full year results year ended 31 july 2016 - graphene€¦ · generation on multiple graphene...
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1www.appliedgraphenematerials.com
Applied Graphene Materials
Full year results
Year ended 31 July 2016
Applied Graphene Materials
Full year results
Year ended 31 July 2016
2
Overview
Solid progress against milestones
Value creation through improving the performance
of our customers’ materials and products
► Strategic approach to commercialisation of graphene through customer
collaborations is proving effective and on track:
► First production order received from Century Composites for use
of graphene in fishing rods
► Accelerated product development programme with James Briggs
with an expectation of product launch in early 2017
► Further products and applications anticipated for launch in 2017
► Modular production capacity expansion – first phase commissioned and
operational
► Continued focus on three core target markets of paints and coatings,
composites/polymers, and functional fluids
Tomorrow’s material. Today
3
Overview of commercial progress
Value creation through improving the performance
of our customers’ materials and products
► First production order received from Century Composites
► Over 120kg of graphene dispersions across 170 evaluation
samples provided to customers in the year
► Continuing to target end applications where our graphene can
have greatest benefit – other end products and applications
anticipated for launch in 2017
► £8.5m equity raise to fund collaborations, working capital and to
expand manufacturing capacity, underpinned by momentum of
customer development work
Greatest priority – securing further production orders
4
2016 Financial overview
2016 2015£’000 £’000
► Revenue & other income 252 101
► EBITDA loss (4,155) (3,860)
► Loss before tax (4,269) (3,909)
► Basic & diluted EPS (22.0p) (22.9p)
► Adjusted diluted EPS (20.8p) (22.4p)
► Cash at bank 7,702 4,709
► Capital expenditure (1,087) (385)
► Cash used in operations (4,184) (3,589)
Solid progress against milestones
Expected time to adoption
Complexity of
opportunity
Automotive coatings
Size and range of opportunity
Lubricants
Thermoplastic parts
Formulated greases
Prepregs
Composite sports goods
Coatings for harsh environments
Toughening of composites for aerospace
Market opportunity significant and AGM is very well positioned
2016 2017 2018 2019 2020 2021 future
Source: Directors’
best estimates
Size of opportunity
5
Aeorosolpaints
Other sports goods
Top ten current customer opportunities
Range of opportunity
Product orders
6
Century Composites case study
Solid progress against milestonesCommence capacity expansion now
► Collaboration extending over c12 months with established
specialist fishing rod manufacturer
► Launch of new range of performance Graphex fishing rods
containing carbon fibre prepreg incorporating AGM graphene
► Products have improved mechanical performance and are able
to be marketed at a premium
► Property enhancements attributed to graphene’s high specific
surface area and mechanical properties
Planned capacity expansion to six tonnes per annum
First production application for graphene
7
Paints and Coatings
Solid progress against milestonesCommence capacity expansion now
► Sixfold improvement in barrier and anti-corrosion properties in
independent trials
► Accelerated product development programme with James Briggs
► Inclusion of graphene in aerosol paints with expectations of
launch early in 2017
► End applications affordable through use at low loading levels in
existing formulations to benefit barrier performance
► Ongoing collaboration with Sherwin-Williams
Planned capacity expansion to six tonnes per annumLaunch expected early in 2017
8
Composites
Solid progress against milestonesCommence capacity expansion now
► Development programme with Airbus Defence and Space for use
of graphene in satellites
► Prepreg is one of several formats of intermediate materials used
in the composites industry
► Working with a leading innovator in EU composites to produce a
graphene enhanced prepreg – marketing across the composites
sector including sporting goods, motorsport and industrial sectors
Planned capacity expansion to six tonnes per annum
Multi-functional properties of graphene
9
Functional fluids
Enhanced performance in volume applications
► Ongoing collaboration with Puraglobe to incorporate graphene
into products based on SYNTAINICS® technology, with initial
focus on metalworking and cutting fluids and adjacent markets
► Establishment of performance database for several of
Puraglobe’s products containing graphene, by independent
German test house, to speed up customer adoption
10
Customer engagement
Ongoing collaboration and data generation on multiple graphene formats. Optimisation of graphene dispersions
> 300 samples
provided:
Supply of sample
quantities of
graphene
dispersions primarily
into three core
target market
sectors
Current position > 20
partners:
JDAs, application
development work, near
term production
opportunities, repeat
supplies and pre-
production sampling
Leading to first
production orders:
Century Composites
Traction with commercial partners
Volume production
Other opportunities for product launch in 2017
11
Development of manufacturing capacity
Solid progress against milestonesCommence capacity expansion now
► Conditions of manufacture impact properties of graphene
► Essential to be able to modify manufacturing conditions to
augment properties for specific end applications
► Significant know-how, understanding and ability has been built up
to deliver specific property enhancements. US patent awarded
► Capacity expansion following modular approach – creates greater
flexibility and also prudent
► First phase of capacity expansion completed and commissioned
► Combined nameplate production capacity extended to 1.5 tonnes
Planned capacity expansion to six tonnes per annum
Expansion of capacity to support anticipated demand
12
Income statement summary
► Higher operating costs
reflecting ongoing costs
of working with and
supporting commercial
partners including
headcount
► Exceptional costs relate
to placing and open
offer
2016 2015
£'000 £'000
Revenue 75 41
Other income 177 60
252 101
Cost of sales (397) (341)
Gross loss (145) (240)
Operating expenses (4,429) (3,822)
EBITDA (4,155) (3,860)
Exceptional costs (250) (91)
Depreciation (169) (111)
Operating loss (4,574) (4,062)
Net finance income 55 62
Loss before tax (4,519) (4,000)
Tax on loss 175 100
Loss for the period (4,344) (3,900)
Diluted EPS (pence) (22.0) (22.9)
Adjusted diluted EPS (pence) (20.8) (22.4)
13
Cash flow summary
► Net £7.9m placing
proceeds placed on
deposit for maturities
of less than one year
► Increase in capital
expenditure for
development of
production processes
and related assets
2016 2015
£'000 £'000
Operating loss (4,574) (4,062)
Depreciation 169 111
IFRS 2 Share based payments 235 156
Net working capital movement (14) 206
Cash used in operations (4,184) (3,589)
Interest received 44 82
Tax received 189 111
Capital expenditure (1,087) (385)
Free cash flow (5,038) (3,781)
Proceeds from issue of shares 8,031 13
Opening cash at bank 4,709 8,477
Cash at bank 7,702 4,709
14
Summary and outlook
Aim is to become global graphene market leader
► First production order and other near term opportunities
give confidence that strategic approach to
commercialisation of graphene is effective and on track
► Focus on supplying formatted graphene into applications
requiring minimal change to existing production
processes
► Securing further production orders remains greatest
ongoing priority
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