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1、CHANGING WOOD TO CHANGE THE WORLD Annual Report and Financial Statements 2023WHATS INSIDEOUR BUSINESS MODEL26OUR STRATEGY28OUR GLOBAL TECHNOLOGY CENTRE 10BUSINESS REVIEW34SUSTAINABILITY56Overview02 Key Highlights04 Our Business at a Glance 06 Case Study How We Enhance Nature08 Case Study Accoya Colo
2、r10 Case Study Our Global Technology Centre 12 Reasons to Invest14 Executive Chairs StatementStrategic Report20 Our Products22 Our Market26 Our Business Model28 Our Strategy34 Business Review 44 Finance Review50 Risk Management56 Sustainability 67 Stakeholder EngagementCorporate Governance74 Board o
3、f Directors76 Senior Leadership Team78 Chairs Statement of Governance80 Corporate Governance82 The QCA Corporate Governance Code(the QCA Code)Statement of Compliance 202388 Audit Committee Report90 Nomination Committee Report92 Health,Safety and Environment(HSE)Committee Report93 Remuneration Report
4、108 Directors Report112 Statement of Directors ResponsibilitiesFinancial Statements116 Independent Auditors Report to the members of Accsys Technologies PLC125 Consolidated Statement of Comprehensive Income126 Consolidated Statement of Financial Position127 Consolidated Statement of Changes in Equit
5、y128 Consolidated Statement of Cash Flow129 Notes to the Financial Statements166 Company Statement of Financial Position167 Company Statement of Changes in Equity168 Notes to the Company Financial StatementsShareholder Information175 Shareholder InformationView the latest results online at|HOW WE EN
6、HANCE NATURE Our acetylation process 06ACCOYA COLOR08Accsys is a fast-growing business with a purpose:CHANGING WOOD TO CHANGE THE WORLDWe combine technology and ingenuity to enhance the properties of wood to create products that are extremely durable and stable,presenting new opportunities for the b
7、uilt environment.FY23 has been a year of significant progress and change for the Accsys business.It has also been a year that has produced some well-documented challenges.”Stephen OdellExecutive ChairFor more information,please see the Executive Chairs Statement|Page 1434%GROWTH IN REVENUE AT 162.0m
8、120%GROWTH IN UNDERLYING EBITDA1 AT 22.9m6%GROWTH IN ACCOYA SALES VOLUMES AT 63,344m3FY23 has been a year of significant progress and change for the Accsys business.It has also been a year that has produced some well documented challenges.The underlying health of the business has never been stronger
9、.We delivered our highest volume production ever in FY23 post the installation and start-up of reactor 4,and the global demand for both Accoya and Tricoya continues to grow.Post the year end,and with a new management team in place,including the appointment of Dr.Jelena Arsic van Os as CEO Designate
10、and Steven Salo as Group CFO,the business is now well placed to capitalise on this customer demand and execute against our ambitious capital projects.We have made significant progress in growing production capacity through the completion of a fourth reactor at our plant in Arnhem,enabling us to prod
11、uce record volumes of Accoya in Q4.We have also made good progress on the construction of our plant in Tennessee.However,the project has experienced some delays and cost inflation and,as a result,commercial operations are now expected to commence in mid-2024.Construction of the worlds first Tricoya
12、plant in the UK has been more challenging,with the project in a hold period while we assess its capabilities and funding options.Our new management team is well positioned to decide how to move forward in the best way for the business.The future growth opportunity for Accsys is clear and we are focu
13、sed on delivering against our strategic growthplans.Cover:Accoya cladding,windows and doors and shutters.Architect:Good Architecture.Builder:Winchester Construction Co.,Inc.Window&Door Manufacturer:Dover Windows&Doors.Landscape Architect:Lila Fendrick.Photography:Erik Kvalsvik.Interior Designer:Mona
14、 Hajj Interiors1.On an underlying basis,including the Groups attributable share of our USA joint ventureOVERVIEWGOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTS01|Accsys Technologies PLC|Annual Report and Financial Statements 20232023 162.0m2022 120.9m2023 34%2022 30%2023 55.2m2022 36.0m2023 11.0m2023
15、 22.9m20222023(44.1)m2022(27.2)m10.4m2022 1.3mKey HighlightsGROUP REVENUE 162.0m+34%GROSS PROFIT 55.2m+53%UNDERLYING EBITDA122.9m+120%GROSS PROFIT MARGIN34%UNDERLYING PROFIT BEFORE TAX11.0m NET DEBT(44.1)m 1.On an underlying basis,including the Groups attributable share of our USA joint venture More
16、 financial highlights|Page 44 See our ESG highlights|Page 56 For our Alternative Performance Measures details|Page 136Project:Villa Harmony,Ibiza,Balearic Islands,SpainDistributor:Grupo Gmiz Architect:Paco Candel Carpentry:Carpintera Gil AlmansaFor more Accoya projects go online at| SALES VOLUME63,3
17、44CUBIC METRESACCOYA SALES GROWTH+6%ACCOYA SALES GROWTH H2 ON H1+64%HEALTH AND SAFETY0.9LOST-TIME INCIDENT RATEINCREASED RENEWABLE ELECTRICITY USAGE AS A PROPORTION OF TOTAL ELECTRICITY TO63%OF THE OVERALL MIX,INCLUDING RECS (2022:39%)CERTIFIED SUSTAINABLE (I.E.FSC(CO12330)WOOD SOURCES 100%(2022:100
18、%)See our Business Review|Page 34 Financial highlights Operational and ESG highlightsOVERVIEWGOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTS03|Accsys Technologies PLC|Annual Report and Financial Statements 202302Our Business at a GlanceOur purposeCHANGING WOOD TO CHANGE THE WORLDChanging wood is what
19、 we do,and to change the world is why we do it.Our purpose gives us a common,aspirational goal to work towards and is embraced by our stakeholders:making the world a better,more sustainable place.Our valuesOur values represent what we believe in as a company.We use them to guide our strategy and act
20、ions for the long term and on a daily basis.Our values are:Who we areWe combine technology and ingenuity to enhance the properties of wood to create products that are durable and stable,presenting new opportunities for the built environment.1Be ambitious the world depends on usOur ambition is to cha
21、nge the world it doesnt get much bigger than that.We must be bold,agile and committed to our goals.We have to be all in and move quickly and decisively.To achieve our ambitions we may make mistakes,but we must not be afraid to try.We will always learn from the experience.2Respect and value all stake
22、holdersEveryone we work with is important our colleagues,customers,partners,suppliers,shareholders and more.We act with integrity and authenticity,encourage collaboration,and build trust through inclusion and mutual respect.As a team,we will succeed.3Be committed to safety,quality and sustainability
23、Safety is of the utmost importance in everything we do.We all share responsibility for protecting people,property and the environment at all times.We strive to fulfil our brand promise and delight our customers.We commit to delivering consistently high quality.Our productsAccoya is the worlds leadin
24、g high performance sustainable wood.Manufactured from abundantly available,FSC certified wood species,it is sustainable,durable,resistant to rot and Cradle to Cradle Certified.Tricoya wood chips are a feedstock for our licensees to manufacture high performance Tricoya panel products suitable for out
25、door use.Our sustainable business modelThrough our sustainable business model we give the world a choice to build sustainability and create value for all our stakeholders.Investing in our futureRead more|Page 26Building new plants and optimising existing sitesWorking with business partnersGlobal sal
26、es and distributionProprietary manufacturingResponsible sourcingOur activitiesResearch and development(R&D)Our footprint Dallas sales office Kingsport Accoya site London Accsys head office Barry Accoya Color site Hull Tricoya site Arnhem Accoya site&office Freiburg Accsys sales officeKeyAccsys Locat
27、ionsProduct DistributionUnder ConstructionOVERVIEWGOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 20230405Case Study|INNOVATION IN ACTION HOW WE ENHANCE NATUREReactor in Arnhem plant 33%ADDITIONAL CAPACITY IN ARNHEM IN FY23Find out more o
28、nline| Accoya and Tricoya grow as global brands,the outstanding qualities of our ultra-high performance and sustainable wood products is becoming more widely recognised by customers,manufacturers and distributors.Our expertise in innovation has enabled us to transform fast-growing softwood into some
29、 of the most durable,stable and low maintenance wood products in the world.Accoya and Tricoya undergo a process called acetylation through which the structure of natural wood is permanently modified,giving it the same durable properties as more carbon-intensive man-made materials.The chemistry utili
30、sed in the acetylation process involves changing the molecular structure of wood cell walls.Free hydroxyls within these cell walls are responsible for the absorption and retention of moisture,causing swelling and eventual decay of the wood.Acetylation solves this problem by replacing these free hydr
31、oxyls with stable acetyl groups(already present in the wood),thereby reducing its ability to retain moisture and making it dimensionally stable and durable.Thorough real-world testing has been conducted over many years on Accoya,which means we can confidently provide industry-leading warranties of u
32、p to 50 years.Successfully commercialising this technology allows Accoya and Tricoya to become ideal wood products for a number of applications including joinery(windows and doors),cladding and decking.Innovation in technology allows us to truly enhance what nature gives us so that we can change woo
33、d,to change the world.Where other companies have tried and failed over the years to commercialise what is often described by those working in the industry as a wonder wood,we have perfected the process,which is protected with extensive intellectual property including c.388 patents and patent applica
34、tions in 45 countries.”Pablo SteenwinkelGroup Head of TechnologyLourens Van As,Project Engineer in ArnhemScan here for more on our acetylation process Our proprietary acetylation processOVERVIEWGOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTS07|Accsys Technologies PLC|Annual Report and Financial State
35、ments 202306Case Study|INNOVATION IN ACTIONACCOYA COLORDecking made out of Accoya Color 140%INCREASE IN VOLUME PRODUCTION OF ACCOYA COLOR IN FY23 Find out more online| Accoya Color pool decking with LED lighting,AustriaAccoya Color is our latest innovation and despite being available in only a few s
36、elect markets,it is already proving to be agreat success.Accoya Color is made initially in the same way as regular Accoya wood but then undergoes a secondary manufacturing process during which it is coloured,surface to core,with a rich,grey tone.Colouring the wood in this way gives the product a pre
37、mium and durable aesthetic for commercial applications,including decks and cladding projects.Accoya Color has all the same advantages as Accoya but with the additional benefit of being richly coloured,removing the requirement of having to manually stain or coat end users wooden decking or cladding a
38、nd also the associated time and cost that comes with annual maintenance to keep the product looking fresh and uniform,year after year.Our technology means that Accoya Color remains consistently grey,even if scratched,pierced or cut through.It is also certified non-toxic and is barefoot friendly in e
39、ven the warmest climates.In addition to the products existing markets of Germany,Switzerland,Austria and North America,Accoya Color was launched this year into the new markets of Australia,New Zealand and France.In 2022 Accoya Color was awarded Cradle to Cradle certification at the prestigious Gold
40、level,as well as being awarded Platinum level(the highest level)for both Material Health and Water Stewardship.This certification demonstrates that Accoya Color is a product that adheres to very high standards of sustainability,alongside the recognised high performance and durability credentials of
41、thebrand.”George NeelManaging Director,Accoya ColorProject:Color decking for pool surround,Switzerland Distributor:Holzagentur SchweizSupplier:SPA Sperrholz-Platten AGManufacturer:Brunner Zimmerei Holzbau GmbH PRODUCT DETAILSOVERVIEWGOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTS09|Accsys Technologie
42、s PLC|Annual Report and Financial Statements 202308Tamsin Stevens,ESG Manager,visiting our Global Technology CentreIts fantastic when our system partners see the value in the performance credentials of our brands and collaborate with us to create high performance product systems to overcome technica
43、l obstacles.”John Alexander Group Sales Director Case Study|INNOVATION IN ACTIONOUR GLOBAL TECHNOLOGY CENTRE Innovation is at the heart of what we do at Accsys and this has enabled us to become a leading modified wood manufacturer on the global stage.Situated next to our manufacturing facilities in
44、Arnhem,our Global Technology Centre(GTC),led by Dr Pablo Steenwinkel,is focused on many innovation projects.The team is focused on both process and product innovation which impact the short,medium and long-term future of the business.Process optimisation is of paramount importance because of the gro
45、wing global demand for our products.A small reduction in the batch cycle time or a small volume-optimisation step in the production process can produce meaningful gains in annual volume production,and with production capacity recently expanded in Arnhem,process optimisation and reliability remain co
46、re areas of focus for the GTCteam.There is a large addressable market for our existing product brands and we work closely with our Sales&Marketing teams to understand evolving consumer needs and to assess where innovation can meet thoseneeds.Some of our most exciting innovation work is being carried
47、 out with system partners businesses that manufacture products that are often used in conjunction with Accoya and Tricoya(such as adhesives,coatings and hardware).The GTC is core to the Accsys business,contributing to our performance today and developing the products and partnerships of the future.O
48、ur Global Technology Centre in Arnhem The new wood stacking process machinery at the Arnhem plantOVERVIEWGOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTS1110|Accsys Technologies PLC|Annual Report and Financial Statements 2023Accoya Color Grey cladding-private residence in Scarborough Hill,Christchurch
49、 New Zealand.Distributor ITI TimspecAccoya cladding,Vilnius,Lithuania Architect Architekturos linija.Sub distributor ArgillaReasons to InvestWE BELIEVE THAT ACCSYS TECHNOLOGIES REPRESENTS A COMPELLING GROWTH OPPORTUNITY FORINVESTORS 12Substantial market opportunity There is a growing need and regula
50、tory push to move from non-renewable to renewable lower carbon construction materials.The properties of our products-sustainability,strength,durability and beauty-perform strongly against the highest performing non-sustainable and man-made materials.With the building sector accounting for c.38%of gl
51、obal CO2 emissions,renewable lower-carbon construction materials such as wood are gaining in popularity in the global construction industry.This presents a significant addressable market for our products.Sustainability Our products meet the growing demand for environmentally friendly alternatives se
52、en in everyday life and in every sector of manufacturing.Our products are grown from renewable sources,sequester carbon and lock it in to a useful,recyclable and non-toxic building material.They enable creative and innovative design and construction,while fitting into a sustainable circular economy
53、bio-cycle,reducing embodied carbon costs,and without risking environmental contamination through the leaching of chemicals or pollution.LOWENVIRONMENTALIMPACTSUSTAINABLYSOURCED See Our Market|Page 22 See our Sustainability section|Page563Scalable growthOur manufacturing process and modular industria
54、l design is based upon confidential technical know-how and protected IP which can be expanded and replicated world-wide.As demonstrated by our successful plant in Arnhem,the Netherlands,the Accsys know-how and intellectual property allows us to add additional capacity to existing sites.Our Accoya US
55、A plant in Kingsport,Tennessee has been designed in anticipation of adding additional reactors to the site as demand for the product grows.See Our Strategy|Page 2845World leaders in wood technology We have developed innovative,proprietary andprotected technologies which chemically modify wood throug
56、h an acetylation process.The resulting products benefit from exceptional dimensional stability,durability and many other qualities.Ourproducts are best-in-class and are leading the revolution of modified woods in a growing building industry which is starting to recognise and adopt the significant lo
57、ng-term benefits of such materials.Strong organisational capability Talented people are at the core of Accsys,with skilled employees at all levels and committed and experienced leadership.This means Accsys has the ability to capitalise on and develop on growth opportunities.Our Board and Senior Lead
58、ership Team are highly committed and experienced,with varied backgrounds including from the broad industrials,chemical,manufacturing,consumer goods,marketing and finance industries.WORLDWIDEACCREDITATIONSORGANISED See Our Products|Page 20 Our Board and Senior Leadership Team|Page 74OVERVIEWGOVERNANC
59、ESTRATEGIC REPORTFINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 202312132023 162.0m2023 22.9m2022 120.9m2022 10.4mOverviewDespite particularly challenging macro-economic conditions,which include the ongoing war in Ukraine,an energy crisis,rising inflation,supply
60、chain disruption and the pressing need to address climate change,Accsys has made significant progress in the 2023 financial year as we move forward with our ambitious plans for growth.The resilience of our business against this difficult backdrop is testament to the attractiveness of our products,th
61、e strength of our business model and the talent and commitment of our people.Overview of performance The successful construction and completion of a fourth reactor in our plant in Arnhem,the Netherlands,together with reactors 1-3 returning to production after the temporary shutdown of the plant in A
62、pril and May during the completion of the R4 capacity expansion,led to our highest ever volume production in Q4.Demand for our Accoya and Tricoya wood has been strong as customers continue to seek products that deliver outstanding performance,durability and sustainability.The year has not been witho
63、ut its challenges,however.In November,we announced that,while we had taken 100%control of the world-first Tricoya project in Hull,we also put the project into a hold period of at least six months to assess future capability and funding options.While further work is required to prove the working capa
64、bilities of the plant,we have made good progress on this review over the past six months.We have also been assessing the cost to complete the project,developing extensive and detailed work packages in order to do so.This work stream has confirmed our original assessment of the costs to complete the
65、project as up to 35m.Over the period we have also continued to sell Accoya to our off-take partners,MEDITE and FINSA,both of which convert Accoya wood into Tricoya and help seed the market.We continue to see good levels of market demand for the product,which reaffirms our view of the long-term marke
66、t potential for Tricoya.Ongoing discussions with both partners about future arrangements following completion of the plant remain positive.We have also been in discussions with certain strategic partners with a view to providing appropriate funding necessary to complete the Hull plants construction.
67、To date,the Company has been unable to reach acceptable terms with any of these strategic partners.In view of the strong market dynamics underpinning Tricoya,the Board of Accsys continues to believe in the underlying attractive economics and margins associated with completing the construction of Hul
68、l and therefore will continue to explore funding options to support the plants construction,including strategic partners and lending institutions.Absent the availability of third-party funding,the Company will use modest levels of internally generated cash to maintain the plant and progress certain
69、pre-construction works.The Board will continue to engage with stakeholders in respect of Hull and its future prospects.Despite its belief in the future potential for Tricoya,the Board is clear that the base Accsys business must not be compromised to find a solution for Hull.In the meantime,we will c
70、ontinue to work with our partners to develop the Tricoya market using Accoya,including exploring the expansion of dedicated capacity for greater volume production within our existing facilities.We have made good progress with our Accoya USA JV with Eastman.However,construction has experienced some d
71、elays and cost inflation.Both Accsys and Eastman remain fully committed to delivering the project,which will replicate the proven technology of our successful plant inArnhem.2023 financial performanceAccsys delivered revenues of 162.0m,a 34%increase on FY22,reflecting continuing strong demand for ou
72、r products,higher average sale prices and the implementation of an Energy Price Premium to mitigate higher gas prices.Underlying EBITDA was 22.9m,an increase of 120%on the prior year,and ahead of our market guidance of nearly doubling last years EBITDA of 10.4m.Group gross margin increased by 4 perc
73、entage points to34%,aided by the higher average sales prices outlined above.Underlying profit before tax increased by9.7mto11.0m.Statutory loss before tax was 67.1m.Net debt increased by 16.9m in the year to 44.1m dueto the planned investment into Accoya USA,(29m),capex investments of 29.8m into the
74、 Arnhem reactor 4 and Tricoya Hull projects(partially offset by a placing in May 2022 which raised net proceeds of approximately 19.0m),the reduction in the NatWest loan(9.4m)and EBITDA generation during the year.Our purpose,values and strategyOur purpose at Accsys is to Change Wood to Change the Wo
75、rld.Ambition,respect for our stakeholders and our commitment to safety,quality and sustainability are the Companys three core values.We have bold ambitions for growth:we successfully enhanced our production capacity in Arnhem this year with reactor 4 and remain fully committed to further expanding o
76、ur global production capability.Safety is of the utmost importance to Accsys and all our colleagues have a collective responsibility to protect people,property and the environment.We continue to strive to fulfil our brand promise and delight our customers with consistently high-quality products.Sust
77、ainability and our impact on society are core to what we do not just for our products,but also for how we operate as a company.Our strategy for growth is predicated on four priorities.They are:1.Grow product demand developing market opportunities to drive revenue growth;2.Practice manufacturing exce
78、llence growing our global manufacturing production capacity and doing things faster,better,and more safely;3.Develop our technology product R&D and process-related technologies and IP to protect and grow our leading market position;and 4.Build organisational capability developing our people and orga
79、nisational capability to enable us to meet our growth objectives.We provide an in-depth review of our progress against these four priorities for growth in our Strategic Review onpages 28 to 33.Executive Chairs StatementA PROFITABLE YEAR WITH GOOD FUTURE PROSPECTSDespite delivery of strong growth in
80、revenue and EBITDA in FY23,the year has not been without its challenges.”Stephen OdellExecutive ChairGROUP REVENUE 162.0m+34%UNDERLYING EBITDA 22.9m+120%OVERVIEWGOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 20231415 BARNSNAP HOUSE PROJE
81、CTWest Sussex,United Kingdom Located in West Sussex,Barnsnap House is a modern five-bedroom property that was recently built on a woodland clearing site.To keep in tune with the natural surroundings of the previous woodland,timber cladding was used for the exterior faade of the familyhome.The timber
82、 chosen was Accoya,which is made from acetylated wood.Accoya has exceptional dimensional stability,evident from its 50-year above-ground warranty,and many other qualities,as well as being sustainably sourced.It was crucial for the client that the Accoya had a rustic finish with a coating that was ea
83、sy to maintain and a colour that was between black and brown.James E.Hatch&Son supplied sawn-face Accoya cladding and produced an in house bespoke colour using a coating system from Anker Stuy Coatings to match theclientsrequests.The client was able to select from three rustic timber finishes,each w
84、ith slightly different shades and appearances.Executive Chairs Statement continuedAward-winning and sustainable wood productsDuring the year,Accoyas high level of performance and sustainability was recognised in various prestigious global industry awards.Accolades include the EmiratesGBC Green Build
85、ing Product of the year and the Best of Products award from The Architects Newspaper,USA for Accoya Color Grey.We continue to see strong customer support for our products,such as Google,where Accoya has been specified on its new HQ landscraper building in Kings Cross,London.Health&Safety During the
86、year,the Company rolled out a number of dedicated safety learning programmes and initiatives,including a Health&Safety month in February 2023 which gave our colleagues the opportunity to participate in group discussions on safety improvement,training sessions and guest speaker events.Health&Safety c
87、ontinues to be a top priority for the Board and for Accsys,and the Board-level HSE Committee established in 2022 has helped support the Boards focus on this key area.ESG Accsys is committed to growing and operating its business in a responsible and sustainable way.Aligned with our values and busines
88、s strategy,our ESG framework outlines 10 key material issues and impact areas on which we are primarily focused.Having completed Stage One of our 2020 sustainability strategy roadmap,we are now in Stage Two and are focused on establishing specific development plans,including setting Science Based Ta
89、rgets(SBTs)to reduce our emissions intensity per cubic metre of Accoya produced.Building on our commitment to transparency,Accsys participated for a second consecutive year in the S&P Global Corporate Sustainability Assessment.Accsys scored 43/100-an improvement of five points(13%)on the prior year,
90、placing the Company in the top quintile inthe Paper&Forest Products industry category.Capital raiseIn May 2022,the Company completed a 19m net capital raise from shareholders to support the completion of current capital projects and increase working capital and cash flow headroom.We extend our thank
91、s to shareholders for their continuing support and investment in Accsys.Our BoardThe Boards composition brings depth and a range of experience to Accsys,both supporting and challenging the Executive team in the execution of the Companys strategy.Post the year end,there has been some considerable cha
92、nge with the departure of Rob Harris and William Rudge from the Board,together with the appointment of Dr Jelena Arsic van Os as Chief Executive Office Designate and Steven Salo as Chief Financial Officer.We also announced in May 2023 that Sean Christie,Sue Farr and Alexander Wessels are to step dow
93、n from the Company as Non-Executive Directors at the forthcoming AGM in September.Please see my Statement of Governance letter on page 78 for further details on these changes.Our people and stakeholders I would like to express my sincere appreciation to our colleagues across the Company for their co
94、ntinued dedication,loyalty and hard work.I would also like to express my thanks to our shareholders,customers,business partners,suppliers,and contractors for their continued support of Accsys Technologies.CASE STUDYSupplier:James E.Hatch&SonCoatings:Anker StuyFor more Accoya projects go online to| S
95、TATEMENTSLooking aheadWe expect to leverage the benefits from greater economies of scale associated with higher production volumes at our plants.FY24 will also be a year of transition,during which we will implement actions to ensure the future sustainable growth of the business and to drive value cr
96、eation for our shareholders.These actions include moving towards completion of the Kingsport plant,which will incur higher costs this year as we invest in people and infrastructure in readiness for start-up and making key investments in the core business to support higher volume production.In view o
97、f our increased capacity at Arnhem and future capacity from Kingsport,and in light of some softening of price and demand in the global construction industry,we are dedicating more resource to sales and marketing,particularly in the US,to prepare for a greater level of supply as this project comes on
98、line.We have made a good start to FY24.With our new executive management team in place to drive the business forward,we are confident in delivering further financial and operational progress in the coming year,and in the longer-term demand and growth opportunity for Accoya and Tricoya.Stephen OdellE
99、xecutive Chair26 June 2023 PRODUCT DETAILSOVERVIEWGOVERNANCESTRATEGIC REPORTFINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 20231617OVERVIEWGOVERNANCESTRATEGIC REPORT17STRATEGIC REPORTStrategic Report20 Our Products22 Our Market26 Our Business Model28 Our Strategy
100、34 Business Review 44 Finance Review50 Risk Management56 Sustainability 67 Stakeholder EngagementFINANCIAL STATEMENTSOVERVIEWSTRATEGIC REPORTGOVERNANCE191918|Accsys Technologies PLC|Annual Report and Financial Statements 202325&50 YEAR WARRANTIESHIGHLY STABLEHIGHLY DURABLELONG SERVICE LIFENATURAL WO
101、ODLOW MAINTENANCEMULTIPLE FINISHESBESPOKE OPTIONSIDEAL FOR COATINGWIDE BOARDS AVAILABLENON TOXICWORLDWIDE ACCREDITATIONLOW ENVIRON-MENTAL IMPACTSUSTAINABLY SOURCED100%RECYCLABLEINSECT RESISTANTFOR ALL CLIMATESFEWER CALL BACKS50 YEARWARRANTYINSECTRESISTANTBESPOKEOPTIONSHIGHLYSTABLEFOR ALLCLIMATESHIGH
102、LYDURABLELOWMAINTENANCEFEWERCALL BACKSLONG SERVICE LIFELOWENVIRONMENTALIMPACTNON TOXICSUSTAINABLYSOURCEDWORLDWIDEACCREDITATIONS100%RECYCLABLEOur ProductsACCSYS PRODUCES TWOPRODUCTSFind out more online|Find out more online| and Tricoya redefine performance when it comes to timber.Both product brands
103、are highly durable with industry-leading warranties of up to 50 years above ground and 25 years in ground or freshwater.Offering outstanding dimensional stability in their composition,both products are suited to extreme climates as well as offering high levels of insectresistance.Accoya is our acety
104、lated solid wood product brand.It is the worlds leading high performance sustainable wood brand,sourced from fast growing,FSC certified forests.It is both highly stable and resistant to rot,with properties that match or exceed those of the most durable tropical hardwoods,plastics and other non-renew
105、able alternatives.Ideal for use across numerous internal and external applications,Accoyas primary applications are windows,doors,decking and cladding.Tricoya wood chips are the principal ingredient used by our licensees to manufacture Tricoya panel products(similar to MDF)with enhanced properties:e
106、xceptional durability,very high dimensional stability and ideal for use in wet environments internally or externally.These properties open countless opportunities for specifiers,architects,joinery manufacturers and product designers.Our products are defined by three sets of credentials:performance,f
107、inish,and sustainability.It is with this combination of product attributes that we seek to delight our customers and stand apart from the competition.WARRANTY FOR50yearsABOVE GROUND AND 25YEARS IN GROUND ORFRESHWATERREDUCTION OF OVER75%IN SWELLING CAUSED BYMOISTURE UPTAKECERTIFICATIONDEMONSTRATING L
108、EADINGSUSTAINABILITY CREDENTIALSFINISHAccoya and Tricoya products look better for longer.Accoya affords the option of being left uncoated to weather naturally or opting for a coated finish.Due to the excellent dimensional stability of both Accoya and Tricoya,coatings last longer,with many coatings m
109、anufacturers offering extended coating warranties on their products.Maintenance time is reduced,saving time and money over the long term.Versatility of products means design freedom not normally achievable with other woodproducts.SUSTAINABILITYBoth wood product brands compete not only with other woo
110、d products,such as tropical hardwoods,but also other carbon intensive materials such as aluminium,steel,concrete and plastic.The durability of our products means that we are well placed to substitute these less sustainable materials,as well as offering the additional sustainability benefits that bui
111、lding from wood affords.All sourced wood that is used to manufacture both Accoya and Tricoya is FSC certified.Our Accoya product brand is also certified by Cradle to Cradle at the Gold level.Accoya comparison chart AccoyaSapeleOakMerantiIrokoRedwoodLifespan ()()()Warranty N/AN/AN/AN/AN/ACoatings per
112、formance Thermally insulated Maintenance intervals The number of Xs(1-3)are an indicative scale with one X being the worst and 3 Xs being the best.FINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 202320OVERVIEWSTRATEGIC REPORTGOVERNANCE21Our MarketA SIGNIFICANT GRO
113、WTH OPPORTUNITYOverviewAccsys products are positioned within the global wood products market,which is estimated to be worth$748bn in 2023 with a compound annual growth rate(CAGR)of 7.4%(Source:TheBusiness Research Company).Macro-economic trends,wider societal megatrends and market penetration opport
114、unities provide uswith significant growth and demand drivers.With demand for our products exceeding our volume of supply,increasing our production capacity,as we have done in our plant in Arnhem this year,is central to salesgrowth.The global wood products industry produces approximately 800m cubic m
115、etres per annum(Source:The UN Food&Agriculture Organization).As our products compete with and displace other non-wood building materials from concrete toplastics,the market opportunity isevengreater.Three key factors support our view ofthe market potential for ourproducts:Our products outperform com
116、peting materials most strongly when used in an outside environment.The global outdoor wood market is estimated to be around 14%of the global lumber orsawnwood market;They compete with the high value end of the outdoor wood market,which represents around 25%ofthe global outdoor wood market;and Our ac
117、hievable market figure reflects our focus on six key geographic targets and four product use categories.Demand driversThere are three main of drivers of demand for our products:1Industry demand driversGDPRising GDP per capita,economic development and higher standards of living are fueling constructi
118、on,the principal driver of wood consumption,across the world.Construction&redevelopmentOur products are used in new constructions and in the refurbishment,redevelopment and remodelling ofcommercial and residential buildings and projects.Underlying drivers include rising standards around expectations
119、 of building usages,performance and design,and regulatory changes(notably building safety,maintenance,sustainability and energy performance).Construction and redevelopment is also impacted by unexpected macro events,such as the COVID-19 pandemic which led to greater levels of home improvements from
120、consumers spending more time athome.FINANCIAL STATEMENTS63,344m3 Accoya sold in this financial year3Market penetrationOur products are most frequently chosen for their characteristics,quality and performance across all climate extremes,and this is fundamental to our proposition.This competitive adva
121、ntage against other woods and non-wood materials means we believe we can grow faster than the market through market penetration and share gains.Market share and growthSince proving the commercial viability of acetylated wood,Accsys has grown its market share and brand awareness in the industry throu
122、gh market seeding within ourcurrent model of distributor supply andmanufacturersupport.2MegatrendsSustainabilityThe built environment is responsible for almost 40%of global carbon emissions.In addition to decarbonisation,the Race to Zero,and setting of net zero carbon targets,there is also an increa
123、sing focus on renewable resources to reduce embodied carbon in materials and buildings.In addition,many countries and global businesses now have mandatory,legislative targets to be carbon neutral by 2050.Shifting consumer priorities Consumers in our geographic end markets continue to shift towards p
124、roducts that have a lower environmental impact,from shopping bags and drinking straws to the cars we drive.The trend is the same in the built environment:around the world we can see evidence of mass timber buildings using renewable,carbon-storing wood in place of concrete and steel.Lifestyle changes
125、Socio-economic changes are driving a cultural shift in expectations for residences and commercial buildings and there is an increasing demand for high performance and low maintenance wood products suitable for outdoor use,with this segment expected to grow faster than for softwood grades generally.|
126、Accsys Technologies PLC|Annual Report and Financial Statements 202322OVERVIEWSTRATEGIC REPORTGOVERNANCE23Our Market continuedCompetitive advantage andmaterial substitutionAccoya solid wood has best-in-class properties that match or improve upon unsustainable alternatives,together with certified sust
127、ainability credentials.Our acetylation process substantially reduces the effects of water on wood,dramatically reducing susceptibility to swelling,shrinking and decay.Architects,specifiers,manufacturers and end users no longer need to choose between performance and sustainability,with Accoya offerin
128、g clear advantages over non-renewable,unsustainable and heavily polluting alternatives such as tropical hardwoods,synthetics,plastics and mined metals.Agreements have been secured with MEDITE and FINSA,who use the Tricoya acetylated wood elements in place of traditional wood chip feedstock to create
129、,market and sell Tricoya panels.Sales of Tricoya panels have increased significantly each year since MEDITE introduced them to the market in 2012,being used both in place of traditional panels and in applications where wood panels would not have previously beenfeasible.By increasing our manufacturin
130、g capacity around the world,we can develop existing markets,expand intonew territories and grow our product range and applications.The enhanced performance and suitability for use in wet environments of our Tricoya panels not only improves their appeal compared to traditional more expensive and less
131、 easily handled panel products,but also introduces new use scenarios and design possibilities.Sales of Tricoya panels have increased significantly each year since their introduction to the market(pleasesee pages 44 to 49 for further details).Both products also offer market-leading warranties and ser
132、vice life,along with the sustainable benefits and credentials that make them particularly attractive in an increasingly environmentally-responsible world.Route to marketOur focus on marketing and selling to our distributors and their customers has proven to be a successful route to establish our pro
133、ducts in the market as we challenge traditional preconceptions about materialchoice.We have built and developed strong relationships with our distributor networks in key territories,achieved through training,support and engagement with both them and their manufacturing customers.As a result,we are a
134、ble to develop brand and product advocates throughout the value chain.We are also seeking to significantly increase awareness of the benefits of Accoya with end users and consumers.Currently our extended sales network,with our partners and customers,is a major driver of end user demand,expert recomm
135、endation being highly valued in our markets.However,we are already seeing evidence of Accoya in particular gaining a very positive reputation with enthusiastic propertyand homeowners.Targeted segment penetrationWith products that could be described as disruptive to existing materials,and with demand
136、 exceeding production capacity,we have focused on developing regions and product applications which will support rapid but sustainablegrowth.The majority of Accoya sales are to a network of timber distributors which in turn supply a variety of industries,principally for joinery(windows and doors),de
137、cking and cladding.Accoya is primarily selected for use by architects,manufacturers and specifiers for its high-performance characteristics.Tricoya panels are currently manufactured using chipped Accoya wood,in advance of the completion of the dedicated Tricoya wood chip acetylation plant in Hull,UK
138、.The integration of our Approved Manufacturer Programme with location-and application-based Where to Buy listings on our website has resulted in significantly increased throughput of demand to vendors of Accoya products,benefitting our brand,our customers,and endconsumers.This year,we launched a new
139、 UK national advertising campaign,“Lasts a Lifetime”,highlighting the high performance of Accoya wood to homeowners.The campaign launched with a commercial on Sky TVtargeting a subset of the homeowner market audience,supported by digital advertisements.Product applicationsOur products encourage manu
140、facturers,architects,specifiers and consumers to make sustainable building material choices on multiple globalapplications,without compromising on performance.DECKINGWood decking has a look and feel of its own.Our products resistance to cracking,splinters,and other effects of weather and water offer
141、s the choice for genuinely sustainable,long-lasting decking of unmistakable quality.WINDOWSClassic looks with contemporary performance:Accoya wood window frames deliver all the benefits and beauty of natural wood with none of the downsides:superior thermal insulation,minimal upkeep,maximum stability
142、,durability andsustainability.DOORSIndustry-leading stability means that our products wont shrink and swell like other wood:reducing the chance of sticking or jamming in wet conditions,and helping coatings last far longer before cracking or peeling.Tricoya and Accoya provide compelling advantages fo
143、r all kinds of exterior doors.CLADDINGForm and function combine perfectly as Accoya andTricoya give designers,specifiers,woodworkers,architects and property owners a material with boundless creative possibilities,world-leading sustainability credentials and best-in-class long-term performance.Demand
144、 driversThere are three main types of drivers of demand for our products.FINANCIAL STATEMENTSScan here to view our “Lasts a lifetime”commercial|Accsys Technologies PLC|Annual Report and Financial Statements 202324OVERVIEWSTRATEGIC REPORTGOVERNANCE25Our differentiatorsWe utilise the following resourc
145、es and relationships,which offer us a competitive advantage in our marketplace:Our Business ModelGIVING THE WORLD A CHOICE TO BUILD SUSTAINABLYThrough sourcing,production,and bringing products to market,our business model enables Accsys to fulfil ourpurpose and give the world a choice to build more
146、sustainably.Our activities We combine chemistry,technology and ingenuity to make high performance wood products that are extremely durable and stable,and opening newopportunities for the built environment.Our business and products add value at each stage from sourcing to sale and use,through their q
147、uality,sustainability,competitive benefits and longevity.Our activities also focus on strategic expansion of our business to capture the substantial global market opportunity we believe is achievable with ourproducts.We obtain the raw wood timber we use to produce our products from certified sustain
148、able,well-managed and fast-growing forests through wood mills and wood chip suppliers in New Zealand,Argentina,Uruguay and the UK.We work with acetyls providers to source acetic anhydride and sell-back acetic acid,our reusable by-product into themarket.We manufacture our wood products using our prop
149、rietary,wood acetylation process at our existing plant in the Netherlands.We work with a network of global distributors to get our sustainable wood products to our customers,who utilise Accoya and Tricoya materials to create branded products such as windows,doors,decking,cladding,faades and other ex
150、ternal applications.Our technology and IPWe have developed families of patents,providing robust protection over our proprietary products and processes.Our people and engineering expertiseOur passionate employees are key to the successful execution of the Groups strategy,together with their valuable
151、know-how and a dedication to the future success of the Group.Environment and sustainabilityAccoya&Tricoya fit perfectly in the bio-cycle of the circular economy.Strong industry relationshipsWe work with equipment manufacturers,wood suppliers,the acetyls industry,testing and certification bodies,and
152、other system supply specialists,to help us develop our technology,products andtheir place in the market.Industry-leading brandsOur brands Accoya and Tricoya are globally registered trademarks,portraying our products sustainable,high quality and long-term performance.Financial positionWith continued
153、growth in revenue and a cash generative Accoya business,our financial position will support our global growth plans.45 countriesin which we hold c.388 patent family membersOver 60 countriesin which our brands are registered trademarks+34%Revenue growth in FY23Accoya isCradle to Cradle Certifiedat th
154、e Gold levelForest Stewardship Council(FSC)certifiedOutputs 63,344m3Accoya wood sold this year+34%FY23 revenue growth which continues to be driven by ongoing distribution customersResponsible sourcingProprietary product manufacturingGlobal sales and distributionBuilding new plants and optimising exi
155、sting sitesResearch and development(R&D)Working with business partnersAccoya USAjoint venture with Eastman in Kingsport,TennesseeWe develop and optimise existing sites and processes to benefit from existing skills and leverage operational and financial scale.We identify new international locations a
156、nd appropriate partners to develop additional capacity in order to meet our longer-term growth potential in global markets.We have developed innovative,proprietary and protected technologies.We continue to investin R&D,focused on optimising our existing product offering and technologies and investin
157、g in focused technology solutions.Working with the right business partners helps us maximise our potential,enabling our growth to realise the substantial global market opportunity for our products.We continue to advance our strategic priorities,in particular by working with partners which have resou
158、rces or technologies that complement ourown.1.5m R&D investment*in FY23*excludes capex on new technologyMEDITE and FINSA convert Accoya into Tricoya wood panelsOur stakeholdersWe work with our stakeholders across our business activities.Through our business activities,we create value for stakeholder
159、s in different ways.Our Stakeholder Engagement report on page 67 sets out further detail on our stakeholder relationships.Our Stakeholders SHAREHOLDERSARCHITECTSEMPLOYEESSUPPLIERSMANUFACTURERSCONSUMERSDISTRIBUTORS&SPECIFIERS See our Stakeholder Engagement section|Page 67FINANCIAL STATEMENTS|Accsys T
160、echnologies PLC|Annual Report and Financial Statements 202326OVERVIEWSTRATEGIC REPORTGOVERNANCE27Our StrategyREALISING OUR AMBITIOUS GLOBAL GROWTH PLANWe have bold ambitions for growth:we successfully enhanced our production capacity in Arnhem this year and are fully committed to further expanding o
161、ur global production capability with a focus on four strategic priorities.Our focus Drive sales growth in key markets and categories Maintain strong customer relationships,service and support Build and protect our brands Maximise our competitive advantage through product performance,quality,and sust
162、ainability Capitalise on our ideal positioning to benefit from global sustainability and consumer megatrendsGROW PRODUCT DEMANDDeveloping market opportunities to drive revenue growth2023 Progress Total sales volume up 6%at 63,344m3 Strong customer demand with record sales in Q4 Website conversion ra
163、te at an all-time high Further increase in lead generation funnel into Approved Manufacturers Accoya Color sales growth in decking in DACH region;new market launches in Australia,New Zealand and France Modest volume growth and more significant revenue growth in North America,despite major supply con
164、straint in H1 and a softening market in H2 Launch of first UK consumer(B2C)campaign:national advertising campaign on Sky TV and digital YouTube campaign.Total 11.2 million impressions combined in Phase 1Looking forward Continued strong product demand despite slowdown in global construction industry
165、and softer price/demand in key timber markets;more resource dedicated to Sales&Marketing to create further demand as capacity becomes available Continued North American sales and brand development System Partner expansion co-branding with coatings,adhesives,and hardware manufacturers Further expansi
166、on of B2B activities including Approved Manufacturers Programme and collaboration with customers Increasing B2C brand awareness in core markets to drive consumer pull Accoya Color market expansion into North America Read more about Our Products|Page 20Material Issues Sustainable&quality productsEner
167、gy&climate changeResponsible sourcingSociety&CommunitiesGovernance,management and advocacyDevelop our technologiesContinue to build our organisational capabilityDeliver manufacturing excellenceGrow product demand200mm wide Accoya wood boards were used for the roof and fastened board-on-board.Design
168、Unknown Architects,Photography MWA Hart Nibbrig,Contractor Kolthof BV,Location The NetherlandsFINANCIAL STATEMENTSOVERVIEWSTRATEGIC REPORTGOVERNANCE2928|Accsys Technologies PLC|Annual Report and Financial Statements 2023For more Accoya projects go online to| Strategy continuedOur focus Grow manufact
169、uring capability and production capacity in North America,Europe and internationally Optimise our plants and processes for scalable growth Replicate proven technology with continuous improvements Ensure colleague safety across all our operations Partner fairly with third parties Read more about our
170、manufacturing expansion in the Executive Chairs Statement|Page 14DELIVER MANUFACTURING EXCELLENCEGrowing our global manufacturing production capacity Doing things faster,better,and more safely2023 Progress Completion of Arnhem fourth reactor 33%capacity expansion Good progress with Accoya USA JV wit
171、h Eastman,however project has experienced some delay and cost inflation Accsys now has 100%control of Tricoya Hull plant,construction substantially complete,project in Hold Period while Board assesses future capability and funding options(see page 14)In-year operational improvements to Accoya Color
172、plant in Barry to drive further volumes in FY24 Further development of safety strategy and culture,and increased monitoring and reporting of safety indicatorsLooking forward Ongoing ramp up to optimal capacity in Arnhem Conclusion of Board review into Hull Project and decision on strategy going forw
173、ard Commercial operations at Accoya USA plant now expected mid-2024Material Issues Sustainable&quality productsEnergy&climate changePeople and wellbeingEcological footprintGovernance,management and advocacyResponsible sourcingHealth and safety ACCOYA DECKINGMonkey Mia,Australia At Monkey Mia beach f
174、ront,located 900km north of Perth,Accoya decking was installed in late 2021.These photos were taken several months later,in August 2022,in front of the dolphin experience centre.The area is well known for its frequently visiting bottlenose dolphins,and the centre maintains a positive relationship be
175、tween the dolphins andhumans.Accoya wood replaced wood-plastic composite(WPC)decking,also being used this time for street furniture along the boardwalk and steps to connect the different levels.The replacement material was required because visitors were unable to walk or sit on the WPC decking as it
176、 got far too hot.Accoya does not have this problem as even in the height of summer,the low thermal gain ensures Accoya decking is barefoot friendly.Accoya approved distributor,M&B,supplied the decking boards for this project uncoated.The natural Accoya wood has already started weathering and the pho
177、tograph below of the steps shows the colour difference in the first 10 months.Distributor:M&B CASE STUDY PRODUCT DETAILSFINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 202330OVERVIEWSTRATEGIC REPORTGOVERNANCE31CONTINUE TO BUILD OUR ORGANISATIONAL CAPABILITY Develo
178、ping our people and organisational capabilities to manage our growthOur Strategy continuedDEVELOP OUR TECHNOLOGIES R&D of product and process-related technologies and IP to protect and grow our leading market positionOur focus Pursuing process technology to enhance efficiency Optimising existing pro
179、ducts Protecting our IP Sourcing responsibly Lowering resource use and incorporating circular processesOur focus Talent management:adding new skills and talent Developing our people:Leadership&Training Engaged workforce Living our values and culture2023 Progress Expansion of Global Technology Centre
180、 and R&D team to drive growth through innovation and continued improvements to Accoya and Tricoya business activities Installation and start up of new automated wood handling equipment in Arnhem to improve wood handling and efficiency Ongoing research into alternative sourced wood species performanc
181、e,resulting in the commercial launch of Accoya made from Taeda(see page 39)Steady production at Accoya Color plant in Barry;improved production cycle time leading to higher volumes Continued and expanded IP protection,and safeguarding freedom to operate,in various areas applicable to the Accoya and
182、Tricoya businesses2023 Progress Further strengthening of manufacturing expertise and leadership through appointments of new Group Manufacturing and Projects Director and new MDs for Hull and Barry plants Increased investment in training and development to support skills and talent pipeline;significa
183、nt increase in colleague training modules and training hours per colleague Post the year end,in April 2023 the Company announced the appointments of a new CEO and CFO,with significant experience in large capital project management,cost management and financial forecastingLooking forward Ongoing impr
184、ovements to overall production process efficiencies,including new quality scanning capabilities of wood handling process and equipment Longer-term research into potential for additional product categories as overall capacity increases Continued development and expansion of our IP portfolio to suppor
185、t business strategy Continued research into,and assessment of,alternative raw materials supply options Preparations for Kingsport Accoya production site commissioning and start-up in mid-2024Looking forward Improving capital project delivery:stronger project management and contracting practices Ongo
186、ing progressive enhancement of processes and management systems New leadership training programmes and talent mapping,to ensure we have the right skills and talent in place to grow our business effectively Continued improvements resulting from colleague survey feedbackMaterial IssuesMaterial Issues
187、Sustainable&quality productsInnovation and technologyGovernance,management and advocacyPeople&Wellbeing,Fair&Ethical Conduct Read more about Innovation&Technology|Page 39 Read more about our Senior Leadership Team|Page 76FINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statem
188、ents 202332OVERVIEWSTRATEGIC REPORTGOVERNANCE33SUCCESSFUL EXPANSION OF CAPACITY IN FY23The successful construction and completion of a fourth Accoya reactor in Arnhem,together with reactors 1-3 returning to production after the Arnhem plants shutdown in April and May,has led to our highest ever volu
189、me production in Q4.Business ReviewOverview of the yearDemand for our Accoya and Tricoya wood was strong(and in excess of our capacity)as customers continued to seek products that deliver outstanding performance,durability and sustainability.Despite the production outages linked to the completion of
190、 reactor 4 highlighted above,the Company delivered very strong revenue growth for the year,underpinned by strong product demand and increases in average sales prices.Underlying EBITDA more than doubled year on year,due to increased average sales prices and an energy price surcharge mechanism which s
191、uccessfully offset raw material cost increases,including the impact of high and volatile prices for acetic anhydride used in our acetylation process,and energy prices in Europe.Despite general price reductions in the global wood products market,the Company has maintained its prices in H2 and into FY
192、24.The energy price premium ceased to be applied beyond the end of FY23.In November we announced that,while we had taken 100%control of the world-first Tricoya project in Hull,we also put the project into a hold period to assess future capability and funding options.Please see the Executive Chairs s
193、tatement on page 14 for further details on progress the Board has made with its review.We have made good progress with our Accoya USA JV with Eastman.However,construction of the plant(which commenced in April 2022)has experienced some delays and cost inflation.Both Accsys and Eastman remain fully co
194、mmitted to delivering the project,which will replicate the proven technology of our successful Accoya plant in Arnhem.FY23 has been another important year for customer relationships,during which we have had to manage inflationary cost increases through higher prices,ongoing disruption to supply chai
195、ns post the COVID-19 pandemic and our own production capacity limit in the face of strong customer demand.We are grateful to our customers for their continued support and have engaged in regular dialogue with them as we navigate these challenging market conditions.During the year Accoyas high level
196、of performance and sustainability was recognised in several prestigious global industry awards.Please see page 16 for further details.Summary of financial performanceAccsys delivered revenues of 162.0m,a 34%increase on FY22,reflecting continuing strong demand for our products,higher average sale pri
197、ces and the implementation of an Energy Price Premium to mitigate higher gas prices.Sales volume grew by 6%during the year to 63,344m3,with H2 volumes of 39,387m3 representing growth of 64%on H1,in excess of our targeted 50%increase.Underlying Group EBITDA was 22.9m,an increase of 120%on the prior y
198、ear,and ahead of our market guidance of nearly doubling last years EBITDA of10.4m.Group gross margin remained above our long-term target of 30%at 34%,aided by the higher average sales prices outlined above.In addition,we continue to benefit from a partial natural hedge on our acetyls raw materials c
199、ost through the sale of our acetic acid by-product,revenues of which grew by 11%in the year to 15.1m.Underlying profit before tax increased by 9.7m to 11.0m.Statutory loss before tax was 67.1m.Net debt increased by 16.9m in the year to 44.1m due to the planned investment into Accoya USA,(29m),capex
200、investments of 29.8m into the Arnhem reactor 4 and Tricoya Hull projects(partially offset by a placing in May 2022 which raised net proceeds of approximately 19m),the reduction in the NatWest loan(9.4m)and EBITDA generation during the year.ACCOYA SALES VOLUME63,344m3During the year,Accoyas high leve
201、l of performance was recognised in several prestigious global industry awards.”Laura Keily Head of Marketing FINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 202334OVERVIEWSTRATEGIC REPORTGOVERNANCE35Accoya During the period we were pleased to complete the expansio
202、n of our plant in Arnhem which adds a new 20,000 cubic metres reactor,enabling the sites maximum annual capacity to increase to 80,000 cubic metres.As previously reported,we experienced some unexpected delays in the final installation,tie-ins and supply of certain equipment for reactor 4,which resul
203、ted in an unexpected second shutdown across the plant in April and May 2022.In addition,during the commissioning and testing period in June,we identified a number of defects to equipment which were repaired over the following eight weeks.As a result,reactor 4 commenced commercial operation in Septem
204、ber.Further work on optimising reactor 4 to reduce cycle times and deliver more capacity is planned for the coming year.In addition,investment in new stacking technology is ongoing which will provide efficiency improvements across the plants workcentres.North America represents the largest potential
205、 regional market for our product.Under our joint venture with Eastman,a world leader in the production of acetyls,we are building an Accoya plant in the USA with an initial approximate 43,000 cubic metres capacity at Eastmans Kingsport,Tennessee site.Under the joint venture,Accsys holds a 60%interes
206、t and Eastman a 40%interest.We have made excellent progress with the construction of the plant,which commenced in April 2022.Key milestones include the completion of ground works,ongoing steelwork and main warehouse construction,installation of the reactors on site,placement of multiple large sub-co
207、ntracts and procurement of more than 80%of major equipment.As we move towards completion of the plant,we will increase our investment in people and infrastructure in readiness of start-up and as a result,the project will incur higher losses in the coming year.As announced in May,the project has expe
208、rienced some delays related to mechanical completion,as well as the impact of cost inflation.Both joint venture partners continue to be fully engaged in delivering this strategically important project,which will replicate the proven technology of our successful plant in Arnhem.In line with our group
209、 commitment to Health&Safety,this has been established as a key priority at the site and by the FY23 year end we were able to celebrate over 150,000 hours worked with only one minor first aid injury.Our 50,000 square foot Accoya Color manufacturing plant in Barry,Wales,has increased our ability to c
210、onvert Accoya wood into Accoya Color a product which combines the benefits of Accoya wood with colour all the way through the wood from surface to core.The site has an maximum capacity of 12,500 cubic metres perannum.During the year we made operational improvements to the site which enabled us to in
211、crease production by 140%to 4,010 cubic metres in FY23.More importantly,this will allow us to further increase future production in FY24 and to support growing customer demand.Accoya Colors unique proposition is proving to be very attractive to customers in our target markets,particularly in the dec
212、king category where the surface-to-core grey colour requires less maintenance to retain over the long term.In addition to the products existing markets of Germany,Switzerland,Austria and US,Accoya Color was launched this year into the new markets of Australia,New Zealand and France.Accoya Color gene
213、rates a higher gross profit per cubic metre than Accoya and will enhance our product margins over time.As we increase our Accoya production capacity,we continue to expect increased Accoya Color sales in the medium term.Business Review continuedStrategic Update PACIFIC COAST HOME FEATURES ACCOYASan D
214、iego,CA,United StatesAccoya wood,known for its durability and resistance to warping,was the ideal choice for a Pacific Ocean residence designed by Greg Coleman Architects.The project aimed to create a beautiful,long-lasting space for the homeowners to enjoy the stunning ocean views.The architects us
215、ed approximately 1,900 square feet of Accoya wood that was milled into 22 slats.The slats were installed as a privacy screen around the second floor decks and for the railing at the exterior stair for the ADU.Accoya woods stability and resistance to warping made it an ideal material for the 22 slats
216、,as other cladding options,such as Ipe,would have been more challenging to work with.CASE STUDYAccoya wood was chosen as it met the projects goals of creating a beautiful and durable outdoor space.Due to its durability,Accoya wood requires less maintenance and refinishing,which made it a cost-effect
217、ive and practical choice for the project.The installation was completed by California Deck Pros,who did an excellent job creating a beautiful and functional outdoor space.RGB Inc.served as the general contractor for the project and oversaw theinstallation.The project was honoured with the award for
218、Residential Project of the Year 2022 by AIA San Diego.Accoya cladding Architect:Greg Colman ArchitectsInstaller:California Deck ProsGeneral Contractor:RGB Inc.AWARD WINNING PRODUCT DETAILSFINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 202336OVERVIEWSTRATEGIC REPO
219、RTGOVERNANCE37Image by FINSABusiness Review continuedBuilding Organisational CapabilityWe are making good progress in developing our people and organisational capabilities to manage growth.As we increase our manufacturing output,we are strongly focused on strengthening our manufacturing expertise an
220、d leadership.Key senior management appointments during the year include a Group Manufacturing and Projects Director,a newly created role which will support Accsys as we expand our operations and develop our global reach.Management has also been strengthened by the appointments of new Managing Direct
221、ors of Tricoya UK and Accoya Color.Post the year end,the Company has also boosted its expertise in the areas of large capital project management,cost management and financial forecasting through the appointments in April 2023 of a new CEO and CFO,both of whom have significant experience in these are
222、as.For full details of these key appointments,please see page 16.We rely on the skills,experience and commitment of our people to meet our business goals and to that end,are committed to investing in their careers.During the year we increased the number of training and development opportunities for
223、our colleagues around the Group,providing 8,579 total training hours in FY23,representing 32.5 training hours per colleague.This years performance is an increase of 526 hours on the prior year and 4,619 hours since FY21.Together with new leadership training programmes and talent mapping,this is an o
224、ngoing process to ensure we have the right skills and talent in place to grow our business effectively.Innovation&TechnologyWe conduct regular strategic reviews of our engineering and technology capabilities and other actions to drive improved delivery of capital and innovation projects.This led to
225、the creation in FY22 of a Global Engineering Centre and Project Management Office,and further development of our R&D function.During the year,we increased our skills and talent in key areas including project and portfolio management in addition to engineering,wood(modification)science and analytical
226、capabilities.Our R&D team is focused on both process and product innovation which impact the short,medium and long-term future of the business.With production capacity recently expanded in Arnhem,process optimisation and reliability remain core areas of focus.Our R&D team works closely with our Sale
227、s&Marketing teams to understand evolving consumer needs and to assess where innovation can meet those needs.To build resilience and mitigate risk in our supply chain,our R&D and supply chain teams have been exploring alternative wood species to Radiata pine.The properties of Radiata pine from certai
228、n regions make it well suited to our proprietary acetylation process.It is also fast growing and available from certified sources,making it a sustainable choice.However,we want to broaden our wood supply,both in terms of species and source location to de-risk our operations as we grow.The reorganisa
229、tion gives Accsys the option to take the Tricoya Hull Project forward on its own terms and to benefit from 100%of the long-term returns from Tricoya,including any future licencing in respect of the global Tricoya market opportunity.At the same time,the Company announced the restructuring of the debt
230、 arrangements between TUK and NatWest,resulting in the principal debt being reduced by 9.4m to 6.0m with a new seven-year term,and no capital repayments during thisperiod.TricoyaAccsys and its former consortium partners in Tricoya UK Limited(TUK)have been building the worlds first Tricoya plant in H
231、ull.In November 2022,Accsys agreed with its partners Ineos,MEDITE,BGF and Volantis to acquire 100%ownership of the plant and the Tricoya Group entities(Tricoya Technologies Limited and TUK),in exchange for 11.9m new shares in Accsys,representing 5.74%of its issued share capital at that date.Ineos an
232、d MEDITE remain commercial partners with Accsys,retaining their respective acetyls supply and acetylated wood chip off-take agreements.Strategic Update continuedThis year we were pleased to see positive results from long-term trials of Accoya made from fast growing Taeda pine from Argentina and Urug
233、uay with ideal growing conditions and forestry practices and mills that can meet our requirements.For example,Accoya cladding made from Taeda has been used to clad the Starbucks building in Wakefield,UK.Installed in 2020,it has shown the same durability and performance as Radiata pine.Being able to
234、source Taeda from South America also makes it an ideal option for supply to the Kingsport,Tennessee plant.Over the coming year,we will be continuing this work with the view to beginning official commercial production of Accoya withTaeda.Accsys produces acetic acid as a by-product of its wood acetyla
235、tion process.This Accsys acetic acid has been proven to be of good quality and of low environmental footprint.For years,Accsys acetic acid customers have recognised these qualities and proven that it can be used,undiluted or diluted,for many standard acetic acid applications,e.g.in water treatment o
236、r as chemical raw material for solvents like acetic anhydride.However,it does have some differences to glacial acetic acid(notably,a slightly lower purity with some content from wood extractives or slightly higher colour).To address these differences,Accsys acetic acid from wood acetylation can be f
237、urther purified in order to reach a quality equivalent to standard glacial acetic acid.This purified acetic acid can be used with almost no restriction in most glacial acetic acid markets/applications(e.g.in Vinyl Acetate,Acetic Anhydride,Mono Chloro Acid,Pure Terephthalic Acid,Butyl or Ethyl Acetat
238、e).The Company stopped site activity in November,placing the project into a hold period to mitigate the risk of weaker economics on start-up(due to the high and volatile acetyls raw material prices in Europe)and to allow the Board time to assess the economics and capability of the plant and its pote
239、ntial returns oninvestment.While further work is required to prove the working capabilities of the plant,we have made significant and positive progress on this review over the past six months.Please see further details on progress with the Boards review on page 14 of the Executive Chairs Statement.F
240、INANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 202338OVERVIEWSTRATEGIC REPORTGOVERNANCE39 THE RISE OF THE CRESCENDO SERIESOuray,Colorado,United StatesAward winning artist Cie Hoover created the first of many inspirational sculptures out of Accoya wood.In 2020,Cie
241、had a wood-based sculpture titled Balance in the Fray permanently installed in a covered setting in the town of Alamosa,Colorado.From there,he wanted to continue to explore the realm of public art and set out on a quest to find a wood suitable for outdoor installationsand thus came across Accoya.Cre
242、scendo stands at roughly nine feet tall and is now installed in the town of Fraser,Colorado.(Photo shown is from a temporary installation of the sculpture for Telluride Art+Architecture in July of 2022).A second,even larger version of the sculpture is currently being created,and will permanently res
243、ide in the town of Ridgway,Colorado.CASE STUDYBusiness Review continuedBuilding on our commitment to transparency,Accsys participated for a second consecutive year in the S&P Global Corporate Sustainability Assessment.Accsys scored 43/100 an improvement of five points(13%)on the prior year,placing t
244、he Company in the top quintile in the Paper&Forest Products industry category.Through our expanding safety programme,which includes increased monitoring,a defined strategy and increasing awareness,we are building a stronger safety culture across the organisation.During the year,the Company rolled ou
245、t a number of dedicated safety learning programmes and initiatives,including a Health&Safety month in February 2023 which gave our colleagues the opportunity to participate in group discussions on safety improvement,training sessions and guest speakerevents.During the year,we completed a Board perfo
246、rmance evaluation and internal review which complements our three-yearly cycle of external evaluations.The results of the evaluation confirmed the individual and collective commitment and effectiveness of Directors.The evaluation also supports the Board in understanding areas of focus as part of its
247、 continuous improvement.Health&Safety(HSE)Health&Safety is a top priority for the Board and for Accsys,and the Board-level HSE Committee,established in 2022,has helped support the Boards focus on this key area.Accsys has set Zero Harm as a key target for our operations and is committed to developing
248、 best practice HSE across the Company.During FY23,we held regular safety briefings for all colleagues and have issued monthly communications to encourage greater awareness of safety.As awareness around safety grows,we have seen corresponding improvements in key HSE performance metrics.During the yea
249、r,we introduced a digital version of our safety observation card,submissions of which grew from 1,060 in FY22 to 1,316 this year.In addition,we have maintained our momentum in leadership safety tours,holding almost 700 tours over the year.We are pleased to report that our Total Recordable Incidence
250、Rates improved from 5.2 to 3.6 per 200,000 hours worked.Our Lost Time Incident Rate per 200,000 hours worked,however,increased from 0.52 to 0.96(versus our target 0.5).Energy&Climate ChangeOur approach to Energy&Climate includes a focus on energy efficiency and process optimisation,assessing the car
251、bon impact of our products and integrated climate considerations and activities across multi-functions across the business.We are innovating to minimise our environmental impact across our operations,in accordance with our Climate Change Policy,whilst sourcing our raw materials responsibly.In 2023,w
252、e established a steering committee at our Arnhem site to focus on carbon intensity reduction per cubic metre of Accoya produced.Additionally,we are using our Scope emissions data to set carbon reduction targets in alignment with the Science Based Targets initiative(SBTi).Scope 1 and 2 emissions can
253、be seen on page 62.Intellectual PropertyAccsys continues to invest in developing and protecting its valuable portfolio of intellectual property and confidential information.Our technology covers not only the physical equipment and engineering that underpins our manufacturing and production,but also
254、the processes and methodology we follow in our supply and production chain:from the way we source our wood,through our wood modification process,to the way we market and sell Accoya and Tricoya.Accsys holds c.388 patent family members covering 28 distinct inventions in 45 countries with 75%of the pa
255、tent family members now granted.The core technologies associated with our current and future plants for the production of Accoya and Tricoya wood products are protected by using a combination of patenting and trade secrets to maintain our differentiation in the marketplace and interest to potential
256、licencing partners.Our principal trademark portfolio covers our Accoya and Tricoya brands,the Trimarque device and the Accsys company name,protected by registrations in over 60 countries.ESGWith its stated purpose of Changing wood to change the world,Accsys is committed to growing and operating its
257、business in a responsible and sustainable way.Aligned with our values and business strategy,our ESG framework outlines 10 key material issues and impact areas on which we are primarily focused.Having completed Stage One of our 2020 sustainability strategy roadmap,we are now in Stage Two and are focu
258、sed on establishing specific development plans,including setting Science Based Targets(SBTs)to reduce our emissions intensity per cubic metre of Accoya produced.Art can be expensive and is not always accessible to many individualsthis is why public art is so important.It allows art to be accessible
259、to EVERYONE.”Cie HooverArtistFINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 202340OVERVIEWSTRATEGIC REPORTGOVERNANCE41Accoya window and doors,Brighton,United KingdomZahBuiltSustainable&Quality ProductsWe are committed to a more sustainable world and use abundantl
260、y available wood sources,certified as sustainable by the FSC.Our commitment to responsible sourcing and manufacturing is recognised by leading accreditation bodies.This year we achieved Cradle to Cradle(C2C)gold certification for Accoya Color Grey,as well as being awarded Platinum level(the highest
261、level)for both Material Health and Water Stewardship.Our core product,Accoya,has held C2C certified status since 2010.C2C certification is the global standard for products that are safe,circular,and responsibly made.Accoya wood is one of the very few building products to have acquired C2C certificat
262、ion on the stringent Gold-level.This represents very high standards of sustainability,alongside the recognised high performance and durability credentials of the brand.Board UpdateThe Boards composition brings depth and a range of experience to Accsys,both supporting and challenging the Executive te
263、am in the execution of the Companys strategy.The last 12 months has seen considerable change,with Rob Harris,Accsys Chief Executive Officer,stepping down after three years,and Will Rudge deciding to leave the Company after 12 years as Finance Director.Rob Harris is succeeded by Dr Jelena Arsic van O
264、s,who will become Accsys Chief Executive on 1 July 2023,at which point Stephen Odell will return to his prior role as Independent Non-Executive Chair ofAccsys.Jelena has over 20 years experience in senior executive leadership roles in large-cap multinational companies and has a proven track record i
265、n transforming and driving complex businesses,delivering on profitable growth targets and successfully delivering large capital projects.Will Rudge is succeeded by Steven Salo,who joined Accsys on 1 April 2023 as Chief Financial Officer.Steven brings significant experience in senior financial leader
266、ship roles,executing high-value corporate and business development transactions,and driving and shaping businesses for profitable growth.Post the year end,in May 2023 the Company announced that as they reach the end of their nine-year terms,Sue Farr and Sean Christie,who chairs the Audit Committee,w
267、ill step down from the Board at the conclusion of the AGM in September 2023.In addition,due to increases in his executive commitments,Alexander Wessels,who chairs the Companys Remuneration Committee,will also step down from the Board at the upcoming AGM.As at the date of this report,the Board is see
268、king to appoint two new high-quality and experienced Independent Non-Executive Directors,with the intention of one as Chair of the Audit Committee,and the second as Chair of the Remuneration Committee.Business Review continuedSociety&CommunitiesAccsys has developed a more structured approach to char
269、itable and community support and its environmental impact through tools such as charitable giving and colleague engagement.During the year,our colleagues chose three official charity partners to support,pledging total donations of 72,219,and participating in our chosen charities missions through a n
270、umber of activities,events and presentations.In January,we organised a colleague volunteering day with our charity partner Trees4All.Accsys colleagues were invited to join volunteers from across the Netherlands to plant trees in the Groene Woud,NL.The day resulted in around 2,000 trees going into th
271、e ground and gave our colleagues the opportunity to give back to the local community and learn about reforestation.A one-off donation was also approved by our Charities Committee to support the Turkey/Syria Earthquake appeal in support of several colleagues who had relatives and friends in affected
272、areas.Further reading See Our Strategy|Pages 28 to 33See our Sustainability section|Pages 56 to 66See our Finance Review|Pages 44 to 49OutlookIn the coming year,we expect to leverage the benefits from greater economies of scale associated with higher production volumes at our plants.FY24 will also b
273、e a year of transition,during which we will implement actions to ensure the future sustainable growth of the business and to drive value creation for our shareholders.These actions include moving towards completion of the Kingsport plant,which will incur higher costs this year as we invest in people
274、 and infrastructure in readiness for start-up and making key investments in the core business to support higher volume production.In view of our increased capacity from the expansion of Arnhem and future capacity from Kingsport,and in light of the softening of price and demand in the global construc
275、tion industry,we are dedicating more resource to our sales and marketing activity globally,particularly in the US,to create more demand as supply becomes available.The Board of Accsys continues to believe in the underlying attractive economics and margins associated with completing the construction
276、of Hull and therefore will continue to explore financing options to fund the plants construction,including strategic partners and lending institutions.Absent the availability of third-party funding,the Company will use modest levels of internally generated cash to maintain the plant and progress the
277、 pre-construction works.The Board will continue to engage with stakeholders in respect of Hull and its future prospects.Despite its belief in the future potential for Tricoya,the Board is clear that the base Accsys business must not be compromised to find a solution for Hull.In the meantime,we will
278、continue to work with our partners to develop the Tricoya market using Accoya,including exploring the expansion of dedicated capacity for greater volume production within our existing plants.We have made a good start to FY24,with performance in line with our expectations.With our new executive manag
279、ement team in place to drive the business forward in its next phase of growth,we are confident in delivering further financial and operational progress in the coming year,and in the longer-term demand and growth opportunity for Accoya and Tricoya.FINANCIAL STATEMENTS|Accsys Technologies PLC|Annual R
280、eport and Financial Statements 202342OVERVIEWSTRATEGIC REPORTGOVERNANCE432023(44.1)m2022(27.2)m2023 11.0m2023 162.0m2022 120.9mFY23FY22Change%Group Revenue162.0m120.9m34%Gross Profit55.2m36.0m53%Underlying EBITDA22.9m10.4m120%Underlying EBIT14.4m4.2m243%Underlying profit before tax11.0m1.3mStatutory
281、(loss)/profit before tax(67.1m)1.7mCash26.6m42.1m Adjusted cash16.8m4.3mNet debt(44.1m)(27.2m)Accoya Sales volume63,344m359,649m36%Finance ReviewIntroductionAccsys has delivered a good performance in the year,with 34%revenue growth and a 120%increase in Underlying EBITDA to 22.9m,driven by increased
282、 sales prices and strong ongoing demand for ourproducts.Net debt increased by 16.9m in the year to 44.1m due to the planned investment into Accoya USA,(29m),capex investments of 29.8m into the Arnhem reactor 4 and Tricoya Hull projects(partially offset by a successful placing in May 2022 which raise
283、d net proceeds of approximately 19m),the reduction in the NatWest loan(9.4m)and EBITDA generation during the year.In November 2022,Accsys agreed to acquire full ownership of the Tricoya entities,including the Tricoya Hull plant from its consortium partners for a consideration in Accsys shares(valued
284、 at 9.5m).At the same time,the debt facility between TUK and NatWest was restructured,resulting in the principal debt being reduced to 6m,with a new seven-year term and no capital repayments during thisperiod.Following these events,an impairment assessment was required to be performed under IAS 36(I
285、mpairment of Assets)on the Tricoya segments gross assets with an impairment loss of 86m being recognised as non-cash exceptional item.The calculated impairment was impacted by:(1)A previously reported increase in the capex to complete the construction of the Tricoya Hull plant of 35m,commencing in 2
286、years;(2)A higher pre-tax WACC rate (used for the discount rate)increasing by 3.0%to 13.5%principally due to higher market interest rates;and(3)A decrease in the production volume forecast for the plant to 24,000MT(from 30,000MT).Statement of comprehensive incomeGroup revenue increased by 34%to 162.
287、0m for the year(FY22:120.9m),driven by continuing strong market demand for Accoya and Tricoya and an increase in average sales prices during the year and prior year implemented to address rising raw material costs.An energy price premium(surcharge)was also successfully added to customer sales prices
288、 in H1 to offset asignificant increase in acetyl costs.Accoya sales volumes increased 6%to 63,344m3 following the successful commissioning and operation of reactor 4 in September 2022.We have continued to see strong underlying demand for Accoya across our regions and with our Tricoya panel manufactu
289、ring partners.The FY23 regional sales trend on a year-on-year basis reflects a 10%increase in sales volumes in North America,where we continue to increase marketing,sales,and allocation of product volumes available to customers as we develop this market ahead of our US capacity expansion.Sales volum
290、es increased by 18%to our Tricoya customers(MEDITE and FINSA)following a drop in allocation in FY22.These sales to MEDITE and FINSA for the manufacture of Tricoya panels are used to develop the market for Tricoya products and represent 24%of Accoya sales volumes(FY22:22%).Other Revenue,which predomi
291、nantly relates to the sale of our acetic acid by-product,increased by 21%to 16.8m(FY22:13.9m)due to higher acetic acid sales volume following the ramp up of production from reactor 4 in Arnhem.Accsys sales of its acetic acid by-product back into the same acetyls market continued to act as a partial
292、hedge to the higher acetic anhydride costs.The net acetyls cost increased by 19%compared to the prior year.Raw wood input costs were moderately higher although more stable than the wider lumber market as we purchase appearance-grade wood under long-term supply contracts with many of our partners.Cos
293、t of sales increased by 26%,on 6%higher sales volumes and higher cost of raw materials,primarily in higher raw wood and acetic anhydride costs.Group gross profit of 55.2m was 53%higher than the prior year (FY22:36.0m)and gross profit margin increased 4 percentage points to 34%.GROUP REVENUE 162.0m+3
294、4%UNDERLYING PROFIT BEFORE TAX11.0m+9.7mNET DEBT(44.1)m+16.9mAccsys delivered a good performance in the year,with 34%revenue growth and a 120%increase in Underlying EBITDA.”Steven SaloChief Financial OfficerSales volume by end marketFY23 m3FY22 m3Change%UK&Ireland 14,667 14,905(2%)Tricoya 15,193 12,
295、860 18%Rest of Europe 16,584 16,809(1%)Americas 10,574 9,575 10%Rest-of-World 6,326 5,500 15%Total63,34459,6492022 1.3mFINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 202344OVERVIEWSTRATEGIC REPORTGOVERNANCE45Finance Review continuedUnderlying other operating cost
296、s(excluding depreciation and amortisation)increased from 25.4m to 31.6m.This is due to Tricoyas ongoing running costs being treated as operating expenditure in the second half following the introduction of Tricoya UKs hold period and increased legal,insurance and staff costs during the year.Deprecia
297、tion and amortisation charges increased by 2.1m to 8.3m following commercial production from reactor 4 in September 2022.Underlying finance expenses increased 0.3m to 3.2m following the interest on Tricoya UKs NatWest facility not being capitalised post the introduction of the hold period for Tricoy
298、a UK and a full year of interest cost on the De Engh 10m loan which was entered into March 2022.An impairment loss(exceptional item)of 86.0m has been recognised in the year relating to the Tricoya segment.The calculated impairment is described in the Introduction and has been recognised as a non-cas
299、h exceptional item.In regard to the Tricoya Consortium reorganisation completed during the year,the following exceptional items have been recognised:1.5m expense for advisory feesincurred;9.4m income related to the restructuring of the NatWest loan,decreasing the principal debt from 15.4m to 6m;and
300、1.4m expense related to the value recovery instrument provided to NatWest,allowing NatWest to recover up to approximately 9.4m,on a contingent basis,depending on the profitability of the Tricoya Hull plant once operational(see note 23).An exceptional foreign exchange gain of 1.4m was recognised rela
301、ted to US dollars held as cash for investment into Accoya USA,which were invested into the joint venture in the first half.Following the May 2021 capital raise,the amount raised to invest into Accoya USA was translated into US dollars and held in cash,ensuring that foreign exchange movements did not
302、 decrease the amount raised below the future US dollar investment into Accoya USA.This treatment did not meet the requirements for hedge accounting under IFRS 9,Financial Instruments,and therefore the foreign exchange gain on the revaluation of the US dollars has been accounted for in Finance Expens
303、es as an Exceptional item.In the prior year,redundancy costs of 0.1m were recognised in relation to the purchase of assets in Barry,UK and 1.6m early termination costs related to the refinance of the Group debt facilities in October 2021,with both classified as exceptional items.No other adjustments
304、 have been recognised in the current year,which were previously also excluded from underlying results.These other adjustments related to foreign exchange differences on the US dollar cash pledged to ABN Amro for the Letter of Credit provided to First Horizon Bank(FHB)as part of the Accoya USA fundin
305、g arrangements and Pound sterling loan notes repaid in the October 2021 Group refinance.See note 5 for further details.Underlying profit before tax increased by 9.7m to 11.0m(FY22:1.3m).After taking into account exceptional items(including the impairment loss)and other adjustments,loss beforetax amo
306、unted to 67.1m(FY22profit:1.7m).The tax charge increased by 1.8m to 2.8m(FY22:1.0m).Underlying earnings per share increased to 0.05 per share (FY22:0.01 per share).A statutory loss per share was recognised of 0.19 per share(FY22:profit of 0.01 per share).Cash flowCash flows generated from operating
307、activities before changes in working capital increased by 11.3m to 22.7m(FY22:11.4m),reflecting continued good operational cash flow generated by our plant in Arnhem.Inventory levels increased by 9.6m during the year with higher raw material levels held due to the ramp up of the fourth reactor,which
308、 increases production capacity by 33%but which was also partially impacted by the delay in start-up of reactor 4 and the long lead time for raw material purchases from New Zealand.Inventory balances started to decrease in H2 and are expected to continue to decrease further in the next financial year
309、.In May 2022,Accsys completed a successful placing for an issue of shares in the Company,raising net proceeds of approximately 19.0 million which have been used to strengthen the Groups balance sheet,increase liquidity headroom and provide additional working capital and fund additional costs to comp
310、lete Arnhems expansion project.At 31 March 2023,the Group held cash balances of 26.6m,a 15.5m decrease in the year,attributable to construction costs relating to the Arnhem plant expansion project(7.9m),Tricoya Hull project(20.1m),the planned investment into Accoya USA(29m)and the increase in invent
311、ory referred to above.This was partially offset by the placing,10.0m of proceeds from loans(explained further below),and cash flow generated from operatingactivities.MOVEART CHOOSES ACCOYA FOR SCULPTURELondon,United Kingdom To create a sense of peace and inspiration in a densely populated area,leadi
312、ng manufacturers moveART designed these Accoya wood sculptures,which have successfully brightened up Nine Elms in London.The regeneration of Battersea Power Station,located in Nine Elms,opened its doors in late 2022,attracting people to visit its shops,restaurants,and other attractions for the first
313、 time.Therefore,the tranquillity the moveArt sculpture brings is more essential than ever,specifically for the increasing number of residents in the Nine Elms area.moveART is a Swiss company established by designer Norbert Roztocki,who is passionate about keeping people physically and mentally healt
314、hy,especially in overpopulated urban areas.moveArt does this by providing art,functionality,and security to public spaces that integrate and inspire people.Roztocki specifically chooses Accoya sustainable wood for all sculptures due to its exceptional durability and stability and the all the sustain
315、ability benefits that come with such a high-performance wood.Swiss moveArt sculptures is another example of AccoyamoveART.CASE STUDYFor more Accoya projects go online to| STATEMENTS|Accsys Technologies PLC|Annual Report and Financial Statements 202346OVERVIEWSTRATEGIC REPORTGOVERNANCE47Group Underly
316、ing EBITDA 2019-2023 millionFY19FY21FY22FY23FY200.9m7.0m10.1m10.4m22.9mFinance Review continuedWhen adjusting for the cash pledged for the Letter of Credit provided to FHB of$10.0m(see note 30),and in the prior year adjusting for the remaining cash raised in the May 2021 equity raise to be invested
317、into Accoya USA,Adjusted Cash increasedduring the year to 16.8m(see note30).Financial positionPlant and machinery additions of 21.4m(FY22:41.0m)consisted of the construction of reactor 4 in Arnhem and the Tricoya plant in Hull.Trade and other receivables increased to 18.1m(FY22:16.9m),primarily due
318、to higher sales following the ramp up of reactor 4.Trade and other payables decreased 4.0m to 25.9m(FY22:29.9m),with a decrease in accruals following the completion of the Arnhem expansion project and the decrease in activity on the Tricoya plant in Hull.Amounts payable under loan agreements increas
319、ed to 65.9m(FY22:64.0m)due to the drawdown of 5.0m on the ABN Revolving credit facility and 5.0m on the Tricoya NatWest 17.2m facility,capitalisation of interest on the Tricoya NatWest loan before the Tricoya NatWest facility was restructured,decreasing the principal debt from 15.4m to6.0m.Net debt
320、increased by 16.9m in the year to 44.1m(FY22:27.2m)due to capex investments of 29.8m,investment into Accoya USA(29m)and the increase in inventory partially offset by the successful placing(net proceeds of 19.0m),cash flow generated from operating activities and the restructuring of the Tricoya NatWe
321、st facility,decreasing the principal debt on the facility by 9.4m to 6.0m.Going concernThe consolidated financial statements are prepared on a going concern basis,which assumes that the Group will continue in operational existence for the foreseeable future,and at least 12 months from the date these
322、 financial statements are approved.As part of the Groups going concern review,the Directors have assessed the Groups trading forecasts,working capital requirements and covenant compliance for the foreseeable future under a base case scenario,taking into account the Groups financial resources includi
323、ng the current cash position and banking and finance facilities which are currently in place(see note 30 fordetails of these facilities).The Directors have also assessed a severe but plausible downside scenario with reduced sales volumes and lower gross margin,also reflecting the possible impact of
324、volatile raw material costs.These forecasts indicate that in order to continue as a going concern the Group is dependent on achieving certain operating performance measures relating to the production and sales of Accoya wood from the plant in Arnhem with the collection of on-going working capital it
325、ems in line with internally agreed budgets.In both scenarios,the Directors have assumed no commitment will be made to complete the construction and start-up of the Tricoya plant in Hull until appropriate funding arrangements have been put in place.The Directors have taken into account the reorganisa
326、tion of the Tricoya consortium and restructuring of its bank debt completed in November 2022 which resulted in Accsys becoming the 100%owner of the Tricoya Hull plant and the commitment to fund ongoing working capital during the hold period.The Directors have also considered the possible amount and
327、timing of capital expenditure required to complete the Accoya plant in the USA,noting that notwithstanding that the construction project benefits from certain contractual measures in place with the lead construction contractor,Accsys has committed to fund its 60%share of cost overruns,should they ar
328、ise.The Directors believe there are a sufficient number of alternative actions and measures within the control of the Group that can and would be taken in order to ensure on-going liquidity including reducing/deferring costs in some discretionary areas as well as larger capital projects if necessary
329、.The Directors believe that while some uncertainty always inherently remains in achieving the budget,in particular in relation to market conditions outside of the Groups control,under both the base scenario and severe but plausible downside scenario,there is sufficient liquidity and covenant headroo
330、m such that there is no material uncertainty with respect to going concern and have prepared the financial statements on this basis.Steven SaloChief Financial Officer26 June 2023Accoya cladding,Villa Harmony,Ibiza,Balearic Islands,SpainFINANCIAL STATEMENTS|Accsys Technologies PLC|Annual Report and F
331、inancial Statements 202348OVERVIEWSTRATEGIC REPORTGOVERNANCE49Risk ManagementHOW WE IDENTIFY,EVALUATE AND MITIGATE RISKSGlobal companies continue to face significant headwinds,and identifying,evaluating,managing and mitigating risk remains an essential corporateactivity.Risk governanceAt Accsys,the
332、Board is ultimately responsible for risk management.Ongoing risk assessment is delegated to the Audit Committee which seeks to ensure that Accsys risk processes remain focused and robust.The Audit Committees terms of reference ensure it has the capability and structure to operate independently of th
333、e Accsys executive team,specifically:the Committee is required to have a particular focus on Accsys processes for the management of business and financial risk;Committee members should have the ability to understand key business and financial risks and related controls and control processes;the Committee is entitled to obtain,at Accsys expense,independent legal,accounting or other professional adv
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