Avantium N : Halfjaarlijkse financiële verslaggeving

Press release

Avantium First Half 2023 Results:

Avantium continues to show strong progress in executing the commercialisation strategies for its proprietary technologies

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AMSTERDAM, 16 August 2023, 07:00 hrs CEST - Avantium N.V. (Euronext Amsterdam and Brussels: AVTX), a leading technology company in renewable chemistry, today reports its 2023 half year results.

Key Business Progress in the First Half of 2023:

• Construction of Avantium's FDCA Flagship Plant remains on track, with commissioning activities expected to commence in the first quarter of 2024 and FDCA production in the second half of 2024.
• Avantium has made further progress in the development of the Ray plantMEG™ and Ray plantMPG™ technology and secured a conditional grant award of €53 million from the National Growth Fund, an instrumental step for the funding of the construction of a Flagship Plant in the Netherlands.
• Avantium's Volta Technology, a carbon capture and utilisation platform, is advancing towards a stage gate decision on the construction of a pilot plant, further supported by the previously announced collaboration with SCGC.
• Avantium has signed a collaboration agreement with Norsk Hydro for further development of Avantium's Volta electrochemistry technology platform to develop innovative and sustainable solutions for Norsk Hydro.
• Avantium R&D Solutions is successfully executing its strategy for R&D solutions for sustainable chemistry, securing additional orders and a strong revenue backlog for 2023.

Key Financial Developments in the First Half of 2023:

(€1,000)	30 June 2023	30 June 2022	% change
Revenues	7,263	4,982	46%
Other income from government grants	3,894	3,184	22%
Net operating expenses	(23,312)	(19,181)	22%
EBITDA	(12,155)	(11,015)	10%
Depreciation, amortisation and impairment charge	(3,841)	(3,937)	-2%
Finance costs - net	(4,150)	(1,312)	216%
Fair value remeasurement - Warrants	(270)	(1,085)	-75%
Loss for the financial year	(20,415)	(17,349)	18%
Cash flow from operating activities	21,321	4,165	412%
Cash flow from investing activities	(47,727)	9,770	-589%
Cash flow from financing activities	38,578	40,658	-5%
Net cash flow	(8,244)	37,244	-122%
Cash position	56,626	72,150	-22%

Tom van Aken, Chief Executive Officer of Avantium: "In the first half of 2023, Avantium made strong progress with all our technologies. We are pleased that the construction of our FDCA Flagship Plant has progressed in line with the key objective to start FDCA production in 2024. We remain on track to start commissioning activities of our FDCA Flagship Plant in the first quarter of 2024. Our plantMEG technology is progressing towards the next phase of scaling-up to a Flagship Plant, for which we secured a conditional

Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, [phone],

P.O. Box 2915, 1000 CX, Amsterdam, the Netherlands, [e-mail], www.avantium.com , C of C: 34138918

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grant award of €53 million from the Dutch National Growth Fund. Our Volta technology has shown significant progress towards the stage gate decision to construct a pilot plant to scale-up production of the monomer glycolic acid and CO2-based polymer PLGA, underpinned by collaborations with global industry leaders SCGC and Norsk Hydro. We continue to see robust demand as well as increasing regulatory support for our sustainable, next-generation materials and technologies."

Outlook

Avantium continues to explore additional funding options to ensure that the Company remains sufficiently funded to execute on its strategy.

For Avantium Renewable Polymers, commissioning of the FDCA Flagship Plant is expected to commence in the first quarter of 2024, and production to start in the second half of 2024. We expect to complete the drawdown of the final €15 million from the Debt Facility Agreement for the FDCA Flagship Plant in Q3 2023.

The signing of the first technology license agreement with Origin Materials has helped accelerate discussions with other industrial partners to explore additional licensing opportunities for the future large-scale production of FDCA and PEF. Avantium Renewable Polymers continues to see strong demand for FDCA and PEF in various applications and continues to pursue additional offtake agreements for the FDCA Flagship Plant and capacity reservations to support licensees.

Avantium Renewable Chemistries intends to enter the Process Design Package (PDP) stage for the Ray Flagship Plant in the second half of 2023. We continue to focus on strategic opportunities for our plantMEG technology.

In the second half of 2023, Avantium R&D Solutions aims to deliver significant top-line growth compared to the first half of 2023, based on a strong order book and project pipeline.

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Financial results

Income Statement

Total first half 2023 revenues increased to €7.3 million (HY 2022: €5.0 million), largely attributable to revenues in the R&D Solutions business unit (€5.0 million). As a result of entering into a technology license agreement with Origin Materials in February 2023, Avantium Renewable Polymers received the first milestone payment of €7.5 million. Under the technology license agreement, Avantium Renewable Polymers will receive the next milestone payment of €7.0 million upon delivery of the Process Design Package to Origin Materials. Under IFRS 15, these two payments will be recognised as revenue over time, up to the delivery of the Process Design Package. In the first half of 2023, Avantium Renewable Polymers recognised €1.9 million as revenue from the Origin technology license agreement.

Other income increased by 22% to €3.9 million (HY 2022: €3.2 million). The higher grant recognition was predominantly in Avantium Renewable Polymers coming from existing grant programmes.

Net operating expenses were €23.3 million in the first half of 2023 (HY 2022: €19.2 million). This increase is primarily the result of the planned increase in FTEs over the reporting period, higher raw materials and contract costs, other operating expenses largely driven by inflation, as well as higher development costs in particular relating to the Renewable Polymers business segment.

EBITDA loss for the first half of 2022 was €12.2 million (HY 2022: loss of €11.0 million)

Finance costs increased to €4.1 million (HY 2022: €1.3) primarily due to €3.3 million in interest and commitment fees related to the debt financing.

Avantium's net loss for the half year of 2023 increased to €20.4 million (HY 2022: €17.3 million) due to higher costs; driven by increase in finance costs related to the financing of the FDCA Flagship Plant, the planned ramp-up of activities across the Company, and inflation. These cost increases were partly offset by an increase in revenues and other income.

Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, [phone],

P.O. Box 2915, 1000 CX, Amsterdam, the Netherlands, [e-mail], www.avantium.com , C of C: 34138918

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(In Euro x 1,000)	30-6-2023	30-6-2022
Total EBITDA of business segments	(7,200)	(6,314)
Amortisation	(10)	(22)
Depreciation of property, plant and equipment	(2,577)	(2,873)
Depreciation of right of use assets	(1,254)	(1,043)
Finance costs - net	(4,150)	(1,312)
Share based compensation	(507)	(457)
Rent	(628)	(312)
Fair value remeasurement	(270)	(1,085)
Company overheads/other	(3,820)	(3,932)
Loss before income tax from continuing
(20,415)	(17,349)
operations

Balance Sheet and Financial Position

The balance sheet as of 30 June 2023 increased to €191.2 million (31 December 2021: €162.0 million), with net equity of €63.4 million.

Avantium's cash position (including restricted cash) was €56.6 million as at 30 June 2023 (31 December 2022: €64.9 million). During the first half of 2023, Avantium drew down €37.5 million under the Debt Facilities Agreement for the FDCA Flagship Plant. In addition, in February 2023 Avantium Renewable Polymers received a loan of €2.5 million from Fonds Nieuwe Doen. The net cash used in operating, investing and lease activities in the first half of 2023 was €48.2 million (HY 2022: €24.3 million).

Capital expenditure increased to €47.7 million (HY 2022: €10.2 million) as a result of planned investments in the FDCA Flagship Plant.

The working capital movement of €12.8 million includes accrued expenses to Worley as EPC contractor for the FDCA Flaghip Plant, the remaining balance of €3.8 million from Worley as part of their contribution in kind in Avantium Renewable Polymers, and a prepaid expense related to the warrants issued as part of the Debt Facilities Agreement, to the relevant lenders.

Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, [phone],

P.O. Box 2915, 1000 CX, Amsterdam, the Netherlands, [e-mail], www.avantium.com , C of C: 34138918

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in millions of €	30 June 2023	30 June 2022
Cash position at the	64.9	34.9
beginning of the period
EBITDA	(12.2)	(11.0)
Lease payments	(0.8)	(0.9)
Working capital movement	12.8	(2.1)
Capital expenditures	(47.7)	(10.2)
Interest and commitment	(1.0)	(0.6)
fees from borrowings
Other	0.6	0.5
Net cashflow used in	(48.2)	(24.3)
operating, investing and
financing activities

Net proceeds from Capital raise

Transaction with non- controlling interest

Proceeds from Borrowings

Net increase/(decrease) in cash and cash equivalents

Cash position at the end of the period

• 41.6
• 20.0

40.0-

(8.2) 37.2

56.6 72.1

Business Overview

Avantium Renewable Polymers

Avantium Renewable Polymers' proprietary YXY® Technology produces FDCA (furandicarboxylic acid), the main building block of the high-performanceplant-based plastic PEF (polyethylene furanoate). Avantium Renewable Polymers is on track to start up the world's first commercial FDCA plant in 2024, when we will bring PEF to our customers in a wide range of high-value applications. The FDCA Flagship Plant is a stepping stone towards executing Avantium's technology licensing strategy.

(In Euro x 1,000)	30-6-2023	30-6-2022
Revenues	2,091	475
Other Income	2,444	1,520
EBITDA	(4,075)	(4,615)

Key highlights Avantium Renewable Polymers:

• Commissioning of the FDCA Flagship Plant is expected to start in the first quarter of 2024, with production on track to start in the second half of 2024.
• In the first half of 2023, a further €37.5 million was drawn down under the €90 million Debt Facilities Agreement.
• Revenues of Avantium Renewable Polymers increased from €0.5 million in the first half of 2022 to €2.1 million in the first half of 2023, predominantly due to the €1.9 million revenue recognition in relation to the technology license agreement with Origin Materials.

The construction of the FDCA Flagship Plant is progressing, with over 90% of the associated procurement now contracted. The warehouse and main control room are finished, the first pieces of equipment and piping

Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, [phone],

P.O. Box 2915, 1000 CX, Amsterdam, the Netherlands, [e-mail], www.avantium.com , C of C: 34138918

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have been installed and cable-pulling activities are progressing well. Over the past months, Avantium has also continued to strengthen its FDCA Flagship Plant operations staff.

In the first half of 2023, a further €37.5 million was drawn down under the €90 million Debt Facilities Agreement for Avantium Renewable Polymers, following the first drawdown of €15 million in November 2022. In July 2023, an additional €22.5 million was drawn down under this Agreement, and Avantium Renewable Polymers is on track to draw down the remaining €15 million in Q3 2023. Moreover, Avantium Renewable Polymers secured and accessed an additional loan of €2.5 million provided by Stichting Fonds Leefbaarheid, Zorg en Energie Groningen (Fonds Nieuwe Doen) in the first half of 2023. Avantium Renewable Polymers is in active discussions with its shareholders and lenders to ensure that sufficient contingency is in place until the FDCA Flagship Plant is fully commercially operational. The Company has previously guided on a total cost increase for the construction of the FDCA Flagship Plant of €15 - 25 million, and this remains under constant review.

In February 2023, Avantium signed its first YXY® Technology license agreement with the US-based company Origin Materials. Under the agreement, Avantium will grant Origin Materials the right to use relevant parts of its YXY® Technology to enable the conversion of Origin-produced CMF (chloromethylfurfural) derivatives into FDCA at a 100 kilotonnes per annum scale facility. As a result of signing the technology license agreement, Origin Materials paid Avantium a first milestone fee of €7.5 million. Origin agreed to pay Avantium subsequent license fees dependent upon achievement of various development milestones. Avantium will also be eligible to receive royalties for each metric tonne of FDCA produced at the licensed plant.

In addition to the first YXY® Technology license, Avantium signed additional offtake agreements for its FDCA Flagship Plant with Henkel, Origin Materials and Kvadrat in the first half of 2023, bringing the total of such agreements to 14. In addition, Avantium's commercial team is working together with Origin Materials to secure capacity reservations for FDCA and PEF for the licensed facility. This includes the capacity reservation agreement with Terphane to purchase PEF for use in industrial and film packaging applications, as recently announced by Origin.

Avantium Renewable Polymers has been awarded a €0.76 million grant by the EU Horizon Europe programme for its participation in the research and development programme Rebiolution1.

Avantium Renewable Chemistries

Avantium Renewable Chemistries develops and commercialises innovative chemical technologies based on viable, non-fossil sources of carbon from biomass and CO2. The business unit is home to three technologies: Ray Technology™, Volta Technology and Dawn Technology™. Ray and Dawn technologies are currently both running at a demonstration plant in Delfzijl, the Netherlands. As one of the world's most advanced carbon capture and utilisation (CCU) technologies, Volta Technology is currently in the pre-pilot phase with two Volta mobile demonstration units successfully deployed at industrial sites in Europe, and a third unit currently operational on-site at Avantium.

(In Euro x 1,000)	30-6-2023	30-6-2022
Revenues	100	-
Other Income	1,321	1,454
EBITDA	(3,084)	(2,115)

Key highlights Avantium Renewable Chemistries:

• Avantium's Ray Technology™ for the production of plantMEG and plantMPG has secured a conditional grant award of €53 million by the Dutch National Growth Fund (Nationaal Groeifonds),

supporting the funding for the construction of a Flagship Plant in the Netherlands.

• Underpinned by the collaborations with SCGC and Norsk Hydro, Avantium's Volta Technology is advancing towards a stage gate decision to construct a pilot plant.

1 This project has received funding from the European Union's Horizon Europe funding programme under grant agreement No 101082040.

Avantium N.V., Zekeringstraat 29, 1014 BV Amsterdam, the Netherlands, [phone],

P.O. Box 2915, 1000 CX, Amsterdam, the Netherlands, [e-mail], www.avantium.com , C of C: 34138918

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