain
components. In addition, although the extension of government
support for the implementation of renewable hydrogen production
projects is in place, the launch of calls for projects, which was
expected in the second half of 2022, should only be effective in
the first half of 2023. The submission of project applications is
generally a prerequisite for the firm commitment of customers,
which delays the signature of the most advanced projects by several
months.
This short-term delay should not have a significant impact on
our medium and long-term development perspectives. On the contrary,
the REPower EU plan in Europe and the Inflation Reduction Act (IRA)
in the United States bring new opportunities to the production of
hydrogen and renewable gas through thermolysis, as well as to
Sustainable Aviation Fuel (SAF)."
Key figures as of September 30, 2022 (IFRS standards /
k€)
In thousands of euros
30.09.22 (6 months)
30.09.21 (6 months)
Revenue
-
316
EBITDA
(4,204)
(1,535)
Operating result
(5,241)
(1,614)
Net income
(5,274)
(1,656)
In thousands of euros
30.09.22
31.03.22
Shareholder’s equity
49,170
54,253
Cash available
48,814
61,429
Continued structuring in the first half of 2022/2023
to achieve future growth
The results of the first half year reflect the continued
structuring of the Company to accelerate its development in the
sale of HYNOCA® and SYNOCA® modules for green hydrogen and
renewable gas production.
During the first half of the year, Haffner Energy did not record
any revenues. The Company continues to deploy the R-Hynoca contract
in Strasbourg. A demonstration module, corresponding to a new
commercial version called 4.0, will be installed on the site in
early 2023. The contract with Carbonloop, also integrating version
4.0, signed on September 30, 2022, will give rise to revenue
recognition on a percentage-of-completion basis as from the second
half of the fiscal year.
In order to support the expected strong growth of its activity,
Haffner Energy has pursued an active recruitment policy, with 26
hires during the first half of the year, bringing the total number
of employees to 48 by September 30, 2022. The structuring of the
Company has also led to an increase in external expenses. EBITDA
thus amounts to €(4,204)k against €(1,535)k the previous year.
In addition, operating income includes a provision of €922k for
loss on completion to take into account changes in the technology
sold and the inflationary price of supplies. This brings the
operating income to €(5,241)k, compared to €(1,614)k as at
September 30, 2021.
The net loss amounts to €5,274k, compared to €1,656k at
September 30, 2021.
As of September 30, 2022, available cash amounted to €48,814k,
compared to 61,429 K€ as of March 31, 2022, a change of 12,615 K€,
half of which is due to the anticipation of supplier orders. Net
cash and cash equivalents amounted to €43,043k as of September 30,
2022.
Strong commercial momentum with a backlog(1) of 54 million
euros and a pipeline(2) of 235 million euros
Sales activity was sustained during the first half of the year,
supported by a team of 10 employees, compared to 2 six months
earlier, and which continues to strengthen.
It has notably resulted in the signature with Carbonloop of an
order for a SYNOCA® renewable gas production unit on September 30,
2022. This is the first order signed under the commercial contract
signed in October 2021 with Kouros.
More generally, the clients within the €33 million backlog(1) at
the time of the IPO (Kouros, Corbat, Roussel, R-Hynoca) are still
very active.
The project company with Alkmaar, in partnership with two
developers, has been created in the Netherlands to produce hydrogen
for mobility.
Advanced discussions with a new French customer should soon lead
to a contract for a hydrogen mobility project.
In total, the backlog(1) increased to 54 million euros.
Finally, the pipeline(2) of prospects, which amounted to 183
million euros at the time of the IPO, now stands at 235 million
euros thanks, in particular, to the attractiveness of the SYNOCA®
syngas offer, which represents 40% of the pipeline and a very
significant additional development potential.
Client wait-and-see attitude towards public subsidies
The conversion of these business prospects into firm orders is
partly subject to the expected finalization in early 2023, of
public policies to support the development of decarbonized
hydrogen. In France, more specifically, the inclusion of biomass
thermolysis in the ADEME "Hydrogen Territorial Ecosystems" calls
for projects will allow public financing of Haffner Energy's
customers' investments. In addition, Haffner Energy and France
Hydrogène are working together to simplify the ICPE 3420 heading
applicable to hydrogen production in order to shorten the
administrative procedures necessary to start the projects.
In Europe, inter-institutional discussions about the legislation
applicable to renewable and low-carbon hydrogen are ongoing. In
order to make final investment decisions, renewable and low-carbon
hydrogen project developers want a clear regulatory framework which
should be in place by early 2023.
In addition, Europe has recently communicated a proposal for a
directive on the certification of negative emissions. This proposal
should allow biochar, a co-product of our sustainable biomass
thermolysis process, to benefit from a regulatory environment at
the European level that will help accelerate the ramp-up of Haffner
Energy's business model.
Delay in the delivery of certain components impacting the
recognition of the second Half-Year 2022/23 revenue using the
percentage of completion method
Since June 2022, Haffner Energy has anticipated orders for
components in order to guarantee reasonable lead times for its
customers and to benefit from volume effects on contracts signed
with its suppliers. In recent months, tensions in the supply chain
and higher prices for raw materials and certain components have
increased.
Despite these anticipations, Haffner Energy is penalized by the
delay of certain suppliers, in particular the purification
specialist, Xebec Adsorption, which has been placed under the
Canadian Creditor Protection Regime (CCAA) since September 29,
2022.
These supply difficulties, combined with the wait-and-see
attitude of customers with regards to the release of government
funding, impact Haffner Energy’s revenue target by March 31,
2023.
Medium-term outlook reinforced by the climate emergency,
soaring energy prices and the geopolitical context
The Company continues to fully benefit from the strong
structural trends, supporting the deployment of its technology,
accelerated recently by the strategic challenges of; energy
independence in Europe and decarbonization in the face of soaring
electricity and natural gas prices. The war in Ukraine, which began
a few days after the company's IPO, has profoundly changed the
energy ecosystem.
This evolution of the geopolitical context strongly improves
Haffner Energy's business model with:
- The extension of the addressable market of syngas
(SYNOCA® solution). Haffner Energy's biomass thermolysis technology
produces Hypergas®, a precursor of hydrogen, which is an
advantageous replacement of natural gas for industry;
- The improvement of the price competitiveness of HYNOCA® and
SYNOCA® solutions which are not related to the energy cost
because of their low gas and/or electricity consumption;
- The small increase in the price of biomass and the
increase in the price of biochar co-product;
- The drastic shift in the United States, where the
Inflation Reduction Act is a major opportunity for Haffner Energy.
Support for hydrogen production is tied to carbon footprint in life
cycle analysis, which strongly favors carbon-negative
solutions.
The multiplication of regulations and support for
decarbonization and hydrogen, in the European Union and the United
States, broadens Haffner Energy's addressable market to natural
gas, methane and SAF (Sustainable Aviation Fuel) for aeronautics.
The SYNOCA® process produces Hypergas®, ideal for connection to a
Fischer Tropsch reactor.
Taking into account this favorable context, the Company is
pursuing its development plan with a target of around 100 employees
by mid-2023, compared with 60 at present and 21 at the time of the
IPO, and confirms its revenue target of 250 million euros for the
2025/2026 financial year.
Post-Closing events
Setting the criterias for the variable compensation of
executive directors and implementation of free share plans for
employees
- On October 27, 2022, the Board of Directors, upon the
recommendation of its Nominations and Remuneration Committee
("NRC"), determined the criterias for variable compensation
applicable, as from the current fiscal year, to the Company's
executive directors, Philippe Haffner, Chairman and Chief Executive
Officer, and Marc Haffner, Executive Vice President, Technology. In
accordance with the recommendations of the Middlenext Code, this
variable compensation is based on four quantitative and qualitative
performance criterias, both financial and non-financial, linked to
the company's performance, its objectives and its long-term
interests:
- three financial criterias: order backlog, revenues and
EBITDA;
- an extra-financial criterion evaluated according to a set of
CSR criteria (EthiFinance rating)
- In addition, the Board of Directors, with a view to
recognizing and associating employees with the Company's success,
has decided, upon the recommendation of the CNR, to grant three new
free share plans to its employees for a total of 322,809 shares,
corresponding to 0.722% of the share capital. These plans are
intended for employees part of the workforce as at the date of
listing of the Company's shares on Euronext Growth, February 14,
2022, as well as for the Group's principal executives, excluding
corporate officers. One of these three plans is subject to the same
performance criteria as those applicable to the variable
compensation of executive directors.
- To cover these programs and as part of the implementation of
its share buyback program authorized by the Combined General
Meeting of September 8, 2022 (6th resolution), Haffner Energy has
given a new mandate to an investment services provider to purchase
100,000 shares, over a period beginning on December 20, 2022 and
extending to December 20, 2023, within the limit set by the General
Meeting.
About Haffner Energy
A listed and family company co-founded and co-managed by Marc
and Philippe Haffner and a player in the energy transition for 30
years, Haffner Energy designs and provides technologies and
services enabling its customers to produce green hydrogen,
renewable gas replacing natural gas combined with carbon capture
through the co-production of biochar through its HYNOCA® and
SYNOCA® processes, by thermolysis of biomass. Those processes allow
the production of hydrogen or renewable gas at highly competitive
cost, is carbon negative of 12 kg (net) of CO2 per kg of hydrogen
produced, while depending very little on the electricity grid and
the cost of electricity. This enables Haffner Energy to make a very
rapid and agile contribution to the strategic challenges of
Europe's energy independence combined with the acceleration of its
decarbonization.
More detailed financial information on the half-yearly financial
statements as of September 30, 2022 is available on the website
www.haffner-energy.com.
Lexicon:
(1)
The backlog designates a project
when at least one of the following situations occurs:
- a deposit, linked to a contract
with a specific number of modules to be ordered or a defined total
amount, has been paid by the customer; or
- a purchase agreement or
purchase order has been signed between Haffner Energy and a
customer; or
- there is a signed letter of
intent or specification between Haffner Energy and a customer;
or
- a project company, created
specifically for a given project involving Company equipment, has
been formed and the sponsors have made a financial commitment;
or
- Haffner Energy is awarded a
contract through a competitive bidding process.
(2)
The pipeline refers to a
business opportunity when at least one of the following occurs:
- a preliminary feasibility study
for the installation of equipment is or has been completed; or
- a preliminary project budget or
business plan or a complete commercial offer including
specifications has been sent to the customer and Haffner Energy is
awaiting a response; or
- a letter of intent is sent to
Haffner Energy by the customer; or
- Haffner Energy has received an
invitation to participate and is part of a tender process.
(3)
EBITDA corresponds to operating
income before depreciation, amortization, impairment losses net of
reversals on fixed and current assets and before operating
provisions net of reversals.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20221218005044/en/
Investor Relations, Haffner Energy Adeline Mickeler
adeline.mickeler@haffner-energy.com
Media Relations, NewCap Nicolas Merigeau haffner@newcap.eu Tel :
01 44 71 94 98
Haffner Energy (EU:ALHAF)
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