Nexam Chemical () : Interim Report for Q3, January to September 2021

Interim Report

January - September 2021

"Net sales for the period land at just over SEK 50 million, which means a growth of 22 percent compared with the same period last year"

- Johan Arvidsson, CEO

Nexam Chemical Holding AB (publ) | Interim Financial Report | January-September 2021

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Third quarter at a glance

Growth with 22 percent in the

quarter

Significant events:

• Continued growth, +22% compared to the corresponding quarter in 2020.
• Both Performance Chemical, + 22%, and Performance Masterbatch, + 23%, are growing compared to the correspond- ing quarter in 2020.
• Important customer orders received to India for PET foam, worth SEK 10 million for the remainder of 2021 and to Russia in polyolefin. The latter took place after the end of the quarter.
• Strong order intake during the quarter, indicates a strong finish of 2021.
• During the quarter, warrants were converted to shares resulting of a capital injection of SEK 12,789,000.

Financials:

• Net sales during quarter amounted to SEK 50,229,000 (41,054,000).
• The operating profit before depreciation (EBITDA) for the quarter was SEK 1,046,000 (1,769,000), which is a conse- quence of increased costs in the supply chain.
• In comparison to the beginning of the year, cash and cash equivalents amounted to SEK 53,775,000 (29,791,000).
• Cash flow from the operating activities during the quarter amounted to SEK - 4,178,000 (- 4,383,000).
• Earnings per share before and after dilution amounted to SEK -0.02 (- 0.03) for the quarter.

Key Figures for the Group		Jul-Sep			Jul-Sep			Jan-Sep			Jan-Sep			Full year
(SEK thousand)		2021			2020			2021			2020			2020
Net sales (SEK thousand)		50 229			41 054		162 399			119 137		165 830
Adjusted operating profit/loss before deprecia-
tion (EBITDA) (SEK thousand)		1 046			1 769		6 401			4 231		6 328
Operating profit/loss before depreciation
(EBITDA) (SEK thousand)		1 046			1 769		5 093			4 231		4 912
Cash and cash equivalents (SEK thousand)		53 775			42 499		53 775			42 499		29 791
Cash flow from operations (SEK thousand)		-4 179			-4 383		-8 050			-9 797		-17 084
Equity (SEK thousand)		230 038			191 124		230 038			191 124		187 183
Equity per basic share (SEK)		3,03			2,52		3,03			2,52		2,47
Equity/asset ratio (%)		79			73		79			73		75
Total assets (SEK thousand)		289 769			261 355		289 769			261 355		250 278
Quick ratio (%)		233			202		233			202		190
Average number of basic shares		76 025 647			75 803 367		76 025 647			75 803 367		75 803 367
Average number of diluted shares		76 025 647			75 803 367		76 025 647			75 803 367		75 803 367
Basic earnings per share (SEK)		-0,02			-0,03		-0,04			-0,09		-0,14
Diluted earnings per share (SEK)		-0,02			-0,03		-0,04			-0,09		-0,14
Share price on balance sheet date (SEK)		12,00			7,22		12,00			7,22		8,10

Nexam Chemical Holding AB (publ) | Interim Financial Report | January-September 2021

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Comments from the CEO

Continued growth despite

challenges in the supply chain

After the end of the third quarter, we can state that Nexam Chemical is adding another quarter of good growth to his- tory. Net sales for the period land at just over SEK 50 mil- lion, which means a growth of 22 percent compared with the same period last year. Quarter 3 is also a quarter with a lot of holiday time, which reduced the revenue. There- fore, we are very happy with this positive development. The strong growth in the third quarter may also mean that so far this year we have sold as much as we did throughout all of 2020.

We are very pleased that we now can now report that sales in polyolefin will start. This is based on the business we have gained in the Russian market. We see several other

potential projects in the region and have a strong belief that this path will continue in the same direction. At the same time, our existing platforms continue to deliver good volumes. We see great growth opportunities in PET foam, as the latest order from Diab in India indicates. Even in the colour masterbatch, we have now grown several quarters in a row.

As we pointed out in connection with the reporting of the second quarter, our margin development is uneven. During the third quarter, we experienced challenges in being a growing company in a market characterized by raw material shortages. This has had negative effects on our mar- gin. In a market with shortcomings, all "volume rebates"

Nexam Chemical Holding AB (publ) | Interim Financial Report | January-September 2021

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are absent. Instead, you must pay extra for added vol- umes. We then do not get a marginal positive exchange on our growth, but rather the opposite. This will be adjusted both by getting our price increases through in full and by the fact that the raw material situation will eventually be in better balance. Our expectation is that we will see an improvement in subsequent quarters. At the same time, it is important to repeat what we communicated earlier this year; Being a growth company means periods of both investments and increased costs to enable new revenue streams, which is why profitability does not always follow sales linearly.

"Being a growth company means periods of both investments and increased costs to enable new revenue streams"

Our volumes are increasing, and we are also seeing an increasing geographical spread. When the product range is developed at the same time, higher demands are placed on our production systems. We are therefore pleased to have recruited a new production manager. Jörgen Heby will have the task to develop Nexam's future production platform with responsibility for the facilities in Sweden, Scotland, Poland, and Hungary. We are building a base that can provide us with the products we need in the future in a structured way.

As we have previously pointed out, we welcome the EU's new taxonomy for sustainable investment, which in the long run will be our way of reporting and clarifying Nexam as a sustainable investment. While waiting for the taxonomy to be completed, we are looking for opportunities to

clarify in other ways how our business contributes to a more sustainable world. After all, Nexam holds some of the keys that can be part of the solution to the unsolved problem; to make high quality recycled plastic. In addition, a large part of our products is used in the area of renewable energy.

"We have great opportunities to continue our growth journey for a long time"

We walk rather than talk when it comes to sustainability, at the same time it is important for us that we look at the subject from both an environmental and social aspect. As we look at our business, it is also long-term sustainable from a business perspective. We are just at the beginning of a long journey. Several of our platforms have just "dipped their toes" in the market and are about to split the water surface and dive in. We see it in polyolefin and the new cooperation in Russia and we see it in PET fiber with the first regular customer, a filament producer who with our additives can use a higher degree of recycled material in their products.

We have great opportunities to continue our growth journey for a long time. The products we sell are of the nature that both existing and new customers will demand year after year, for a very long time. And with the journey towards a circular manufacturing industry, we have only just begun, we are convinced that the need for our products will in- crease.

With these words, I wish you a happy autumn,

Johan Arvidsson, CEO

Nexam Chemical Holding AB (publ) | Interim Financial Report | January-September 2021

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This is Nexam Chemical

Nexam Chemical

Stronger, lighter and recyclable materials. It is one part of what the world needs to be able to grow in a sustainable way. We at Nexam Chemical can contribute to this. We work with improving polymeric materials - more commonly described as plastics. By adding our products, the customer can create materials that will give the end-products completely new and effective properties. Such as lower weight, increased heat resistance and strength, longer life cycle and increased recycling.

Today we help our customers to improve materials that are then used in everything from computers, wind turbines and vehicle components to water pipes and food packaging. We are a growth company with a turnover of approximately SEK 165 million, with production in four countries, employs close to fifty persons and cooperates with well-known chemical and material companies all over the world.

The Company's head office is located in Lomma, Sweden. Development of new products and applications and formulation evaluation takes place in the laboratory in St. An- drews, Scotland where also the facility for production of the

Company´s molecules are located. Large scale production of the company's unique molecules is also performed in collaboration with contract manufacturers. Manufacturing of masterbatch and multifunctional masterbatch is performed by the subsidiary Nexam Performance Masterbatch.

Our vision

To be a recognized world-leader in property modification of polymeric materials through heat-activated chemistry.

Our mission

To contribute to a more resource-efficient and sustainable society through innovative chemistry that improves proper- ties, usability and recycling of polymeric materials.

Our sustainability vision

Nexam Chemical strives towards a sustainable future through innovative and reactive chemistry and to create possibilities to save on our valuable and scarce natural resources. We want to enable our customers to develop lighter, stronger, more durable, and more recyclable products.

Nexam Chemical Holding AB (publ) | Interim Financial Report | January-September 2021

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