Itaconix plc
("Itaconix" or the “Company”)
Half year results for the period ended 30 June 2022
Itaconix (LSE: ITX) (OTCQB: ITXXF), a leading innovator in sustainable plant-based polymers used to decarbonize everyday consumer products, is pleased to announce its unaudited interim results for the six months ended 30 June 2022.
A copy of the Interim Report & Accounts is available for download on Itaconix's website at www.itaconix.com.
John R. Shaw, CEO of Itaconix, commented:
“We reached a new level of success for our proprietary plant-based technology platform in the first half of 2022 with record half-year revenues from new and recurring orders generated out of our growing customer base. These customers are increasingly relying on our ingredients for competitive advantages in everyday products used for cleaning, beauty, and hygiene. From detergents and air fresheners to shampoos and underarm deodorants, our ingredients add safety, performance, and sustainability to new generations of existing and new products used by millions of consumers every day.”
Financial Highlights
- First half revenues of $3.1 million were 124% higher than the first half of 2021, 148% higher than the second half of 2021, and 40% higher than our prior record half-year revenues of $2.2 million in the second half of 2020.
- Gross profits were $0.8 million, representing an increase of 45% over the first half of 2021 and an increase of 332% over the second half of 2021.
- Gross profit margin was 25% compared to 27% for the full year of 2021 This slight decline in gross profit margin was due to a higher percentage of revenues from large detergent customers and price support for two large customers. The Company has implemented three price increases since January 2022 to keep pace with higher raw material costs but held to 2021 pricing for two customers in early 2022 to support major marketing campaigns that started in late 2021.
- Adjusted EBITDA1 was a loss of $0.6 million, compared to a loss of $0.7 million for the first half of 2021 and a loss of $0.9 million for the second half of 2021, including continued investment spending on major new revenue opportunities.
- Cash and Cash Equivalents as of 30 June 2022 was $0.9 million, compared to $0.7 million as of 31 December 2021.
- In April 2022, the Company completed an equity raise with gross proceeds of $0.4 million for working capital, predominantly to strengthen finished goods inventories held in the EU to assure reliable and ready delivery times to EU customers.
Company Milestones:
- Cleaning revenues were $2.7 million for the first half of 2022 compared to $0.9 million in the first half of 2021 and $0.9 million in the second half of 2021, reflecting increased market share for Itaconix® TSI™ 322 as the key ingredient in a new generation of non-phosphate dishwashing detergents. Continued growth is expected as current customers gain market share, new customers go into full production in Europe and North America, and additional customers emerge in 2023 from the current pipeline of new cleaning projects.
- Combined hygiene, beauty, and BIO*Asterix revenues remained steady at $0.4 million for the first half of 2022 compared to $0.5 million in the first half of 2021 and $0.3 million in the second half of 2021. New growth is expected as post-Covid formulation activity increases and more projects in the Company’s customer pipeline advance to commercial launch.
- The Company advanced further new revenue opportunities for 2023 with a new development effort announced with a major pulp and paper company for odor control in hygiene products.
- Itaconix’s addressable market increased from $750 million to $2.3 billion with three new commercial opportunities emerging from the Company’s proprietary technology platform in hygiene with a plant-based superabsorbent, in composites with a new plant-based intermediate, and in beauty with a new hair care product.
- Replacement of fossil-based acrylate superabsorbents with Itaconix’s VELAFRESH® SAP80 plant-based superabsorbent is a major new revenue opportunity. The Company announced early commercial work with a potential hygiene customer in January. Testing and further development with this and other potential customers are expected to continue through 2023 for initial use in consumer products in 2024.
- One new patent application filing was announced in February 2022 for a plant-based ingredient with potential use in composites.
- An additional new patent application filing was announced in April 2022 for a new plant-based hair care ingredient that the Company will introduce in the second half of 2022.
- Following the period end, Dr. Peter Nieuwenhuizen was appointed in July 2022 as Non-Executive Director and Interim Chair. As the former CTO of AkzoNobel Specialty Chemicals and current Founding Partner of the European Circular Bioeconomy Fund as well as Chair of the Green Chemistry & Commerce Council, Peter is a recognized business and technical leader in advancing plant-based chemistries across supply chains to create the Low-Carbon Economy.
- Also following period end, Laura Denner, CFO since 2018, was appointed in July 2022 as an Executive Director of the Company.
Commenting on the outlook John R. Shaw, CEO added:
“The immediate and long-term prospects for Itaconix are progressing very well as existing customers expand into more retailers, new customers bring new formulations to market, and potential major new customer projects advance in our pipeline. We expect to see at least one new EU detergent product on the market this year, a new hair care ingredient launched in the coming months, and major new potential in hygiene applications.
The Company remains on course to deliver full year 2022 revenues ahead of current market expectations based on progress in commercial volumes and success in passing on increases in direct costs. Adjusted EBITDA1 loss for full year 2022 is expected to be an improvement in 2021, but below previous market expectations, reflecting continued investment in the growth of the business.”
1Adjusted EBITDA is defined and reconciled to Operating loss in Note 4 of the Interim Report.