Keith Broadbent - CEO

Mark Chapman - CFO

March 2021

Haydale our DNA

An Industry leading materials technology beacon

  • • Two state-of-the-art technologies brought together - plasma functionalisation and nanomaterials - in unique, environmentally friendly and growing world-wide applications

  • • Our capacity to produce commercial levels of functionalised nanomaterials sets us apart

  • • The next phase of these technologies is ready to roll out - keeping Haydale ahead of the competition

  • • Patents on the HDPlas® process and PATit technologies (the latter with a number pending) being supplemented and aligned to considerable in-house know-how

  • • Loss from Operations reduced by £0.84m (32%) and LFL Cash used in Operations reduced by 50% to £200k pcm

  • • The company has moved swiftly to address new markets and at the same time further reduced costs to streamline for the new normal commercial business world - team is now circa 50

| Creating material change

Our expertise and USP is our worldwide patented HDPlas™ functionalisation process

Industry leader applying

advanced and unique material

plasma functionalisation

techniques to nano and other

materials, including graphene,

thereby enhancing existing

products across a wide range of

industries.

  • • Graphene and nano materials are inert, they do not disperse easily.

  • • Haydale HDPlas™ is a world wide patented technology to enhance the dispersibility of nano materials

  • • Improving properties such as mechanical, electrical and thermal performance in a wide range of applications

FY21 Interim Highlights

  • • Agreement with Qinhuangdao ENO High-Tech Material Development Co., Ltd., to act as a representative for Haydale's ceramic and silicon carbide products in China

  • • Ahead of schedule on the three-year exclusive agreement with iCraft announced in September 2020 with 0.4 tonnes being shipped by the Period end and further orders pending of 1.6 tonnes for H2 FY2021

  • • Commercial progress with elastomers now evident following first sale to Bolflex of our functionalised nano-enhanced rubber masterbatch for use in its premium shoe range. Follow up orders are scheduled for H2 FY2021

  • • In collaboration with a leading biosensor technology company, developed a next generation functionalised biomedical ink with improved analyte detection which enhances detection and the accuracy of diagnosis.

  • • In broadening the product range in the U.S, completed a successful trial of CeramycShield™, a ceramic surface treatment that utilises SIC to enhance and protect concrete assets, at a Central American water treatment facility (see next slide)

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|

CeramycShield™

This unique technology is NOT a coating but a Ceramic Shield. It forms a new surface and fills in cracks and voids.

It is reinforced with SI-TUFF™ silicon carbide.

Repair in Place

Ceramic polymer with SI-TUFF® is spray-applied to existing concrete piping and structures. It cures in-place under almost all conditions.

  • • Turnover adversely impacted by depressed aerospace/petrochemical demand

    • • Minimal Blanks sales;

    • • Support from Far East customer for whisker but partially offset by US customer not taking contractual commitment;

    • • Sales of functionalized nanomaterials increased in Period and this will continue in H2 FY21.

  • • Product mix led to GP margin improvement - should fall back slightly in H2 FY21.

  • • Other operating income including grants reduced reflecting commercial focus of Group.

  • • Adjusted Admin Expenses of £2.54m (H1 FY20: 3.26m), reduction anticipated to continue in H2 FY21:

    • • Diminishing returns achievable on cost savings in the future

    • • R&D capitalisation of £0.13m (H1 FY20: £0.12m)

  • • Loss from Operations of £1.79m (H1 FY20: £2.63m) reduced by £0.84m (32%)

Dec-20 Unaudited £'000

Dec-19 Unaudited £'000

% Mov

Revenue

1,277

1,347

-5%

Gross Profit

939 838

12%

Gross Profit Margin

74% 62%

Other Operating Income Adjusted Admin Expenses

212 320

-34%

2,545

3,268 22%

Adjusted Operating Loss

1,394

2,110 34%

Adjusting Administrative Items

Share Based Payment Exp Lease rental Charges (IFRS 16) Restructuring Costs

75 142

310 315

- 123

Dep & Amort

627 854

Total Trading Admin Expenses

Loss from Operations

2,937 1,786

3,788 -22%

2,630 -32%

Finance Costs

147

94 -56%

Loss Before Taxation

1,933

2,724 29%

Taxation

182

159 14%

Loss for Year from Cont. Ops

1,751

2,565 32%

Operating cash flow before working capital changes

Working Capital Movement

Cash used in Operations

R&D Tax Credit Received

Net Cash used in investing activities

Cash Flow used in Financing Act

Finance Costs

Finance Costs - Right of Use Asset Payment of Lease Liability

Net proceeds from Share Issue New Bank Loans Raised Repayment of BorrowingsEffect of XR Changes

Net Change in Cash

Balance at Start of Year

Balance at End of Year

1,061

106

955

-

150

91

56

310

2,757 -

77

2,088 49%

430 125%

2,518 62%

846 -100%

149 1%

94 3%

0 0

436 532% -

545 86%

2,223 203

66 36

1,052

823

1,875

1,988 153%

- -

-283%

4,688 82%

2,700 31%

Net Cash used in Operations

IFRS 16 Adj Payment of Lease Liabilities

LFL Net Cash used in Operations

955 310

1,265

2,518

-

2,518

  • • Significantly reduced Cash used in Operations in H1 FY21 - improvement of £1.26 million (50%) on a LFL basis

    • • Cash burn reduced to circa £200k pcm for Operations

  • • Small positive working capital movement due to:

    • • Timing on sales/receivables;

    • • US inventory - should continue to unwind through H2 FY21.

  • • R&D Tax Credits - delayed receipt of £0.4m to H2 FY21. Prior Yr double receipt from both FY18 and FY19 received in Period;

  • • Capex remains muted but will increase in H2 FY21.

  • • Financing

    • • Fund raise of £2.76 million (H1 FY20 - £0.44m)

      62%

    • • H1 FY21 continued repayment of US Fixed Asset loan (final payment in Oct 2021). Prior year repayment of Development Bank of Wales loan and repayment of US Fixed Asset loan.

- 50%

  • • IFRS 16 adjustments

    • • Property, Plant and Equipment increased by £2.1 million; offset by

    • • Right of use liability included in Other Payables of £2.56 million

  • • Reduction in working capital due to

    • • Gradual unwinding of US inventory through FY21 - hampered by subdued sales

    • • Increase in trade receivables only party offset by Trade and other payables

  • • Corporation tax (R&D tax credits) increased by the £0.39m due in H2 FY21.

  • • US Defined Benefit Pension Scheme (Closed)-obligation increased due to reduction in discount rate used - no payments into the scheme expected in H2 FY21.

  • • Net repayment of Bank loans in the Period of £0.31 m - repayment per cash flow offset by £0.05m UK Bounceback Loan.

Dec-20 Unaudited £'000

Dec-19 Unaudited £'000

% Mov

Non Current Assets

Goodwill Intangible Assets Property, Plant & Equip

9,617 1,454 1,184 6,979

7,347

31%

1,454 0%

1,078 10%

4,815 45%

Current Assets

5,167

Inventories Trade Receivables Other Receivables Corporation Tax Cash

1,562

5,331 1,618

-3% -3%

580

512 13%

483

352 37%

567

149 281%

1,975

2,700

-27%

Total Assets

14,784

12,678

17%

Non Current Liabilities

3,888

1,128

-245%

Bank Loans Pension Obligation Other Payables

44 234

-81%

1,280 894 43% 2,564 0

Current Liabilities

Bank Loans

Trade & Other Payables Deferred Income

2,551 1,024 1,391 136

2,495 2%

1,148 1,174 173

-11% 18% -21%

Total Liabilities

6,439

3,623

78%

Total Net Assets

8,345

9,055

-8%

Summary Outlook

  • • COVID-19 has been a major challenge with the US operation in the 'eye of the storm'

  • • The crisis has been used as a catalyst to further gear Haydale for growth in all regions - New products, New geographies, New commercial hires (Uwe Kemper)

  • • Haydale's spread of current and potential customers in different industries and geographies continues to grow and provides business resilience

  • • Our long term business confidence is underpinned by belief in the significant impact our state-of-the-art technology can have on materials science across many sectors

  • • The next phase of these technologies is ready and rolling out - keeping Haydale ahead of the competition

  • • The team has shown that it is fully adaptable to the challenges of the new world, looking to turn obstacles into opportunities - and moves at speed - commercially

  • • Directors are focused and have a will to win for all stakeholders and the progress continues

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Thank you

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Haydale Graphene Industries plc published this content on 02 March 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 17 March 2021 10:35:10 UTC.