full year results year ended 31 july 2016 - graphene€¦ · generation on multiple graphene...

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


► 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


► 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


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


► 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


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

full year results year ended 31 july 2016 - graphene€¦ · generation on multiple graphene...

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