Half Year 2026 Agilyx ASA Earnings Call
Speaker #2: Ladies and gentlemen, we warmly welcome you to the H1 2026 earnings call for Agilyx ASA. Please note that this call is being recorded, and a replay will be available later.
Speaker #2: Your participation in the call implies your consent to this. I am pleased to welcome Agilyx's CEO, Ranjit Bhatia, and CFO, Bertrand Laroche, who will guide us through the presentation in a moment.
Speaker #2: After which, we will move on to the Q&A session. And with no further ado, let's move on to the presentation.
Speaker #3: Thank you very much, and good morning. Thank you for joining us. I'm Ranjit Bhatia, Chief Executive of Agilyx, and I'm joined today by my colleague and Agilyx Chief Financial Officer, Bertrand Laroche.
Speaker #3: I've personally been a shareholder in this business, in Agilyx, and a director since 2009. Chief Executive since 2024. I also serve as the Chair of GreenDock Global.
Speaker #3: We will have a Q&A period at the end of the presentation, as was mentioned. If you have any questions during the presentation, please do feel free to include them in the chat box.
Speaker #3: And we will try to answer your questions during the Q&A, or, of course, take audio questions afterwards. Today, we'll step through an overview of Agilyx and highlights from H1.
Speaker #3: First, we'll provide an operational review and a current market outlook. Then, we'll discuss—Bertrand will lead us through—our H1 financials in more detail.
Speaker #3: This presentation will also be posted on our website after this session, so please feel free to download it from there as well. Firstly, a brief summary of Agilyx.
Speaker #3: We are listed on the Oslo Stock Exchange, and we have two business units that operate in parallel. The first is the primary operating platform.
Speaker #3: We own a majority of GreenDock Global, one of Europe's leading integrated plastic recyclers, which has been fully consolidated into Agilyx since the end of April this year.
Speaker #3: And GreenDock receives just in brief, GreenDock receives and owns plastic waste, and operates mechanical recycling facilities in multiple EU countries. This segment is really what generates our group profitability and today's cash flow.
Speaker #3: The second segment is Arc Labs, our wholly owned technology and analytics firm, ARM, in the United States. It has over 20 years of chemical recycling research and development experience, 22 patents, and it markets lab services that support both our own facilities and third parties.
Speaker #3: It's really the R&D arm of our company. The slide is intended to answer a common question, which is: what do we do, and why does owning all of it together present an advantage in the marketplace?
Speaker #3: So, we structured Agilyx to meet the needs of a really rapidly evolving market. In plastic recycling, the strategic and industrial logic is to control high volumes of plastic waste through collection programs, to own the mechanical and the chemical recycling feedstock plants, and thus have the capability to route plastic volumes through the most profitable channels. This is a dynamic decision, which is evolving as the market is moving quickly.
Speaker #3: In addition, controlling plastic from source to recycled products to recycled end products enables us to develop into a one-stop shop for brands and retailers who are already our customers and are now working on pan-European recycling strategies.
Speaker #3: The last four columns on this slide are services provided by GreenDock. So, moving from left to right, it's the contracted supplier of waste handling in Germany under its extended producer responsibility rules.
Speaker #3: It's a significant producer of recycled plastic, with mechanical recycling facilities across five European Union countries. It's a supplier of chemical recycling feedstock. And lastly, it's a co-developer of an AI-powered EPR compliance software platform, in collaboration with Osapians, a German software business, to address increasingly complex EU reporting requirements.
Speaker #3: Needless to say, it takes years to develop these customer relationships, the brand awareness, the market insights, and, of course, the operating permits and expertise.
Speaker #3: The right two columns are the capabilities of our technical platform, Arc Labs, which I referred to. Again, our US-based R&D center, which qualifies feedstock and licenses technology.
Speaker #3: I'd say that some of our peers may own one or two of these capabilities, but it's difficult to find one with the full breadth of Agilyx.
Speaker #3: Our position across the value chain really gives us operational flexibility and strategic synergies. Focusing for a moment on the highlights of 2026, the first half of 2026, a central highlight is our increased ownership in GreenDock Global, which Agilyx now owns 51.1% of and is consolidating results.
Speaker #3: As of April 20th, there has been an expansion of that platform through multiple acquisitions that have occurred over the last nine months of our involvement. In H1, we also implemented a strategic restructuring, where we exited all of our US project development activities and obligations and repaid our outstanding senior debt, which had been allocated for that purpose.
Speaker #3: We're now focused primarily on Europe, where GreenDock is our key asset. As part of our pivot, we placed €26 million of convertible bonds during the period, and we extended our operating runway to at least late 2027.
Speaker #3: For H1, we reported 85 million euros in revenue, and EBITDA loss of 1.9 million euros, and a net profit of 9.7 million euros. GreenDock, just for transparency, GreenDock on a standalone basis, for the full six months, booked 229 million euros in revenue, 8.9 million in EBITDA, so we only consolidated two months of those operations given the date of our control of the control transaction, but on a pro forma six-month consolidated basis, we would report a solid EBITDA profit.
Speaker #3: So, while Agilyx has been through really significant transformation over the last two years, in H1 we really emerged as a stronger company and on solid financial footing.
Speaker #3: Focusing on GreenDock operations—the central business here, as I mentioned—is the EPR, which has a 15% market share in Germany and over a 30-year operating history.
Speaker #3: It has near universal brand recognition in the German market, and it licenses its brand and logos across Europe, including in Norway, where I'm currently a resident, where it's familiar to many as Grønpunkt Norge.
Speaker #3: In 2026, the EPR business is processing 400,000 tons of recycling volumes, including approximately 200,000 tons of waste plastic. If we take into account recent acquisitions, the total input mechanical recycling capacity has increased to 175,000 tons.
Speaker #3: On the chemical recycling feedstock side, we have a prep facility—preparation facility—in construction in Austria, which is on budget and on time for commissioning in Q2 2027.
Speaker #3: And combined, that Austrian plant, combined with our plant outside of Milan, will bring our chemical recycling feedstock production capability to close to 60,000 tons per annum.
Speaker #3: Importantly, again, I come back to the EPR business. It's the central part of our financing structure—GreenDock—or EPR. The EPR segment is paid upfront for plastic before the plastic is sold, so revenue that comes in does not necessarily depend on commodity prices of plastic.
Speaker #3: And we have good visibility early each year on the full-year performance. You can see from the slide on the left side of this page that gross profit has been consistent over five years, and we expect this to continue with modest or moderate growth.
Speaker #3: But the stable waste volumes and the predictable and stable cash flow of EPR really help us insulate GreenDock from the cyclicality of the recycling sector.
Speaker #3: And it's enabled, or empowered, the company to make opportunistic investments to expand its platform. So, to that end, the mechanical recycling throughput capacity has expanded two and a half times in less than a year, by way of acquisitions in France and Spain earlier this year, and the addition of an Italian acquisition completed late last year.
Speaker #3: So, integrating and consolidating these acquisitions into GreenDock's portfolio has been a real focus of management this last year, and we're seeing immediate contributions from both the Italian and the French mechanical operations. We won't see full potential from these, and from the Spanish acquisition, until 2027 and onwards, though we are already seeing the benefits of the network.
Speaker #3: So what's driving this market, and why particularly now there's so much catalyst, is that the EU legislation is really set to transform the industry.
Speaker #3: The EU's packaging and packaging waste regulation came into legal force on August 12th of this year, just a couple of weeks ago. It mandates and requires that recycled content targets kick in in 2030, and that all packaging placed on the European Union in the European Union must be recyclable, must also be recyclable by 2030.
Speaker #3: And then, critically, from November 21st of this year, in three months, the EU is going to ban plastic waste exports to non-OECD countries. That means that waste that used to leave Europe will primarily need to be processed inside the EU.
Speaker #3: With that together, you get really two effects. First, the work is to our benefit: the demand for recycled content is becoming mandatory rather than voluntary, which is a structural tailwind for those of us who can supply a product.
Speaker #3: And the export ban decreases input costs, which will have a positive effect on supplier operating margins. So the demand impact of that legislation is pretty significant.
Speaker #3: It's really, I would say, not an overstatement to say we expect a wave of demand as a function of the legislation. Plastics Europe projects that the EU will require over 11 million tons of recycled plastic for packaging by 2040.
Speaker #3: To meet this demand, the 2.5 million tons currently used for packaging will need to double by 2030 and double again by 2040.
Speaker #3: Our mechanical recycling capacity will directly benefit from increased demand for high-quality recycled plastic, and we firmly believe that this demand is going to outstrip its current capacities.
Speaker #3: And therefore, it’s also going to accelerate the need for chemical recycling to meet targets. So while we have a strong, operative, and profitable mechanical recycling platform, our footprint in chemical recycling also provides us optionality on that growth by providing feedstock through GreenDock’s facilities and conversion technology from Arc Labs.
Speaker #3: Which, in combination, allows us to really be a player in that sector. We have previously shared some indicative 2026 performance figures for GreenDock.
Speaker #3: So we're very pleased that the company is substantially on track to achieve these expectations. We've made a small downward adjustment in the mechanical recycling EBITDA forecast due to the acquisition of Anviplast in Spain, which was not in our previous forecast and will require some investment over the balance of the year.
Speaker #3: We expect Anviplast to break even by year-end, though, and make a positive contribution in 2027. We have high visibility on approximately €19 million of GreenDock EBITDA in 2026, growing from €11 million in 2025, so very substantial growth.
Speaker #3: And I've made a comment that, as an Agilyx shareholder recently observed to me—and she was absolutely correct in saying it—anyone who wants to win in 2030 needs to be a player in 2028.
Speaker #3: At GreenDock, we're moving very quickly to consolidate and integrate a fast-growing and profitable platform, and we're confident that we're tracking to a 2028 target of €50 million in EBITDA.
Speaker #3: And lastly, before I return over to the financial section, I do also want to mention or comment on our projects around digitalization, which are very important to the future of the industry. As regulation expands across the European Union, companies are under increasing pressure to navigate compliance and complexity.
Speaker #3: In H1, GreenDock entered into an exclusive relationship with Osapians, a German AI software unicorn, backed by BlackRock and other prominent investors, to develop and market a recycling compliance solution for the EPR market.
Speaker #3: The first modules are expected are currently under development. We expect them to start coming to market at the end of '26. And combined with GreenDock's other activities to digitize packaging information, we're very excited about the potential software-like margins and meaningful growth to this segment and deliver over the coming years.
Speaker #3: With that, I'd like to pass the microphone to Bertrand, who will review our financial performance in more detail. Bertrand?
Speaker #2: Thank you, Ranjit. Good afternoon. Let me take you through the first half of 2026. Consolidated only from April 2026. So these results do not reflect the full six months.
Speaker #2: And with no GreenDock in the 2025 comparative, all line is like-for-like. Consolidated EBITDA was negative €1.9 million. Positive €2.7 million from GreenDock since last April.
Speaker #2: Since late April, against negative $4.6 million from Agilyx, which includes $1.4 million of one-off costs, mainly related to the fundraising costs for the convertible issuance.
Speaker #2: We expect Agilyx platform costs to run at around €1.5 million per quarter going forward. Net profit for the period was €9.7 million, which includes a €30.2 million one-off gain that I will come to on slide 17.
Speaker #2: Cash was $54.5 million at the end of June, compared to $4.8 million at year-end. The increase is principally due to cash coming onto the balance sheet with GreenDock and Cyclics consolidation, together with the convertible bond proceeds.
Speaker #2: We also show GreenDock on a 100% basis for the full six months. GreenDock is tracking well on EBITDA for the full year, with €8.9 million delivered in the first half.
Speaker #2: Enviplast, the Spanish acquisition that closed at the end of June, is slightly dilutive on EBITDA for this year, while we integrate the business we acquired out of insolvency.
Speaker #2: We expect to reach EBITDA break-even on that asset by year-end, and a positive contribution from 2027. Let's look at GreenDock's performance under each segment.
Speaker #2: EPR revenues were €189 million, with volumes and margins stable year-on-year, despite lower paper recycling prices. Mechanical recycling is where the growth is—revenues are up from €17 million to €40 million.
Speaker #2: And EBITDA from $0.9 million last to a $1.9 million gain, driven by the acquisitions over the last nine months of three groups. RG Group in France is performing strongly.
Speaker #2: Foreplast is slightly behind plan, as the bottle-to-bottle business is ramping up more slowly than projected. The fire at our German plant that I sell slightly disrupted operations in June, with the site coming back online from August.
Speaker #2: For context, mechanical recycling generated $31 million of revenues in the whole of 2025, and already $40 million in this half alone. Chemical recycling went from a $1.9 million to a $3.2 million EBITDA last.
Speaker #2: Mainly due to the fire at our Italian sorting facility, which was down for around seven months for repairs and repair milling. It restarted in May and is ramping back up.
Speaker #2: Let's review the bridge from the operating results to the reported profit. An operating loss of $5.3 million, against which, see $30.2 million of gains.
Speaker #2: First, $11.4 million from the remeasurement of our previously held 46% interest in GreenDock to fair value. Then $12 million on the Cyclics reorganization, where we took the remaining net assets for no consideration.
Speaker #2: And $6.8 million on Enviplast, both through a court-supervised sale for a nominal sum well below the fair value of these assets. So, these three recurs.
Speaker #2: Below that, €15.2 million of net financial items, principally the cost of redeeming the senior bond in March, which gives €9.7 million of profit—of which €3.6 million goes to the non-controlling interest in GreenDock and €6 million to Agilyx shareholders.
Speaker #2: The balance sheet has changed significantly since December 2025, essentially due to the GreenDock consolidation. Total assets are now €468 million. And we now carry GreenDock in full, replacing the €41 million equity account in investment.
Speaker #2: There is $136.9 million of goodwill and $113.7 million of customer relationships and trade names. Equity includes $64.7 million of non-controlling interest. The balance sheet shows a net current liability position of around $58 million.
Speaker #2: That is structural to the EPR cycle rather than a liquidity constraint. Licensing fees are billed annually upfront, and the associated recycling costs are provided for and settled throughout the year.
Speaker #2: Against it, we hold $54.5 million of cash and an under $25 million revolver facility. On the capital structure, the senior bond was fully redeemed in March, removing its covenant and releasing $34 million of restricted cash from escrow.
Speaker #2: In its place, we issued $26 million of convertible, of which only $9.7 million was cash as of February. The tap was an exchange for senior bonds.
Speaker #2: No cash interest is payable on that loan, and it does not mature until June 2028. Interest-bearing debt has increased to €142.6 million, mainly from the consolidation of GreenDock. At the Agilyx level, net debt has declined by around €20 million this year, following the redemption of the senior bond and the issue of the new convertible.
Speaker #2: After nailing the consolidated $54.5 million of cash, the group net interest-bearing debt is $88.1 million. Refinancing of the GreenDock facilities is targeted for early 2027.
Speaker #2: GreenDock has secured a $25 million revolving facility and received $9.3 million of new equity from both shareholders in June. Neither Agilyx nor GreenDock has a near-term funding requirement, and Agilyx is funded through at least late 2027.
Speaker #2: That concludes the financial review.
Speaker #1: Thank you, Petra. And just to wrap up and to conclude, GreenDock's EPR really anchors the platform. It provides consistent cash flow and margins, while controlling high volumes of plastic waste.
Speaker #1: EU regulation is catalyzing a wave of regulatory-driven demand. We're seeing increasing momentum and engagement as brands work to meet pending QPWR requirements. We're moving up the value chain by increasing product quality, through investments in higher-quality capacity in our mechanical recycling business to drive EBITDA growth.
Speaker #1: Agilyx conversion technology and technical expertise give us real optionality to close the loop as that market develops, building on our successful deployment in Japan, where we have credible improvement technology already deployed.
Speaker #1: And we are well funded, as Petra mentioned. We are well funded to meet our objectives, with excellent debt refinancing opportunities, like GreenDock. I would add, finally, that the macroeconomic, industry, and at times company-specific headwinds over the last years have been a clear challenge, but we've worked through them.
Speaker #1: We've navigated those waters, and we've pivoted our strategy to meet the opportunity. We really emerged today as a transformed company, well-positioned to compete.
Speaker #1: And to consolidate our position as an innovator and a market leader in the European recycling sector. I'm very excited for the balance of the year and to be able to report our progress next time we are able to speak about it.
Speaker #1: So, I want to thank you for your time today, and we will be happy to take any questions.
Speaker #3: Thank you very much for the presentation. Ladies and gentlemen, now it's your turn. We are opening the Q&A session. If you would like to ask your questions in person via the audio line, please click on the right-hand button.
Speaker #3: If you are dialed in by phone, please press the star key, 9, to raise your hand, and star key, 6, to unmute yourself. And, of course, you're also very welcome to post your questions in our chat.
Speaker #3: And we will read them out for you. There is already one raised hand from Adam Forsyth. I will allow you to unmute yourself.
Speaker #3: You should be able to speak now, and ask your question.
Speaker #1: Hello, Adam.
Speaker #4: Hi there. Just checking that I'm unmuted. Can you hear me okay?
Speaker #1: Yep. Very loud and clear.
Speaker #4: Great, thanks. Thanks, Ranjit, and thanks, Bertrand. Two questions—actually, kind of one for each of you. In the deck, you've got the phrase "fully funded until at least late 2027."
Speaker #4: The GreenDock refinancing is early 2027. So, I'm wondering why that date—and my question is less connected with the finance and more with the strong tailwinds you're seeing from the regulatory change?
Speaker #4: Are you thinking that in late 2027 you're going to want to be looking at maybe significant new investment to meet the demand that's out there?
Speaker #4: And, related to that, what sort of utilization levels are you at? How much spare capacity do you have in just what you have at the moment?
Speaker #4: And then I'll go with the second question for Bertram. It's a little bit more technical. Just on the EPR working capital, I think I'm right in saying, looking at the notes, it's the waste and licensing accruals figure—€88 million.
Speaker #4: I'm wondering, is there any seasonality in that? And, just looking forward, would we expect that kind of level to be maintained—maybe growing with the EPR business, but not with the rest of the business?
Speaker #1: I'm trying to take that, that last part there.
Speaker #2: Sure, that's correct. There is some seasonality to it. The working capital and the licensing business is all-year negative, but there are some swings. It tends to start on the other side, like the billing upon the early side of the year.
Speaker #2: So receivables tend to be at their highest early in the year, then go down. So there is a bit of a seasonal swing over the years, but the net working capital is actually roughly stable and always negative.
Speaker #4: Great. Thanks.
Speaker #1: And Adam asked you a question about runway and cash at the end of 2027—that’s our current view. And there's another question I see from George Powell about cash burn.
Speaker #1: So Agilyx is about $500,000 a month. So one and a half quarters. So at our current balance of roughly $10 million, that's sort of end of 2027, assuming no changes.
Speaker #1: In fact, that burn will come down as our cloud business builds. We have a series of commercial opportunities that we're pursuing, which we expect will potentially mitigate that.
Speaker #1: But that's why we're using those numbers—just to be conservative and to provide transparency on our runway to Agilyx. The financing at GreenDock is not really a function of that, although it could impact it, because the refinancing of the bank lines at GreenDock would therefore allow dividends to be paid up to the shareholders.
Speaker #1: And that's one way that Agilyx would, therefore, mitigate some of its cash needs. But the decision around growth is really what's driving the timing of the GreenDock financing, in the sense that if there's additional infrastructure that we would like to fund, or opportunities we'd like to pursue, that's probably the best way to do that because there's some headroom to increase those lines to allow for that type of investment.
Speaker #4: Yep, yep. Okay, makes sense. Thanks.
Speaker #1: George, did we answer your question there? I think you had a question about that, yes. Okay.
Speaker #3: Yeah. Question answered. Perfect. Then another reminder of how to ask your questions. Oh, there is another question in the chat, but I'll still remind you once.
Speaker #3: For questions in person via the audio line, please click the right-hand button. If you're dialing in by phone, please press the star key (★) 9 to raise your hand, and star key (★) 6 to unmute yourself.
Speaker #3: And you can also post the questions in the chat, as has so happened. Of €68.9 million in trade receivables, €36.6 million is past due, including €9.7 million over the 90 days.
Speaker #3: Yet the loss allowance is zero, justified by Agilyx's historical credit losses. Why is that history applied to GreenDock's German, French, Italian, and Austrian EPR customers?
Speaker #3: And what does GreenDock's history look like on collection?
Speaker #2: Right now, we're on mute. The history of GreenDock doesn't show any significant losses on collection, and that's why the loss allowance is zero.
Speaker #2: We will revisit all the policies to compute the loss allowance. But there is no concern about the ability to collect on those receivables.
Speaker #3: Thank you very much. So let's hold one moment and see if any further questions arise. There is another raised hand again—from Adam first.
Speaker #3: You should still be able to speak.
Speaker #4: Great, thanks. Just a slightly more general one. Partly, actually, Ranjit, talking about where he is at the moment. In terms of the acquisitions you've made, it feels very country-driven and feels very mechanical recycling-driven.
Speaker #4: And I wonder, if we look forward—obviously, we do expect you'll be continuing to assess acquisition opportunities as they arise. Is there anywhere you would rule out? Would you avoid non-EU Europe, such as Norway, or where I am sitting in the UK, or are these areas still on the shopping list, if that's the right way to put it?
Speaker #1: That's a good question. Of course, there are multiple reasons to do acquisitions: to find synergies with the group, and geographic proximity could be one of them, where we can share resources and waste sheds. I would say, though, in general, one of the primary motivators for us has been the PPWR regulations coming into force in the EU.
Speaker #1: And so we're seeing a lot of opportunity around eco-modulation and targets, which tend to then aggregate us in that region. So I would never exclude that.
Speaker #1: And GreenDock's certainly looking at all types of opportunities, but I think the better probability is that we'd be looking at assets that are in that geography.
Speaker #4: Yeah. Yeah. Makes sense. Thanks.
Speaker #3: Thank you as well. So, a last reminder to ask your questions now if you have any, or place them in the chat. And since there seem to be no further questions, we come to the end of today's earnings call.
Speaker #3: In any case, if you have any further questions at a later date, please feel free to contact Investor Relations. And a big thank you to Mr. Bhatia and Mr. Larroche for your presentation and your time.
Speaker #3: I wish you all a successful day and hand over to you, Mr. Bhatia, once again for your closing remarks.
Speaker #1: No, I just thank you very much for joining, and we're looking forward to the next period of time in the company's development. Bertrand and I are always available.
Speaker #1: Happy to meet with you or speak with any of you at any time. Please feel free to reach out, and we'll make the time to do that.
Speaker #1: Thank you very much.
Speaker #2: Thank you.
